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

By Herbert H. Harwood

This account of a doomed enterprise is “an important contribution to both rail and road history, as well as to business history”—photos and maps included (The Lexington Quarterly).
 
Stretching over two hundred miles through Pennsylvania’s most challenging mountain terrain, the South Pennsylvania Railroad would form the heart of a new trunk line, from the East Coast to Pittsburgh and the Midwest. Conceived in 1881 by William H. Vanderbilt, Andrew Carnegie, and a group of Pittsburgh and Philadelphia industrialists, it was intended to break the rival Pennsylvania Railroad’s near-monopoly in the region.
 
But the line was within a year of opening when J.P. Morgan brokered a peace treaty that aborted the project and helped bolster his position in the world of finance. The railroad right of way and its tunnels would sit idle for sixty years—before coming to life in the late 1930s as the original section of the Pennsylvania Turnpike.
 
Based on original letters, documents, diaries, and newspaper reports, The Railroad That Never Was uncovers the truth behind this mysterious railway, one of the most infamous construction projects of the late nineteenth century.

• Language: English
• Publisher: Open Road Integrated Media
• Release date: Sep 6, 2010
• ISBN: 9780253001559

Book preview

THE RAILROAD THAT NEVER WAS

THE RAILROAD THAT NEVER WAS

VANDERBILT, MORGAN, AND THE HERBERT H. HARWOOD, JR.

SOUTH PENNSYLVANIA RAILROAD

RAILROADS PAST & PRESENT • George M. Smerk, editor

INDIANA UNIVERSITY PRESS • Bloomington & Indianapolis

This book is a publication of

Indiana University Press

601 North Morton Street

Bloomington, IN 47404-3797 USA

www.iupress.indiana.edu

Telephone orders    800-842-6796

Fax orders    812-855-7931

Orders by e-mail    [e-mail]

© 2010 by Herbert H. Harwood, Jr.

All rights reserved

No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage and retrieval system, without permission in writing from the publisher. The Association of American University Presses’ Resolution on Permissions constitutes the only exception to this prohibition.

The paper used in this publication meets the minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48-1992.

Manufactured in the United States of America

Library of Congress Cataloging-in-Publication Data

Harwood, Herbert H.

The railroad that never was : Vanderbilt,

Morgan, and the South Pennsylvania Railroad / Herbert H. Harwood, Jr.

p. cm. — (Railroads past and present)

Includes bibliographical references and index.

ISBN 978-0-253-35548-5 (cloth : alk. paper) 1.

South Pennsylvania Railroad. 2. Railroads—

Design and construction. I. Title.

TF25.S67H392 2010

385.09748—dc22

2010010147

1 2 3 4 5 15 14 13 12 11 10

To

PAUL J. WESTHAEFFER (1916–93)

Whose friendship and whose unfulfilled hope to complete his own

South Pennsylvania history directly inspired this work

CONTENTS

SOURCES & ACKNOWLEDGMENTS

INTRODUCTION

1 PRELUDE: THE OMNIPOTENT PENNSYLVANIA RAILROAD

2 THE BACK STORY

3 WHY?

4 VANDERBILT TAKES CHARGE

5 THE SPOILERS

6 THE SYNDICATE FORMS

7 A RUGGED ROUTE

8 BUILDING A MOUNTAIN RAILROAD

9 THE SECOND FRONT

10 COOLER HEADS AND COLDER FEET EMERGE

11 A SUMMER CRUISE ON THE HUDSON

12 NOT QUITE DEAD

13 THE END

14 RAILROAD TO SUPERHIGHWAY, MORE OR LESS …

15 EPILOGUE: GHOST HUNTING ALONG THE SOUTH PENN

NOTES

BIBLIOGRAPHY

INDEX

SOURCES & ACKNOWLEDGMENTS

As will be noted from the source notes, much of the material in this book came from original documents that at one time had been in the files of the corporate secretary of the Baltimore & Ohio Railroad, which inherited the records of the South Pennsylvania Syndicate, South Pennsylvania Railroad, and American Construction Company when it bought the property in 1904. But therein lies a mysterious tale. Much of this material was subsequently turned over to the Pennsylvania Turnpike Commission by both the B&O and Pennsylvania Railroad (which in turn had inherited a portion from the B&O) and is presently preserved in the State Archives in Harrisburg. The Turnpike Commission was primarily interested in the records directly relating to the railroad’s surveys, property, and construction; as a result, a residue of invaluable corporate material and correspondence remained in Baltimore until at least 1988. It was during an inventory of the stored B&O corporate secretary’s office files, then in temporary storage at the B&O Railroad Museum, that this South Penn material came to light.

Once the inventory was completed, however, all the office files were removed to CSX headquarters in Jacksonville. Much was subsequently returned to the museum, but somewhere in the process all of the South Penn-related material disappeared. An optimistic scenario is that it remains in some cob-webbed corner in Jacksonville. But in any event, I have donated photocopies of all the documents noted here, plus others, to the Railroad Museum of Pennsylvania in Strasburg, where they are, or will be, accessible.

Otherwise, two people deserve special mention for their enormous help—Christopher T. Baer of the Hagley Library in Wilmington, Delaware, and Russell Love of Plum, Pennsylvania. To say that Chris Baer was helpful is like saying that engines are helpful in getting a jetliner off the ground and keeping it airborne. The custodian of numerous corporate records at the Hagley, and with a bottomless personal knowledge of eastern railroad history, he was essential in putting more factual meat on this book’s bones, making sense out of what were often behind-the-scenes corporate maneuverings and decisions, and putting it all in perspective. Helpful indeed!

Russ Love’s passion is the physical part of the South Penn—its route, both built and only projected, and its visible remains. To that end he has dug endlessly into the original railroad surveys in the Pennsylvania State Archives files, correlated them to present-day maps and aerial photographs, and almost literally has trooped over every foot of the ghost railroad’s route. He has generously shared his work through his web site and two CDs illustrating his innumerable findings. As noted in the text, all of chapter 15 as well as some material on the line’s surveys and construction in this book came out of Russ’s work.

A special kind of thanks goes to the late Paul J. Westhaeffer, a highly competent and serious historian whose published works include the definitive history of the Cumberland Valley Railroad. Following that effort he began work on his own South Penn book and, in the process, shared some of his information with me. Ironically, toward the end of his life he asked me to carry on and finish the project, which he felt unable to do—but, sadly, in 1989 the time was not right. With this work, I hope I have come somewhere near to what Paul intended, although I suspect that he would have done better.

Others who provided materials, photos, and other sorts of help include Sharon Beischer; Kurt Bell and Nicholas Zmijewski of the Railroad Museum of Pennsylvania; Carrie Blough of the Historical and Genealogical Society of Somerset County, Pennsylvania; Ken Bradford; Ava Bretzik, director of the Asa Packer Mansion and Museum in Jim Thorpe, Pennsylvania; Mitchell E. Dakelman, researcher, collector, and author of the pictorial book The Pennsylvania Turnpike (Arcadia Publishing Co., 2004); Gerald Francis of the Lower Merion Historical Society; Gerald Kuncio; John Maranto, archivist for the B&O Railroad Museum; Kevin Martin at the Hagley Library, Edward H. Weber, and Thomas T. Taber III. Roberta Poling of Thunder Grafix in Columbia, Maryland, is responsible for many of the maps

Thanks, too, to those who pulled this mess together and made a book out of it: Sponsoring Editor Linda Oblack, who had the faith, if not good sense, to commit to the project, and her assistant, Peter Froehlich; Brian Herrmann, project editor; Elaine Otto, copy editor supreme; Miki Bird, managing editor; Chandra Mevis, editorial assistant; and the book’s designer, Jamison Cockerham. Elise Meyer-Bothling did her usual meticulous job of indexing.

Herbert H. Harwood, Jr.

THE RAILROAD THAT NEVER WAS

INTRODUCTION

Drive the Pennsylvania Turnpike through the Alleghenies, and you will be touched by a ghost the entire way. You will catch it briefly in the remaining tunnels, but elsewhere along the highway it hides well, showing itself only fleetingly and then only if you know when and where to look. It is always close by, though, usually lurking beneath the trees and undergrowth. It is a phantom, to be sure, but one with solid form—high earth embankments and deep cuts through the forbidding terrain, and small stone bridges and culverts lost in deep backwoods. Now mostly engulfed by nature or intermittently paved over, these are the tangible remains of what was once heralded as one of the boldest and most daring railroad projects of its time: a 208-mile-long mainline railroad that would blast its way through the Alleghenies over a route that earlier surveyors and engineers had despaired of, producing the shortest line between Pittsburgh and the East Coast. It is also a ghost with the best of breeding, fathered in the early 1880s by a distinguished roster of capitalists with names like William H. Vanderbilt, Andrew Carnegie, John D. Rockefeller, and Henry Clay Frick. It was designed and built by some of the best engineers in the business and finally put to an uneasy rest by J. Pierpont Morgan in one of the more legendary episodes of Gilded Age finance.

Its formal name was the South Pennsylvania Railroad, usually simply shortened to the South Penn. But mention the South Penn today, even to many serious railroad historians, and the best you may get is a noncommittal mumble or a quizzical stare. Even the few who do connect usually think of it only as the foundation for the country’s first long-distance superhighway and know little more. Yet this impossible railroad, which was to form a new trunk line between Pittsburgh and the East, came close to overcoming its innumerable obstacles. And even after it was declared dead, it continued breathing at least a quarter of a century longer.

Although the South Penn’s genesis dated to the late 1830s, and its corporate identity to the mid-i85os, its real life began in 1881. That year Vanderbilt’s agents acquired the charter and corporate shell of a moribund company with a misbegotten past and seemingly no future. Vanderbilt then promptly dispatched surveyors through Pennsylvania’s rugged southern tier to plot the path of a double-track main line connecting Pittsburgh with Harrisburg, Pennsylvania, forming a bridge between the Midwest and the large industrial and population centers in eastern Pennsylvania, New Jersey, and New York Harbor. At its west end, the Vanderbilt-controlled Pittsburgh & Lake Erie would feed traffic from Pittsburgh, the upper Ohio River valley, and Youngstown; from Cleveland and Youngstown, his Lake Shore & Michigan Southern Railway would provide traffic access to the New York Central system’s entire midwestern network reaching to Chicago, Cincinnati, and St. Louis. At Harrisburg, the Philadelphia and Reading, along with its affiliated Central Railroad of New Jersey, would provide access to the northeastern markets. And along its own line, coal and coke traffic would flow from the western Pennsylvania mines and ovens and, through connections, from the Broad Top fields.

But also along that line were the most challenging barriers any railroad surveyor could imagine. It would need to cross six major mountain ridges and their intervening valleys. Yet, to be competitive, its ruling grades had to be held to a relatively gentle 1 percent, requiring creative engineering and heavy construction. That would include drilling nine tunnels, four of them about a mile long.

Nonetheless it was thought to be worth it. The new railroad would break the near-monopoly of the arrogant, all-powerful Pennsylvania Railroad in Pittsburgh, open new markets for Vanderbilt’s railroads and for the Reading, and lead to lower freight rates and better negotiating leverage both for Pittsburgh’s coal and steel industrialists and Rockefeller’s Standard Oil interests. Initial enthusiasm was high as a select coterie of wealthy investors banded together to finance and build the railroad entirely by themselves, with no outsiders welcome.

In truth, though, they were on a quixotic quest—some even said a lunatic venture. (Vanderbilt’s Folly, some called it.) Even as wagonloads of laborers, tools, and supplies flooded into the remote mountains to begin their work, Wall Street was beginning to have second thoughts about the orgy of redundant railroad construction then going on nationwide. True, the financiers were profiting handsomely from all the new securities issues, but the effects of too much competition against too much sunk capital were beginning to hurt their investors. The South Penn was a prime example—a line that promised to be expensive to build and to operate but might end up as a weak competitor for the better-located Pennsylvania.

So as the tunnels and cuts were being painfully and sometimes fatally blasted out, and as the earth fills rose, Vanderbilt began having second thoughts. So did J. P. Morgan, then a rising power and an emphatic advocate of financial sanity. Eventually a peace treaty was negotiated, and although the agreement turned out to be illegal—and although some unhappy South Penn investors cried betrayal—the project was stopped a year short of its planned completion. Even so, for two more decades, it periodically threatened to rise from the dead.

The South Penn’s sorry story occasionally shows up in business histories and biographies, mostly as a sidelight to something else—sometimes as a case example of the wasteful excesses of late nineteenth-century railroad competition, sometimes as the turning point between competitive anarchy and rationality in railroading, and often as a pivotal point in J. P. Morgan’s rise to financial monarchy, but most of all simply as the shadowy and misunderstood parent of the original Pennsylvania Turnpike. Yet this ghost railroad that never ran a train had a remarkable life of its own, complete with an overload of larger-than-life personalities, skilled engineers, heroic builders, and a death and resurrection—not to mention mysteries that will never be fully explained. And like many enterprises that came close to fruition but never made it, the South Penn will always offer an endless array of tantalizing what if … ? speculations to argue and fantasize over.

1

PRELUDE: THE OMNIPOTENT PENNSYLVANIA RAILROAD

After the Civil War, U.S. railroads rapidly reshaped the country’s economy, making possible mass production, large-scale mining and farming, and mass markets for it all. Railroading, too, had become a spectacular growth industry; capital was poured into building new lines seemingly everywhere—some of them soundly based, some purely speculative, and some that represented the honest but often naïve hopes of communities 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 Erie Railroad was a fourth contender, 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 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.

The Pennsylvania system as it was in 1893.

By 1873 the Pennsylvania (or Pennsy, as many called it, not always fondly) had made itself the East’s most powerful and aggressive system and the 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

Reviews for The Railroad That Never Was

[shrike58 · Rating: 4 out of 5 stars]

My main purpose in reading this monograph was to get some sense of just what the relationship of this railroad was to the origins of the Pennsylvania Turnpike, as the legend is that the highway pretty much followed the railway cut; the answer to that is not really. Before that though Harwood throws you into the super-heated world of of railroad building in 19th-century America when William H. Vanderbilt of the New York Central, and a coterie of Pittsburgh businessmen (including Andrew Carnegie), decided that they needed to put the screws to the Pennsylvania Railroad. The amazing thing to me is that they were going to punch a railroad through some the roughest terrain in the Keystone State, but at a certain point it dawned on the principals that there was no way that this project could be viable and J.P. Morgan finessed a deal that satisfied most of the relevant parties. This monograph will actually be quite interesting readers other than enthusiasts of railroad history and students of American business, but it doesn't hurt to have driven the Pennsylvania Turnpike a few times just to get a sense of daring and defiance behind this project!