The Hoosier Partisans Move for Autonomy as the Cleveland Clique Tightened Its Grip on the Bee Line Railroad

See Part V to learn about the Cleveland Clique’s elusive grasp for control of the Bee Line Railroad.

Map of Bee Line Railroad Component Lines: the Indianapolis, Pittsburgh and Cleveland, the Bellefontaine and Indiana, and Cleveland, Columbus and Cincinnati
Map of Bee Line Railroad Component Lines: Indianapolis, Pittsburgh and Cleveland (blue), Bellefontaine and Indiana (red) and Cleveland, Columbus and Cincinnati (green), courtesy of Erin Greb Cartography.

In the four months since John Brough left the presidency of the Bee Line’s Indianapolis, Pittsburgh and Cleveland Railroad (IP&C) in February 1855, more than just its name had changed. The Hoosier Partisans’ move for autonomy would take concrete form as the Cleveland Clique tightened its grip on the Bee Line Railroad

Calvin Fletcher, reluctantly elected president in John Brough’s stead, had met with a litany of key personnel and other midwestern railroad presidents to gain a broader perspective. He had also dealt with a variety of operational, cash flow and accounting issues left unaddressed by Brough.

Images of John Brough and Calvin Fletcher
(L to R): John Brough, courtesy of the Ohio History Connection. Calvin Fletcher, courtesy of the Indiana Historical Society.

As a result, by April the line’s Superintendent had resigned. At the same time, Fletcher engaged an individual to look into unaccounted for and delayed freight. He pushed for cost reductions at the engine shop at Union, and restructured the road’s finances.  John Brough, reflecting on his own performance, acknowledged: “It appeared there were large discrepancies between the books of the Superintendent and those of the Secretary…As President I should have discovered these discrepancies and applied the remedy.”

Map of the proposed route of the Mississippi and Atlantic Railroad, the Terre Haute and Richmond Railroad, and the Indianapolis, Pittsburgh and Cleveland Railroad
Map of the proposed route of the Mississippi and Atlantic Railroad (orange), Terre Haute and Richmond (magenta) and Indianapolis, Pittsburgh and Cleveland (blue), courtesy of Erin Greb Cartography.

On top of Brough’s lapses while heading the IP&C, he had been removed as President of the Mississippi and Atlantic Railroad (M&A) by late May 1855 in favor of Chauncey Rose – founder and former president of the Terre Haute and Richmond Railroad. The M&A, the Cleveland Clique’s bet to reach St. Louis, was in its death throes. It had taken a public relations beating at the hands of Illinois river town and Chicago politicians, who questioned the road’s legal legitimacy – and John Brough’s managerial track record. Investors abandoned the M&A, leaving Brough without portfolio.

Image of Chauncey Rose
Chauncey Rose, courtesy of the Indiana Historical Society.

Calvin Fletcher, frustrated by what he discovered as president of the IP&C, informed the Hoosier Partisans: “I feel that my official duties in the RR are oppressive & that I must leave them…There is a degree of corruption in relation to it that I cannot arrest—or rather the effects of which already passed that I cannot overcome.”

As the July 1855 annual meeting approached, the Partisans pushed Fletcher to continue on as president. They soon faced reality:  he would not remain. As late as the day before the meeting Fletcher could not figure who would become his successor. It soon became clear, however, the Cleveland Clique had been making plans as well. Incredibly, John Brough would be resurrected not only to retake his prior role at the IP&C, but also be anointed as president of the Bee Line’s Bellefontaine and Indiana Railroad (B&I) at the same time!

Brough’s operational and financial shortcomings would have been obvious to the Cleveland Clique by then. On the other hand he was loyal, politically savvy, and possessed an Ohio pedigree. Given the newly redefined and more limited scope of the president’s role, and with strong Clique operational and financial expertise now present on both boards, Brough was serviceable.

Effectively, the Cleveland Clique would now control both the B&I and IP&C. While not yet legally consolidated, the two roads would be run as one while John Brough and the Clique considered the calculus to officially bind them together.

Sparked by Brough’s Clique-masterminded elevation to the dual Bee Line presidential roles, the IP&C’s Hoosier Partisans squirmed under the terms of the joint operating agreement foist upon them by the Cleveland Clique the year before. Both the perpetual nature of the contract and mandate to consolidate with the B&I “at the earliest possible moment” were not sitting well. Discovering the Cleveland, Columbus and Cincinnati Railroad (CC&C) had never technically executed the contract, the Hoosier Partisans made a move to modify its language.

By the IP&C’s March 1856 annual meeting, revised terms of the joint operating agreement had been hammered out. A newly reconstituted and more representative overall executive/finance committee was arranged. At the same time, the contract term was reset to five years, instead of being perpetual. Any party to the contract could now terminate it with three months’ notice. However, this clause could only be exercised after the agreement had been in place for three years.

Map of the Bee Line Railroad component lines, and Columbus, Piqua and Indiana and other roads aligned with the B&O (to Wheeling WV), Pennsylvania (to Pittsburgh PA) and New York Central (to Buffalo NY) trunk lines.
Map of the Bee Line Railroad component lines (blue, red, green), and Columbus, Piqua and Indiana (brown) and other roads aligned with the B&O (to Wheeling WV), Pennsylvania (to Pittsburgh PA) and New York Central (to Buffalo NY) trunk lines, courtesy of Erin Greb Cartography.

Fortunately for the Hoosier Partisans, the IP&C’s three-year joint operating obligation ended as the Columbus, Piqua and Indiana Railroad (CP&I) finally reached Union in the spring of 1859. Now the IP&C could anticipate a substantial revenue boost as freight and passengers traveled to/from Columbus across CP&I track to Union. From Columbus, Pittsburgh could now be reached – and the Pennsylvania Railroad headed to Philadelphia – via affiliated lines.

Union and the IP&C were proving to be a pivotal funnel for other traffic as well. Freight and passengers headed to/from New York across the CC&C and aligned roads to the fledgling New York Central Railroad at Buffalo would find their way to Union. Similarly, via the CP&I link between Union and Columbus OH, the Baltimore and Ohio Railroad (B&O) could now be accessed at Wheeling WV. And, courtesy of a new through-line arrangement connecting the B&O’s eastern terminus at Baltimore with New York City, a second alternative for reaching this center of commerce from Union became a reality.

The IP&C would be the clear beneficiary of these new connections to the east – if only it could effect a separation, if not a divorce, from the B&I as well as the CC&C. Then, standing individually, the IP&C could strike lucrative through-line agreements with each of the eastern trunk lines and their local affiliates. By way of these arrangements, the Hoosier Partisans could once again regain control over their own destiny.

At the March 1859 IP&C board meeting, Partisan David Kilgore proposed a three-person board committee be appointed to “pursue a line of fair and impartial conduct between our two connections at Union.” The concept was for the IP&C to direct traffic under its control and destined for New York, Philadelphia, Boston, and Baltimore to these connecting roads “in proportion to the trade and travel received from the several points named above.”

Images of David Kilgore, Thomas A. Morris, and Stillman Witt
(L to R): David Kilgore, from the author’s personal collection; Thomas A. Morris, Courtesy of the Indiana Historical Society; Stillman Witt (J. Fletcher Brennan, ed., Biographical Cyclopedia and Portrait Gallery of the State of Ohio, Vol. 2. Cincinnati: John C. Yorston & Co., 1880.)

In addition to David Kilgore, ubiquitous Indiana railroad construction engineer, recent president of the Indianapolis and Cincinnati Railroad and IP&C board/executive committee member Thomas A. Morris, and Cleveland Clique and CC&C strongman Stillman Witt were appointed to the committee.

The stars were aligning from an operational standpoint as well; a March 28 letter from the receiver of the CP&I announced they “will be prepared in a very few days to transport passengers and freight” between Union and Columbus OH.

A crucial series of IP&C-arranged meetings with presidents and general managers of several of the eastern trunk lines and their Ohio-affiliated roads took place in Columbus, Ohio that May. The importance of Union and the IP&C’s Indianapolis connection west toward St. Louis were obviously not lost on the roster of kingpins who decided to attend the Columbus confab.

As might be expected, there were two distinct perspectives on the IP&C’s postulated autonomy. Those regional lines aligned with the Pennsylvania Railroad or B&O via CP&I connections at Columbus OH endorsed the IP&C’s move toward independence. Not surprisingly, those roads associated with the New York Central via Bee Line alignments at Cleveland, or with the Pennsylvania Railroad via the Ohio and Pennsylvania Railroad [O&P] (passing near the B&I’s eastern terminus at Galion OH) took the opposite position. Among this group was the CC&C’s then president, Leander M. Hubby.

Image of Leander M. Hubby
Leander M. Hubby, (Biographical Cyclopedia and Portrait Gallery of the State of Ohio, Vol. 4. Cincinnati: Western Biographical Publishing Company, 1887.)

Shortly after the meeting, as Hubby contemplated the implications of the IP&C’s stratagem – with its alternative access to New York City via the B&O – he balked. “This company would not quietly submit to receiving a divided business from the IP&C.” Hubby went on, and to the heart of the matter, “this company contributed largely in money and credit to the completion and opening of the Bellefontaine Line…I think it my duty to say…this Company…will at once form other connections which are being offered them.”

Bee Line financier Richard H. Winslow of Winslow, Lanier & Co. tag-teamed with Hubby, mounting an attack on the IP&C’s soft financial underbelly. “In view of your embarrassments growing out of the large debt falling due the 1st of January next, we should think it a hazardous experiment and one that may lead to very bad consequences.”

In many respects the Hoosier Partisans’ dream of an independent IP&C had been dashed years before when it accepted the financial help of “foreign” interests—be they in New York, Cleveland, or Europe.

Hollow recognition was paid to the Partisans in the wake of the Union episode. At the annual IP&C board elections in July 1859, Thomas A. Morris was elected president. In turn, John Brough stepped down from the IP&C presidency but continued to hold dual roles as president of the B&I and chairman of the overall Bellefontaine Line executive committee. The title of general superintendent was also added to his dossier. Brough and the Cleveland Clique would control eight seats on the IP&C board to the Hoosier Partisans’ seven.

At the May 1860 board meeting, extension of the revised Bee Line joint operating contract was considered. Swallowing its pride and with a financial gun to its head, the IP&C board reluctantly moved to accept it.  If anything, the Union episode crystallized the Cleveland Clique’s determination to drive the B&I and IP&C to a formal and final consolidation under their direct control.

And while the IP&C’s contract extension with the B&I had taken more than a year to be resolved, the Union episode hastened the day when the IP&C would no longer exist as a separate entity. And with it, the Hoosier Partisans’ dream of maintaining control of their own destiny faded to a smoldering ember.

Check back for Part VII to learn more about the push and pull of the Hoosier Partisans and Cleveland Clique, leading to the legal consolidation of the Bee Line component railroads.

Continue reading “The Hoosier Partisans Move for Autonomy as the Cleveland Clique Tightened Its Grip on the Bee Line Railroad”

The Cleveland Clique’s Elusive Grasp for Control of the Bee Line Railroad

See Part IV to learn how the Cleveland Clique leveraged on John Brough to solidify its control of the Bee Line and a route to St. Louis.

John Brough, Henry B. Payne
(L) John Brough, courtesy of the Ohio History Connection. (R) Henry B. Payne, courtesy of the Library of Congress.

With John Brough’s election to president of the Indianapolis and Bellefontiane Railroad [I&B] on June 30, 1853, the Cleveland Clique cemented its position as the Midwest’s dominant railway cabal. Brough’s dual roles, both there and as president of the Mississippi and Atlantic Railroad (about to initiate construction between Terre Haute and St. Louis), personified the Clique’s reach.

It was also a visible sign of president Henry B Payne’s effectiveness crafting and implementing the Cleveland, Columbus and Cincinnati Railroad’s [CC&C’s] growth strategy. Now his attention turned to commanding the Bee Line component railroads and a line to St. Louis, both physically and legally. But, the Cleveland Clique’s grasp for control of the Bee Line Railroad would be elusive at best.

Map of railroads between Indianapolis and Cleveland c1860, annotated to show component Bee Line railroads, and the Columbus, Piqua and Indiana railroad
Map of the Bee Line component lines: CC&C, B&I in red, I&B in blue; Columbus, Piqua and Indiana Railroad (CP&I) in brown, courtesy of Erin Greb Cartography.

Just prior to Brough’s promotion, the I&B’s Clique-influenced board had resolved to convert its 4’ 8½” ‘standard gauge’ track (lateral dimension between rails) to the 4’ 10” ‘Ohio gauge.’ By law, the Ohio legislature had mandated that all railroads chartered there must be constructed to this dimension. As a result both Ohio legs of the Bee Line, the Bellefontaine and Indiana [B&I] and CC&C, had been built to this dictated standard. The Indiana-chartered I&B’s non-conforming gauge, however, prevented uninterrupted service between Cleveland and Indianapolis.

The I&B moved carefully to implement its gauge-change resolution. This was because, in early 1852, former president Oliver H. Smith had come to terms on a through-line agreement with a rail line being built between Columbus OH and Union IN – the Columbus, Piqua and Indiana Railroad [CP&I]. When completed, this important link would provide a connection to lines extending toward Pittsburgh, and on to Philadelphia over one of the growing trunk line giants: the Pennsylvania Railroad.

image of Oliver H. Smith
Oliver H. Smith, courtesy of the Indiana Historical Society.

As part of through-line negotiations to coordinate schedules and share facilities, the CP&I had acceded to Smith’s demand that it petition Ohio’s legislature to build to the I&B’s ‘standard’ gauge. It soon received a legislative exemption and began building. However, the CP&I met financial headwinds almost immediately – most notably from the Pennsylvania Railroad, which failed to meet its guarantee commitment when the company defaulted on construction bonds. Unfortunately, following bankruptcy reorganization, the CP&I would not complete construction to Union until 1859.

From the I&B’s perspective, the CP&I’s financial problems and construction delays seemed insurmountable. In contrast, the temptation to avail itself of lucrative east-west business across the combination of Ohio gauge B&I and CC&C lines proved irresistible. Under cover of a finely crafted resolution to skirt its through-line agreement with the CP&I, the I&B board resolved to lay track using the Ohio gauge as “other circumstances and relations for the welfare of the Road may require.” Under this guise, by the summer of 1853, it had re-laid track between Union and Muncie to the “Ohio gauge”.

Given this developing situation, the CP&I felt compelled to act. It successfully sought a preliminary injunction to block further track/gauge conversion. The Bee Line was effectively stymied in its effort to achieve a uniform gauge run from Cleveland to Indianapolis. Although the I&B argued the 1852 through-line agreement was silent on the CP&I’s track conversion accord, Smith’s apparent sidebar pact proved compelling to the court. I&B president John Brough, backed by a new board replete with Clique members, was directed to move decisively to resolve the problem in late summer 1853. It proved to be a particularly costly settlement.

Together, all component roads of the Bee Line agreed to guarantee the CP&I’s performance on $400,000 of bonds issued to complete the road to Union. Beyond eventually finding themselves on the hook for this issue, the Bee Line roads would provide another, and then another tranche of funding by the time the CP&I limped into Union in 1859. At least the I&B could now finish its Ohio gauge track conversion between Muncie and Indianapolis. And, under terms of the settlement, the CP&I also re-laid its track to the Ohio gauge.

Winding up the CP&I lawsuit had been a prerequisite to inking a Cleveland Clique-initiated through-line agreement among all Bee Line component roads. The day after securing the CP&I settlement, the Bee Line’s through-line agreement was signed. There were two telling provisions that spoke to the different vantage point of the Cleveland Clique and Hoosier Partisans.

Map of midwestern railroads c1860, annotated to show Bee Line component railroads and intersecting rail lines to Pittsburgh
Map of the Bee Line component railroad: I&B, B&I in blue, CC&C in red; lines to Pittsburgh in brown: CP&I to S&I/P&S, O&P, courtesy of Erin Greb Cartography.

On the one hand, the agreement allowed the B&I and I&B to make “fair and eligible connections and business arrangements . . . to secure . . . their legitimate share of the business between the cities of Philadelphia, Pittsburgh and Indianapolis.” While this clause provided a degree of freedom for the Hoosier Partisans and their Ohio counterpart to step away from their CC&C overseer, the other clause was engineered to reign in these independently minded stepchildren: “The B&I and I&B shall be consolidated at the earliest practicable moment.”

As to the latter clause, it would be easier for the Cleveland Clique to do its bidding if the Hoosier Partisans’ influence was diluted in a newly constituted board. At the same time, combining the two lines could prevent the Partisans from cutting their own agreement with the CP&I to carry traffic back and forth to Columbus and toward Pittsburgh via Union – totally avoiding carriage over the B&I and CC&C. And there was also a second option to reach Pittsburgh, via the Ohio and Pennsylvania Railroad (O&P) – passing near the B&I’s eastern terminus at Galion OH. Still, at the time, the Clique’s consolidation mandate only served to draw the two smaller lines more closely together in their common struggle for independent decision-making. As unfolded for the Cleveland Clique, however, its consolidation directive would not be accomplished easily or quickly.

image of David Kilgore
David Kilgore, from the author’s personal collection.

Squirming under the Clique’s dictate, and recognizing its strategic position as the funnel for rail traffic to and from Indianapolis to either Cleveland (and New York) or Pittsburgh (and Philadelphia), the I&B board served up its own subtle message. Essentially touting its option to bypass Cleveland through separate links to Pittsburgh, Hoosier Partisan David Kilgore proposed a name change “from and after the first day of February 1855. . . . The said Corporation shall be known by the name and style of the ‘Indianapolis, Pittsburgh and Cleveland Railroad Company’ [IP&C].” It was overwhelmingly adopted.

The name change really symbolized much more. The locally controlled and focused I&B railroad era was gone. The newly rechristened road would now test its wings as a regional player—hoping, like a teenager seeking freedom from parental control, to stand apart from the clearly parental CC&C.

Map of the proposed Mississippi and Atlantic Railroad route from excerpt of Map of the Bellefontaine and Indiana Railroad 1852
Map of the proposed route of the Mississippi and Atlantic Railroad. Excerpt from “Map of the Bellefontaine and Indiana Railroad and connecting lines” (W. Milnor Roberts, Chief Engineer: 1852). Courtesy of the Library of Congress.

Separately, in 1854, John Brough was ramping up his Mississippi and Atlantic Railroad [M&A] – destined to link Terre Haute and St. Louis. After an arduous legal effort to validate its claim to an Illinois charter, the M&A had prevailed against Chicago and Mississippi River town political interests earlier in the year. However, it would soon be faced with another trumped-up legal challenge and a concerted public relations effort to undermine its viability and management capabilities. Such obstacles were having a detrimental effect on Wall Street investors.

In March 1854 a legal opinion by Abraham Lincoln’s Illinois law office asserted the illegality of the M&A’s corporate existence. Then, a New York newspaper article questioned Brough’s managerial track record at the Madison and Indianapolis Railroad. The investor community was beginning to shy away from the M&A.

Nonetheless, with short-term funding secured, Brough pressed on with the M&A’s building phase. He issued a marketing circular and let contracts for the whole line by May, announcing the line would be completed by the summer of 1856. Brough would spend an increasing amount of time on this effort as 1854 wound down.

By the beginning of 1855 it was becoming clear Brough had the M&A on his mind. At the very least, the M&A’s pivotal role in the Cleveland Clique’s Midwest control strategy virtually mandated Brough’s full-time attention. Rumblings of his imminent departure reached IP&C board members by early February. He resigned as IP&C president on February 15, noting “experience has demonstrated to me that in this event my entire time and attention will be required on that [M&A] line.”

image of Calvin Fletcher
Calvin Fletcher, courtesy of the Indiana Historical Society.

Former I&B director (1852-53) Calvin Fletcher, among Indianapolis’ most prominent civic and business leaders, was elected president in Brough’s stead. Reluctantly thrust into the role, Fletcher noted, upon hearing of his election: “I learned to my regret I was appointed President of the Bellefontaine R.R. Co.”

Fletcher’s reticence to assume the post was understandable, based on his close familiarity with the affairs of the I&B. “I fear their affairs are desperate . . . It needed my character & acquaintance to unravel the mischief of the finances. . . . The president Brouff [Brough] has no influence on the road. All employees eschew his authority & claim that the Superintendent is the man to look to & not the President. The road & its business is [sic] in great confusion.”

image of James F. D. Lanier, c1877
James F. D. Lanier, Sketch of the Life of J. F. D. Lanier, self-published, 1877.
image of Chauncey Rose
Chauncey Rose, courtesy of the Indiana Historical Society.

Even though Brough was dealing with M&A matters full time beginning in mid-February 1855, the concerted efforts of powerful Chicago and Mississippi River town political interests had swept away investor confidence. James F. D. Lanier, the M&A’s financier through the Wall Street firm that bore his name – Winslow, Lanier & Co. – decided to take desperate action.

On May 20th the M&A board, controlled by Lanier, demoted Brough to Vice President in favor of Chauncey Rose. Rose, founder of the Terre Haute and Richmond Railroad linking Indianapolis with Terre Haute, assumed the presidential mantle. In spite of his impeccable reputation as a railroad executive, Rose’s presence failed to sway the investor community.

John Brough would not live to see the Mississippi and Atlantic Railroad completed to St. Louis. And, more to the point, how would the Cleveland Clique view Brough as their pawn in its broader Midwest railroad control strategy?

Check back for Part VI to learn more about the Hoosier Partisans move for autonomy as the Cleveland Clique tightened its grip on the Bee Line Railroad.

Continue reading “The Cleveland Clique’s Elusive Grasp for Control of the Bee Line Railroad”

The Cleveland Clique’s Bee Line Railroad Control Strategy to St. Louis: John Brough

See Part III to learn about how the Bee Line and other Midwest railroads reset, and sought to accomplish, their goal – to reach St. Louis.

Bee Line railroads map, excerpt from Bellefontaine and Indiana 1852 Railroad Map

Proposed Mississippi and Atlantic Railroad route map, excerpt from 1852 Bellefontaine and Indiana Railroad Map
Top: Map of the Bee Line component railroads. Bottom: Map of the proposed route of the Mississippi and Atlantic Railroad (both excerpts from “Map of the Bellefontaine and Indiana Railroad and connecting lines,” 1852, courtesy of the Library of Congress).

With John Brough’s elevation to the presidency of the Bee Line’s Indianapolis and Bellefontaine Railroad [I&B] segment – between Indianapolis and Union – on June 30, 1853, the Cleveland Clique was understandably euphoric. Brough’s newly arranged presidential authority there and at the Mississippi and Atlantic Railroad [M&A], about to begin construction between Terre Haute and St. Louis, personified the Clique’s growing regional dominance. By all appearances they, through the Cleveland, Columbus and Cincinnati Railroad (CC&C) and president Henry B. Payne, would soon control the key Midwest rail corridor linking the East Coast and the West.

At the same time, the closer-to-home Bellefontaine and Indiana [B&I] – linking the I&B at Union with the Clique’s marquee railway, the CC&C, at Galion OH – had already found itself under the financial sway of the Cleveland band.  Incredibly, the strategy to command a string of railroads tying St. Louis to the Eastern truck lines then breaching Ohio’s eastern boundary had been orchestrated by the CC&C’s Henry Payne in little more than two years.

image of John Brough, image of Henry B. Payne
(L) John Brough, courtesy of the Ohio History Connection. (R) Henry B. Payne, courtesy of the Library of Congress.

In the almost giddy atmosphere that prevailed following John Brough’s coronation, an impromptu trip was arranged. Why not visit Terre Haute, and the Illinois state line for that matter, and then travel in a single day from Terre Haute to Cleveland? It would underscore what the Clique had accomplished, provide an on-the-ground view of the new western terminus of the coordinated lines, and draw them closer to the independently minded stockholder/management team at the controls of the Terre Haute and Richmond Railroad [TH&R] – the only gap in the Clique’s string of pearls between Cleveland and St. Louis.

image of James H. Godman, image of Calvin Fletcher
(L) James H. Godman, courtesy of the Marion (Ohio) County Historical Society (R) Calvin Fletcher, courtesy of the Indiana Historical Society.

Members of the Cleveland Clique along with president James H. Godman of the B&I, newly minted I&B president John Brough as well as board member Calvin Fletcher and secretary Douglass Maguire boarded a special train destined for Terre Haute on July 1st. It had been less than twenty-four hours since the Clique’s I&B annual meeting coup. None of the original I&B Hoosier board members went along for the ride.

In one respect the trip was a success. They drank brandy and wine with Samuel Crawford, president of the TH&R, supped together and made it to a symbolic bridge spanning the Wabash—peering across wide stretches of western Indiana farmland toward Illinois. Truman P. Handy and William Case, board members of the Cleveland Clique’s cornerstone CC&C railroad, continued on to the Illinois line by horse and returned to Terre Haute by 3 a.m. Now they could boast of having made it from the Illinois line to Cleveland in a single day.

image of Truman P. Handy, image of William Case
(L) Truman P. Handy, Biographical Cyclopedia and Portrait Gallery of the State of Ohio, Vol 2. (Cincinnati: John C Yorston & Co, 1880). (R) William Case, courtesy of Cleveland Public Library.

A private train left Terre Haute before dawn on July 2nd. It ran at a blistering thirty miles per hour until hitting a cow near Belleville—knocking the engine and car off the track. It was a near-death experience, as Calvin Fletcher recounted. Still, they were in Indianapolis by 6:30 a.m.

Fletcher did not record whether they accomplished the lofty goal of making it to Cleveland that day, as he remained in Indianapolis. All the same, except for the lack of participation by original I&B board members, it had been a notable start to John Brough’s presidency – and provided a glimpse of the Clique’s mechanism for expansion. The Hoosier Partisan’s absence would prove to be a telling sign of issues looming ahead.

Two weeks later Calvin Fletcher was among a sizable number of Indiana business and political nobility who, along with their spouses, received an invitation from the Cleveland Clique. The request was to join them for an all-paid junket to Niagara Falls. “I had an invitation with our citizens, those of Lafayette, Crawfordsville, Terre Haute, Dayton, Cleveland, Bellefontaine &c…a number have an invitation here.”

image of Daniel Yandes, image of David Kilgore, image of Thomas A. Morris
(L) Daniel Yandes, courtesy of the Indiana Historical Society. (M) David Kilgore, author’s personal collection. (R) Thomas A. Morris, courtesy of the Indiana Historical Society.

Hoosier Partisans Alfred Harrison, Daniel Yandes and David Kilgore as well as ubiquitous Indiana railroad construction engineer and soon to be I&B board member Thomas A. Morris were among the throng. They all boarded a special train awaiting them in Indianapolis on the morning of July 20th. In his diary, Calvin Fletcher would capture both the spectacle of the excursion and the travails of travel during this era.

Map of railroads between Indianapolis to Niagara Falls, annotated to show 1853 excursion route.
Map of Cleveland Clique junket from Indianapolis to Niagara Falls, over the Indianapolis and Bellefontaine, Bellefontaine and Indiana (both in red), Cleveland, Columbus and Cincinnati (blue), by ship to Buffalo (orange dash), and rail to Niagara Falls (orange). Cities visited in colored rectangles. Courtesy of Erin Greb Cartogarphy.

The conductor to Union was none other than Fletcher’s recently hired son Stoughton Jr., who helped the party around a derailed freight train along the way. They arrived at Union about 10:30 a.m. Connection delays added to a tardiness that precluded the Hoosier contingent from stopping at Marion, Ohio, for a B&I board–arranged dinner. Instead, they raced on to Galion to connect with CC&C cars coming from Columbus. The crowd reached Cleveland at 7:30 p.m., only to find the boat hired to take the assembled masses to Buffalo had broken down.

image of Cleveland Railway Station and Docks, 1854
Cleveland Railway Station and Docks, 1854. (James Harrison Kennedy, A History of the City of Cleveland: Its Settlement, Rise and Progress 1796-1896. Cleveland: Imperial Press, 1896.)

Because the politicians of Erie, Pennsylvania had made smooth rail travel between Cleveland and Buffalo nearly impossible during the early 1850s, going by this route was not a viable option. To force passengers and freight to overnight in Erie, city fathers had mandated different track ‘gauges’ (the lateral distance between iron rails) for railways entering/leaving the city from the east and west. The Erie “war of the gauges”, in combination with intentionally and poorly synchronized railroad schedules, wreaked havoc on passengers and shippers alike. Erie thrived on this senselessness until 1855, during which time near-riots by local merchants and warehouse workers nearly scuttled a move to finally synchronize schedules and re-lay rails to a uniform gauge.

It was midnight before more than 750 passengers stranded in Cleveland boarded a replacement vessel to Buffalo – arriving the next day at noon. There, a train of nearly fifteen cars met the ship and whisked its guests the final miles to Niagara Falls. They took in the falls and were awestruck by the engineering feat of the recently completed railway suspension bridge traversing the Niagara River. The revelers were then ferried behind the tumultuous sheets of water before dinner and a moonlit trip to Goat Island. The excursion lasted less than twenty-four hours. On the return boat trip to Cleveland the assembled guests lunched, ironically, at Erie, Pennsylvania.

image of Niagara Railway Suspension Bridge, c1876
Postcard image of the Suspension Bridge across Niagara Falls circa 1876, courtesy of the Library of Congress.

That evening Cleveland’s mayor hosted what Fletcher referred to as a “soirée” of dinner, music, and speeches. He called it “a most splendid affair that I ever witnessed.” As might have been expected, newspaper editors and writers had been invited gratis. They clearly earned their passage by publishing effusive articles in the regional and national press.

The editor of the Indianapolis-based Locomotive gushed: “We have never taken an excursion with which we were so well pleased. Every arrangement was made in princely style for the accommodation of the invited guests; and everything free as air, from our railroad bills down to our omnibus bills, including hotels and everything necessary.” It had proved to be the most incredible public relations feat of its day.

Finally, on the return leg from Cleveland to Indianapolis, the B&I board hosted the earlier-deferred dinner party at Marion, Ohio. Toasts were exchanged, a “three cheers” shouted, and the Hoosiers were off to Union the next morning. There they waited an hour for connecting passengers coming from Cincinnati. Exhausted, the entourage supped at Muncie and finally arrived back in Indianapolis by 11 p.m.

Still, for the people of the era, it had been both an awe-inspiring event and a technological marvel. To the parochial Hoosier Partisans, it brought home the sobering reality that the Cleveland Clique outgunned them financially and politically. The sheer number of interconnected board, business, banking, and government relationships represented at the Cleveland festivities was astounding. And they had gathered with a single purpose: to focus their wide-ranging powers on dominating the Midwest rail corridor between Cleveland and St. Louis.

The I&B, basking in the afterglow of this landmark event, which drew investor attention to its pivotal role as a funnel for traffic from Ohio to Indianapolis, saw its stock and bond prices jump. Nonetheless, Calvin Fletcher decided to sell all but $5,000 of his stock in August. He found a ready market: “I distributed among my friends who seemed to want it & one demanded, as a matter of right as I had offered to others, that he should have a portion. The stock soon fell & it was fortunate I let it go.”

Fletcher’s unemotional view was sprinkled with a candid and ominous reality, however: “Brough the president has failed to establish his right to go through to St. Louis straight. This I think will effect [sic] the road materially.” And he was right.

Whatever the reason for the I&B’s price bounce, it did not reflect the financial or business reality with which John Brough and the Cleveland Clique were faced.  Brough’s usefulness to the Cleveland Clique appeared, for the moment, to be in question.

Check back for Part V to learn more about how the Cleveland Clique turned their attention to binding the various component parts of the Bee Line together both physically and legally – to the irritation of the Hoosier Partisans.

Continue reading “The Cleveland Clique’s Bee Line Railroad Control Strategy to St. Louis: John Brough”

The Bee Line Railroad Financing Dilemma: Loss of Local Control

Indianapolis and Bellefontaine Railroad 1853 advertisement-schedule
Indianapolis & Bellefontaine RR train schedule, printed in Calvin Fletcher’s diary, courtesy of the Indiana Historical Society.

See Part I to learn about the origins of the Bee Line and the men who brought it to life.

The Bee Line Railroad almost never was. At the dawn of the Midwest railroad era Hoosiers were slow to embrace what became the technological marvel of the 19th century. Dependent on state funds or newly emerging Wall Street for cash, initial railroad financing prospects looked dim. Instead, canals were the preferred method of transportation in the mind of the public.

The State of Indiana began planning for a litany of “internal improvements” from its inception in 1816.  In his 1827 message to the General Assembly, Governor James B. Ray (1825-1831) admonished the legislators, noting that railways could convey “equal burdens to any that can be transported on a Canal . . . and with double the velocity.” However, at the time, the legislature was not moved by his argument.

Indiana Governor James B Ray and Wall Street financier James F. D. Lanier
(L) Governor James B. Ray, courtesy of the Indiana Historical Society (R) James F. D. Lanier, Sketch of the Life of J. F. D. Lanier (self-published, 1877).

Finally, as interest in railroads began to percolate by 1832, legislators approved charters for eight – including the Madison, Indianapolis and Lafayette Rail-Road Company. Prominent among its board members was Madison banker James F. D. Lanier, destined to become the leading Wall Street financier of virtually all Midwest railroad era lines during the mania of the 1850s, including the Bee Line.

More than thirty Indiana railroads were chartered between 1832 and 1838. Nonetheless, attempts to lure private capital via stock subscriptions fizzled. Only a mile and a quarter of experimental track had been laid near Shelbyville by the end of the decade.

Madison and Indianapolis Rail Road 1850 Annual Report Cover
Annual Report Cover, Madison and Indianapolis Rail Road Company, 1850, courtesy of the Indiana State Library.

Indiana’s infatuation with canals was reflected in the Mammoth Internal Improvements Act of 1836, which appropriated one-sixth of the state’s wealth for the effort. Of eight state projects funded, only one was for a railroad – what became Indiana’s first: the Madison and Indianapolis Railroad [M&I].

Much of the debt to fund these efforts was taken up by the financial barons and financiers of Europe. Rolling mills and metal fabricators in the United Kingdom (UK) were then seeking new markets for their locomotive and rolled rail products. American manufacturers capable of producing such articles were only just beginning, as the Industrial Revolution reached its peak in Europe a full generation before doing so in the U.S. It became a mutually dependent relationship through the 1850s: English products for American dollars.

By the early 1840s Indiana’s failed internal improvements push had become obvious. The state called on Lanier to extricate it from near financial ruin. Before Lanier sailed to Europe in 1847 to negotiate Indiana’s financial exit plan, it had already jettisoned its canal and railroad holdings.

Beyond his success ensuring the state’s survival, Lanier returned from Europe with the confidence of the barons of Continental and English finance. Since the UK was America’s primary source for finished iron rails until the Civil War, the importance of such developed trust was pivotal. These relationships became the cornerstone of Lanier’s success as the Midwest’s preeminent member of Wall Street’s new financial sector: investment banking.

Wall Street Investment House floor circa 1865
Wall Street Investment House, circa 1865.

As part of its privatizing move in 1842, the Indiana legislature had authorized the M&I to borrow money and issue bonds to complete the line to Indianapolis not later than 1848. In his role on the M&I’s reconstituted board, Lanier orchestrated placement of $50,000 (in 1845) and $100,000 (in 1846) of private bonds through the Wall Street firm which would soon bear his name: Winslow, Perkins & Co.

With funds in hand, the M&I finished the final fifty-six miles of track to Indianapolis by October 1847, at a cost of $628,000. Daniel Yandes, subsequently the Indianapolis and Bellefontaine Railroad’s primary stockholder, had won a bid to construct ten miles of the road. The whole task was finished nearly a year before its targeted completion date. In comparison, as a state-run company, it had taken seven years and over $1.5 million to lay the line’s first twenty-eight miles.

The M&I’s Wall Street firm of Winslow, Perkins & Co. began to weigh in on the railroad’s managerial approach after suffusing it with cash. It foretold the more active role financiers would take in operational decision-making of businesses they were funding. To that end, a new president arrived at the M&I in August 1848: John Brough of Ohio, whose life would revolve around the Bee Line railroad.

John Brough image
John Brough. Courtesy of the Ohio History Connection.

Brough had been a youthful and powerful member of Ohio’s legislature. As a freshman legislator at the age of 26, he chaired the Committee on Banks and Currency. Subsequently he was chosen the state’s auditor, a position he held until 1845. Brough had come to Madison, Indiana from Cincinnati, after a three year stint with his brother running the emerging Cincinnati Enquirer newspaper.

By the time Brough issued his first report to shareholders in January 1849, the newly christened Wall Street financial firm of Winslow, Lanier & Co. held more than $92,000 of M&I cash equivalents. Both Merssrs. Winslow and Lanier held positions on the board of directors.

Wall Street was fast becoming the financial clearinghouse for matching Eastern Seaboard and European investors with Midwest railroad securities. A new class of private bankers arose, backed by European firms, which began to serve as investment middlemen. These newly coined “investment bankers” evaluated the quality of securities, served as investment advisers to individuals with surplus capital, acted as financial agents for the railroads, and frequently took investment positions themselves. They also allocated investment capital among the many railroads seeking cash infusions.

Map of Midwest Railroads, with Madison and Indianapolis, Indianapolis and Bellefontaine, Bellefontaine and Indiana, and Cleveland, Columbus and Cincinnati railroads annotated in color
Map of Midwest Railroads, with the Madison and Indianapolis [M&I], and Bee Line component lines: Indianapolis and Bellefontaine [I&B], Bellefontaine and Indiana [B&I], and Cleveland, Columbus and Cincinnati [CC&C] annotated in color. Courtesy of Erin Greb Cartography.
Initially, Brough developed a strategy to build, invest in, or otherwise secure favorable operating agreements with a planned web of railroads radiating from Indianapolis. And invest he did. The M&I, Brough reasoned, would gather agricultural goods from the southern two-thirds of Indiana and funnel them via Indianapolis to Madison for transport on the Ohio River.

To assure its dominant position, Brough used his politically powerful board to block a railroad charter for a rail line headed from Indianapolis toward Cincinnati (Lawrenceburg). He also rejiggered timetables to prevent convenient connections over a newly chartered branch line extending toward Louisville (Jeffersonville) from Columbus, Indiana.

David Kilgore image
David Kilgore, from the author’s personal collection.

David Kilgore, director of the 1848-chartered Indianapolis and Bellefontaine Railroad [I&B] – first leg of the Bee Line extending from Indianapolis to the Ohio state line – noted Brough’s aggressive, anti-competitive tactics: “now they would put their feet upon the neck of competition . . . And why? . . . Rival interests are springing up at other points, and if they can be crippled, so much the better for this city [Indianapolis] and Madison.” It would not be long, however, before Brough would prove unable to stem the tide of competition.

Brough’s involvement planning Indianapolis’ Union Station in the early 1850s, with M&I’s investment in the Indianapolis Union Railway Company, yielded insights about the financial health and intentions of other lines terminating there. Unfortunately for him, in 1851 Indiana’s new constitution was adopted, including a mandate to craft general incorporation laws. No longer would special charters be required to form new railroads. It signaled the end of the M&I’s political agility to stifle competition.

Indianapolis Union Station image circa 1906
Indianapolis Union Station, circa 1906, courtesy of the Indiana Historical Society.

As a result, Brough shifted strategies. He now sought to make two of the newborn and financially anemic lines dependent on the M&I. Brough would set his sights on the Indianapolis and Bellefontaine, building northeast from Indianapolis. It was already making plans to connect with roads angling to another key center of economic growth: Cleveland. And with the help of Lanier and his Wall Street firm, the lure would prove to be almost irresistible.

Cleveland Railway Station and Docks 1854
Cleveland Railway Station and Docks, 1854 (James Harrison Kennedy, A History of the City of Cleveland: Its Settlement, Rise and Progress 1796-1896. Cleveland: Imperial Press, 1896).

To the surprise of investors, as well as the Indianapolis and Bellefontaine’s board, costs of funding construction and operation of the new railroad had been grossly underestimated. Without access to substantial credit facilities, motive power equipment, rolling stock, iron rails and operating personnel, the I&B was going nowhere. There to “help” was Brough and Winslow, Lanier & Co.

The M&I, as orchestrated by Brough, guaranteed newly issued I&B bonds that Lanier had floated.  Now, it could purchase the M&I’s surplus iron rails, and lease its motive power and rolling stock equipment. The basis of the bargain was a lucrative five-year operating agreement, which commenced in 1850. The M&I would not only supply all personnel, but also collect and distribute ticket and freight receipts, paying itself from the proceeds it handled.

Whose railroad was it anyway? By the time the I&B started partial service between Indianapolis and Pendleton in 1851, the railroad was the Indianapolis and Bellefontaine in name only. It was all as Brough had planned.

image of Henry B Payne, president of Cleveland, Columbus and Cincinnati Railroad 1851-1854
Henry B Payne, courtesy of the Library of Congress.

There was another important aspect of the new line’s financial health. By 1853, when the I&B commenced service all the way to Union, the dominant regional player – the Cleveland, Columbus and Cincinnati Railroad [CC&C] through its president Henry B. Payne – had loaned the I&B and its sister Bellefontaine and Indiana line in Ohio a combined sum of over $100,000.

Thus, no sooner had the smaller combined Bellefontaine lines, now known collectively as the Bee Line, begun full service than they began to lose a grasp on their own destiny. Pulling the financial strings were John Brough, James F. D. Lanier, and a Cleveland Clique of businessmen and bankers headed by Henry B. Payne, then at the controls of the CC&C. The resulting tug of war between the Cleveland Clique and Hoosier Partisans for control of the Bee Line would continue throughout the 1850s.

Map of the Madison and Indianapolis, Indianapolis and Bellefontaine, Mississippi and Atlantic, Terre Haute and Richmond railroads annotated
Map of the Madison and Indianapolis [M&I] and involved lines: Indianapolis and Bellefonatine [I&B] and Mississippi and Atlantic [M&A] annotated in color, as well as the Terre Haute and Richmond [TH&R]. Courtesy of Erin Greb Cartography.
But Henry Payne and the Cleveland Clique had other aspirations as well. Controlling rail lines all the way to St. Louis would cement its dominant role among Midwest railroads. And John Brough, recognizing the need for the M&I to control other railroads heading to more viable destinations, had – with the help of James Lanier – already turned his gaze to St. Louis.

Check back for Part III to learn more about John Brough and the Cleveland Clique’s pivotal play to reach St. Louis, as well as the resulting impact on the Bee Line and its Hoosier Partisans.

Continue reading “The Bee Line Railroad Financing Dilemma: Loss of Local Control”

The Bee Line Railroad: At the Dawn of the Midwest Railroad Era

Bee Line Train, Bellefontaine Railway 1864
A Bee Line Train; Bellefontaine Railway 1864 Annual Report Cover. Courtesy of the Indiana State Library.

On May 11, 1848, as the Midwest railroad era dawned, Connersville-based former Indiana Congressman and Senator Oliver H. Smith took to the podium in Indianapolis: “The time has now come when central Indiana has to decide whether the immense travel, emigration, and business of the west should pass round or go through central Indiana…and not force them round by either Cincinnati on the east, or Chicago on the north.”

Smith, who had also sponsored a bill to extend the National Road through Indiana during his Congressional term in 1828, foresaw the potential economic synergies in linking Midwest railroads from the heartland with East Coast markets. Now, its citizens would need to make the financial investment to make it happen. And the mechanism to ignite this explosive rush was not a rutted path or canal, but a new form of transportation in the Midwest: a railroad. It would be among Indiana’s first.

By July, Smith had tallied the necessary stock purchase commitments or “subscriptions” to incorporate the railroad destined to link Indianapolis to Cleveland on one end, and to St. Louis on the other. In legal terms, it was called The Indianapolis and Bellefontaine Railroad [I&B], extending 83 miles northeast from Indianapolis to an undefined location in the wilderness along the Ohio state line.

Soon, it connected with two others Ohio railroads to reach Cleveland – one with a confusingly similar name: The Bellefontaine and Indiana Railroad [B&I]. The other was already the regional powerhouse that soon financed, controlled and finally swallowed the other two: The Cleveland, Columbus and Cincinnati Railroad [CC&C]. But to the traveling public the complete or partial string of railroads linking these economic centers became known as the Bee Line – like a bumblebee’s nearly straight-line path between these two cities.

Bee Line Railroad, circa 1860
Route of the Bee Line Railroad, circa 1860. Courtesy of Erin Greb Cartography.

The pedigree of Smith’s first board of directors read like a Who’s Who of eastern Indiana politicians and business leaders. Because the bulk of initial stock subscriptions came from county boards through which the line would pass, representatives from Marion, Hancock, Madison, Delaware and Randolph counties populated the first board.  Many were closely affiliated with Oliver Smith in terms of shared political and legal careers – such as Jeremiah Smith of Randolph County and David Kilgore of Delaware County.

Indianapolis & Bellefontaine Railroad route, circa 1855
Route of the Indianapolis & Bellefontaine Railroad, circa 1855. Reprinted from Map of Indiana. New York: J. H. Colton & Co., 1855. Courtesy of Ball State University Libraries, GIS Research and Map Collection (annotated by Erin Greb Cartography).

The two Smiths had met in the mid 1820s when both served as state and county prosecuting attorneys. Oliver appointed Jeremiah to chair the Indianapolis and Bellefontaine’s committee to locate its eastern terminus somewhere along the Ohio state line. Once determined, the Smiths moved quickly to capitalize on their insider information. They purchased the land and platted what shortly became known as Union – today’s Union City. Jeremiah in particular would profit handsomely, as Union became a key Midwest railroad junction town by the mid 1850s.

And because early railroad companies did not allow locomotives or rail cars to travel beyond their geographic/corporate boundaries, Union bustled with activity. Oliver Smith rationalized that the avoidance of potential accidents and repairs to cars sent out of state “would more than counter balance any inconvenience growing out of transfers at the State Line, from one line to another.” One can only guess the passengers’ reaction to this rationale, as they were often forced to stay overnight at Union’s Branham House hotel awaiting an onward train.

Oliver and Jeremiah Smith
(L) Oliver H. Smith. Courtesy of the Indiana Historical Society. (R) Jeremiah Smith. Courtesy of the Preservation Society of Union City.

David Kilgore, on the other hand, had been active with Oliver Smith in Indiana Whig politics. They often served as lawyers on the same case, and grew close as Smith purchased the land and platted Kilgore’s Yorktown hometown in 1837. Kilgore owned a parcel adjacent to Yorktown as well as a sizeable farm on the Indianapolis Road between Yorktown and Daleville. Conveniently, the Bee Line would slice through both parcels of Kilgore’s land – not to mention curving through Smith’s Yorktown.

David Kilgore
David Kilgore. From the author’s personal collection.

As prominent editor Henry V. Poor of the nationally renowned American Railroad Journal spouted about the route of the Bee Line: “the road undoubtedly should have been constructed on a direct line between Indianapolis and Union…why did he not take this line for the Bellefontaine road? Because he owned some property at Yorktown or Muncietown and curved the road to promote his private interests.” Railroading was about more than just railroading.

Daniel Yandes
Daniel Yandes. Courtesy of the Indiana Historical Society.

The opportunities for personal gain abounded in building the railroad as well. Nearly all of the directors gained lucrative contracts to supply ties for long stretches of the route, for building depots, and representing the Bee Line in right-of-way disputes. Then, as funding grew thin, Indianapolis entrepreneur Daniel Yandes and banker Alfred Harrison teamed up to finance and complete construction of the route from Chesterfield to Union – essentially taking stock and board control of Smith’s railroad even before the first train reached Union in 1853.

Oliver Smith’s eagerness to cut lucrative side business deals connected to the Bee Line ultimately proved to be his undoing. In 1853, Indianapolis led the country by constructing the nation’s first “Union Station“. Remarkably, until then, different railroads terminating in the same metropolitan center did not share a common station or depot. They would often be miles apart from each other. While good for local transportation companies, warehouses and hotels, it made little long-term business sense. Although the Indianapolis and Bellefontaine’s depot in the northeast corner of Indianapolis was the outlier among all others, Smith refused to place a machine or repair shop facility closer to Union Station.

Indianapolis Depots map, 1852
Indianapolis Depots Map, from SD King Map of Indiana, 1852. Courtesy of the Library of Congress (annotated by Erin Greb Cartography).

Calvin Fletcher, the highly-regarded Indianapolis civic leader and banker through whose land the Bee Line passed – and who assumed a board position in mid 1852 – took note of Smith’s rationale for resistance. Recounting the board issue in his diary, Fletcher observed: “The subject of removal of the Depo [sic] now built on the North East part of the town would be adjitated [sic]. This I knew would be extremely offensive to Mr. O.H. Smith…as he was, as I supposed, connected with Billy Young in the property in its vicinity.”

Calvin Fletcher
Calvin Fletcher. Courtesy of the Indiana Historical Society.

Smith was still laboring under the misimpression that his authority was all but absolute. He had clearly dismissed the board power shift that occurred the year before when Daniel Yandes and Alfred Harrison struck a stock payout deal to complete building the road to Union. The emerging Hoosier Partisans power group which grew to include Calvin Fletcher – whose board election they orchestrated – and David Kilgore, however, relegated Smith to the sidelines.  By the Spring of 1853 they accepted his resignation from the board of the railroad he had toiled to bring to life.

As was typical of early Midwest railroad boards, the Bee Line far underestimated the amount of capital required to bring such a massive undertaking to life. For early Midwest businessmen, financing and operating such large corporate organizations were matters of first impression. And with hard cash virtually non-existent, individuals could commit to purchase stock by pledging labor, materials or land. Such arrangements often left the railroad cash poor and unable to meet its obligations. County governments, with pushback from both its citizens and Indiana’s governor, had reached their limit as well.

Bee Line, Indianapolis, Madison, Railroad
Map of the Indiana portion of the Bee Line, and the Madison and Indianapolis Railroad circa 1860. Courtesy of Erin Greb Cartogarphy.

Fortunately for the Indianapolis and Bellefontaine and Indiana’s first railroad, the Madison and Indianapolis Railroad [M&I] (completed in 1847), their pressing mutual financial problems would be the solution for each. The M&I had a supply of unused rails, underutilized equipment, and a solid credit position – courtesy of its earlier birth as a state-run and funded railroad. But it was slowly diminishing in importance as its route to Indiana’s Ohio River port city of Madison could not rival the well establish and larger commercial cities just up and down river – Cincinnati and Louisville. And the situation became more acute when Indiana’s legislature allowed any group of individuals able to raise $50,000 to build a railroad to anywhere in the state without a special charter. Those headed toward Cincinnati and Louisville were at the top of the list.

On the other hand, the I&B possessed an enviable route pointed toward Cleveland and ultimately the East Coast. However, it needed the credit to which the M&I had access – not to mention rails to finish its construction, and equipment and operating personnel to actually run the line. It appeared to be a ‘win-win’ for both. M&I’s President, John Brough, saw this opportunity and capitalized on the situation.

By the time the Bee Line’s first segment, the I&B, opened between Indianapolis and Pendleton in 1851, Brough’s M&I would be supplying rolling stock and operating personnel as well as financial backing. It would not come without a cost. The balance of his life and career would be closely tied to the Bee Line. However, this new relationship also signaled the beginning of a love-hate affair between Brough and the Hoosier Partisans.

Check back for Part II to learn more about John Brough’s career and relationship with the Bee Line, and the financier behind the growth of Midwest railroads: Indiana’s James F. D. Lanier.

Continue reading “The Bee Line Railroad: At the Dawn of the Midwest Railroad Era”