Paved Roads & Public Money. Richard DeLuca

      In another attempt to compete with the internal combustion engine, the New Haven Railroad considered establishing its own airline, in partnership with Trans World Airlines, to be called TWA New England. However, ticket pricing proved too expensive, and the service was never begun. New York, New Haven & Hartford Railroad

      Last of all, the Connecticut Company, operator of the New Haven’s street railways in cities around Connecticut, announced in 1931 that it planned to substitute motor buses for trolley service on its interurban lines, where thanks to the automobile, large-capacity trolley cars were no longer required. Over the decade, as the popularity of the automobile continued to rise, some intracity trolley lines that had become unprofitable were abandoned, while others were replaced with gasoline-powered motor buses, as once well-used trolley tracks were paved over in city after city around the state. By 1941, those routes still remaining in the Connecticut Company’s Hartford Division were completely converted to motor bus service, though some electric trolleys continued to run on the streets of New Haven until 1948.⁶⁶

      Yet despite all these attempts to adapt to the new world of automobility, the debt accumulated during the Morgan and Mellen expansion still encumbered the New Haven’s balance sheet. It was only through a combination of good management, belt tightening, and federal loans authorized by the Emergency Transportation Act of 1933 that the New Haven was able to remain afloat during the early years of the Great Depression, even as the corporation’s gross revenues declined from $142 million in 1929 to $71 million in 1935. Still, the inevitable could not be postponed forever. Unable to cover the interest on its bonded debt, and with no further outside loans forthcoming, the New Haven Railroad finally filed for bankruptcy on October 23, 1935.

      What followed was a prolonged corporate reorganization that required twelve years, eleven ICC reports, fourteen circuit court decisions, and eight U.S. Supreme Court decisions to untangle the financial affairs of the New Haven and its subsidiaries. At the heart of the road’s financial rehabilitation was the elimination of $200 million in bonded debt, an amount not coincidently similar to that squandered by Morgan and Mellen on their steamboat and trolley purchases a generation earlier. As the ICC noted, “It is apparent that the losses resulting from the New Haven’s investment in other companies are more than sufficient to explain the profit-and-loss deficit existing as of October 23, 1935.”⁶⁷ Indeed, what was remarkable was that the New Haven managed to remain solvent for as long as it did following the financial mischief created by Morgan and Mellen. But in the end, even with a combination of competitive initiatives, good management, and outside financial assistance, the once mighty New Haven, try as it might, could not outrun its own history.