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Monon tries to take over the South Shore

In 1964, Monon President William Coleman attempted to make a major move. The Monon quietly, until it was reported in trade press, acquired 20% of the stock of the Chicago, South Shore and South Bend Railroad. The move was cloaked at first as merely an "investment" for the Monon, but discussion for joint operations, and the addition to the map of the Hoosier Line in the Monon's 1963 Annual Report, left limited doubt about the long term goals of Coleman.

At first glance, the CSS&SB seemed a particular addition to the Monon. After all, the 90 mile South Shore was the last of America's interurban lines and was saddled with electric passenger service from Chicago to its end point at South Bend, IN. But for Coleman's lan to entrench Monon around the base of Lake Michigan, the CSS&SB was a prime acquisition. Not the least important attribute of the South Shore was that it served Indiana's Burns Ditch lakefront, where various steelmakers were expecting to expand mill operations. And, it should also be mentioned that one of the largest protestors of a proposed Monon Michigan City coal dock plans was the South Shore.

With appeals to the hearing examiner's approval of the Monon's plan to be filed with the ICC in early 1964. It made sense to bring CSS&SB into the Monon family, thus removing the railroad that had the most to lose by the Monon's expansion in Michigan City. Unfortunately for the Monon, the CSS&SB proved to be a hostile merger partner.

The South Shore did want a merger partner, but a different one. In its 1963 Annual Report, South Shore had gone so far as to show with maps how it would fit into three major eastern roads. CSS&SB wanted a larger mate, a partner more secure than it viewed the Monon. In March of 1964, the South Shore refused to seat a Monon Director on its board and in June, the South Shore filed in U.S. District Court for a restraining order to prevent the Monon from adding to its holdings until the ICC could rule on the legality of Monon's stock purchases. The South Shore suggested that in addition to Monon's 20% ownership, parties friendly to the Monon held another 20%. Legal battle and maneuvering continue through the summer of 1964 as the ICC refused to intervene.

In March of 1965 the deal to acquire the CSS&SB collapsed. The Chesapeake & Ohio Railway proclaimed itself a major stochholder of the South Shore and applied to the ICC for control of the railroad. Having found larger parent it had envisioned, the South Shore board immediantly backed C&O's proposal. Another battle awaited the Monon.

Plenty of legal ranglings folowed. The Monon reacted by calling for an investigation of all C&O stock purchases. By April, the whole stock matter and the purchases of both the Monon and C&O were under investigation by the ICC. Both railroads kept fighting, but by the end of May 1965 CSS&SB had asked the ICC to reject Monon's bid for control. In the end a truce was called between the Monon and C&O and an agreement was reached. The Monon came to realize that the odds were firmly against them. By the end of the year the Monon agreed to withdrawl its bid for control of the South Shore in exchange for trackage rights on the CSS&SB into Burns Harbor and between Michigan City and the Indiana-Illnois state line, pending C&O control. The Monon also agreed to sell C&O its 60,000 shares of stock if and when the ICC approved C&O control of the South Shore. The C&O did take control of the CSS&SB in 1967 and Monon sold its stock. The trackage rights were never significantly used.

-Excerpts from Monon, The Hoosier Line, by Steve and Gary Dozall-


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