EVER SINCE the wreck of the Penn Central and other ballads of bankrupt train service in the Northeast seven years ago, the federal government has been working on the railroad--and vice versa--to the tune of millions of dollars. The result is called Conrail, the Consolidated Rail Corporation, and to the surprise and delight of all skeptics, this great government-issue gamble seems to have started turning a profit. What it means, if this keeps up, is that Conrail could--and should--stay in one piece when it is ultimately sold. And that is good.

The result would be preservation of single-railroad freight service for the Northeast--instead of a piece- at-a-time selling off of Conrail and the abandonment of any leftovers. The credit for this considerable accomplishment goes to Conrail's exceptional management, led by L. Stanley Crane, former president of Southern Railway. With keen insight, careful negotiation and some painful contractions of service and jobs, Conrail has beaten the odds even as hard times have hit its big customers, which are automobiles and steel.

Deregulation helped; with less red tape, Conrail could sell services to shippers more easily, and did. Congress let management get out of the passenger business, leaving commuter trains for state and local management. There were significant labor concessions, too, on everything from wages to severance buyouts and jobs simply lost by the thousands. Underused tracks were abandoned, which lost friends in towns along the way. When the recession caused a $585 million revenue loss, Conrail management met it head on, matching it with cuts in costs.

Today, the U.S. Railway Association, the government monitoring agency charged with overseeing and reporting on Conrail, will issue its report to Congress, officially noting that the railroad will be a "profitable carrier."

One key will be the continued cooperation of labor, which so far has been a sophisticated partner in the difficult periods of consolidations--and may wind up as Conrail's buyer, under a consortium called the Railway Labor Executives Association. For now, at least, Conrail can stay in one piece, keeping up its battle to collect more money than it spends.