AMENDMENT NO. 1

                              to the

                      TRANSACTION AGREEMENT

                           by and among

                         CSX CORPORATION,

                    CSX TRANSPORTATION, INC.,

                   NORFOLK SOUTHERN CORPORATION

                NORFOLK SOUTHERN RAILWAY COMPANY,

                          CONRAIL INC.,

                  CONSOLIDATED RAIL CORPORATION

                               and

                         CRR HOLDINGS LLC

                    Dated as of June 10, 1997

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                          AMENDMENT NO. 1

     THIS AMENDMENT NO. 1 dated as of August 22, 1998 is by and
among CSX CORPORATION, a Virginia corporation ("CSX"), CSX
TRANSPORTATION, INC., a Virginia corporation, for itself and on
behalf of its controlled Subsidiaries (collectively, "CSXT"),
NORFOLK SOUTHERN CORPORATION, a Virginia corporation ("NSC"),
NORFOLK SOUTHERN RAILWAY COMPANY, a Virginia corporation, for
itself and on behalf of its controlled Subsidiaries
(collectively, "NSR"), CONRAIL INC., a Pennsylvania corporation,
for itself and on behalf of its controlled Subsidiaries
(collectively, "CRR"), CONSOLIDATED RAIL CORPORATION, a
Pennsylvania corporation ("CRC"), and CRR HOLDINGS LLC, a
Delaware limited liability company ("CRR Parent").

     WHEREAS, CSX, CSXT, NSC, NSR, CRR, CRC and CRR Parent have
entered into that certain Transaction Agreement dated as of June
10, 1997 (the "Agreement").

     WHEREAS, The Parties to the Agreement have determined to
amend the Agreement to increase the size of the Board of
Directors of CRC under the Agreement as set forth herein.
     Accordingly, the parties agree as follows:

     SECTION 1.  Definitions.  Capitalized terms used in this
Amendment and not defined herein shall have the meanings assigned
to such terms in the Agreement.

     SECTION 2.  Amendments of the Agreement.  The Agreement is
hereby amended pursuant to and in compliance with Section 11.1 as
set forth below:

     (a)  The text of subsection 4.2(a) is hereby deleted in
entirety and the following substituted therefor:

          "Following the Control Date, the business and affairs
          of CRC shall be managed under the direction of the CRC
          Board consisting of eight persons divided into two
          classes of four directors.  Four directors shall be
          designated by CSX (the "CSX Directors") and four
          directors shall be designated by NSC (the "NSC
          Directors")."

     SECTION 3.  Effectiveness.  This Amendment shall become
effective as of August 22, 1998 (the "Amendment Date").

     SECTION 4.  Integration; Confirmation.  On and after the
Amendment Date, each reference in the Agreement to "this
Agreement," "herein," "hereunder" or words of similar import, and
each reference in any Note or other document delivered in

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connection with the Agreement shall be deemed to be a reference
to the Agreement as amended by this Amendment, and the Agreement
as so amended shall be read as a single integrated document.
Except as specifically amended by this Amendment, all other terms
and provisions of the Agreement shall continue in full force and
effect and unchanged and are hereby confirmed in all respects.

     SECTION 5.  Counterparts.  This Amendment may be signed in
any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument.

     SECTION 6.  Governing Law.  This Amendment shall be
construed in accordance with and governed by the law of the State
of New York.

     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.

                         CSX CORPORATION

                         By:  /s/ Paul R. Goodwin
                              Name:  Paul R. Goodwin
                              Title: Executive Vice President -
                                     Finance and Chief Financial
                                     Officer


                         CSX TRANSPORTATION, INC.
                         (for itself and on behalf of its
                          controlled Subsidiaries)

                         By:  /s/ Michael Ward
                              Name: Michael J. Ward
                              Title: Executive Vice President -
                                     Finance and Chief Financial
                                     Officer


                         NORFOLK SOUTHERN CORPORATION

                         By:  /s/ S. C. Tobias
                              Name: S. C. Tobias
                              Title: Vice Chairman and Chief
                                     Operating Officer


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                         NORFOLK SOUTHERN RAILWAY COMPANY
                         (for itself and behalf of its controlled
                         Subsidiaries)

                         By:  /s/ S. C. Tobias
                              Name: S. C. Tobias
                              Title: Vice President and Chief
                              Operating Officer


                         CONRAIL INC. (for itself and on behalf
                         of its controlled Subsidiaries)

                         By:  /s/ Timothy O'Toole
                              Name: Timothy O'Toole
                              Title: President


                         CONSOLIDATED RAIL CORPORATION

                         By:  /s/ Timothy O'Toole
                              Name: Timothy O'Toole
                              Title: President


                         CRR HOLDINGS LLC

                         By:  /s/ S. C. Tobias
                              Name: S. C. Tobias
                              Title:  Vice President


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