|
CHAPTER
XXI The New Orleans Great Northern Railroad Company - 1905-33 |
|
|
In
contrast, the New Orleans Great Northern was developed by a group of
wealthy Yankee lumbermen who began their operations in the Mississippi
timber regions after 1900. This
group, led by F. H. and C. W. Goodyear, of Buffalo, New York, purchased
a tremendous amount of standing timber in the southwestern part of
Mississippi and adjacent areas of Louisiana.
Their plan was to erect a large-scale sawmill somewhere in the
vicinity of their holdings and to process their timber at this central
point. Since there was no
railroad through much of their holdings, the group, of necessity, had to
build a line to haul their timber to the mill and the lumber to market.
After extensive study, the group decided to build the Great
Southern Lumber Company at the site of what is now the city of Bogalusa,
Louisiana. The town was built alongside Bogue Lusa Creek and thus
received its unusual name. There
was no town, lumber mill, or railroad when the project started, so all
three essentials to this operation were begun at about the same time. The plan called for a town to house 8,000 people, a mill to
manufacture a million feet of lumber each day, and a railroad some 200
or more miles long to run between New Orleans and Jackson, Mississippi
by way of Bogalusa. Construction
of the New Orleans Great Northern was delegated to the Crescent City
Construction Company, which was owned by the owners of the Great
Southern Lumber Company. Although
the road’s primary purpose was to haul timber for the lumber company,
it was designed from the first as a common carrier and as a permanent
line. Standards much higher
than those for log lines were set and in general were lived up to.
Proof of this is to be found in the statement made by Coverdale
and Colpitts in 1938 that the Louisiana Division (New Orleans Great
Northern) was the best roadbed in the entire GM&N-Mobile and Ohio
territory. The
New Orleans Great Northern Railroad Company was incorporated under
Louisiana law on January 27, 1905.
A sister concern, the New Orleans Great Northern Railroad Company
of Mississippi, was incorporated on May 9, 1905, and the two companies
were merged into one under the Louisiana charter on August 6, 1906. On
June 1, 1905, the New Orleans Great Northern bought the East Louisiana
Railroad, which had been incorporated on July 8, 1887 to buy, build, or
operate a railroad in certain sections of Louisiana and Mississippi.’
This line had been started by a group of local businessmen whose
principal purpose was to open up the timber reserves in the area north
of Lake Pontchartrain. The
principal properties of the East Louisiana were acquired from the
Poitevant and Favre Lumber Company of Mandeville, Louisiana, which had
built a log road from Florenville, Louisiana, to a point on West Pearl
River near the present town of Pearl River, Louisiana. In
1903 the East Louisiana Railroad operated 24 miles of main line between
Covington, Abita Springs, and West Pearl River, at which point timber
was dumped into the river to be floated down-stream to mills at
Pearlington, Mississippi. The
road also operated into New Orleans over the tracks of the New Orleans
and Northeastern under lease agreements.
In addition there was a 12-mile branch which ran from Mandeville
junction on the main line down to the town of Mandeville on Lake
Pontchartrain. At one time
the East Louisiana had operated a ferry service from Mandeville across
to New Orleans, but this operation was given up in 1896.
The East Louisiana also operated about 12 miles of sawmill spur
lines. According to the
report of the East Louisiana to the Interstate Commerce Commission in
1903, the road had 4 locomotives, 12 passenger cars, 28 freight cars,
and 4 service cars. The
line hauled 693,639 ton-miles of freight an average of 11 miles at an
average price of 5.99 cents per ton-mile.
Forest products amounted to 65 per cent of the total tonnage
moved. During
the years from 1903 to 1905 the East Louisiana built a 13-mile addition
to its lines which ran from Covington to Folsom, Louisiana. Thus, on June 1, 1905, when the New Orleans Great Northern
bought the East Louisiana, it had about 50 miles of main lines with a
dozen miles of spur tracks to sawmill sites.
The East Louisiana had no bonds outstanding, and its capital
stock in 1903 totaled $340,300. The
road had been given about $10,000 in bonus payments by various lumber
concerns to help pay for construction.
The town of Franklinton, Louisiana, had raised a contribution of
a little over $400 from its citizens, even through the road never was
built that far north. The citizens of Covington and Mandeville had imposed a
special 10-year tax on their communities which eventually paid the road
a total of about $9,100 as an aid in meeting the costs of construction. The
New Orleans Great Northern bought the East Louisiana by exchanging its
stock and bonds for the smaller road.
The East Louisiana was purchased because of its valuable lumber
connections and because its charter rights enabled it to build into
areas which the New Orleans Great Northern hoped to serve.
By the purchase, the New Orleans Great Northern secured valuable
tonnage and also forestalled possible future conflict as to which road
should serve the territory in question. The
New Orleans Great Northern engineers did not take long to decide that
they had no interest in bridging Lake Pontchartrain and constructing
another entry into New Orleans. Accordingly,
new arrangements similar to the East Louisiana plan were developed, by
which the New Orleans North Eastern line from Slidell, Louisiana to New
Orleans would be used by the New Orleans Great Northern.
Thus construction began at Slidell and proceeded northward toward
Bogalusa where the Great Southern Lumber Company mill was under
construction. At the same
time another line was started, which was to run from Tylertown,
Mississippi, through Franklinton, Louisiana, and then was to curve to
the southeast almost paralleling the Bogue Chitto River.
This is the branch line which now joins the main line of the
GM&O at Rio, Louisiana. The
36 miles of line from Slidell to Bogalusa were completed in 1906, and
service was begun to that point as soon as possible.
The report of the New Orleans Great Northern to the Interstate
Commerce Commission as of June 30, 1907, showed this 36 miles in
operation as the only addition to the lines bought from the East
Louisiana. The report did state, however, that some 36 miles of line had
been built from Bogalusa to near Columbia, Mississippi, that 32 miles of
the line out from Rio had been built, and that 15 miles of a new line
from Slidell to Mandeville and up toward Covington was under
construction. The
New Orleans Great Northern experienced many of the same construction
problems which have continually plagued most railroad builders.
It was not possible to keep to construction schedules which had
been optimistically projected when the task was begun.
Not until June 30, 1910, was the New Orleans Great Northern able
to report to the Commission that its other mileage was put into service.
In the year from July 1, 1909, to June 30, 1910, the road
inaugurated service on 185 miles of new line.
This included the 114 miles from Bogalusa to Jackson (actually
Nogan), Mississippi, 41 miles from Rio, Louisiana, to Tylertown,
Mississippi, 27 miles from North Slidell, Louisiana, to Abita Springs,
Louisiana, and 2 1/2 miles from West Columbia to Columbia, Mississippi.
From Nogan, Mississippi to Jackson, a distance of 4 1/2 miles,
the line of the Illinois Central was to be used under a trackage
agreement. Terminal
facilities of the IC in Jackson were to be used under lease also. The
beginning of through service from Bogalusa to Jackson brought drastic
changes in rates charged by the New Orleans Great Northern, as well as
great increases in tonnage hauled.
In 1909 the New Orleans Great Northern moved 13,245,548 ton miles
of freight an average of 41 miles at an average charge of 2.86 cents per
ton mile. In 1910, the road
moved 59,932,045 ton-miles an average of 77 Miles and collected 1.78
cents per ton-mile. In 1909
the average train contained 20 cars, 14 of which were loaded with a
total of 216 tons per train or about 16 tons per car.
These averages increased in 1910 to 23 cars per freight train
with a total of 262 tons per train or about 19 tons per car. When
construction work on the New Orleans Great Northern ceased, the road
showed 243 miles of owned main track which had been built and equipped
at an average charge of $64,424 per mile.
Of this, $30,352 was in common stock, $32,072 was in 5 per cent
bonds, and the remainder was in equipment obligations and short-term
notes. The company had outstanding $7,500,000 in stock, of which
Crescent City Construction Company owned $6,870,000. The line had 181 miles of 85-pound rail, 41 miles of 70-pound
rail, and 21 miles of 60-pound rail.
The road operated some 35 miles of main track under lease
agreements. This was the
mileage from Slidell to New Orleans and from Nogan to Jackson,
Mississippi. In
the years immediately, following completion of construction, the New
Orleans Great Northern found that much still needed to be done to make
its line really fit for efficient operation.
Trouble developed with some poorly built bridges, and parts of
the track work had to be done over.
Creosoted timbers were found to be greatly superior to untreated
pine and eventually, had to be substituted in much of the line.
In the main, however, the construction work on the New Orleans
Great Northern was far superior to that on many lines built in
Mississippi at or near the same time.
Evidence of this is to be found in the annual report to the
stockholders for the year ending June 30, 1912.
The. report stated that traffic had been greatly affected by the
tremendous amount of rainfall which Mississippi had experienced in tire
months from June 30. The
territory served by the New Orleans Great Northern had received 89
inches of rain in seven months. This
was about 13 inches per month in territory which normally receives about
5 inches per month. The
annual report stated: “This condition affected seriously, the freight
and passenger traffic. The
country roads were impassable at times and the logging and lumber
industry was almost totally, suspended for several periods of
considerable duration.” The report did not set out any specific damage
that these rains had done to the tracks or roadbed of the company, which
indicates that the line suffered no major destruction.
In a similar period, the GM&N line was practically destroyed
in places and was out of service in several instances. During
the years following the completion of the road, the management of the
company showed much interest in the development of the cut over lands of
the region. The road
reported great improvements in farming and vegetable production in its
territory. Dairying was
pushed as a means of turning the bare lands back to productive use.
In conjunction with the Great Southern Lumber Company the New
Orleans Great Northern announced that new uses had been found for
sawmill refuse in the making of paper box board. One
of the problems which plagued the New Orleans Great Northern management
during the years prior to World War I was a perennial car shortage, on
the line. Most of its
business was originated on its lines by the lumber mills of the area.
As comparatively little tonnage was shipped into the area,
however, few freight cars tended to “come home” naturally.
The New Orleans Great Northern was in a constant struggle to get
the IC and other connecting lines to send empty cars back to the
territory so they could be refilled and once more make the trip north or
east to market. This
condition be-came such a problem during the early years of World War I
that the New Orleans Great Northern almost seemed glad to see the
Director General of Railroads take control of the New Orleans Great
Northern. A federal manager
presumably could make other roads release freight cars to the smaller
line. During
the war years the New Orleans Great Northern was operated by the same
federal manager who controlled the IC system.
Under these circumstances, it was fortunate for the New Orleans
Great Northern that its lumber was in such great demand, or its business
might have been neglected in much the same manner as was that of the
GM&N After
the close of World War I, the New Orleans Great Northern suffered a
slump in passenger traffic much as its sister roads experienced.
Fortunately its freight business increased when the postwar
depression was over, and its business continued “good” for a number
of years due in large measure to the building boom which the country
experienced in the decade of the 1920. The
New Orleans Great Northern began to purchase heavier locomotives and to
operate heavier trains in the postwar years in much the same pattern as
the GM&N Two of the Mikado type decapods were bought from the
federal government, which helped to increase operating efficiency on the
line. Net tons per freight train went up steadily: 336 in 1920, 429
in 1921, 530 in 1922, 587 in 1923.12 At this point the net ton figure
tended to level off, but the change from 336 tons in 1920 to 587 by 1924
was nothing short of phenomenal. The
increase was much more rapid than the similar movement upward on the
Gulf, Mobile and Northern although the upward climb on the Gulf, Mobile
and Northern was of longer duration. The
New Orleans Great Northern began early use of gasoline-powered cars to
replace steam passenger trains along its lines in the first years of the
1920’s. The annual report
for the year ending December 31, 1924, stated that motor coach No.
2 had been placed in service between Bogalusa and Tylertown and
that the road expected to save about $13,000 per year over steam train
service. The following year
a similar motor train was put in service between Bogalusa and Jackson. 1926
was the year in which the New Orleans Great Northern reached its
preferential traffic agreement with the GM&N and the Chicago,
Burlington and Quincy. Immediately
after this agreement was made, the New Orleans Great Northern began to
build its own line from Nogan into Jackson, Mississippi, and to rework
all of its main line south to Slidell in anticipation of the increased
flow of traffic. The
company, in conjunction with the GM&N and the Burlington, opened
outside traffic offices to solicit business over the new route which was
opened for service on July 17, 1927.
The New Orleans Great Northern was no longer at the mercy of the
IC on its northbound freight. Its founders, too, had dreamed of a new north-south line from
Chicago to the Gulf, and this arrangement finally made it possible. The
through-haul business which the Burlington-GM&N agreement gave the
New Orleans Great Northern was of great benefit to the road.
Timber and lumber tonnage was to decline after 1926, and the road
sorely needed other traffic to help keep revenues up to a satisfactory
level. In 1927 the New
Orleans Great Northern managed to show an increase in total tonnage, but
its net income declined due to the loss in timber traffic.
The road’s net income in 1927 was $34,000 less than in 1926.
Certainly the decline would have been much greater if the
GM&N-Burlington-New Orleans Great Northern agreement had not been in
effect for part of the year. Unfortunately
for the New Orleans Great Northern, its income for 1926 was higher than
the road was ever to experience again.
Net in-come in 1928 was $129,000, and in 1929 the company showed
a deficit of $83,000. The
territory which was served by the New Orleans Great Northern could not
provide tonnage to replace the decline in timber production, and
through-haul business in itself was not yet sufficient to maintain the
road. When the national
building boom began to abate after 1926, this region and the New Orleans
Great Northern were very severely hit. In
spite of the decline in the fortunes of the New Orleans Great Northern,
its line to New Orleans was vital to the future of the
GM&N-Burlington traffic agreement.
To protect this interest, the GM&N in 1929 proposed to assume
operating control of the New Orleans Great Northern through a stock
exchange agreement. The plan called for joint operation, with the officers of the
GM&N in charge of both lines. The
New Orleans Great Northern, however, was to remain as a separate
corporation. New Orleans
Great Northern stock was to be exchanged for GM&N stock on a ratio
of 1 share of GM&N for each 2 3/4 shares of New Orleans Great
Northern stock turned in. This
proposal was submitted to the stockholders of the New Orleans Great
Northern in October, 1929, and became effective on December 30, 1929,
because a large majority of the stockholders agreed to the exchange.
By February 15, 1930, 91 per cent of all New Orleans Great
Northern stock had been exchanged under the plan. As
a result of this transaction, Mr. Tigrett became executive
vice-president of the New Orleans Great Northern, and the offices were
consolidated in Mobile during the year 1930.
This move was too late to effect major economies during the year,
however, and the New Orleans Great Northern ended 1930 with a deficit of
$185,000 in spite of the fact that no salaries were paid to the new top
officials. 1931
brought some relief to the hard-pressed New Orleans Great Northern, but
the company still had a deficit of $23,000.
Unfortunately this “good” showing could not be continued in
1932 and the net deficit for this worst depression year was $373,000.
In the early months of 1932 it was apparent to all concerned that
the New Orleans Great Northern could not continue to carry its heavy
bonded debt on its expected revenues. At a meeting of the Directors of the GM&N in January, Mr.
Tigrett had announced that a scaling down of the bonded indebtedness of
the New Orleans Great Northern would be necessary if conditions did not
improve. There
definitely was no improvement of conditions, and on August 1, 1932, the
New Orleans Great Northern defaulted on its bond interest payments.
A receivership was established by the courts on November 7, 1932,
and Mr. Tigrett was named receiver.
Since all parties at interest realized this step was inevitable,
there was no opposition to the receivership, and no major difficulties
were encountered during the reorganization which followed. The
plan of reorganization was developed before the default on the bonds
took place. A
bondholders’ committee had been set up in the spring of 1932, and this
group announced its plan of reorganization on July 1, a full month
before the default. The
plan was amended in March, 1933, and this was the actual basis for the
reorganization. Under the amendments, holders of each $1,000 bond in the old
company were to receive a $500 bond from the new company, plus a $500
income debenture and a share of stock.
The fixed obligations were cut in half, and all old stock was
wiped out. Control of the
new company would rest with the bondholders, since the only stock to be
issued was the 824,800 shares to go with each new $500 bond.
Under this plan the GM&N lost its stock equity, which it had
purchased in 1929-30 at a book value of $2,588,890. The
plan of reorganization set up a new company, the New Orleans Great
Northern Railway Company. The
new company was to issue $843,000 of its bonds to the Gulf, Mobile and
Northern Railroad Company of Louisiana in payment of the purchase price
of that company’s property. The
property consisted of the Canal Yards and connecting facilities in the
New Orleans area which has been built in 1930-31 for the use of the New
Orleans Great Northern. The
New Orleans Great Northern Railway Company was to be leased for 99 years
to the GM&N, effective the day the new company assumed control of
the property. This allowed
continuous operation of the joint properties, for the foreclosure sale
was held June 29, 1933, and the lease became effective July 1, although
it was not until August 1 that all legal hurdles had been cleared away
and the Interstate Commerce Commission gave its approval to the entire
transition. Under the terms
of the lease, the GM&N was to pay interest at 5 per cent on the new
first mortgage bonds of the Railway Company and also was to pay
contingent interest of 5 per cent on the debentures if and when the
GM&N paid dividends on its own capital stock.
In addition, the GM&N was to pay all current charges and
expenses against the leased properties as well as current expenses of
the Railway Company, and it was to maintain roads tracks, buildings, and
fixtures at an adequate standard. With the execution of this lease, the New Orleans Great
Northern properties became in effect an integral part of the GM&N,
and its history ceased to be of general interest.
Only its corporate entity was kept alive as custodian of legal
title to the property. Since
July 1, 1933, all operating and control functions of the Louisiana
Division have been exercised by the GM&N and the Gulf, Mobile and
Ohio.
|
|
|
|
|
