When Penn Central filed for bankruptcy protection in June 1970 it was not only the largest business failure in America to date, but it rendered stock in the beleaguered company all but worthless.
One footnote to the Penn Central story is that when the New York Central and Pennsylvania railroads merged on Feb. 1, 1968, the company was officially known as the Pennsylvania New York Central Transportation Company, a name that didn’t last long and was shortened to Penn Central Transportation Company.
As seen above the stock certificates came in two colors, blue and brown. Shareholders also had the option of mixing the two shades.
Not unlike many stock certificates, Penn Central stock had an elaborate appearance, featuring a profile of the Roman god Mercury. He was the god of financial gain, commerce, messages/communication, travelers, boundaries, luck, trickery and thieves.
Given some of the financial shenanigans that PC management practiced during their trouble company’s life, perhaps the choice of Mercury was appropriate given their embrace of the latter two of Mercury’s traits.
Mercury appears amid scenes of a city skyline and various forms of transportation.
Because the PRR was the nominal survivor of the merger, it’s date of origin is listed toward the top on the right hand side.
From a legal perspective, the PRR had changed its name to Pennsylvania New York Central Transportation Company.
That didn’t last long. On May 8, 1968, the company name changed to Penn Central Transportation, a wholly owned subsidiary of Penn Central Company.
For awhile, PC paid dividends to stock holders in an effort to create the illusion of success.
In reality, the railroad ran up a deficit of $2.8 million in its first year and it only grew from there, reaching $83 million in 1969. On June 21, 1970, PC entered bankruptcy proceedings.
At the time, Penn Central was the nation’s sixth largest company.
We all know that many of the railroad operations of PC were turned over to Consolidated Rail Corporation on April 1, 1976. Some PC lines not picked up by Conrail were saved, but others simply never saw rail service again and were eventually abandoned.
Penn Central Company survived the bankruptcy. It had considerable real estate holdings and eventually evolved into a financial services and insurance company later known as American Financial Group.
Today, Penn Central stock is a collectors item. One website that deals in old stocks and bonds is offering PC stock certificates online for $6.95, marked down from $10.95. On eBay, PC stock certificates on Thursday ranged in asking price from $2.19 to $8.19.
The stock certificates shown above are from the collection of Jack Norris.
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