How Rails Saved a Seaport

On June 1, 1881, the morning train from New York arrived in Baltimore on schedule at 2 P.M. Its most distinguished passenger, a large, heavy-set man in his early sixties, stared eagerly from the window of his private palace car as the train was broken up and shunted aboard the ferry steamer Canton for the trip across Baltimore Harbor to the B&O piers at Locust Point. The temperature was in the low eighties, the weather partly cloudy, and to the big man just returned from twelve months in Europe the city and its bustling harbor presented a cheering sight on this warm June day. The man was John W. Garrett, president of the Baltimore & Ohio Railroad and one of Maryland’s leading citizens, and his native Baltimore had prepared a welcome for him.

 

As the Canton nosed into her wharf at Locust Point the guns in Fort McHenry, guarding the entrance to the inner harbor, boomed a salute. Mr. Garrett and his wife and daughter were met by his two sons, who boarded the presidential car for the short trip to the B&O’s main depot at Camden Station in the heart of town. Locomotives were flying the national flag in honor of the return of their chief, and a reception committee awaited his arrival at the depot. Official Baltimore was out in force, several hundred strong, to greet him, and everyone cheered, and the mayor made a speech about how glad they were to have him home. The president of the Baltimore & Ohio was unquestionably the man of the hour.

There was reason for this. Baltimoreans owed something to John W. Garrett, and they knew it. Many changes had taken place since Garrett’s accession to the B&O presidency in 1858. In the ensuing 23 years he had transformed the company from a 375-mile line connecting Baltimore with the Ohio River into a giant system touching Pittsburgh, Cincinnati, Chicago, and St. Louis, with branches tapping the most important agricultural and industrial areas between the Chesapeake and the Great Lakes. The Baltimore & Ohio had become the powerful instrument whereby the busy city on Chesapeake Bay could hold its own with the other great eastern ports—New York, Philadelphia, Boston—in their endless competition for the interior trade.

And with the expansion of the railroad came greater prosperity for Baltimore. Prosperity was trainload after trainload of western produce pounding eastward to market; prosperity was a harbor thronged with vessels waiting to transfer cargoes manufactured in Europe and the industrial Northeast to boxcars loading for interior points. This railroad was Baltimore’s leading commercial artery in an era of startling and unprecedented industrial expansion, capable of handling a respectable portion of the enormous volume of raw materials, foodstuffs, and manufactures that moved between the seaboard and the interior because of the way in which John W. Garrett had improved and modernized and enlarged the system. And Baltimore had prospered accordingly, and turned out to honor the man who had helped the port to keep pace with her rivals and share in the boom times that followed the Civil War.

It had all happened so fast. As Garrett spoke to the crowd in Camden Station, reminiscing about his early career, his mind took him back through the years to the Baltimore of Andrew Jackson’s day. In the 1830's young John and his brother Henry were learning the produce and commission business in their fathers countinghouse. Then, as on John’s triumphal return from Europe over forty years later, Baltimore thrust its wharves into the Northwest Branch of the Patapsco River at tidewater, and owed its prosperity to the commerce that passed through its warehouses on the way to market. Smoke from the steamboat and the factory chimney was hardly in evidence in the 1830’s, although bay steamers had already begun to ply between Baltimore and other ports on the Chesapeake, and small cotton textile factories were springing up here and there on the edge of town.

Smoke hung more heavily over Baltimore in 1881. The countless spars that bespoke coasting schooners from Boston or brigs from Havana or barks from Rio were still there, as John had seen them half a century before: but now they were sharing harbor space with black-funneled ocean steamers that tied up at Locust Point to fill their bunkers with Cumberland coal and their holds with western wheat for the markets in Liverpool or Bremen or Amsterdam. Factories were larger and more numerous, and much of the smoke came from the tall stacks of B&O switch engines constantly shunting their strings of freight cars on Locust Point. The city had grown, and the growth and the gathering smoke clouds were evidences of the industrial change that had transformed the nation since Garrett’s youth and destroyed forever Thomas Jefferson’s dream of a sturdy agrarian republic.

The history of the Atlantic ports during this period of change, and indeed since the Revolutionary War, was one of intense competition in every phase of commercial activity. There was competition on the sea lanes as enterprising skippers from Massachusetts Bay or Sandy Hook or the Delaware or the Chesapeake drove their ships and their bargains equally hard in the overseas markets—Europe, Latin America, Africa, the Orient—in ceaseless attempts to outdo Britons, Frenchmen, Dutchmen, and one another. There was competition for the home market, carried on by hundreds of small schooners and sloops in the coasting trade, poking their noses into the myriad inlets and harbors that broke the irregular Atlantic coastline from Passamaquoddy in eastern Maine to the sea-island coast of Georgia.

 

And following the War of 1812 there was, increasingly, competition for the interior trade. America’s destiny lay westward, and by 1800 the West meant somewhere beyond the Appalachians. As the tide of settlers flooded over the mountains and into the fabulously rich farming country of the Mississippi Valley, merchants along the seaboard cast covetous eyes toward this horde of potential customers and debated the best means of reaching a market so full of promise.

The Mississippi River and its tributaries were the West’s highways, New Orleans its outlet, but this was a roundabout route to Europe and the eastern seaboard even after the steamboat arrived to speed the flow of traffic on the western waters. Textile mills in England and France were hungry for the cotton that yearly whitened the fields of Alabama and Mississippi: north of the Ohio the corn grew tall and went to market in the form of meal and whiskey and hogs to feed the urban workers in the East. The land beyond the mountains also teemed with other products. What was needed was a better means of reaching them than by way of distant New Orleans.

The Appalachians, running in a series of rough parallel ridges all the way from Maine to northern Alabama, constituted a formidable barrier to the western trading ambitions of the Atlantic ports: and the wagon traffic: that jolted over such highways as the National Road offered poor competition for the busy river boats. The first successful challenge to New Orleans came in 1825 when New York completed its Erie Canal across the level farm country between Albany, on the Hudson, and Buffalo, on Lake Erie, and thereby commanded a cheap and direct route to the interior. Traffic on the Mississippi, thanks to the steady over-all expansion of the western trade, continued to grow: but for the other Atlantic ports, New York’s water-level route across the Appalachian barrier posed a serious threat.

Indeed, New York was forging rapidly ahead of her rivals. Leadership in the export of western grain and meat products was bestowed by the Erie Canal, while the establishment of a regular line of sailing packets between New York and Great Britain in 1818— the famous Black Ball Line. soon joined by host of imitators—enabled her to secure the cream of the high-cost freight and passenger business on the Atlantic shuttle. New York further strengthened her position by invading the all-important cotton trade. Her merchants not only made huge profits marketing the crop for the southern planters: they also shipped much of the cotton to Europe by way of Sandy Hook, thus providing eastbound cargoes in the transatlantic trade to balance the costlv western shipments of English manufactures. The other seaboard cities were left far behind by the enterprise that radiated from Manhattan’s countinghouses.

The disappointed rivals pinned their hopes on finding an effective answer to the Erie Canal. Prosperity and growth still awaited any city that could open an economical route to the continually expanding interior market. The eventual solution was provided by the railroad. Alter a quater-century of apprenticeship. the railroad came of age in the 1850’s and conquered the stubborn Appalachians, offering new and steadily improving highways between the West and the seaboard. The key years were 1851, when the Erie Railroad was completed between New York and Dunkirk on Lake Erie; 1852, when the Baltimore & Ohio reached the Ohio valley at Wheeling and the Pennsylvania Railroad was opened between Philadelphia and Pittsburgh; and 1853, when a series of short roads between Albany and Buffalo were united to form the New York Central System.

These four—the Erie, the B&O, the Pennsylvania, and the New York Central—were the trunk lines, the new implements of the rivalry among the Atlantic ports, destined within the next few decades to extend that rivalry on their own rails as far west as St. Louis and Chicago, to cripple the mighty Eric Canal and virtually sweep the lordly steamboat from the western rivers, to move freight eastward across the mountains at a speed and at a price and on a scale undreamt of even in the heady, expansive years before the Civil War. The trunk lines were to fight, and combine, and fight again for greater shares of the western business. Their scramble for traffic was to reveal the American competitive system at its savage best and unbelievable worst.

This was the situation confronting John W. Garrett when he became president of the Baltimore & Ohio in 1858. The railroads had suddenly emerged as the makers of cities. A continental treasure hunt was underway. The trans-Mississippi country was revealing its wealth to the miner, the farmer, and the cattleman, while factory chimneys darkened the skyline in eastern cities and Chicago was becoming the world’s hog butcher. There were new oil refineries along the Cuyahoga at Cleveland, new steel mills along the Monongahela at Pittsburgh. The men who extracted or produced or refined or processed America’s unbelievable abundance clamored for transportation to market, and in most cases this demand was supplied by the railroads.

The need was great, and the railroads were built too fast. Frequently overextended and overcapitalized, often suffering at the hands of stock speculators or construction companies, forced by top-heavy debt burdens into irresponsible rate-cutting and flagrant discrimination in favor of towns fortunately located or shippers offering large consignments, the roads brought injury as well as prosperity to farmers, investors, and cities in the struggle to meet expenses. Yet there were enormous profits to be made in railroading, whether by conscienceless manipulators or constructive managers, and the nation had its share of both. Large systems began to emerge. The big railroad executive had become a power in the land, in many instances guiding a corporation too large for the states to cope with in a period before federal regulation was effective, playing for high stakes in a game that had few rules, fewer umpires, and too many players.

It was no game for the squeamish or the hesitant. In pitting the B&O against its rivals to the northward—the Pennsylvania, the Erie, the New York Central--Garrett was moving in fast company. The New York Central in those days was guided first by hard-headed Erastus Corning, New York ironmaster and railroad promoter, and later by swaggering, shrewd, profane old Commodore Vanderbilt of Staten Island. The incisive Edgar Thomson and the handsome, ambitious Tom Scott, equally capable and equally aggressive, controlled the Pennsylvania. And the Erie was then becoming notorious as the Scarlet Woman of Wall Street under the guiding hands of pious little Daniel Drew and that most competent manipulator and wrecker of railroads, Jay Gould. These men, differing widely in character and personality, had this much in common: they wielded near-absolute power with a skill that bordered on recklessness, and they shared equal and substantial portions of the acquisitive instinct. That John Garrett could hold his own in such a group reveals a good deal about the strength and power of the B&O’s new president.

The trunk lines competed savagely for traffic, and the West in all its abundance could not offer enough to satisfy all four, especially when the Great Lakes, the Erie Canal, and the Mississippi River were still carrying freight cheaply and the Grand Trunk Railroad could offer yet another seaboard outlet by way of Montreal and Portland. Competition meant price-cutting, and during the periodic rate wars that broke out among the trunk lines in the Sixties and Seventies, it was possible to travel from Chicago to New York for ten or twelve dollars, while livestock occasionally went for a dollar a head. This was great for travelers and shippers, but ruinous for the railroads; and after some weeks or months of such rock-bottom rates there would be meetings at Saratoga or Niagara Falls or New York, attended by frock-coated railway presidents who smoked cigars around conference tables and hammered out agreements to maintain profitable rates.

Rate-making—which was one of the first problems Garrett had to face—was less spectacular than stock market raids in Wall Street or crack express trains thundering through sleepy villages at night, but it was the very heart and core of railroading, and in the robust days of the Gilded Age it was still considerably more of an art than a science. It was by all odds a complicated business. Rate agreements involved such items as distance, the threat of competing water routes, the need for prorating with connecting and feeder lines, the classification of freight, and so on. Even with the best of intentions, which among railroad executives of that day were often lacking, it was impossible to adhere to given rate levels when feeder lines continually demanded larger shares of prorated traffic and enthusiastic agents shaved prices independently in order to secure large consignments. Furthermore, simple economics prescribed that it was less costly to carry freight at a loss than not to carry it at all, a fact of life especially apparent to chronically bankrupt roads like the Erie, milked dry by the speculations of Jay Gould and hungry for any sort of revenue. So the agreements were invariably broken, to be remade and then broken again.

Garrett was able, during these periods of alternating wars and agreements, to win acceptance of the principle that rates to Baltimore should be lower than those to Philadelphia and New York by virtue of Baltimore’s shorter distance to the interior. This so-called differential system, which favored Baltimore, and to a lesser extent Philadelphia, over New York and Boston, was accepted by the northern trunk lines reluctantly and resented by New York merchants most vociferously; but Garrett insisted that the alternative to his differentials was no adherence by the B&O to any rate agreements, and the other lines conceded the point. Much freight thus found its way to Baltimore which would otherwise have sought a market in New York, and the port on the Chesapeake had reason to be grateful for the differential system.

Competition was more than rate-cutting. It also involved expansion into new territory, another corollary to the ceaseless quest for traffic. This expansion was often dictated less by ambition than by the need to bring un-co-operative (and frequently bankrupt) feeder lines under control so that rate levels could be maintained. Each of the four trunk lines began the gradual acquisition of connecting roads, usually by operating agreements, loans, and bond guarantees which had a way of becoming leases or purchases of the smaller companies within a few years. Thus did the New York Central reach to Chicago and St. Louis by bringing the Lake Shore, the Michigan Central, and the Big Four into its orbit; the Erie moved westward by acquiring the Atlantic & Great Western; the Panhandle to St. Louis and the Fort Wayne road to Chicago fell to the Pennsylvania; and Garrett, after absorbing roads with outlets in Columbus, Cincinnati, and Sandusky, Ohio, constructed a direct line from northern Ohio to Chicago in 1874 and later gained access to St. Louis through control of the Ohio & Mississippi from Cincinnati.

The trunk lines engaged in this process of acquisition by a series of maneuvers that bore considerable resemblance to the territorial jockeying of feudal baronies in medieval times. Garrett succeeded in obtaining for the B&O a long-sought extension to Pittsburgh in 1871, a move that the Pennsylvania had blocked for years through its influence upon the stage legislature. As though to retaliate, Edgar Thomson challenged Garrett’s power in Maryland politics and built a line from Baltimore to Washington that paralleled the B&O’s profitable Washington Branch. The B&O and the Pennsylvania invested in various Virginia roads during the Sixties and Seventies, but the ambitious plans of both Garrett and Tom Scott for vast railway systems in the South fell through when hard times forced many southern lines into receivership; the Pennsylvania disgorged its southern holdings in the mid-Seventies, and by 1881 the B&O had disposed of all save a branch line in the Shenandoah Valley. The rivalry between the two systems continued elsewhere. Shortly before his death in 1884 Garrett was to begin construction of a costly line from Baltimore to Philadelphia when the existing road that connected those cities fell into the hands of the Pennsylvania.

With this brand of leadership the B&O held its own in the trunk line struggles and expanded in all directions, becoming one of the larger systems, but modernization as well as expansion was necessary in the campaign to bring more traffic to Baltimore and increased profits to the B&O. The Main Stem was double-tracked. Tunnels were arched, curves realigned, and great bridges erected across the Ohio at Benwood and Parkersburg to avoid the troublesome ferry connections with B&O lines in Ohio. The company built spacious, comfortable hotels to be operated in conjunction with its stations along the line.

The Baltimore & Ohio began building its own sleeping and dining cars and operating its own express company, put up a large rolling mill at Cumberland to make its own rails, controlled its own telegraph company, and built many of its own locomotives. From the great B&O shops at Mount Clare in downtown Baltimore came the graceful ten-wheelers of Thatcher Perkins and the weird-looking camels of Ross Winans —slow, powerful, unorthodox locomotives with cab mounted atop the boiler, long a hallmark of B&O motive power. Number 600, the giant Mogul built at Mount Clare by John C. Davis in 1875, was exhibited at the Philadelphia Centennial as the world’s largest passenger locomotive, later spent years hauling B&O express trains over the steep Allegheny grades.

Above all, Garrett labored to improve the road’s facilities in Baltimore. The gigantic Locust Point terminal, with coal yards, huge grain elevators, a dry dock, coffee and tobacco warehouses, cattle pens, and ample water frontage adjacent to the tracks, was perhaps his greatest contribution to the city’s commercial expansion. Ships and freight cars could now exchange their products swiftly and cheaply, and European immigrants bound for the interior could board trains at dockside.

Recognizing the future of steam in ocean transport, Garrett bought three small steamers from the government after the Civil War and installed regular service to Liverpool. This venture was short-lived, the vessels being less than adequate for profitable operation, but the outgrowth was a joint investment by the B&O and the North German Lloyd Company in four new steamships to operate between Baltimore and Bremen. A few years later the Allan Line was sending steamers from Liverpool, and at the time of Garrett’s return in 1881 Baltimore also enjoyed steamer service of sorts to London, Newcastle, Rotterdam, and Bristol.

Garrett was well fitted by background and temperament for the strenuous duties required of a trunk line president. He had learned the importance of the interior trade as a junior partner in his father’s firm, selling western wheat and provisions on commission in the eastern market and filling orders from western customers for sugar, coffee, tea, and other items in demand beyond the mountains. In the Forties and Fifties, under the energetic guidance of John and his brother, the firm of Robert Garrett & Sons began to engage in banking operations that soon overshadowed the grocery business. The intricacies of dealing in domestic and foreign exchange, discounting commercial paper, buying and selling securities for investors, and negotiating bond issues for various railroad companies provided valuable experience for the complex financial side of railroading.

It was only natural that the Garretts, interested alike in the western trade and in profitable investments, should buy stock in the B&O during the Forties as it pushed westward across the Appalachians, and enlarge their holdings in the Fifties when completion to the Ohio swelled the value of B&O securities. It was also natural that a stockholder of John Garrett’s background and ability should be elected to a seat on the B&O board of directors in 1855. He made his presence felt almost immediately, throwing himself into committee work and acquiring a thorough knowledge of the road’s facilities, traffic, and financial condition. He led the private stockholders in a battle against the directors representing the city of Baltimore and the state of Maryland, secured the declaration of a thirty per cent stock dividend long opposed by the city and state interests, and so impressed his fellow directors that they elected him president of the road in 1858. Before the outbreak of the Civil War the Garretts had gained effective control of the B&O. For nearly a quarter of a century that control was exercised in vigorous fashion by John Work Garrett.

It became apparent, right from the start, that Garrett, this large, imposing, banker’s son, with his firm humorous mouth and massive forehead and penetrating eyes, intended to run his railroad. Courteous, friendly, urbane, generous, altogether charming, and every inch an autocrat, Garrett won the devotion of some, the enmity of others, and the respect of all. He poked and fussed about the railroad like a dyspeptic general on a new post.

Little things did not escape him. He inquired about a loading chute being installed by the company to facilitate the transfer of cattle from barges in the Ohio River and remarked acidly that “the delay has been extraordinary in erecting so simple a structure.” He demanded close monthly statements from all departments as to expenditures, material on hand, repairs, and so on, with an eye to correcting slipshod methods of keeping accounts. He required daily reports to his office on the performance of each engine on the line, kept a minute check on rates charged and traffic carried, noted discrepancies and demanded explanations for them, and personally investigated many reports of discourtesy to passengers or inconvenience to shippers.

“The statements you present,” he informed one of his department heads bluntly, “are not only inaccurate and unjust, but palpably disingenuous.” “In my judgment,” he wrote another, “you are entirely wrong.” The recipients of these little missives probably shook their heads and swore, but most of them continued for years on John Garrett’s payroll, and the sharp attention to detail began to show results in the form of more efficient operation and decreased expenses.

And Baltimore was showing the effects of its superior connection to the West. The wooded Alleghenies echoed day and night to the wails and labored exhaust of B&O coal trains pounding eastward, a black tide roaring down to tidewater for transshipment throughout the smoky industrial northeast. From elevators that broke the flat midwestern skyline came the wheat, tons of it, more each year, filling every boxcar the road could send, until Baltimore with her lower freight rates far surpassed Philadelphia and Boston and challenged the leadership of New York in the export of grain. And still the trains rolled eastward-- with corn, with cattle and hogs, with flour and whiskey and tobacco, with oil from the refineries in Pittsburgh and Marietta, with hams from the Chicago stockyards. New industries sprouted along sidings in the Baltimore area, while Rio coffee and West India sugar continued to swell the warehouses on Locust Point and fill freight cars for the long trip to western kitchens. Iron and steel rails stacked up along the docks as vessels from Britain emptied their holds to make room for the constant yellow flood of grain. Baltimore and her western railroad had assuredly kept pace with their rivals in the new age of coal and iron and steam.

Garrett spoke of these things, briefly, from the rear platform of his private car. When he had finished and the applause had died away, the crowd pressed forward to shake his hand for over half an hour. Eventually the people began to thin out, and Garrett and his family walked through the station and entered carriages for the drive to his estate, Montebello.

Baltimore’s prosperity, of course, was far more than the work of one man. But the giant commercial and industrial center that is Baltimore today and the thriving railroad that continues to wheel its long freight trains into the yards alongside the piers on Locust Point yet bear the imprint of the big man who guided the B&O so vigorously through the boisterous Gilded Age.