18 Slices
Medium 9780253019066

12 Coal and Competition

Cordery, Simon Indiana University Press ePub

Coal lies beneath two-thirds of Illinois and has been mined at one time or another in three-quarters of the state’s counties. More than 7,400 mines have operated within the Prairie State’s borders. Illinois is in a bituminous (soft coal) field also covering much of Indiana, Ohio, and western Pennsylvania, providing a source of power for individuals and industries along the East Coast and into the Midwest. The price of Illinois coal fluctuated with national demand trends and regulatory shifts, creating periods of boom and bust over which mining companies had almost no control.1 Railroads were likewise at the mercy of the marketplace until they built lines into coal fields, contracting directly with the mines for the resource.

Coal was vital to the financial health of the railroads, but the operational and commercial problems of finding and transporting it were not the only challenges the railroads faced at the beginning of the twentieth century. In 1915 between three-quarters and four-fifths of total rail revenue came from freight, but the rates being charged in 1915 were virtually the same as they had been in 1900 despite prices rising by 30 percent. The Interstate Commerce Commission (ICC) refused to grant anything other than minimal rate increases.2 This situation, coupled with a disastrous takeover, led to the Rock Island’s first bankruptcy.

See All Chapters
Medium 9780253019066

6 Conflagrations and Expansion

Cordery, Simon Indiana University Press ePub

The railroad-building surge of the 1850s made Chicago into an international marketplace and would help the North win the Civil War. Railroads transformed Illinois by bringing in people and capital, mechanizing and growing the grain trade, and dramatically expanding the labor force. A national financial downturn in 1857 caused an immediate drop in traffic volume, brought expansion to a halt, and tipped many railroads into bankruptcy, but local services temporarily kept them running and allowed the system to adjust to the new mileage.

The 1860s and 1870s witnessed the trauma of Civil War and the excitement of transcontinental railroading. The war caused little direct injury to Illinois railroads, though the closure to civilians of the Mississippi River and additional wartime traffic meant deferred maintenance, damaged track, and worn-out rolling stock. Illinois was the fastest-growing state in the Union during the Civil War because of its network of railroads, migrants entering from the Confederacy, and the increased importance of Chicago as a transshipment center. When the conflict began the industry seemed ready to contribute, though few could have predicted how much the railroads had to offer the war effort.

See All Chapters
Medium 9780253019066

2 Development Delayed

Cordery, Simon Indiana University Press ePub

The earliest attempts to build steam-powered railroads in Illinois failed miserably. Several private projects laid a few miles of track before going bankrupt; two short coal lines used animals to haul wagons; and an ambitious state-funded network fell victim to an economic depression—called a “panic” at the time—in 1837. But the seed blown across the Atlantic Ocean from Britain fell on fertile soil. Railroads offered relatively fast, all-weather transportation for people and commodities. Engineering challenges, especially safely and reliably harnessing steam power, proved surmountable, and investment capital became available, but the development of the industry was neither smooth nor simple. The demand was fueled in part by roads so poor that Illinois became a notorious “mud state” when the weather turned foul. In the winter of 1848–49, for example, the people of McLeansboro found themselves isolated. Bereft of “coffee, sugar and other necessaries of life,” they survived on what they had stored from previous harvests until the roads dried out the following spring.1 This was a common occurrence in the harsh Illinois climate, and town and country alike needed a dependable, all-weather mode of transportation to combat snow, ice, and mud.

See All Chapters
Medium 9780253019066

14 World War I and the 1920s

Cordery, Simon Indiana University Press ePub

The First World War—or the “war to end all wars,” as President Woodrow Wilson called it—nearly brought private ownership of the railroads to an end. Refusing to cooperate and unwilling to coordinate train movements, the lines became so congested in the East and so empty in the West that the federal government took them over. Plans were prepared, and seriously considered, to leave the trains in government hands at war’s end. But the probusiness Republican Party regained power in 1920 and the owners regained their property. The 1920s witnessed a massive program of railroad improvements when as much total capital was expended on railroad physical plant and rolling stock as had been the case during the entire history of the industry up to 1920. Yet even as the railroads improved, public policy turned slowly toward highways. During the 1920s the state of Illinois ranked first in the nation for miles of concrete roadways, and a vibrant auto-building industry developed.1 The Good Roads movement continued to gain adherents, and traffic switched slowly but surely from rail to truck, car, and bus with devastating long-term effects for Illinois railroads.

See All Chapters
Medium 9780253019066

5 Financing Railroads

Cordery, Simon Indiana University Press ePub

Railroads drew Illinois into a global network of capital and capitalists. Fewer than 50 miles of track existed in the state in 1850; by 1860 the Prairie State’s 2,500 route miles connected it with a world marketplace, thanks primarily to foreign money and the growth of Chicago. The iron for all that track was scarce, and much of it had to come from overseas, primarily Great Britain. Rails told only part of the story: railroads needed rolling stock and buildings, workers and coal, managers and paper, bridges and lumber, land and customers. Finding these required capital, raised in the form of stocks and bonds sold in exchanges far from the state and trading outside of local control.

Railroad financing became increasingly complex as capital needs expanded. The experience of the Galena & Chicago Union Railroad—funded in part by progressive artisans and exuberant farmers—was unusual, as was that of the land-grant sustained Illinois Central. There was no such thing as purely private or purely public funding during the first two decades of railroading, if private excludes support of any kind from government entities. Confident assertions like that of Swedish emigrant Gustav Unonius, who wrote “Neither the state nor the city has spent a single dollar” building railroads, bolstered the prevailing laissez-faire ideology but were patently false. The promoters of America’s earliest railroad, the Baltimore & Ohio, created a joint-stock company in which the state of Maryland bought five thousand shares worth $500,000, one-sixth of the initial $3 million offered. The South-Carolina Canal and Rail-Road Company built the first line in the South using state guarantees and municipal monies to stimulate interest and investment in the line between Charleston and Hamburg. And the company destined to be the largest corporation in the world during the nineteenth century, the Pennsylvania Railroad, mixed guarantees that government entities would purchase half of its stock with private investment.1

See All Chapters

See All Slices