My first post as a new member and as you can tell from the subject I am researching the history of the Whitcomb locomotive. My hope is to find a member here that lives near the California State Railroad Museum.

http://m.csrmf.org/

The mother load of Whitcomb company documents went to this museum and I'm too poor to travel there and spend the time needed to survey their holdings.

http://m.csrmf.org/library-and-collecti ... ollections



I've displayed Whitcomb history here in Rochelle, the home of the Whitcomb company.



I've discovered numerous errors on the internet relating to Whitcomb history and plan on editing Wiki and either do a website or a book - or both - if I can afford to.

If anyone can help me with the CSRM please contact me.

Steve

Welcome. I'm sure you will get some help from this forum.

You may be interested that the Whitcomb at Northwest Railway Museum has, in a sense, become a piece of playground equipment in the depot yard. The kids love it. Sometimes it is quite difficult for a parent to pry one out of the engineer's seat. Lots of "Whooa Whoos". She has an spark ignition engine, is chain driven, and has two speeds (forward and reverse). The radiator is not original and she now is standard gauge but was built as 3-foot gauge. She has boat tie downs on her flanks (above the front wheel) because she was used by the SP on the Oakland, CA docks.

She's very happy. Hey, look at those nice stairs!

http://railfan44.rrpicturearchives.net/ ... id=2761541

Thank you. I hope I can find someone. I've posted this same plea for help over at TrainBoard with no results.

The Whitcomb that you photographed with the wrong radiator is a cute one.

The Wiki article on Whitcomb has a number or errors in it:

http://en.wikipedia.org/wiki/Whitcomb_Locomotive_Works

First, the company was never named "Whitcomb Locomotive Works".

For a clue as to the actual name . . .



It amazes me how many errors are out there on the web with regards to this company.

Second error in the Wiki article is this . . .



Take a look at this document I just found two Mondays ago . . .



This is a court document from Baldwin entered in a suit that was filed in the Chicago Circuit Court in 1934.

I'll proceed to show other errors in the Wiki article and other web pages that claim historical background on Whitcombs.

This will keep the thread current and hope somebody from California will spot my plea.

Steve

To continue with the errors found all over the net surrounding the Whitcomb company history, here are some that I've found:

http://www.trainweb.org/westernrails/kn/kn-loco.html



I particularly like this one because of the "92 percent stock control". This claim only shows up in this web site - and it is wrong. But, give them an "A" for creativity and the precise "92 percent".

http://www.northeast.railfan.net/whitcomb1.html



This site got the year and name right, just left out a detail or two - like bankruptcy and previous Baldwin ownership of Whitcomb stock.

http://www.american-rails.com/whitcomb- ... works.html



This one is off the wall. The father, George Dexter, had essentially no hand in the design of the first locomotive in 1906. It was primarily his son, William Card Whitcomb and an engineer that William hired, William Franklin Eckert.



This error is repeated all over the internet.

The name "Whitcomb Locomotive "WORKS" was never used.



This work of creativity is repeated all over the net.

Take a look at this add from 1936:



Notice the name - "Whitcomb Locomotive Company".

I'll start posting the documents that set the history correct.

Steve

Here is the background to how, when and what degree Baldwin became involved in Whitcomb. This is straight from Baldwin in their court case in 1934 with William Card Whitcomb, president of the George D. Whitcomb Company. More about that suit to come.





In 1928, G. D. Whitcomb Company invited Baldwin to participate in a recapitalization program (issue and sell new stock) for the Whitcomb company. This was before George Houston became president of Baldwin in 1929.

On December 10, 1928 Baldwin purchased $537,000 in common and preferred stock giving Baldwin (in addition to Preferred stock) 22,500 out of a total of 50,000 shares of No Par Common Capital Stock.

The plaintiff in the above document refers to William Card Whitcomb, then president of Whitcomb.

Baldwin did not own a majority of Whitcomb stock. Whitcomb retained 4 out of the 7 board of directors while Baldwin placed 3 on the board. (control of the board would become a big issue later on as I shall show).

Up through this time, everything between Whitcomb and Baldwin was free of conflict.

That would change.

Steve

I got ahead of myself. The actual time when Baldwin gained 3 of the 7 board of directors is stated in the below document.

This is the original suit that W. C. Whitcomb filed in Chicago in 1934.



Paragraph 7 states that on March 18, 1930 that a special meeting was held of the Whitcomb stockholders and that Baldwin had nominated and caused to be elected 3 of its own employees to the Whitcomb board of directors.

The 3 Baldwin employee directors were:

1. George H. Houston - President of Baldwin
2. Charles Riddell - Chicago sales manager for Baldwin
3. Archibald H. Ehle - A Vice-President of Baldwin


The 3 Whitcomb employee directors were:

1. William Card Whitcomb - President Whitcomb
2. Carl Heim - Vice-President Whitcomb
3. Alvin E. Stein - Director of Whitcomb

The 7th director was:

Lloyd E. Work - Chicago Trust Company. This company held the mortgage bonds on the real estate of the Whitcomb company.

Again, up until this time realtions between Whitcomb and Baldwin had no conflict.

Steve

A quick diversion on a beautiful day. Took my son (15 years old and severely autistic to where he can't ride a bike so he rides in a bike trailer) and our dog on a bike ride/walk past the Rochelle Railroad Park and caught this passing of two UP trains. Quite the Kodak moment. Thank God for cell phones with cameras built in.



And by the way, my son loves trains.

Steve

At this time in Whitcomb history the Great Depression was starting. The stock market which had been rising in a speculative bubble now contracted violently in late October, 1929.

U.S. Gross Domestic Product in 1929 was $103.6 billion and contracted to $91.2 billion in 1930. Unemployment went from 3.2% in 1929 to 8.9% in 1930.

As went the U.S. economy, so went the U.S. railroads.

The U.S. railroad industry was one of the very few in the world to be completely owned by private capital with the other major exception being Ireland. Virtually all other nations had at least a partial state ownership of rail lines.

This meant that the entire U.S. railroad industry was completely dependent on private financial institutions for funding and raising capital.

As the banks folded and bond markets collapsed and stock values plummetted so did the money source for the railroads. Banks that were still open became increasingly reluctant to make new loans as they struggled to extract repayment of existing loans. Also, depositors were quick to remove funds from banks as fear of a run on the bank could quickly exhaust its reserves. The last depositors could face losing their entire assets as the reserves were all distributed to satisfy previous depositor demands. With diminished reserves came diminished loans. What meager reserves the banks did have they held on to in defense of possible runs. This situation is described as a "Keynesian Liquidity Trap" - named after the famous British economist, John Maynard Keynes. (My first love is economics and economic history.)





As American railroads found their business contracting, they also found it increasingly difficult to secure loans and raise capital. With reduced capital came reduced investment in new equipment - including locomotives

As went the U.S. railroads, so went the U.S. locomotive builders.

By late 1930 Whitcomb was in need of cash. A Whitcomb relative has told me that William C. was to the point of making payroll using his own account. At this time Whitcomb had a little over 100 employees.

Steve

To help keep Whitcomb operating, Baldwin in December 1930 made an offer for an unsecured loan for $125,000 to Whitcomb:





Whitcomb accepted under the condition that Baldwin would gain another board member for the duration of the loan. On December 24, 1930 the loan was created in the form of a 90-day promisory note. Here is the original promisory note from the Federal bankruptcy docket from the National Archives in Chicago:




Now the board of directors for Whitcomb was as follows:

The 4 Baldwin employee directors were now:

1. George H. Houston - President of Baldwin
2. Charles Riddell - Chicago sales manager for Baldwin
3. Archibald H. Ehle - A Vice-President of Baldwin
4. John p. Sykes - Vice-President of Baldwin

The 2 Whitcomb employee directors were:

1. William Card Whitcomb - President Whitcomb
2. Carl Heim - Vice-President Whitcomb

The 3rd Whitcomb employee director, Alvin E. Stein was forced to resign and was replaced by Mr. Sykes.

The 7th director was:

Lloyd E. Work - Chicago Trust Company. This company held the mortgage bonds on the real estate of the Whitcomb company. At this time Chicago trust owned about $95,000 of mortgage bonds that Whitcomb was obliged to pay interest on and were due to be paid back in full by 1937.

By this time Baldwin was invested to the amount of $537,000 in stock and now $125,000 for the promisory note for a grand total of $662,000.

Baldwin was increasingly concerned about the financial position of Whitcomb and repeatedly requested from Carl Heim who was now both Whitcomb Vice-President and Treasurer - for accounting information on the Whitcomb books.

But Mr. Heim stalled and gave incomplete accounting information.

Tension was now building between Baldwin and Whitcomb.

Steve

I'm very happy tonight. I have located the grandson of William Card Whitcomb. He has a lot of information and memories of his grandfather. Also, W. C. Whitcomb had two daughters, one of which married into the Harvey family of the Harvey Girls fame:

http://en.wikipedia.org/wiki/Fred_Harvey_Company

One of the daughters of this line still lives in Chicago and has done Whitcomb research. Planning on getting together in the next couple of weeks with these two and swap notes.

Steve

This is an amendment to The Whitcomb suit. It added a paragraph "17 A" which states that sometime before March 5, 1931 that Baldwin had been attempting to buy out William Whitcomb's and Carl Heim's stock and become complete owners of the company but the deal fell through.

During this time Baldwin had pressured Heim to allow an audit of the Whitcomb books.

Apparently Heim gave in and the audit was scheduled to begin on Monday, January 26, 1931.

W. C. Whitcomb must have decided to start his own look before the Baldwin accountants got there. He didn't like what he found:





Carl Heim, the Vice-President and Treasurer of the George D. Whitcomb Company was stealing money from the company.

Steve

I have no record of anything happening in February, 1931 but I suspect that Mr. Heim was being pressed for paying back the missing $75,000 he took from the company.



By Monday March 2, 1931 The Central Trust Company of Illinois was demanding payment on a $20,000 note due that day and an additional note for $105,000 due Thursday March 5, 1931 was also expected to be paid. At the time the Whitcomb company had an account with Central Trust Company with a cash balance of about $41,000 and Central Trust was threatening to seize that cash and apply it against the notes that were due. On March 5 Central Trust did exactly that with the result of:

" . . . depriving the said Company of its only substantial cash balance and rendering the Company unable to meet its payrolls and current operating expenses."



Very quickly, William Card Whitcomb and his company were falling into a major crises.



This photograph, the only one I have of William Card Whitcomb, was taken from his passport application in 1920 when W. C. W. was 51 years old.



Born October 3, 1868, W. C. Whitcomb by this date was 62 years old and his business that his father had started was on the brink of bankruptcy.

Steve

From pages 7,8 and 9 above taken from the William C. Whitcomb suit:

Before March 5, 1931 it is certain that Baldwin had its lawyers draw up the legal papers necessary to file for a voluntary bankruptcy. And I'm certain that Baldwin never told W. C. Whitcomb about it.

As for Baldwin promising Lloyd Work to pay off the mortgage bonds early that Mr. Work held on the Whitcomb factory, Mr. Work later would deny any such scheme. Besides, by this time Baldwin had enough board members without Mr. Work to get a majority vote on any motion.





In short, Baldwin took control of the George D. Whitcomb Company and passed a resolution to file for a voluntary bankruptcy in Federal Court in the Northern District of Illinois on March 5, 1931.

William Card Whitcomb voted against it, but he was in the minority.

Steve

Here is the petition for voluntary bankruptcy from March 5, 1931 for the George D. Whitcomb Company.

This was the beginning of a 7 year long court battle to settle the mess that was to unfold.





One of the first orders of business was to find the Vice-President Carl Heim, who now had a warrant for his arrest for the embezzlement of about $75,000. He was nowhere to be found.

Steve

A photo of the Whitcomb plant taken sometime before WW II.



As the bankruptcy began to investigate the finances of the Whitcomb Company, details of Mr. Heims' actions emerged.

It soon became apparent that the 3 Rochelle banks had known and assisted Mr. Heim in transfering funds from the Whitcomb account to his personal account, making the banks liable for the return of the funds.

This would greatly complicate matters.



At least some of the embezzled funds ended up used for the purchase of stocks for Mr. Heim.

This was done at probably the worst time in U.S. history to speculate in the stock market.

And a second look at this document reveals that some activity did occur in February of 1931. Mr. Heim was attempting to pay back some of the $75,000 he stole.

Steve