Scam or bad engineering, too many years have passed to be entirely sure. They did run trains, or more properly, interurbans; they even ran their own amusement park!
What'm I on about? ...Gimme a minnit; this'n's good. Questions first:
What's the shortest distance between two points? Why are rails-to-trails projects popular with bicyclists and pedestrians? If you said, "A straight line," and "Easy grades and gentle curves," go to the head of the class!
Better yet, go to offices of The Chicago-New York Air Line...oops, you missed 'em. But in 1906, they had a plan: to speed travelers from Chicago to New York City in ten hours (for ten bucks, call it $200-odd in those Federal greenbacks clogging your wallet) on a track so straight and flat it gave surveyors migraines. One straight line, straight through, eat-your-heart-out, 20th Cent. Ltd. They even built and ran trains on a few miles of track in and around LaPorte, Indiana (stops included the aforementioned amusement park) before going belly-up in 1917.
It wasn't really an engineering shortfall that did 'em in -- the Ancient Egyptians would've had the skills to get 'em through Indiana and Ohio and the Glorious Imperial Romans actually built comparable rights-of-way. But the banks were too small. They needed 742 miles of track, straight and level; they built, at staggering expense, right around ten miles and teetered on the slippery brink of bankruptcy from Day One 'til they finally fell. Not even high-order Masons could have guessed what the price of crossing Pennsylvania straight and level might've come to.
Remember this little lesson the next time high-speed rail comes up. The engineering's easy. Folks did it with steam and horses before Woodrow Wilson sent young men off to finish up the Great War. Paying for it's the hard part; speed isn't cheap.
(PS: y'know what killed streetcars and interurbans? --Okay, okay, the flivver; but even after that, they were hangin' on, keepin' little old ladies and teenagers from clutterin' the streets, right up until Mr. Roosevelt's government, still trying to Do Something about that darn Depression and those wicked-evil fatcats who were hurtin' the little people, handed out the Public Utility Holding Act of 1935, which forever sundered power companies from railways. Unable to get their electricity at dealer cost, the traction companies saw their last fragile margin of profit crumble; the final interurban left Indianapolis in 1941, never to return. Yeah, they Did Something, all right. Remember it the next time you're trapped behind blue hair or T-boned by a texting teen).
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