What a very strange world we live in when it comes to railroad companies. The title of this entry may seem, to those that know railroad ownership, to be almost a no brainer. After all, through several ownership changes, the Monon and the B&O are the same company. Technically. At least they are under the same umbrella as CSX. But that is not the point of this blog entry.
Railroad company mergers have been happening as long as there have been railroad companies. The current behemoths of CSX and Norfolk Southern are basically collections of consolidations being made for over a century. One of my most favorite consolidations that wasn’t, and ended up being, is the whole split up of Conrail between CSX and Norfolk Southern. In the 1960’s, two major components that would become part of Conrail were trying anything they could think of to survive. It was the plan for the New York Central to merge with the Chesapeake & Ohio, and the Pennsylvania to merge with the Norfolk & Western. This failed government scrutiny, and ended up with the disaster that was the Pennsylvania New York Central Transportation Company – or Penn Central. Along comes the split up of Conrail, and anything going to CSX (the “C” does stand for “Chessie,” from the Chesapeake & Ohio) was marked “NYC.” The Norfolk Southern’s marked equipment read “PRR.”
But back to the Monon. The Transportation Act of 1920 included a provision which allowed the United States Congress to combine railroads into a limited number of systems. The major truck lines would take over smaller roads. The Interstate Commerce Commission, controller of all that was federal government policy when it came to railroads, was looking into this plan to keep the number of railroad company failures down. Needless to say, the plan would work…but not for another 50 years.
One of the smaller roads that would be grouped into the bigger railroad trunk plan was to be the Chicago, Indianapolis & Louisville, known to most as the Monon. At the time, the Monon was actually controlled, through stock ownership, by the Southern Railway and the Louisville & Nashville. The Monon, however, “seems to be of little use to the Louisville & Nashville, which exchanges Chicago business primarily at Evansville.” (Source: Munster Times, 6 June 1929)
The B&O suffered from a regional problem. The Interstate Commerce Commission was looking for a way to expand its reach. “The problem with the Baltimore and Ohio, therefore, is to incorporate with it other properties which shall let it into New York and into good traffic-originating eastern territory and shall also extend its mileage to the Michigan peninsula and ferries and out across Indiana and Illinois through Chicago with trans-Mississippi systems.”
Part of this goal was accomplished when the Cincinnati, Indianapolis & Western Railroad was acquired by the Baltimore & Ohio. But the inclusion of the Monon would have made teh B&O stronger in the Indiana realm.
It should be noted that all this talk about railroad mergers at the time stems from an Interstate Commerce Commission study completed by Professor W. Z. Ripley of Harvard University. It was his recommendation that the Monon be consolidated into the Baltimore & Ohio. The ICC went along with that plan, as they did many others made in the report.
Part of the argument for the (not to happen) merger is that the Monon has for more than 30 years “maintained a joint through service with the Baltimore & Ohio between Cincinnati and Chicago, and with no other company, so far as I know, has the Monon ever maintained joint service anywhere.”
The Presidents of the railroads, Daniel Willard of the B&O and H. R. Kurrie of the Monon, were of differing opinions of the recommendation. The latter had made a speech about the plan, not coming out for the recommendation. After the latter’s speech, the former came out with a speech defending the plan. Part of the idea is that the Monon would fit better with the B&O with its location north of the Ohio River.
Mr. Willard pointed out that one of the arguments against the merger would be the “state of Indiana being injured.” That argument, Willard said, didn’t hold water in that the B&O spent $10 million a year in Indiana alone, as opposed to the $4 million spent by the Monon.
It was also mentioned that if the merger would go through, the yards at Indianapolis would most likely transfer most of the work to either Lafayette or Bloomington. The fear that traffic would be routed away from the Monon were put at ease by Mr. Willard, pointing out that the route between Cincinnati and Chicago via the Monon is 72 miles shorter than using the B&O between the two cities.
In the end, the ICC plan didn’t happen. At least not the way it was envisioned in the 1920’s. Instead of systems that were centered in the south, north, east and west of the United States, the Monon would fall under the sway of the Louisville & Nashville, ultimately making it a “southern” railroad. The Baltimore & Ohio would become part of the Chessie System, a “northern” railroad. Both would become part of CSX, a consolidation of a northern and southern railroad into an Eastern railroad.