Published: October 11, 2008 10:41 pm            

Historical Perspective: D.J. Mackey, John R. Walsh and the Southern Indiana Railroad

Earlier this year the former Southern Indiana Railroad freighthouse at Seymour — on the National Register of Historic Places since 2003 — became the Jackson County Visitor Center.

Rededication of the historic building brings to mind the inaugural Southern Indiana Railroad passenger train trip from Terre Haute on Aug. 20, 1900: a special newspaper excursion for the benefit of the Terre Haute Express.

It also recalls the contributions of David J. Mackey and John R. Walsh, two rail barons who had major impacts on Indiana and the Wabash Valley.

A close friend of Crawford Fairbanks, Mackey lived in Terre Haute briefly. Walsh was beloved by quarrymen and coalmen throughout southern Indiana, including Bedford.

Walsh’s impact on the Wabash Valley deserves more attention than he can be given here.

On Jan. 1, 1900, eight railroads were serving Terre Haute. The Southern Indiana Railroad, successor to Mackey’s Evansville & Richmond Railroad (E&R) was the ninth.

Chartered in 1882, the Evansville & Richmond commenced passenger service July 6, 1890, with a round-trip between Seymour and Elnora in Daviess County.

An Evansville dry goods merchant, Mackey was one of the wealthiest men in Indiana before the end of the Civil War. In 1869, he paid more property taxes than anyone in Vanderburgh County.

One of Mackey’s early ventures was the Evansville & Terre Haute Railroad. He also acquired a major interest in the Evansville & Richmond Railroad and other railroads serving Evansville, the Lake Erie & St. Louis Air Line, Belleville, Centralia & East St. Louis Railroad and the Peoria, Decatur & Evansville Railroad (PD&E).

Married to one of the daughters of Judge John Law of Vincennes (Judge Law’s other daughter was married to Henry Curtis Gilbert of Terre Haute), Mackey bought the right-of-way of the Evansville & Richmond RR believing “The Mackey System” would eventually connect Evansville with Richmond and northern Indiana.

Evansville & Terre Haute Railroad guaranteed the bonds of the Evansville & Richmond. Traffic on the E&R partially opened on May 23, 1890 and was completed from Elnora to Seymour by the end of 1890.

Though Mackey owned much E&TH RR stock, he did not own it all. When creditors and other stockholders realized he was utilizing E&TH assets and revenues to finance construction for his other railroads, they rebelled. On Sept. 5, 1893, the Sullivan State Bank filed an application for receivership in the Vigo County courts.

One damaging allegation was that all of Mackey’s railroads had the same treasurer.

At the time of the application, the bank asserted that E&TH owed $76,000 and that the railroad was $36,000 in arrears.

Though Mackey and other E&TH officers were indignant over the receivership, the Financial Panic of 1893 soon proved more than they could handle. Meanwhile, E&R ceased operations before reaching its eastern terminus and was sold March 26, 1897 at a Sheriff’s Sale in Daviess County for $1,413,712.90.

Millionaire Terre Haute industrialist Crawford Fairbanks respected Mackey and, in 1897, put him to work as a bookkeeper at the Diamond Paper Mill in Anderson. In September 1900, the railroad magnate filed bankruptcy, listing liabilities of $577,705. The Illinois Central Railroad acquired the PD&E that year.

President of the Chicago National Bank, The Equitable Trust Company and The Chicago Chronicle, Walsh bought the E&R in October 1897 for $179,000 and changed its name to “The Southern Indiana Railroad.” He also acquired the Bedford Belt Railroad.

By early 1898, Southern Indiana was handling passenger and mail traffic between Elnora and Bedford. On Sept. 28, 1898, one of its passenger trains struck a southbound Evansville & Indianapolis Railroad passenger train, killing E&I engineer George Peyton.

Later that year, Walsh announced that he intended to “push into the Indiana coalfields,” building one rail line to Pleasantville and Sullivan and another to Linton and Terre Haute. Walsh also built resort hotels at Trinity Springs and Indian Springs.

The decision to build a railroad all the way to Terre Haute and, perhaps, farther north, was confirmed Sept. 10, 1899. In October, the railroad began advertising for men to work on laying the Linton to Terre Haute extension.

A new limestone passenger depot opened in Bedford on March 5, 1900. The Seymour station opened around the same time. Each day workers came closer to Terre Haute but there was concern about Walsh’s failure to obtain permission to enter Terre Haute or use Union Depot.

Undaunted by those challenges, Walsh bought an ad in a special Historical Industrial Edition of the Terre Haute Express to advertise Southern Indiana Railroad’s arrival in Terre Haute. The edition was scheduled for publication in October 1900.

On Aug. 20, Walsh’s railroad escorted eight Express employees on a trip to Seymour to accumulate data and photographs for use in the special newspaper edition. The trip was nonstop (except to permit a passing train to get by) and included a side trip to some of Bedford’s famous limestone quarries.

The trip was hosted by Henry H. Roseman, Southern Indiana’s Passenger and Freight Agent, and J.W. Thompson, General Superintendent.

Abandoning all plans to build to Richmond, Walsh negotiated trackage rights on the Big Four between Westport and Greensburg at Southern Indiana’s eastern terminus. Unable to negotiate agreements for the use of railroads north of Terre Haute, he built his own line, reaching Humrick, Ill., in 1903, and Chicago Heights in 1907.

As America entered a recession in 1907, Walsh discovered he had stretched himself too thin. Two of his banks failed and Walsh was charged with 180 violations of federal banking laws. Terre Haute attorney Samuel R. Hamill defended him.

Despite Hamill’s persuasive final argument, on Jan. 18, 1908 a Chicago jury found Walsh guilty of 54 counts of misapplication of bank funds. He was sentenced to five years at Leavenworth penitentiary. He was found not guilty of the 126 remaining charges.

Working day and night on Walsh’s behalf, Hamill contracted pneumonia and died on Jan 24, 1908, barely a month after his 50th birthday.

The Southern Indiana went into receivership in November 1910 and was reorganized as the Chicago, Terre Haute & Southeastern Railroad. That railroad became part of the Milwaukee Road in the early 1920s.

        

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