The Chicago Tunnel Company was the builder and operator of a narrow-gauge railway freight tunnel network under downtown Chicago, Illinois. This was regulated by the Interstate Commerce Commission as an interurban even though it operated entirely under central Chicago, did not carry passengers, and was entirely underground. It inspired the construction of the London Post Office Railway. History Initial tunnels The city of Chicago granted the newly formed Illinois Telephone and Telegraph company the rights to construct utility tunnels under the streets of Chicago in 1899 to carry its planned network of telephone cables. Initial plans for the tunnels called for filling them with phone cables, leaving a by passage for maintenance. When the city refused to permit manholes through which cable could be unreeled into the tunnels, the plans were changed to include rails for hauling cable spools through the tunnels. The city was largely unaware of the nature of the tunneling, and the first of tunnel were excavated somewhat covertly, working from the basement of a saloon and carting away the spoil after midnight. Initially, the intended purpose of the narrow gauge railroad below the telephone cables was limited to hauling out excavation debris and hauling cable spools during the installation of telephone lines, but in 1903, the company renegotiated its franchise to allow the use of this railroad for freight and mail service. In early 1905, the system was taken over by the Illinois Tunnel Company. By this time, of a projected of tunnel had been completed. The actual construction work was subcontracted to the Illinois Telephone Construction Company, under the management of George W. Jackson (1861–1922). Refinancing By 1904, the first round of financing for tunnel system construction had largely been spent. A second round of financing was arranged by James Stillman of the National City Bank of New York City, with public support from E. H. Harriman, Jacob H. Schiff, and Patrick A. Valentine, all directors of that bank. With this financing, the Chicago Subway Company, incorporated in New Jersey, became a new holding company for the tunnel system. The Chicago Warehouse and Terminal Company was an affiliate, formed in 1904 to construct and operate terminal facilities for interchanging freight with railroads and other carriers. The Illinois Tunnel Company continued to expand the tunnel system and serve a growing customer base until 1908, when the employees moved to join the Amalgamated Association of Street and