Independent Operation
On March 30, 1949 the Interstate Commerce Commission authorized Southern to discontinue service over the A&D providing certain conditions were met: Southern had to restore the railroad and its equipment to the standards when the lease was entered into; access to the Pinners Point terminal and trackage rights over the Norfolk and Portsmouth Belt Line had to be obtained; and Southern had to grant trackage rights so that the A&D could operate across a bridge at Clarksville, Virginia. On July 31, 1949 the A&D became an independent railroad. Passenger service was discontinued at this time.
For the first year and a half, the A&D was unprofitable. By the end of 1950 traffic started to surge with the outbreak of the Korean War. Construction also started on the new Buggs Island hydro-electric dam and facilities. The A&D was the exclusive server to the project and made connections with the U.S. Government's branch at the dam site. The dam helped to simulate an increase in carloads and revenue of the previous year through 1951. Unfortunately the roadbed had been neglected for years and the expense to upgrade was offsetting the increase in business. By 1953 the War was over, construction of the dam was complete, a drought was plaguing tobacco territory, and parallel highways in southern Virginia were being improved. All these factors reduced revenue for the A&D. Nevertheless in 1956 the A&D reported 124 million net ton-miles of revenue freight on 213 miles of road.
Due to continuing deficits, the A&D did not have sufficient funds to maintain property, its roadbed, and its equipment. The A&D attempted to renegotiate loans each year so that payments on its outstanding debt could be made. In 1959 in a desperate bid to keep the company operating, the A&D applied to the ICC for a government guarantee of an $800,000 loan. The application was rejected on January 6, 1960; two weeks later the A&D petitioned for reorganization under Section 77 of the Bankruptcy Act.
In February 1960 Judge Walter E. Hoffman appointed a Portsmouth businessman, Seaborn J. Flournoy, as sole trustee of the A&D. Flournoy was directed to operate the railroad but he subsequently testified that he was unable to produce a plan for continued independent operation of the railroad. Therefore he petitioned for the sale of the railroad because it needed at least $1 million in capital to bring the railroad operations up to safe and profitable margins. The end of the A&D was near.
Read more about this topic: Norfolk, Franklin And Danville Railway
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