Under the 1973 3R Act, the ailing Northeast railroads were joined together in preparation to form Conrail. In 1974 creditors had ruled under Chapter 77 that the Boston & Maine Railroad, originally included in the 3R Act, was financially stronger than the other roads and opted out. While they chose to stay out, stating that they could survive on their own, the creditors wanted to liquidate the B&M. It is reported that many of the B&M’s creditors also had financial ties to Penn Central, and it is suspected that they could have actually lessened their Penn Central losses by selling the B&M, and thus also eliminating Penn Central competition in the Northeast.

Struggling in a dying market where Conrail was slightly beginning to turn around, the Boston & Maine inched closer and closer to complete bankruptcy. It was all too clear to B&M’s President Alan Dustin that the northern New England’s railroads were doomed. In late 1979 he began to pressure the board of directors of US Filter, then owner of the Maine Central, to merge the two roads. The B&M and MEC always having ties, Dustin stated to the US Filter board that he could convince the B&M Trustees that with the two lines merged and with lobbying in Congress that they could provide a profitable, and possibly an improved rail network in New England. With approval from the US Filter board, Dustin approached his own Trustees, on what he knew would be a hard sell. Still seeking to cut their losses the railroad, the Trustees at first were adamant that they would have no merger with Maine Central, arguing that another Penn Central style merger with such meager funds would ruin the northeast and that they were still under intense pressure from the creditors. Distraught, Dustin banded with Conrail and lobbied Congress to end the archaic control that the ICC was placing on the railroads, stating that the reason that the industry was failing was because of the ICC’s interline pricing and unreasonably lengthy hearing processes. Legislation was soon introduced in the summer of 1980, with what would be known as the Staggers Act. Meeting again with his Trustees, Dustin argued that if the B&M, as well as other railroads, could escape the ICC controls, that they could become profitable again. The trustees, who preferred to keep the system whole, agreed stating that they would consent to a merger with the Maine Central, only if the Staggers Act passed. In 1980, the Staggers Act was passed, and on November 1, 1980 the Boston & Maine, and Maine Central merged.

With the ICC’s control over the railroads significantly reduced, many struggling lines were able to set their own rates, and eliminate track that was not profitable. The merged lines began to come into the black with the Staggers act, and for the first time since the 1960’s, the combined B&M, MEC announced a profit of $2 million on March 26, 1982. However both roads could not overcome bad decisions made by prior management and lines and equipment that had long been subject to deferred maintenance continued to deteriorate. Needed capital was hard to come by as B&M/MEC did not have the federal funding that Conrail had, and already pleateaud traffic was only covering minor repairs to infrastructure

In September of 1984 Dustin approached L. Stanley Crane, the head of Conrail, to plead his case to reintroduce the idea of the B&M being included in Conrail. Both men aggreed that it was in the best interest for the Northeast rail network and economy, but had to act quickly as Transportation Secretary Dole was seeking to sell Conrail to the highest bidder. After considerable debate in Congress, a bill was drafted by membersto transfer the B&M and MEC to Conrail, and signed by President Reagan in the spring of 1985. Soon after the Conrail Privatization Act of 1986 was signed into law by President Reagan on October 21, 1986 realinving the US Governemnt of Conrail and placing it in to the hands of private investors.

Conrail's continued sucess helped to revitilze the railroad network in New Hampshire and Maine even further. Better maintanied equipment and track helped separate the Conrail ownership from that of the former roads. Conrail was swift to rationalize the vast B&M and MEC network even more than what had been done by Dustin, leaving only the lines that were necessary, and contributed more than 1% of profit to the new "Amoskeag Northern" Division.