The Illinois Central: a centennial view

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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-

8

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).

10

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

11

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.

12

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

14

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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