Again we have the old familiar story of the combination of factors leading to decline and eventual abandonment. Short haul passenger haulage, in which Union Traction excelled, actually diminished as commerce grew, because the private automoble could give a door to door service very difficult to duplicate by public carrier, railed or not.
L-C-L freight, with it attendant high transfrering and handling costs, was a natural for truck lines, with their comparatively light overhead costs. Bus competition, which was unregulated until the late 1920's, and jitneys cut into traction revenues just when improvements in equipment and routing were most needed.
Inabitility to make improvements soon became inability to maintain maintenance standards and dividends. As the spiral continued, gaining momentum, Union Traction's reputation and credit was not helped by an epidemic of train service accidents. Result: receivership to start out the year 1925.
Quoting Electric Traction, November 1925:
"The usual receiver's program is to inaugurate economies from which a fund can be gradually accumulated out of earnings to improve the property. This process was too slow for Mr. Brady (President, then Receiver). He knew that long before such a program could be carried out the road would have passed into the realm of deceased institution. Furthermore, on the basis of facts relating to the growth of the communities served he thought the Union Traction Co. was entitled to borrow money for new equipment. So he got it. Nearly half a million dollars of new capital for the pruchase of new equipment was secured on car trust certificates."
The fifteen steel cars numbered 427-441 were the result of this program and they went into the deluxe limited service of the Hoosierland on Monday, October 26th, 1925, a gala occasion.
Permission to abandon the never-profitable Anderson-Middletown branch was granted in 1925, after attempted improvements (better car, more service, special lower fare) failed to put it on a paying basis. During 1925 too, the Indiana Columbus & Eastern Traction line from Dayton to Union City was abandoned, ending the interchange that had kept the Muncie-Union City line out of the red.
Electric railway capitalists were not blind to the trend, and Samuel Insull was evidently convinced that interurbans which could be made over for fast passenger limited service and steam road interchange could be profitable. The dream of a super-interurban system, a consolidation of all the electric railways of the central states suddenly, after all these years, seemed nearer to fulfillment than ever before. The financial difficulties that the interurbans were in offered a seemingly golden opportunity to buy them up at far below cost and still leave plenty of credit that was then booming with an ominous, but unheard , rumble. Yes, plenty of credit that could be used to obtain the needed improvements.
As a preliminary to the consolidation deal the receiver was asked to secure abandonment of certain clearly useless branches....those that could never fit into the super-interurban scheme.
So it was that, on February 28, 1930, operations ceased on the Muncie-Union City division. And the last cars finally rolled over the Middletown branch, implementing the petition that had been granted five years sooner. Other petitions were on file pleading abandonment of Kokomo-Logansport and Marion-Wabash branches. With affairs in this state the property was sold to Midland United on July 2, 1930, and became INDIANA RAILROAD, to be beset with a whole new chain of circumstances leading to gradual demise.
So passed Union Traction into history.
The super-interurban, as far as Central Indiana was concerned, never quite made the grade.