Mike, The New York Central and Pennsy merged in the late sixties to become Penn Central. The Penn Central went bust as was inevitable and it was at this point that it became the major component of Conrail, in the seventies. I'm not sure if it was considered legally as a government owned road, but that's what it was. The government up to that point had basically refused to see that it's policies regarding rates, union labor requirements and subsidies to airlines and highway construction made these roads impossible to run at anything but a loss. Eventually they had to let the roads cease operation, which they would have done much sooner if allowed. Once the government started footing the bill (since abandonment of rail service was not an option) they started to see things differently. It took almost 20 years, but Conrail became profitable. And was privitized, and became a property eyed by the other major roads, which prior would have nothing to do with it. It was recently split between Norfolk Southern and CSX. Although not accurate completely, one could say that former NYC lines went to CSX, and former Pennsy lines went to NS. I don't pretend to be an expert on this matter, I have read a lot and remember some. Perhaps others will add or dispute facts.
Gary