Pithole Valley Railway
Constructed under the charter of the Clarion Land and Improvement Company, it was informally known as the Oil City and Pithole Branch Railroad.
The new management was also closely connected with the Pennsylvania Petroleum Railroad, chartered in 1872, which would have tapped the oil fields from the north for the benefit of the Atlantic and Great Western.
The Atlantic and Great Western sold a large bond issue to cover the construction and extension of these railroads, which was to be paid back from their revenues when completed.
Still unprofitable to operate, the rails and equipment were removed by 1876 and sold to the Shenango and Allegheny Railroad, another Atlantic and Great Western affiliate.
[4] In 1863, it made its line dual gauge, allowing it to interchange cars with the Philadelphia and Erie Railroad, a PRR subsidiary, which also connected with it at Corry;[5] however, the Philadelphia and Erie ran east from Corry only as far as Warren, on the Allegheny River, and would not be completed to a link with the rest of the PRR at Williamsport until November 1864.
Most of the land for the right-of-way was acquired in the following winter and spring, when its name was changed to the Warren and Franklin Railway, but due to labor and material shortages imposed by the American Civil War, construction did not begin until September 1865.
[9] The charter of this company granted it the right to extract oil or minerals or otherwise improve up to 5000 acres of land in the northwestern Pennsylvania counties of Clarion, Elk, Forest, Jefferson, Venango, Mercer, and Lawrence, and to build railroads to connect its lands with any road or navigable stream, provided that the railroad did not exceed 20 miles in length and was not broad gauge.
[12] The Clarion Land and Improvement Company obtained some scattered oil leases in the area, but its energies were focused on the construction of a railroad, as authorized by their charter, to serve the many new wells in the Pithole valley.
Some work was done on an extension north 5 miles from Pithole to Pleasantville, where another local boom took place in 1868, but it is not clear that this was ever completed or opened.
[25] They represented the interests of the Atlantic and Great Western;[26] Barlow was one of the American agents of James McHenry, the English financier who controlled that railroad.
The Pennsylvania Petroleum Railroad was chartered in 1872, and its leadership largely overlapped with that of the Pithole Valley: Steele was president and Dale, Barlow and Day were directors.
[28] The new railroad proposed to build from Tidioute, on the Allegheny River upstream of Oleopolis, west through Titusville and northwest to the harbor at Erie to provide another outlet for the region's oil.
The Pithole Valley was to be extended a short distance north of Pleasantville to reach the Pennsylvania Petroleum's main line at a point designated Colorado Junction.
This lack of funds meant that construction was not completed on the Pennsylvania Petroleum and the Pithole Valley railroads.
The misappropriation of the bond revenue testified to the particularly bad financial state of the Atlantic and Great Western, but speculative over-extension generally prevailed among American railroads of the time.
That fall, the Panic of 1873 took place as the speculative bubble collapsed, making it much more difficult to finance railroad construction than in the preceding years.
[30] It was sold at foreclosure on February 24 to satisfy a debt for railroad ties and bought by Henry S. Huidekoper, then the president of the company, for about $600, the money being furnished by Devereaux as receiver of the Atlantic and Great Western.
[30] Rails were removed from part of the line, although the corporation remained in existence, hoping for a resumption of the Pennsylvania Petroleum Railroad project.
[32] Bereft of track and equipment, the Pithole Valley Railway apparently continued to exist as a paper corporation.
