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THE ILLINOIS CENTRAL: A CENTENNIAL VIEW
By Robert M. Sutton Instructor in History University of Illinois
Reprinted from
Current Economic Comment
May 1951
Published by the University of Illinois Bureau of Economic and Business Research
ILIINOIS HISTORICAL SURVEY
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The Illinois Central: A Centennial View
Robert M. Sutton Instructor in History, University of Illinois
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WHISTLES BLEW and flags waved on the morning of February 10, 1951, as the Illinois Central Railroad officially opened its centennial celebration. Of the rail lines in the United States, many of which will be observing their centennials during this decade and those shortly to follow, none is more exciting or colorful than the "Main Line of Mid-America." The story of the Illinois Central is a record of trans- formation, growth, and progress adding much to the drama of transportation from the day of the covered wagon to the streamliner of the present.
Across the pages of Illinois Central history move some of the great leaders of this country in the past century, as well as a few of the more colorful per- sonalities who have added zest to the American scene. With Abraham Lincoln, company attorney, heading the list the supporting cast includes George B. McClellan, Grenville Dodge, Sidney Breese, Allan Pinkerton, Ros- well B. Mason, Ambrose E. Burnside, Nathaniel P. Banks, John A. Logan, and, for good measure, "Casey" Jones and Mark Twain.
This was the first railroad to receive a grant of public land, the first to carry on a large-scale colonization pro- gram, and the first to promote rail service to the Gulf region. Portions of this present-day system served under both Union and Confederate flags dur- ing the War Between the States, and probably did more than any other private agency to hasten the re-estab- lishment of commercial relations be-
tween the North and the South, once the conflict was over.
Today the Illinois Central, with its affiliated lines, constitutes one of the vital north-south railroad systems of the country, extending the length of the Mississippi Valley from the Great Lakes to the Gulf of Mexico. As the "Main Line of Mid-America" it serves this vast region, which Alexis de Tocqueville once called "the most mag- nificent dwelling place prepared by God for man's abode." The Illinois Central operates 6,542 miles of main line and branches located in fourteen states of the Middle West and South, and it is one of the few major systems in the country operating in a predom- inantly north-south direction. Its main line links Chicago, focal point of twen- ty-three railroad systems and the world's greatest railroad center, with New Orleans, the Crescent City, second most important seaport in the country in value of commerce and itself served by eleven railroads.
Before glancing back over the cen- tennial history of the "Main Line of Mid-America" let us briefly examine the factors which make a railroad significant, as well as prosperous, in our time.^ The most trustworthy gauge of the economic health and efficiency of a rail line is a knowledge of the amount of traffic which moves over its route.
' For an excellent, full-length treatment of the history of the Illinois Central Railroad and its affiliated lines, see Carlton J. Corliss, Main Line of Mid-America: The Story of the Illinois Central (New York: Creative Age Press, 1950).
CURRENT ECONOMIC COMMENT
The sum total of operating revenues, whether derived from freight, passen- ger, express, baggage, or mail service, makes possible, in turn, payments for wages and salaries, purchase of new equipment, repair of property and roll- ing stock (including maintenance of way), taxes, debt retirement and divi- dends — in short, everything for which a railroad company spends its money.
Freight Traffic
The most important single character- istic of the freight traffic handled by the Illinois Central is its diversification. With the exception of coal, no par- ticular commodity normally contributes as much as 10 percent of the total freight tonnage. In addition to the products of mine, forest, and farm, the road reaps the benefit of a widely varied and rapidly expanding industry over the entire line. Because of the nature of the territory served and the number of industries located along its route, the Illinois Central normally originates more traffic than it receives from connecting railroads. Approxi- mately two-thirds of the total tonnage is originated along its own lines, and only about one-third is received from connecting lines.
An interesting aspect of the latter type of business is the so-called "bridge traffic" classification, i.e., the freight traffic received from connecting rail- roads and delivered to connecting rail- roads. Because of its north-south direc- tion the Illinois Central lies across the lines of the principal east-west carriers that dominate the American railroad scene. It makes contact with 150 rail- roads at 500 connecting points between the Great Lakes and the Gulf. Thus
it is in the fortunate position of being able to offer numerous routes not only for traffic bound to points in its own territory, but also for traffic destined for locations served by others. The profitable bridge traffic results from the number of locations at which traffic exchange is accomplished and from the wide variety of commodities which find their way into this exchange.
A look at the tonnage totals of the Illinois Central will be enough to con- vince even the most casual observer that this route ranks high among the major coal - carrying roads of the country. Nearly half of its total tonnage derives from the transportation of coal. There are two important bituminous coal fields reached by the Illinois Central, one in Western Kentucky and the other in Southern Illinois, both of which arc adequately served by the tracks of the "Main Line of Mid- America." Production in both these fields has been increased sharply in the last decade, largely as a result of the mechanization of mining operations, proper treatment of coal at the mines, and more aggressive merchandising methods — to which this railroad has contributed in a substantial way.
Because it serves so many different regions with varied climates, the Illi- nois Central is particularly fortunate in the diversity of its agricultural traffic. Such products as cotton, fruits and vegetables, soybeans, potatoes, wheat, corn, and bananas figure prom- inently in its annual freight statistics. Meat and other packing-house prod- ucts are likewise important items of traffic revenue. The company has played an important role in organizing and supporting agencies devoted to the
THE ILLINOIS CENTRAL: A CENTENNIAL VIEW
development of more diversified crops, and to the improvement in ciuality and yields of those already under cultiva- tion. It has also pioneered a movement to improve the milk and beef herds in its territory by providing a widespread artificial as well as natural insemination service. The result has been not only to bring about a steady improvement in the quality of herds, but also to gather for the Illinois Central a con- siderable store of good will among cattle owners.
Lumber and other forest products also enter into the traffic total of this leading north-south carrier. Here again the Illinois Central has demonstrated its foresight and energy in developing and maintaining traffic by taking an active part in furthering reforestation in the South. It has perfected a small tree planter, several of which are avail- able to southern farmers, and which facilitates the planting of new trees in a serious effort to keep southern forests on a perpetuating basis.
The vast number of varied manu- facturing establishments served or reached by the Illinois Central extend along the entire line and compose a virtual roster of American industry. The company has in its employ quali- fied industrial engineers who not only solicit the location of new plants on its lines but also draft plans for developing the natural resources within its terri- tory. In recent years a large number of important industrial plants have been established along the lines of the Illi- nois Central.
No summary of the traffic potential of this line in its centennial year would be complete without a reference to its promotion of an export-import business
with Latin-America. This export-im- port business, which now constitutes nearly 10 percent of all Illinois Central traffic, is a most unusual type of rail- road promotion. Representatives of the company make frequent trips to Latin- American countries and endeavor to develop business opportunities for ship- pers served by the Illinois Central. On their return they travel throughout the territory served by the Illinois Central in order to bring to the attention of businessmen various opportunities for trade with regions they have visited. In addition, the company's representatives are often called upon to search out markets for particular United States products, and to establish business con- nections for the importation of Latin- American products which are desired by customers of the railroad.
Some idea of the results of this very active promotion of export -import traffic may be gathered from the fact that the Port of New Orleans advanced to a rank of second place in value of its commerce in 1948.
Passenger Traffic
Although for years freight revenue has accounted for the bulk of the operating revenue on the Illinois Cen- tral (just as it has on most American railroads), this company has not neg- lected or sacrificed its passenger serv- ice in any area where such service has continued to be profitable. The passen- ger service of the Illinois Central can be divided rather easily into three main categories, long-distance (or medium long-distance), commuter, and local service. It is the last of these categories which has suffered most grievously in recent decades, as the travel habits of
CURRENT ECONOMIC COMMENT
millions of Americans have been al- tered by the widespread availability and use of automobiles and motor buses. Consequently, local and branch- line passenger service has been seriously curtailed as railroads have been willing to abandon this type of business to their competitors. It may come as a surprise to learn that one hundred years after its founding no passenger trains operate over what was once the "main stem" of the charter lines of the Illinois Central Railroad between Centralia and Freeport through the agricultural heart of the Prairie State.
Suburban service on the Illinois Central is almost as old as the road itself. The community of Hyde Park (now well within the city limits) had been laid out some six miles south of Chicago during the same time that the Illinois Central was under construction, and an experimental round trip be- tween the two locations was performed on June 1, 1856. The first suburban service west of the Alleghenies began regular operation between Chicago and Hyde Park on July 21, 1856.
From this early beginning, commuter service on the Illinois Central has grown to today's gigantic proportions. The great Chicago fire of 1871 was not an unmixed blessing for the com- pany, as it increased the demand for homes outside the congested areas and stimulated the development of com- munities on the South Side.
The selection of Chicago as the site for the World's Columbian Exposition of 1893 and its location in the Jackson Park area meant that the Illinois Central would bear the main brunt of the transportation load. During the time that the Exposition was open the
Illinois Central operated 40,116 special World's Fair trains, and another 36,600 regular suburban trains, carrying alto- gether 19,142,911 people to, from, or in Chicago, between May 1 and Octo- ber 31, 1893.
The most important improvement of the suburban service within the twen- tieth century was the program of electrification that was carried out be- tween 1921 and 1926. Plans for the electrification of the commuter service were well advanced when World War I intervened. The project had to be post- poned until the return of peace and the termination of control by the United States Railroad Administration.
The electrification of Illinois Central suburban train service, virtually com- pleted by 1926, was accompanied by other long-range improvements, such as the elimination of street and high- way grade crossings, and of railway grade crossings as well, for a distance of 28 miles south of the terminal area. The continued development of com- munities in the South Shore district, together with the extraordinary popu- lation growth in the area, is largely responsible for the steady increase of suburban traffic, which reached an all- time peak of 47,067,959 revenue pas- sengers carried during 1947.
In the realm of swift, comfortable, long-distance passenger service the Illi- nois Central has more than held its own. Between Chicago and New Or- leans, Miami, and Florida West Coast points (in cooperation with southern roads) ; and between Chicago and St. Louis, Waterloo, and Sioux City, Iowa, excellent coach and Pullman accom- modations are offered by such well- known favorites as the Panama
THE ILLINOIS CENTRAL: A CENTENNIAL VIEW
Limited, the City of New Orleans, the City of Miami, the Seminole, the Day- light, the Green Diamond, the Night Diamond, the Hawkeye, and the Land o' Corn. During the past twenty years the Illinois Central has confined its acquisition of new passenger equipment almost entirely to the purchase of cars for its fleet of light-weight streamliners and most of those mentioned above are so equipped.
Motive Power
The "Main Line of Mid-America" is rapidly becoming unique in the mat- ter of its motive power, for at the present moment the road has no great interest in, and certainly no long-range plan for, a major Dieselization pro- gram. True, most of its distance stream- liners are powered by Diesel-electric locomotives, and the company has re- cently acquired many new Diesel switch engines, but for the backbone of its operations the Illinois Central is going along with the steam freight locomo- tive. Several factors help to account for this decision on the part of the management. First, the Illinois Central is fortunate in that its roadway is char- acterized by easy grades and relatively slight curvature that place practically no restriction in the way of efficient railroad operation, nor does it in any serious way limit freight train tonnages. In the second place, while the company is fully aware of the economies which result from complete Dieselization, it is also convinced that the use of steam power has been a vital force in en- couraging coal traffic. The soundness of this program has been clearly dem- onstrated up to the present time. While coal traffic has grown substantially, the
ratio of transportation costs to total operating revenues has been held down remarkably well. In this respect, inci- dentally, the Illinois Central has done much better than most railroads of the United States since the end of World War II.
But certainly the most important factor is that the Illinois Central pos- sesses a highly efficient and recently modernized fleet of steam locomotives. During the dark depression years of the mid-1930's it was faced with the serious alternatives of either buying a large number of new locomotives or of extensively modernizing those on hand. Recognizing the necessity for holding down costs, and appreciative of the fact that at the moment not all its locomotives were being kept busy moving the reduced traffic of the de- pression years, the company adopted the policy of modernization. An ex- tended program of improvement and conversion was begun in 1935 which ultimately aff"ected more than a thou- sand locomotives, and which found the Illinois Central meeting the traffic chal- lenge of World War II with a fleet of steam locomotives so modernized as to meet the schedules of its sharpest com- petitors, and capable of handling the available traffic efficiently and eco- nomically.
Improved Finances
The remarkably strong financial posi- tion enjoyed today by the Illinois Cen- tral Railroad is not only a reflection of the high regard in which that com- pany's securities have been held almost from the beginning of its history, but also an indication of the success of its long-range program aimed at the re-
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CURRENT ECONOMIC COMMENT
duction of its bonded indebtedness through the use of earnings.
Doing what one Wall Street railroad security expert has called "an amazing job" of restoring its financial position endangered by the depression, the Illi- nois Central managed in the years between 1936 and 1951 to reduce its bonded indebtedness by more than a third. At the same time it was making improvements on its physical property and adding to its rolling stock. This was not accomplished without hard- ship, however, and between 1931 and 1950 common stockholders of the Illi- nois Central received nothing in divi- dends. It is the judgment of investment counselors that the road's efforts have borne fruit in that the company has today a much stronger physical and financial structure than would other- wise have been the case.
Historical Background
With the "Main Line of Mid-Amer- ica" thus entering its second century' of service rather well situated as re- gards traffic, equipment, and finances, let us examine the beginnings of this mid-century railroad giant of the Mis- sissippi Valley. It is not possible to summarize adecjuately the early history of the Illinois Central Railroad with- out at least mentioning the shortcom- ings of internal transportation within Illinois, since these, it was feared, would seriously retard the economic development of the state.
The widespread interest in canals and river improvements, in road build- ing, and soon thereafter in railroads points most clearly to the almost fren- zied determination on the part of the young state to provide the necessary
facilities for transportation. At least fifteen years before the Illinois Central Railroad became a reality, public men in Illinois were promoting seriously the idea of a "great central railroad" which would link up the southern terminus of the Illinois and Michigan Canal with the important Ohio-Mississippi River junction at the southern tip of the state. The earliest efforts to con- struct a central Illinois railroad, how- ever, ended in dismal failure with the complete collapse of the Illinois In- ternal Improvements Scheme of 1837. Subsequent attempts to construct a rail- road under private auspices during the 1840's also came to naught in spite of the tireless efforts of Sidney Breese, Senator from Illinois, to win Congres- sional approval for a pre-emption scheme designed to aid the railroad builders.
The construction of the Illinois Central Railroad was made possible through a grant of 2,595,000 acres of public land to the state of Illinois. Senator Stephen A. Douglas was in- strumental in getting the Federal Con- gress to agree to this step, and the proposal became law on September 20, 1850. The General Assembly of Illinois decided, in turn, to award the land grant, along with a charter to build and operate the railroad, to a group of eastern capitalists and railroad pro- moters headed by Robert Rantoul, Jr., of Massachusetts. The corporate exist- ence of the Illinois Central Railroad dates from February 10, 1851, when the General Assembly approved and Governor Augustus C. French signed the charter which established the company.
Few railroads have been organized
THE ILLINOIS CENTRAL: A CENTENNIAL VIEW
under circumstances which augured for a more bright and prosperous future than was anticipated for the Illinois Central. The handsome grant of alternate sections of land six miles deep on either side of its two hundred- foot right of way made it the largest landlord in the state of Illinois next to the Federal government itself. In ad- dition, the rich agricultural potential of the central and eastern counties of the state was just beginning to break through the stigma which had attached to the prairie lands almost from the beginning of white settlement in the West. This region, once described as the "lair of the wolf and the feeding ground of the deer," was soon to be- come one of the richest agricultural areas in the world. At that time, of course, an adequate understanding of either the mineral wealth of the Prairie State or its industrial possibilities was completely beyond the fondest imagi- nation of even the most enthusiastic entrepreneur.
Nevertheless, in spite of these favor- able factors which we now recognize as working for the success of this ambi- tious western railway, the projection and construction of the Illinois Central Railroad was a tremendous undertak- ing at the time. The magnitude of the operation may be judged from the fact that it contemplated building a mileage more than double that of any then existing railroad, and the tracks had to be laid through a relatively unde- veloped and sparsely populated state. The population of Illinois was only 851,470 in 1850, and the Illinois Cen- tral and its contractors found it neces- sary to import some 100,000 men to work on the project. There were times
when as many as 10,000 workmen were engaged on various aspects of the road's construction.
Large numbers of these workers re- mained to purchase farms or establish homes in Illinois. Other thousands from Europe, as well as from the east- ern states of the Union, were encour- aged to come and settle on the railroad's land as a part of the vigorous publicity campaign carried on by the agents of the company's Land Department. -
Construction was pressed forward rapidly between 1852 and 1855, and the last spike in the "Charter Lines" was driven near Mason, Illinois, on September 27, 1856, well within the time limit laid down by the Act of Incorporation. This portion of today's Illinois Central System totals 705.5 miles of railroad and is still known as the "Charter Lines." Its main line ran northward from Cairo directly through the center of the state to a junction with the western end of the Illinois and Michigan Canal in the LaSalle-Peru vicinity. From there it proceeded in a northwesterly direction to reach the Mississippi River at Dunleith (now East Dubuque), Illinois. The Chicago branch (still so-called by many veteran railroaders, in spite of the fact that it has long since become the main line of the Illinois Central) departed from the main stem at a point just north of Centralia and, following a course re- markably free from curves or grades, reached the rapidly growing metropolis
■ An excellent study of the land policy and the settlement program of the Illinois Central is to be found in Paul W. Gates, The Illinois Central Railroad and Its Colo- nization Work (Cambridge: Harvard Uni- versity Press, 1934).
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CURRENT ECONOMIC COMMENT
on the shores of Lake Michigan. In addition to opening the rich interior of IlHnois to settlement and promoting agricuhural development, the Illinois Central also operated as a year-round, all-weather connection between the Great Lakes-Upper-Mississippi region and Cairo, the "gateway to the South."
Much of the Congressional enthu- siasm for the Illinois Central Railroad at the time of the passage of the land- grant act had been generated by the plan to extend the central railroad to the Gulf of Mexico at Mobile, Ala- bama. The successful passage of the Douglas-sponsored measure was due, in no small part, to the solid support given it by congressmen and senators from the Gulf States. One should never lose sight of the fact that the Illinois Central was designed, not as an end in itself, but as an important part of a boldly conceived transportation scheme which it was believed would bind to- gether economically and commercially the rapidly developing West and South- west.
The Mobile and Ohio Railroad, already in existence, fell heir to the land granted to the states of Alabama and Mississippi, and it was freely pre- dicted that a traveler would soon be able to make a continuous rail journey from Chicago to Mobile, Alabama. Un- fortunately, no guarantee of a physical connection or even a corporate union between the north and south lines was insisted upon, with the result that the ambitious program suffered at the very outset from a lack of long-range plan- ning and coordinated effort — so nec- essary in a project of this kind.
The Illinois Central was deeply
interested in the development of a southern connection, and soon a spir- ited rivalry sprang up between the business interests in Mobile and in New Orleans. Both the Mobile and Ohio and a series of roads working north from New Orleans proceeded slowly toward a potential junction with the Illinois Central at Cairo. The New Orleans line reached Columbus, Ken- tucky, a small but thriving river com- munity twenty miles below Cairo, on January 31, 1860, whereas the Mobile and Ohio Railroad was not completed to the same point until April 22, 1861, some days after the Fort Sumter epi- sode had opened the American Civil War.^
The completion of the southern routes came too late to have any real bearing upon the commercial outlook in the immediate prewar years. Neither the Mobile and Ohio nor the lines to New Orleans had time to demonstrate how they would have exploited the new connection with the Northwest before war was upon them. Plans for the exchange of goods ceased with the outbreak of hostilities, and it remained for the postwar decades to see the southern lines develop as important avenues of north-south trade. The re- construction of these lines and the new emphasis upon the southern connection arc a vital part of the interesting story of Illinois Central development after 1870.
^ A more thorough coverage of many of these developments in the early history of the Illinois Central Railroad may be found in the author's doctoral dissertation entitled The Illinois Central Railroad in Peace and War, 1858-1868, manuscript copies of which are available in the University of Illinois Library.
THE ILLINOIS CENTRAL: A CENTENNIAL VIEW
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Impact of the Civil War
The beginning of civil war in 1861 raised serious problems for the Illinois Central. The immediate result of the war was to interrupt the coordinated rail service which had so recently been established between the sections, and eventually to aim at the complete severance of those long-established lines of business and trade which followed the Mississippi River and its tributaries. Furthermore, there was the haunting fear that the wording of the company's charter would impose strange and burdensome obligations upon the oper- ations of the road. Finally, with southern Illinois surrounded by slave- holding territory, and with troops of the Confederacy concentrated heavily in Kentucky and southeastern Missouri, the company's first aim was undoubt- edly to protect Cairo and the southern portion of the line from attack. Indeed, the first active participation of the Illinois Central in the Union war effort was directed toward that very end, as several companies of Illinois militia- men were secretly moved from Chicago to the defense of Cairo and the stra- tegic Ohio-Mississippi junction at that point early in May, 1861.
The Civil War raised a difficult question in the relationship between government and railroad with refer- ence to the legal position of the land- grant lines. In the earliest Congressional grants of land for turnpikes and canals it was customary to insert a provision to the effect that these improvements should "be, and forever remain, a pub- lic highway for the use of the govern- ment, free from any toll or other charge whatever, for any property of the
United States, or persons in their service."
When the first Federal land grant for a railroad was passed in 1850, the form and spirit of the above pronounce- ment was contained in section four of the act. Until the time of the Civil War no question was raised as to the obliga- tions of companies under land-grant charters excepting that concerning the transportation of mail. Considering the limited military establishment existing in the country at that time, little, if any, importance was attached to the "free from any toll" clause in the charters.
The war changed all this, however, and for the next several decades the obligations imposed upon land-grant railroads by their charters received serious consideration both in Congress and in the courts. The Illinois Central, as the largest and most important of the land-grant roads, was deeply con- cerned as to the interpretation which should be placed upon the "free from any toll" clause by the government.
Months of uncertainty ensued, dur- ina: which time the road continued to provide transportation service for the military and naval forces without any assurance of reimbursement. Finally, an agreement was reached whereby the government claimed the right to use the company's roadway without compensation, but agreed to compen- sate the railroad for the use of its motive power, passenger and freight cars, and other facilities. The amount agreed upon was the normal rate al- lowed non-land-grant railroads for pas- senger and freight service, less 33¥i percent said to be due the government for "charter" privileges.
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CURRENT ECONOMIC COMMENT
The agreement reached between the United States government and the Illi- nois Central Railroad on August 15, 1861, was continued in force through- out the war. Except for numerous com- plaints on the part of the railroads and occasional efforts in Congress to bring about a more literal interpretation of the "free from any toll" clause, it re- mained as the guiding principle in the relationship between government and the land-grant railroads until all claims to land-grant rates were finally aban- doned within the past decade.
The experience of the Civil War caused an entirely new estimate to be placed upon the value of railroads in modern warfare. The Illinois Central soon demonstrated its ability to serve the needs of the military forces in the West by taking the lead in the move- ment of troops, equipment, and sup- plies to Cairo for distribution farther south. Its main line, reaching the upper Mississippi at Dubuque, tapped the de- veloping resources of the younger states of Iowa, Wisconsin, and Minnesota, while its 250-mile Chicago branch made contact with the important east- ern rail lines, as well as with the vitally important Great Lakes traffic. In the words of William H. Osborn, wartime president of the Illinois Cen- tral, "The Illinois Central Railroad is second only to the Washington branch of the Baltimore and Ohio Railroad in relation to the military operations of the Government."
In view of its strategic location and the transportation demands which were made upon it, the Illinois Central was most fortunate in being spared the ravages of war upon its property and line, a circumstance not enjoyed by
certain of the important eastern lines, notably the Baltimore and Ohio and the Northern Central. As the tide of war moved south from Cairo the Illi- nois Central's southern tenninus con- tinued to be an important point of de- parture for men and materials required by the Union commanders in the field, and a concentration point for prisoners of war moved northward after success- ful military operations in the South.
Although the contribution of the Illi- nois Central to the military activity of the North deserves emphasis, it should be remembered that the com- pany was also called upon to provide transportation service for civilian enter- prises likewise quickened by the stimu- lus of war. Frequently, the road was taxed to the limit to meet the demands made upon it, and in situations where military and civilian activities were in competition for the road's facilities, it was the civilian activity \vhich suffered.
Obstacles placed in the way of trade as a result of the closing of the Missis- sippi River struck a crippling blow at one of the road's major sources of revenue. The shift in the pattern of the export trade of the Northwest away from the Mississippi route and toward the Great Lakes-Erie Canal route accelerated a movement which had been gaining strength for a decade and more. The Illinois Central Rail- road played a vital role in rerouting the commodities of the Ohio and Mis- sissippi valleys after the southern route had been closed by the war.
Furthermore, the road found it necessary to undertake the duties of a grain merchant during 1861 and 1862 in order to protect its own position as the state's largest landholder and make
THE ILLINOIS CENTRAL: A CENTENNIAL VIEW
13
possible the marketing of a bumper corn crop. More than 3,000,000 bush- els of corn and a much smaller quan- tity of wheat were accepted by the railroad at a figure slightly above market price in lieu of cash payments on company lands during these years. Naturally, local industry, agriculture in particular, felt the shortages of equip- ment as well as the uncertainties of freight service which were most acute during periods of intense military effort.
The superiority of the Illinois Cen- tral's Chicago line dates very clearly and unmistakably from the Civil War era. Even before 1861, the rapid de- velopment of Chicago as a center of trade and commerce had raised the branch to a position of near equality with the main line. The stoppage of the Mississippi trade and the routing of a major share of the Illinois grain crop to Chicago hastened the transition still further. By 1863, President Osborn stated publicly that the Chicago branch had become, in fact, "the main line of the road."
The experience of the Illinois Cen- tral during the Civil War was much like that of American railroads gener- ally during the world conflicts of the twentieth century. Such difficulties as a shortage of equipment, an inadequate labor supply, rising costs, and main- tenance difficulties in the face of an unprecedented traffic demand all com- bined to intensify the ordinary problems of railroad operation. Consequently, although rail earnings reached new heights during the war, expenses of labor, maintenance, and operation also increased at a rapid pace. Nevertheless, the Illinois Central became a consistent dividend-paying railroad for the first
time during the Civil War. Dividends, which had been meager before the war, rose to 4 percent in 1862, 6 percent in 1863, 8 percent in 1864, and reached the handsome figure of 10 percent in 1865.
Post-Civil-War Problems
The chief concerns of the company management as the postwar era opened centered around such problems as the difficulty of maintaining the traffic level at a point comparable with that of the war years, the necessity for re- ducing the expenses of railroad opera- tion which had nearly trebled since 1861, and the imperativeness of ac- quiring feeder lines whose local busi- ness, would, in turn, swell the traffic total of the parent line. It was in con- nection with this last concern that the course and direction of future Illinois Central development was determined.
The postwar decision of the com- pany to acquire connections beyond the borders of Illinois marked a definite break with the original policy of the road. Events of the previous years had convinced the management of the ad- visability of obtaining branch and feeder line railroads as the surest method of stimulating new business for the Illinois Central. The initial steps in the first out-of-state acquisition were taken while the war was still in prog- ress. The Dubuque and Sioux City Railroad and its subsidiary, the Cedar Falls and Minnesota, offered a most satisfactory path for expansion into the promising states of Iowa and Min- nesota. The details of consolidation were worked out during 1867, and on October 1 of that year the Illinois
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CURRENT ECONOMIC COMMENT
Central took formal possession of the Dubuque and Sioux City Railroad.
That the Illinois Central had clearly embarked upon the highroad of inter- sectional expansion, by way of lease, merger, and consolidation, became per- fectly evident in the early 1880's. In 1872 the Illinois Central had extended its influence 547 miles southward from the Ohio River to New Orleans by means of an agreement with the Mis- sissippi Central and the New Orleans, Jackson and Great Northern roads. Soon these companies, along with several other pioneer railroads of the lower Mississippi Valley, were brought together in the Chicago, St. Louis and New Orleans Railroad Company, and the Illinois Central's lease of this latter company in 1883 extended its control all the way to New Orleans.
Until 1881 the interchange of pas- senger and freight cars was hindered at the Ohio River by the necessity for ferry service between Cairo and the Kentucky shore. An additional dif- ficulty arose from the fact that the gauge of the lines north of the Ohio was 4 feet 8V2 inches (today's standard gauge) while that of the lines south of the river was 5 feet. In a remarkable performance on July 29, 1881, the gauge of the entire line from East Cairo to New Orleans was converted in the course of a single day to stand- ard gauge, thereby enabling both loco- motives and cars to be exchanged freely between the northern and south- ern lines.
Equally noteworthy was the con- struction of an enormous bridge across the Ohio River at Cairo. Opened to traffic in 1889, the Ohio River bridge represented the last link in the long de-
velopment of the Lakes-to-Gulf rail route. The Illinois Central is at the present time engaged in a major proj- ect of rebuilding and repairing the bridge at Cairo. The improvements, which will require several years to com- plete, have been planned to interfere as little as possible with the normal flow of traffic over the bridge.
Through the years the present out- line of today's Illinois Central map has been filled in by numerous mergers and consolidations accomplished both by the parent company and by its southern affiliate, the Chicago, St. Louis and New Orleans Company. Be- tween 1880 and 1900, the mileage of the Illinois Central more than trebled, while the traffic and earnings increased in an even more spectacular manner. This span of years includes the long as- sociation of Stuyvesant Fish and Ed- ward H. Harriman in the management of Illinois Central affairs, and repre- sents for the company its period of greatest expansion and growth.
The pattern for twentieth century railroad development had clearly been set at the time of the death of Mr. Harriman in 1909, though problems of unbelievable intensity growing out of wars, periods of inflation, and de- pressions lay just ahead to complicate the transportation scene down to the present day.
The Railroad and Its Public
It would be unfair to assume that the Illinois Central has been com- pletely free from public criticism dur- ing its long history. No company engaging in business of a public char- acter and directly concerned with the public interest could be so fortunate.
THE ILLINOIS CENTRAL: A CENTENNIAL VIEW
15
Most of its difficulties during the nine- teenth century grew out of either the unique arrangement prevailing between the Illinois Central and the state of Illinois, or the aroused state of the public mind distressed by the industrial transformation which followed the Civil War. This condition was still further inflamed by the prevalence of questionable corporate practices in an age of loose business morality.
In the former connection, tax diffi- culties and interpretations arising mainly from the charter provision that the railroad must pay 7 percent of its gross earnings into the treasury of the state held the spotlight, and were sharply reflected in the efforts of sub- sequent Illinois constitutional conven- tions (1862 and 1869) to prevent any relaxation of the obligations of the company under its 1851 charter. Thus it is that the present Constitution of Illinois contains the provision that "No contract, obligation or liability what- ever, of the Illinois Central Railroad Company . . . shall ever be released, suspended, modified, altered, remitted, or in any manner diminished or im- paired by legislative or other authority. . . ."
In the latter situation the "aroused state of the public mind," represented by the Granger Movement, centered its attack upon railroads generally and emphasized in particular the matter of rates and the discrimination evil. Illi- nois, one of the centers of Granger agi- tation, responded with a Railway and Warehouse Commission to regulate the rates and charges of railroads, grain elevators, and warehouses. The de- cision of the Supreme Court in the celebrated case of Munn v. Illiriois
(1876) established the principle of the greater responsibility of a business clothed with the public interest and in so doing upheld the right of govern- ment to regulate all types of public transportation. The enactment of legis- lation in 1887 setting up the interstate Commerce Commission shifted the burden of regulation from the shoul- ders of the individual state to those of the Federal government. The various strengthenings of the I.C.C. have long since satisfied the demand for ade- quate Federal supervision of American transportation.
Additional difficulties which have been more or less common to American railroads over the past century occa- sionally produced friction between the Illinois Central Railroad and its work- ers, its patrons, and its neighbors. In- cluded in this category would be prob- lems raised by the upsurge of organized labor in the United States, the ever- present smoke nuisance, and the de- mand for the improvement of terminal facilities. The controversy which raged for years over the rights and privileges belonging to the Illinois Central, and the obligations and responsibilities owed by the company, as a result of permission granted by the city of Chi- cago for the railroad to enter the city along the lake front, proved to be one of the hardest to settle. After years of disagreement, litigation, and bitter re- crimination, the lake-front controversy was ultimately settled to the satisfac- tion of the city, the state, the Federal government, and the railroad.
To point out that the Illinois Cen- tral has not always enjoyed the high level of public confidence which it possesses today is both to admit the
16
CURRENT ECONOMIC COMMENT
intensely human character of many of its early leaders in a day of great eco- nomic and social turmoil, and to credit the company with having made great strides in the direction of building better relations with its public. Begun shortly after World War I, the public relations program of the Illinois Cen- tral has been remarkably successful in its avowed intention of "taking the public into its confidence." Under the general supervision of George M. Crowson since 1925, the program has earned many compliments and much favorable comment for its fresh and constructive approach to a problem long neglected by American business. Sponsored and encouraged by its last three presidents, Markham, Downs, and Beven, and by the present head, Wayne A. Johnston, the Illinois Cen- tral has not only accomplished much
in the direction of maintaining friendly relations with its public, but has set a high standard of achievement in the realm of employee relations and com- pany safety as well.
Over the broad sweep of a century, the Illinois Central Railroad stands to- day secure in its proud claim of being the "Main Line of Mid-America." Its own century of service coincides with an amazing century of national and continental development to which the railroad has contributed in such large measure. Whatever the demands that may be made upon American railroads in the uncertain future, we may be certain that the "Main Line of Mid- America" will continue to provide the same kind of safe, dependable, and efficient transportation for which it has been famous in the past.
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