Indiana Railroad - Decline

Decline

The Indiana Railroad could not sustain its planned infrastructure improvements for long due to declining income. Automobile competition was increasing, and the Depression weakened the entire economy dramatically. On July 28, 1933, IR went into bankruptcy. Control was placed into the hands of receiver Bowman Elder. Elder was able to keep the system virtually intact for four years, and IR was operating about 600 miles (970 km) of interurban lines throughout Indiana during this period. In 1936, IR actually showed an operating profit. This was the only time in its history that it did so. In that year, IR brought under its control a final interurban line, the Dayton and Western, which it leased for two years. This provided a valuable link to the very active Cincinnati and Lake Erie Ohio interurban which ran from Cincinnati to Toledo and east to Cleveland using the Lake Shore Electric interurban. When the Lakeshore Electric abandoned, the C&LE was soon to follow. The Dayton and Western provided a connection from the IR to the C&LE. Eventually, the IR did not have the funds to continue to lease the D&W. The lease was dropped, the D&W quit, and the important freight connection was lost.

In 1937, though, the final slide into bankruptcy began. By order of the Securities and Exchange Commission, Midland Utilities was dissolved and the interurban lines it controlled were divorced from the subsidy income of their parent electric power generating company. In March 1937, the line abandonments began. The old Indiana Service Corporation ISC lines from Fort Wayne north to Waterloo, Garrett and Kendallville were abandoned on March 15. On May 9, the former THI&E line east of Indianapolis to Richmond was abandoned. This severed the IR's important connection with the Ohio C&LE interurban network and hurt both the IRR and the C&LE by ending their interchange business. In September 1938, the former Union Traction line from Indianapolis to Fort Wayne via Peru was abandoned leaving the more southern Indianapolis to Ft Wayne via Muncie route intact. A year later, the major trunk former Interstate Public Service Indianapolis to Louisville line was cut back to Seymour. In January 1940, the former THI&E line west of Indianapolis to Brazil, Greencastle and Terre Haute was abandoned. On January 18, 1941, the remaining Union Traction Indianapolis to Fort Wayne and Bluffton and Muncie to New Castle branch were abandoned, ending practically all service on the IR. The final operation, Indianapolis to Seymour, was abandoned following a fatal wreck of a passenger car and a freight motor.