Thanks to a large freight traffic base, the Illinois Terminal Railroad Company was one of a few interurbans to survive the Great Depression. In 1956, nine Class I railroads acquired the carrier (joined by two others the following year). Subsequently, the freight-only Illinois Terminal decided to close many of its original, light-rail traction lines in favor of trackage rights on its Class I owners, such as the Illinois Central, Wabash and New York Central (Peoria & Eastern). The company reversed this trend somewhat in 1976 when it acquired Penn Central’s Decatur-East Peoria route (including trackage rights on both ends).
Illinois Terminal nearly faced bankruptcy and liquidation in the late 1960s but a new president turned things around. Several good years followed then in 1977, a derailment near Mackinaw destroyed a railroad trestle, forcing premature closure of even more of the carrier’s original traction mileage. Detouring Trains 200 and 203 over the Illinois Central Gulf between Mount Pulaski and Pekin and P&PU to East Peoria for most of the next two years proved costly, and sent the ITC in the red for the first time since 1970.
By mid-1979, track crews had upgraded the ex-Penn Central line so Trains 200 and 201 (replacing 203) could get off the expensive ICG detour. In 1979 and 1980, the State of Illinois studied requests to fund further rehabilitation to 25mph. But the ITC was entering its final few years. The carrier’s steep 1978 losses made its Class I owners nervous, and the advantages of owning a carrier such as ITC were going away as regulation was being eased. Further, the liquidation of the Chicago Rock Island & Pacific, an ITC owner, and major connection (at Peoria) had killed off a large volume of ITC business. Deep losses followed, and a decision was made to sell.
On June 1, 1980, Illinois Terminal and other owners (except the Rock Island) entered into a an agreement in which its principle assets would be acquired by one owner, Norfolk & Western, and everything else (such as trackage rights) abandoned and/or liquidated. On December 23, 1980, N&W and ITC filed a joint application with the Interstate Commerce Commission for N&W to acquire the latter. On June 19, 1981, the ICC granted the railroads’ request. On September 1 that year ITC became a wholly-owned subsidiary of the N&W. The operational merger took place just after midnight on May 8, 1982.
So how did the Illinois Terminal use the Peoria Gateway? The Rock Island is known to have tapped Peoria as a southeast gateway, and Illinois Terminal gave the Rock neutral connections to the Louisville & Nashville and Southern Railway at E. St. Louis. Rock Island shippers in the Illinois River Valley, Peoria-Pekin, the Quad Cities and eastern Iowa likely used the ITC-E. St. Louis connections to connect with southwestern carriers (Cotton Belt, Frisco, Katy and MoPac) as well. Furthermore, ITC served a lot of large shippers between Alton and St. Louis and also at Springfield (Fiat-Allis) and Decatur (ADM, A. E. Staley), which no doubt shipped and received to Rock Island-served points. Some storage-in-transit business is believed to have moved over the ITC as well.
With this in mind, you can see how the Rock Island’s 1975 bankruptcy filing, 1979 strike shutdown and 1980 liquidation was painful for ITC. EJ&E and BN directed service preserved some connecting traffic for a little while, but subsequent cutbacks, rate-making freedoms gained through the Staggers Act and industrial closures and cutbacks as a consequence of the 1979 and 1980 recessions deepened traffic losses
One mystery I’d like to solve is this: According to at least one resource, Illinois Terminal acted as a bridge route between the Burlington Northern at Peoria (P&PU actually) and the St. Louis-San Francisco (“Frisco”) at St. Louis. Both of these carriers could connect at St. Louis directly (actually via Terminal RR Association) so routing via Peoria suggests traffic included slow-moving “storage-in-transit” business, such as roller lumber. Whatever the case, deregulation and the December 1, 1980 BN-Frisco merger eliminated ITC from such routings.
Shippers still routed a quantity of traffic via ITC-TP&W-AT&SF in either direction. It has also come to my attention that TP&W served as a bridge line (low volume however) between the Milwaukee Road at Webster, Illinois (near Sheldon) and Illinois Terminal at East Peoria. Some of this no doubt disappeared with the Milwaukee’s 1980 cutback, but ITC-TP&W-MILW routings were viable even post-Staggers.
By the time Norfolk & Western had gained control, ITC Trains 200 and 201 had been cut from seven to three weekly cycles north of Springfield. On December 1, 1981, N&W introduced its own tariffs to cover ITC traffic. Comparing an Illinois Terminal route map to a N&W one, it is obvious how these new tariffs dried up nearly all that was left of the ITC’s Peoria Gateway routings. Any ITC traffic in the Alton-St. Louis, Springfield and Decatur areas routed north-south via Peoria to eastern or western connections could shift to existing N&W lines.
By 1982, ITC Trains 200 and 201 were usually quite short. Poor track conditions on ITC’s “Northern District” (former Penn Central) prompted N&W to shift the trains to a temporary, alternate routing between Decatur, Bement, Gibson City, Bloomington and East Peoria. This became effective February 27 that year. The trains were dropped when or shortly after the operational merger took place on May 8.
AmerenIllinois’ E. D. Edwards Station south of Bartonville, Illinois
The War on Coal has suffered a major defeat.
The Illinois Pollution Control Board voted 3 to 1 on Thursday to grant Dynegy Inc. the same waiver given to AmerenIllinois for its five coal-fired power plants. giving them until 2020 to install pollution controls. Environmental groups fought Dynegy’s request to be given the same waiver in hopes denial would lead to closure of the plants.
I couldn’t find the Journal Star’s article online but Crain’s Chicago Business contains an interesting item not found anywhere else.
The Pollution Control Board said Ameren’s E.D. Edwards plant should be retired as soon as possible.
But then it says,
Any closures first must be approved by the region’s grid operator, the Carmel, Ind.-based not-for-profit Midwest Independent Transmission System Operator.
According to Crain’s, coal generates 48 percent of electricity in a 15-state electrical grid, so I’d guess Dynegy intends to acquire, operate and eventually upgrade all five plants, thus ensuring each a long future.
Plants involved are at Coffeen, Duck Creek (near Canton), E. D. Edwards Station (near Bartonville), Newton and Joppa. All receive coal by rail. A Dynegy news release says it will acquire these plants in December 2013.
Gen. Wayne A. Downing Peoria International Airport is getting $4.3 million as part of Gov. Pat Quinn’s “Illinois Jobs Now” program.
The Journal Starreported Friday that the funds were for, “improvements on the general aviation apron for $3,448,909 and the terminal apron for $887,692.”
If you’ll recall, funding for these improvements was on hold due to sequestration. In my July 4 post, I noted that $4.6 million was needed for the Byerly ramp and about $1 million for widening the western portion of the airline apron. Back in September, $1.4 million was awarded to PIA for ramp improvements, so the total of $5.7 million should cover the total cost of these projects.
For the Toledo Peoria & Western Railroad, the 1970s only increased anxiety.
Two facts would govern events for the last half of the decade, and well into the 1980s. Conrail’s Preliminary System Plan did not include Penn Central’s Kenneth, Ind.-Effner Branch, a vital link for the TP&W. Also, the Pennsylvania Company (Pennco) retained its half-interest in the TP&W.
The TP&W interchanged 51,300 and 46,278 carloads of traffic with Penn Central at Effner in 1974 and 1975, respectively. More than half of this was interchanged with the Santa Fe at Fort Madison, Iowa, thus TP&W still functioned as a major bridge route. Some was handled between Burlington Northern- and Rock Island-served industries in Keokuk, Iowa and Penn Central at Effner, and between those carriers at Peoria and with Penn Central at Effner.
TP&W traffic still supported a daily through freight in each direction between Fort Madison and Effner (No. 122-20 and No. 21-121), between East Peoria and Keokuk (Nos. 120 and 123) and locals between East Peoria and Effner (Nos. 24 and 25). The Kolbe Local worked daily except Sunday between East Peoria and Mapleton. Coal and grain extras ran as needed.
Conrail’s Final System Plan designated Kenneth-Effner for transfer to TP&W with trackage rights to reach Conrail’s 18th Street Yard in Logansport, Indiana. But TP&W would not sign on to the plan until it was guaranteed the same marketing position with Conrail as it had with Penn Central. Thus on December 9, 1975, Conrail and TP&W signed a private agreement (legality covered by the 3R Act) to maintain existing, rates, routes and service.
On April 1, 1976, TP&W gained control of the Effner line, and on this day or shortly thereafter, a pair of daily East Peoria-Columbus, Ohio trains began using Conrail trackage rights into Logansport. This extended TP&W’s rate division, and reduced Conrail’s. Because of the poor condition of the track, trains were restricted to 10mph, with numerous 5mph slow orders. At first, TP&W spent its own funds to upgrade the tracks, and the expense sent the carrier over $1 million into the red in 1978. But to fully rehabilitate the line to 40mph, TP&W had to win approval from its board of directors and assurances from shippers (to would continue routing via TP&W) before borrowing $5.8 million from the Santa Fe.
The Rock Island strike and subsequent liquidation diverted some traffic away from the TP&W, but with it came increased potential for more traffic moving between Keokuk and Conrail at Logansport. TP&W had assumed ICC-directed service for Hubinger Co. at Keokuk. That shipper had sent some eastbound traffic via Rock Island and Chicago. Now more would move via TP&W. Also, in 1978, when Norfolk & Western closed its former Wabash line into Keokuk (via trackage rights on TP&W west of Elvaston), a small volume of traffic shifted to the TP&W west of East Peoria or Forrest (Ill.).
Unfortunately, poor track conditions on rail lines used by TP&W trains were causing sometimes unpredictable delays to train movements, which threatened diversion of business. The bankrupt Rock Island did not have funds to repair its Peoria Terminal Co. line between Iowa Jct. (on Peoria’s far south side) and Hollis. About six to eight TP&W trains used this line daily, and rehabilitated it at its own expense in 1973. But track conditions had again deteriorated to where trains had to crawl at 5mph. This was unacceptable, but the TP&W lacked resources to repair the PTCo and its Indiana trackage so in 1979 it appealed to the State of Illinois for funds.
Out of all this chaos, the Santa Fe purchased Pennco’s half-interest in the TP&W in July 1979. Then in December 1979, the Santa Fe petitioned the Interstate Commerce Commission for full control of the TP&W. Santa Fe believed this was vital to the TP&W’s survival, since it was suffering declining traffic (107,432 cars in 1969 vs. 76,981 in 1978). In fact, Santa Fe intended to reverse this trend by diverting Conrail interchange from Chicago and Streator to the Logansport gateway after gaining full control.
The major sticking point to Santa Fe control was Conrail’s demand that the private traffic agreement with TP&W be canceled. Conrail was essentially forced to sign the December 9, 1975 agreement, and subsequently schemed to divert traffic away from the TP&W. In 1975, TP&W overhead traffic amounted to 42,424 carloads, but in 1978 had declined 27 percent to 30,270 carloads. Santa Fe’s plans to divert more east-west transcontinental traffic to the TP&W would reduce Conrail’s rate division.
The Interstate Commerce Commission ruled on December 17, 1980 that Santa Fe could control the TP&W and that the 1975 agreement between Conrail and TP&W was canceled. The decision became effective after 30 days. Santa Fe gained actual control of the TP&W in March 1981. A Board of Directors, formed by the Santa Fe and Pennsylvania Railroads in March 1960, was abolished, though at least one member (Caterpillar Tractor Co. president Robert Gilmore) became a Santa Fe director.
Although TP&W was adopted by a willing parent, it was about to be thrown under the bus. Cancelation of its 1975 agreement with TP&W enabled Conrail to use its new pricing freedom to divert traffic to favored gateways. In June 1981, it canceled joint rates with numerous railroads, including the TP&W. Suddenly, some 30,000 carloads of bridge traffic shifted to Chicago or Streator.
Traffic interchanged with Conrail and originating or terminating at TP&W-served industries was affected as well. Most was interchanged with Conrail at East Peoria (via P&PU) or shifted to trucks. Caterpillar export traffic (machinery and containers) had already begun shifting to the Norfolk & Western, a process completed by Conrail’s actions in 1981.
Suddenly, TP&W was a quieter railroad, which forced it to downsize operations. Train Nos. 20 and 21 were reduced to tri-weekly operation. Locals 24 and 25 operated when 20 and 21 did not. Train Nos. 121 and 122 continued to run daily between East Peoria and Kansas City. Nos. 120 and 123, which ran daily between East Peoria and Keokuk, were soon dropped and replaced by a Keokuk-LaHarpe local.
With Santa Fe’s assistance, TP&W did what it could to stem losses and find new sources of traffic. CILCO replaced western coal with Kentucky coal by spring 1983, so TP&W’s East End got a reprieve as three 90-car coal trains a week were received from the Seaboard System at Watseka. A 1981 deal with ADM (which had purchased Hiram Walker & Sons’ Peoria distillery) concentrated grain traffic from Indiana and Illinois elevators to that company’s Peoria barge loadout. Finally, the Hoosierlift opened near Remington, Indiana on November 1, 1983. A daily intermodal train began operation between Remington and Los Angeles.
But none of this was enough, and a decision was made to merge the TP&W into the Santa Fe at 11:59pm on December 31, 1983. You all know that the TP&W was reborn in 1989, but that’s another story.
From the outset, let’s make one thing clear: railroad deregulation saved the railroad industry from decline and eventual nationalization. But the Peoria Gateway benefited from the regulatory regime that began with the Interstate Commerce Act of 1887, and was harmed when it ended in 1980. The ICC’s rate regulations alone didn’t create the Peoria Gateway, but such regulations gave shippers the ability to route traffic how they wanted, and the advantages of a Peoria routing were quite known by the early 20th Century. There is always some danger of oversimplifying complex issues, and [partial] railroad deregulation is no exception. So what I will do here is explain how and why it impact the Peoria Gateway so quickly after enactment in October 1980.
The first thing to remember is why the Peoria Gateway developed in the first place: a divide between eastern and western railroads (which connected primarily at Chicago and St. Louis) and severe congestion in Chicago’s numerous rail terminals. In 2013, Chicago terminal congestion can still delay carload freight shipments, thus the motive behind CREATE. So why don’t shippers route freight via Peoria on a large scale anymore in order to avoid such delays? The explanation is simple: railroads control pricing, and they use it to concentrate traffic on preferred lanes and interchange points, thus taking advantage of economies of scale. Extra costs of congestion and delays are probably offset by such economy.
Before the Staggers Rail Act, pricing was generally equalized between any two points with competitive routings, regardless of single-line or multi-line service. So traffic managers routed their freight based on service, car supply and relationships with railroad salesmen. Service was how the Toledo Peoria & Western Railroad persuaded shippers on the Santa Fe and Pennsylvania railroads (and others) to include the TP&W in their east-west transcontinental routings. (“Avoid Chicago congestion and delays, route Transcontinental Peoria Way!”) Other carriers had much incentive to persuade shippers to use the Peoria Gateway. The Minneapolis & St. Louis didn’t even serve Chicago so its direct eastern connections were only made via the Peoria Gateway. Of course, M&StL’s fast service beat competitors such as the Burlington or the Rock Island (which favored Chicago as an interchange point).
The C&NW-M&StL, N&W-NKP-WAB, NYC-PRR, GM&O-IC and Conrail mergers successively diverted traffic away from the Peoria Gateway from late 1960 through the late 1970s, but in the summer of 1979, Peoria could still boast a significant role as an interchange point. Figures from Moody’s Transportation Manual tell the story.
P&PU traffic declined from 572,028 cars to 377,970 cars in 1969 (partly due to the use of larger capacity rolling stock and emphasis on bulk freight), but spiked up to 480,440 in 1970 due to a shift of Illinois Terminal trains to P&PU’s East Peoria Yard, TP&W’s permanent detour and the new BN-C&IM low-sulfur western coal movement to Havana, Illinois. All of this took place in a matter of six weeks between December 27, 1969 and February 12, 1970. Traffic was lower in 1971 and 1972 but peaked at 496,170 in 1973 largely due to longer coal trains and Peoria Terminal trains using P&PU to reach two major Pekin industries. A building fuel shortage that year may have shifted freight from truck to rail. Peoria, in fact, was suffering its own rail congestion.
A severe recession during 1974 and 1975 dipped traffic to just 379,081 in 1976 (a 23.6 percent decline in just three years). Traffic continued to decline in 1977 and 1978 then spiked again in 1979 when Commonwealth Edison’s Powerton Station switched to western coal. Some 40 percent of this figure may have come from railroads using P&PU trackage rights (BN, C&IM, PTCo and TP&W), so actual traffic moving via P&PU yards was significantly less than these figures show. In fact, it isn’t entirely clear how these figures are derived.
One theory of mine is that “cars handled” represents revenue cars, not just carloads. This means a loaded car arriving for delivery to a P&PU served industry, then delivered empty back to connecting railroad is counted ONCE. But a car routed via the Peoria Gateway, loaded in one direction and empty the other, is counted TWICE. This means that intermediate traffic represents a disproportionate share in these figures than originating or terminating traffic. If this theory is correct, it explains how P&PU seemingly lost more than half of its business from 1980 to 1981.
Despite the collapse of the Rock Island and sputtering economy, P&PU traffic levels were trending higher in 1980 over 1979. This can probably be explained by changes in routings (most out of necessity) due to closure of Rock Island lines to Chicago and the Quad Cities before mid-year. The Rock Island handled a decent volume of traffic from Peoria-Pekin industries to and from eastern points via Chicago. Post-liquidation, much of this may have been interchanged with Conrail or Norfolk & Western via P&PU or sent to Conrail at Logansport over the TP&W. Most certainly this was the case since P&PU assumed directed service for Peoria Terminal Co. at Pekin.
“Storage-In-Transit” traffic was a lingering source of Peoria Gateway business through the 1970s. This was primarily lumber that was billed to destination, after leaving the mill. The key to this was to ensure a carload of plywood, particle board, cedar fencing, etc. moved slowly across the country from west to east. This was accomplished by using as many interchange points (and railroads) as possible.
President Jimmy Carter signed the Staggers Rail Act into law on October 14, 1980. This legislation gave railroads full pricing freedom where competition existed and allowed them to enter into confidential contracts with shippers. Railroads had long been aware that rates did not always cover costs, especially in an era of rapidly rising inflation, and quickly added surcharges on existing tariffs. Most canceled transit rates. As new tariffs were introduced and contracts were signed, railroads used their freedoms to divert as much traffic as possible to preferred traffic lines, thus eliminating or reducing traffic through multiple interchange points.
In the summer of 1979, P&PU still handled a decent volume of intermediate traffic at its East Peoria Yard. Most was between the Rock Island and Illinois Central Gulf and Rock Island and Illinois Terminal, probably 100-150 cars a day. Although Norfolk & Western had been harmed by the 1976 Conrail merger and its own 1978 strike, there is evidence that it still interchanged a decent volume of freight with the Burlington Northern, and to a lesser extent, the Chicago & North Western and Rock Island. Illinois Terminal also interchanged a decent volume with Burlington Northern and Chicago & North Western via P&PU. Any two pair of railroads connecting with P&PU exchanged at least a small volume of traffic here. Very little of this was transcontinental traffic that would’ve been routed via Chicago. Most in fact, moved north-south or was destined to north or central Indiana points.
The Rock Island’s strike then liquidation began shifting traffic away from the Peoria Gateway. Rate regulations and directed service by the Elgin Joliet & Eastern and then Burlington Northern kept Peoria in the routing for a time, but deregulation allowed railroads to using their new pricing freedom to increase their line hauls and shift traffic to preferred interchange points. As a result, P&PU traffic dropped from 382,469 cars in 1980 to just 170,082 in 1981. This drop was nearly 600 cars a day, a devastating loss.
Part of the decline was due to factors such as a decision by the Chicago & North Western to take over switching its own Peoria customers about April 1981, closure of Hiram Walker & Sons’ Peoria distillery for 3-4 months to install ethanol-making equipment in preparation for ADM’s June 1, 1981 startup, and diversion of freight from rail to trucks as a consequence of surcharges imposed post-Staggers. It seems that P&PU may have also ceased counting BN-C&IM and C&NW-C&IM coal trains in these figures. This represented potentially 300+ carloads a day. Another factor was a substantial decline in traffic on TP&W, whose trains ran via P&PU trackage rights. More on that in the next post. But the decline of Peoria Gateway traffic had to have been the biggest factor.
Amazingly, P&PU traffic increased slightly to 174,732 cars in 1982. This was most likely due to an expansion of local operations, particularly directed service on Rock Island trackage and a full year of operations by ADM and Pekin Energy Company. If not for a severe recession, it is likely these figures would’ve been closer to 200,000. But very little intermediate traffic was handled by this time. An era had ended.
This post mainly focused on the Peoria & Pekin Union Railway. The affect of Staggers on TP&W will covered in the next post.
Although the Rock Island’s management found ways to cut costs (but also kill off traffic) while attempting to reorganize, stronger competitors, continuing regulatory burdens and labor troubles brought the venerable carrier to its knees. A strike by the Brotherhood of Railway and Airline Clerks (BRAC) on August 29, 1979, was the beginning of the end. Eventually, management employees were able to restore limited operations, but on October 5, the Interstate Commerce Commission authorized the Kansas City Terminal Railway (KCT) began operating the Rock Island under a directed-service order.
Rock Island’s heavy use of the Peoria Gateway had been sustained through the summer of 1979 thanks to connections (via P&PU’s East Peoria Yard) with the Illinois Central Gulf and Illinois Terminal Railroads. A smaller, but steady, interchange with the Toledo Peoria & Western contributed as well (much of this was forwarded to Conrail at Logansport, Ind.). And no doubt, some small volume of traffic was interchanged (also via P&PU) with the Norfolk & Western, and perhaps Conrail. With the strike, shippers were forced to look for alternatives, which meant competing railroads, or trucks.
Although KCT operation restored normal operations if and when possible, it is likely much lost traffic did not return. Worse, Rock Island’s reorganization plan was rejected by bankruptcy court in late January 1980, which in turn ordered liquidation. Lines in the Midwest region were to comply by the end of March. Directed service by other railroads would provide shippers with continued service on most lines.
The Elgin Joliet & Eastern Railway began ICC-directed service on April 1. Peoria Terminal Company was operated by P&PU (Pekin) and TP&W (Iowa Jct.-Hollis). The EJ&E operated the Rock Island’s mainline from Joliet west to Bureau Jct. then south to Peoria. It also operated the Kellar Branch. During the two months EJ&E operated this line, it is likely that some traffic was still routed via the Peoria Gateway.
But no one operated the Rock’s mainline from Bureau Jct. west to Silvis, thus cutting off eastern Iowa and Quad Cities area shippers from routing via Peoria to and from southeastern points. It is likely, however, that until the passage of the Staggers Act in October 1980 (which gave railroads pricing freedom), Burlington Northern and Chicago & North Western provided alternative routings for Rock Island shippers between Cedar Rapids, Clinton, the Quad Cities and Peoria connections (pre-Staggers, existing joint and local rates had to be used by directed service carriers).
The EJ&E wanted to buy Joliet-Bureau-Peoria but the bankruptcy trustee’s price was deemed too high. Burlington Northern replaced the EJ&E in early June 1980. The BN only ran from Peoria to Henry and up the Kellar Branch, thus cutting off Rock Island shippers in the heavily-industrialized Illinois River Valley from the Peoria Gateway. BN’s directed service was extended by the ICC through 1981, though the carrier ended service to Henry on October 1 that year. Then it ceased directed service altogether at the end of January 1982.
In mid-February, the Peoria & Pekin Union stepped in, operating the Rock Island from downtown Peoria to Mossville and up the Kellar Branch as far as Peoria Heights. It acquired Peoria Terminal’s Pekin trackage in August 1981 and would purchase five miles of Rock Island trackage from downtown Peoria to just north of the McClugage Bridge in September 1983. The Chicago & North Western acquired Peoria Terminal’s Iowa Jct.-Hollis line in November 1982, after having served as directed service operator since April 1981.
All of these changes secured continued local rail service, but the collapse of the Rock Island symbolized the end of the Peoria Gateway. But railroad deregulation and two subsequent mergers were the final nails in the Peoria Gateway’s coffin. We’ll look at the former in the next post.
Check out this Federal Express commercial from c. 1977. The company, founded by Fred Smith in 1971, began operations April 17, 1973 with a fleet of 14 Dassault Falcon 20s to 25 cities from its Memphis, Tennessee hub.
This commercial is fascinating for its Peoria reference. I’m curious when the airline began service here. If not part of the initial network, it was probably added within a couple of years. In fact, the October 1975 Peoria City telephone directory contains an airport address and an image of a Falcon 20 in Federal Express colors.
I recall seeing a Federal Express Falcon 20 parked by the cargo building just west of the old terminal in 1982 while waiting to board a 727-100 at a TWA open house. Later that year, Federal Express began using a 727-200 at Peoria (parked all day east of the old terminal, which they did until the current cargo terminal opened in 1993).
So the legendary Federal Express has served Peoria for more than three decades, and probably closer to four.
American Airlines and US Airways, which announced merger plans in February 2013, have reached a tentative deal to settle a lawsuit by the U. S. Department of Justice (DOJ). The DOJ, as you may recall, filed the lawsuit in August on grounds the merger would be anti-competitive.
Conditions include divestiture of slots and gates at airports serving Boston, Chicago, Dallas, Los Angeles, Miami, New York and Washington, D.C. Details can be found here. The merger still requires a bankruptcy judge to approve American Airlines’ reorganization plan.
There has been some speculation that an AA-US merger could result in expanded service for Peoria or Bloomington-Normal, likely to Charlotte or Philadelphia. The former is deemed most likely, and would provide competition for Delta [Connection] flights to Atlanta, likely resulting in lower fares.
My dream would have American Eagle initiate twice-daily, nonstop Peoria-Charlotte roundtrips by the summer of 2014 using 70-seat Canadair CRJ700s. This would prompt Delta Connection to drop its CIRA-Atlanta flights and concentrate all central Illinois capacity at PIA to battle its new competitor. I’m sure, however, this dream is offensive to my faithful Bloomington-Normal readers
Don’t get me wrong, I liked Conrail. I actually saw their trains arriving or departing East Peoria eight times in 1994 and 1995. They were short, but exciting to see. Conrail saved the industry from nationalization, and led to the Staggers Rail Act, which deregulated railroads. Yet the existence of this railroad (and events leading up to it) did great harm to the Peoria Gateway.
Consolidated Rail Corporation was a publicly-owned entity created April 1, 1976 by a merger of six bankrupt railroads. The largest of these, Penn Central, was formed on February 1, 1968 by a combination of the New York Central and Pennsylvania Railroads. As a condition of federal approval for the merger, PC was required to take control of the bankrupt New York, New Haven & Hartford Railroad, which it did on December 31, 1968. Penn Central filed for Chapter 77 bankruptcy protection on June 21, 1970 and continued to operate for the next six years. Cost-cutting and federal loans sustained the carrier as it attempted to reorganize.
Penn Central didn’t suffer alone. The Central Railroad of New Jersey entered court-supervised bankruptcy in 1967. Lehigh Valley did so three days after Penn Central on June 24, 1970. The Reading Company and Lehigh & Hudson River followed in 1971 and 1972, respectively. The Erie Lackawanna might have avoid this path if not for devastation inflicted by Hurricane Agnes in 1972.
The Regional Rail Reorganization Act of 1973 authorized Congress to provide these bankrupts with interim funding and created the United States Railway Association (USRA) to assume the Interstate Commerce Commission’s regulation over bankrupt railroads. The USRA was to create a Final System Plan to decide which lines of the bankrupt railroads would be retained in a merger.
Of these six bankrupts, only Penn Central served Peoria. Conrail’s Final System Plan would affect two lines in the Peoria area.
Farmdale Jct. – Terre Haute, Ind. – The former Pennsylvania Railroad’s “Peoria Secondary” had been downgraded to local train service only in 1969. In 1972, the Illinois Terminal Railroad offered to buy the Maroa – Farmdale Jct. segment (along with trackage rights into Decatur and East Peoria), but was rebuffed by Penn Central’s inflated price. Apparently, PC intended to run this line for the foreseeable future. But in July 1973, severe flooding washed out track between Waynesville and Atlanta, forcing Penn Central to embargo this segment. Tri-weekly trains SW-30 and SW-31 were replaced by PAT-1 and PAT-2, which ran tri-weekly between East Peoria and Atlanta, Ill. The rest of the line’s customers were handled by locals running out of Decatur or Terre Haute. As it turned out, Conrail’s Final System Plan omitted the entire Peoria Secondary, and the USRA sold Maroa – Farmdale Jct. to Illinois Terminal for a fraction of PC’s 1972 price. Locals PAT-1/2 ceased operating at the end of February 1976 and ownership of the badly deteriorated line was transferred to Illinois Terminal on April 1, 1976.
Pekin – Indianapolis, Ind. – The Peoria & Eastern Railway mainline was included in Conrail’s Final System Plan. Conrail bought out the remaining 19% stock it did not own, so on April 1, 1976, the P&E ceased to exist. Conrail acquired Penn Central’s part-ownership of the Peoria & Pekin Union Railway, and with a direct route from Conrail’s major classification yard at Avon, Indiana (just west of Indianapolis), the former P&E would be the new carrier’s primary route to Peoria-Pekin.
Since the Peoria & Eastern Railway’s use of the Peoria Gateway had been de-marketed a decade earlier, little “through” traffic was interchanged with western connections in 1976. Almost all traffic handled there by eastbound PO-8 and westbound PE-9 was generated by P&PU-served industries (Keystone Steel & Wire being the largest), and two major Pekin industries, American Distilling Company and Corn Products Co., the latter switched by Peoria Terminal Co. The only remaining “gateway traffic” included a small volume of lumber for Tremont, Farmer City and perhaps Urbana; Canadian potash for on-line agricultural customers and perhaps some manufactured products moving west out of Champaign-Urbana and perhaps Danville.
But Conrail was still very much involved with the Peoria Gateway, and it didn’t like being short-hauled by an expanded Toledo Peoria & Western. More on that in a future post.