SC 14D1/A

                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549


                               SCHEDULE 14D-1
                             (AMENDMENT NO. 3)
            TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                                    AND
                                SCHEDULE 13D
                             (AMENDMENT NO. 5)

                                CONRAIL INC.
                         (Name of Subject Company)

                        NORFOLK SOUTHERN CORPORATION
                      ATLANTIC ACQUISITION CORPORATION
                                 (Bidders)

                  COMMON STOCK, PAR VALUE $1.00 PER SHARE
          (INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
                       (Title of Class of Securities)

                                208368 10 0
                   (CUSIP Number of Class of Securities)

                      SERIES A ESOP CONVERTIBLE JUNIOR
                     PREFERRED STOCK, WITHOUT PAR VALUE
          (INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
                       (Title of Class of Securities)

                               NOT AVAILABLE
                   (CUSIP Number of Class of Securities)

                            JAMES C. BISHOP, JR.
                        EXECUTIVE VICE PRESIDENT-LAW
                        NORFOLK SOUTHERN CORPORATION
                           THREE COMMERCIAL PLACE
                        NORFOLK, VIRGINIA 23510-2191
                         TELEPHONE: (757) 629-2750
          (Name, Address and Telephone Number of Person Authorized
         to Receive Notices and Communications on Behalf of Bidder)

                              with a copy to:

                           RANDALL H. DOUD, ESQ.
                  SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                              919 THIRD AVENUE
                          NEW YORK, NEW YORK 10022
                         TELEPHONE: (212) 735-3000



      This Amendment amends the combined Tender Offer Statement on Schedule
14D-1 initially filed on February 12, 1997, as amended, and the Schedule
13D initially filed on February 5, 1997, as amended (the "Combined
Statement"), by Norfolk Southern Corporation, a Virginia corporation
("Parent"), and its wholly owned subsidiary, Atlantic Acquisition
Corporation, a Pennsylvania corporation ("Purchaser"), relating to
Purchaser's offer to purchase all outstanding shares of (i) Common Stock,
par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP
Convertible Junior Preferred Stock, without par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares"), of Conrail
Inc. (the "Company"), including, in each case, the associated Common Stock
Purchase Rights, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated February 12, 1997 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, together constitute the
"Second Offer"). Unless otherwise defined herein, all capitalized terms
used herein shall have the respective meanings given such terms in the
Offer to Purchase or the Combined Statement.

 ITEM 11.  MATERIAL TO BE FILED AS EXHIBITS.

      Item 11 is hereby amended and supplemented by the following:

      (a)(10)     Customer Letter dated October 28, 1996 (incorporated by
                  reference to Exhibit (a)(12) to Parent's and Purchaser's
                  Tender Offer Statement on Schedule 14D-1, dated October
                  24, 1996, as amended on October 30, 1996).

      (a)(11)     Press Release issued by Parent on October 30, 1996,
                  including Parent's Principles of Balanced Rail
                  Competition (incorporated by reference to Exhibit (a)(13)
                  to Parent's and Purchaser's Tender Offer Statement on
                  Schedule 14D-1, dated October 24, 1996, as amended on
                  October 30, 1996).

      (a)(12)     Text of Testimony by James L. Granum, Vice
                  President-Public Affairs of Parent, before the joint New
                  Jersey Assembly Transportation and Communications
                  Committee and Senate Transportation Committee on February
                  24, 1997.

      (a)(13)     Text of Information which may be distributed to certain
                  Company shareholders.




                                   SIGNATURE

      After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.

Dated:  February 24, 1997

                                   NORFOLK SOUTHERN CORPORATION

                                   By: /s/ JAMES C. BISHOP, JR.
                                       ---------------------------
                                   Name:  James C. Bishop, Jr.
                                   Title: Executive Vice President-Law


                                  ATLANTIC ACQUISITION CORPORATION

                                  By: /s/ JAMES C. BISHOP, JR.
                                      -----------------------------
                                  Name:  James C. Bishop, Jr.
                                  Title: Vice President and General Counsel




                                 EXHIBIT INDEX

Exhibit
Number                  Description
- -------                 -----------

(a)(10)     Customer Letter dated October 28, 1996 (incorporated by
            reference to Exhibit (a)(12) to Parent's and Purchaser's Tender
            Offer Statement on Schedule 14D-1, dated October 24, 1996, as
            amended on October 30, 1996).

(a)(11)     Press Release issued by Parent on October 30, 1996, including
            Parent's Principles of Balanced Rail Competition (incorporated
            by reference to Exhibit (a)(13) to Parent's and Purchaser's
            Tender Offer Statement on Schedule 14D-1, dated October 24,
            1996, as amended on October 30, 1996).

(a)(12)     Text of Testimony by James L. Granum, Vice President-Public
            Affairs of Parent, before the joint New Jersey Assembly
            Transportation and Communications Committee and Senate
            Transportation Committee on February 24, 1997.

(a)(13)     Text of Information which may be distributed to certain Company
            shareholders.

EX-99

                                                          [Exhibit (a)(12)]

                        TESTIMONY OF JAMES L. GRANUM
                  REGARDING NORFOLK SOUTHERN CORPORATION'S
                      PROPOSED ACQUISITION OF CONRAIL


                      BEFORE THE JOINT PUBLIC HEARING
                        SPONSORED BY THE NEW JERSEY
            ASSEMBLY TRANSPORTATION AND COMMUNICATIONS COMMITTEE
                    AND SENATE TRANSPORTATION COMMITTEE
                         MONDAY, FEBRUARY 24, 1997



        Good morning, and thank you for this opportunity. My name is
James L. Granum, Vice President, Public Affairs, for Norfolk Southern
Corporation. I work out of Washington, D.C. Accompanying me today is
Steve Eisenach, Director, Strategic Planning, from Norfolk Southern
headquarters in Norfolk, Virginia; Jim Blaze, of the Kingsley Group of
Marlton, New Jersey; and Roger Bodman, of Public Strategies/Impact of
Trenton. Mr. Blaze and Mr. Bodman have been retained by Norfolk Southern
to assist in our Conrail acquisition effort.

        I'd like to take this opportunity to accomplish three things.
First, I want to tell you something about Norfolk Southern. Then, I'd
like to inform you of the benefits of a Norfolk Southern merger with
Conrail. Finally, I hope to persuade you to endorse Norfolk Southern's
plan to open the State of New Jersey and the Port of New York/New Jersey
to rail-to-rail competition. After that, we'll be glad to answer
questions.

        Some basics about Norfolk Southern: We are the fourth largest
freight railroad in the United States. We own more than 14,000 miles of
track throughout the Midwest and Southeast. We haul anything that moves
by rail, but primarily, coal, chemicals, automobiles, auto parts, grain,
paper and construction materials. Importantly for New Jersey, we also
move truck trailers and containers--known as intermodal freight--because
it moves over more than one kind of transportation; trains and trucks,
trains and ships.

        Norfolk Southern is known for running a 'mighty fine line,' to
steal a line from an old song. We are the safest big railroad on the
continent and have been for eight years running. Because of our
proficient and dedicated employees, we win awards for service to our
customers. We are admired by our peers: Fortune magazine just this month
named Norfolk Southern "most admired" among large railroads--the second
year in a row we've topped the list, and we ranked in the top ten percent
of all 431 companies in the Fortune survey.

        And, we make money for our shareholders. We grossed $4.8 billion
in 1996 and brought $770 million down to the bottom line. We are proud
that we have the lowest ratio of operating expenses to revenue of all the
major railroads, which enables us to maintain and reinvest in our
railroad at higher levels than others in the industry.

        Norfolk Southern achieved these outstanding financial results
operating in a fiercely competitive environment. That's why Norfolk
Southern, which has demonstrated its willingness and ability to compete,
vigorously opposes a merger of Conrail with CSX, our strongest and larger
rail competitor. Conrail's neutrality and independence will vanish, and
we will find ourselves shut out of the Northeast, from Baltimore to
Boston.

        That is because our tracks do not go north of Alexandria,
Virginia or Hagerstown, Maryland. We depend on Conrail to move our
customers' freight into the Northeast. As an independent railroad,
Conrail has historically operated as a neutral carrier, serving as a
joint line partner equally well between Norfolk Southern or CSX. Good or
bad, Conrail provides comparable service to all connecting railroads that
want to reach the Northeast, where Conrail is the sole large major
railroad. But Conrail is gone; there is no status quo. CSX/Conrail is not
Conrail.

        Why should you care that Conrail's past neutrality would
terminate under a CSX/Conrail deal? Because competition benefits you, and
a lack of it hurts you. In practice, Conrail has only minimal rail
competition in New Jersey and in the New York/New Jersey Port area today.
Is it a coincidence that economic development in New Jersey has stagnated
under twenty years of Conrail dominance? If Conrail and CSX combine, then
Conrail's lock on the region will intensify.

        CSX and Conrail will tell you that they will offer single-system
service to more places and that they will be more efficient than an
independent Conrail. They may even suggest that by introducing
competition to New Jersey as Norfolk Southern proposes, railroad costs
will go up and rates will increase. If you believe that, I have a bridge
to sell you. In the absence of competition, a beneficial monopoly is
rarer than a benevolent dictatorship. Which would you trust more to
ensure competitive rates and services? CSX promises or the marketplace?

        They also say that rail-to-rail competition is not important.
Maybe that's because Conrail has not experienced rail-to-rail competition
before--only truck. While CSX claims that its acquisition of Conrail will
take trucks off highways, CSXT's record does not support the rhetoric.
Since 1988, when both CSXT and Norfolk Southern began serious intermodal
initiatives, Norfolk Southern intermodal traffic grew 94 percent--more
than double the industry growth rate. During the same period CSXT
intermodal traffic was flat and trailed industry growth, while Conrail
intermodal growth only tracked the industry average with a 43 percent
gain. Who do you want leading the charge to relieve highway truck
congestion into and out of New Jersey? Last year we handled 59,000 units
for one trucking company alone. Norfolk Southern has the best record of
intermodal growth and terminal investment to support customer
requirements.

        New Jersey is part of the largest consumer market in the United
States. The Port of New York/New Jersey, the largest East Coast container
port, is the first call in the eastern U.S. for most North Atlantic
shipping lines. All other major U.S. East Coast ports are served by two
competing major railroads, but the Port of New York and New Jersey does
not enjoy this advantage. Knowing how competitive ports are with each
other and how much public investment there is in their facilities, can
the Port afford to be captive to one railroad while the competition--such
as Hampton Roads--continues to be served by two?

        Norfolk Southern wants to merge with Conrail. In fact, we've been
wanting to join up with them longer than anyone. We like to say: Why Not
the Best? If Conrail is going to be sold, we offer a better deal, a
better plan, less route overlap, and will execute a better merger. We
have offered Conrail's owners the best financial terms--$115 a share, all
cash, for all shares. Approximately two-thirds of Conrail's shareholders
endorsed the Norfolk Southern offer with their January rejection of the
Conrail/CSX deal; twenty-nine percent of Conrail's employee plan shares
voted against the CSX deal. Even so, Conrail's board continues to
reject our superior offer.

        Thankfully for all of us, federal regulators--the Surface
Transportation Board--ultimately will decide who will merge with whom.
The Board is charged by law with advancing the national transportation
policy. It represents the public interest. We intend to file an
application with the Board in April seeking permission to merge with
Conrail. We believe that a Conrail-Norfolk Southern merger will prevail
at the Surface Transportation Board because it preserves two-railroad
competition to all major markets in the Northeast, restores rail
competition to New Jersey for the first time in twenty years, and assures
that the competitive balance that has been achieved among major Western
railroads will also be achieved in the Eastern United States.

        Norfolk Southern's is the only plan that will introduce another
major rail carrier into the region over owned routes and with access to
owned terminals. The Norfolk Southern plan will implement the vision of
competitive rail service in New Jersey and the entire Northeast and Mid
Atlantic Region intended by Congress and the United States Railway
Association planners in the 1970s when Conrail was originally created.
Our offer is clearly in the public interest.

        Here are some of the things a Conrail-Norfolk Southern
combination can do for New Jersey and why we hope the State will endorse
our acquisition effort. Conrail plus Norfolk Southern will:

o       Open the Port area between Conrail's Port Reading and Croxton
        Yards, roughly between Woodbridge and Secaucus, to another Class
        I carrier. This includes competitive access to rail stations and
        customers within that terminal area, direct access to Port Newark
        and Port Elizabeth; and connections to all Port-area short lines.
        The new competitor will also have exclusive ownership of
        Conrail's Croxton intermodal terminal and the ability to build an
        automobile or other terminal on its own property.

o       Extend single-line service for the first time from New Jersey
        west to Kansas City, where Conrail plus Norfolk Southern will
        connect with all western railroads. This will supplement
        Conrail's existing Chicago to St. Louis service.

o       Serve New Jersey with expanded RoadRailer(R) service to southern
        and midwestern destinations.

o       Provide shorter, faster, north-south double-stack routes via
        Harrisburg, Pennsylvania, and Hagerstown, Maryland and east-west
        routes via Kansas City, Chicago, and St. Louis.

o       Clear the Pattenburg tunnel to provide for a new double stack
        route between Harrisburg and Newark via Allentown. Conrail has
        repeatedly refused to make the necessary tunnel improvements
        because the Canadian Pacific has rights over that route, and
        Conrail has sought to protect its own double-stack stranglehold
        on the Port.

o       Introduce another rail competitor for the New York/New Jersey
        automobile distribution market.

o       Bring to New Jersey communities the benefits of the consistently
        aggressive and successful Norfolk Southern Industrial
        Development Department. Norfolk Southern's economic development
        efforts, in conjunction with the states and communities it
        serves, located 8 of the last 11 new auto assembly
        plants--including BMW and Mercedes Benz--on Norfolk Southern
        lines. Major industries today require access by two railroads
        when making site selection decisions. The Norfolk Southern plan
        will help New Jersey create new jobs through economic
        development.

o       Introduce New Jersey citizens to a company that prides itself on
        being a good corporate citizen, is proud of its heritage,
        recognizes and honors the rich heritage of Conrail and its
        predecessor companies, and salutes the pride New Jersey has in
        its own rich railroad past as the gateway from which countless
        immigrants left Ellis Island and ventured off via the iron horse
        to begin a new life. To that end, we are aware of efforts to
        establish a railroad Heritage Foundation in the State, and
        while I cannot make any promises here today, we are at least
        willing to consider what role we can play in promoting that
        effort. But please bear in mind that we will never lose sight of
        our number one objective to provide safe, customer-focused, and
        competitive freight rail service.

    Our proposed merger should have little impact on New Jersey
employees. Since there is no Norfolk Southern and Conrail overlap in New
Jersey, there are no redundant yards, no redundant terminals and no
redundant diesel shops. Nor redundant workers.

    In the front of the gray folders we distributed, you will find a
single sheet titled "Principles of Balanced Rail Competition." This is
Norfolk Southern's written commitment that, by merging with Conrail, we
will make sure that the largest markets, including New Jersey, will be
served by two large railroads.

    Norfolk Southern has met repeatedly with representatives from the New
Jersey Department of Transportation, the Port of New York/New Jersey, the
North Jersey Transportation Planning Authority, Southern New Jersey
Development Council, New Jersey Transit, and the New Jersey Short Line
Association. We have met with Union County community leaders. We have
had frank exchanges of information. Much of what we have learned will
find its way into the merger application we file with the Surface
Transportation Board.

    To summarize: We believe that only Norfolk Southern's merger with
Conrail will prevent New Jersey from becoming increasingly captive to a
monolithic rail carrier. We want the opportunity to show you what
rail-to-rail competition will mean for New Jersey, its highways, and
its air quality. And we want to work with you to stimulate economic
development within your borders.

    In closing, we'd like to ask three things of you: First, support our
effort. Second, if for whatever reason you can't endorse our merger
proposal, come out in favor of the "Principles of Balanced Rail
Competition," as described on the sheet in your information packet. Make
sure Governor Whitman and New Jersey's congressional delegation know that
you support these principles. Third, give us your feedback. We want to
know what matters to you and your constituents.

    Thank you. We'll be glad to answer any questions you may have.

                                   ###

EX-99

                                                        [Exhibit (a)(13)]
                                  CR+NS

                            The Better Choice

Norfolk Southern's acquisition of Conrail is the last chance to assure
that there will be balanced, competitive rail transportation in the East
and the service reliability and quality that competition assures. With
many experts predicting a final round of consolidation that will result
in the nation being served by just two transcontinental rail systems, it
is essential that competition in the East be maintained and strengthened.

Railroad Mergers -- A Natural Trend

        Railroads have been merging almost since the first trains ran in
the United States. A common theme has run through the industry's mergers
right from the start. By combining, railroads could serve more customers
more efficiently with broader networks and provide better service to
those customers.

        Driven by globalization of trade and customer demand that
transportation providers serve even larger territories and offer more
complete and better service, railroad consolidation in recent years has
spurred the creation of large carriers that operate extensive networks
throughout several regions of the United States.

        From approximately 40 Class I railroads that were in business in
1980 when the industry was deregulated, mergers have shrunk the roster to
today's five giant systems. The West is blanketed by two companies, Union
Pacific and Burlington Northern Santa Fe, while three carriers, Conrail,
Norfolk Southern and CSX Transportation, cover the East. History reveals
that current efforts to acquire Conrail should come as no surprise.

CR+NS -- Transportation Excellence

        History does not teach that all mergers are equal in benefit or
harm. Some mergers are better than others. CR+NS will be superior to a
CSX/CR combination in many ways.

        Customers throughout the northern U.S. will gain the benefits of
Norfolk Southern intermodal expertise. Norfolk Southern's intermodal
traffic has grown at twice the industry rate in the last decade and
reflects Norfolk Southern's expertise and interest in shorter haul
intermodal traffic. Every intermodal unit handled by CR+NS is one more
long haul truck off northeastern highways.

        While railroads now dominate the long haul movement of truck and
container freight, over-the-road truckers still prevail in short haul
markets. CR+NS will change that. Rail intermodal traffic generally is
competitive with trucks on hauls of 750 miles or more, but NS is
competitive on hauls as short as 500 miles.

        Norfolk Southern will extend its bimodal Triple Crown service
into new markets as well.

        CR+NS will bring to employees and communities the benefits of a
consistently aggressive and successful industrial development department.
Norfolk Southern's economic development efforts, in conjunction with the
states and communities it serves, located 8 of the last 11 new auto
assembly plants on Norfolk Southern.

        CR+NS will open markets throughout the eastern U.S. to more
efficient single line service. For example, paper movements from plants
in the Southeast to northeastern markets will benefit. Improved car
utilization for clay shippers with movements to the Northeast will result
from elimination of interchange inefficiencies.

        Extensive new direct, through services will be created. CR+NS
will create a lot of new and faster carload services by using the best
routes and best yards of the combined company.

        New service will link Conrail points with Kansas City. The NS
route bypasses congested terminals in both Chicago and St. Louis. New
carload service will operate down the Eastern Seaboard, providing direct
service between Philadelphia, Wilmington and Baltimore and the Southeast.
Another new carload service will operate directly from the Northeast to
the Southeast on a shorter, faster route than the current I-81 corridor.
Traffic that now moves the long way around via Cincinnati in joint line
service now will follow these direct routes, saving both time and
mileage.

        CR+NS will bring to the Northeast rail operations that
consistently have a lower ratio of operating expenses to revenue than any
other major railroad. This efficiency is achieved through the dedication
and discipline of Norfolk Southern employees. Conrail employees will
become part of a system with the best safety record in the industry and
that is widely regarded as the best-run and most efficient railroad.

        Conrail and CSX facilities overlap in 60 communities, and
Conrail's major Hollidaysburg and Altoona, Pa., car and locomotive shops
are just 70 miles from CSX's facilities at Cumberland, Md. With far less
overlap, CR+NS is likely to see far fewer job losses.

        Basically, CR+NS are an end-to-end merger with fewer competitive
problems than a CSX/CR merger creates.

        Balanced competition will stimulate even greater economic
activity in the region, resulting in more growth opportunities and job
creation under CR+NS.

CR+NS -- Balanced Competition

        Unlike the competing CSX/CR plan, CR+NS is pro-competitive.
Putting substance to its "Principles of Balanced Competition," Norfolk
Southern is committed as part of its merger plan to assure competitive
balance throughout the region by transferring lines to competitors.
Norfolk Southern and CSX already compete vigorously throughout the
Southeast and much of the Midwest, although CSX is the larger railroad.
Conrail, created by the federal government in 1976 following the
bankruptcy of six eastern railroads, has a virtual monopoly in the vital
New York market, and dominates other parts of the Northeast.

        A merger of Conrail with either NS or CSX would create an
unbalanced rail transportation environment throughout the East unless
steps are taken to restore the balance. CSX/CR would dominate rail
transportation with almost 70% of the market by revenue; without a
competitive remedy the CR+NS market share would be approximately 61%.
Norfolk Southern will take positive steps to remedy the imbalance.

What is Balanced Competition?

        Balance is not merely the act of changing colors of lines on a
map. Competitive balance is a combination of market share, geographic
coverage, market access and commodity diversity.

        That is the situation that prevails in the West. Union Pacific
and Burlington Northern Santa Fe both go just about everywhere and are
comparable in size, although UP is slightly larger. Neither is dependent
on a single commodity for its future. Balance assures that neither
western carrier is in a position to dominate the rail transportation
market and reduce competitive options for freight shippers.

        In the Southeast, CSX and NS long have competed on relatively
equal terms. CSX enjoys broader geographic coverage and a 55% market
share, but NS is more profitable. As an independent carrier, Conrail acts
as a "neutral" in the Northeast, even though it competes with NS and CSX
in the Midwest. Today, both NS and CSX must interchange freight with
Conrail to reach customers in the Northeast. A merged Conrail, with
either NS or CSX, affects much more than the Northeast. Absent the kind
of competitive balance Norfolk Southern proposes and which exists in the
West and Southeast today, the merged carrier would not only dominate the
Northeast, it would extend that domination south and westward.

        As a result, the non-merging carrier would be forced to
interchange much of its traffic with its competitor and eventually would
be driven from now competitive markets. This elimination of competitive
service would not be good for freight shippers any more than it would be
good for the losing railroad.

        With CSX/CR, 64 cities face a reduction from two competing
railroads to one, compared with only 38 two-to-one points under CR+NS.
CSX/CR results in 7 cities with more than 100,000 population -- Baltimore;
Philadelphia; Pittsburgh; Indianapolis; Dayton, Ohio; Grand Rapids,
Mich., and Youngstown, Ohio -- in the two-to-one category. CR+NS produces
only two -- Erie, Pa., and Fort Wayne, Ind. Similarly, only one short
line railroad would lose competitive connections under CR+NS, while 18
would become totally tributary to CSX/CR. Norfolk Southern will maintain
competition at all those points.

Creation of Balanced Competition

        While a CR+NS combination has much less geographic overlap than
CSX/CR, Norfolk Southern is committed to preserving competition where the
systems overlap. Norfolk Southern will go farther, by opening the
Northeast -- most significantly the New York/New Jersey metropolitan area
and the vital ports in that region -- to service by two strong
competitors for the first time in more than 20 years. This will bring
competitive balance between CR+NS and CSX closer to 55%-45%. It also will
assure that freight shippers will have competitive options throughout the
eastern half of the nation.

        Norfolk Southern will further assure that competition is real by
transferring ownership of competing lines. Through ownership, carriers
can differentiate their service and make normal business decisions about
capacity and investment. This is necessary in the Northeast, where NS and
CSX lack market presence and facilities in numerous major markets. In the
West, both large rail systems already were in most markets and grants of
trackage rights could fine-tune competitive balance.

CR+NS -- Benefits for All Constituencies

        Norfolk Southern recognizes the public policy benefits of market
share and geographic coverage balance. Basically, CR+NS has fewer
disruptions to communities, workers and short line railroads than would a
CSX/CR combination, as well as far greater service and efficiency
benefits.

        For rail service customers, for rail employees, for the
communities we serve, for the deregulated rail industry, and for the
public at large, CR+NS clearly is

                            The Better Choice!


02/06/97


                                  CR+NS

                            The Better Choice
                                   for
                                NEW JERSEY


The State of New Jersey as well as rail customers and consumers in the
State will benefit greatly as a result of Norfolk Southern's acquisition
of Conrail and the related competitive alternative package.

Balanced Competition

Conrail dominates rail transportation in New Jersey today, with 100
percent of the Class 1 mileage in the state. The Conrail + Norfolk
Southern combination will restore true competition in New Jersey, with
two Class I railroads serving both carload and the fast-growing
intermodal markets.

Norfolk Southern is committed to balanced rail competition. The Norfolk
Southern application to acquire Conrail, to be filed with the Surface
Transportation Board within two months, will offer a competitive
alternative package that ensures freight shippers and receivers rail
pricing and service options.

Meaningful rail competition has certain minimum requirements: 
       o    competing rail networks must be of comparable size 
       o    major markets must be served by two large railroads 
       o    railroads must own their own routes to/from most
            major markets 
       o    competing railroads must have effective access to
            terminals.

New Jersey is part of the largest consumer market in the United States.
The Port of New York and New Jersey, the largest East Coast container
port, is the first call in the eastern U.S. for most steamship lines. All
other major U.S. East Coast ports are served by two competing major
railroads, but the Port of New York and New Jersey does not enjoy this
advantage.

Today, Conrail is a neutral carrier for freight moving between regions of
the country, interchanging freight with CSXT, Norfolk Southern Railway
and western railroads without preference. These interline options give
many New Jersey rail customers price, service, and routing alternatives.
A CSX/CR combination, however, would reduce competition by extending
Conrail's current domination of New Jersey into areas previously served
by interline service. Conrail's current neutral position on NS and CSXT
interline traffic would disappear, and even the limited current interline
service and rate competition would end.

In contrast Norfolk Southern's competitive alternative package will
assure that two major railroads will serve New Jersey. Full competitive
rate and route choices will be created for New Jersey freight customers.

Norfolk Southern's competitive alternative package will implement the
vision of competitive rail service in New Jersey and the entire Northeast
and MidAtlantic Region intended by Congress and United States Railway
Association planners in the 1970s when they dealt with the collapse of
the Penn Central and five other eastern railroads. The original
restructuring plan provided for competitive rail service into New Jersey
and other areas where Conrail today overwhelmingly dominates rail
service.


                                  CR+NS
                            The Better Choice
                                   for
                                NEW JERSEY


Service and Pricing Benefits

CR+NS will open the New Jersey market and port to service from two major
Class I railroads. As a result, New Jersey rail customers will have a
choice between two competitive east-west routes and two competitive
north-south routes from northern New Jersey. In southern New Jersey the
Philadelphia/Camden area also will enjoy two carrier competitive service.
This additional service option will ensure that businesses moving goods
to and from New Jersey will be able to make transportation choices based
on price, service and safety --particularly important to chemical
customers. Such head-to-head competition between railroads of similar
size can change market prices and generate new business.

CR+NS will bring to New Jersey communities the benefits of the
consistently aggressive and successful NS Industrial Development
Department. Norfolk Southern's economic development efforts, in
conjunction with the states and communities it serves, located 8 of the
last 11 new auto assembly plants -- including BMW and Mercedes Benz -- on
Norfolk Southern lines. Major industries today require access by two
railroads when making site selection decisions. The NS competitive
alternative package will help New Jersey to create new jobs through
economic development.

CR+NS will extend single-line service for the first time from New Jersey
west to Kansas City, where CR+NS will connect with all western railroads
and bypass congestion and costly delays at Chicago and East St. Louis.

Safety in rail operations is particularly important in New Jersey, with
its extensive commuter rail network and the key chemical industry helping
drive the state's economy. In 1995 for the seventh consecutive year,
Norfolk Southern received the Harriman Gold award for outstanding safety
performance in the railroad industry. The company also has received
chemical customer quality awards from BP Chemical, Amoco, Dow Chemical,
DuPont, Occidental, and Air Products and Chemicals. CR+NS will bring rail
service backed by this reputation for quality and safety to New Jersey
chemical companies.

The competitive rail service offered by CR+NS also will make the Port of
New York and New Jersey more competitive for automotive importers. The
international vehicle manufacturers will gain a choice of rail routes and
competing price and service packages to move vehicles and parts into the
rest of the United States. Innovative equipment -- such as the fully
enclosed AutoRailer(R) -- will be offered by the CR+NS bimodal
subsidiary, Triple Crown Services Company.

Competitive intermodal service -- carrying truck trailers and containers
on rail cars --benefits more than just rail freight customers.
Competitive rail service will attract more traffic to rail intermodal and
will divert traffic from trucks. With key stretches of I-95 and other
highways in New Jersey approaching gridlock at times, taking trucks off
the highway produces significant benefits for the region by alleviating
congestion and helping to reduce air pollution.


                                  CR+NS
                            The Better Choice
                                   for
                                NEW JERSEY


NS has a proven record of investing in intermodal terminals and equipment
and new train services to support intermodal growth. While CSX claims
that its acquisition of Conrail will take trucks off highways, CSXT's
record does not support the rhetoric. Since 1988, when both CSXT and NS
began serious intermodal initiatives, NS intermodal traffic grew 94
percent -- more than double the industry growth rate. During the same
period CSXT intermodal traffic was flat and trailed industry growth,
while Conrail intermodal growth only tracked the industry average with a
43 percent gain.

Triple Crown Services Company successfully competes today with
over-the-road trucks in the market for transportation of consumer goods
and industrial material for just-in-time inventory management. CR+NS will
serve New Jersey with expanded RoadRailer(R) service to southern and
midwestern destinations. A larger RoadRailer(R) network will take more
truck traffic off I-95 and will permit CR+NS to provide services that
might not be cost effective or possible with conventional rail service.

For rail service customers in New Jersey, for customer and rail
employees, for the communities we serve, for the deregulated rail
industry, and for the public at large, CR+NS clearly is

                            The Better Choice


02/19/97


[Map of eastern United States showing CSX and Company rail systems.]


[Map of eastern United States showing Parent and Company rail systems.]