In order to restore the bankrupt northeastern railroad system, and to sustain the transit of freight and passengers by rail, the government passed the Regional Rail Reorganization Act of 1974 (the ‘3R Act’) and created the Consolidated Rail Corporation (Conrail). Conrail was to be a government-funded private operator, which was to revitalize the regional rail system by taking over potentially profitable lines. Conrail took over eight northeastern railroads, including the Penn Central Transportation Company, and ensured that routes across the northeast remained viable. Lines extended from the North Atlantic coast, westwards to Illinois and northwards to Michigan, New York and Montreal, Canada. By the early 1980s Conrail had made a full economic recovery and after railroads were deregulated under the 1980 Staggers Act, Conrail began to make a profit. By 1984, it was one of the biggest freight haulers in the US.
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