DOUGLAS V. SHAW
Interurbans in the Automobile Age:
The Case of the Toledo, Port Clinton
and Lakeside
From the first decade of the twentieth
century until the early 1930s electric
interurban railways connected almost all
Ohio towns and villages of more
than 5000 population. With its numerous
cities and market towns within
reasonable proximity of one another,
prosperous agriculture, and generally fa-
vorable topography everywhere but in the
southeast, Ohio provided ideal terri-
tory for interurban development.
Promoted vigorously from 1890 until 1910,
interurbans quickly became important
components of regional transport sys-
tems; at the industry's height between
1914 and 1918 the Ohio system
reached its maximum of roughly 2800
miles.1
Built and operated in many respects like
urban street railways, interurbans
offered greater frequency of passenger
service and more rapid delivery of local
freight than did steam railroads. Most
offered service at no less than two-hour
intervals, headways far shorter than
those maintained on typical local railroad
lines. Increased convenience and
flexibility formed the core of interurban suc-
cess, and electric lines tended to
replace steam roads as the transport mode of
choice between points where the two competed
directly for traffic.2 Yet in the
long run the industry was not a success.
Most interurbans never developed
Douglas V. Shaw is Associate Professor
of Urban Studies in the Department of Urban
Studies, The University of Akron.
1. George W. Hilton and John F. Due, The
Electric Interurban Railways in America, second
printing (Stanford, 1964), 4-25; Report
of the Public Utilities Commission of Ohio for the Year
1917 (Springfield, Ohio,
1918), 645 (hereafter abbreviated as PUCO Report, [year]); George
S. Davis, "The Interurban Electric
Railways of Ohio," Street Railway Journal, 18 (August 3,
1901), 145-56. See also "The Latest
Ohio Interurban Map," Street Railway Review, 12 (March
20, 1904), 190-91.
2. Hilton and Due, 14-15; Guy Morrison
Walker, "The Why and How of Interurban
Railways," Street Railway Review, 14
(June 20, 1904), 365-68; Ernest L. Bogart, "Economic
and Social Effects of the Interurban
Electric Railway in Ohio," Journal
of Political Economy,
14 (December, 1906), 588-92. Within four
years of the opening of the Interurban Railway and
Terminal Company between Cincinnati and
Lebanon in 1902, for example, passenger traffic
on the Cincinnati, Lebanon and Northern
steam railroad fell 59 percent. John W. Hauck,
Narrow Gauge in Ohio: The Cincinnati,
Lebanon and Northern Railway (Boulder,
1986), 226-
27. On the development of freight
traffic, see Charles S. Pease, Freight Transportation on
Trolley Lines (New York, 1909).
126 OHIO
HISTORY
sufficient traffic and revenue levels to
assure financial stability and few in-
terurbans ever paid consistent returns
on their investment for very long. After
1925 lines were abandoned as rapidly as
they had been built before 1910, un-
able to meet their fixed charges as
traffic dwindled in the face of competition
from automobiles, buses, and trucks.
Indeed, toward the end many lines pro-
duced more net revenue from the sale of
electricity to communities and farms
along their rights-of-way than from the
sale of transportation itself.3
The Toledo, Port Clinton & Lakeside
provides an excellent illustration of
the aspirations, insurmountable
difficulties and dashed hopes of the interurban
industry. Completed in 1906 between
Toledo and the end of the Marblehead
peninsula to the east, the road lost
money during every year of its existence
when all proper charges are computed.
Yet the line did not discontinue pas-
senger service until 1939, one of the
last in the state to do so. Owned for all
but its first seven years by utility
holding companies willing to underwrite its
losses, the Toledo, Port Clinton &
Lakeside avoided the bankruptcy and aban-
donment which would have been its
certain fate had it continued as an inde-
pendent corporate entity. Because it
survived so long its records allow explo-
ration of the manner in which this
interurban and others interacted with the
development of automotive transport and
with increased demand for electricity
in its service area.4
The Early Years, 1902-1912
The Toledo, Port Clinton & Lakeside
was incorporated in late 1902 by a
group of wealthy and well-connected
Toledo businessmen. By linking the
Marblehead peninsula in Ottawa County
with Toledo they expected to secure
much of the heavy seasonal tourist
traffic to peninsula and island resorts and
to the large Methodist camp at Lakeside.
They also expected the area's lime-
stone and gypsum mines and highly
productive farms and fruit orchards to
supply a respectable freight traffic.
Securing franchises to lay track on village
streets in Genoa, Oak Harbor, Port
Clinton and Marblehead in the spring and
summer of 1903, the company prepared to
build.5
3. Hilton and Due, 54, 208-51;
"Selling Energy Along Interurban Railways," Electric
Railway Journal, 48 (October 28, 1916), 920-25.
4. The records of the Toledo, Port
Clinton & Lakeside and successor companies are part of
the Ohio Edison collection, housed in
the American History Research Center, University of
Akron Archives, University of Akron,
Akron, Ohio. See also George Hilton's excellent The
Toledo, Port Clinton and Lakeside
Railway, Bulletin No. 42, Electric
Railway Historical Society
(Chicago, 1964).
5. Hilton, 3-4; "Toledo, Port
Clinton and Lakeside," Street Railway Journal 26 (December
30, 1905), 1130-32; "Annual Report
of the Toledo, Port Clinton and Lakeside Railway to the
Railroad Commission of Ohio for the Year
Ending June 30, 1908" (hereafter abbreviated
"TPC&LS Railroad Commission
Report," 1907-08), 16, 18, Box 157, Ohio Edison papers
Interurbans in the Automobile Age 127 |
Like other interurban promoters, the men behind the TPC&LS constructed the line through their own closely held Toledo Interurban Construction Company. Issuing $1,500,000 in five percent first-mortgage bonds and $1,800,000 in common stock, they turned these securities over to the con- struction company which in turn sold the bonds and some of the stock to raise the money necessary to cover construction costs. The first segment, from Genoa to Port Clinton, was completed in 1904. At Genoa the TPC&LS met the Lake Shore interurban which connected Toledo with Cleveland, and until it finished its own route into Toledo two years later, the TPC&LS entered the city over the tracks of the Lake Shore. In selecting a route from Genoa to Toledo the TPC&LS chose a round- about route which took it due north from Genoa through Clay Center to Curtice, then northwest through Booth, and finally east through Ryan, enter- ing Toledo on Starr Avenue over the tracks of the Toledo Railway & Light
(hereafter abbreviated OE papers). Copies of franchises granted by Oak Harbor, Port Clinton and Marblehead are in folder, "Toledo, Port Clinton and Lakeside," Box 132, OE papers. Each stipulated a maximum five-cent fare for travel wholely within village boundaries. Tourism development is covered in Commemorative Biographical Record of the Counties of Sandusky and Ottawa, Ohio (Chicago, 1896), 392, and Robert J. Dodge, Isolated Splendor: Put-In Bay and South Bass Island (Hicksville, NY, 1975), 71-107. The limestone blocks for Henry Ford's River Rouge mansion, Fare Lane, completed in 1915, came from Marblehead peninsula quarries. Craig Wilson, "Life in Michigan's Fare Lane," Akron Beacon Journal, July 26, 1992, Sec. F, 1, 3. |
128 OHIO HISTORY
Company. This entry took the road
through several minor villages not oth-
erwise served, but it added slightly
more than three miles and about fifteen
minutes to the more direct route from
Genoa to Toledo taken by the Lake
Shore. Clearly, the road's promoters
placed a higher value on maximizing
the population served than on speed of
service to and from the Marblehead
peninsula, a calculation unaffected by
the prospect of automobile competition
and the less forgiving definitions of
speed and convenience that accompanied
mass automobile ownership.6
The TPC&LS was an exceptionally
well-designed and well-built interurban.
Constructed with a solid roadbed and shallow
curves under the supervision of
railroad engineer Herbert C. Warren, the
road could support railroad freight
cars, facilitating traffic interchange
with steam roads. Its brick powerhouse,
located along the Lake Erie shore-line
at Port Clinton close to abundant cool-
ing water, and its electrical
distribution system received approving reviews in
Street Railway Journal and Railway Age, as didits attractive stations
in the
communities through which it passed. At
the same time, some components
showed more interest in economy than in
permanence: its 143,000 cross ties
and 3800 electrical distribution poles,
for example, were of untreated wood,
assuring earlier replacement than more
durable alternatives. On balance, how-
ever, there can be little doubt that the
road's promoters intended their invest-
ment to be long-lasting and they built
to a generally high standard.7
On February 20, 1907, the construction
company turned the completed road
over to the Toledo, Port Clinton &
Lakeside. The company received a single-
track electric interurban railway, 50.70
miles long with 3.15 miles of
turnouts and sidings, entering Toledo on
the east over the tracks of the Toledo
Railway & Light Company. The road
cost a total of $1,350,000 to con-
struct, an amount almost equal to the
face value of the $1,500,000 five per-
cent first-mortgage bonds. The
$1,800,000 in common stock, then, did not
represent tangible assets, and in the
language of the day, the TPC&LS was a
typically "watered"
corporation. Using the terminology of a more recent and
more tolerant generation, the road was
100 percent debt-financed through
"junk" bonds and highly
leveraged; its stock could attain value only if the
road developed a cash flow sufficient to
generate a healthy surplus for divi-
6. Hilton, 5-9, "Toledo, Port
Clinton and Lakeside," Street Railway Journal, pp 1130-32;
"TPC&LS Railroad Commission
Report," 1907-08, 16, 18, Box 157, OE papers. In Toledo the
company paid 3.5 cents per passenger
carried and a percentage of freight charges to the
Toledo Railway and Light Company for
trackage rights.
7. Hilton, 5-8; "The Toledo, Port
Clinton and Lakeside," 1130-38; "Toledo, Port Clinton and
Lakeside," Railway Age 41
(May 11, 1906), 794-96. "Annual Report of the Toledo, Port
Clinton and Lakeside Railway Company to
the Tax Commission of Ohio for the Year Ending
January 1, 1911" (hereafter
abbreviated "TPC&LS Tax Commission Report," 1910), 43, Box
156, OE papers. The company used 70
pound-per-yard T-rail, the customary weight in the
interurban industry. Ibid., Hilton and
Due, 48.
Interurbans in the Automobile
Age
129
dends after paying all operating
expenses, taxes, and the annual bond interest
charge of $75,000. How the bonds were
placed is not known. The stock,
however, remained in friendly hands,
with the construction company retaining
a third and company promoters and their
families controlling another 40 per-
cent. Most of the rest was held in lots
of twenty shares or less, primarily by
people in communities through which the
road passed; in many cases the
stock probably represented payment to
rural property owners for roadside right
of way.8
Although Street Railway Journal enthused
that the "features which go to
make an interurban line successful are
peculiarly combined" on the
Marblehead peninsula, success proved
elusive. While the road's promoters
projected summer tourism as a major
revenue source, the tourist season lasted
a scant three months. Terminating on a
peninsula, the railway could hardly
participate in intercity through
traffic, except indirectly via lake boat to
Sandusky across the bay, and then only
during the shipping season. The
largest village through which the road
passed, Port Clinton, the county seat
of Ottawa County, had a 1910 population
of 3,000. Hence the road would
have to rely for most of the year on
whatever local traffic rural Ottawa
County's 20,000 people could provide.
A review of the company's operation and
finances between 1908 and 1912
illustrates its inability to generate
sufficient traffic to cover its costs even be-
fore the automobile developed as a
serious competitor. Intended primarily as
a passenger road, the railway carried
782,766 revenue passengers for the year
July 1, 1907, through June 30, 1908,9
the first full year following entry into
Toledo, dipped to 738,413 in 1910-11 and
then climbed to 781,600 in 1911-
12. Passenger revenue ranged from
$120,200 in 1908-09 to $148,200 in
1911-12. Freight traffic showed more
consistent growth; revenues doubled
from $18,900 in 1907-08, to $37,800 in
1911-12.10
8. Hilton, 9; "TPC&LS Railroad
Commission Report," 1907-08, 11, 15, 59-60a, Box 156,
OE papers.
9. The Railroad Commission and its
successors, the Public Service Commission (PSC) and
Public Utilities Commission (PUCO),
required annual reports covering July 1 through June 30
of the following year until 1916 when
the PUCO changed to calendar year reporting. State
reports duplicated Interstate Commerce
Commission reports exactly and covered the same time
spans. PUCO and ICC reports required
financial and operating data. Reports to the Tax
Commission of Ohio included financial
and detailed property ownership data, but not operating
data, on a calendar year basis. Figures
often differ slightly from report to report, even when
covering the same time period, but
seldom by as much as one percent. To reflect this lack of
uniformity and precision, as well as to improve
readability, I have generally rounded figures to
the nearest hundred or thousand.
10. "TPC&LS Railroad Commission
Reports," 1907-08, 21, 45, 1908-09-1910-11, 35, 65,
"TPC&LS PSC Report,"
1911-12, 35, 65, Box 157, OE papers.
130 OHIO HISTORY |
|
Even more impressive was the growth in electric sales, which increased 162 percent between 1907-08 and 1911-12, from $23,300 to $61,400, constitut- ing a full 24.2 percent of the latter year's operating revenues. Except for its major villages, the Marblehead peninsula was largely without electric service before the construction of the TPC&LS. Area limestone and gypsum quarries quickly contracted for power; others along the right-of-way followed. The vil- lages of Oak Harbor and Elmore supplied their municipal distribution systems with power purchased wholesale from the railway.11 As anticipated, railway traffic and revenue proved to be highly seasonal. Surviving monthly traffic figures from July 1910 through June 1912 show a base passenger load in the winter of fifty to sixty thousand passengers per month, rising through the spring and early summer to a peak of about 80,000 in August, and then dropping through the fall, with a second minor peak in the holiday month of December. In August 1911 the railway carried 82,534 passengers, 54 percent above the average (53,541) for January, February and March of that year; the December peak was 27 percent above the winter aver- age. Freight traffic showed a similar pattern, peaking during the height of the
11. Hilton, 11-12; "TPC&LS PSC Report," 1911-12, 35, 63 Box 107, OE papers; "Ohio Public Service, PUCO Report (Electric)," 1924, 9 Box 157, OE papers. In Elmore several plans to generate and sell electricity had gone awry; in April 1911 residents voted to build a municipal plant, but in November the city instead contracted for power with the TPC&LS and built its own distribution system. Grace Luebke, Elmore, Ohio: A History Preserved (Evansville, 1975), 227. |
Interurbans in the Automobile
Age 131
fruit harvest in September when the
company ran twice the freight car
mileage as it averaged in non-harvest
months.12
Revenue peaked even more sharply than
traffic. Tourists to peninsula and
island resort areas rode further and
paid higher fares than did Ottawa County
residents using the railway for local
travel. In 1911 the average fare paid be-
tween January and June was 14.5 cents,
indicating an average ride of slightly
more than seven miles at the typical
fare of two cents per mile, compared to
22.3 cents between July and December.
Hence the railway collected 65.9 per-
cent of its passenger revenue in the
second half of the year. Similarly, freight
charges per carload for handling
perishable crops were considerably higher
than for hauling bulk commodities such
as limestone and gypsum; in 1911
the TPC&LS earned 73.4 percent of
its freight revenue in the second half.13
The TPC&LS seems to have been as
well managed as it was well designed
and well built. A key measure of
efficiency is the ratio of expenses to rev-
enues, known as the operating ratio. If
operations were to consume all avail-
able revenue, there would be no
remaining funds to cover fixed costs such as
bond interest or to allow payment of
dividends on common stock. Operating
ratios above 60 percent tended to
squeeze earnings on all but the strongest
roads.14 Between 1907 and 1911
the TPC&LS maintained an operating ratio
of between 50 and 57 percent, a good
indication of competent management.
But the road never achieved the
financial stability such a favorable ratio im-
plied, as the company failed to generate
earnings sufficient to support its
heavy fixed charges. In spite of earlier
rosy projections, traffic and revenue
levels were disappointing and
insufficient to cover costs. The figures in
Table I (page 130) show that in spite of
prudent management the road earned
its expenses in only two of its first
five years and compiled a cumulative
deficit of more than $8,000. While the
road's position improved after 1910
as gross income increased, these
increases came almost entirely from im-
proved freight and electricity earnings.
Passenger income remained nearly
constant and declined as a percent of
gross income from 69.8 percent in 1907-
08 to 58.5 percent in 1911-12.15 The
sharp seasonality of the railway
business helped to keep earnings low. In
1912 the company was profitable
for the year with an operating ratio of
58.2 percent, but this represented the
12. Figures are taken from work sheets
used to total monthly traffic data pasted inside the
back covers of "TPC&LS Report
to the Railroad Commission," 1910-11 and "TPC&LS Report
to the PSC," 1911-12, Boxes 156-57,
OE papers.
13. Figures are taken from work sheets
used to total revenues and expenses by calendar
halves pasted onto the inside front
covers of Ibid.
14. Hilton and Due, 186-95.
15. "TPC&LS Railroad Commission
Reports," 1907-08, 21, 1908-09--1911-12, 35, Box
156-57, OE papers. In comparison, the
Lake Shore Electric Railway received 87.2 percent of
its 1911 income from passenger revenue,
and the Cleveland Painesville and Eastern 80.5
percent. Electric Railway Journal, 40
(August 17, 1912), 262; (September 21, 1912), 465.
132 OHIO HISTORY
average of an anemic 64.9 percent forthe
first half and a healthy 50.4 percent for
the second. Because of low demand and
idle capacity the company lost money
in the first half but then more than
made up for it in the second; whatever
profits the TPC&LS earned came
between the summer solstice andChristmas.16
The proceeds from the securities issued
in 1903 had to fund not only con-
struction but also bond interest
payments until the road began to produce in-
come. By the time the operating company
took possession of the road in
early 1907, funds were pretty much
depleted, and the lack of cash reserves,
coupled with the failure of the road to
earn expenses in its early years, created
severe financial stresses. Unable to
meet its full bond commitments consis-
tently, the company slowly fell behind
in its interest payments and then, in
1908-09, began to cover its delinquency
through short-term borrowing. By
June 1911 the company had reduced its
interest arrears to $16,625, but in do-
ing so had acquired $45,550 in
short-term debt. Only by juggling the de-
mands of short and long-term creditors
was the TPC&LS able to remain sol-
vent. 17
Dismal as are the figures in Table I,
they still understate the actual financial
situation of the TPC&LS. Mortgage
bonds invariably required the issuing
corporation to assure their eventual
redemption by contributing one to two
percent of the principal annually to a
sinking fund. As the bonds of the
TPC&LS came due in 1928, the company
needed to fund $1,500,00 by that
date. But as of 1911 the company had
made no deposits to a sinking fund,
and clearly lacked the means to do so.
Similarly, prudent accounting called
for the company to fund its depreciation
so that as parts of the system wore
out funds would be on hand to purchase
replacements. But the TPC&LS
maintained no depreciation reserve.
Barely able to meet current demands, the
company lacked the resources to make
prudent provision for future needs and
obligations.
These liabilities directly affected the
company's value as an investment. In
early 1912 the Ohio Tax Commission
questioned the company's failure to
state in its most recent annual report a
market value for its bonds and com-
mon stock. Responding for the company,
General Manager Theodore
Schmitt noted that neither set of
securities had ever been listed on an ex-
change and that he was unaware of any offers
for bonds "which would indicate
16. "TPC&LS Tax Commission
Report," 1912, pp, 55, 63, Box 156, OE papers;
"Northwestern Ohio Railway and
Power Company Tax Commission Report," 1912, 55, 63, Box
99, Ibid. It is possible to separate
data for 1912 into approximate calendar halves the
Northwestern Ohio Railway and Power
Company (NOR&P) bought the TPC&LS in July 1912.
The old company filed a report covering
January-July; the new company filed two reports, one
covering July-December, and one covering
the entire year.
17. "TPC&LS Railroad Commission
Reports," 1906-07, p 17, 1907-08, 13, 1908-09-1910-
11, 17, 21; "TPC&LS PSC
Report," 1911-12, 17, 21, Boxes 156-57, OE papers.
Interurbans in the Automobile
Age 133
a market price"; the stock, he
claimed, "has no market value." With no assets
backed by equity and no reasonable
prospect of earnings to apply to dividends,
it is difficult to argue with Schmitt's
somber conclusions.18
Others shared his pessimism. In 1912
Philadelphia banker Leslie M. Shaw
joined the company's board, its first
member from outside the Toledo area.
President of First Mortgage Guarantee
& Trust Company of Philadelphia,
Shaw undoubtedly represented bondholders
unhappy with the road's failure to
meet its interest and sinking fund
obligations and anxious to protect what re-
mained of their investment.19 In
1911-12 the company paid off its short-term
debt, but in the process fell a
disastrous $87,600 behind in its interest pay-
ments. Bondholder discontent seems to
have been the catalyst which shortly
thereafter forced the road's sale to
General Gas and Electric.20
The Middle Years, 1912-1924
General Gas and Electric Company, a
utility holding company based in
New York City, agreed to purchase the
Toledo, Port Clinton & Lakeside in
May 1912 for $1,100,000, a price the
purchaser explained to the state Tax
Commission as representing original cost
less accrued depreciation. After set-
tlement of the old company's
obligations, bondholders received about
$975,000, or roughly sixty-five cents on
the dollar; stockholders received
nothing.
Controlled by William S. Barstow,
General Gas and Electric owned utilities
in several eastern cities and supplied
transport as well as electric power in and
around Rutland, Vermont, and High Point,
North Carolina. Barstow formed a
new corporation, the Northwestern Ohio
Railway & Power Company, as a
wholely owned subsidiary of General Gas
and Electric. Capitalized much like
its predecessor, the NOR&P issued
five percent first mortgage sinking fund
bonds for the full purchase price of
$1,100,000 plus $500,000 in seven per-
cent preferred stock and $800,000 in
common. None of the securities were
sold to the public; all remained the
property of General Gas and Electric.
18. Irville A. May, Street Railway
Accounting: A Manual of Operating Practice for Electric
Railways (New York, 1917), 287-90; [Theodore Schmitt], General
Manager, TPC&LS, to R.
M. Dittey, Chairman, Tax Commission of
Ohio, March 27, 1912, letter folded inside front
cover, "TPC&LS Tax Commission
Report," 1911, Box 156, OE papers.
19. Before assuming the presidency of
First Mortgage Guarantee & Trust Company of
Philadelphia in 1909, Shaw had been a
lawyer and banker in Iowa, governor of that state from
1898 to 1902, and Theodore Roosevelt's
Secretary of the Treasury from 1902 to 1907. Albert
N. Marquis, ed., Who's Who in America
(London, 1910), 1727.
20. "TPC&LS PSC Report,"
1911-12, 5, Box 157, OE papers. The company's final state-
ment of current assets and liabilities
showed cash and accounts receivable of $14,900 against
current liabilities of $96,500. The
railway was all but bankrupt. "TPC&LS Tax Commission
Report," 1912, 23, Ibid.
134 OHIO HISTORY
Later in the year the NOR&P issued
an additional $193,000 in bonds to fund
a large power house addition, purchase
the small Port Clinton Light and
Power Company ($30,000), and make other
minor improvements. While the
stock of the NOR&P was as
speculative and dependent on future earnings as
was the stock of the TPC&LS, the
reduction in bond interest from $75,000
to $64,650 dropped the fixed charges that
had to be met before dividends could
be considered. At least as interested in
electric sales as transport, General Gas
and Electric followed its Marblehead
peninsula purchases with acquisition of
the Sandusky Gas and Electric Company
across Sandusky Bay.21
Purchasing the TPC&LS during its
best year, Barstow doubtlessly expected
recent earnings improvements to continue
into the future, and earnings did
improve in the second half of 1912 when
the railway paid bond interest, full
dividends on the seven-percent
preferred, and two percent on the common, al-
though it ran a small deficit to pay the
last. But dividends soon disappeared.
Beginning in 1914 rising costs and
declining revenues quickly reversed the
railway's fortunes, and in 1915 it
earned only $73,950 on operations and ran a
$4900 deficit after paying bond interest
and taxes.22
The reasons for the reversal were
fourfold. First, the inflation that accom-
panied World War I increased the prices
of all commodities including labor
and particularly coal, sharply raising
operating costs. Second, as the railway
aged the funds required for annual
maintenance of road bed, bridges and trestles
("way and structures")
increased more rapidly than inflation, from $8,200 in
1910, to $18,000 in 1915, and $45,500 in
1920. Third, the Marblehead
peninsula gradually lost its position as
the focal point of tourism in northern
Ohio, eclipsed after World War I by
flourishing Cedar Point on the south side
of Sandusky Bay. The TPC&LS
attempted to meet this challenge by leasing
and electrifying a spur of the
Marblehead and Lakeside Railroad to Bay Point
in 1911, thereby moving the terminus of
the line three miles south from
Marblehead and as close to Cedar Point
as peninsular geography would allow,
and by entering into seasonal joint
traffic agreements with lake steamers
which connected the railway with Cedar
Point, Sandusky and Cleveland.23
But the overriding reason for the decline
in the NOR&P's fortunes was the
increasingly widespread ownership and
use of the private automobile. As a
21. Hilton, 12-16, Electric Railway
Journal, 39 (June 1, 1912), 945; 40 (July 6, 1912), 38;
(July 27, 1912), 141; (September 28,
1912), 512; (November 16, 1912), 1043; Public Service
Commission Report, 1912, 540-45, 645-46; "NOR&P Tax Commission
Report," 1912, 72, Box
99, OE papers; "Sandusky Gas and
Electric, Tax Commission Report," 1913, 7, Box 143, OE
papers.
22. "NOR&P Tax Commission
Reports," 1912-1914, 15, and "NOR&P ICC Report," 1912-
13, 31, 35, Box 99, OE papers. The
NOR&P paid two percent on its preferred in 1913, 0.5
percent in 1914, and nothing on its
common.
23. "TPC&LS Tax Commission
Report," 1910, 47; "NOR&P Tax Commission Reports,"
1915, 61, 1920, 33, Boxes 99, 157, OE
papers; Hilton, 9-10.
Interurbans in the Automobile
Age
135
tourist road it was particularly
vulnerable to automobile competition as fami-
lies with automobiles, particularly in
rural areas, used them in preference to
available public transport for
recreation and pleasure. County fairs provide a
good example. In 1914 Electric
Railway Journal reported that while atten-
dance at agricultural fairs in the upper
midwest generally was above that of
the previous year, electric railway
patronage and revenues on lines serving fair
grounds were off sharply; an
accompanying illustration showed a field of
parked touring cars at the Fremont,
Ohio, fairgrounds.24
Similarly, the automobile expanded
vacation possibilities by increasing in-
dividual control over travel
arrangements. "Vacationing in a motor car is
quite the finest thing that has been
discovered," a Detroit newspaper observed
in 1915; "The expense is no greater
but the liberty is, for one does not have
to depend on time tables and be in a
rush."25 Interurbans dependent on tourist
traffic quickly felt the consequences. A
New England street railway president
told the Federal Electric Railway
Commission in 1918 that electric lines built
"through strictly summer resort
territory" in western Massachusetts had in re-
cent years lost up to two-thirds of
their patronage and in some cases been
abandoned. "Some years ago,"
he explained,
the tourists came in and spent a week or
a month in some favorite inn with an oc-
casional trolley trip through the hills.
Now the tourist comes in his automobile,
and depending upon his standing, a very
elaborate one or a very simple one, stays
a day or two and passes on to some other
part of the country. That has had a most
disastrous effect upon the revenue of
the electric lines in the territory. .. .26
Cedar Point, with its resorts, amusement
park and other attractions, profited
from these changing patterns in tourism.
Easily accessible by automobile
from northern Ohio's numerous industrial
cities and market towns in a broad
24. Michael L. Berger, The Devil
Wagon in God's Country: The Automobile and Social
Change in Rural America, 1893-1929 (Hamden, Conn., 1979), 103-26; "Effect of
Automobiles
on Interurban Transportation," Electric
Railway Journal, 44 (December 5, 1914), 1243.
Promoters considered county fairgrounds
to be important traffic builders. A never-built line
from Akron to Mansfield planned its
route to pass five. Electric Railway Journal, 33 (January
16, 1909), 121.
25. "Motor Cars Change Ideas of
Vacation, Greater Freedom," Detroit Free Press, July 11,
1915, Pt. 5, 8.
26. Testimony of Lucius S. Storrs,
President of the Connecticut Company, before the
Federal Electric Railroad Commission,
quoted in Delos F. Wilcox, Analysis of the Electric
Railway Problem, (New York, 1921), 101. A Wisconsin hotel executive
estimated that from
May to December "motor
tourists" constituted 75 percent of his hotels' transient business.
Walter Schroeder, "Concrete
Highways Bring Business to Wisconsin Hotels," Concrete
Highway Magazine, 8 (December 1924), 270-72. For the impact of the
automobile on tourism
in the White Mountains, see William L.
Taylor, "Getting There," in Richard Ober, ed., At What
Cost? Shaping the Land We Call New
Hampshire (Concord, 1992), 25-35; for
Glacier National
Park, see Douglas V. Shaw, "The
Great Northern Railway and the Promotion of Tourism,"
Journal of Cultural Economics, 13 (June 1989), 65-76.
136 OHIO
HISTORY
arc from Cleveland to Toledo, it
attracted a growing automobile trade from an
early date. On July 4, 1915, for
example, 3,500 patrons arrived by steamer,
3,500 by train, and 3,000 by automobile;
on the same holiday six years later
3,000 cars occupied parking spaces,
representing far more than 3,000 people.
Long stays in the Point's resort hotels
declined in importance, replaced by
many more people arriving for one-day
auto visits. As a result, traffic on the
NOR&P seeking to transfer to Lake
Erie steamers dwindled, and in 1925 the
line terminated its joint traffic
agreements with steamer companies and aban-
doned its extension from Marblehead to
Bay Point.27
Summer tourist traffic began to desert
the NOR&P in 1912 or shortly
thereafter. Total annual passenger revenue
peaked in 1913-14, but total pas-
senger numbers did not peak until
the following year, consistent with slight
increases in local use set against
modest declines in seasonal long-distance
travel, such as Toledo residents
visiting resort areas on the peninsula and adja-
cent islands.28 Surviving
monthly traffic figures from 1917 suggest the ex-
tent of the decline in summer tourist
patronage. August continued to be the
railway's busiest month in 1917, but in
contrast to 1911, when the August
peak was 54 percent above the
January-to-March average, the August peak in
1917 was only 17 percent above the
winter average. While winter patronage
in 1917 exceeded that of 1911 by 13.9
percent, August 1917 patronage fell
9.2 percent below that of August 1911.29
The rapid decrease in tourist traffic
accompanied a severe but more gradual
falling off of patronage generally.
Peaking in 1914-15 at 934,000, ridership
began a long secular decline which
continued with only occasional interrup-
tion until the end of passenger service
in 1939. By 1918 the number of rev-
enue passengers had fallen to 656,000,
the lowest in the road's history.
Traffic stabilized near 600,000 through
1921 but then began to fall again,
reaching 492,000 in 1923, a mere 53
percent of the 1914-15 high.30
27. David W. and Diane D. Francis, Cedar
Point: The Queen of American Watering Places
(Canton, Ohio, 1988), 56-57, 72-73, 82.
28. "NOR&P ICC Reports,"
1914-15 and 1915-16, 403. Evidence from the company's
annual reported revenues from handling
baggage confirms these conclusions. Baggage rev-
enue peaked in 1911 at $1,442, fell
slightly to $1,372 in 1912, and then began a more dramatic
slide, to $1,210 in 1913, $1,056 in
1914, and $806 in 1916. The drop in baggage revenue would
seem to provide a rough proxy by which
we can gauge the decrease in long-term tourist
traffic. "TPC&LS and NOR&P
Tax Commission Reports," 1910-1916, 55, Boxes 99 and 157,
OE papers.
29. Monthly figures from work sheet
folded inside back cover of "NOR&P ICC Report,"
1917, Box 99, OE papers.
30. "NOR&P ICC Reports,"
1914-15, 65, 1915-16--1923, 403, Boxes 99-100, OE papers.
These figures differ from those given by
Hilton as he did not take into account that the com-
pany filed two reports in 1916, one on
June 30 and one on December 31. Hence Hilton's
figures beginning with 1917 are ahead by
one year. See Hilton, 16.
Interurbans in the Automobile
Age 137
Interurbans all over the country
experienced similar declines as automobiles
increased in number and as improved
roads expanded their range. Electric
Railway Journal noted the impact of the automobile on traffic as early
as
1911. In an unnamed Indiana town of
8,000 connected by interurban to a
nearby city of 20,000, it claimed, there
were thirty-five automobiles.
Through 1910 the railway "derived a
very gratifying income from the town,"
but now, "owners of machines go to
the city in their autos and invite their
neighbors to accompany them, and the
company loses not only the business
of the owners but that of many [other]
persons besides." Similarly, a Texas
railway official noted in 1917 that in
small towns, "where everyone seems to
know everyone else," automobile
owners hailed their friends waiting at in-
terurban stops and carried them free to
their destinations. The most common
reason for cashing in an unused leg of a
round-trip ticket, he maintained, was
"'made the trip in an
automobile."' Thus the impact of automobile use on
rail patronage had the potential to
extend well beyond the community of own-
ers.31
Automobile ownership expanded most
rapidly in prosperous rural and
small-town areas of the Midwest. Ottawa
County was no exception. County
residents owned 3,382 registered
automobiles in 1922, a figure which grew 76
percent to 5,944 in 1926, or one auto for
every 3.57 persons. As access to
automobiles increased, as paved roads
connected the county's farms and vil-
lages with each other and with places
more distant, the relative importance of
public transport diminished.32
Between 1923 and 1926 traffic on the
NOR&P declined another 41 percent,
from 492,000 to 290,000, a direct result
of increased automobile use. Unlike
many other Ohio interurbans, the
NOR&P remained relatively free of motor
bus competition along its route as that
industry developed after 1915. Only
in the Port Clinton area did buses
compete directly. A line connecting Port
Clinton with Fremont and Tiffin
paralleled the railway for several miles be-
fore turning south, and in 1921 service
with a single vehicle began between
Port Clinton and Gypsum, four miles
further east along the peninsula.33
31. "Automobiles Affect Interurban
Traffic," Electric Railway Journal 38 (August 26,
1911), 370; James P. Griffin, "The
Influence of the Automobile on the Interurban," Ibid., 49
(May 5, 1917), 820.
32. Berger, 77-94; "Anticipated
Progress, 1927-1937, The Toledo Edison Company"
(typescript), 1927, 18, Box 134, OE
papers; The Ohio Public Service Company, "Market
Analysis of the Securities Sales
Territory" (typescript), 1926, Table X, Box 135, OE papers.
33. "NOR&P ICC Report,"
1923, 403, Box 99, OE papers; Ohio Public Service Division
Operating Reports, 1927-1930, Box 129,
OE papers; "Motor Bus Reports," 1926, 1931,
Records Group 1496, Ohio Historical
Society, Columbus, Ohio. A 1922 review of the Ohio
intercity bus industry confirmed the
lack of competition with the NOR&P. "Birdseye View of
Ohio Buses," Bus Transportation,
1 (March, 1922), 173-81.
138 OHIO HISTORY
More troubling than the motor bus was
the motor truck. Just as interur-
bans had used their greater convenience
and flexibility to take some of the
less-than-carload freight, package
express and perishable commodity traffic
from steam railroads, motor trucks used
their even greater flexibility and
lower costs to undercut electric
railways and to edge them out of the various
specialized niches they had found in the
movement of freight. As with the
motor bus, serious motor truck
competition began around 1915 and grew
rapidly in the 1920s as roads and
vehicles improved.34
From its inception the promoters of the
TPC&LS had looked to the or-
chards and truck farms of the Marblehead
peninsula as a major revenue source,
and as we have seen, heavy freight
traffic in the early fall represented the rail-
way's participation in those harvests.
But this type of traffic was particularly
susceptible to truck competition as
trucks could load in every farm yard and
drive directly to Toledo markets and
freight houses, eliminating the haul from
farm to railway loading dock. In the
early 1920s the NOR&P encountered se-
rious competition from local truck lines
and reduced its rates at the beginning
of the 1922 season in an attempt to
maintain its position in transporting the
fruit harvest to market.35
The growth and decline of the NOR&P
as a milk hauler more clearly doc-
uments the impact of the motor truck on
the carriage of perishable farm
commodities. Few products require more
rapid handling than unrefrigerated
raw milk, and interurbans proved
superior to both railroads and horse-drawn
wagons in moving milk from farm to
market. Farmers with access to in-
terurbans took advantage of improved
transport links, and dairy production
generally increased along interurban
lines. Like other interurbans, the
NOR&P built platforms along its
right-of-way on which dairy farmers left
milk in standard five, eight, and
ten-gallon cans. To each can farmers tied a
prepaid ticket and a return address tag;
for rates which in 1920 ranged from
12.5 to 28.5 cents per can depending on
can size and distance, the railway
picked up the cans, carried them to
Toledo and returned the empties.36
Although Ottawa County was not a major
milk producer, the NOR&P
built up a small but respectable
business. Receipts grew from $700 in 1909
to $1200 in 1914, to $3450 in 1918.
Peaking at $6250 in 1920, receipts fell
to $3550 in 1923, the last year for
which figures are available. The NOR&P
34. Pease, 35; William R. Childs, Trucking
and the Public Interest: The Emergence of
Federal Regulation, 1914-1940 (Knoxville, 1985), 7-43.
35. "Special Rates Being
Arranged," Electric Railway Journal 60 (July 1, 1922), 30; John
M. Killets, Toledo and Lucas County,
1623-1923, Vol. I (Chicago and Toledo, 1923), 557.
36. Northwestern Ohio Railway and Power
Company, Local Milk Tariff, October 30, 1920,
in "Rates and Tariffs for Railway
Service, The Ohio Public Service Company," Box 134, OE
papers. See also Pease, 9-11; Bogart,
598-99; G. W. Parker, "Transportation of Milk and
Cream," Electric Railway Journal
36 (December 24, 1910), 1237-38; and "Transportation of
Freight," Ibid., 42 (October 4,
1913), 601-02.
Interurbans in the Automobile Age 139 |
experience, however, mirrored that of interurbans around the state. Milk rev- enue for all Ohio interurbans grew from $152,000 in 1909 to $290,000 in the peak year of 1920, and then began to fall rapidly, to $212,000 in 1923, $87,000 in 1927, and $15,000 in 1930. Within ten years the greater speed, flexibility, and convenience of the motor truck edged interurbans almost com- pletely out of the milk trade.37 Falling ridership and revenue in the face of rising costs after 1915 brought the NOR&P to a state of acute financial distress. As Table II (page 139) shows, net operating income (income after operating expenses but before
37. "Statistics, Electric Interurban Railroads," Railroad Commission Reports, Public Service Commission Reports, and PUCO Reports, 1909-1930, various pages; Frank A. Cannon, "What Good Roads Do for the Dairy Business," Concrete Highway Magazine, 2 (June 1918), 125. |
140 OHIO HISTORY
bond interest and taxes) peaked in 1912
at $114,700 and then began to fall.
As net income fell, the railway's
operating ratio, the percentage of revenues
required to fund operations, rose, from
58.2 percent in 1912, to 69.6 percent
in 1915, and 86.1 percent in 1917. By
1915 net income after operating ex-
penses no longer covered fixed costs,
and the company lost $4,900. Losses
increased 50 percent to $7450 in 1916
and then escalated to a disastrous
$43,550 in 1917 when railway operating
costs rose 24.1 percent while rev-
enues rose only 6.8 percent. Power costs
jumped 45 percent above those of
1916, primarily the result of sharply
higher coal prices, and labor rose 22 per-
cent. While other items increased more
modestly, these two alone represented
increased annual costs of more than
$23,000. As earnings declined the com-
pany ceased to be able to cover its full
bond interest payments, and between
1918 and 1923 fell $101,000 behind.38
Like other Ohio interurbans, the
NOR&P responded to increased costs by
attempting to raise fares. It eliminated
discounts and applied to the PUCO to
boost maximum fares from two cents to
three cents a mile. Granted the in-
crease in July 1918, the NOR&P
immediately raised its fares to the new max-
imum.39 Higher fares,
however, did not have the desired impact on the rail-
way's balance sheet. Ridership in 1919,
the first full year in which the new
fares were in effect, was 24 percent
below 1917 levels; consequently 1919
passenger revenue rose only 13 percent
above that of 1917. At the same
time, the railway made only nominal cuts
in service, running its cars with in-
creasing numbers of empty seats. To
attract traffic the railway began in 1922
to discount the fares it had worked so
hard to secure in 1918, offering books
of tickets discounted 20 percent and
low-priced weekend excursions. In spite
of the company's best efforts, however,
patronage continued to decline and
railway net revenue fell steadily, from
$61,000 in 1918 to $18,400 in 1923
(see Table II). Net income from railway
operations in 1922 and 1923 was not
sufficient to pay the annual taxes on
the property.40
While demand for NOR&P rail services
dwindled, demand for power and
light grew from year to year. From its
beginning the TPC&LS carried on a
successful sideline in the sale of
electricity, and under NOR&P ownership
that business expanded steadily, with
the most rapid growth coming after
38. "NOR&P Tax Commission
Reports," 1915-1920, 55, 61-63, 71, 73, 79; 1921-1923, 27,
33-35, 43, 45, 51. In addition, the
NOR&P made no required contributions to a bond sinking
fund and did not begin a depreciation
reserve until 1920. "NOR&P ICC Reports," 1918-1923,
206, 232; C. C. Cash to the ICC,
November 4, 1922, letter, inside 1922 Report, Boxes 99-100,
OE papers.
39. PUCO Report, 1918, 141-43;
"Three Cents a Mile for Interurbans" Electric Railway
Journal, 51 (June 8, 1918), 1099-1100; "Ohio Interurbans
Act," Ibid. (June 29, 1918), 1254;
"Increase for Ohio
Interurbans," Ibid., 52 (July 20, 1918), 133.
40. "New Schedules and Fares
Announced," Electric Railway Journal 59 (June 3, 1922),
915. "NOR&P ICC Reports,"
1918-1923, 301, 403, Boxes 99-100, OE papers.
Interurbans in the Automobile
Age
141
World War I. Total sales rose from
$57,400 in 1913, to $82,600 in 1918, to
$302,500 in 1923, and the number of
customers grew from an estimated 300
in 1912 to around 3,000 in 1924. By the
mid-1920s power and light was
more than a sideline.41
Selling electricity improved railway
earnings in several ways. Electric
railways were rather inefficient users
of power plant capacity as their opera-
tion necessarily involved high peak
demand relative to average demand.
Hence railway power houses required
large reserve capacities to meet peak de-
mand. By selling electricity to
additional users with varying peak hours, the
ratio of peak demand to average demand tended
to fall, raising what the indus-
try calls the "load factor;"
higher load factors increased production efficiency
and lowered unit costs. Before 1910, in
spite of low load factors, railways
commonly generated their own power
because only in the largest cities did in-
dependent generating capacity exist
which might supply their needs. After
1910, as societal demands for power and
light grew, railways tended to be-
come either net sellers of electricity
to others, satisfying that demand, or net
purchasers, phasing out their own power
houses and integrating their idiosyn-
cratic loads into the more diversified
loads of larger producers serving many
consumers. Either way railways
benefitted through lower unit costs for the
power they consumed, but railways which
sold electricity gained the addi-
tional benefit of the revenue and profit
which that commodity earned.42
In the long run the future lay with
power sales. By the end of the 1920s
railway transport was a distressed
industry almost everywhere, while electric
light and power demand continued to
expand steadily. Akron-based Northern
Ohio Traction and Light, for example,
passed a milestone in 1919 when more
than 50 percent of net revenue
came from power sales, and it reached a major
turning point in 1926 when the electric
division for the first time earned the
majority of gross revenue. In
that year the company changed its name to
Northern Ohio Power and Light,
eliminating the association with transport,
and four years later shed its
increasingly marginal urban and interurban trans-
port divisions and renamed itself Ohio
Edison.43
41. "NOR&P Tax Commission
Report, 1913, 55, 1918, 69, 1923, 21 (elec.); "Anticipated
Progress, 1930-1937, The Ohio Public
Service Company," June 1930 (typescript), Box 134, and
Ohio Public Service, "Market
Analysis of the Securities Sales Territory," December 1926
(typescript), Box 135, OE papers.
42. Harold L. Platt, Electric City:
Energy and the Growth of the Chicago Area, 1880-1930
(Chicago, 1991), 95-138; Samuel Insull,
"The Relation of Central Station Generation to
Railway Electrification," Electric
Railway Journal, 40 (July 6, 1912), 12-19; C. N. Duffy, "The
Effect of Load Factor on Cost of
Electric Railway Passenger Service," Ibid., 41 (February 1,
1913), 195-96; "Selling Energy
Along Interurban Railways," Ibid., 48 (October 28, 1916), 920-
25; "Helping Out the Passenger
Earnings," Ibid., 50 (September 1, 1917), 349-50; Charles H.
Jones, "Power Facilities,"
Ibid., 64 (September 27, 1924), 493-97.
43. James M. Blower and Robert S.
Korach, The N.O.T. & L Story (Chicago, 1966), 8-9;
142 OHIO HISTORY
The NOR&P followed a roughly similar
course on a much smaller scale.
Hurt by high coal prices in 1917 and
1918, electric earnings emerged there-
after as the heart of the company (see
Table II). Each year the NOR&P ex-
panded its area of service; indeed, the
company listed in its reports the receipt
of between four and seven thousand
dollars in income annually as "donations"
from private parties seeking line
extensions. In 1920 net operating income
from electricity exceeded that of the
railway, and in 1923, the company's best
year since 1912, 52 percent of gross
revenues, 85 percent of pre-tax net rev-
enues, and 100 percent of after-tax net,
came from electric sales. The
NOR&P had returned to profitability,
but as an electric utility tethered to a
money-losing railway subsidized by
electric earnings.
In 1924 the company set out to break
that tether and end the subsidy.
Drawing up plans to separate the railway
and electric divisions into separate
co-owned corporations, company directors
planned to retire the 1912 railway
bonds and to issue new mortgage bonds
secured only by the electric proper-
ties. As an independent entity the
railway would purchase power from the
electric company. But the railway could
hardly stand alone. Unable to earn
even its taxes, it would quickly fail,
and like other failed interurbans in the
1920s, just as quickly be abandoned. It
seems clear from the record that the
NOR&P sought to detach the railway
from the power business in order to
scuttle it. Although approved by the
PUCO, the reorganization was not im-
plemented.44 Instead,
Barstow's General Gas and Electric received and ac-
cepted an unsolicited offer to purchase
both the NOR&P and Sandusky Gas
and Electric.
Years of Decline, 1924-1939
The purchaser, Ohio Public Service,
deserves detailed attention. Utility
magnate Henry L. Doherty followed his
1913 acquisition of The Toledo
Railway & Light Company (which split
in 1920 into Community Traction
and Toledo Edison) with the purchase of
several small utilities forming an ir-
regular crescent thirty to eighty miles
from Cleveland, and encompassing
Warren, Alliance, Massillon, Mansfield
(where the company also supplied
traction), Ashland, Elyria, and Lorain.
As electric demand grew, each local
generating plant began to push the
limits of its production capacity. In 1921
Doherty merged all of these companies
into Ohio Public Service, wholely
Northern Ohio Power and Light, Annual
and Monthly Operating Reports, 1919-1930, Boxes
22-25, OE papers.
44. "Application to P.U.C.O., March
13, 1924," carbon copy folded inside back cover of
NOR&P Director's Minute Book,
January 10, 1921 to April 17, 1925, n.p.,
Box 98, OE papers;
PUCO Report, 1924, 108.
Interurbans in the Automobile
Age 143
owned by his Cities Service holding
company, with the intent of connecting
the cities with high-tension lines and
supplying them with power produced in
plants located on Lake Erie where
abundant cooling water and ease of coal de-
livery assured low generation costs.
Additionally, as peak demand occurred at
different times in each locality, the
reserve capacity required by an inter-con-
nected system would necessarily be less
than the sum of the reserves required
for each of the localities standing
alone; the more diversified load of several
cities would provide a higher load
factor for an integrated system than any
single city could achieve individually.
Hence inter-connection reduced the
need for reserve capacity, allowed
maximum production at low cost plants,
and increased overall system efficiency.45
Quickly integrating its system and
concentrating power production in large
lake-shore plants near Lorain, OPS in
1923 began to explore expansion
prospects. A Cleveland consultant hired
to analyze the Ohio utility industry
identified Barstow's Sandusky Gas and
Electric as a particularly strategic ac-
quisition. An industrial city set in a
prosperous agricultural region, Sandusky
would furnish a large and diverse load,
and the property would forge a link be-
tween OPS territory in Lorain and Elyria
to the east and co-owned Toledo
Edison to the west; Toledo Edison, the
consultant recommended, should ac-
quire the NOR&P for its Ottawa
County electric territory. In September
1924 OPS bought both companies,
solidifying Doherty's position along the
lake shore west of Cleveland.46
Ohio Public Service paid General Gas and
Electric $2,755,000 for the
NOR&P, an enormous price. Earlier in
1924, when the NOR&P sought
PUCO approval for its restructuring, the
commission placed a value of
$1,013,000 on its electric properties.
In structuring its purchase, OPS paid
$1,105,000 for the electric assets and
$1,650,000 for the railway, an amount
just about equal to what the NOR&P
claimed as its original cost plus im-
provements. Yet no astute investor would
offer that amount for the railway
alone; by 1924 it was more liability
than asset, as General Gas and Electric
implicitly recognized in its plan to
reorganize and recapitalize the NOR&P.
45. "[Toledo Edison],"
(untitled bound report containing history and analysis of company
operations), 1940? Box 135, OE papers;
Henry L. Doherty & Company, "A Suggested Plan for
the Development of the Ohio Electric
Properties," November 1, 1919 (typescript), Box 134,
OE papers; William A. Duff, History
of North Central Ohio, Vol. I (Topeka, 1931), 247-50;
Thomas P. Hughes, Networks of Power:
Electrification in Western Society, 1880-1930
(Baltimore, 1983), 291-93; David E. Nye,
Electrifying America: Social Meanings of a New
Technology, 1880-1940 (Cambridge, 1990), 182.
46. H. A. Fountain, "The Ohio
Public Service Company, Electric Territory, Preliminary
Survey," May 31, 1923 (typescript),
17-18, Box 134, OE papers. Fountain believed Barstow's
properties were developed below their
potential and that the Sandusky purchase had the
additional benefit of preventing rival
Ohio Power, operating in Tiffin and Fremont, from
reaching the lake.
144 OHIO
HISTORY
By purchasing the railway at close to
its book value, OPS in effect paid a
premium for the Ottawa County and
Sandusky electric territories. OPS
wanted access to new markets, and if in
the process it had to acquire an unpro-
ductive railway at a price unrelated to
its investment value, it was prepared to
do so.47
Company actions soon after support this
conclusion. Within a year of ac-
quiring the NOR&P and Sandusky Gas
and Electric, OPS tied the Marblehead
peninsula to Sandusky by means of
high-tension lines under the bay and
closed the Port Clinton power house. It
then connected Sandusky to its
Lorain generating stations to the east
and to Toledo Edison to the west, inte-
grating its new properties into a
growing regional power grid, and closed the
Sandusky power house.48 Although
OPS considered its primary business to
be "the production, transmission,
distribution and sale of electric energy" and
its transport facilities to be
"incidental to the acquisition of its electric proper-
ties," it made a good faith effort
to operate its railways in the public interest
in spite of continuing losses; it did
not capitalize them apart from the electric
properties and issued no securities
against them. In 1925 its Mansfield and
Port Clinton properties together lost
$28,500 on operations and $70,750 after
taxes, losses easily covered by a net
income of $3,312,000 from the sale of
electricity, electrical appliances, and
natural gas.49
On the Marblehead peninsula passenger
trends continued much as they had
since World War I. As travel moved to
the automobile, patronage on OPS
fell 55 percent between 1923 and 1929,
from 492,000 to 218,500. In spite of
this decline, however, the company
maintained service levels, reducing sched-
uled passenger mileage only by 14
percent. To encourage ridership, OPS re-
duced round-trip and children's fares in
1927, and in 1929 began bus service
with two leased 21-passenger buses,
connecting Port Clinton and Marblehead
with Sandusky across the recently
completed Bay bridge. But this service
47. "Northwestern Ohio Property
Passes to Doherty," Electric Railway Journal, 64 (August
2, 1924), 183; PUCO Report, 1924, 108;
"OPS Tax Commission Report," 18, Box 109, OE
papers. Because the price OPS paid for
the railway did not exceed the value of its physical
assets, the PUCO accepted the figure,
even though it bore no relation to the present or probable
future earnings potential of the
property.
48. "The Cities Service Power and
Light Company, Ohio System, Summary--O.P.S. and
A.P.S. Section, Plant Capacity,"
October 9, 1940 (typescript), n.p., Box 135, OE papers.
Before purchasing the Barstow properties
OPS verified that it could import power from Lorain
more cheaply than producing it in
Sandusky and Port Clinton. Henry L. Doherty & Co.,
"Report on Sandusky Gas &
Electric," July 3, 1924 (typescript), Box 145, OE papers.
49. "History and Business,"
n.d. (prob. 1937; appears to a fragment of a draft of an SEC
submission), Box 134, OE papers;
"OPS ICC Report," 1925, 301, 303, Box 110, OE papers. Six
percent of the company's $3,312,000 net
income in 1925 came from the sale of electric
appliances, ten percent from natural
gas, and 84 percent from electricity. Pre-tax transport
losses reduced net income by less than
one percent.
Interurbans in the Automobile
Age
145
drew far fewer patrons than the minimum
necessary to cover costs, and the
company gave it up after a six-month
trial and operating losses of $10,900.50
The decline in passenger traffic was
offset to some extent by steadily in-
creasing freight traffic. Although
interurbans tended to lose freight traffic dur-
ing the 1920s, the unusual role of OPS
in hauling mine products from the
Marblehead peninsula to Toledo railroad
connections gave it a traffic for
which motor trucks could not readily
compete. In 1926 freight revenue
reached $111,600, exceeding passenger
revenue (which decreased to $92,800)
for the first time. While freight
produced the majority of revenues, passenger
service accounted for most operating
costs. The railway ran 440,000 passen-
ger miles in 1929 and 105,000 freight
miles. Each freight mile produced
$1.05; each passenger mile only 17.7
cents. As operating costs averaged
34.0 cents per revenue mile, the
conclusion seems inescapable that freight
earnings subsidized passenger service.51
In the late 1920s the seasonality that
had characterized passenger and freight
traffic since the railway's inception
all but disappeared. In 1926 the number
of revenue passengers carried in August
equalled only 84 percent of the winter
average, and after 1926 the railway no
longer added extra cars to its summer
base schedule to handle anticipated
heavier traffic loads. Yet the link to
tourism was not completely lost. In
spite of the low August passenger count
in 1926, revenue collected from
passenger fares was the highest of any month
that year. The average August rider paid
39.7 cents, 34 percent above the
January average of 29.5 cents. The
longer average rides of summer tourists
continued to affect revenue patterns,
even if those tourists were now compara-
tively few in number. August revenue
peaks persisted through 1938, the last
summer of passenger service, although in
each year the railway attracted its
greatest number of patrons per month in
the winter when it functioned as a
cold-weather substitute for the private
automobile.52
The traditional September harvest-season
freight peak also faded. While
September freight revenues in 1926 were
28.4 percent above the average for
the year, that figure dropped to 22.0
percent in 1927; in 1928 September
50. "NOR&P ICC Report,"
1923, 403, Box 100, OE papers; OPS Division Operating
Reports, 1927-1930, Box 129, OE papers;
"Motor Bus Reports," 1929, 1930, Records Group
1496, Ohio Historical Society; Hilton,
23; "Rates and Tariffs for Railway Service, The Ohio
Public Service Company," Box 134,
OE papers. The railway did not reduce its "corpse rate"
in 1927, keeping it at $3.00 between any
two stations, with no discounts to encourage regular
riding. The corpse had to be in a casket
and the casket in a "rough box," accompanied by "a
person in charge" who carried
applicable permits and paid the regular fare.
51. OPS Division Operating Reports,
1927-1930, Box 129, OE papers. These monthly re-
ports give operating statistics for each
division, electric, gas and transport. As each report
included year-earlier figures, the 1927
reports include 1926 comparative information. These
are the first monthly figures available
after those of 1917. OPS ended freight and package
express service on its
Mansfield-to-Shelby interurban in 1925. PUCO Report, 1925, 232.
52. OPS Division Operating Reports,
1927-1938, Boxes 129-30, OE papers.
146 OHIO HISTORY
freight revenues were somewhat below the
year's average, indicating the loss
of virtually the entire fruit and
produce crop to the motor truck. Increasingly
dependent for revenue on the bulk
shipment of minerals from the Marblehead
peninsula, the railway more and more
resembled a short-line steam railroad.
Perhaps for this reason OPS explored
converting the railway to steam in
1926, but lost interest when it discovered
that its village franchises forbade
steam operation on local streets.53
The steady ridership declines of the
late 1920s eventually led to sharp cut-
backs in service. In January 1930 OPS
reduced its base schedule to require
five cars rather than six, and a year
later cut back again from five to three.
Annual mileage dropped 36 percent, from
426,000 in 1929 to 271,000 in
1932, the first full year of reduced
service. Infrequent schedules and economic
hard times accelerated the decline in
ridership; patronage dropped 69 percent
between 1929 and 1932, from 218,500 to
67,700. The depression affected
freight service similarly, with revenues
falling 61.5 percent between 1929 and
1932; indeed, 1932 combined passenger
and freight revenues were the lowest
in the railway's twenty-five year
history. Only by slashing service and main-
tenance expenditures did OPS avoid
losses on operations.54
The rest of the 1930s were equally
bleak. Passenger counts fell to 57,000
in 1933, rose slowly to 77,500 in 1936,
and then began to fall again, reach-
ing a new low of 49,000 in 1938. In
hopes of generating ridership, OPS of-
fered heavily discounted fares which
rewarded regular patrons. A book of
twenty-five tickets for the four-mile
trip between Port Clinton and Gypsum
sold in 1934 for $1.50, a cost of six
cents per ride or 1.5 cents per mile; a
year later a book of forty tickets for
the eleven miles from Oak Harbor to Port
Clinton sold for seven dollars, roughly
the same cost per mile. In 1937 the
company offered a $1.50 weekend
round-trip fare between Toledo and
Marblehead, and a $1.00 Sunday-only
fare, a price justifiable only on the
grounds that hauling low-fare passengers
added more value than hauling
empty seats. But even at these prices
the railway could not compete success-
fully with the private automobile.55
Bus competition also affected revenues
in the 1930s. By mid-decade
Greyhound connected Toledo with Oak
Harbor on a long local route that ter-
minated in Delaware, Ohio, and in
February 1938 Gottleib Schuster put three
hundred dollars down on a second-hand
eleven-passenger bus and began busi-
ness as Port Clinton Coach Lines.
Connecting Port Clinton with Bowling
53. Ibid., 1927-1930; unsigned memorandum
to T[heodore] O. Kennedy, February 22,
1926, "Toledo Port Clinton and
Lakeside" folder, Box 132, OE papers.
54. OPS Division Operating Reports,
1929-1932, Box 129, OE papers; Delta [an employee
oriented company periodical], VIII
(January 23, 1931), 3, Box 138, OE papers.
55. "Rates and Tariffs for Railway
Service, The Ohio Public Service Company," Box 134,
OE papers.
Interurbans in the Automobile
Age 147
Green, Schuster paralleled the railway
for twenty miles from Port Clinton to
Elmore. Shortly thereafter Schuster
revived the route attempted by OPS ten
years earlier, linking Port Clinton,
Marblehead and Sandusky with one six-
teen-passenger bus, but gave that up the
following year in favor of a route
from Marblehead to Toledo. In 1939
Schuster cleared $1,900 after expenses;
with his minimal capital investment and
the relatively low operating costs of
small buses, he could eke out a
respectable living from a level of traffic far
below the minimum required to sustain an
interurban railway.56
By 1938 OPS had reduced its service to
six runs each way, at roughly two-
hour intervals between six in the
morning and six at night. In early 1939
Community Traction announced it would
convert its Starr Avenue streetcar
line to motor bus, eliminating OPS's
rail entry into Toledo. Choosing to
abandon passenger service rather than
terminate at the city line with a transfer
to city buses, OPS made its last
passenger run on July 11th.57
A review of the final twelve months of
passenger operation illustrates the
futility of continuing service. From
July 1, 1938, through June 30, 1939,
the railway operated 188,000 miles of
passenger service and carried 46,600
passengers, slightly less than five
percent of the 1914-15 peak. Collecting
$12,675 in fares, the railway produced a
meager 6.7 cents of revenue per mile
operated. Cars traveled almost empty.
With an average fare of twenty-seven
cents, the average ride did not exceed
fifteen miles. Spreading 46,600 passen-
gers riding fifteen miles apiece over
188,000 miles of scheduled service pro-
duced an average passenger load of 3.71
patrons riding in cars designed to seat
fifty-six. Not surprisingly, in spite of
freight revenues of $61,000, the rail-
way lost $11,900 on operations with an
operating ratio of 116 percent, mean-
ing the company spent $1.16 to produce
each dollar of revenue.
A comparison with the twelve months
following the cessation of passenger
service illustrates the heavy losses the
passenger business must have incurred
for many years. While freight revenues
increased to $106,000, blurring an
exact comparison, expenses still fell
from $86,000 to $65,700 and the road
achieved an operating ratio of 61.5
percent, its most favorable showing since
1912. In spite of increased freight
activity, power and labor costs each fell
about 50 percent, a combined $17,500.
Without the high costs and low rev-
enues of passenger carriage, the railway
could, in a prosperous year, cover the
expenses of its freight service.58
Given the extremely low levels of
patronage during the 1930s, it is reason-
able to ask why the company continued
passenger service until it literally lost
56. "Motor Bus Reports," 1938,
1939, Record Group 1496, Ohio Historical Society; "News
of the Road," Bus
Transportation, 23 (November, 1944), 69.
57. Hilton, 25, 28.
58. OPS Division Operating Reports,
1938-1940, Box 130, OE papers.
148 OHIO HISTORY
its way in Toledo in 1939. An internal
study in 1935 found transport to be
"of minor importance" to the
company, with service continued "only for rea-
sons of public policy and convenience of
the public as there is no possibility
of profiting from these
operations." In all likelihood the company considered
the provision of transport at a loss as
a means of maintaining good public re-
lations in an electric territory and a
way to mitigate the growing criticism in
the 1930s of utilities and utility
holding companies. There is no indication
that OPS ever envisioned a resurgence in
the fortunes of interurban rail trans-
port.59
As OPS anticipated when it purchased the
NOR&P in 1924, electricity
proved to be a far more lucrative
product than transport, with sales rising
from $302,500 in 1923 to $374,000 in
1925. OPS then reduced its Port
Clinton service district by about a
third, selling the portion closest to Toledo
to co-owned Toledo Edison. To manage
growing demand, OPS followed
connection to Lorain generating plants
with a complete rebuilding of its
Marblehead peninsula distribution
system. The company was not disap-
pointed: revenue in the reduced
territory grew from $251,000 in 1926 to
$277,000 in 1929, and in early 1930 the
company forecast a rosy future for
itself in Ottawa County, projecting
revenue growth to $343,000 in 1933 and
$697,000 in 1937. The depression, of
course, intervened; revenue peaked in
October 1929 and then started to fall,
first slowly and then more rapidly.
Annual sales declined every year through
1933 when revenues bottomed at
$213,000, but then began to rise,
reaching a new high of $298,000 in 1936
and $321,000 in 1937, less than half of
what the company had projected for
itself in 1930.60
While severe, the impact of the
depression on the Port Clinton district elec-
tric business did not create a major
crisis. The sales category which declined
most sharply, power to industrial users,
was also the category with the lowest
sales price per kilowatt. Other
categories, such as domestic, commercial and
municipal uses, declined only modestly.
Hence while kilowatt sales fell 37.2
percent between 1929 and 1933, revenue
declined only 23.3 percent. The
company's most profitable sales
categories were least affected by depression
declines. Indeed, the company partially
offset sales declines elsewhere by ex-
tending rural-domestic service, its most
expensive per-kilowatt category. The
150 customers outside of urban areas in
1928 grew to 306 in 1933, 746 in
1936, and 1,289 in 1939. Accounting for
only six percent of all users in
1928, rural-domestic customers constituted
32 percent in 1939; in addition,
59. "Benefits to Communities Served
by Ohio Public Service Company Resulting form
Holding Company Management,"
February 20, 1935 (typescript), 3, Box 135, OE papers.
60. PUCO Report, 1925, 225;
"Anticipated Progress, 1930-1937, The Ohio Public Service
Company," June 1, 1930
(typescript), Box 134, OE papers; OPS Division Operating Reports,
1927-1937, Boxes 129-30, OE papers.
Interurbans in the Automobile
Age 149
average annual kilowatt sales per rural
customer grew from 514 to 1,277.
Similarly, while the number of
urban-domestic customers increased a modest
15 percent between 1928 and 1939,
average annual consumption per house-
hold rose from 456 kilowatts in 1928 to
778 in 1939. Domestic consumers
may have on occasion deferred purchasing
new electric appliances, but they do
not seem to have restricted their use of
electricity in major ways, and Ohio
Public Service earned income sufficient
to pay dividends on its common stock
during each year of the Great
Depression.61
Conclusion
By late 1939 the transition of the
original TPC&LS was virtually com-
plete. What had begun as a promising
passenger-oriented transport entity
serving an economy centered around
agriculture and tourism survived as an
electric sales district of a regional
electric utility with an appended transport
anomaly, an electric rail line
interchanging car-load freight with steam rail-
roads. OPS continued freight operations
over all but the easternmost four
miles of track until the end of 1945,
although in most years expenses ex-
ceeded revenues. Disposing of the
railway in late 1945 to comply with
Securities and Exchange Commission
utility holding company regulations,
OPS sold the eleven miles nearest
Toledo, along with much of its rolling
stock, for $32,710 and abandoned the
rest of the line. After selling what it
could for scrap, OPS took a $962,000
capital loss, which the company esti-
mated would produce a $230,000 federal
income tax credit. New owners
maintained car-load freight service
between Ryan and Clay Center under the
name Toledo and Eastern Railroad until
changes in shipping patterns brought
about final abandonment in January
1958.62
In retrospect, the Toledo, Port Clinton
& Lakeside failed to develop a level
of traffic sufficient to justify its
construction. In its thirty-five years as a
passenger road its income never equalled
its full costs if depreciation and
amortization of debt are included. One
of the longest lasting Ohio interur-
bans, the TPC&LS was also one of the
first to fail. Its presumably forced
61. OPS Division Operating Reports,
1928-1939, Boxes 129-30, OE papers; Moody's
Manual of Investments: Public Utility Securities, 1923, 1255; 1939, 1569. See also Nye, 348-
51.
62. Hilton, 25-35; "OPS PUCO
Report," 1945, 227, Box 108, OE papers; "Rail
Abandonment," Bus Transportation
20 (January 1941), 55; "Cities Service Bus Lines Affected
by SEC Order," Ibid., 22
(September, 1943), 93. The Toledo and Eastern was purchased by
Alliance businessman L. P. Kulka; on the
board of directors were Curtis M. Shelter and W. E.
Hamaker who purchased the Alliance-based
Stark Transit Company from OPS in 1944. The
T&E paid its expenses plus a two
percent dividend ($1000) on its $50,000 capitalization in
1946, 1947 and 1948, the first dividends
paid since 1914. "Toledo and Eastern PUCO
Reports," 1946-1948, 101, 302, Box
156, OE papers.
150 OHIO HISTORY
sale in 1912 came while the industry
still found at least modest favor with
investors and Barstow willingly paid
three-fourths of the original cost. But
1912 was the best year in the road's
history, and it is unlikely that the prop-
erty would have brought half as much
several years later when interurbans had
ceased to offer investors the allure of
potential future revenues and profits.63
For Barstow the railway was indeed a
disaster. The steady growth in electric
sales was the only bright spot on the
NOR&P's balance sheet, but not until
the early 1920s did demand for power and
light provide sufficient net revenue
to offset the railway's annual losses.
The sale to Ohio Public Service for
$1,650,000 twelve years later was
something of a fluke. By 1924
money-losing interurbans did not sell for
anywhere close to their book value; they
either brought a small fraction of
their original cost or were abandoned
outright. The Cleveland and Eastern
provides an example. Failing to make its
operating expenses after 1921, the
company simply abandoned its lines from
Cleveland to Chardon and
Middlefield in 1925; the petition to the
PUCO cited three reasons why man-
agement believed revenue would never
again equal expenses: "Widespread use
of the privately owned passenger
automobile," "Growth of bus lines," and
"Increasing use of motor trucks for
hauling milk, farm produce and freight."64
But the C&E lacked an electric
territory, and it was the NOR&P's electric
business that OPS desired when it bought
the railway. Bailing Barstow out
of a railway investment gone awry was
the premium OPS paid to gain con-
trol of the promising Sandusky and
Ottawa County electric markets. In the
twenty-one years OPS owned the road it
never anticipated nor earned a return
on this investment.
Yet the railway was not without
accomplishment. In his brief 1917 histor-
ical sketch of Ottawa County Scott Stahl
noted that the TPC&LS brought a
new level of speed and convenience to
local travel, and that improved trans-
port helped to quiet agitation to move
the county seat from Port Clinton to
more centrally located Oak Harbor. But
in his next paragraph he proudly re-
counted recent improvements in the
county's road system, roads which were
the railway's ultimate undoing.65 Secondly,
the railway introduced electric
current to large areas of Ottawa County.
The role of interurbans in extending
electric technology to Ohio small towns
and farms remains unexplored; cer-
tainly the TPC&LS accelerated the
diffusion of this technology in its service
area. Indeed, in the long run it was the
powerhouse the railway built and the
wire it strung to power its cars, rather
than the cars themselves and the rails
63. Hilton and Due, 25-41, 209-12.
64. Ibid., 272; Electric Railway
Journal 63 (March 1, 1924), 348.
65. Scott Stahl, "Ottawa
County," in Nevin O. Winter, ed., A History of Northwestern Ohio,
Vol. I (Chicago, 1917), 528.
Interurbans in the Automobile
Age 151
on which they rode, which had the more
lasting impact on Ottawa County.66
Paradoxically, the only application of
electric technology to gain wide accep-
tance and then fail was also the first,
the application to local and regional
transport.
Motorized transportation on paved
highways proved to be more flexible and
more convenient. The motor car, motor
bus and motor truck in their various
applications successfully competed with
and eventually replaced interurban
railways as the transport modes of
choice. The Toledo, Port Clinton &
Lakeside, by enduring in spite of losses
until the eve of World War II, a
decade after most interurbans
disappeared, illustrates the manner in which mo-
torized technology superseded electric
rail, first in such areas as tourism and
hauling milk and produce, and then more
generally in all other areas of pas-
senger and freight transport, the
carload movement of area minerals excepted.
Much to the probable surprise of the
railway's original promoters, carload
mineral shipments and sales of electric
current proved to be the only lines of
business in which the railway achieved
long-term success.
66. Nye, 10-11,292.
DOUGLAS V. SHAW
Interurbans in the Automobile Age:
The Case of the Toledo, Port Clinton
and Lakeside
From the first decade of the twentieth
century until the early 1930s electric
interurban railways connected almost all
Ohio towns and villages of more
than 5000 population. With its numerous
cities and market towns within
reasonable proximity of one another,
prosperous agriculture, and generally fa-
vorable topography everywhere but in the
southeast, Ohio provided ideal terri-
tory for interurban development.
Promoted vigorously from 1890 until 1910,
interurbans quickly became important
components of regional transport sys-
tems; at the industry's height between
1914 and 1918 the Ohio system
reached its maximum of roughly 2800
miles.1
Built and operated in many respects like
urban street railways, interurbans
offered greater frequency of passenger
service and more rapid delivery of local
freight than did steam railroads. Most
offered service at no less than two-hour
intervals, headways far shorter than
those maintained on typical local railroad
lines. Increased convenience and
flexibility formed the core of interurban suc-
cess, and electric lines tended to
replace steam roads as the transport mode of
choice between points where the two competed
directly for traffic.2 Yet in the
long run the industry was not a success.
Most interurbans never developed
Douglas V. Shaw is Associate Professor
of Urban Studies in the Department of Urban
Studies, The University of Akron.
1. George W. Hilton and John F. Due, The
Electric Interurban Railways in America, second
printing (Stanford, 1964), 4-25; Report
of the Public Utilities Commission of Ohio for the Year
1917 (Springfield, Ohio,
1918), 645 (hereafter abbreviated as PUCO Report, [year]); George
S. Davis, "The Interurban Electric
Railways of Ohio," Street Railway Journal, 18 (August 3,
1901), 145-56. See also "The Latest
Ohio Interurban Map," Street Railway Review, 12 (March
20, 1904), 190-91.
2. Hilton and Due, 14-15; Guy Morrison
Walker, "The Why and How of Interurban
Railways," Street Railway Review, 14
(June 20, 1904), 365-68; Ernest L. Bogart, "Economic
and Social Effects of the Interurban
Electric Railway in Ohio," Journal
of Political Economy,
14 (December, 1906), 588-92. Within four
years of the opening of the Interurban Railway and
Terminal Company between Cincinnati and
Lebanon in 1902, for example, passenger traffic
on the Cincinnati, Lebanon and Northern
steam railroad fell 59 percent. John W. Hauck,
Narrow Gauge in Ohio: The Cincinnati,
Lebanon and Northern Railway (Boulder,
1986), 226-
27. On the development of freight
traffic, see Charles S. Pease, Freight Transportation on
Trolley Lines (New York, 1909).