Until the abandonments and bankruptcies there were five lines competing for traffic between Chicago and the Omaha gateway: C&NW, CB&Q, CMStP&P, CGW, IC. Six lines, if one counts the roundabout Wabash route. Obviously it was overbuilt for an earlier era with a dense network of feeder branchlines in Iowa, and the demise of some was inevitable.
C&NW, CA&E, MILW, CGW and IC fan
In November 1964, a MoPac ticket agent at Warrensburg, Mo., told me, of Jenks: "He ruined the Rock Island, and now he's ruining our road."
I'm sure his perspective was mainly from the passenger side, for Jenks surely was death on the passenger service that was eating his lunch. (And he did go through that service on both roads like a dose of salts.)
Since, everything I've read about Jenks indicates he was a heck of a good railroad man in a difficult time. Didn't know or had forgotten about the situation that helped move him from the Rock Island.
Interlibrary Loan worked for me. The cost was about $3 for shipping and handling. Well worth it.
Ed
Unfortunately, the book is available only in hardcover at more than $30. It's time to see what the interlibrary lending system can produce!
Jeff:Have you read Craig Minor's book on the Missouri Pacific? "The Rebirth of the Missouri Pacific" is an outstanding look at MP's history from 1930s thru the merger with UP. Very similar timeline as Scheinder's book.
Jenks was a very good manager. Your question is a valid one. He could have made the difference with the Rock Island.
First of all there were too many railroads running between Chicago and Omaha. Is it true that both Milwaukee Road and C&NW were more dependent on Union Pacific for traffic than Rock Island ? Today more of the Milwaukee is gone than Rock Island; talk about a redundant railroad. I understand that Milwaukee Road and Rock Island considered merger around 1961. Milwaukee Road between Chicago and Omaha and Chicago Kansas City could have been abandoned shortly after the merger.
One issue it missed and I had hoped the book would address, why the RI turned down Kenefick's offer to ensure the RI would have enough traffic to make it profitable if the RI would only solicit traffic for UP via KC or CB. Don Hoffsomer's book on Iowa railroads mentions Kenefick approached the RI twice in the early 1970s. Prof. Schneider, in discussions on the RITS List yahoo group, said he maybe should have mentioned this in at least the footnotes but down played the UP's offer. He said it happened after the UP-CNW coordination of service had already begun. (While giving no specific date, Hofsommer gives the impression that it happened before or very early in the UP-CNW relationship.) I myself think it's a big deal when your would-be merger partner, whom you yourself have made it clear is your only hope, offers to help you out and you turn them down. (It's like being on a crumbling raft in the middle of the ocean surrounded by hungry sharks. A ship stops and offers you rescue, but you say, "No thanks, I'll wait for the next one.")
People who were in RI management at the time only speculate that the reason for turning down the UP was the "long haul" mentality. You always try to go for the long haul, don't short-haul yourself. My own opinion, not worth even is that RI management ran the railroad the way the owners wanted. Crown was a big and vocal owner and wanted his money quickly, either through sale or liquidation, not longer term thru operating the RI. Even if the UP made it profitable and ultimately took over.
It's been a few months since I read the book. One thing that stood out was how D.B. Jenks left and went to the MP. I didn't realize he left partly because of differences within the management structure. I wonder how things might have been different had he stayed with the RI and had been able to run it.
Jeff
I finished the book yesterday afternoon, and am upgrading my opinion. It is a good book of the history of the Rock Island. As Greyhound indicated, this is not a book about trains, but about the corporate governance, bankruptcy, and liquidation of the railroad.
The Union Pacific issue could have been covered a bit more, from a planning and operational standpoint. It would have been interesting to know how the Rock Island would have fit into the UP. From what I know of the Rock Island and the CNW...UP got the better line.
One interesting fact, briefly covered, was the GM parts train which Rock Island received $50,000 per day in revenue....that is $100 per mile in 1970s dollars. This train has been covered in Trains and Classic Trains, but for me it would be interesting to understand the economics of that train and how GM could afford to pay that much for auto parts.
In the end, it appears that Schneider felt the trustees did their duty in liquidating the line. I still think the Chicago - Council Bluffs line will become a mainline in the future. If not, it certainly has a niche handling grain and ethanol.
MP173 . I regret not spending time on or near the Rock Island in the late 70's. I was nearby...only an hour away and failed to ride the Peoria Rocket, nor to explore the mainline operations. Not a single photo in my collection exists of the Rock Island. Ouch. Ed
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I regret not spending time on or near the Rock Island in the late 70's. I was nearby...only an hour away and failed to ride the Peoria Rocket, nor to explore the mainline operations. Not a single photo in my collection exists of the Rock Island. Ouch.
The Peoria Rocket was a class act in its day. Two round trips per day between Chicago and Peoria.
I got to spend some summer days hanging at the Rock Island depot in Peoria. My mother was a grade school teacher who started teaching before there was a requirement that teachers have a college degree. When that changed they didn't fire all the existing teachers without degrees but they required that those teachers get a degree. In the summer, when she wasn't teaching, she'd go to college at Bradley University in Peoria. She graduated from Bradley when I was a senior in high school. Considering the fact that she was 41 when I was born, that was quite an accomplishment for her.
She'd sometimes take me with her to Peoria and in those more innocent days she could just drop me off at the depot knowing I'd be OK when she came back to pick me up. (I was 13 or 14 or so) If she had an early morning class I'd get to watch the assembly and departure of the 7:00 AM Rocket for Chicago. The usual power consist was an E unit or maybe the Alco DL-109 that had been reeingined by EMD. (Funny looking thing.) It was water level into Chicago so one E could handle: a working RPO complete with a mail hook and armed postal clerks, a baggage express car, the parlor car "Peoria", the diner-lounge "Creve Coure Club" and usually three coaches.
The noon inbound from Chicago was less of a train with two head end cars, a parlor-buffet and usually two coaches. It returned to Chicago at 3:00 PM.
One morning, as I was standing there taking pictures of the train the engineer came over, talked to me, and took me through the E unit. God bless that man. My glasses fogged over as I walked by the steam generator.
I have a lot of old Rock Island pictures, of very poor quality, in an old scrapbook. I rode four round trips on the Peoria Rocket. I never got in the parlor car. But breakfast in the Creve Coure Club on the way to Chicago is something I'll never forget.
As with any story, where do you start?
A retired Rock Island locomotive engineer was on my paper route. Collecting for his subscription was something we both looked forward to. His was my last stop to allow time to talk. With his wife serving treats, we all sat at their kitchen table. The time was the late 1960's.
The old engineer hired on as a Rock Island fireman in the early years of the last century. Other than a tour of duty under General Pershing to make the world safe for democracy, the Rock Island was his work history. He worked well past age 65.
The old engineer still received the employee magazine. Copies he loaned me were returned with his paper. The Rock Island's decline was not hard to read between the lines.
Decades of stories working on the road brought joy to the old engineer. He was not living in the past. He grew serious when expressing a great deal of concern for his old employer's future.
The engineer acknowledged railroading's changed business climate with excessive regulation and subsidized competition. The old engineer remembered the collapse of the Reid-Moore syndicate that controlled the Rock Island when he was young.
Reid-Moore, of that operation how the old engineer swore. His wife would would glare across the table telling him to clean up his language.
The old engineer said the Rock Island never really recovered from being run into the ground by Reid-Moore. Internal combustion fueled competion took off not long after the old engineer returned from France. The old engineer told of seeing business shift primarily to highways. The old engineer said the weakened Rock Island was in a worse condition than other lines to meet the challenge.
The old engineer pointed to an article in his Rock Island employees magazine. "If this Union Pacific merger falls through, the Rock Island is through."
The old engineer was correct. He did not live long enough to see his prophecy come true.
Schneider's book appears worth reading. It maybe interesting comparing the book to what I was told by an old Rock Island man when I was a boy.
Not quite finished with the book, but just completed the chapter leading to liquidation (ch 10 - The Rock is Dead). This, so far, is Schneider's best writing. This was pretty interesting as you had the BRAC and UTU pushing for a strike, President Carter's administration trying to be re-elected, Trustees pushing for reorganization, creditors wanting their due, RTA in Chicago wanting to purchase the commuter line, and a judge attempting to balance it all.
I agree with Greyhound...this property needed to be liquidated. The railroad was not going to be successful in any form, at that time. Today segments are very successful, but look at the changes in technology and productivity which have occured.
DwightBranch Here is one source of documentation, I have seen longer versions of this, by the trustee (Gibbons?) as I recall, but can't find it just now. To quote it: "Henry Crown was a major investor who bought Rock Island bonds from fearful investors at pennies on the dollar betting on the bankruptcy judge (McGarr) ruling to liquidate the property." Crown had connections to the political elite in Illinois at the time. It didn't help that Jimmy Carter was a fool, but with Crown intentionally running it into the ground it would have been difficult to reverse.
Here is one source of documentation, I have seen longer versions of this, by the trustee (Gibbons?) as I recall, but can't find it just now. To quote it: "Henry Crown was a major investor who bought Rock Island bonds from fearful investors at pennies on the dollar betting on the bankruptcy judge (McGarr) ruling to liquidate the property."
Crown had connections to the political elite in Illinois at the time. It didn't help that Jimmy Carter was a fool, but with Crown intentionally running it into the ground it would have been difficult to reverse.
That's not documentation. That's an internet posting.
Henry Crown was heavily invested in the Rock Island. He was the largest bondholder and a large stockholder. He's often mentioned in the book. His involvement with the Rock Island began in th 1940's when he bought, at a discount, Rock Island bonds that were in default.. (That would be perfectly normal and legal.) These particular bonds were exchanged for common stock when the railroad was reorganized out of bankruptcy in the 1940s. (P. 28)
We could certainly use more men and women such as Henry Crown. People that can build businesses and create wealth. His profile in "Rock Island Requiem" says that he was born in Chicago to Russian Jewish immigrants in 1896. His father worked in a factory that made suspenders. He was one of seven children and he quit school at age 14 to go to work. At first he had a series of menial jobs but he kept trying to better himself, eventually landing a position as a salesman.
Along with two of his brothers he created the business that was to become Material Service Corporation. He did cultivate political connections because much construction work was on government contracts for roads, etc. MSC almost went under with the Depression. Henry Crown offered to put up his own home as collateral to keep it going. This caused a banker at First National Bank of Chicago to take a second look. The bank was able to carry MSC though the tough times and Crown formed a personal relationship with the banker. (Always a good thing.)
Crown saw an opportunity in the heavily discounted Rock Island bonds that were in default and bought them. So what? That was just a good business move. It was in the 1940s and had nothing to do with the 1970s bankruptcy. You're conflating things to fit your ideology.
Crown did push for liquidation at the end. Again, so what? He didn't get to decide, his lawyers just got to argue his case in bankruptcy court. My conclusion is that Crown was right. The Rock Island was worth more broken up than it was as a separate corporate entity. Various RI lines are important parts of the rail network to this day. They just didn't work as part of an independent railroad.
Henry Crown died in 1990 after a long, successful, prosperous life.
MP173My reading of the book was that Crown was a HUGE part of the Rock Island until he realized it wasnt going anywhere and liquidation was inevitable. His lawyers argued for liquidation during the late 70s. Whether or not you agree with his reasoning or not, he had the right as his money was on the line.
That would be the case if he only began pushing for liquidation at a late date when he saw the writing on the wall, say 1980, but in fact it began long before that, PRIOR even to the 1975 bankruptcy. John Ingram has reported that prior to his becoming (last) president of the Rock Island in 1975 the main issue that gave him pause in coming in to rebuild it after years of deferred maintenance was Crown and his bonds. Ingram has stated that it was well known to insiders that Crown was opposed to trying to turn it around in 1975, and for years prior. It is one thing to try to get your money out in 1980 when the company has failed, it is quite another to push for its dissolution years before, prior to bankruptcy. I consider Crown to be a vulture akin to the corporate raiders of the 1980s, who took advantage of quirks in the tax laws etc. to enrich themselves at the expense of workers and customers who relied upon their company. And again, that it was savable and viable can be seen by the fact that most of the of the Rock Island are still in place- including in its entirety from either Chicago or St. Paul to the end point in Tucumcari. Completely anti-social and unnecessary
MP173 Unless I have missed something...Crown was a long term holder of the bonds. Thus, he didnt purchase these at 25% discount, unless the bonds were purchased during the previous bankruptcy.
Unless I have missed something...Crown was a long term holder of the bonds. Thus, he didnt purchase these at 25% discount, unless the bonds were purchased during the previous bankruptcy.
The previous bankruptcy was from 1933 until 1947, the reorganized railroad established Jan 1 1948. There was a lot of political maneuvering involved with that reorganization, probably why some in the 1940s were willing to sell their interest in the company at pennies on the dollar. Iron Road to Empire, the RI's 100 year history covers that period.
Schneider on page 25 discusses the first Board of Directors after the 1948 reorganization. Henry Crown is listed as a member of the board.
"Within a decade the Crown and Norris interests would hold more than 250,000 shares of Rock Island stock and Henry Crown would be the largest bondholder in the railroad." That would put Crown as the largest bondholder by 1958.
On page 27, Schneider states that Crown purchased bonds for as little as 30 cents on the dollar (in 1946!). By the end of 1947 he had bond holdings over $4million which he exchanged for 100,000 shares of stock in the railroad.
The $4 million he put into Rock Island "nearly tripled" per Time Magazine. Schneider states (p27) that Crown's :purchase of Rock Island paper at such low prices made him the most important single investor in the railroad from the reorganization until its bankruptcy in 1975."
So, yes he did buy bonds at a low price ... in the 1940s. I do not know if he invested further in the 70s, but in the 40s he was a critical investor.
Those bonds were available to others who passed.
My reading of the book was that Crown was a HUGE part of the Rock Island until he realized it wasnt going anywhere and liquidation was inevitable. His lawyers argued for liquidation during the late 70s. Whether or not you agree with his reasoning or not, he had the right as his money was on the line.
MP173 Unless I have missed something...Crown was a long term holder of the bonds. Thus, he didnt purchase these at 25% discount, unless the bonds were purchased during the previous bankruptcy. Crown also had equity skin in the game, over 200,000 shares (out of 2,900,000 shares). He was a very significant investor in not only the bonds, but the equity of the Rock Island. As a secured bondholder, he had rights considerably higher than anyone else, unless it is the GM bond fiasco of a few years ago. Crown was involved on the board of directors for years and once it became obvious the UP was bailing out, he pushed and pushed hard for liquidation. Do you blame him? He invested and knew the risks and what his rights were. Ed
Crown also had equity skin in the game, over 200,000 shares (out of 2,900,000 shares). He was a very significant investor in not only the bonds, but the equity of the Rock Island. As a secured bondholder, he had rights considerably higher than anyone else, unless it is the GM bond fiasco of a few years ago.
Crown was involved on the board of directors for years and once it became obvious the UP was bailing out, he pushed and pushed hard for liquidation. Do you blame him? He invested and knew the risks and what his rights were.
Ed is correct, Crown was hardly a scavenging Johnny-come-lately to the Rock Island scene. In Iron Road to Empire, the celebratory 1952 official centennial biography of the road, which has been in my library for 50 years, he is pictured seated at the table, with the great J.D. Farrington, of the board of directors.
I've seen previous reports of the new book, including in the Wall Street Journal, and wondered what Schneider has to bring to this well-ploughed ground, so late. I think this old Rock Island fan (and Rockets rider) will pass.
I find the Crown/UP/CNW story to be very interesting. If you want to look at the complete bungling by the ICC, look no further than this example.
The USRA work of the 1970s has always fascinated me, perhaps the complete book needs to be written on that.
Greyhound, those were indeed bleak days for the IC. The branchline thru my hometown just fell apart. A book on the IC from 1960 on to present day would be a great story of how a railroad can be transformed.
The Crown family's financial maneuvers during RI's bankruptcy proceedings as related to their bond holdings appears to not be all that uncommon. There are some financial firms which will buy out the interests of some junior secured creditors on the cheap when the debtor is in Chapter 11 proceedings and will try to get a better payback on these holdings as part of the re-organization. A well-known local example was Aurelius Capital Management during Tribune Company's Chapter 11 re-organization.
Greyhound:I missed the Sandhouse Gang presentation by Prof Schneider, but have looked at the Power Point of the presentation online at NU's site. It seems to have been yet another great presentation by the University on transportation related (railroad) subjects.
I am about 2/3 of the way thru the book and am luke warm. I knew this would be a book about railroading, not trains and that did excite me. Schneider does a very good job of distilling all the information about the Rock Island into a 300 page report, but we really do not get to know the Rock Island, as we did Conrail with Rush Loving's "The Men Who Loved Trains". What were the operational strengths (perhaps few or none) of the Rock Island? Armed with an Official Guide and a Moody's 1970 reference, I could trace the evolution of financial deterioration but I really didnt get to know the Rock Island.
We did get to know the lawyers, trustees, politicians, and administrators...or at least 2/3 of the way thru the book. The UP / Rock Island courtship is covered, but we do not really understand what the UP wanted to do with it. Of course we can look at the subsequent "affair" with CNW and ultimate marriage and get an idea. UP seemed, at least in the book, very distant to the merger as CNW's Heinemann began his strategy. Ultimately CNW's strategy is revealed. Delay, delay, delay and push for liquidation of Rock Island. It worked. By then Heinemann was long gone, as was the CNW (into employee ownership) and the routing of all that freight was forever changed.
Fred Frailey's excellent book on the Blue Streak Merchandise discusses SP's purchase of the Tucumcari Route and we can put bits and pieces together about the Iowa Railroad and the Spine Line. My guess is the book will give a glimpse at the disposition of the assets and we can see the Rock Island was at best a "poor mans' Burlington Route." Always at the party, but never the center of attention.
This book for me is worth reading, but it leaves me wanting a little more. The overall political landscape of the 70's is critical as it sets the stage for the Staggers Act and today's railroading industry. The Henry Crown involvement is fascinating. Certain corporate and boardroom issues are of high interest. But, it would be interesting to know...when did UP unofficially pull the plug on the merger? One gets an idea, but perhaps too much time has passed to know for sure.
Thanks for a worthwhile, interresting, and relevant review.
Does the book mention "Colonel" Henry Crown, the main shareholder? (I put Colonel in scare quotes becasue he was awarded that by virtue of briefly joining the Army Corps of Engineers, he was an aggregates magnate, birth name Henry Krinsky, but insisted on being addressed as Colonel). Crown paid millions for Rock Island bonds at around 25% of their face value, but under bankruptcy law at that time if the Rock Island were liquidated he would be reimbursed at their full face value (before, say, the Rock Island's workers), a 75% windfall, and so pushed to have it liquidated. Between ownership and management there is plenty of blame to go around without bringing in the government. It certainly was viable, currently around 75% of the Rock Island still exists, compared to say the Chicago Great Western of which only about 5% is still in place.
By Gregory L Schneider, professor of history at Emporia State University. Available on Amazon in hardcover for $31.80 plus shipping.
I was around the periphery of this when it happened. So I took off from work when Dr. Schneider made his presentation on this book at the Northwestern University Sandhouse Gang. I attended the presentation in person. I knew two of the former Rock Island employees Dr. Schneider thanks as sources. I attended grad school at NU with Dennis Opferman. He and I had many of those oh so serious grad student discussions regarding transportation issues. After Paul Victor left the Rock Island he came to work for the Illinois Central Gulf Railroad. Another down on its heels Midwestern railroad where I was employed. We crossed paths several times. (I did get the MS in Transportation from NU.)
At the ICG we were one step away from bankruptcy ourselves and we watched as the Rock Island went under. Dr. Schneider tells a true tale. The final chapters about the Rock Island were centered on lawyers, judges and bureaucrats. Not on railroad men and women innovating and competing for freight traffic. The government would not then allow that. Dr. Schneider's comments on the failed government regulatory system are on the mark. (Today, the regulation is largely gone and the railroads are allowed to compete. They are now one of the heathiest industries in the US. A big change.)
The Rock Island was not viable as a separate corporate entity, but today many of the former Rock Island routes are still operated by other railroads. Heck Fire, the old Rock Island between Kansas City and New Mexico is a speedway handling 70 MPH Union Pacific freight trains. That's for the good.
But I do miss the Peoria Rocket. It was "The Way" to Chicago from central Illinois in my long ago youth. Bacon and eggs in the diner was flat out great.
"Rock Island Requiem" is not about trains, but it's about a railroad. If you're looking for tales of high balling perishables across Kansas, this book does't have it. If you're looking to read the history of the end stage of the Chicago, Rock Island and Pacific Railroad Corporation, this book does have it. But you'll be reading about court rooms, not high iron.
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