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

1 Prelude: The Omnipotent Pennsylvania Railroad

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S B J M S P B E 1 1 1S S S F F F M M M V V V E E E F F F  U U U I I I F F F P P P . . .O O O J J J 1 1 1 P P P U U U F F F O O O U U U 1 1 1F F F O O O O O O 4 4 4Z Z Z M M M 7 7 7B B B O O O J J J B B B S S S B B B J J J M M M S S S P P P B B B E E E After the Civil War, U.S. railroads rapidly reshaped the country’s economy, making possible mass production, large-scale mining and farming, and mass marketsforitall.Railroading,too,hadbecomeaspectaculargrowthindustry; capital was poured into building new lines seemingly everywhere—some of them soundly based, some purely speculative, and some that represented the honestbut often naïve hopes ofcommunities that hoped to have a bigger piece of the expanding economy. And with no federal regulation, rail rates gyrated between “whatever the traffic will bear,” where there was little or no competition , and uninhibited and often vicious rate wars where there was too much. The end of the war also ushered in the gradual creation of ever-larger and more powerful trunk-line railroad systems, the most powerful of which were the ones that dominated the industrial centers and large cities of the East and near-Midwest. As things shook down, there were three: the Pennsylvania Railroad, “Commodore” Cornelius Vanderbilt’s New York Central system, and the Baltimore & Ohio, the pioneering American railroad, whose birth certificate dated to 1827. By the mid-1870s, all three linked the Atlantic coast with the gateways of Chicago, Cincinnati, and St. Louis. (The perennially weak and victimized ErieRailroad was a fourthcontender, but its market penetration could never match its larger rivals.) Each of the “big three” was based in a different Atlantic port city: the Pennsylvania in Philadelphia, Vanderbilt (along with the Erie) in New York, and the B&O in Baltimore. Each, too, competed with one another in different ways: Vanderbilt had no direct presence in Prelude 5 Philadelphia or Baltimore, and at the time the B&O had none in Philadelphia or New York, while the PRR tapped all three ports. In common, though, all three fought for business through Chicago, Cincinnati, and St. Louis as well as in many other markets west of the Alleghenies. By 1873 the Pennsylvania (or “Pennsy,” as many called it, not always fondly)hadmadeitselftheEast’smostpowerfulandaggressivesystemandthe country’s leading business corporation, thanks to the teamwork of its shrewd but shy president, J. Edgar Thomson, and his ranking vice president, the ebullient , aggressive, and manipulative Thomas A. Scott. In the space of only 15 years, including time out for the Civil War, these two opposite but lethally complementarypersonalitieshadtransformedasingleHarrisburg–Pittsburgh main line into a sprawling system reaching New York Harbor, Washington, Chicago, Cincinnati, St. Louis, Louisville, and most of the important cities in between—and it was now extending into the Deep South. Along with the “big three” (plus the Erie) was a network of what today would be called large regional lines that were especially dense in New England and the eastern Pennsylvania anthracite country. The “anthracite roads” included the Delaware, Lackawanna & Western, the Lehigh Valley, Central RailroadofNewJersey,andthePhiladelphiaandReading—simplythe“Reading ” to almost everyone. The Pennsylvania system as it was in 1893. The Railroad That Never Was 6 The Reading needs some special attention for reasons soon seen. Its main lineconnected the two citiesofits corporate name, and by the end ofthe 1870s it had lines radiating from Reading and Philadelphia northwest to Shamokin, Sunbury, and Williamsport, Pennsylvania; north to Allentown and Bethlehem ; west to Harrisburg; and northeast to Bound Brook, New Jersey, where a Central Railroad of New Jersey connection gave it access to New York Harbor . In addition, its Philadelphia & Reading Coal & Iron Company subsidiary owned vast eastern Pennsylvania anthracite acreages and was the state’s dominantproducer.Besidesitshugecoaltraffic,therailroadhaddeeprootsin Philadelphia’s industrial and export-import markets and a strong presence in the New Jersey/New York area through the New Jersey Central partnership. Atthetime,infact,itwasclaimedthattheReadingwas“oneofthelargestcorporations in...