The corporate structure of the PV&T Railway Trust & subsidiaries

The PV&T Railway Trust was formed in 1928 (after a hard fought-against takeover attempt) to control a voting majority of the PV&T’s stock, ensure the continued health of the railroad, and provide pensions (and dividends) for workers and minority stockholders.

The controlling family prior to the formation of the trust came from the pink belt across central new hampshire & vermont, so when they set up the trust they made sure that it would be resistant to board tampering by putting in the bylaws how the Trust could invest dividends they get from the stock (back into the railroad), requiring the trust always keep a +1 majority of the voting stock in its subsidiaries, and by assigning at least one third of the board seats to the railroad unions, and the board chair to the previous railroad owners (in 2023, this makes a 15 member board with 6 union seats, 5 management seats – the chair & one seat for the D&H, LT&L, PV&T, and TdM – and 4 at large seats, one of which is de facto reserved for an ILW representative. This is not a takeover bid friendly board, as many venture capitalists have discovered after getting enough stock to guarantee a seat on the board, only to their bright diversification/divestiture/union-busting plans rebuffed.)

This structure made electrification even more appealing; putting wires up is really expensive at first, but makes the money back over time, so if you’re always not chasing the next quarter’s results the “making money back over time” part overrules the initial cost.

And so, by the time the 1960s rolled around, the PV&T could afford to merge with the LT&L & TdM without stepping on the trust’s charter, and then the increase in revenue not only managed to insulate the railroad somewhat from the depression in the 1970s but save enough money to win the 1983 bidding war for the mortibund D&H and salvage it from the sad state it was in.

After the D&H merger, the board tweaked the organizational structure of the 4 major railroads that made up the Parsons Vale Lines; the TdM (formerly a subsidiary of the PV&T and LT&L) and the D&H (merged into the PV&T) were taken out of their control and placed at the same reporting level as the PV&T and LT&L, and then in the mid 1970s ILW was moved up the corporate structure to become a top-level subsidiary of the trust.

The official goal of the Parsons Vale Lines is to electrify all of the important trunk lines in the system, and as of 2023 the PV&T and D&H are almost completely under wire (a few dozen embargoed miles on the PV&T, all but one branch & the Southern Tier of the D&H), and the LT&L is electrifying from Buffalo to Niles, Michigan via subsidiaries I&M, OSW, and CTRC.

From 1928 through 1964, the Trust operated out of Boston, MA, but the TdM/LT&L merger saw that HQ moving up to Montréal, PQ where it remains today.

  • Copyright © 2023 by David Parsons ( unless otherwise noted
    Mon Feb 20 03:26:29 PST 2023