In the recent year, I have been trying to contact some of the important people that had their hands in trying to salvage the remains of the Rock Island. The people I have tried to contact have been;
1. Mr. Williams M. Gibbons. Sorry to say he has passed away.
2. Colonel Henry Crown. He too passed away in 1990.
3. Honorable Judge Frank J. McGarr. My relations with him are still pending. We are still in conversation.
4. Mr. John W. Ingram. Listed below is a letter from one
of my conversations with him.
In the conversation listed below, my questions to Mr. Ingram are in red. The replies to the questions from Mr. Ingram are in black. This conversation took place December 24, 1998.
1. Could I get a little back ground history on you, where you live now, and that kind of stuff?
1. No need for a lot of personal stuff. Just old and gray
and enjoying my martinis. Since the powers that be decided to welsh on
my pension, I watch my pennies and stay out of trouble. It's cheaper that
2. How did you come up with the idea for the design and colors that you had applied to power units and rolling stock when you became President?
2. The new colors flowed from the necessity of making it obvious to all concerned that new and rebuilt equipment was being acquired in quantity. We didn't want people giving up. If it wasn't new or rebuilt it wasn't supposed to be painted blue -- although someone repainted a passenger station blue much to my disgust.
The old colors, red and yellow, reminded me of the red ink that had been accepted as a way of life for much too long. "THE ROCK" was easier for customers to remember and for us to sell than was "The Chicago Rock Island and Pacific Railroad Company, Inc." The new colors, blue, black, and white were about as far from red in the spectrum as you can get.
The "Craggy" logo was meant to carry forward the idea
of "THE ROCK." The actual design was done by an artist whose name I forget.
He was the same guy that designed the Illinois Central split rail logo
when I was working for that road. He came up with three or four designs
and we picked the one that was used.
3. When you became President, how bad was the financial situation of "THE ROCK?"
3. The financial situation of "THE ROCK" was about as
bad as it could get by the time I got there. The economy tumbled about
the same time and that was all she wrote. When we trotted over to the Judge
a few months later, there was only a few hundred dollars of cash in the
4. How did and why would you want to become the President of "THE ROCK," and want to leave the FRA to go to a company that was in the financial hurt that "THE ROCK" was in?
4. John Barringer talked me into going to "THE ROCK." He had a soft spot in his heart for it — had worked for it in the past -- and thought it could be put right.
And I had had enough of Washington D.C. I had succeeded in keeping the railroads from being nationalized on my watch — there were many, both in and out of the government, who thought it was the only way out. The rail unions were pushing hard for it. The Senate was about to start the process but we stopped it by promising to create a final system plan for the Northeast in 30 days. It would have been impossible but for a chit from the President that allowed us to use the Defense Department computer banks. And at the same time, working with General Motors, I had laid the groundwork for the bail out of Penn Central. The trick was to buy the railroad without taking title to the property. If the government had ever gotten full title, even contingently as collateral for a mortgage, the railroads would have been nationalized very quickly.
During all of this I had made a lot of political enemies
-- the"Nationalizers" and the ICC crowd -- I had done my best to get it
abolished. Gerry Ford, of course, had taken over from Nixon and I was the
Senior Nixon Presidential appointee in the DOT. Average life expectancy
of a Presidential appointee was about 22 months and I had been there about
twice that. It was time to go.
5. I know this sort of question can be very difficult, but nobody really knows a "Year by Year" account of what happened to "THE ROCK" during those final years. I was wondering if you could give me some insight as to a "Year to Year" account of what "THE ROCK’s" situation was? (Financial or other)
5. I could go through all the papers and do a year by
year analysis of " THE ROCK's" final five years financial situation but
I won’t. It would take too long and I don't have the energy or the inclination.
Annual reports were filed for all those years both with the ICC and various
state regulatory commissions on the ICC annual report "Form A," and to
shareholders in a more cursive manner. I'm sure they are still available
in various libraries.
6. How long did it take to liquidate "THE ROCK?" I have video footage of a "Trustee Extra" that was used in El Reno, Oklahoma that dates 1981, was there still activity on "THE ROCK" after this date?
7. When "THE ROCK" was finally liquidated, how much money was generated by the sale, and how much money was left over after paying all debts?
6 & 7. I had nothing to do with the liquidation of the railroad. I left before it really got started. I understand it was quite successful as liquidations go. We had built up considerable real value in the property in the five years we were there. I have heard that the bonds were paid off in full with accrued interest and that creditors who stayed until the end were paid in full.
And I have been told that there was a remainder for the
stockholders in the form of a "New Corporation" which took over the remaining
assets and went off into non-rail fields. Of course the Trustee, wisely,
bargained many creditors out before the end -- they took less than the
full amount owed them in return for being paid sooner. But as I say, I
was not there during the liquidation and what I have been told may be in
8. Was Henry Crown one of the major factors that contributed to the "Shut Down" of "THE ROCK?"
8. Colonel Crown was one very big but only one factor in the final demise of "THE ROCK." Of course the bankruptcy was not caused by him but rather by the way the Interstate Commerce Commission handled the UP/SP-RI merger case.
The structure of the railroad -- it was really built as
a passenger road, and its labor practices and contracts. Crown was a major
bondholder and was on the board of the road. He had purchased his bonds
at a rather low price -- some say 25 cents on the dollar — sometime before
I came to the road. He had not been getting his interest payments because
the road was not earning them. The bonds, of course, were paid off at par
-- 100 cents on the dollar -- at liquidation, plus back interest. As you
know, bonds have first claim on assets before other creditors. I must say,
if I were a major bondholder with a prospect of say, 400% return and with
a ton of money tied up in them, I would have pushed for liquidation too.
And he did push. Hard.
9. I have also been trying to get in contact with William Gibbons, but haven't had any luck. Would you how I could contact him? (I have found the Honorable Judge Frank J. McGarr; he is still in Chicago.)
9. Sad to say, Bill Gibbons died. Let me have Judge McGarr's
address if you will please. I have misplaced it.
10. How would you describe your years at "THE ROCK?" Did you really want to stay there after they entered bankruptcy? Did you think it was still possible to save "THE ROCK" when you became President?
10. My years at "THE ROCK?" Wouldn't have missed them for the world! Of course I would have liked it better if they had paid me my pension as they did everyone else. Could it have been "Saved?" I'm sure you don't mean that in the religious or in the preservation sense that some rail fans think important.
There is no doubt in my mind that the railroad could have become a very profitable billion dollar property by now, IF the owners and laborers were willing to stiff it out for about 15 years of rebuilding before the profits could come in. We had got it to more or less break even so it would not pose a drain on anyone unless they were greedy. As you know, rail capacity is now in short supply in the West. Railroads are undertaking very expensive capacity expansion or paying congestion costs for the lack of capacity. "THE ROCK" would have been ideally situated, especially given today's work rules, to take advantage of this situation.
There are only four important constituencies for a railroad: Customers and Government, Labor and the Owners/Creditors. Customers continued to support the railroad but in a limited way -- limited by labor's refusal to provide consistent service -- and hence with declining traffic volume. Government policy was to downsize railroads until the market could support them. Unlike the Chrysler bailout, they felt they had lost $4-5 billion on the Conrail bailout and the rail industry looked to the DOT like a constant bleeder. Labor showed its support for "THE ROCK" by going on strike. What labor thought they were going to get from their strike is still beyond me? The "Clerks" had enough people in our accounting department to know exactly what our financial situation was. I can't help but think they were striking against their own interests. I'm sure there was a reason but I have never found out what it was. The strike cost them about 6000 jobs. It was the immediate cause of the Judge calling it quits.
Of course, the owners and creditors wanted their money back. I've never heard of any railroad running just to please its management. So when the Trustee and the Judge opted for liquidation they had my support. I'm sure the Judge felt:
11. I don't know if you have any idea, but I was wondering if you knew how the Maytag Corporation became the copyright holders of the Rock Island name?
12. Why did and when did the transition
of the "Chicago Rock Island & Pacific Company" become the "Chicago
11 & 12. I have no idea how or if Maytag or Chicago Pacific entered the picture after "THE ROCK" service was suspended. Maytag was the biggest manufactured goods shipper on "THE ROCK" and they had a good man on the Board before bankruptcy. But as I have said I was not around during the
Sorry to have taken so long to get around to answering your questions but such is life when you get old and gray!
John W. Ingram