Product Details
Cincinnati & Lake Erie Railroad Company
Certificate TypeClass B Preferred Stock Date IssuedMay 5, 1931CanceledNoPrinterFranklin-Lee Division, American Bank Note CompanySignaturesHand signedApproximate Size11 1/4" (w) by 7 1/2" (h)Additional DetailsNA
Historical Context
The Cincinnati and Lake Erie Railroad was legally formed as a corporate entity in January, 1930, by the consolidation of three existing 1929 electric interurban lines: the Cincinnati, Hamilton, and Dayton (CH&D); the Indiana, Columbus and Eastern (IC&E); and the Lima-Toledo Railroad (LT). The combination of these three companies created an interurban system that operated a south-north line from Cincinnati through Dayton and Springfield to Toledo, and an east bound line from Springfield to Columbus.
The Cincinnati, Hamilton and Dayton Railway was acquired and reorganized in 1926 by Dr. Thomas Conway, Jr., a professor of business at the University of Pennsylvania's Wharton School. Believing that he could turn the interurban into a very profitable operation, he made substantial investments in infrastructure and rolling stock, including passenger cars and freight locomotives. He spent $500,000 to purchase the CH&D and then spent $1.5 million on improvements. The interurban's business and prospects improved as hoped, particularly in the movement of freight. In 1929, it handled 75,000 tons of freight in Cincinnati. Conway then contemplated the advantages of extending his railway north to Toledo, Ohio connecting to Detroit where the C&HD could tap the shipping business of the automotive industry. Thus Conway acquired the Indiana, Columbus and Eastern and the Lima-Toledo as the two teetered at the edge of bankruptcy. These acquisitions gave him the desired access to Toledo. In early January, 1930, the three combined lines were officially incorporated as the Cincinnati and Lake Erie Railroad.
Financing and rebuilding
Conway had his new Cincinnati and Lake Erie enterprise issue $3.7 million in stock and $3.5 million in bonds and began an extensive 1930 round of infrastructure improvements and equipment purchases. The timing proved unfortunate as this extensive borrowing was added to the already large bond debt of the earlier CH&D, and it came as the United States entered the Great Depression, which lasted ten years to 1939. The requirement to make the large interest payments on these bonds when added to the railway's normal operating expenses caused the line to operate at a paper loss every year except 1936. When in bankruptcy court mandated "Receivership", the C&LE had the cash to continue to operate due to the suspension of bond payments. The C&LE totaled 323 miles in length and consisted of three operating divisions. Company offices and the train dispatching center were located in Dayton, Ohio. The Toledo Division ran from Toledo south to Springfield. The Columbus Division ran west alongside U.S. Route 40 and met the Toledo Division at Springfield, Ohio, and turned south to Dayton. The Cincinnati Division ran south from Dayton through Hamilton to Cincinnati. It followed the old towpath of the Miami and Erie Canal for part of its route. The Toledo Division, formerly the Lima–Toledo, ran parallel to the route of the Baltimore and Ohio Railroad.
Connecting interurbans were essential
At Toledo, the C&LE interchanged with the Lake Shore Electric Railway (LSE) from Cleveland and the Eastern Michigan Railway from Detroit. At Dayton, it interchanged with the Dayton and Western Traction Company from Indianapolis. All of these neighboring interurban lines provided important freight business for the C&LE, but all were hurting financially. The Eastern Michigan abandoned operations in 1932 and the C&LE lost its connection to Detroit. The Dayton and Western was so weak that the C&LE, in conjunction with the Indianapolis interurban Indiana Railroad, provided the financial support to keep it operating, but it ultimately failed in 1937. The absolutely essential Cleveland connection ended in 1938 when the Lake Shore Electric abandoned after an unwise freight agent strike. The loss of these connections with the related loss of the interchange freight business, particularly that of the LSE, eventually proved fatal to the C&LE.
Abandonment
Competition with a growing population of automobiles riding on state paved highways plus the dire financial impact of the Depression led to a decline in C&LE passenger business. The reasonably good freight business collapsed as the C&LE's interchange partners went out of business. The C&LE ceased operations in 1939.
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