Chapter 17
To return to the conference at Saratoga, the New York Central, the Pennsylvania, and the Erie came to the conclusion that they must have the co-operation of the Baltimore and Ohio. As Mr. Garrett, president and controlling owner of that road, would not come to the conference, the members decided that the emergency was so great that they must go to him. This was probably the most disagreeable thing Commodore Vanderbilt ever did. The marvellous success of his wonderful life had been won by fighting and defeating competitors. The peril was so great that they went as associates, and the visit interested the whole country and so enlarged Mr. Garrett's opinion of his power that he rejected their offer and said he would act independently. A railway war immediately followed, and in a short time bankruptcy threatened all lines, and none more than the Baltimore and Ohio.
The trunk lines then got together and entered into an agreement to stabilize rates and carry them into effect. They appointed as commissioner Mr. Albert Fink, one of the ablest railway men of that time. Mr. Fink's administration was successful, but the rivalries and jealousies of the lines and the frequent breaking of agreements were too much for one man.
The presidents and general managers of all the railroads east of Chicago then met and formed an association, and this association was a legislative body without any legal authority to enforce its decrees. It had, however, two effects: the disputes which arose were publicly discussed, and the merits of each side so completely demonstrated that the decision of the association came to be accepted as just and right. Then the verdict of the association had behind it the whole investment and banking community and the press. The weight of this was sufficient to compel obedience to its decisions by the most rebellious member. No executive could continue to hold his position while endeavoring to break up the association.
It is one of the most gratifying events of my life that my associates in this great and powerful association elected me their president, and I continued in office until the Supreme Court in a momentous decision declared that the railroads came under the provision of the Sherman Anti-Trust Law and dissolved these associations in the East, West, and South.
It was a liberal education of the railway problems to meet the men who became members of this association. Most of them left an indelible impression upon the railway conditions of the time and of the railway policies of the future. All were executives of great ability and several rare constructive geniuses.
In our system there was John Newell, president of the Lake Shore and Michigan Southern, a most capable and efficient manager. Henry B. Ledyard, president of the Michigan Central, was admirably trained for the great responsibilities which he administered so well. There was William Bliss, president of the Boston and Albany, who had built up a line to be one of the strongest of the New England group.
Melville E. Ingalls, president of the Cleveland, Cincinnati, Chicago and St. Louis, had combined various weak and bankrupt roads and made them an efficient organization. He had also rehabilitated and put in useful working and paying condition the Chesapeake and Ohio.
Ingalls told me a very good story of himself. He had left the village in Maine, where he was born, and after graduation from college and admission to the bar had settled in Boston. To protect the interests of his clients he had moved to Cincinnati, Ohio, and rescued railroad properties in which they were interested. When his success was complete and he had under his control a large and successfully working railway system, he made a visit to his birthplace.
One evening he went down to the store where the village congress was assembled, sitting on the barrels and the counter. They welcomed him very cordially, and then an inquisitive farmer said to him: "Melville, it is reported around here that you are getting a salary of nigh unto ten thousand dollars a year."
Mr. Ingalls, who was getting several times that amount, modestly admitted the ten, which was a prodigious sum in that rural neighborhood. Whereupon the old farmer voiced the local sentiment by saying: "Well, Melville that shows what cheek and circumstances can do for a man."
I recall an incident connected with one of the ablest of the executives in our system. One day we had a conference of rival interests, and many executives were there in the effort to secure an adjustment. For this purpose we had an arbitrator. After a most exhausting day in the battle of wits and experience for advantages, I arrived home used up, but after a half-hour's sleep I awoke refreshed and, consulting my diary, found I was down for a speech at a banquet at Delmonico's that night.
I arrived late, the intervening time being devoted to intensive and rapid preparation. I was called early. The speech attracted attention and occupied a column in the morning's papers. I was in bed at eleven o'clock and had between seven and eight hours' refreshing sleep.
On arriving at our meeting-place the next morning, one of the best-known presidents took me aside and said: "Chauncey, by making speeches such as you did last night you are losing the confidence of the people. They say you cannot prepare such speeches and give proper attention to your business."
"Well," I said to him, "my friend, did I lose anything before the arbitrator yesterday?"
He answered very angrily: "No, you gained entirely too much."
"Well," I then said, "I am very fresh this morning. But what did you do last night?"
He answered that he was so exhausted that he went to Delmonico's and ordered the best dinner possible. Then he went on to say: "A friend told me a little game was going on up-stairs, and in a close room filled with tobacco smoke I played poker until two o'clock and drank several high-balls. The result is, I think we better postpone this meeting, for I do not feel like doing anything to-day."
"My dear friend," I said, "you will get the credit of giving your whole time to business, while I am by doing what refreshes my mind discredited, because it gets in the papers. I shall keep my method regardless of consequences."
He kept his, and although much younger than myself died years ago.
George B. Roberts, president of the Pennsylvania, was a very wise executive and of all-around ability. Frank Thompson, vice-president and afterwards president of the same road, was one of the ablest operating officers of his time and a most delightful personality. Mr. A. J. Cassatt was a great engineer and possessed rare foresight and vision. He brought the Pennsylvania into New York City through a tunnel under the Hudson River, continued the tunnel across the city to the East River and then under the river to connect with the Long Island, which he had acquired for his system.
D. W. Caldwell, president of the New York, Chicago, and St. Louis, added to railway ability wit and humor. He told a good story on Mr. George Roberts. Caldwell was at one time division superintendent under President Roberts. He had obtained permission to build a new station-house, in whose plan and equipment he was deeply interested. It was Mr. Roberts's habit, by way of showing his subordinates that he was fully aware of their doings, to either add or take away something from their projects.
Caldwell prepared a station-house according to his ideas, and, to prevent Roberts from making any essential changes he added an unnecessary bay window to the front of the passengers' room. Roberts carefully examined the plans and said: "Remove that bay window," and then approved the plan, and Caldwell had what he wanted.
Caldwell used to tell of another occasion when on a Western line he had over him a very severe and harsh disciplinarian as president. This president was a violent prohibitionist and had heard that Caldwell was a bonvivant. He sent for Caldwell to discipline or discharge him. After a long and tiresome journey Caldwell arrived at the president's house. His first greeting was: "Mr. Caldwell, do you drink?"
Caldwell, wholly unsuspicious, answered: "Thank you, Mr. President, I am awfully tired and will take a little rye."
Mr. E. B. Thomas, president of the Lehigh Valley, was a valuable member of the association. The Baltimore and Ohio, as usual, had its president, Mr. Charles F. Mayer, accompanied by an able staff. The Erie was represented by one of the most capable and genial of its many presidents, Mr. John King.
King was a capital story-teller, and among them I remember this one: At one time he was general manager of the Baltimore and Ohio under John W. Garrett. In order to raise money for his projected extensions, Garrett had gone to Europe. The times were financially very difficult. Johns Hopkins, the famous philanthropist, died. His immortal monument is the Johns Hopkins University and Medical School. Everybody in Baltimore attended the funeral. Among the leading persons present was another John King, a banker, who was Hopkins's executor. A messenger-boy rushed in with a cable for John King, and handed it to John King, the executor, who sat at the head of the mourners. He read it and then passed it along so that each one could read it until it reached John King, of the Baltimore and Ohio, who sat at the foot of the line. The cable read as follows: "Present my sympathies to the family and my high appreciation of Mr. Johns Hopkins, and borrow from the executor all you can at five per cent. Garrett."
Commodore Vanderbilt was succeeded in the presidency by his son, William H. Vanderbilt, who was then past forty years old and had been a successful farmer on Staten Island. He was active in neighborhood affairs and in politics. This brought him in close contact with the people and was of invaluable benefit to him when he became president of a great railroad corporation. He also acquired familiarity in railway management as a director of one on Staten Island.
Mr. William H. Vanderbilt was a man of great ability, and his education made him in many ways an abler man than his father for the new conditions he had to meet. But, like many a capable son of a famous father, he did not receive the credit which was due him because of the overshadowing reputation of the commodore. Nevertheless, on several occasions he exhibited the highest executive qualities.
One of the great questions of the time was the duty of railroads to the cities in which they terminated, and the decision of the roads south of New York to have lower rates to Philadelphia and Baltimore. New York felt so secure in the strength of its unrivalled harbor and superior shipping facilities that the merchants and financiers were not alarmed. Very soon, however, there was such a diversion of freight from New York as to threaten very seriously its export trade and the superiority of its port. The commercial leaders of the city called upon Mr. Vanderbilt, who after the conference said to them: "I will act in perfect harmony with you and will see that the New York Central Railroad protects New York City regardless of the effect upon its finances." The city representatives said: "That is very fine, and we will stand together."
Mr. Vanderbilt immediately issued a statement that the rates to the seaboard should be the same to all ports, and that the New York Central would meet the lowest rates to any port by putting the same in effect on its own lines. The result was the greatest railroad war since railroads began to compete. Rates fell fifty per cent, and it was a question of the survival of the fittest. Commerce returned to New York, and the competing railroads, to avoid bankruptcy, got together and formed the Trunk Line Association.
New York City has not always remembered how intimately bound is its prosperity with that of the great railroad whose terminal is within its city limits. Mr. Vanderbilt found that the railroad and its management were fiercely assailed in the press, in the legislature, and in municipal councils. He became convinced that no matter how wise or just or fair the railroad might be in the interests of every community and every business which were so dependent upon its transportation, the public would not submit to any great line being owned by one man. The Vanderbilt promptness in arriving at a decision was immediately shown. He called upon Mr. Pierpont Morgan, and through him a syndicate, which Morgan formed, took and sold the greater part of Mr. Vanderbilt's New York Central stock. The result was that the New York Central from that time was owned by the public. It is a tribute to the justice and fairness of the Vanderbilt management that though the management has been submitted every year since to a stockholders' vote, there has practically never been any opposition to a continuance of the Vanderbilt policy and management.
Among the most important of the many problems during Mr. Vanderbilt's presidency was the question of railway commissions, both in national and State governments. In my professional capacity of general counsel, and in common with representatives of other railroads, I delivered argumentative addresses against them. The discussions converted me, and I became convinced of their necessity. The rapidly growing importance of railway transportation had created the public opinion that railway management should be under the control and supervision of some public body; that all passengers or shippers, or those whose land was taken for construction and development, should have an appeal from the decision of the railway managers to the government through a government commission.
As soon as I was convinced that commissions were necessary for the protection of both the public and the railroads, I presented this view to Mr. Vanderbilt. The idea was contrary to his education, training, and opinion. It seemed to me that it was either a commission or government ownership, and that the commission, if strengthened as a judicial body, would be as much of a protection to the bond and stock holders and the investing public as to the general public and the employees. Mr. Vanderbilt, always open-minded, adopted this view and supported the commission system and favored legislation in its behalf.
In 1883 Mr. Vanderbilt decided, on account of illness, to retire from the presidency, and Mr. James H. Rutter was elected his successor. Mr. Rutter was the ablest freight manager in the country, but his health gave way under the exactions of executive duties, and I acted largely for him during his years of service. He died early in 1885, and I was elected president.
The war with the West Shore had been on for several years, with disastrous results to both companies. The Ontario and Western, which had large terminal facilities near Jersey City on the west side of the Hudson, ran for fifty miles along the river before turning into the interior. At its reorganization it had ten millions of cash in the treasury. With this as a basis, its directors decided to organize a new railroad, to be called the West Shore, and parallel the New York Central through its entire length to Buffalo. As the New York Central efficiently served this whole territory, the only business the West Shore could get must be taken away from the Central. To attract this business it offered at all stations lower rates. To retain and hold its business the New York Central met those rates at all points so that financially the West Shore went into the hands of a receiver.
The New York Central was sustained because of its superior facilities and connections and established roadway and equipment. But all new and necessary construction was abandoned, maintenance was neglected, and equipment run down under forced reduction of expenses.
I had very friendly personal relations with the managers and officers of the West Shore, and immediately presented to them a plan for the absorption of their line, instead of continuing the struggle until absolute exhaustion. Mr. Vanderbilt approved of the plan, as did the financial interests represented by Mr. Pierpont Morgan.
By the reorganization and consolidation of the two companies the New York Central began gradually to establish its efficiency and to work on necessary improvements. As evidence of the growth of the railway business of the country, the New York Central proper has added since the reorganization an enormous amount of increased trackage, and has practically rebuilt, as a necessary second line, the West Shore and used fully its very large terminal facilities on the Jersey side of the Hudson.
During his active life Mr. Vanderbilt was very often importuned to buy a New York daily newspaper. He was personally bitterly assailed and his property put in peril by attacks in the press. He always rejected the proposition to buy one. "If," he said, "I owned a newspaper, I would have all the others united in attacking me, and they would ruin me, but by being utterly out of the journalistic field, I find that taking the press as a whole I am fairly well treated. I do not believe any great interest dealing with the public can afford to have an organ."
Colonel Scott, of the Pennsylvania, thought otherwise, but the result of his experiment demonstrated the accuracy of Mr. Vanderbilt's judgment. Scott selected as editor of the New York World one of the most brilliant journalistic writers of his time, William H. Hurlburt. When it became known, however, that the World belonged to Colonel Scott, Hurlburt's genius could not save it. The circulation ran down to a minimum, the advertising followed suit, and the paper was losing enormously every month. Mr. Joseph Pulitzer, with the rare insight and foresight which distinguished him, saw what could be made of the World, with its privileges in the Associated Press, and so he paid Scott the amount he had originally invested, and took over and made a phenomenal success of this bankrupt and apparently hopeless enterprise.
I tried during my presidency to make the New York Central popular with the public without impairing its efficiency. The proof of the success of this was that without any effort on my part and against my published wishes the New York delegation in the national Republican convention in 1888, with unprecedented unanimity presented me as New York's candidate for president. I retired from the contest because of the intense hostility to railroad men in the Western States. Those States could not understand how this hostility, which they had to railroads and everybody connected with them, had disappeared in the great State of New York.
During my presidency the labor question was very acute and strikes, one after another, common. The universal method of meeting the demands of labor at that time was to have a committee of employees or a leader present the grievances to the division superintendent or the superintendent of motive power. These officers were arbitrary and hostile, as the demands, if acceded to, led to an increase of expenses which would make them unpopular with the management. They had a difficult position. The employees often came to the conclusion that the only way for them to compel the attention of the higher officers and directors was to strike.
Against the judgment of my associates in the railway management I decided to open my doors to any individual or committee of the company. At first I was overwhelmed with petty grievances, but when the men understood that their cases would be immediately heard and acted upon, they decided among themselves not to bring to me any matters unless they regarded them of vital importance. In this way many of the former irritations, which led ultimately to serious results, no longer appeared.
I had no trouble with labor unions, and found their representatives in heart-to-heart talks very generally reasonable. Mr. Arthur, chief of the Brotherhood of Locomotive Engineers, had many of the qualities of a statesman. He built up his organization to be the strongest of its kind among the labor unions. I enjoyed his confidence and friendship for many years.
There never was but one strike on the New York Central during my administration, and that one occurred while I was absent in Europe. Its origin and sequel were somewhat dramatic. I had nearly broken down by overwork, and the directors advised me to take an absolute rest and a trip abroad.
I sent word over the line that I wanted everything settled before leaving, and to go without care. A large committee appeared in my office a few mornings after. To my surprise there was a representative from every branch of the service, passenger and freight conductors, brakemen, shopmen, yardmen, switchmen, and so forth. These had always come through their local unions. I rapidly took up and adjusted what each one of the representatives of his order claimed, and then a man said: "I represent the locomotive engineers."
My response was: "You have no business here, and I will have nothing to do with you. I will see no one of the locomotive engineers, except their accredited chief officer."
"Well," he said, "Mr. President, there is a new condition on the road, a new order of labor called the Knights of Labor. We are going to absorb all the other unions and have only one. The only obstacle in the way is the locomotive engineers, who refuse to give up their brotherhood and come in with us, but if you will recognize us only, that will force them to join. Now, the Brotherhood intends to present a demand very soon, and if you will recognize our order, the Knights of Labor, and not the Brotherhood of Locomotive Engineers, we will take care of what they demand and all others from every department for two years, and you can take your trip to Europe in perfect peace of mind. If you do not do this there will be trouble."
I declined to deal with them as representatives of the Brotherhood of Locomotive Engineers. Then their spokesman said: "As this is so serious to you, we will give you to-night to think it over and come back in the morning."
I immediately sent for the superintendent of motive power and directed him to have posted by telegraph in every roundhouse that the request of the Brotherhood of Locomotive Engineers, of which this committee had told me, had been granted. The next morning the committee returned, and their leader said: "Well, Mr. President, you have beaten us and we are going home."
Then I appealed to them, saying: "I am a pretty badly broken-up man. The doctors tell me that if I can have three months without care I will be as good as ever. You must admit that I have at all times been absolutely square with you and tried to adjust fairly the matters you have brought to me. Now, will you take care of me while I am absent?"
They answered unanimously: "Mr. President, we will, and you can be confident there will be no trouble on the New York Central while you are away."
I sailed with my mind free from anxiety, hopeful and happy, leaving word to send me no cables or letters. After a visit to the Passion Play at Ober-Ammergau in Upper Bavaria, I went into the Austrian Tyrol. One night, at a hotel in Innsbruck, Mr. Graves, a very enterprising reporter of a New York paper, suddenly burst into my room and said: "I have been chasing you all over Europe for an interview on the strike on the New York Central." This was my first information of the strike.