A story was told many years ago of Commodore Vanderbilt which, while
perhaps not strictly true, was pointed enough to warrant its constant
repetition for more than two generations. Back in the sixties, when this
grizzled railroad chieftain was the chief factor in the rapidly growing
New York Central Railroad system, whose backbone then consisted of a
continuous one-track line connecting Albany with the Great Lakes, the
president of a small cross-country road approached him one day and
requested an exchange of annual passes.
"Why, my dear sir," exclaimed the Commodore, "my railroad is more than
three hundred miles long, while yours is only seventeen miles."
"That may all be so," replied the other, "but my railroad is just as
wide as yours."
This statement was true. Practically no railroad, even as late as the
sixties, was wider than another. They were all single-tracked lines.
Even the New York Central system in 1866 was practically a single-track
road; and the Commodore could not claim to any particular superiority
over his neighbors and rivals in this particular. Instead of sneering
at his "seventeen-mile" colleague, Vanderbilt might have remembered that
his own fine system had grown up in less than two generations from
a modest narrow-gage track running from "nothing to nowhere." The
Vanderbilt lines, which today with their controlled and affiliated
systems comprise more than 13,000 miles of railroad--a large portion of
which is double-tracked, no mean amount being laid with third and fourth
tracks is the outgrowth of a little seventeen-mile line, first chartered
in 1826, and finished for traffic in 1831. This little railroad
was known as the Mohawk and Hudson, and it extended from Albany to
Schenectady. It was the second continuous section of railroad line
operated by steam in the United States, and on it the third locomotive
built in America, the De Witt Clinton, made a satisfactory trial trip in
August, 1831.
The success of this experiment created a sensation far and wide and led
to rapid railroad building in other parts of the country in the years
immediately following. The experiences of a participant in this trial
trip are described about forty years later in a letter written by Judge
J.L. Gillis of Philadelphia:
"In the early part of the month of August of that year [1831], I
left Philadelphia for Canandaigua, New York, traveling by stages and
steamboats to Albany and stopping at the latter place. I learned that a
locomotive had arrived there and that it would make its first trip
over the road to Schenectady the next day. I concluded to lie over and
gratify my curiosity with a first ride after a locomotive.
"That locomotive, the train of cars, together with the incidents of the
day, made a very vivid impression on my mind. I can now look back from
one of Pullman's Palace cars, over a period of forty years, and see that
train together with all the improvements that have been made in
railroad travel since that time.... I am not machinist enough to give a
description of the locomotive that drew us over the road that day, but
I recollect distinctly the general make-up of the train. The train
was composed of coach bodies, mostly from Thorpe and Sprague's stage
coaches, placed upon trucks. The trucks were coupled together with
chains, leaving from two to three feet slack, and when the locomotive
started it took up the slack by jerks, with sufficient force to jerk
the passengers who sat on seats across the tops of the coaches, out from
under their hats, and in stopping, came together with such force as to
send them flying from the seats.
"They used dry pitch for fuel, and there being no smoke or spark
catcher to the chimney or smoke-stack, a volume of black smoke, strongly
impregnated with sparks, coals, and cinders, came pouring back the whole
length of the train. Each of the tossed passengers who had an umbrella
raised it as a protection against the smoke and fire. They were found
to be but a momentary protection, for I think in the first mile the
last umbrella went overboard, all having their covers burnt off from the
frames, when a general melee took place among the deck passengers, each
whipping his neighbor to put out the fire. They presented a very motley
appearance on arriving at the first station. Then rails were secured and
lashed between the trucks, taking the slack out of the coupling chains,
thereby affording us a more steady run to the top of the inclined plane
at Schenectady.
"The incidents off the train were quite as striking as those on the
train. A general notice of the contemplated trip had excited not only
the curiosity of those living along the line of the road, but those
living remote from it, causing a large collection of people at all the
intersecting roads along the route. Everybody, together with his
wife and all his children, came from a distance with all kinds of
conveyances, being as ignorant of what was coming as their horses, and
drove up to the road as near as they could get, only looking for the
best position to get a view of the train. As it approached the horses
took fright and wheeled, upsetting buggies, carriages, and wagons, and
leaving for parts unknown to the passengers if not to their owners, and
it is not now positively known if some of them have stopped yet. Such is
a hasty sketch of my recollection of my first ride after a locomotive."
The Mohawk and Hudson Railroad was originally constructed with inclined
planes worked by stationary engines near each terminus, the inclinations
being one foot in eighteen. The rail used was a flat bar laid upon
longitudinal sills. This type of rail came into general use at this
period and continued in use in parts of the country even as late as the
Civil War.
The roads that now make up the New York Central were built piecemeal
from 1831 to 1853; and the organization of this company in the latter
year, to consolidate eleven independent roads extending from Albany
to Buffalo, finally put an end to the long debate between canals
and railroads. The founding of this company definitely meant that
transportation in the United States henceforth would follow the steel
route and not the water ditch and the towpath. Canals might indeed
linger for a time as feeders, even, as in the case of the Erie and a few
others, as more or less important transportation routes, but every one
now realized that the railroad was to be the great agency which would
give plausibility to the industrial organization of the United States
and develop its great territory.
Besides the pioneer Mohawk and Hudson, this consolidation included
the Utica and Schenectady, which had been opened in 1836 and which had
operated profitably for many years, always paying large dividends. The
Tonawanda Railroad, opened in 1837, and the Buffalo and Niagara Falls,
also finished in the same year, were operated with profit until they
were absorbed by the new system. In 1838 the Auburn and Syracuse and
the Hudson and Berkshire Railroads were opened. The former after being
merged in 1850 with the Rochester and Syracuse Railway, became a part of
the consolidation. The Syracuse and Attica Railroad, opened in 1839, the
Attica and Buffalo, opened in 1842, the Schenectady and Troy, opened
in the same year, and several other small lines, some of which had
undergone various changes in name and ownership, were all merged into
the New York Central Railroad. This great property now comprised five
hundred and sixty miles of railroad, the main stem extending from Albany
to Buffalo. Though it had as yet no connection with the Hudson River
Railroad, the New York Central Railroad at this period was the most
substantial and important of American railroad systems. It developed a
large and healthy through traffic to the Great Lakes and was practically
free from railroad competition. The Erie Railway, which for many years
had been struggling under great difficulties to reach the Great Lakes
and had gone through nearly a generation of financial vicissitudes,
was just getting its through line actively under way. The Pennsylvania
Railroad was just pushing through to the waters of the Ohio and was not
likely for many years to compete with the New York Central for the lake
traffic. The Baltimore and Ohio, while remotely a competitor, was, like
the Pennsylvania, looking more for the traffic of the Ohio Valley than
for that of the Lakes.
The period of six years following the consolidation of 1853 was one of
great prosperity for the New York Central system, and, notwithstanding
the setbacks to business caused by the panic of 1857, large dividends
were continuously paid on the capital stock. In the year 1859--before
the Vanderbilt regime opened--the management embraced what to modern
men of affairs are famous names. Erastus Corning was president, Dean
Richmond was vice-president, and John V. L. Pruyn, Nathaniel Thayer,
Isaac Townsend, and Chauncey Vibbard were directors. The headquarters of
the company were at Albany, and the stock was owned mainly by residents
of that city.
Meanwhile the building of railroads in other parts of the State and
under other leadership was going forward rapidly. As far back as 1832
the first mile of the New York and Harlem Railroad was opened for
traffic. This single mile remained for some time the only property
of the company. It extended through what is now a thriving part of
down-town New York. Its original terminus was at Prince Street, but the
line was afterwards extended southward to the City Hall and later to the
Astor House. It was not until 1837 that the road reached northward
to Harlem and not until 1842 that Williamsbridge became the northern
terminus. The line was looked upon as a worthless piece of property
until 1852, when it was extended north to Chatham, to connect with the
Albany and Stockbridge Railroad, and thus give a through line from New
York City to Albany.
Another property built in these days and destined to become eventually
an important part of the Vanderbilt lines was the Hudson River Railroad.
This company was chartered in 1846, but for many years was frowned on as
an unsound business venture, because of the belief that it would be in
direct competition with the river traffic and therefore could never be
made to pay. Nevertheless the promoters went ahead and by 1850 the road
had been opened to Poughkeepsie. The entire line of one hundred and
forty-four miles was completed to East Albany in 1851. At the same
time the Troy and Greenbush Railroad, extending six miles to Troy, was
leased, thus giving the new Hudson River Railroad an entry into the city
of Troy. The Hudson River Railroad was entirely independent of the New
York Central enterprise and was controlled in those early days by a
group of New Yorkers, prominent among whom was Samuel Sloan.
As we enter the Civil War period, we find the three important properties
which were afterwards to make up the Vanderbilt system all developing
rapidly and logically into the strategical relationship which would make
ultimate consolidation inevitable. The completion of the Erie Railway
and its gradual development as the only through line across the State
from New York to the Great Lakes; the opening, expansion, and general
solidification of the Pennsylvania lines and their aggressive policy of
reaching out to the lake region on the west and across New Jersey on the
east; the extension of the Erie interests into the New England field,
and the possibility that the latter might gain control of the Harlem or
the Hudson River Railroad--all these considerations naturally aroused
in the New York Central interests a desire to insure the future by
obtaining for themselves control of the lines that would connect their
own system with New York City and the Eastern seaboard.
During the Civil War, however, no progress was made in this direction.
It was not until 1869, four years after the closing of the war, that any
radical change took place. But in the years that had intervened, a new
and commanding figure in the railroad world had come upon the scene.
This man had grown to be the dominating genius, not only in the field
of railway expansion, but in the world of finance as well. His name was
Cornelius Vanderbilt. Born in 1794 in very humble circumstances, he had
received little or no education, and as a youth had eked out a living by
ferrying passengers and garden produce from Staten Island to New York.
He had painfully saved a few hundred dollars within a year or two
after his marriage, and with this capital he began his career in the
transportation business. From his first ferrying project he engaged in
other undertakings and laid the foundation of his subsequent fortune in
steamboat navigation. About 1860, at an age when most men are beginning
to retire from active affairs, the "Commodore"--as he was called on
account of his numerous fleet--entered actively into the field of
railway development, management, and consolidation. The extraordinary
character and genius of the man are well depicted by the events of the
years that followed.
Before the opening of the Civil War and until immediately after its end,
the New York Central and the Erie systems were controlled by bitterly
antagonistic interests. These interests were beginning to foresee the
day when extremely aggressive competition would call into play their
greatest energies. Vanderbilt, wiser than his generation, foresaw more
than this. His vision took in the vast future values of the properties
as developed trunk lines, and the greater possibilities of their control
and operation as a consolidated whole. He was in a very real sense
the forerunner or pioneer of the great consolidation period of a half
century later. He was the Harriman and the Hill of his day.
The Erie had its own approach to New York City, but the New York
Central was connected with the metropolis only by the river and the two
independent roads--the Harlem Railroad and the Hudson River Railroad.
To get the latter two roads under his complete control was Vanderbilt's
first object. He would then have unimpeded access to New York and so
become independent of the river.
He began his ambitious plans by making himself the master of the Harlem
property, and in so doing got his first experience in railroad stock
manipulation and at the same time picked up a moderate fortune. It
was comparatively easy to buy the control of the Harlem Railroad. The
Company had never paid a dividend, and, in 1863, when the Commodore
quietly began his work, the stock was selling below thirty dollars a
share. Before the close of this year he had manipulated the stock until
it had reached ninety-two, and by a corner, in August of that year,
he raised it to 179. On this deal Vanderbilt reaped a nice little
fortune--but evidently not enough to enable him to carry through the
ambitious plans which were in the back of his head, for in 1864 we find
him manipulating another corner and this time running the price of the
stock up to 285. In this wise the Commodore not only added millions
to his already growing fortune but also made himself a power in
the financial world. Financiers began to fear him, and he found it
comparatively easy later to buy up the control of the Hudson River
Railroad, which he did by paying about 100 for the stock. Then he began
speculating again, sent Hudson River up to 180, and incidentally reaped
another fortune for himself.
By this time Vanderbilt had achieved a great reputation as a man who
created values, earned dividends, and invented wealth as if by magic;
other railroad managers now began to lay their properties at his feet
and ask him to do with them what he had done with the Harlem and the
Hudson River. For under the Commodore's magic touch the Harlem Railroad
for the first time in its long history began to pay dividends at a high
rate, and in four years the earnings of the Hudson River property had
nearly doubled.
One of the first properties to be placed at Vanderbilt's feet was the
New York Central, and the control passed into his hands in the winter of
1866-67. He was now in a powerful position and immediately began to lay
his plans for obtaining control of the Erie Railroad in the following
year. In the latter effort he did not succeed, however, and after a
protracted and dramatic contest he was defeated by his great adversary,
"Uncle" Daniel Drew. The story of this contest need not be detailed
here, as it is given in full in the chapter on the Erie Railroad.
In the fall of 1869 the Commodore, having secured everything in the
railroad field he had sought except the Erie, put through his scheme
for consolidation. The New York Central and Hudson River Railroad was
incorporated. It included the old New York Central and also the Hudson
River Railroad but not the Harlem. The capital of the consolidated
company was placed at ninety million dollars, a figure of such magnitude
in those days that the world was startled. The system embraced in
all nearly 850 miles of railroad lines. A few years later the Harlem
Railroad was leased to the property at a high valuation and a large
dividend was guaranteed on the stock, the ownership of which was
retained by the Vanderbilt family.
The Vanderbilt system as it is now understood really began with these
transactions. From this time on, its history has been similar in many
respects to that of other large systems which were the outgrowth of
merger or manipulation in these early days. During the remarkable period
of commercial and industrial development in this country from 1870
onward, when thousands of miles of new lines were built every year,
when the growth of population was beginning to make the States of Ohio,
Indiana, and Illinois centers of wealth and production, and when
the wonderful Northwestern country embracing the States of Michigan,
Wisconsin, and Minnesota, was so rapidly opened up and brought nearer
to the Eastern markets, the Vanderbilt railroad interests were not idle.
The original genius, Cornelius Vanderbilt, was soon gathered to his
fathers, but his son, William H. Vanderbilt, was in many ways a worthy
successor.
By 1885 the Vanderbilt lines had grown in extent and importance far
beyond any point of which the elder Vanderbilt had ever dreamed. Long
before this year the system included many smaller lines within the State
of New York, and it had also acquired close control of the great Lake
Shore and Michigan Southern system, with its splendid line from Buffalo
to Chicago, consisting of more than 500 miles of railroad; the Michigan
Central, owning lines from Detroit to Chicago, with many branches in
Michigan and Illinois; the Canada Southern Railway, extending from
Detroit to Toronto; and in addition to all these about 800 miles of
other lines in the States of Ohio, Indiana, Michigan, and Pennsylvania.
In this same year 1885, another event of importance took place. The New
York, West Shore and Buffalo Railroad, which after strenuous efforts
extending over many years had constructed a new trunk line from
Weehawken along the west shore of the Hudson to Albany and thence to
Buffalo, came under the control of the New York Central. The great
system in the Middle West, now known as the "Big Four," or Cleveland,
Cincinnati, Chicago and St. Louis--embracing 750 miles of lines westward
from Cleveland and Columbus, Ohio, to Indianapolis, Springfield, and
Cincinnati, and having traffic connections with St. Louis--was also a
Vanderbilt property at this time, although not under the formal control
of these interests. Another important competing line secured in this
period was the New York, Chicago and St. Louis, built to parallel the
Lake Shore and known as the "Nickel Plate" route. This road extended
from Buffalo to Chicago, and, like the West Shore, had been constructed
with the hope of ultimately selling out to its competitor.
The development of railroad properties under the Vanderbilt influence
was not confined to the territory east of Chicago and the Mississippi
Valley. As early as 1859 a large system of roads had been merged in
the section extending westward from Chicago to Omaha and radiating
throughout Iowa, Minnesota, Kansas, Wisconsin, Missouri, and other
States. This company was known as the Chicago and North Western
Railroad, and its property, which was one of large and growing value,
by 1886 embraced a system of over 3500 miles of road. Although neither
controlled by the New York Central nor directly affiliated therewith, it
was classed as a Vanderbilt property.
While for many years after the death of the Commodore the Vanderbilt
family remained in direct financial and operating control of the New
York Central and its myriad of subsidiary lines and their genius as
railroad builders and operators was distinctly evident, yet the brains
and resources of the Vanderbilts were not alone responsible for
the brilliant career of the system down to recent times. William H.
Vanderbilt, though a man of unusual ability, did not possess the breadth
of view or the sagacity of his father, and in the course of a few years
he found himself exposed to a cyclone of public criticism. He had let
it be widely known that he was personally the owner of over eighty-seven
per cent of the hundred million capital of the company. In 1879 the New
York Legislature, backed by the force of the popular anger and surprise
at the accumulation of a hundred million dollar fortune by one man in
ten years, was investigating the management of the New York Central
with a view to curtailing its power; the rate wars were on between the
seaboard and Chicago; and Jay Gould was threatening to divert all the
traffic of his Wabash, St. Louis, and Pacific lines from the New York
Central and turn it over to other Eastern connections unless Vanderbilt
would give him a vital interest in the Vanderbilt lines.
Vanderbilt was harassed beyond endurance and, being of softer material
than his father, was fearful of the outcome of public opinion,
notwithstanding the fact that in a moment of anger--according to the
statement of a newspaper reporter whose veracity Vanderbilt denied
to his dying day--he had used the familiar expression, "The public be
damned!" There were intimations that the Legislature was planning to
impose heavy taxes on the property, solely because Vanderbilt held this
gigantic personal ownership in the property. This prospect frightened
him and he consulted friends whose judgment he respected. They urged him
to sell a considerable part of his holdings in order to distribute the
ownership of the property among a large number of people.
This plan could not be carried out, however, in the ordinary way,
because large sales of stock by the Vanderbilt interests, if the
speculating and investing public learned that he was making them, would
greatly depreciate the price and might create general demoralization and
a panic, while they would certainly injure the credit of the New York
Central property. But a way out of the dilemma had to be found. It was
at this juncture that a new personality, later to be closely identified
with the Vanderbilt lines for a long series of years, appeared upon
the scene. Vanderbilt was advised to consult J. Pierpont Morgan, of the
banking house of Drexel, Morgan and Co. At that time the name of J.P.
Morgan was just beginning to come prominently to the front in banking
circles in New York. The Drexels had been conspicuous in business in
Philadelphia for many years and in a sense were the fiscal agents of the
great Pennsylvania Railroad Company. But the spectacular success of the
House of Morgan a few years before in marketing the French government
loan in England had added largely to its prestige. And so Vanderbilt
concluded that, if any man could show him a way out in his difficult
problem, Pierpont Morgan was that man.
The upshot of the matter was that Morgan devised a plan for the sale of
a large amount of Vanderbilt's stock holdings through private sale in
England, and in such a way that the knowledge of such sale would not
become public in America. A confidential syndicate was formed which
undertook to take the stock in a block and pass it on to English
investors at approximately its current market price of about $130 per
share. The sale was promptly accomplished; the stock went into the hands
of unknown interests abroad; Vanderbilt received more than $25,000,000
in cash, which he largely reinvested in United States government bonds,
and the Morgan syndicate reaped a profit of about $3,000,000. Five
months after the closing of the syndicate public announcement was made
of the sale and of the syndicate profit. The striking success of this
transaction naturally added greatly to the prestige of. J. P. Morgan as
a financier of very large caliber, and it had the satisfactory effect of
curtailing the legislative attacks on Vanderbilt.
From that date forward, the history of the Vanderbilt railroads has
been closely identified with the House of Morgan. J.P. Morgan and
his business associates became the company's financial agents, and
thereafter all plans of expansion or consolidation were handled directly
by them. In the board of directors Morgan banking interests had full
representation, which they have held until this day.
The subsequent history of the Vanderbilt lines is chiefly a story of
business expansion and growth. From 1885 to 1893, the great panic year,
the New York Central each year added to its mileage, either by merger of
smaller lines or by construction. All this time it was consolidating the
system, eliminating the weaker links, and strengthening the stronger.
Its lines penetrated all the best Eastern railroad territory outside of
New England, New Jersey, and Pennsylvania, and no other railroad system
in the country, with the single exception of the Pennsylvania, covered
anything like the same amount of rich and settled territory, or reached
so many cities and towns of importance. New York, Buffalo, Cleveland,
Detroit, Chicago, St. Louis, Cincinnati, Indianapolis--these are a
few of the great traffic centers which were included in the Vanderbilt
preserves. The population of all these cities, as well as that of the
hundreds of smaller places and the countryside in general, was growing
by leaps and bounds. Furthermore the Northwest, beyond the Great Lakes
and through to the Pacific coast, saw the beginnings of its great
development at this time; and the wheat fields of the far western
country became a factor of profound importance in the national
development. Consequently when the period of depression arrived with the
panic of 1893, the Vanderbilt properties were, as a whole, in a strong
position to meet the changed situation and, like the great Pennsylvania
property, they all passed through to the advent of the new industrial
era without the defaulting of a bond or the passing of a dividend. The
remarkable character of this achievement is evident in view of the fact
that in the period from 1893 to 1898 more than sixty-five per cent of
all the railroad mileage in the United States went into the hands of
receivers.
After the close of this era of panic, the Vanderbilt lines began
expanding again, though on a much smaller scale than in their more
active time. In 1898 William K. Vanderbilt, then president, made the
announcement that the New York Central had leased the Boston and Albany
Railroad, at that time a lucrative line running from Albany across
Massachusetts into Boston. This gave the system an entry into the New
England field, which it has continuously held since. A few years later
this New England interest was increased by the acquisition of the
Rutland Railroad in Vermont, thus making connection with the Ogdensburg
and Lake Champlain, a line running across the northern part of New York
State, which had also come under Vanderbilt control.
When business revived in the closing years of the nineteenth century,
the history of American railroads began a new chapter. Federal railroad
regulation, which started in a moderate way with the passage of the
Interstate Commerce Act in 1887, had steadily increased through the
years; the Sherman Anti-trust Act, passed in 1890, had been interpreted
broadly as affecting the railroads of the country as well as the
industrial and other combinations. These influences had thus greatly
curtailed the consolidation of competing lines which had gone on so
rapidly during the decades following the Civil War. Railroad managers
and financiers therefore began to face a very serious problem.
Competition of a more or less serious nature was still rampant, rates
were cut, and traffic was pretty freely diverted by dubious means.
Consequently many large railroad systems of heavy capitalization bid
fair to run into difficulties on the first serious falling off in
general business.
Great men are usually the products of their times and one of the men
developed by these times takes rank with the greatest railroad leaders
in history. Edward H. Harriman had risen in ten years from comparative
obscurity and was now the president of the Union Pacific Railroad, which
he had, in conjunction with the banking house of Kuhn, Loeb and Company,
reorganized and taken out of bankruptcy. Harriman was one of the
originators of the "community of interest" idea, a device for the
partial control of one railroad system by another. For instance,
although the law forbade any railroad system from acquiring a complete
control of a competing line by purchasing a majority of its capital
stock or by leasing it, nothing was said about one railroad having a
minority investment interest in another. A minority investment, even
though it be as low as ten or twenty per cent, usually constitutes a
dominating influence if held by a single interest, for in most cases
the majority of the shares will be owned in small blocks by thousands of
investors who never combine for a definite, practical purpose. Thus the
interest which has the one large block of stock usually controls
the voting power, and runs little risk of losing it unless a contest
develops with other powerful interests--and this is a contingency which
it almost never has to meet.
Carrying out this policy of promoting harmony among competing lines,
the New York Central and Pennsylvania Railroad early in 1900 acquired a
working control of the Reading Company, which in turn controlled the
New Jersey Central and dominated the anthracite coal traffic. Later the
Baltimore and Ohio shared this Reading interest with the Lake Shore of
the New York Central system. The New York Central and the Pennsylvania
acquired a working control of the same kind in the Chesapeake and Ohio
Railway, which was an important element in the soft coal fields and was
reaching out to grasp soft coal properties in Ohio and Indiana.
These and other purchases, and the consequent voice acquired in the
management, established comparative harmony among Eastern railroads for
a long time; they stabilized rates and enabled formerly competing roads
to parcel out territory equitably among the different interests. Later,
Harriman, and to some extent Morgan, carried the community of interest
idea some steps further. Morgan caused the New York Central to acquire
stock interests in certain "feeder" lines such as the New York, New
Haven and Hartford and the Chicago, Milwaukee and St. Paul, as well as
in competing lines; and Harriman caused the Union Pacific not only to
dominate the Southern Pacific Company by minority control but also to
acquire interests in the Illinois Central, the Baltimore and Ohio,
the New York Central, and other eastern properties. The fact was that
Harriman had plans in view for acquiring actual control of the New York
Central for the Union Pacific and thus, with the Illinois Central, of
creating a continuous transcontinental line from ocean to ocean.
In the past decade few unusual or startling events have marked the
history of the Vanderbilt lines. The Vanderbilt family no longer
possesses a majority interest in the stock, or anything which approaches
it, and the New York Central system and its subsidiaries have come to be
known more and more as Morgan properties. The system has grown up with
the country. Many of its former controlled roads have now been merged
into the main corporation and many new lines have been added to it.
Hundreds of millions of dollars of new capital have been spent on
the main lines and terminals since 1900. In 1919 the entire property,
including controlled lines, embraced more than 13,000 miles of main
track, besides about 5000 miles of extra tracks; over 200,000 freight
cars are in use on the system, and every year upwards of 200,000,000
tons of freight are transported. The gross annual revenues of the
entire system now aggregate more than $400,000,000, while the total
capitalization in stocks and bonds exceeds a billion dollars. It is
indeed a far cry from that day in August, 1831, when the De Witt
Clinton locomotive made its trial trip over the primitive rails of the
seventeen-mile Mohawk and Hudson road--a far cry even from that other
day, thirty-eight years later, when the sagacious Commodore startled the
financial world by his New York Central and Hudson River Railroad, with
a capital of ninety million dollars.