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There are many people interested in former transportation companies, whether they were trucking companies, railroads, airlines or ocean lines. They are called “fallen flags,” and the term describes those companies whose corporate names have been dissolved through merger, bankruptcy or liquidation.
Part 1 of this article recounted the Nickel Plate Line’s early years.
In 1916 the Nickel Plate Line was sold to the Van Sweringen brothers of Cleveland. The brothers were real estate investors; they had no previous experience in railroading.
They sought to build a rapid-transit line to serve their new suburb of Shaker Heights. The brothers realized that the Nickel Plate’s east-to-west route through Cleveland offered what they had been seeking. They paid $2 million as a down payment on the railroad and gained control of it on July 5, 1916.
Despite the fact that they had no railroad experience, they nearly pulled off an audacious plan to cobble together a fifth main line railroad in the eastern U.S. through the control, and then mergers of the Nickel Plate, Chesapeake & Ohio, Erie Railroad and Pere Marquette.
The “Nickel Plate Limited” (Chicago-Buffalo) at Hammond, Indiana on April 1, 1956. (Photo: Gordon Lloyd/American-Rails.com)
Called the “Greater Nickel Plate System,” it would have been a major carrier with 9,213 route miles in the U.S. and another 337 miles of the Pere Marquette in Canada’s southern Ontario province.
This railroad conglomerate would have included Nickel Plate’s high-speed main line, Erie’s double-tracked Chicago-Jersey City route, and C&O’s southern Appalachia-Tidewater corridor.
Projections of annual operating revenue were $340 million, which would rank it behind only the Pennsylvania Railroad and the New York Central Railroad. However, one of the brothers’ numerous corporations was a secret stock trust. Until that information was revealed they had enjoyed a very positive reputation in financial circles (despite heavy debt) as well as with the Interstate Commerce Commission (ICC).
The revelation of the secret stock trust caused the “Greater Nickel Plate” scheme to collapse. Nonetheless, despite the setback, the brothers did add two railroads to the Nickel Plate – the Lake Erie & Western (LE&W) and the Toledo, St. Louis & Western (TStL&W).
The acquisition of the TStL&W took place in March 1922. The railroad was nicknamed the “Clover Leaf Route,” and it operated 450 miles of track via a corridor linking Toledo with East St. Louis.
As noted above, the LE&W was once part of the Seney Syndicate. After the sale of the Nickel Plate to the New York Central and its subsequent sale to the Van Sweringen brothers, the LE&W had remained under NYC control. The LE&W extended 718 miles from Sandusky, Ohio to Peoria, Illinois. “In addition to its east-west route the LE&W also operated a pair of north-to-south branches linking Michigan City with Indianapolis and Fort Wayne with Rushville/Connersville.” The brothers bought the LE&W on April 26, 1922.
The Van Sweringens tried to revive the “Greater Nickel Plate System” just prior to the start of the Great Depression. The plan (to combine the Nickel Plate, the C&O, the Lackawanna, the Pere Marquette and several short lines) was approved by the ICC. However, the stock market crash in October 1929 ended the scheme.
The Van Sweringen brothers’ empire was crippled by the Great Depression; they were forced to divest control of the Nickel Plate in 1935.
The Nickel Plate Road PA-1 #190, taken circa 1948 and wearing the company’s attractive “Bluebird” livery.
(Photo: Nickel Plate Line/American-Rails.com)
The Nickel Plate Road as an independent company
Despite the financial difficulties of the Van Sweringen brothers and the nation as a whole, the Nickel Plate managed to escape bankruptcy and also recovered so well that it repaid its outstanding debts in full. It was one of only a few railroads able to do so during the Great Depression.
The railroad had lost more than $4.4 million in 1932; it then borrowed $18.1 million from the federal Reconstruction Finance Corporation to stave off receivership. However, during the spring of 1933 traffic rebounded and in 1934 the Nickel Plate generated a small profit (its first since 1931).
The railroad continued to recover throughout the 1930s. In addition to a strengthening national economy, traffic growth also occurred because of the railroad’s infrastructure improvements and subsequent higher train speeds. The Nickel Line purchased new locomotives, laid heavier rails and introduced centralized traffic control in January 1942.
A Nickel Plate locomotive departs Chicago’s LaSalle Street Station with eastbound “New Yorker” on October 14, 1955.
(Photo: Bob Collins/American-Rails.com)
World War II and the 1940s
The Nickel Plate regained its independence during the 1940s. After the Van Sweringens lost control, the railroad had been managed with the C&O/Pere Marquette. That arrangement ended on December 15, 1942, when John Davin was elected as the railroad’s new president.
Davin had worked for the C&O for most of his career. He continued the tradition of strong, efficient management that the Nickel Plate had had at key times in its history. Like most U.S. railroads, the Nickel Plate did well financially during World War II, carrying troops and war materiel along with coal and other commodities.
Under Davin’s leadership the railroad began the switch to diesel locomotives. The railroad also grew in October 1948 when it leased the 530-mile Wheeling & Lake Erie Railway (W&LE).
The W&LE was a lucrative regional railroad. It moved coal, coke and steel as well as general merchandise along its main line that connected Wheeling, West Virginia with Toledo. It also had a route that linked Cleveland with Zanesville and branches reached the Ohio cities of Huron and Lorain.
The W&LE served the industrialized cities of Ohio, the steel mills of West Virginia and also had a strategic connection to Detroit and its auto manufacturers. It was a good fit for the Nickel Plate and increased its system to nearly 2,300 miles of track.
Davin led the railroad during 1948, its best financial year in history. Unfortunately, he died on January 7, 1949.
A Nickel Plate Road locomotive works local service at Gibson City, Illinois on November 24, 1962.
(Photo: Roger Puta/American-Rails.com)
The railroad’s switch to diesel locomotives began in the early 1950s, and the last steam engine was retired in August 1960.
The 1950s were generally positive for the Nickel Plate. However, increased competition and rising costs impacted the railroad industry, including the Nickel Plate. As a number of other railroads did, the Nickel Plate began the new “piggyback” service on July 12, 1954 between Cleveland and Chicago. The railroad’s successful trailer-on-flatcar (TOFC) service was extended to trains to Buffalo and New York.
The United States went through a recession in 1957-1958. This led the railroad’s management to ponder the Nickel Plate’s role in an industry on the decline. Where did the Nickel Plate fit, and what were its options going forward? Industry consolidation began when the two largest railroads in the eastern U.S. the – Pennsylvania Railroad and the New York Central – announced their merger plans in 1957.
A Norfolk Southern train. (Photo: Jim Allen/FreightWaves)
The 1960s brings new ownership
The PRR-NYC merger announcement is was followed by the merger of the Lackawanna and Erie railroads on October 17, 1960, which created a 3,000-mile network. The Norfolk & Western sought to extend its lucrative coal traffic across the Midwest; the Nickel Plate Road was its chosen target.
The acquisition of the Nickel Plate by the Norfolk & Western was approved by the ICC on April 17, 1963. The result was a strong Midwest-Tidewater system that also included the Wabash, Pittsburgh & West Virginia as well as the Akron, Canton & Youngstown.
The negotiations, ICC hearings and planning took four years. But the new and larger Norfolk & Western became a reality on October 16, 1964. Years later, the Norfolk & Western would merge with Southern Railway, creating Norfolk Southern.
Like many other fallen flags, the Nickel Plate Line’s name exists only in memories and the corporate records of Norfolk Southern. However, the railroad’s primary corridors continue to be important to Norfolk Southern.
Author’s note: This article would not have been possible without the resources made available by Adam Burns of American-Rails.com. Those interested in learning more about the railroads operating in North America – and those that are now “fallen flags” – should explore the American-Rails site.
This article first appeared on www.freightwaves.com
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