Decline
The Rutland Railroad entered receivership for the first time in 1938 following prolonged financial instability. In response, the company implemented cost-cutting measures, including wage reductions. The financial condition of the railroad remained sufficiently severe that, in March 1939, the State of Vermont agreed to suspend the company's tax obligations for two years in an effort to support its recovery.[5]
A temporary increase in traffic during World War II produced a short-lived improvement in revenues. Following the war, however, declining traffic resumed and intensified, leading to renewed pressure to reduce operating costs.[6] As part of these efforts, the Chatham Division between North Bennington, Vermont and Chatham, New York was abandoned and dismantled in 1953. This segment, characterized by numerous curves and long regarded as unprofitable, had provided connections with NYCRR's Harlem Division and B&A at Chatham. Following its removal, Rutland freight traffic was rerouted via NYCRR connections at Troy, New York.[7]
A corporate reorganization in 1950 resulted in the railroad being renamed the Rutland Railway. In 1953, a three-week strike by employees led to the permanent discontinuation of passenger service. That same year, the railroad removed all remaining steam locomotives from active service; they were subsequently scrapped by 1955 to generate additional revenue.[8]
In early 1961, following additional labor disputes that included demands for wage increases the company stated it could not sustain, the Rutland applied to the Interstate Commerce Commission for authority to abandon its entire system. Approval was granted, and operations ceased later that year, although formal abandonment had not yet occurred. The labor disputes stemmed in part from proposed operating changes that would have shifted the railroad's operational center from Rutland to Burlington, requiring employee relocation and extending crew run times through the introduction of overnight layovers. Under previous operating practices, crews typically completed round trips between Rutland and Burlington or Bellows Falls within a single day, as well as runs between Malone, New York and Ogdensburg.[9]
In 1961, the State of Vermont petitioned the bankruptcy court to delay liquidation of the railroad for scrap value. The court granted the state two years to identify a new operator in order to preserve the possibility of continued rail service. When no private operator was secured, the state purchased substantial portions of the line in 1963.[10] Following formal abandonment in 1963, much of the remaining right-of-way, track, and facilities were acquired by the State of Vermont through the bankruptcy proceedings. A 132.4-mile segment between Union Station in Burlington and Norwood, New York, via the Champlain Islands, Alburgh, Rouses Point, and Malone, was closed in 1961, formally abandoned in 1963, and dismantled in 1964.[11] The removal of this segment left Malone without rail service, following the earlier abandonment of the northern portion of NYCRR's Adirondack Division through the village in 1960.[12]
The westernmost 26 miles of the Rutland's Ogdensburg Division, between Ogdensburg and Norwood, remain in service and are operated by VTR. As a result, all remaining former Rutland trackage is now operated by a single company. Ownership of the former roadbed between Norwood and Burlington has since been dispersed. Portions have been converted to recreational rail trail use, including a 21-mile segment between Norwood and Moira that forms part of the multi-use Rutland Trail. Other former sections have been incorporated into the Hudson & Delaware, Corkscrew, and Alburgh Recreation rail trails, respectively.
Passenger service returned to the Rutland–Burlington route in 2022, when Amtrak extended the Ethan Allen Express to Burlington.[13]
Steamtown
Prior to its relocation to Scranton, Pennsylvania, the Steamtown Foundation operated excursion trains from its museum site near Bellows Falls to Chester, Vermont. Following Steamtown's departure, additional tourist operations were conducted over portions of the former Rutland Railroad using original rolling stock.
