The life of Hoosier industrialist Henry Ulen seems like a movie—a person of little education and resources who uses his raw talents and savvy to build a massive business empire, who then comes back to his hometown to share the fruits of his success. Perhaps it was his years drifting from town to town on the railroads as a young man that inspired a sense of community, of needing a place to call one’s own. As such, his business ventures were all about providing places with the tools they needed to build communities and wealth of their own. And today, over 120 people still call the town of Ulen home, with the golf course still serving as a hub that brings the community together. The life, work, and charity of Henry C. Ulen exemplified the true meaning of “Hoosier Hospitality.”
During his long and storied career, Indianapolis-based investigative journalist William H. “Billy” Blodgett exhibited a penchant for exposing local corruption and unlawful business practices. One not entirely aboveboard business in particular caught his attention in the 1890s.
Of these companies, the Allen Manufacturing Company garnered moderate success but attracted controversy. Founded in 1894 and later incorporated in 1895 by David F. Allen, David A. Coulter, James Murdock, and William B. Hutchinson, Allen Manufacturing maintained a peculiar corporate structure and political affiliation with the Democratic party. In some respects, you could have called the company a “Government-Sponsored Enterprise,” wherein the products made were sold in the marketplace but the labor and capital costs were funneled through government institutions. This is especially true of its labor force, comprised exclusively of prisoners from the State prison north in Michigan City. As reported by the Indianapolis News, “the convicts who work in the factory are to be paid 42 cents a day. Mr. French [the prison’s warden] says that 150 men will be employed in the factory.”
Before Blodgett’s investigative reporting on the company, the Indianapolis Journal published a pointed critique of Allen Manufacturing’s labor force. The piece referred to the venture as a “blow to honest labor” and argued that the lack of skilled bicycle makers will “glut the market with cheap wheels.” The article emphasized this point in a further passage:
At the price paid [for labor] the company will have a great advantage over the manufacturers of Indiana, and their employees will, of course, share in the loss by reason, if not through cheapened wages, then of less opportunity for work. The new venture is not likely to decrease their hostility to the prison labor system and the Democratic party of Indiana.
Another piece in the Indianapolis News, possibly written by Blodgett, also criticized the company’s deep ties to political operatives, and in particular, founder David F. Allen. Allen was serving on the State Board of Tax Commissioners when the company was founded (but not incorporated), and if he didn’t leave the Board, he would be violating section 2,049 of the Indiana legal code. In other words, Allen and his business partners kept the public existence of the company private for nearly a year, incorporating on March 14, 1895, so as to avoid potential conflicts of interest.
While Allen Manufacturing was still an unincorporated entity, it struck a deal with the Indiana prison north in October 1894 to employ 150 prisoners at forty cents a day (lower than forty-two cents, as mentioned in the papers) for the next five years. The agreement was then amended in 1896 to remove twenty-five workers from the contract for another project. Again, this is a private consortium of well-connected political operatives setting up a business to take advantage of the state’s prison labor system .
At least the prisoners made a quality product. While I couldn’t find photographs of the bicycles, they were apparently made well enough to appear in a state-wide bicycle exhibition on January 28, 1896 at the Indianapolis Y.M.C.A. According to the Indianapolis Journal, the Allen Manufacturing Company displayed its bicycles with 14 other firms and the show also displayed artwork by T.C. Steele, among others. Allen Manufacturing also acquired the Meteor Bicycle Company, a nationally recognized firm located in Grand Rapids, Michigan, and began manufacturing bikes under the name from 1896 to 1898. While the public face of their company seemed bright, its internal workings quickly began to unravel.
By 1897, Allen Manufacturing’s financial problems began bubbling to the surface. After the release of twenty-five prisoners from their contract at Indiana state prison north, its labor force wasn’t big enough to keep up with an order for 2,000 bicycles wheels. From there, the company ran up debts that were nearly impossible to reverse, taking out a mortgage to offset their losses. As reported by the Indianapolis News:
Edward Hawkins, of this city [Indianapolis], who has been appointed trustee under the mortgage, returned to-day from a meeting of the officers and directors of the company at Michigan City. The company, he says, found itself unable to pay its paper due, and executed a mortgage on the plant for the benefit of the banks that hold the paper.
Even though it paid off $6,500 owed to the state in October of 1897, Allen’s troubles continued. Hawkins was removed as mortgage trustee, more and more creditors were filing claims, and two court-appointed receivers stepped in to try to clean up the mess.
This is where Billy Blodgett’s articles began to shed light on the corruption. In January of 1898, Blodgett began a series of hard-hitting exposes in the Indianapolis News against Allen Manufacturing, writing of alleged abuses of state power, graft, and fraud. His first article, published on January 13, 1898, alleged that whole train-cars of bicycles were purchased by individual owners of the company, such as D. F. Allen and D. A. Coulter, and then shuffled around the assets for accounting purposes. Specifically, Allen purchased “$4,000 worth of bicycles,” transferred ownership to his son, and then “applied [the amount] on notes given to the Merchants’ National Bank of Lafayette.” The article also reaffirmed what many had suggested since the company’s founding. Namely, its public incorporation was made after key leaders removed themselves from conflicts of interest yet acted as an incorporated entity when it negotiated its labor contract with the prison.
The next day, Blodgett published the next installment, writing of the company’s alleged fraud in connection to its stocks. The Chicago firm Morgan & Wright, who purchased the company’s manufacturing plant during its initial financial woes, alleged that Allen Manufacturing had used backdoor loans from the Merchant’s National Bank of Lafayette in order to inflate its asset value. “In other words,” Blodgett wrote, “Morgan & Wright will try to show [in court] that the total amount of money paid for the stock was $300,” rather than the $4,000 or $5,000 the company claimed.
Blodgett also reported another fascinating case of company misdirection. On October 15, 1897, LaPorte County Judge William B. Biddle ordered the company to stop selling any products and hand the reins over to receiver Alonzo Nichols. This order was ignored by Henry Schwager, another receiver appointed to the company in Michigan City. Biddle retaliated on November 23, issuing an order against the company at large and reaffirmed his previous decision. What came next is shocking:
. . . Sheriff McCormick went to Michigan City to take possession of the property. When he got there, he found the building of the Allen Manufacturing Company locked up, and he could not get in to make the levy, without using force. He was warned not to do this, so the sheriff and his deputies stood around on the outside of the prison, and as the carloads of property came out they seized them. He found the property at different points, and turned it all over to Nichols as receiver.
In other words, Sheriff N. D. McCormick and his deputies had to wait until the company didn’t think the authorities were looking before they could seize the goods. Even in the face of court orders, the Allen Manufacturing Company still tried to do things its own way, to disastrous results.
Billy Blodgett’s final big piece on Allen Manufacturing appeared in the Indianapolis News on January 15, 1898. In it, Blodgett tries to track down and interview company big-wigs David Coulter and David Allen. Blodgett wrote of Coulter that, “He is pleasant and affable, courteous and polite, but I might as well have talked to the Sphynx in Egypt, so far as getting any information from him.” Over the course of a short, frosty conversation between Blodgett and Coulter, the businessman declined to speak about any of the charges leveled against him and maintained his innocence. When Blodgett pressed him on some of the specific charges of defrauding investors, his “demeanor demonstrated that the interview was at an end. . . .”
As for Allen, he was unable to interview the man directly but spoke to one of his colleagues. Blodgett chronicled the exchange:
A few weeks ago Mr. Allen met this friend and said to him:
“You remember the evening you asked me to dinner with you in Chicago?”
“Yes, I remember.it distinctly.”
“Well, that failure to take dinner with you has cost me $5,000, and may cost me more.”
The friend understood from this that if Allen had not gone to the meeting at which the company was formed he would have been money ahead. This friend gives it as his opinion that every member of the Allen Manufacturing Company lost from $3,000 to $5,000 each.
In one corner, you have Coulter trying to hold things together and denying changes against him and Allen in the other allegedly remarking on how he and many others lost money. This inconsistency in the press didn’t help to make the public or the company’s shareholders feel any better about the situation.
Blodgett did write a follow up article in 1901, noting that Indiana state prison north Warden Shideler resigned over allegations that he was a stockholder in the company at the time he was serving as Warden. It also indicated that labor contract developed by Allen, Coulter and others in 1894 was binding until 1904, with other companies stepping in to fill the void left by the demise of the Allen Manufacturing Company. Newspaper evidence suggests that Allen, Coulter, and many of the other big players never faced serious charges and that the company’s multiple lawsuits distracted from the other allegations leveled against them. Allen himself would eventually pursue other political offices, including Indiana Secretary of State, as well as serve in the Spanish-American War. He died in 1911, with the failure of his company firmly behind him.
So what do we make of the Allen Manufacturing Company? In some ways, you can look at it as a quasi-private, quasi-public boondoggle, destined to fail. In other ways, you can look at it as a company created to enrich its leadership by taking advantage of sub-contracted labor. However, these may be the symptoms of a larger malady. The major take-away from this episode was that a rapidly changing industrial economy and a national fad in bicycles spurred a slapdash attempt to create a company that benefited from public connections. Furthermore, the episode highlights how determined and detailed journalism helps to keep the public and private sectors of society accountable, both to citizens and shareholders. While some of the key players never faced accountability, Blodgett’s success in investigating Allen Manufacturing’s corruption nevertheless exemplified how an individual citizen, and a free press, can check some of our more abject motivations.
At the Indiana Historical Bureau, we routinely get requests from researchers for assistance. Some of these are fairly simple, like helping with someone’s family history or determining the age of an antique they just bought. However, every once in a while, we get queries so interesting that they require a whole lot more research, and you never know what you might turn up.
Back in March, I received an email from a gentleman in California who recently found a unique item while metal-detecting on the beach. He needed help figuring out what it was and how old it might be. It was a weathered, rusted emblem with two elephants on the front and a name, “Rub-No-More.” On the back, it said, “some worry about wash day; others use Rub-No-More.” He also knew it had an Indiana connection, as a quick internet search determined that the Rub-No-More brand was based out of Fort Wayne.
It turns out that the item he found was a Rub-No-More watch fob, likely made sometime between 1905-1920. A watch fob was a decorative piece that accompanied a pocket watch, and helped keep the watch in a wearer’s pocket. A fob exactly like this one was recently sold at auction. Chicago’s F.H. Noble & Company, whose long history includes making trophies and urns for cremated remains, manufactured the fob. But what about the history of the company who commissioned it, the Rub-No-More Company? In learning more about this small, weathered piece of advertising, I discovered a history of one of Indiana’s most successful businesses at the turn of the twentieth century.
While its origins go back at least to 1880, the Summit City Soap Works of Fort Wayne (the Rub-No-More Company’s original name) was formally incorporated in May of 1885, with a capital stock of $25,000 for “manufactur[ing] laundry and other soaps,” according to the Indianapolis Sentinel. Their penchant for lavishing gifts on customers goes back almost to its founding. As the Wabash Express reported on May 27, 1886, Harry Mayel of the Summit City Soap Works came to Terre Haute and provided “over one hundred and fifty thousand dollars in beautiful and valuable presents” to purchasers of the company’s Ceylon Red Letter Soap. While this was a great deal for consumers, it appears it wasn’t as good for the company. By 1888, the Summit City Soap Works was insolvent, with $18,000 in debt and only $14,000 in assets, and a court-ordered receiver came in to clean up the mess. The difficulties didn’t end there. Two years later, as mentioned by the Crawfordsville Daily Journal, the company’s facilities on Glasgow Avenue burned to the ground, an estimated loss of $6,000. The company, sadly, had no insurance to cover these damages.
Clearly, it was time for new leadership, and it came in the form of the highly successful Berghoff family, German immigrants who became a mainstay of Fort Wayne’s business community. The Berghoffs ran a profitable brewery in the city, most known for its “Dortmunder Beer” brand. They parlayed this success into other ventures, including the Summit City Soap Works. Gustave A. Berghoff, a traveling salesman for the brewery, purchased the soap manufacturer in 1892, likely from his own brother, Hubert. The latter had purchased the firm a year earlier for a measly $5,000, and intended to revive the soap maker to “run day and night,” according to the Fort Wayne Sentinel.
Gustave Berghoff and his team wasted no time getting the company back on its feet and profitable, betting its success on a brand new product, Rub-No-More. Introduced in 1895, Rub-No-More was a “labor saving compound” that “clean[ed] the working clothes of a mechanic as well as the finest linen of the household, without much rubbing,” the Fort Wayne News wrote in its May 30th issue. To kick off the new product, the company launched a massive advertising campaign that provided free samples of Rub-No-More to every family in Fort Wayne. Summit City Soap Works then sold it at five cents, in a package that would cover five washing weeks. Rub-No-More became a hit, greatly benefiting Berghoff and his company. As such, they continued their tradition of giveaways. For example, in 1898, Summit City Soap Works offered its customers a free children’s book or wall calendar in exchange for saved Rub-No-More coupons and Globe Soap wrappers.
The company completely reorganized in 1903, including a new incorporation and expansion of its facilities. After eighteen years as an incorporated company, the Summit City Soap Works saw its capital stock increase four fold, to $100,000. Its executive staff also evolved, with Gustave Berghoff retaining his position as president but appointing his brothers, Henry and Hubert Berghoff, along with J. W. Roach and Albert J. Jauch, to the board of directors. The Fort Wayne Journal-Gazette reported that Berghoff was “having built a large addition to his factory, which will double the plant’s capacity.” The paper also commented on the company’s success, writing that “the business has grown from a small beginning to large proportions, and the institution is now known all over the United States, and the output is used almost universally in this country.”
The company also expanded its marketing, filing for multiple trademarks in 1905. The first filing, from April 17, 1905, included its new logo for Rub-No-More as well as an emblem, one so iconic to the company that it inspired my research: the two elephants logo. Used for decades as the symbol of Rub-No-More, the trademark displays an adult elephant dressed as a washerwoman washing a child elephant with its trunk. The second filing, dated September 19, 1905, includes both the new logo for the company’s name as well as the two elephants symbol. These became the company’s go-to branding for both its products and promotional materials, and it served them well. Grocers at Kendallville purchased 14,000 pounds of soap from the company in April of 1909, as noted by the Fort Wayne Sentinel, which traveled “in a single shipment over the [city’s] interurban.” That year, the Summit City Soap Works continued its tradition of promotional giveaways. An advertisement in the Dayton Herald offered customers free gifts in exchange for some of their products’ packaging trademarks. They offered girls an embroidery set and boys a “very interesting game” suitable for thirteen people.
One incident in 1911 showed how Rub-No-More soap could lead to more than just fun giveaways. A young woman named Bessie Lauer, an employee of the Summit City Soap Works, wrote her name on the inside of a soap bar’s packaging. It made its way out west, where a “wealthy California orange grower” found it and sought out a courtship, perhaps even marriage. She turned down his offer, but the publicity it garnered led to a Hanford, California Sentinel article describing the whole affair. Apparently embarrassed by the incident, Lauer told the Sentinel that “this is the first time she has ever written her name on a soap wrapper, and she fervently states that it will be her last.”
After decades of operation under the Summit City Soap Works moniker, the company formally changed its name in 1912 to the Rub-No-More Company, solidifying the importance of their branded soap to the entire enterprise. (A notification of the name change was published in the January 18, 1912 issue of the Fort Wayne Daily News, but it wasn’t official until April 12, 1912, when articles of incorporation were filed, according to the Indianapolis News. Advertisements in newspapers as early as June of that year indicated the name change). Around this time, Gustave Berghoff, the company’s president, began serving on the board of directors of the German-American National Bank based in Fort Wayne, greatly increasing his stature within the local business community.
By 1917, sales of the Rub-No-More Company topped $3,000,000 a year, as referenced in a profile in the Fort Wayne Journal-Gazette celebrating its 25th anniversary under the ownership of Berghoff. The article noted the expansion of its production facilities, from “the old days [when the plant was] comprised [of] but a few shacks” with “equipment consisting mostly of crude apparatus[es],” to a plant comprising “thousands of square feet.” This machinery was “of the most modern design . . . the value of which totals near a million dollars.” Within two decades, Rub-No-More, the company’s flagship product, became a mainstay product for consumers, with “circulars, wrappers, etc. . . . reproduced 200,000,000 times a year,” bringing “both the institution and the city continually before the minds of millions of people residing in this and foreign countries.”
An interesting modern parallel, the Rub-No-More Company encouraged sterilizing face masks during the influenza pandemic of 1918. A notice printed in the November 22, 1918 issue of the Indianapolis News instructed readers to “sterilize flu masks” by “thoroughly dissolv[ing] two tablespoonsful [sic] of Rub-No-More soap chips in one quart of boiling water” to “carefully wash masks.” As with today’s COVID-19 pandemic, soap companies have used their advertising to encourage people to wear masks and to keep them clean, something the Rub-No-More company did over 100 years ago.
Despite the Rub-No-More Company having a mostly positive reputation, it wasn’t without controversy. In 1918, the Indianapolis Star reported that the Rub-No-More Company was one of several companies charged with violating the federal child labor law. In a grand jury indictment against them, it was alleged that “three children were required to work ten and one-half hours a day” at their plant. Another issue the company faced came from its manufacturing process— one of “obnoxious odors.” The Indianapolis Times wrote in 1923 that the City of Fort Wayne was seeking a “permanent injunction” requiring the Rub-No-More Company to reconfigure their production process to alleviate the harsh smells that bothered the city’s east side residents. It is unclear what the outcomes of these situations were, but violations of child labor laws and air quality, somewhat new to American industry in 1918, represented some of the lesser angels of industrialization.
After 35 years of success at the helm, Gustave Berghoff sold the Rub-No-More Company to Procter & Gamble and retired from the company in 1927. The company’s roughly 140 employees were transferred to other Procter & Gamble plants after a transitional period where Rub-No-More Company’s manufacturing stock was used. The Rub-No-More brand continued for many years under the Procter & Gamble umbrella, with advertisements for the product appearing in newspapers well into the early 1950s. Gustave Berghoff, the company’s former president, died on January 25, 1940 at the age of 76. He is buried in Catholic Cemetery in Fort Wayne.
The Rub-No-More Company exists in history as something of a Horatio Alger tale. A German immigrant, helped by his family, purchased a failing firm and turned it into one of the most successful soap companies of the early 20th century. Additionally, its innovative approach to marketing, promotions, and branding ensured its dominance in the marketplace. This story is also about how even a simple item, like a watch fob washing up on the beach in California, can lead to an understanding of one of northern Indiana’s industrial giants at the beginning of the American Century.
This weekend, some 300,000 fans are expected to descend upon the Town of Speedway to watch the 102nd running of the Indianapolis 500. The Speedway area has been home to the “Greatest Spectacle in Racing” since 1911. The race attracted drivers and fans from all over the world. It has only been cancelled on two occasions: during World War I (1917-1918) and World War II (1942-1945). While there was no roar of race cars, the area was by no means quiet. Instead, the Speedway area became a hub for wartime production, with aircraft engines taking center stage.
Entrepreneur and Indianapolis Motor Speedway co-founder James Allison quite literally shifted gears when he devoted his precision machine shop’s resources on Main Street, just south of the track, to the war effort in 1917. Allison originally built the shop to redesign and rebuild foreign and domestic racecars. By mid-1918, the War Department awarded government contracts to Allison Experimental Company to build parts for the Liberty aircraft engine. According to the National Museum of the United States Air Force, the Liberty represented “America’s major technological contribution to World War I.” The United States’ auto industry produced over 20,000 of these engines during the war and Allison’s Speedway company played its part in this endeavor. The Speedway area also saw the development of an aviation repair depot where workers helped repair, modify, and test hundreds of airplanes and aircraft engines.
Just one month after the war’s end, in December 1918, the owners of the Indianapolis Motor Speedway announced that the Indianapolis 500 would resume in May 1919. The focus in the Speedway area quickly shifted back to automobiles and racing, but interest in aviation there had just begun. During the 1920s, Allison Experimental Company (Allison Engineering Company by 1921) worked on rebuilding and inverting Liberty engines.
Following James Allison’s death in 1928, General Motors Corp. filed an appropriation request to buy the company the following year. According to the request, General Motors planned to continue Allison’s work in the aviation industry. The Indianapolis Chamber of Commerce promoted the acquisition, stating that with General Motors’ purchase of the company:
Development of this city as a center for the nation’s aviation industry seems assured.
The Chamber of Commerce was not far off the mark. During the 1930s, Allison Engineering Co. focused its efforts on developing a 1,000 horsepower liquid-cooled aircraft engine in the Speedway area. Known as the V-1710, it would become the primary engine that powered Allied fighter aircraft during World War II. Norman Gilman, chief engineer and general manager for the company, reasoned that a liquid-cooled engine could be placed inside the fuselage, where a radial type engine could not and therefore developed high wind resistance or drag, particularly at higher speeds. Despite initial hesitation from both the U.S. Navy and U.S. Army, the Navy placed an order with Allison Engineering Co. for a liquid-cooled airplane engine of 750 horsepower in June 1930. The company designed, built, and delivered this engine to the Navy in March 1932. After completing a 50-hour development test, the Navy accepted the engine in September of that year. The Army Air Corps followed suit and soon after placed an order for the engine with the company.
Throughout the mid-1930s, Allison Engineering Co. worked to improve the engine, with the goal of making it 1,000 horsepower. After several tests and improvements to the design, the company delivered the engine to the Army Air Corps at Wright Field in Dayton, Ohio in March 1937. One month later, the V-1710 passed the 150-hour acceptance test.
By 1939, as war clouds gathered over Europe, Allison Engineering (renamed Allison Division of General Motors in January 1941) committed itself to mass production of the V-1710 aircraft engine in Speedway. At the time, Allison employed 600 people, but this number grew exponentially as orders for the V-1710 came pouring in. In April 1939, newspapers reported that the company would soon triple its facilities with construction of a new plant that would span 200,000 sq. ft. By the end of the year, employment figures had almost doubled to 1,200. Allison Division constructed additional plants in Speedway and the Indianapolis area throughout the war years and with these plants came thousands of additional employees.
Demand for the V-1710 engine made Allison Division one of the three principal manufacturers of aircraft engines in the country during the war, alongside Pratt & Whitney and Wright Aeronautical. In January 1941, Life magazine ran a feature on the engine, highlighting it as the “plane motor on which the Army puts its biggest bet.” By July 1941, the War Department awarded Allison a new contract for the engines. With this contract, total orders for Allison engines since the beginning of the defense emergency program totaled approximately $242,000,000.
America has bet heavily on the Allison engine in its aircraft defense plans, just as the war industries board in 1917 bet everything on the Liberty engine . . . the Allison engine has been delivering regularly for the R.A.F. [Royal Air Force]. Allison is now producing 400 aviation engines a month, where a year ago it was delivering only 150, and expects to approach 1,000 engines a month by the end of 1941. – “More Air Power,” Mason City [Iowa] Globe Gazette, August 13, 1941, 4.
Orders and output for the V-1710 engine continued to grow, particularly after the Japanese attack on Pearl Harbor in December 1941. By this point, employment at Allison Division surpassed 12,000. It swelled to 23,019 in October 1943. The company’s growth impacted the Town of Speedway as well. As early as 1940, Indianapolis newspapers commented on Speedway’s growing pains, reporting that officials from the town were seeking state aid to address problems that had come about from the influx of workers to the plants. These problems included the need to improve streets, sanitary conditions, and the need for a better water system. The Indianapolis Times noted that with more employees at the Allison plants came “more money, more home buying, more eating, etc.” School enrollment in the area doubled, church attendance rose greatly, and many new homes were built.
Meanwhile, Allison Division continued to impress. By March 1944, it built and delivered its 50,000th liquid-cooled engine. By the war’s end, the total figure reached 70,000. These engines powered many of the United States’ fighter planes during the war, including the P-38 Lightning, the P-39 Airacobra, and the P-40 Warhawk. The engine was also used in several fighter planes flown by the Royal Air Force of the United Kingdom.
Allison Division received high praise for the fine precision, workmanship, and durability of the V-1710. It won the Army-Navy “E” Award for excellence in production four times during the war: in October 1942, March 1944, October 1944, and June 1945. By the spring of 1945, Allison Division reduced production schedules of the V-1710 to focus more of its time on building jet engines, which could power planes at much higher speeds. The U.S Army Air Forces had awarded Allison a contract for the production of jet propulsion units in the fall of 1944. The Navy followed the Army’s lead and placed their own order with Allison in the summer of 1945, citing Allison’s “well established reputation for delivering the goods on time.” This reputation would continue through the end of the war in August 1945 and through the post-war years.
As had happened following the conclusion of World War I, racing returned to the Speedway area in 1946 to much fanfare. Left abandoned for nearly five years, the Indianapolis Motor Speedway had fallen into disrepair during World War II. Tony Hulman purchased the track in November 1945 and worked to restore it in preparation for the May 1946 500-mile race. Fans came in droves to witness the 30th running of the Indianapolis 500 that year, as racing returned to center stage in the Speedway area.
Allison’s work in Speedway and its commitment to technological advancements did not end with World War II, but rather continues through today. In addition to continuing its investment and development in the aviation industry following the war, Allison also organized a new department for the design and development of transmissions. The transmissions were manufactured for commercial and military use, with many powering tanks during the Korean War. Their production ushered in a new chapter in the company’s history. Today, James Allison’s experimental company in Speedway , now known around the globe as Allison Transmission, is one of the world’s largest manufacturers of fully automatic transmissions.
May is finally here and with it racing fans from around the world will soon begin flocking to the Indianapolis Motor Speedway to attend practices and qualifying races in preparation for the Indianapolis 500. For the past century, the Speedway ─ both the track and the adjacent areas of the town ─ have become synonymous with motorsports and racing.
In addition to racing though, the area holds another important place in Indiana and U.S. history ─ as an innovative aviation hub during both world wars. During World War I, the track was used as a landing and flight test field and hangars built on site helped house aircraft. Just south of the track, the Allison Experimental Company manufactured parts for the Liberty Engine, arguably one of America’s greatest contributions to the war. And at Speedway’s aviation repair depot, workers restored 313 planes, 350 engines, and numerous aircraft parts. Their work helped keep our nation’s pilots in the air and made the Speedway area a center for military aviation during the war.
The United States lagged far behind the British, French, and Germans in military aviation when it entered World War I in April 1917. Those countries had been fighting for three years and in that time had understood and capitalized on the value of military aircraft for combat and reconnaissance. American entry in the war spurred rapid expansion of the industry in the country. Although time constraints forced the U.S. to purchase much of its military aircraft from the British and French during this period, the country made great strides in preparing pilots for air service abroad and in the production and repair of engines and training aircraft.
Indianapolis’ central location made it a prime site for aviation repairs and flight testing. Nearby flying fields included Chanute Field in Rantoul, Illinois and Scott Field in Belleville, Illinois, McCook Field and Wilbur Wright Field in Dayton, Ohio, and Selfridge Field in Mt. Clemens, Michigan, among others. Additionally, the proximity of railroad lines in the city and automobile centers in Ohio, Michigan, and Illinois made it easier to access raw materials such as steel, aluminum, and lumber, as well as supplies and spare parts used in repairing wrecked aircraft. Perhaps even more importantly though was the leadership of men like Carl Fisher and James Allison, co-founders of the Speedway, who dedicated their manufacturing resources in the area and the Indianapolis Motor Speedway to the war effort.
The U.S. Army established the aviation repair depot in Speedway on February 4, 1918 with the arrival of the 810th Aero Squadron from Kelly Field in San Antonio, Texas. According to William Menkel, former captain in the U.S. Air Service and commanding officer of the depot, it was the first of the repair depots to get under way and begin repairs in the U.S. Other repair depots later opened in Dallas, Texas and in Montgomery, Alabama. In addition to the 810th Aero Squadron, the Speedway depot was also home to the 809th, 811th, and 821st squadrons. 150 men served in each squadron.
In October 1918, the Speedway Dope, the newsletter of the aviation repair depot, reported that “the commissioned and enlisted personnel [at the depot] constitutes a cosmopolitan community. Mechanicians, [sic] clerks, cooks, and chauffeurs have come from all parts of the Union, and at the Speedway there is no East or West or North or South.” The majority of the civilian mechanics at the repair depot had little knowledge of aircraft before American entry in the war, but within a short time they became experts in the industry and in repair work. The U.S. Air Service established training schools for these men across the country and provided classes in engine assembly and wing and fuselage construction, while also teaching skills such as making and fastening metal parts to the aircraft, sewing fabric on wings, and applying dope varnish to the aircraft. The first wrecked aircraft arrived in April 1918.
Damaged planes were unloaded and often sent to the Dismantling Department where the engine, landing gear, tail surfaces, and other parts were removed, cleaned, and worked on separately before reassembly began. While some of the planes that arrived only needed minor repairs before being shipped back out, others were total wrecks that needed to be completely rebuilt and tested.
By July, output reached three completed planes a day. Perhaps even more impressive though were the modifications made to the aircraft to help increase pilot safety. Workers at the repair depot analyzed incoming wrecks in order to find patterns in destruction. They then used this information to make improvements in design of the aircraft. For example, in his 1919 report on repair depots, Captain Menkel noted that many damaged planes that arrived in Speedway had smashed instrument boards. The instrument board was located so close to the pilot that in the case of a crash their head was likely to hit it. Workers at the depot moved the instrument boards farther away from the pilot’s seat during their repairs. This extra space reduced the chance that the pilot would hit it in a crash, thereby improving the pilot’s safety and lowering the chance of damage to the instrument board.
The information learned from wrecked aircraft that arrived at the depot also resulted in other modifications, including the reinforcement of longerons and other parts of the plane to lower the chances of damage or fatal injury of the pilot and cutting out sections of the cowl frame to provide more distance between it and the pilot.
In a post report to Washington in January 1919, the Speedway Dope reported 313 airplanes repaired at the depot during 1918, representing a total value of $1,195,550.00 and 350 airplane motors valued at $638,699.00. In addition to these figures, the report noted repairs of wings, ailerons, elevators, rudders, and other miscellaneous parts valued at approximately $300,000.00. Added together, repairs at the depot well exceeded $2,000,000.00. Beyond the economic benefits and savings to the government was the fact that those working at the repair depot helped keep pilots in the air, reducing their chance of injury or death and ultimately giving the U.S. a better opportunity to win the war.
Articles in the Speedway Dope reiterated these sentiments, noting that those who trained or repaired airplanes in the Speedway area might be inclined to downplay the role they played in the war because they were not in the trenches abroad or flying in France. The repair and reconstruction of airplanes was a vital part of the war effort though.
The third side of aviation has not only been neglected, but the public generally does not know that it even exists. The repair and reconstruction of damaged planes and motors, constitutes a bit part of the game of aviation. It is that part of the game that must be done and done right, or the other parts would fail to accomplish anything. True it does not carry any of the romance or glamour that follows the course of the pilot and his plane, and neither does it require the enormous financial outlay that goes with production . . . Yet this third side of aviation has been well taken care of and thousands of men who enlisted for service in France have remained at home repair depots and made it possible for others to enjoy foreign service and win international fame.
“The Third Side of Aviation-Rebuilding,” Speedway Dope, November 30, 1918, 1, accessed Indiana State Library Collections.
In the days immediately following the armistice on November 11, 1918, the Speedway Dope wrote that even though the war had ended, production at the depot should continue, as there was still plenty of work to do before completion of the final peace terms. Major Guy L. Gearhart, former commanding officer of the depot agreed. Maj. Gearhart recognized the important role the airplane would play in transportation after the war and believed the repair depot would become a permanent fixture in the Speedway.
The depot’s future remained unclear though. With the war over, immediate aviation interests in the area took a backseat to racing and motorsports. The Indianapolis 500, which had been cancelled in 1917 and 1918, recommenced in May 1919. The resumption of the annual race led to questions and concerns about the track and infield being used for aircraft. Despite initial orders calling for the closing of the depot in March 1919 though, the South Bend News-Times reported that recruitment for men for the U.S. Air Service at the Speedway aviation repair depot continued as of July. By the following year, however, the status of the aviation repair depot was again called into question. Some speculated that it would be removed from the Speedway area and relocated to Fairfield, Ohio. The government officially ordered the abandonment of the repair depot in September 1920 and publicized the sale of buildings and utilities in November of that year.
Although work in the Speedway area shifted back to racing and motorsports, aviation interests did not disappear completely. The Allison Experimental Company (Allison Engineering Company by 1921), located just west of the repair depot, continued to work to improve the Liberty aircraft engine into the 1920s. When General Motors purchased the company in 1929, it expressed a commitment to expanding its work in the aviation field. It was this commitment that made the Speedway area an aviation hub once again during World War II.
Be sure to check back in a few weeks when we examine the vital role the Speedway area played in military aviation in World War II!
Sources Used and Research Note:
William Menkel, “‘New Plans for Old’: The Work of the Aviation Repair Depots,” Aerial Age Weekly, September 1, 1919, 1129-1133, 1144, accessed Google Books.
Much of the information about the aviation repair depot came from articles in the Speedway Dope. The publication ran from September 28, 1918 until February 1, 1919. Copies of the paper can be located at the Indiana State Library.
The Indiana Historical Bureau installed a new state historical marker commemorating the aviation repair depot in Speedway on April 24, 2018. Marker sponsors included Rolls-Royce North America, Rolls-Royce Heritage Trust – Allison Branch, and the Town of Speedway. For more information on the aviation repair depot and additional sources, see: https://www.in.gov/history/markers/4406.htm
On December 5th 1868, a home gas stove explosion nearly killed and “terribly burned” longtime Cleveland, Columbus and Cincinnati Railroad (CC&C) president, Leander M. Hubby. For more than a decade Hubby had led this regional powerhouse as it solidified its financial grip on the Bee Line component railroads. Along the way, he earned an almost patriarchal reputation among officers and men of the road’s operating corps.
In May 1868 Hubby had assumed the presidency of the successor railroad that, for the first time, combined the Bee Line components roads into a single legal entity: the Cleveland, Columbus, Cincinnati and Indianapolis Railway(CCC&I). Unfortunately, his near-death experience effectively sidelined Hubby until he officially resigned his role in September 1870.
Into this leadership vacuum stepped a new duo of recently ensconced Bee Line board members. Oscar Townsend’s board appointment in September 1868 closely followed Hinman B. Hurlbut’s similar election at the formation of the CCC&I that May. Then, following Hubby’s unfortunate accident and subsequent resignation in 1870, the Townsend/Hurlbut duo formally assumed their heretofore-tacit responsibilities as president and vice president. They could not have written a more perfect script.
Hurlbut had joined the Bellefontaine Railway’s board and finance committee at its formation in 1864. His Cleveland-centric banking business included numerous Cleveland Clique clients. Soon he was part of the group. Hurlbut had purchased the charter of Cleveland’s Bank of Commerce in the 1850s and reorganized it as the Second National Bank.
Oscar Townsend began his career with the CC&C as a laborer in 1848. Between 1856 and 1862 he advanced through the ranks of its Cleveland freight office. Townsend shifted to Hurlbut’s Second National Bank in 1862, learning his banking skills at Hurlbut’s knee.
The CC&C’s longstanding general ticket agent S. F. Pierson reported, in an exposé on the demise of the railroad, that Hurlbut had tapped the bank of its financial strength by the time he left it in 1865. While one flattering biographer characterized Hurlbut’s exit as due to “the arduous labors and close application necessitated by these and other financial tasks he had undertaken,” Pierson had a different take.
From Pierson’s perspective, Hurlbut “retired, consequent upon the destruction of more than its [the Second National Bank’s] entire surplus, and some of the securities and private deposits of the Bank. These…had been abstracted, and the money lost in speculation. The cashier had ended his own life in a painfully tragic manner, and Mr. Hurlbut was permitted to retire.”
It was about this time that Oscar Townsend also left the bank and segued to a superintendent’s role overseeing the Western Department of the Empire Transportation Company. Such businesses were immensely profitable and important extensions of the railroads they served in the post-Civil War era. Responsible for developing relationships with key shippers, businesses such as the Empire Line “fast freight” often decided which railroads would transport the huge amounts of freight under their control.
At the same time, nearly all railroad presidents quizzed by an 1867 Ohio Special Legislative Committee confessed they had been offered fast freight line stock “on favorable terms, or as a gratuity.” Enticed railroad directors began to work in concert with the “fast freights” to direct high-value freight traffic over their favored “fast freight”. This left only bulkier and less profitable local freight for the railroads themselves.
Inasmuch as the CCC&I started life in 1868 as a “financiers” railroad, Townsend and Hurlbut fit right in. By the time of Hubby’s retirement in 1870, they took control.
In the Bee Line’s new form, an old and wily politician to handle the Hoosier “good old boy” network was no longer needed. The long railroad career of David Kilgore came to an end in February 1870. And with his departure went the last vestige of the Hoosier Partisans.
Only one significant transregional railroad would be constructed during the Civil War. The amalgam of railroads that became known as The Atlantic and Great Western Railway Company (A&GW) would stand by itself. With huge capital infusions from London and Continental investors, the road opened for business in August 1865 along its entire 388 mile route from Salamanca in Upstate New York to Dayton Ohio.
Nefarious London rail broker-cum-financier James McHenry had cajoled voracious English and European investors to fund the improbable A&GW project. Exploiting his role as proxy for these complacent capitalists, McHenry seized control of the road Ohioan Marvin Kent had brought to life in the 1850s. And by the early 1870s, he also commandeered the board of the Eastern trunk line intersecting with the A&GW at Salamanca: The Erie Railway. Now, he needed an outlet to St. Louis to complete his domination of railroads extending from New York City to the West.
James McHenry’s financial flimflam with A&GW’s European investors always left free cash with which to subsidize his own schemes. He had used some of those funds to insert Peter H. Watson as president of the Erie Railway in 1872. Watson became McHenry’s conduit to Hinman B. Hurlbut and the Bee Line. McHenry would sprinkle a substantial amount of cash on Hurlbut, and their subterfuge to assume control of the CCC&I.
Within weeks of Watson’s elevation to Erie’s presidency, he penned a letter to McHenry:
I opened negotiations with the parties controlling this road [CCC&I], and my success was greater and more rapid than I could have hoped. The result is embraced in the conditional agreement made by you with Mr. Hurlbut.
Hurlbut convinced members of the Cleveland Clique to sell their shares before word of an impending takeover became public. He then conveyed the acquired shares, and others from the Bee Line treasury, to McHenry. As S. F. Pierson noted:
…several members [of the CCC&I board] were …retired from active pursuits, and not disposed to take much trouble in the matter; and of the balance, one portion used the Vice-President [Hurlbut] to further some scheme of their own, and the other hoped he might want to use them.
When the A&GW’s plans for the CCC&I became public in early 1873, members of the Cleveland business establishment and other New York investors were completely flummoxed. After all, the A&GW showed assets of less than $40 million while reporting liabilities of more than $120 million. By comparison, the CCC&I was of robust but declining financial health. S. F. Pierson was stunned, noting, “Vice President [Hurlbut] has unbolted our doors from within.”
John H. Devereux, soon to become a key player in the final destiny of the Bee Line, painted a more colorful picture. He characterized the possibility as “an attempt to chain a living man to a dead corpse.” Before long, as orchestrated by James McHenry, Devereux would become President of both the Bee Line and the A&GW, and vice president at the Erie – all at the same time!!
McHenry had arranged for Devereux’s CCC&I presidential appointment as soon as the A&GW assumed financial and board control of it in April 1873. Devereux’s installation quelled some of the Bee Line stockholders’ angst, given his upstanding reputation as a railroad executive. But when Ohio’s legislature blocked McHenry’s plan to lease the CCC&I to the anemic A&GW, the Bee Line shareholders’ attitude shifted.
Still seeking to run the A&GW and CCC&I as a single entity in spite of his failed leasing scheme, McHenry orchestrated Devereux’s appointment as general manager at the A&GW. By January 1874 he was bumped up a notch to president – while still heading the rival Bee Line!
The Bee Line shareholders had had enough. In an effort to oust McHenry’s A&GW and Erie board proxies, they orchestrated a massive CCC&I shareholder turnout for the March 1874 annual meeting. The opposition candidate slate included several former Cleveland Clique members, New York investors, and one Hoosier: David Kilgore.
And in an interesting twist, deposed CCC&I president Oscar Townsend headed the opposition – until Hinman Hurlbut brought to light Townsend’s involvement in a freight payola ring. The revelation tipped the balance. The opposition suffered a narrow defeat. There would be no Hoosier Partisan revival.
Longer term, James McHenry’s self-induced financial problems would only mount. His tenuous grip on the A&GW and CCC&I slipped away at the hands of Peter Watson’s 1874 Erie Railway successor: Hugh H. Jewett. Jewett would extricate the Erie from McHenry’s grasp, and push him to near-bankruptcy.
In making this decision Devereux, in his role as president of the NYPA&O, effectively parted ways with a livid Hugh Jewett and the Erie. A week later Devereux resigned. Soon, the Erie would subsume the NYPA&O.
The die was now cast for the future of the Bee Line as well. Its destiny would lie with Vanderbilt’s New York Central.
It had been a long journey since 1848, when Oliver H. Smith challenged the citizens of east central Indiana to avoid being bypassed by the technological marvel of the age. They would heed his warning by their investment in the Indianapolis and Bellefontaine Railroad – the Bee Line’s Indiana segment.
Smith’s prescient vision proved to be uncannily accurate. It was if he had penned Indiana’s state motto: “the Crossroads of America.” But for the Bee Line, it might never have come to pass.
See Part VI to learn how the Hoosier Partisans moved for autonomy as the Cleveland Clique tightened its grip on the Bee Line railroad.
In the summer of 1859, the Indianapolis, Pittsburgh and Cleveland’s (IP&C’s) Madison locomotive exploded near Kilgore Station in Yorktown, Indiana – killing the engineer and fireman. A month later, near the same location, an intoxicated man fell from the station’s platform and was killed by a passing train.
These tragic events occurred just weeks after the Hoosier Partisans’ scheme to achieve their independence, by leveraging on the IP&C’s strategic position as a funnel to the West, had failed. The accidents seemed eerily suggestive of the Hoosier Partisans’ plight in the face of the Cleveland Clique’s mustered financial power.
By the IP&C’s May 1860 board meeting the Partisans were resigned to their fate: “we know of no other means by which we can extricate ourselves from our monetary difficulties and save the road . . . We deem it best to extend and continue said [joint operating] contract with said Bellefontaine and Indiana Railroad (B&I).”
Indiana board members had again faced the reality that the railroad business, on many levels, could be a perilous endeavor. The push and pull of the Hoosier Partisans and Cleveland Clique would ultimately result in the legal consolidation of the Bee Line Railroad components roads.
Clearly sensing the IP&C would be reluctantly compelled to extend its joint operating agreement with the B&I, John Brady, the receiver for the Columbus, Piqua and Indiana Railroad (CP&I), demanded that the IP&C honor its 1852 through-line agreement with them. He recited the agreement’s language regarding freight and passenger traffic between Columbus, Ohio and Indianapolis, which mandated “sending any/all east/west traffic which can be done” over this connection.
Incredibly, Brady was able to pull off what the Hoosier Partisans had been unable to accomplish in their effort to effect a divorce from the Cleveland Clique – at least until 1863 when the CP&I was once again reorganized.
Ironically, the advent of the Civil War in 1861 would bring prosperity to the anemic component roads of the Bee Line – now operating jointly as the Bellefontaine Line. The combination of enhanced demand for grain to feed the troops and bolster poor harvests on the European continent spelled profits for the railroads.
During this time, frustrations had mounted among East Coast merchants and the railroad trunk lines that served them. West of the Appalachians they were dealing with a fractured network of independent short lines and their inefficient freight handling between lines. Add to this the further stress of moving troops and supplies quickly, and something had to be done.
The demands of war pushed operational efficiency forward – driven by the trunk lines. The resulting more integrated rail networks also led to enhanced profitability, and opened the door for the Eastern trunk lines to expand their footprint west.
The Bee Line roads finally got their financial houses in order. By June 1863 the IP&C declared its first dividend in years—3 percent. Taking advantage of newfound prosperity, it declared another 3 percent dividend in December and voted to increase capital stock by $300,000.
Ostensibly this was done to pay for new equipment, new terminals, and road improvements. In reality it provided a convenient opportunity for the Cleveland Clique to increase their stock position and thereby dominate upcoming shareholder votes. To that end they determined, once and for all, to quell the IP&C board’s irritating Hoosier independence.
Courtesy of the Clique’s voting block, John Brough returned as IP&C president at the February 1863 annual meeting – following Hoosier figurehead Thomas A. Morris’ 3½-year tenure. In a last-ditch effort to stem the Clique’s board dominance, Alfred Kilgore—Yorktown’s first station agent, son of director David Kilgore, and an Indiana state legislator— introduced a House bill in January 1863. Had it passed, all Indiana railroad corporations would have been required to elect three-quarters of their board from stockholders resident in the state. It died in committee.
Beyond Brough’s return to the IP&C’s presidency, he emerged as the front-runner in Ohio’s governor’s race in the summer of 1863. Orchestrated by the Cleveland Clique, Brough’s candidacy leveraged on his earlier but noteworthy Ohio political career and effective pro-Union speechmaking style. The War Democrats and Republican Union parties joined forces to secure his nomination. He was overwhelmingly
elected in October 1863.
Stillman Witt, Cleveland Clique heavyweight and by then the second-largest individual holder of Bee Line roads stock, had encouraged and supported his close friend’s candidacy. On Brough’s election as governor Witt volunteered to fulfill his duties as president of the Bee Line roads. He insisted Brough draw his IP&C presidential salary while serving as governor.
During 1864 Witt steered the Bee Line roads toward a brisk legal consolidation. At the IP&C’s June board meeting a committee was appointed “to agree upon mutual and just terms for consolidating the capital stock of this company with that of the B&I.” Reprising its once central role in the history of both the IP&C and B&I, Union and its Branham House was chosen as the site for the decisive shareholder consolidation vote.
Finally, after years of Hoosier Partisan and Cleveland Clique push and pull, the two lines were legally consolidated on November 24, 1864 – emerging as the Bellefontaine Railway Company. For the first time since its inception in 1848, the railroad extending from Indianapolis to Union failed to exist as a stand-alone Hoosier-based—if not completely controlled—entity.
Brough was elected the new entity’s first president at its inaugural meeting in Union on December 22nd. It would be a short tenure, however, as Brough died in office on August 29, 1865 while also serving as Ohio’s last wartime governor.
After Brough’s death, Witt officially assumed the role he had been occupying as Brough’s proxy. His style was businesslike and close to the vest. Board minutes reflected meetings run with a limited agenda, focused on few topics, and with little discussion noted.
Witt saw to it that the Cleveland Clique began to recoup investments made in the road’s predecessor lines. Hardly a board meeting would go by over the next three years in which a dividend was not declared. And there were up to three board meetings a year.
The Cleveland Clique was not done tightening its grip on the Bee Line. In addition to Brough’s election as president in December 1864, a landslide of Cleveland Clique members took eight of eleven seats on the Bellefontaine Railway’s board. Included among this number was an individual destined to alter the Bee Line’s future trajectory: Hinman B. Hurlbut.
By the spring of 1868 the Cleveland Clique decided to finally consolidate all three of the original Bee Line component roads – then comprised of the Bellefontaine Railway and the Cleveland, Columbus and Cincinnati Railroad (CC&C). The need for additional monies to restructure debt and fund an expanding footprint was justification enough to tap the CC&C’s solid financial underpinnings.
In reality the freed and raised cash by the consolidation would be spent on both business expansion and personal enrichment. To a greater extent than marketed to the public the new road was being recast, like many others in the post-Civil War era, as a “financiers’” railroad.
On May 13, 1868, the Cleveland, Columbus, Cincinnati and Indianapolis Railway (CCC&I) sprung to life under the leadership of former CC&C president Leander M. Hubby. Hubby had established a long, profitable, and almost patriarchal reputation among his management team over the course of more than a decade at the helm of the CC&C. He and the newly recast Bee Line faced two immediate and significant obstacles to their future viability.
One challenge was to finally complete and/or control a rail line between Indianapolis and St. Louis. By 1867, the Cleveland Clique had assembled what it thought was a consortium of six similarly-interested rail lines to sign an expensive long-term lease of a road between Terre Haute and St. Louis. It proved to be otherwise.
The poorly engineered, indirect, and financially tenuous St. Louis, Alton and Terre Haute Railroad (StLA&TH) was its only option. And by the time the lease was signed the original consortium had essentially dwindled to two: the Bee Line and another Clique-affiliated railroad.
More to the point, as the consortium disintegrated, the road between Indianapolis and Terre Haute – by then called the Terre Haute and Indianapolis Railroad (TH&I) – backed out. Instead, it would align with Pennsylvania Railroad interests to complete John Brough’s dream of a direct line to St. Louis, under the colloquial Vandalia Line moniker. As a result, consortium participation with competitors made no sense.
However, the TH&I’s realignment with Pennsylvania Railroad interests meant the Bee Line was left without a link between Indianapolis and Terre Haute. And the TH&I would not entertain an arrangement to let the Bee Line utilize its tracks.
By the fall of 1867 the Clique’s Bee Line board made the financially difficult decision to build its own parallel line between Indianapolis and Terre Haute. The Indianapolis and St. Louis Railroad(I&StL), headed by Thomas A. Morris, would be built in less than three years. And soon, it would fold and operate the StLA&TH under its banner. But it had been a costly decision.
Hubby’s other immediate Bee Line challenge was more sinister in its design. And, at least initially, Hubby would be unaware of its existence. But, in fact, it would threaten the Bee Line’s very survival and that of its Cleveland Clique benefactor.
Check back for Part VIII, the final blog in the Bee Line series, to learn more about how the national aspirations of other railroads, and their financial chicanery, recast the Bee Line Railroad’s ultimate destiny.
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.
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.”
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.
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.
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.”
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.
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.
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.
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.
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.
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.
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.
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.”
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.”
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.
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.
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.
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.
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.”
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.
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.
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.
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.