The Railroad That Never Was: Vanderbilt, Morgan, and the South Pennsylvania Railroad

4 Vanderbilt Takes Charge

30  7B O E F S C J M U
U B L F 4
$I B S H F 7 7B B O O E E E F F S S C C C J J J M M M U U
U U B B L L L F F 4 4 $ $I I I B B S S H H H F F No one knows precisely how and when Vanderbilt gained control of the old South Penn company. Secret negotiations were carried on through agents, so one can only spot names and dates in the company records and make associations . Up to late 1881 the dormant railroad had been in the hands of those ostensibly independent Reading, Pennsylvania, businessmen with implied ties to either the McCalmonts or Philadelphia & Reading Railroad; veteran civil engineer James Worrall remained its nominal head, his tenure now approaching 20 years. ButthingschangedabruptlyonNovember12ofthatyear.Onthatdatethe SouthPennheldadirectors’meeting,atwhichanassortmentofNewYorkand Philadelphia “investors” presented themselves, headed by a 35-year-old New York lawyer named Reon Barnes. Barnes and the nine members of his group each offered to buy a nominal three shares each immediately, while Barnes personally committed himself to purchasing 7,000 shares, giving him clear control of the company. The money was to be strictly dedicated to starting work on the railroad. Although Barnes had done some railroad legal work, he appeared to have no direct ties to any railroad company or specific financial interests. Barnes’s proposal was accepted immediately, clearly indicating that the path had been cleared by earlier, unrecorded negotiations. Several of the olddirectorsfromReadingthenresignedandwerereplacedbyBarnesandfive other newcomers who, like Barnes, were unconnected to other railroads, industries ,orfinancialinstitutions.ThenewSouthPennboardincludedSilasW. Vanderbilt Takes Charge 31 Pettit, Horace Pettit, and William G. Wise, all of them noted Philadelphia corporate lawyers.1 (At some later date following formal Vanderbilt syndicate control, some $336,300 was paid to what were shown on the South Penn books as its “promoters ,” unnamed but probably including Worrall, whose patience had finally paid off.)2 Afterward everything started moving at once. Having now assumed personal control of the company, Reon Barnes charged himself with arranging a new survey for the railroad; to head it, he picked New York–based consulting engineer Oliver Weldon Barnes. (Despite their last names, the two Barneses were not directly related.) The 58-year-old Oliver Barnes certainly knew the territory; in 1847 he had made the preliminary surveys for the Pennsylvania Railroad’s Western Division and afterward was chief assistant engineer for its final location and construction. Following that he became chief engineer for the original Pittsburgh & Connellsville Railroad in 1854, then went back to the Pennsylvania before moving on to New York and New England in 1860. Among his projects there was directing location or construction of the Dutchess & Columbia, the Boston, Hartford & Erie, and the Connecticut Western railroads. He began his exhaustive South Penn work in the cruel month of December 1881.3 Then, on December 8, the newly reconstituted South Penn board voted to issue 84,000 new stock shares and increase the railroad’s bonded debt to $15 million—a clear sign that something serious was up. Barnes and Silas Pettit appointed themselves as a committee to begin buying right-of-way property.4 MoreactioncameattheJanuary12,1882,meeting.First,anonentitynamed Richard K. Sheldon was named the South Penn’s president to replace James Worrall, who remained as a director for another 21 months. Oliver Barnes gave a preliminary survey report covering the line from the Susquehanna at Marysville (then the South Penn’s projected eastern terminal) to the Pennsylvania –West Virginia state line near Wheeling, and the board authorized immediate construction on a short stretch through the “Narrows” of the Raystown Branch of the Juniata between Everett and Bedford, to head off a rival project.Amonthlater,ReonBarnespaidthelastinstallmentofhis7,000-share purchase contract, cementing his control, and the South Penn’s corporate office moved from Reading to Philadelphia. (Later it would move back to Harrisburg .) At this point, the board remained a faceless collection of lawyers and unknowns, including Richard Sheldon’s brothers, George and Archie.5 NowhereinallofthisdidthenameofVanderbiltoranyofhisregularassociates appear. Yet unquestionably Reon Barnes and his group were Vanderbilt The Railroad That Never Was 32 Oliver W. Barnes, a railroad civil engineer with special experience in mountain surveying and building, was hired to direct the extensive South Penn surveys and remained as its senior consulting engineer until construction stopped in 1885. Hagley Library. Vanderbilt Takes Charge...