If the 1960s were the Go-go years, the ’70s were the birth time of the Rust Belt. Across the Northeast and Midwest, important heavy industries fell into decay.

In June 1970 the Penn Central, the largest U.S. railroad, filed for bankruptcy. The company had been formed only two years earlier, through a merger of the New York Central and the Pennsylvania Railroad.

A combination of federal meddling and union work rules had laid both carriers low. Rates set in Washington had discouraged shippers, who had taken their business to trucks. Union rules enforced overmanning. Taxes took their own toll; each mile of track carried thousands of dollars in state and local levies.

The Penn Central’s trustees struggled for a few years, and then the bankruptcy judge told them in 1973 that they faced outright liquidation. Congress stepped in at the last moment and set up Conrail, which took over the bankrupt railroads of the Northeast and spent billions upgrading decrepit track and rolling stock.

In 1980 a new law deregulated the railroads and gave them broad freedom to set their own freight rates. This, finally, allowed them to compete effectively with trucks. The new nationwide rail industry had fewer miles of track and less than half as many workers. Slimmed down, and with green lights signaling profitability, Conrail and other roads were no longer the invalids of American industry.

—T.A.H.