Chapter 2


John Ephraim Haynes:

I had never intended to enter into the railroad business and in fact was utterly ignorant of it. A consortium had been formed for the purpose of opening textile mills in Charleston, South Carolina, and I had been offered a share as a managing partner. I was born and raised in Rhode Island, and had worked in a mill in Providence but was without patron and unable to rise in that business and so came South, a man in his third decade, to take up the offer of a friend I had known at college, for gainful employment with the proposed Mercury Textile Mill Company.

The critical factors were shortages of labor and transport, we soon found. Slaves were expensive and difficult to manage in delicate work, and free labor was scarce. We were able to copy some of the systems used in Northern mills, including the employment of orphans and unmarried women, but labor cost and availability remained a concern.

Transport should not have been a problem; Charleston is located on a spit of land between the Ashley and Cooper Rivers and a railway company was founded there in 1827. The rivers are however shallow, narrow and are not navigable for any useful distance into the hinterlands. Of the plantations located near the city, most are given over to the production of rice and indigo and produce little if any cotton. Those plantations that could still produce a viable cotton crop were located farther inland, in the piedmont and low hill country, where cotton had not yet leached the soil and wrecked its fertility.

There was a railroad already in place from Charleston west to Hamburg, which is across the river from Augusta, Georgia. Once touted as the longest in the world, it had fallen into a sad state of disrepair and disuse. A boiler explosion some years before had driven away investors as well as potential customers for freight and passage, and in general there had been false economies and mismanagement of finances. We were invited to join the company as investors but refused; a counter-offer of purchase was accepted and the partners named me to head up railroad operations of the renamed Mercury Transport Company. We had not chosen the name to flatter the Charleston newspaper of the same name but soon found it did not hurt us; I did not know then and never did discover the origins of the name.

I was as I said a very young man for such a position, and I had a young man's foolish confidence. With new owners came resurgence in optimism and an influx of new capital, and so we set about restoring the railroad to operation so that we might bring cotton to our mill. Our most notable improvements were the addition of a branch line to the state capital in Columbia and a set of new and modern locomotives from William Norris' works in Philadelphia. These machines replaced old English-style locomotives that were lightweight, underpowered and unreliable, and the Norris machines gave us fine service. For that day they had high pressure and great traction power, and their ability to climb a grade under load meant we could extend our tracks into the piedmont where the cotton grew.

We spent much time and effort adjusting our freight tables with an eye to keeping our rates moderate so as to attract customers, and as much or more on our mechanics and engineers so that our service might be reliable. And attract customers we did! Our opening day festivities were the talk of the town! We provided a train of special cars for notables to officially open the new branch line to Columbia, stopping at Branchville to allow the examination of the new switch and a modern watering facility. With that done, there was nothing for it but to open the lines for regular service and keep up the schedule as regular as a chronometer. That was something different for Charleston, and at first they did not care for it. If a prominent man needed fast passage to Columbia he expected the engineer to await his arrival, and did not take kindly to being told the train had left as scheduled a quarter-hour before!

I met my future wife, my Caroline, for the first time that day in Branchville. I had been married once before, to Mary Hanlon, but poor Mary died in childbirth - the child, too - and I had thrown myself into my work since then. But there was Caroline, not a bit frightened of the big Norris or its hissing boiler, eager for a ride and stamping her little foot at her outraged father. She was above the coquette, had no use for the simpering manners so common to Southern ladies. I loved her, even then.



During our first six months of operations there were regular meetings of the company for the purpose of discussing our situation and future plans. Our debates were often heated - even intemperate! - and concerned how to apportion out our scant resources between the mill and the railroad. Due to delays in delivery of equipment and the problem of securing sufficient labor, the mill buildings sat idle for most of the first year, absorbing funds yet producing nothing of fabric or revenue. The railroad prospered, but South Carolina was not large enough for us to materially expand our operations in that state. One set of men wished the company to purchase cotton plantations to supply the mill, but we were unable to secure an offer we could afford. The plantation owners were barely bringing in a respectable crop of cotton, but their pride and their debts encouraged an asking price we could not raise. Many of these high-toned gentlemen planters were in fact deeply indebted and near impoverished except for the slaves they could sell West where the soil was not yet exhausted. With no further investment in industry or land possible, we turned our full attention to the railroad.

At this time the state of Georgia was actively debating a charter for a railroad company, the so-called Central of Georgia, which would have a monopoly of operation for the entire state. Through the good offices of prominent men of Augusta we were able to induce the Georgia legislature to agree to charter any railroad company possessed of a fixed amount of financial backing. Opposition came from Savannah, whose port feared a railroad that terminated in Charleston. By promising the immediate construction of a spur line south to Savannah (via ferry at first, as at Augusta) we were able to attain their agreement and the expansion into Georgia began. To pre-empt the Central railroad we secured a bond from the Planters Bank of Charleston and immediately purchased property and right-of-ways in Macon, Columbus and the new city of Atlanta in the far north.



By the close of 1840, freight and passenger traffic had brought in about $165,000 each for a clear profit of some $135,000. The backers of the mill threw their energies into getting that industry up and running. So poorly had their hopes prospered that they lost all influence with the directors; in the space of a single year, we had become a railroad company, and I a railroad man.

Financiers in Savannah helped provide the funds for our expansion program of 1841, and as railroad fever swept into Georgia the bonds sold well; the promise of a return of some 11% certainly encouraged that. We were able to secure enough iron rails to run the tracks on through to Savannah, purchasing most from English firms and some few from Philadelphia. From that later city, and the works of William Norris, we obtained additional locomotives and a score or more of passenger and freight cars. By September we had completed additional track to Macon, Georgia and were running regular trains through Augusta to Savannah and Charleston. The result was dramatic as freight costs fell and fell even as volumes doubled and redoubled.

Pressed as we were for rapid expansion to forestall competitors, our grading crews and track gangs quickly became proficient at cutting through the pine forests and red clay of the lower South. Timber remained a problem as the region abounded mostly in pine, which was deficient for our purposes. Though we never achieved the mileage rates of the Trans-Continental crews, for 1840 our expansion was the marvel of the country. We learned early on the great lesson of the American railroad: build the road cheaply and improve it from the profits.

For 1841 we tripled our profits, netting $464,000. This included some moneys from the textile mill, which was at last in production, but the figures of the ledger-book were beyond dispute: the money was in the railroad business.

I remember how proud I was in 1842, and how very happy. Our company was prospering, and my fortunes with it. My salary was increasing, and with the establishment of our first regular dividends on stock, I for the first time entered into a modest prosperity. The company secured lower interest rates for our bonds, issuing new certificates at 10%. With my new financial security, I was emboldened to ask for the hand of my beautiful Caroline in marriage, and my proposal was accepted! Her father was an attorney and frowned on my employment in 'mechanic work', but Caroline entreated him and melted his resolve, and we were wed.

The Mercury Company borrowed deeply that year, securing a million of dollars to run the line on to Columbus, Georgia. In June we borrowed another million to connect Augusta northwest to what would become the city of Atlanta, running trains from Atlanta through Augusta to Charleston and Savannah. As new locomotives were procured we inaugurated non-stop service from Atlanta to Charleston; this was so popular we soon added additional trains to the schedule. Our purchases of locomotives and cars were so heavy we were obliged to retain a permanent agent in Philadelphia and he became well acquainted with the problems and perils of shipping rails, locomotives and cars by sea.

All told, we profited some $630,000 dollars that year against a debt of $3 millions, the mill side of the business showing a solid profit of $225,000. Although this seemed to show that our profits were static from the previous year, the truth is that our expenditures for rails, locomotives, cars and equipment of all sorts, and labor of all kinds, were heavy. So we were well content with our financial position, and were coming to appreciate the profit potential of passenger traffic.


Chapter 3

Back to Cover Page

Top