Chapter 10


It was not to be expected that a secret cache of weapons could remain a secret for very long. Both state and federal officials were intrigued by rumors of large stands of arms with no apparent owner; the one favored, and the other feared, an expansion of the filibustering expeditions such as the one William Walker was making in Nicaragua in that year. With some creative use of paperwork I was able to transfer the bulk of these weapons to various state armories, chiefly in Georgia and Louisiana, and with the active help of the Secretary of War (John Floyd) headed off the federal inquiry entirely. The rifle factory continued to operate at a loss, but not so large a deficit as to impede the company.

1857 was a landmark year - a dreadful year - in many ways. Politically it was the ruin of any hope for peace; Brooks and Sumner had their famous altercation in the Senate chamber after Sumner's passionate speech against the 'harlot' of slavery. Kansas was roiled by outright warfare as factions sought to intimidate or silence any opposition. Rival state constitutions were proposed; one, legalizing slavery, was patently voted in gunpoint, proving that Southern men were prepared to countenance anything, no matter how repugnant or debased, if it only promoted slavery. President Buchanan's administration proved itself weak and indecisive in the face of crisis, and so the country continued to divide.

Financially this wretched year was catastrophic, approaching apocalyptic. The Jacksonian Democrats having done away with a central bank decades ago, the nation had no sound stable currency and far too many fiscal policies. The net effect was to amplify the expansion of business in the good years and the wreckage of companies and fortunes in the bad. The national economy had been cooling down from a roaring boom, over-supply of commodities and under-capitalization of businesses conspiring to make an inevitable contraction in the market. This contraction, however, was to be different in kind and scale from anything the United States had ever seen.

There were a number of old firms that made steady if unspectacular profits and paid high dividends to a select group of investors, these chiefly being old New England families. Unfortunately, even Yankee aristocrats are not immune to the realities of business, and even fine old gilt-edged firms cannot long pay out more money than they earn. Tight money and high interest brought several of these old patricians down, sending waves of unease through the commercial sector. Unease became fright as more companies defaulted on loans, destroying the capital of banks overnight. These banks suspended payments in turn and were forced to refuse depositors who wanted to withdraw money; as the banks failed, fright became panic.

Panics in the market had been seen before; businesses had failed and banks collapsed in roughly ten-year cycles. What was different about 1857 were the number of corrective measures not taken or which proved ineffective. Instead, the unexpected collapse of the Ohio Life & Trust - an employee had embezzled a fortune and fled - set off a hysterical frenzy. British concerns began withdrawing funds from American banks. Ordinary people attempted to get their money out before their bank could fold, thus causing the very failure they feared.

Well and truly frightened, the wealthy financiers of the East purchased fortunes in California gold and arranged to have it shipped around Cape Horn, reasoning that the presence of such an amount of solid gold would calm the public hysteria. I believe this would have succeeded, save for the loss of the steamship 'Central America' in a hurricane off South Carolina. Along with the tragic loss of life, lost were more than fifteen tons of gold, some owned by the federal government and the rest by private investors. Proving that American money was soundly backed by gold might have stemmed the panic, certainly it would have calmed British fears and renewed international faith in the dollar. Instead, such a staggering loss convinced everyone that the dollar was unsupported, worthless. So tens of millions of dollars went to the ocean's bottom, and hopes were sunk equally deep. Despair gripped the financial centers, gold and silver disappeared from circulation, businesses closed and banks fell like so many houses made of playing cards. It was without question the worst catastrophe yet seen in America, and it lasted until the greater calamity of civil war arrived.

Through all of this, the Great Southern continued to function. We were reduced in some cases to accepting barter, and forced to cut rates to ruinously low levels. Combined with the losses incurred by our iron milling operation and the rifle factory, we scarcely turned a profit but we did remain in business and on schedule, and we paid our bills. More than this I dared not ask.



At this turbulent and difficult time was born the locomotive that became the symbol of steam railroading in America, the 'American' type 4-4-0. Produced in greater numbers than perhaps any other locomotive in history, the design and parentage of the 4-4-0 were fraught with difficulties, and it is fair to say that had the Great Southern Railroad not taken an interest, it might never have come to production at all.

By 1857 our 0-6-0 'Baldwin' types were ageing, and as we were using them hard the locomotives were suffering more frequent and costly breakdowns. There was no shortage of competing designs on the market, and the 4-4-0 design dated back to Henry Campbell's first patent of 1836. They simply didn't measure up to the 0-6-0, whose long wheelbase allowed plenty of room for a big firebox and boiler. The solution was to extend the distance between the swiveling front truck of four wheels and the central set of four drivers, filling up the added space with the big boiler and firebox that speed and power required. This new improved 4-4-0 could out-pull an 0-6-0, and with its front truck to help it around curves it could go faster, too.

The Baldwin works were instrumental in developing and perfecting the new 4-4-0, but old William Baldwin wanted nothing to do with it! Tried-and-true, the reliable 0-6-0 was a steady money-maker for Baldwin as they were inexpensive to make. A new locomotive type meant new tools, new training for workers, new molds and forgings. He wanted no part of it! And so his men migrated to other shops like Eastwick and Harrison, William Norris and Campbell's own factory. We hired our share for our Providence works, and put at least ten in service in 1857 alone.


Old William Baldwin had the last laugh on all of us, however. Spurred by loss of sales, he quickly converted his shop to making 'American' types, and by careful management and solid construction recaptured the business he had formerly lost. We used several different makes of 4-4-0 on the Great Southern, and I will freely attest that Baldwin's machines were as good or better than any, including our own.

The improvements that had so increased the acceleration of our 0-6-0's were applied to the new designs, with equally remarkable results. Our machines might not set speed records, but for fast starts and sustained speed on grades they were unmatched.



Chapter 11

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