Beginning July 8, 1906, this advertisement was published in several newspapers, including The Chicago Sunday Tribune. Only Railway Age critiqued this project shortly after it was announced.
Stock was offered at $25 a share and by the winter of 1906-1907 there were 15,000 investors and $2,000,000 in the bank.
The Railway Age, July 13, 1906
THE CHICAGO-NEW YORK ELECTRIC AIR LINE RAILROAD
“The long-dreamed of project of a direct, trunk-line\ electric railroad between Chicago and New York has at last become a reality.“ Without a moment’s warning, without legislative, financial or physical preliminaries, without the assistance or even the previous knowledge of the lynx-eyed press, suddenly there has been launched into triumphant existence the Chicago-New York Electric Air Line Railroad, 750 miles long, straight as a string, level as a floor, alive with hourly trains hurrying the trust-emancipated common people between the two great cities in 10 hours without a stop, at the exhilarating average speed of 75 miles an hour, for the inconsiderable sum of $10—reducible to $2.50 by immediate purchase of stock—while “old railroad men can scarcely believe their eyes, and the officials of existing steam railroads are aghast with astonishment.”
All this and more is true, for we read it in a feature article occupying an entire page of the Chicago Sunday Tribune, a great journal whose imprint is the stamp of truth and whose mighty influence never would be given, and surely would not be sold, for any questionable purpose. Moreover, we know the enterprise to be genuine, because we see with our own eyes a large, clear picture showing “One of the hundred-mile-an-hour electric engines that will take a train to New York in 10 hours,” and below it a still larger map on which is indicated by a bold, straight line the “Route of the ten-hour electric road between Chicago and New York.” While the map leaves still something to be desired in respect to geographical knowledge, as it fails to show a single village or city upon the route, yet this evidence that the road traverses an uninhabited saw, country emphasizes the greatness of the enterprise as a which direct through line, unconcerned with the trifling matter of intermediate and local traffic.
The same reserve shown in regard to the route of this remarkable road—which although at first emphasized as “a reality” appears later on to have no material existence as yet—is to be noted in regard to its philanthropic promoters. This much, however, is revealed, to inspire full confidence:
The conception of this stupendous railroad is so far-reaching in nature that affects the very groundwork of our national existence. The new electric line was conceived and brought to its present stage by men who had felt the pressure of high rates, the inconvenience of slow time and the necessity of a shorter route. These men do not come out into the open and show their hands at this stage of the project because it would interfere with their other business interests. The preliminary promotion and manipulation of the new electric road has been put into the hands of practical and experienced railroad men—men who have done things, built railroads, operated railroads, and to whom every minutest detail of railroading is a matter of every-day experience. After the road gets into full operation the real men back of the project will come out into the open and show their hands
Ignoring the unworthy intimation that the practical railroad men who conceived the enterprise are not “real men,” and reassured by the statements that the C.-N.Y. E. A. L. road “has among its staff the very man who secured every foot oi the right of way for the A. E. & C. electric road,”and that “there are also among its officials several men who Were actively connected with the Burlington road, two of them in the operating department,” we will make a few excerpts from the Tribune article having to do with the financing for $150,000,000 of this truly gigantic undertaking:
These men have made the start. but it will be the plain. every-day citizen who will complete the project. It has been determined that the people, the plain people, shall own this great electric road.
The men behind this greatest commercial undertaking oi the age would be able to ultimately put the Chicago-New York Electric Air Line Road through to completion by calling upon the financial world for help, if it was necessary or expedient. But it is not. It is far wiser to allow the people to be the largest owners in the enterprise, scattering its gilt-edged securities over the land in small or moderate holdings. The time has come when the people ought to own the railroads, and they are going to own them!
The profits that this great electric road will make for its stockholders are almost beyond calculation, while the natural rise in value of the shares because of their extraordinary earning power is likely to be such that an investment of $100 at the reduced price at which the first shares are marketed may, at the end of a few years, stand for a quoted market price of two thousand dollars and yield a yearly income of two hundred dollars. If it does this, and it is not at all unlikely that it will, the man who invests $500 in its shares now. will have a yearly income of $1,000. Of course, the only time such colossal profits can be made is at the very start. After the first section of the road is built and the people see it in actual working order, see it rolling up profits and making money like a mint. there will be slight reason to offer the shares at any considerable sacrifice, as we are now doing.
Many a clerk, grocer. plumber, carpenter, or other man of moderate means who has the foresight to realize the marvelous possibilities of this investment and buy at present prices will be numbered among our rich men five years hence. Even a few hundred dollars, invested at the price the shares sell for today, will almost surely yield such an income within five years that the holder thereof will never need to toil or work another day as long as he lives.
This ought to induce the most impecunious clerk or the most capitalistic plumber to put his bottom dollar into an investment so absolutely safe and so fabulously profitable, but a still further inducement is offered. To quote:
The stock certificates are given a double value and put beyond the power of man to make them worth any less than par, by the following clause printed on them:
This certificate will be accepted in payment for transportation to the amount of its face value. and at current rates. when the road is in operation.
CHICAGO-NEW YORK ELECTRIC AIR LINE RAILROAD
This means that no matter what the certificate is worth as stock, no matter what it is quoted at in the market, the bearer thereof can step onto a ten-hour train for New York and pay his or his friend’s fare with it, or pay for freight to the amount of $100, and all with a certificate of stock that only costs $25 at the present moment. It is evident, therefore, what an unusual opportunity this stock offers. Nothing on earth can wreck its value. From the moment the road begins to run trains. each share of stock will he just as good as money; four times as good if bought at present prices. it will be easy to turn it into instant cash if you don‘t want transportation, because any ticket broker will cash it at a small discount for brokerage.
While the ordinary railway man may not see just how the income of the company would be improved by carrying its stockholders for nothing, nor how the scheme would jibe with certain laws in regard to discrimination, rebating, etc., still he can but admire the financial ability which devises so many indticements to investors.
These extracts do scant justice to the persuasive statements that fill the seven nonpareil columns of the Tribune article, which, however, lacks somewhat in logical sequence and mathematical demonstration. We venture therefore to deduce and tabulate from the disconnected propositions the following results, which while they may not serve as a promoter‘s prospectus, yet may have suggestive value to prospective investors:
Let us supplement these statistics by the touching appeal with which the document closes:
Reader, we have tried to show you that this is your opportunity to lay the foundation of wealth. Whether you have much or little money, we say to you in all frankness and candor. that you will be doing a wise thing’if you invest every dollar you can spare in the stock of the Chicago-New York Electric Air Line Railroad. Don’t let fears or doubts deter you, but just make a careful study of the facts as we have told them and let your own common sense and better judgment guide you. Every man or woman who invests in the shares of the Chicago-New York Electric Air Line Railroad at the “ground floor” price of $25 per share. at which we now offer them. will, in all human probability. be able ultimately, to get dividends in excess of 30 per cent or be able to sell the stock within a short time for $300 per share. Twenty-five dollars buys a share today.
Speaking seriously, for the moment, about this fraudulent investment scheme one is in doubt whether to wonder most at the gigantic effrontery of the perpetrators, the gullibility of the poor dupes who will flood the mails with their subscriptions, or the carelessness if not cupidity of the newspaper publishers who seem to sanction the swindle by giving it publicity.
Chicago Tribune, June 23, 1907
Inter Ocean, June 16, 1907
In the presence of 5,000 persons, 300 of whom were from Chicago, at La Porte, Ind., the first wheel on the Chicago-New York Air Line was turned yesterday, afterMayor Sherburn M. Becker of Milwaukee, Mayor J. C. Dahlman of Omaha, and Mayor Darrow of La Porte, Ind., had delivered speeches.
The occasion was made a general holiday in the Indiana town, and special trains from Chicago carried a large crowd from the city to inspect the work already done on the new road. Five miles of road, from La Porte to South La Porte, has been completed, and yesterday hundreds were carried between the terminal points. Half the proceeds of the day’s traffic were donated to the La Porte hospital and formed a handsome sum.
In addition to the portion of the road ready for traffic, about twenty miles toeard Goshen, Ind., has been graded and the steel will be laid immediately.
Many Stockholders Are Present.
Among those present at the ceremonies were a carload of stockholders in the enterprise from Minneapolis, Minn., as well as similar contingent from the New England states.
Mayor Becker of Milwaukee was the principal speaker of the afternoon. He said in part:
You are met here today, primarily for the purpose of appropriately celebrating the turning of the first wheel which will slide along the shining bands iof steel of that enterprise in which, I take it, you are all interested, the Chicago-New York Electric Air Line railroad.
On such an occasion, whether it be the real and formal opening of a project such as this or whether it be some other railroad, it is only natural that it occur to us, once again, what wonderful strides have been made in transportation in the past century; yea, in the past fifty years. But this business now is only in its infancy.
The development of electric traction has reached a point where it is no longer experimental. It comes to competition with steam even now. What the next ten years will develop none can tell. Most of you, no doubt, are thoroughly familiar with the objects, aims, and policy of the officers, directors, and stockholders of the Chicago-New York Electric Air Line railroad. There are thousands of stockholders throughout the country who are satisfied; there no doubt will be thousands more. It would be superfluous for me to attempt to go into details concerning this project.
An air line, meaning a line as drawn across a map with a ruler between Chicago and New York. Why not?
At present there is no direct line from the East to the West. All present operative roads are aggregations of local lines. A straight line ought to be possible.
Not Ready for Municipal Ownership.
I want to say right now that I am a firm believer and advocate of municipal ownership, as far as it is reasonable to believe that it will benefit the municipality, the state, or the nation.
But I am not ready to admit that simon-pure municipal ownership is the proper thing for railroads or electric lines.
I will not discuss the why and wherefores now, but it is possible there is some intermediate station between private ownership by the corporation and municipal ownership that will solve the problem.
I believe that this road here today is built along the line of what we may call public ownership. We have no right to assume that this cannot be made highly successful and will not ultimately lead to a solution of the transportation problem of the nation, should cur present healthy movement for regulation and control be frustrated.
Chicago Tribune, August 14, 1914
H.G.L.—The Chicago-New York Electric Air Line railroad company some years ago built and put in operation twenty-five miles of track extending from Laporte to Gary, Ind. It controls the Goshen, South Bend and Chicago company, which in turn controls the Valparaiso and Northern, operating between Valparaiso, Chesterton, and Porter, Ind. The Air Line operates in all thirty-seven miles of track and owns two motor cars and three trailers, according to Poor’s Manual. A. C. Miller is president and general manager, Ira C. Woods vice president, and L. E. Woodward secretary and treasurer. No dividends have ever been paid and the stock is quoted nominally at $1.62 to $2.10. The company has an authorized capitalization of $2,500,000, of which about $2,200,000 has been issued.
Charles Burton abruptly discontinued the Air Line News in 1913 and the idea of a Chicago to New York direct system was given up.
For a while the Gary and Interurban did well with a handsome depot built at Woodville junction, a more convenient station than Goodrum. (The depot exists today, remodeled into a family home.) A world war was looming and the Gary and Interurban defaulted in January 1915 and went into receivership. The only true portion of the Air Line (Woodville to LaPorte) shut down in November 1917.
The car to Chesterton continued to be a losing proposition and was discontinued on April 30, 1922 and replaced by a bus. The interurban line from Valparaiso and Garyton continued to run but was finally abandoned in 1938. It was a great favorite with rail fans but a failure financially. The only profit from the enterprise was to bondholders of the Gary and Interurban Railway. Air Line stockholders were never paid dividends.
The Air Line News was published monthly from October 1906 until April 1913. It was edited by Charles P. Burton and included progress reports with many pictures.