The Great Railroad Builders

By E. J. Edwards





FIFTY years ago the railway mileage of the United States was approximately five thousand miles. Today that mileage has expanded to considerably more than two hundred thousand miles. The money invested in the railways that we had in operation in 1880 was comparatively a few millions. Today the railway systems of the United States represent an investment of three billions and a yearly earning capacity of hundreds of millions.

Within four or five years after the close of the Civil War, the inventor and the scientist had brought forward the ideas which have made possible this stupendous expansion of the American railway systems, and insured the great industrial and commercial growth of the country. These inventions were the air brake of Westinghouse the coupler of Janney, and the steel rail, which the Bessemer process made practicable. Without this equipment it would have been impossible to open up the great West beyond the Mississippi.


The first era of American railway development is that measured by the years between 1840 and 1865. The sole purpose of those who then invested their capital in railway construction was communication between two or more interior cities, or between an interior city and tide water. Irregular, short, independent, and often unconnected railway lines appeared here and there—almost all of them east of the Alleghanies and north of the Potomac—prior to 1850. No preeminently great constructive intellect, no man who fully, perceived and grasped the opportunity which the United States offered to the builders of railroads, is identified with that earlier epoch.

Sheffield, at New Haven, bought a canal, drained off its water, and constructed a railway upon the mule path, penetrating central New England as far north as Northampton, Massachusetts. The promoters of the Erie Railway, whose purpose was to connect the lakes with tide water, ran their road down to a little landing place upon the Hudson, built piers to the channel, and then learned one of the first lessons of the many that were taught in those days. That was that for the highest development of a railway a harbor or terminal must be sought, not at any convenient point upon river or sea, but at some center of commerce or manufacture. And so one after another the experiences out of which the later generation have built this colossal railway structure were being furnished here and there, one by one.


When Westinghouse came forward with his air brake and Janney with his coupler, and when it was demonstrated that the steel rail made possible a traffic which would have been impracticable with an iron rail, then there began the second era of our railway development. In it the best intellects and strongest creative forces of the time began to identify themselves with this most important of all the incidental and artificial impulses that have made the United States a world power.

Not in any one man were combined, in their finest development, the three distinctive capacities that have created and perfected our gigantic railway system. These three intellectual forces were genius for finance, engineering ability, and mastery of the complex details which the operation of a railway system involves. In some one of these three all the forces conspicuously identified with our railway development were trained. Commodore Vanderbilt combined two of them. He was trained in early life as a common carrier, although by water rather than by land, and he was also a self schooled, self reliant, and eminently successful financier. But he did not possess in a high degree the scientific or engineering ability, nor would he have ever been personally very successful as a practical operator.

To the south the elder Garrett, an operator taught in the first railway epoch, and a man of some prophetic vision, had by inspiration learned that a greater career than that of a mere coal carrier for the benefit of Baltimore was possible for the Baltimore & Ohio Railroad. He took his line over the Appalachian range, at whose foothills it had stopped, and brought it to a terminus upon the Ohio River. In Pennsylvania J. Edgar Thomson, and afterward Thomas A. Scott, had a broader vision than that possessed by Mr. Garrett. They foresaw the possibilities of the Ohio and the Mississippi valleys, and perceived that the highest development of the Pennsylvania system was dependent upon the mastery of lines that bisected Ohio and reached towards the Northwest, terminating at Chicago.


About that time, Commodore Vanderbilt made evident his constructive statesmanship by his purchase of various little railway lines in New York State. By a wearisome iteration of changing cars, these small roads made it possible to go by rail from New York to Buffalo in twenty four hours. Politics, finance, and engineering talent were all involved in the consolidation, and it was through the command of men skilled in these various vocations that at last the commodore was able to perfect a railway system stretching from Lake Erie to New York, reducing the time of transit by fourteen hours.

Having done this, his financial intuitions taught him that he had materialized lurking opportunity into visible and profit returning wealth; and it was to obtain marketable evidences of his success that he by one stroke of the pen added forty millions to the capital of his system. That was financing. Some called it watering the stock, but the public can scarcely have so esteemed it, since in the public market that stock has, excepting in years of depression, maintained itself at par or above.

As soon as he had perfected his system from New York to Buffalo, the elder Vanderbilt saw that its permanent strength was to be maintained through its mastery of connections with the metropolis of the West, and the later years of his life were devoted to the compassing of a secure trunk line that would command much of the traffic that was opened up beyond Chicago.


A little further south, by means of the schooling that the theodolite and the rodman's task gave to J. Edgar Thomson, and after him George B. Roberts, these two men were successively approaching the executive control of the vast Pennsylvania system. They were preeminently engineers, and they typified the relation which science and the actual work of railway building have had to the development of our national systems. Between these two came Colonel Thomas A. Scott, the superb cavalry leader of the railway army, that inspiring and magnetic genius who during the Civil War put aside his duties to do invaluable service to the government in transporting troops and supplies. When the war was ended, he brought back to the Pennsylvania the charm of his personality, and revealed his financial ability by his part in the erection of the Pennsylvania Company, a triumph of financial strategy whereby the control of the great railroad is secured against the perils of speculation. All these things combined to make of Colonel Scott the most attractive figure in the intensely exciting railway life of his time. He was also a masterly force as a practical operator, and he taught others many of their best lessons.

Later, Colonel Scott turned from his triumphs in Pennsylvania to what he deemed to be greater possibilities, the construction of a railroad from the Gulf of Mexico to a harbor upon the Pacific. All that he possessed was in this enterprise. His faith in it was supreme, but he did not live to see that faith justified. It remained for Jay Gould, who was the first to teach what profit there might be in the speculative mastery and utilization of railroads, to take the burden of this Texas Pacific from the shoulders of Colonel Scott.

It was J. Edgar Thomson's experience as an engineer that led him, a few years after the close of our Civil War, to import from England what he called ten miles of steel rails. The cost of these rails was a hundred and sixty six dollars a ton, and yet Mr. Thomson did not regard the price as prohibitive provided the rails were able to stand the traffic they were expected to bear. Four miles of them were laid at a place where the test was severe. In spite of certain imperfections, not inherent in the rail, they were found to fulfill the most glowing promises, and immediately the Pennsylvania began the equipment of its lines with steel rails, thereby setting an example to the managers of other systems. It soon became apparent that if the railroads were to carry the traffic of the great West, the steel rail was an absolute necessity.


In the West, beyond Chicago and the Mississippi, the impulse towards expansion was felt with even greater pressure than in the East. The little railroad that ran from Chicago to Freeport, Illinois, became the nucleus out of which the colossal Northwestern system has expanded. One of its earlier presidents reported that he had obtained near Elgin an ample supply of timber for the railroad as long as it existed. Twenty years later the general manager, J. D. Layng, reported that this supply would not furnish enough kindling wood for the company's locomotives for one year.

President Albert Keep and his associates, mastered by this impulse for expansion, and looking forward with the clear vision of business statesmanship, took that railroad across the trackless and desolate prairie full a thousand miles. After the rails had been put down, they carried a party of friends over the new line. When the inspection was ended, President Keep said

"Well, what do you think of it?"

His friends thought that his faith might wait many years for justification. Within two or three years the road was transporting westward two hundred carloads of emigrants daily. The wave of immigration that has with almost magic celerity pushed our frontiers further and further west, until there is no longer any frontier excepting the Pacific, responded instantly to the faith of those who were constructing railways over the prairies. The vast uninhabited tracts that these pioneers penetrated are today sending the fruit of their majestic harvests, valued at many millions, to feed their own countrymen and much of Europe.

A similar inspiration impelled C. P. Huntington upon the Pacific Slope, and James J. Hill in the far North, to dare, one from westward to eastward and the other from eastward to westward, to civilize great unpeopled regions with their steel rails. Mr. Huntington was trained a trader. He would have made a great merchant, and was in fact a successful one before he became a railway constructor upon a grand scale. He was also of high financial capacity. Mr. Hill went from the humblest of vocations to the details of transportation, and was therefore well fitted for the practical work of operation. He carried his nerves and enthusiasms upon the surface, while Huntington concealed his. The philosophy of both was the same, but its expression in speech and mannerisms and personality was very different.

Mr. Hill persuaded men so well that some of the great bankers of New York encouraged him with counsel and with funds, after he had demonstrated the feasibility of developing a little railway in Minnesota to a transcontinental line. Mr. Huntington was in great measure—partly through the aid of the government, for he was a master politician—his own financier.


Henry Villard, whose name is identified with the completion of the Northern Pacific system, should rank with those who have financed large railway propositions rather than with the great operators, engineers, or discoverers of hidden possibilities in the opening up of vast tracts. Mr. Villard made the completion of the Northern Pacific possible, and the fact that he was able to recover his power after having lost it by reason of the storms of 1884 justifies his title to a place among masterful railway financiers.

Jay Gould combined to a remarkable degree the three qualities which in their highest development have made our American railroads what they are. He ranked with the ablest of financiers, and often showed his ability in financing railroads both into and out of difficulties. His demoralizing methods, however, were abandoned early in life. His training as an engineer and surveyor, the statesmanlike vision which caused him to comprehend the possibilities of the Southwest, impelled him while still a young man to undertake the creation of a great Southwestern railway system. He lived long enough to inspire his son, George J. Gould, with his own enthusiasm, not long enough to witness the fruition of his ambition. The son, today master of a steel network that covers the great Southwest, has turned his eyes towards the East. At first a cautious conservator of the properties left to him by his father, he now seems to feel himself strong enough to bring his railway system across the Alleghanies to the seaboard.

Canada, official Canada, imperial Canada, perceiving the development of the republic to the south of her, sharing the British yearning for an independent route to the far east, undertook, as a great national work, a transcontinental system reaching from the Atlantic at Halifax to the Pacific at Vancouver.

William Van Horne, trained in railway service as a telegrapher in Illinois, and from that by successive steps attaining rank with the greatest of engineers and of executive forces, was called to Canada that this Canadian Pacific might be speedily and well completed. For this service he was knighted, and he is today contemplating a supplement to it through the opening up of a national railway system in Cuba. He is eminently an executive, an operator, and an engineer.

The great era of railway construction for the United States, at least for through lines, ended in the middle eighties. From 1885 until 1895 the country was digesting its enormous expenditures of capital, liquidating the colossal debt which they created in foreign markets, and waiting for the rich development of the new lands the railroads furrowed. A year or two later there were the first hints of what is to be the new era of railway development in the United States.


For twenty years the tendency had been to assimilate collateral lines, small branches and feeders, into comprehensive systems, so that the traffic of territory penetrated by a railroad could be protected. But competition had entailed vast wastage and demoralization, and when the courts and the legislatures declared that certain agreements like those of the Joint Traffic Association and the Trans Missouri Association were illegal, it became clear that either there must be some radical departure, or ultimately the government itself must be the owner of the railroads.

This came at a time when, by reason or the revival of business activity, and of an enormous excess of exports over imports—itself made possible by our railroad expansion—there was a great increase of surplus capital in the United States. Intuitively, tentatively, there began the new development, which was the combination of great systems within certain zones into one control, either sympathetic or direct—"the community of interest," as it was termed.

This movement brought a remarkable group of constructive financiers—Edward Harriman in the far West, the Rockefellers and James Stillman, of New York, and especially J. Pierpont Morgan—into the higher activities of railway expansion. Dominated by the men already named, and by Mr. Speyer and Mr. Schiff, private bankers of New York, by George F. Baker, by George Gould and Russell Sage, by the Belmonts, representing the Rothschilds, and by the financial interests that are identified with the Vanderbilt name, this movement seems inevitably to point to the concentration of all our railroads into five or six vast groups. Each group will control its own zone—in some cases intersected by the parallels of latitude, and in others by those of longitude. By this new system, say its organizers, ruinous competition shall be finally ended, and we shall see a demonstration of that true law of business prosperity which teaches how to obtain the greatest market and the greatest productive activity. Modern industrial science tells us that these things can be assured only by working with the utmost economy and at the lowest prices consistent with fair profit.

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