Indiana Vs. Terre Haute and Indianapolis Railroad

In 1899, the state of Indiana brought forth a lawsuit against the Terre Haute & Indianapolis Railroad for tax money due for the school fund. It started with a charter. In the early days of Indiana, to create a railroad company (and basically any company, as far as that goes), a charter for the company and its goals would have to be written and taken before the Indiana General Assembly for approval. I would love to say that these things were basically rubber stamped…but I truly have no way of knowing without extensive research.

The Terre Haute & Indianapolis Railroad was issued it original charter by the Indiana General Assembly in 1831. The name on the charter was the Terre Haute & Indianapolis. The TH&I was then issued a special charter as the Terre Haute & Richmond Rail Road on 24 January 1847. The company was to build a railroad between the two title cities, through Indianapolis. The official name of the company had changed twice between the special charter of 1847 and the court case of 1899. First, in 1850, the space was taken out between rail and road, making it the Terre Haute & Richmond Railroad legally. Then, in 1865, the name was changed to suit the actual extent of the railroad company. It became the Terre Haute & Indianapolis Railroad Company.

Newspapers of the time often refer to the legal action against the Terre Haute & Indianapolis as the Vandalia Case. By the time of the legal action, the TH&I was already leasing the St. Louis, Vandalia & Terre Haute, the only line (for a while) connecting Indianapolis to St. Louis. The St. Louis, Vandalia & Terre Haute was known most of the time as the Vandalia. The Vandalia was in financial trouble while under construction. Money was floated from five railroad companies to complete the route in 1870: Terre Haute & Indianapolis, Pennsylvania, Panhandle, Steubenville and the Indiana Central. The last three being consolidated later into the Pittsburgh, Cincinnati, Chicago & St. Louis Railway, also nicknamed the Panhandle. The Pennsylvania would gain control of the Panhandle and the Vandalia…although the Terre Haute & Indianapolis would fight it the entire way.

The whole case stemmed from how the charter for the TH&I was read, and who was doing the reading. The State of Indiana was of the opinion that the TH&I owed the School Fund somewhere between $1.2 and $2 million dollars. Obviously, the TH&I was of the opposite opinion. The entire case stemmed from a special charter that had been issued for the company in 1847, give or take a year. The new charter, keeping a provision from the old one, would allow the railroad to set its own passenger and freight rates, and allow for a 15% profit to be split among its shareholders after all of the construction bills have been paid.

The state, in its case, claimed that the TH&I was setting its rates to a point where it was earning 18% to 35% profits. Since the limit was 15%, the rest, the state continued, would be required to be paid to the state school fund. Vandalia saw things differently.

The South Bend Tribune of 4 October 1899 describes the beginning of the case as such: “Noble C. Butler, as master in chancery, began taking testimony, Monday afternoon (2 October 1899), in the case of the state against the Vandalia railroad for money due the school fund on account of the special charter under which the road operated 20 years ago.”

“Experts have been examining the company’s books to ascertain the exact earnings and the proportionate amount due the state, and their testimony is expected to be interesting. About $2,000,000 is claimed to be due the school fund from the railroad.” (Source: South Bend Tribune, 4 October 1899, pp 1 via newspapers.com.)

When the time came to defend itself, the Vandalia brought out John G. Williams, a man, according to the Indianapolis News of 17 January 1900, “who is said to know more about the affairs of the road than any other man.” Attorney Williams started talking about the charter of the Terre Haute & Richmond, the charters of other railroads, and the fact that when the original charters were written for the early railroads, the company had a choice between building a railroad and building a toll road. The state saw no real difference between the two.

He also mentioned that, according to the News, “one of the first roads built in the State was the Baltimore & Ohio. In the beginning, its cars were moved by horses and, when the wind was favorable, sails were hoisted on the cars to help propel them.” I would be that the News meant in the United States, as the Baltimore & Ohio wouldn’t have been in Indiana in 1831.

Reference is also made by the attorney for the railroad that in the beginning, the B&O charged 4 cents a ton a mile for moving of freight. “Modern railroads” (1900) are lucky to get one half cent per ton/mile. And passengers were actually weighed and charged essentially a pro-rated charge of 4 cents per ton/mile. If I am reading this right, since I weigh 200 pounds, it would cost me eight cents to travel by train from Indianapolis to Greenfield in those days. If I lived then…and the train actually was built to connect the two.

Mr. Williams went on to argue that the ability to regulate tolls by the state was left out of the charters of seven of the eight railroads that were incorporated in 1832. All eight of these charters allowed for the company to build a railroad or turnpike. Also in 1832, a company applied for a charter to build a bridge across the Ohio River at the Falls, the location of New Albany and/or Jeffersonville, and Louisville on the Kentucky side.

In 1832, five more railroads were incorporated, including the Evansville & Lafayette. It, like the Terre Haute & Indianapolis (1831 charter), had a clause stating that the State of Indiana could purchase the road after a certain period. Very few railroad company charters included the state regulation of the amount of dividends to its shareholders.

Ultimately, the Vandalia won the original case. Special Master Butler determined that the state was owed nothing by the Vandalia. The State appealed to the Superior Court, in which it was determined that the Vandalia owed the state of Indiana $913,000.

According to the Indianapolis Journal of 18 June 1902, as the case was being brought before the Indiana Supreme Court, “the charter provided that the company should pay the State its surplus earnings over the operating expenses and 10 per cent to the stockholders. The company surrendered its special charter in 1873 and has since operated under the general railroad law.” The company claimed that the surplus money was spent to improve the road, and there was no money left to pay the state.

The case before the Indiana Supreme Court lasted three days, ending on 19 June 1902. When the ruling went against the Vandalia, the Pennsylvania Railroad announced that they would appeal the decision to the United States Supreme Court. That decision was made on 28 November 1902.

The Indiana Supreme Court judgement ruled that the Vandalia must pay $913,905, and a six percent interest from the date of the Superior Court judgement. This brought to total to $1,028,143. Of course, the state was to only receive $771,107 of that, with the rest going to attorney’s fees. The Vandalia would fall into receivership after the ruling, and arguments between Illinois and Indiana receivers would follow.

31 May 1904, and the United States Supreme Court ruled, after much deliberation, that the Vandalia Railroad owed a grand total of nothing to the state of Indiana School Fund. This would go on to allow the Vandalia to consolidate the following railroads into one corporate entity: Terre Haute & Indianapolis, Indianapolis & Vincennes, Logansport & Toledo, Terre Haute & Logansport, and the St. Louis, Vandalia & Terre Haute. A consolidation which created the Vandalia Railroad Company on 1 January 1905.

Interstate 70 Tidbits

Indiana is the home to four major interstates. Two of those share a route across northern Indiana mainly due to geography. (Let’s face it, Lake Michigan is one of those things that is kind of hard to miss.) The other two connect Indianapolis to St. Louis, Chicago, Louisville, and Columbus, Ohio. Today, I want to focus on little newspaper items that I found concerning the main east-west route labelled as Interstate 70.

The plan in Indiana, as approved by the Federal Bureau of Public Roads, had I-70 being a parallel route to US 40. This would be the case through most of the eastern United States.

According to Indiana state law at the time, the Indiana State Highway Commission was required to publish annually its construction plans for the following two years. While most of the projects would be built, some were placeholders and pipe dreams that still, even to this day, never seemed to appear on any official maps. It should be noted that the plans run from 1 July to 1 July, and are subject to change along the way. And, any project after the ending 1 July (in this case 1965) would be on the following two year plan (in this case, 1965-1967).

In the post “State Highway Department Construction Plans for 1963-1965,” I mentioned I-69 and I-74. One interstate highway left off the original two year plan was I-70. The Jasper Herald of 14 November 1961 mentioned that “there was no Interstate 70 construction in the program.” State Highway Commission Chairman David Cohen mentioned that “the problem is, the route is not approved.” However, engineering work on the route would be conducted during that two year plan. 108 miles of I-70 in all the counties that it would be built would be part of the preliminary engineering projects for the 1963-1965 plan.

One of the projects that came to be with the building of I-70 was a replacement for SR 1. The Highway Commission decided to move SR 1 two miles to the east. At the time, SR 1 entered Cambridge City using Boyd Road and Center Street. It left Cambridge City on Dale Avenue at the west end of the town. The state’s new plan was to move SR 1 due north from Milton, removing the road from Boyd Road and Center Street.

The National Road Traveler (Cambridge City) of 10 June 1965 reported that the ISHC would open bids for paving of the newly constructed Interstate 70 from New Lisbon to its end, at the time, east of Cambridge City. The newspaper reported lamented that an oft used county road would be dead ended at the new interstate highway. Cambridge Road, which leaves Cambridge City as Lincoln Drive, would not have a bridge over the highway. This decision was made by the federal Bureau of Public Roads. What would become Old SR 1 and the New SR 1 would cross I-70. But Cambridge Road, being a mile between each, would not. “A bridge for East Cambridge Road would be the third span in the two-mile stretch between new and old Indiana 1 and would be a waste of funds.”

The Muncie Star Press reported on 28 April 1965 that a contract had been let to Rieth-Riley Construction Company for $2,920,987.69 to build the interstate from south of Mohawk east to 1/2 mile west of SR 209. This included three bridges: SR 13 northwest of Greenfield, SR 9 north of Greenfield, and Brandywine Creek northeast of Greenfield. The traffic disaster that would occur near the Hancock County seat was covered 20 April 2019 in an article “I-70 in Greenfield.”

The 1965-1967 two year plan, according to the Muncie Star Press of 18 October 1962, included a grand total of 21.4 miles of Interstate 70 construction. This only included sections in Henry County, and entering Wayne County. But it involved not only building the road, but also constructing 25 bridges in that section.

The 1971-1973 plan, as reported on 26 June 1971 in the Richmond Palladium-Item, included 5.8 miles of Interstate 70 in Marion County: Belmont Avenue to River Avenue (0.9 mile); south leg of the inner belt (1.5 miles); and from what is now called the North Split to Emerson Avenue (3.4 miles).

Indianapolis News, 15 July 1975.
Indianapolis News, 9 January 1975

Beech Grove Traction

1906. A rural station stop on the Big Four Railroad, originally called Ingalls (or Ingallston), has just been incorporated as a shop town for the same Big Four Railroad. It’s official name at this point became Beech Grove. The new town that grew from the building of the railroad shops, covered in my blog entry “Beech Grove,” found itself barely accessible by anything other than the very railroad that built it. It wouldn’t be long until that would change.

First, the town was actually accessible by route of an old toll road that had been built to reach the farm of a local resident, a Mr. Churchman. That road, for the longest time, had been called the Churchman Pike, even after the county bought it back from the toll road company. The Churchman Pike connected to the town via what would become Albany Street, a survey section line that also acts as the separator between all of the southern townships and the central townships in Marion County. Dirt roads along the other survey lines – which would later become Troy and Emerson Avenues – also led to the area that would become Beech Grove. The old train station, Ingalls or Beech Grove, was at the survey line (Emerson Avenue) and the railroad track. Today, that would be under the Emerson Avenue bridge over the railroad.

But it wouldn’t be long before another method of transportation would make its presence known, and try to work its way into the railroad city. Electric Traction, also known as the interurban, had made its way into Indianapolis, officially, with the opening of the Greenwood line on 1 January 1900. After that, companies started popping up all over the United States. And Indianapolis became a hub for the new transportation form.

But this would create a problem. Steam railroads, which all standard railroads were called at the time, saw the new Traction companies as direct competition. Even though the gauge (width between the tracks) was the same on both, traffic interchange was one of those things that the steam roads were going to keep to an absolute minimum. And since the Traction companies specialized in moving people, this was even more reason for the steam roads to dislike the interurbans.

And now someone wants to add an interurban route to a town BUILT by the railroad? The short answer…yes. The reason for this was actually based in the nature of the steam railroad itself. Passenger trains, taking people from Beech Grove to downtown Indianapolis, weren’t scheduled at very convenient times for citizens of the new town. While the company that had invested in, and created, the town, the Beech Grove Improvement Company, tried running its own special trains to downtown Indianapolis, it was at the whim of the very busy Big Four line from Indianapolis to Cincinnati. In comes the planners of the electric traction.

It started in 1909. A company called the Shore Line Traction Company applied for a franchise to run a traction line from the Indianapolis city limits (point unknown) to Beech Grove. Louis McMains, a real estate agent, put in the petition to the County Commissioners. In October 1909, the petition asked that the Shore Line Traction Company be allowed to use the Churchman Pike from the city limits near Keystone and Churchman Avenues to the corporation limit of Beech Grove. It also asked for some straightening work along the road, and the right of way be widened by 27 feet (adding 13.5 feet on each side). “The petition signifies that the property owners on each side of the pike are willing to part with the necessary land to widen the road.” (Source: Indianapolis News, 14 October 1909)

The county had problems with the widening…especially when it came to the Churchman Pike bridge over Bean Creek (between Walker and Southern Avenues today). The bridge had been in disrepair for years, listed as such as early as 1891. Whether the bridge had been repaired or replaced at this point is unknown. Suffice it to say, the county wasn’t really likely to spend money to replace the bridge.

The petition mentioned that the plan for the Churchman Pike is to widen it to 66 feet, allowing two tracks to be built in the center, with only one track being built to start the company. The new company already had a franchise in hand for the route inside Beech Grove itself.

The Shore Line Traction Company found itself trying to come up with a new route to Beech Grove when the county balked at the Bean Creek bridge. With that, the company was not heard from again.

But shortly after the above petition was filed, a new company would be incorporated – the Beech Grove Traction Company. This company was officially started on 30 December 1909. It had the same goal as the Shore Line Transit Company – connect Beech Grove and downtown Indianapolis.

There was more progress with the Beech Grove Traction than there was with Shore Line. The Indianapolis News of 2 April 1910 reported that the Beech Grove company had elected its corporate officers and announced that grading work would begin soon on the line. Rails, ties and cars had already been ordered. Work on the new Churchman Pike bridge over Bean Creek had begun on 28 March 1910. Officials of the traction company were negotiating with the Indianapolis Traction and Terminal Company “for use of the tracks of the latter company in Shelby Street and Virginia Avenue for entrance to the business district.”

The franchise rights had been awarded by Marion County and the town of Beech Grove. When construction was to begin in April, the company had no agreement with the city of Indianapolis about using the city street railway tracks to enter the downtown area. This agreement would not have been reached until September 1910. This caused construction to be delayed until November 1910.

Even before the track was complete, the first train run over part of the line happened on 20 March 1911. Seven days later, regular service began. The Beech Grove end of the line was on what became Garstang Avenue east of First (Emerson) Avenue. The track then ran north on First Avenue to Main Street. Following Main Street west, it turned north on 17th Avenue (Sherman Drive) for one block, to turn northwest on Churchman Pike (Avenue). The route then turned west on LeGrande Avenue to connect to the city street railway system at Shelby Street.

1917 Map of the route of the Beech Grove Traction Company.

At first, the company found itself very popular. The Beech Grove Traction only owned, at the start, four cars to travel between the two ends. But there were so many people that wanted to use the new train that the company found itself running trains every 40 minutes from daybreak to midnight. The time table showed that first car left for Indianapolis at 0530, with the first car from Indianapolis arriving at 0610. A nickel would get a rider from Beech Grove to Shelby Street and LeGrande. A dime would get you all the way to the Traction Terminal.

Now, one might ask about why someone would get off the interurban at Shelby Street. Rightly so. But a trip to Garfield Park would require a change to a city street car. Or, one could catch the interurban to Greenwood, Franklin, Columbus and even Louisville at the end of the city Shelby Street line…which was at the Greenwood Line Stop 1 at Perry Street, south of Troy Avenue, on Shelby Street.

But business along the Beech Grove Traction line would start falling off rather quickly. The Big Four, with the completion of the traction line, stopped issuing passes to employees and families to ride the steam train. This made the interurban the best way to get to downtown Indianapolis. In the early days, most traffic was Big Four shop employees coming to and from work from their homes in Indianapolis. Due to the success of the town of Beech Grove, these employees were moving to the town. This caused a drop in traffic on the traction line. And due to shops being built along Main Street, the traffic drop wasn’t made up for in shopping trips to the stores of downtown Indianapolis.

By 1914, an average of 24 round trips ran each day along the line, with a schedule of 1 hour 10 minutes between trains. That had slowed down to 16 round trips a day by March 1916. And, as is typical of Indiana railroads of the time, the Beech Grove Traction Company found itself falling into receivership in December 1917, caused by increased costs without the subsequent increase in revenue.

Lawsuits were filed. Newspapers reported that the traction line wouldn’t be necessary for much longer, since with the improvement of city streets, bus service between Beech Grove and Indianapolis would replace the electric traction line. In a strange twist of fate, the operator of the bus competition to the Beech Grove Traction ceased his bus company and took over the traction line as railway superintendent. Fortunes improved…for the time being.

One of the things that the line started was carrying mail from the Fountain Square post office to the post office in Beech Grove. This started shortly after completion of the line until it was discontinued in the late 1920s.

The little line lumbered on for almost two decades after receivership…barely. It was recommended in November 1923 that the line be closed and sold. Revenues increased with the permission given to raise fares. But the company found itself sold to make up $30,000 in debt due to maintenance and new rolling stock in 1925. The new buyer made a condition – if a bus line was approved, the sale would be null and void, and the line would be junked. Again, lawsuits were filed, and a bus line was granted an injunction to operate. And the bus company was purchased by the traction line…and both were operated at the same time. It found itself teetering financially, yet still managing to survive.

The Great Depression hurt the line, just like it did almost everything else at the time. But it managed to survive…for a while. The Public Service Commission of Indiana, on 7 January 1937, officially told the company that it was to close the line. Indianapolis Railways, the power provider for the line, complained to the PSCI that Beech Grove Traction owed in the neighborhood of $20,000 for power…which Indianapolis Railways turned off at 0100 on 8 January 1937. And hence, the end of the Beech Grove Traction line. Some people hadn’t seen the notices about the end of service, and were waiting at stops on a cold 8 January morning.

The last vestiges of the traction company would last until 21 August 1973. The company’s car barn, at First and Garstang, would last until demolition started that day.