Heredity has much to do with a man's career. The village of
Peekskill-on-the-Hudson, about forty miles from New York, was
in the early days the market-town of a large section of the
surrounding country, extending over to the State of Connecticut.
It was a farming region, and its products destined for New York City
were shipped by sloops on the Hudson from the wharfs at Peekskill,
and the return voyage brought back the merchandise required by
the country.
My father and his brother owned the majority of the sloops engaged
in this, at that time, almost the only transportation. The sloops
were succeeded by steamboats in which my people were also
interested. When Commodore Vanderbilt entered into active rivalry
with the other steamboat lines between New York and Albany, the
competition became very serious. Newer and faster boats were
rapidly built. These racers would reach the Bay of Peekskill in
the late afternoon, and the younger population of the village would
be on the banks of the river, enthusiastically applauding their
favorites. Among well-known boats whose names and achievements
excited as much interest and aroused as much partisanship and
sporting spirit as do now famous race-horses or baseball champions,
were the following: Mary Powell, Dean Richmond, The Alida, and
The Hendrick Hudson.
I remember as if it were yesterday when the Hudson River Railroad
had reached Peekskill, and the event was locally celebrated. The
people came in as to a county fair from fifty miles around. When
the locomotive steamed into the station many of those present had
never seen one. The engineer was continuously blowing his whistle
to emphasize the great event. This produced much consternation
and confusion among the horses, as all farmers were there with
their families in carriages or wagons.
I recall one team of young horses which were driven to frenzy;
their owner was unable to control them, but he kept them on the
road while they ran away with a wild dash over the hills. In
telling this story, as illustrating how recent is railway development
in the United States, at a dinner abroad, I stated that as far
as I knew and believed, those horses were so frightened that
they could not be stopped and were still running. A very successful
and serious-minded captain of industry among the guests sternly
rebuked me by saying: "Sir, that is impossible; horses were never
born that could run for twenty-five years without stopping."
American exaggeration was not so well known among our friends on
the other side then as it is now.
As we boys of the village were gathered on the banks of the Hudson
cheering our favorite steamers, or watching with eager interest
the movements of the trains, a frequent discussion would be about
our ambitions in life. Every young fellow would state a dream
which he hoped but never expected to be realized. I was charged
by my companions with having the greatest imagination and with
painting more pictures in the skies than any of them. This was
because I stated that in politics, for I was a great admirer of
William H. Seward, then senator from New York, I expected to be
a United States senator, and in business, because then the largest
figure in the business world was Commodore Vanderbilt, I hoped
to become president of the Hudson River Railroad. It is one of
the strangest incidents of what seemed the wild imaginings of a
village boy that in the course of long years both these expectations
were realized.
When I entered the service of the railroad on the first of January,
1866, the Vanderbilt system consisted of the Hudson River and
Harlem Railroads, the Harlem ending at Chatham, 128 miles, and
the Hudson River at Albany, 140 miles long. The Vanderbilt system
now covers 20,000 miles. The total railway mileage of the whole
United States at that time was 36,000, and now it is 261,000 miles.
My connection with the New York Central Railroad covers practically
the whole period of railway construction, expansion, and development
in the United States. It is a singular evidence of the rapidity
of our country's growth and of the way which that growth has
steadily followed the rails, that all this development of States,
of villages growing into cities, of scattered communities becoming
great manufacturing centres, of an internal commerce reaching
proportions where it has greater volume than the foreign interchanges
of the whole world, has come about during a period covered by
the official career of a railroad man who is still in the service:
an attorney in 1866, a vice-president in 1882, president in 1885,
chairman of the board of directors in 1899, and still holds that office.
There is no such record in the country for continuous service with
one company, which during the whole period has been controlled by
one family. This service of more than half a century has been in
every way satisfactory. It is a pleasure to see the fourth
generation, inheriting the ability of the father, grandfather, and
great-grandfather, still active in the management.
I want to say that in thus linking my long relationship with the
railroads to this marvellous development, I do not claim to have
been better than the railway officers who during this time have
performed their duties to the best of their ability. I wish also
to pay tribute to the men of original genius, of vision and daring,
to whom so much is due in the expansion and improvement of the
American railway systems.
Commodore Vanderbilt was one of the most remarkable men our
country has produced. He was endowed with wonderful foresight,
grasp of difficult situations, ability to see opportunities before
others, to solve serious problems, and the courage of his
convictions. He had little education or early advantages, but
was eminently successful in everything he undertook. As a boy on
Staten Island he foresaw that upon transportation depended the
settlement, growth, and prosperity of this nation. He began with
a small boat running across the harbor from Staten Island to
New York. Very early in his career he acquired a steamboat and
in a few years was master of Long Island Sound. He then extended
his operations to the Hudson River and speedily acquired the
dominating ownership in boats competing between New York and Albany.
When gold was discovered in California he started a line on the
Atlantic side of the Isthmus of Darien and secured from the
government of Nicaragua the privilege of crossing the Isthmus
for a transportation system through its territory, and then
established a line of steamers on the Pacific to San Francisco.
In a short time the old-established lines, both on the Atlantic
and the Pacific, were compelled to sell out to him. Then he
entered the transatlantic trade, with steamers to Europe.
With that vision which is a gift and cannot be accounted for, he
decided that the transportation work of the future was on land
and in railroads. He abandoned the sea, and his first enterprise
was the purchase of the New York and Harlem Railroad, which was
only one hundred and twenty-eight miles long. The road was bankrupt
and its road-bed and equipment going from bad to worse. The
commodore reconstructed the line, re-equipped it, and by making
it serviceable to its territory increased its traffic and turned
its business from deficiency into profit. This was in 1864.
The commodore became president, and his son, William H. Vanderbilt,
vice-president. He saw that the extension of the Harlem was not
advisable, and so secured the Hudson River Railroad, running from
New York to Albany, and became its president in 1865. It was
a few months after this when he and his son invited me to become
a member of their staff.
The station of the Harlem Railroad in the city of New York was
at that time at Fourth Avenue and Twenty-sixth Street, and that of
the Hudson River Railroad at Chambers Street, near the North River.
In a few years William H. Vanderbilt purchased the ground for the
Harlem Railroad Company, where is now located the Grand Central
Terminal, and by the acquisition by the New York Central and
Hudson River Railroad of the Harlem Railroad the trains of the
New York Central were brought around into the Grand Central Station.
In 1867, two years after Mr. Vanderbilt had acquired the
Hudson River Railroad, he secured the control of the New York
Central, which ran from Albany to Buffalo. This control was
continued through the Lake Shore on one side of the lakes and
the Michigan Central on the other to Chicago. Subsequently the
Vanderbilt System was extended to Cincinnati and St. Louis. It
was thus in immediate connection with the West and Northwest
centering in Chicago, and the Southwest at Cincinnati and St. Louis.
By close connection and affiliation with the Chicago and Northwestern
Railway Company, the Vanderbilt system was extended beyond
to Mississippi. I became director in the New York Central in
1874 and in the Chicago and Northwestern in 1877.
It has been my good fortune to meet with more or less intimacy
many of the remarkable men in every department of life, but I think
Commodore Vanderbilt was the most original. I had been well
acquainted for some years both with the commodore and his son,
William H. When I became attorney my relations were more intimate
than those usually existing. I was in daily consultation with the
commodore during the ten years prior to his death, and with his
son from 1866 to 1885, when he died.
The commodore was constantly, because of his wealth and power,
importuned by people who wished to interest him in their schemes.
Most of the great and progressive enterprises of his time were
presented to him. He would listen patiently, ask a few questions,
and in a short time grasp the whole subject. Then with wonderful
quickness and unerring judgment he would render his decision.
No one knew by what process he arrived at these conclusions.
They seemed to be the results as much of inspiration as of insight.
The Civil War closed in 1865, and one of its lessons had been
the necessity for more railroads. The country had discovered
that without transportation its vast and fertile territories could
neither be populated nor made productive. Every mile of railroad
carried settlers, opened farms and increased the national resources
and wealth. The economical and critical conditions of the country,
owing to the expansion of the currency and banking conditions,
facilitated and encouraged vast schemes of railroad construction.
This and a wild speculation resulted in the panic of 1873. Nearly
the whole country went bankrupt. The recovery was rapid, and
the constructive talent of the Republic saw that the restoration of
credit and prosperity must be led by railway solvency. In August,
1874, Commodore Vanderbilt invited the representatives of the
other and competitive lines to a conference at Saratoga. Owing,
however, to the jealousies and hostilities of the period, only the
New York Central, the Pennsylvania, and the Erie railways were
represented.
The eastern railway situation was then dominated by Commodore
Vanderbilt, Colonel Thomas A. Scott, of the Pennsylvania, and
John W. Garrett, of the Baltimore and Ohio. Both Scott and Garrett
were original men and empire builders. There was neither
governmental nor State regulation. The head of a railway system
had practically unlimited power in the operation of his road.
The people were so anxious for the construction of railways that
they offered every possible inducement to capital. The result was
a great deal of unprofitable construction and immense losses to
the promoters.
These able men saw that there was no possibility of railway
construction, operation, and efficiency, with a continuance of
unrestricted competition. It has taken from 1874 until 1920 to
educate the railway men, the shippers, and the government to a
realization of the fact that transportation facilities required
for the public necessities can only be had by the freest operations
and the strictest government regulations; that the solution of
the problem is a system so automatic that public arbitration shall
decide the justice of the demands of labor, and rates be advanced
to meet the decision, and that public authority also shall take
into consideration the other factors of increased expenses and
adequate facilities for the railroads, and that maintenance and
the highest efficiency must be preserved and also necessary
extensions. To satisfy and attract capital there must be the
assurance of a reasonable return upon the investment.
The meeting called by Commodore Vanderbilt in 1874, at Saratoga,
was an epoch-making event. We must remember the railway management
of the country was in the absolute control of about four men, two
of whom were also largest owners of the lines they managed.
Fierce competition and cutting of rates brought on utter
demoralization among shippers, who could not calculate on the cost
of transportation, and great favoritism to localities and individuals
by irresponsible freight agents who controlled the rates. Under
these influences railway earnings were fluctuating and uncertain.
Improvements were delayed and the people on the weaker lines
threatened with bankruptcy.
Public opinion, however, believed this wild competition to be the
only remedy for admitted railway evils. As an illustration of
the change of public opinion and the better understanding of
the railway problems, this occurred in the month of October, 1920.
A committee of shippers and producers representing the farmers,
manufacturers, and business men along a great railway system
came to see the manager of the railroad and said to him: "We have
been all wrong in the past. Our effort has always been for lower
rates, regardless of the necessities of the railways. We have
tried to get them by seeking bids from competing lines for our
shipments and by appealing to the Interstate Commerce Commission.
The expenses of the railroads have been increased by demands of
labor, by constantly rising prices and cost of rails, cars,
terminals, and facilities, but we have been against allowing the
railroads to meet this increased cost of operation by adequate
advances in rates. We now see that this course was starving the
railroads, and we are suffering for want of cars and locomotives
to move our traffic and terminals to care for it. We are also
suffering because the old treatment of the railroads has frightened
capital so that the roads cannot get money to maintain their lines
and make necessary improvements to meet the demands of business.
We know now that rates make very little difference, because they
can be absorbed in our business. What we must have is facilities
to transport our products, and we want to help the railroads to get
money and credit, and again we emphasize our whole trouble is
want of cars, locomotives, and terminal facilities."
Happily, public opinion was reflected in the last Congress in the
passage of the Cummins-Esch bill, which is the most enlightened
and adaptable legislation of the last quarter of a century.
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?"