The railroad's name itself conveys the great dreams that its founders had for the future. Originally incorporated in 1894 as the Galesburg, Etherly & Eastern, the builders' dreams were a reflection of the day's mentality; a railroad would bring development and prosperity to towns along the way, commerce would flow because of the railroad. This mentality would lead to a rapid expansion of the railroad physical plant in several areas of the United States. In particular, the northeastern and midwestern United States would be overrun with railroads. Not all of those railroads would survive; our Galesburg & Great Eastern is one of those roads.
Because of the potential commerce generated by a new railroad, conflict and competition between communities was a common reality. This railroad line was initially built from Wataga, Illinois to the new mining town of Etherly, three miles south of what was to later become Victoria. Etherly was a company town, built largely at the direction of the Galesburg Coal Company, which had two shaft-type mines in the vicinity. The infant Victoria was only a farm support town, serving as the source of necessities for local farmers.
In 1893, there had been a business panic which disrupted America. Credit was no longer readily available, and personal savings had often been wiped out by bank failures. This bad economic spell continued through 1894, when a bitter labor strike began at the Pullman Company works in Chicago. At the same time, grain prices had been slowly dropping, causing hardships in farming communities such as Victoria. It soon also was discovered that the coal deposits at Etherly had become not commercially viable and the mines closed. The little railroad, founded in 1894, quickly went into bankruptcy in 1895, with the locomotive and other company assets sold to pay expenses. It has been observed that 318 railroads went bankrupt because of the financial panic of 1893. It is probable that the Galesburg, Etherly & Eastern was one of those casualties.
The economic situation in the US stabilized, and the remaining assets of the railroad line were sold in 1897 to a Henry Harms of Chicago. By 1898, the Galesburg & Great Eastern Railroad was formed and railroad service was begun to Victoria in that year. By 1899, Etherly had declined to the point that many of the town's prominent structures had been sold and moved to nearby Victoria. Yet, the Galesburg & Great Eastern continued to struggle. In the ensuing years, there was a brief flurry of competition when a second railroad in the area was planned and initial construction began. Because this second line was being built solely with local financing, it was undercapitalized and the construction of this second railroad soon was simply a dream. The G&GE was to be Victoria's sole railroad connection.
Finances of the railroad were always shaky, although local individuals continued to support the road financially. In 1914 Harms, the major investor in the road, died. His capital stock had never been properly conveyed to the G&GE holding corporation, leaving the road's future again in doubt. The matter was resolved in a Knox County court in 1915, and the line continued in operation. At the same time, the line's other investors built a grain elevator and cattle stockyard in 1915 at a location identified as "Alert", midway between Victoria and Wataga. Ultimately, local investors bought the road in 1916. By the 1920's, the railroad was operating two trains a day in each direction. But the area's fortunes rested upon the coal and grain trades, which were prone to boom and bust cycles. The Galesburg & Great Eastern fortune's rose and fell with these business cycles.
Two unrelated events were to prove to be another challenge to the G&GE line. In an era before mandatory deposit insurance, an abrupt bank closure would be devastating to a community. As The Great Depression ground along, the Victoria bank closed in 1931, decimating the railroad's capital which had been on deposit with that bank. To cut expenses, the railroad bought a 12-cylinder Lincoln, fitted it with flanged wheels, and used it to provide passenger & mail service. In 1933, the Lincoln was involved in a grade crossing altercation on July 4th. Litigation related to the grade crossing accident posed a substantial potential liability to the railroad. The matter was finally resolved to parties' satisfaction in late 1935, but the line's owners had seen the future. The accident had shown them that ownership of the G&GE also posed a massive financial risk. By the mid-1930's, the G&GE was little more than a right of way, with neither locomotives nor freight traffic. The arrival of the Central Indiana Coal Company would change that.
Coal mining financiers from Indiana had approached the road's investors about purchasing the line and its assets at about the same time. Initially, the G&GE owners had rejected their proposal, but when it was learned that these investors planned to build a branch line from their new mine to the Santa Fe at Dahinda, the G&GE owners quickly changed their minds. Ownership of the Galesburg & Great Eastern was transferred to the Central Indiana Coal Company in May, 1936. From that time until the end of operations in 1961, the G&GE was primarily a coal hauling railroad.
This 1937 entry from a car register of that era gives a clue as to what makes the G&GE interesting: