Chapter 3


1843 began less joyfully; we needed continual infusions of fresh capital in order to maintain our rapid growth and our bankers were becoming reluctant to foster the new debt that growth must entail. I had gone around one afternoon to see Mister George Fulton of the Planters Bank, our usual representative, in response to his note indicating it was a matter of some urgency. His office was accoutered as a gentleman's club might be, with chairs upholstered in fine leather and liveried servants on hand to bring refreshments.

Fulton was fond of gesturing with his cigar and punctuating his pronouncements with puffs of aromatic smoke, so I was not surprised to see him puff meditatively and exhale before raising his topic. "We at the Planters Bank are very satisfied with the operation of the Rail Road, John. Very satisfied. Our clients speak to us of the moderation of your rates and the excellence of your schedules. It is a great work, perhaps as great an enterprise as our city has ever witnessed." Puff. Puff. A gust of smoke. "Nonetheless, there are concerns that your credit may be rising to a risk... The Bank would like your reassurance that the Rail Road intends to devote its income to repayment of these bonds outstanding rather than undertake further expansion."

I had a taste for spirits in those days, and Fulton kept a fine brandy for his customers. I paused for a thoughtful sip before I made my rejoinder. "I am very sorry to hear that, George. The Mercury is in fact contemplating rapid expansions and we shall be very sorry if our beneficial relationship with Planters should come to an end. If you are troubled, we can of course relieve you of the obligation and do business elsewhere."

He looked at me nonplussed; it was not the response or the deferential tone that he had expected. "But... where should you obtain capital! In such amounts! I... We...That is to say, the bank has been very satisfied with our investment in the Mercury road! That is to say!"

I took another sip. "I cannot reveal matters of confidence, of course... but there is a bank in Savannah that has made its willingness known to me. And a bank in Columbus, but they are new, and somewhat small. Our agent Mister Dutton has been contacted by a Philadelphia concern..."

"Philadelphia!" He gasped and coughed gently around the inhaled smoke. "My good sir! Phil-a-del-fayah! There is no necessity in even considering doing business in that city! Why, we at the Planters are equal to any issue of credit you might have without resort to Yankee money! The idea that the great Charleston Rail Road should be funded by Northern bankers is not to be contemplated!"

I held my tongue - I have found that to be a singularly valuable negotiating tool, the ability to sit calmly and say nothing. I allowed him to profess his willingness at some length, then extracted another million in credit and refinanced the old bonds at a full percent lower interest! For I have found it true that if you owe a large sum the bank is your master, but if you borrow a great deal more you can master the bank!

With additional bonds and our profits in hand, I was able to grade and lay a line all the way to Raleigh, North Carolina. That city was already served by the Raleigh & Greensboro line, and there was some discussion as to our route and method. One faction proposed to extend from Charleston itself north to Raleigh, jointly using the R & G station and track. My proposal was to build northeast from Columbia, SC and build a station that would be ours entirely. Our stockholders had become more numerous and their individual holdings less, so that my block of stock was now one of the largest. Coupled with the company's flourishing success under my management, this meant my proposal carried with a comfortable margin. We built the new station at the western boundary of the city, and named it Raleigh Central though it was in no wise central to that place. This became our policy for any city that already had railroad service - we never shared station or track, and we always called our station the Central.



There was some concern as to the layout of the track into Raleigh, as our line must pass over the R & G right of way. Some doubted our engines could pull a load over the necessary grade, but our chief engineer swore it could be done and in fact we never experienced any difficulty, even in the occasional snow and ice of winter. There was further concern as to the great size and cost of the new facility as it was to be a station of the largest size, but I pressed ahead and refused to contemplate any reduction. Within two years the buildings were fully in use, and I resolved from that point always to think big.

With profits rolling in we constructed a spur line to the port of Wilmington and offered regular train service from Raleigh and Charleston to that place. Chiefly this trade consisted of carrying tobacco to the port and supplying Raleigh and Charleston from the meat packers of Wilmington. For that year of 1843 we paid a regular dividend of $.55 per share, posted a profit of $1.3 millions of dollars, and reaped $250,000 more than expected from passenger fares. In sheer length of track and quantity of rolling stock, the Mercury had become one of the largest railroads in America.



As we were now operating in three states and planning to grow even further, we reorganized the company in 1844. The old Mercury was bought out by the new Great Southern Railroad, keeping Mercury Industries as a division and paying out three shares of GSRR for each share of Mercury. With this new division of stock in hand I found I was a wealthy man, at least on paper, and I began to pay close attention to my own finances and investments. One extravagance I did permit was the purchase of a home in Charleston, allowing Caroline to decorate it to her taste. It was small, even for the two of us and our few servants, but I do say it was comfortably and beautifully appointed. For the first time in my life I felt secure; I had the love of my wife, a home, good and challenging work, and before the year was out we were blessed with a son! We named him Franklin for the great man I admired above all others, and Mason for his mother's father.



I did soon have to turn to other sources of capital than the Planters Bank, but a booming national economy and our reputation for financial solidity meant investors came to us rather than the reverse. Our entire bonded debt of $4 millions was refinanced at 7% and service extended as far as Richmond, Virginia in 1844. The Central Station we built on the west side of that city was a large and fine structure, quite eclipsing the rough, whitewashed buildings of the Richmond Eastern. In the autumn we pushed our road over the border into Alabama, connecting to a fine new station in Montgomery. We laid our one-thousandth mile of track on that line and it was a great event at the time, yet so soon to be eclipsed by other triumphs!

Another innovation of 1844 was the service we offered from Richmond to Charleston with no stops in between. When announced, it was widely ridiculed: no rail service could compete with coastal steamers, so it was said, and no locomotive could make such a lengthy trip with any reliability. Editorials predicted that women and children would be abandoned in the wilderness, or blown apart in boiler explosions. We proved them wrong! We ran our locomotives hard, but tended them as beloved children and they repaid us with fast, efficient service. We ran the steam ships right out, too! They might offer greater luxury in their fine cabins, but we cut their asking price by half and beat their best times by hours. And that success made me believe we might compete with the steamboats on the western rivers.

1844 is chiefly remarked in my memory, however, as the beginning of the controversy that ended those happy years in Charleston, and which came about in this way. Born and raised in the North-East as I was I had no experience with the South's peculiar institution - slavery - until I found myself in Charleston. Strange and repugnant as it might seem to me, slavery was nonetheless legal and constitutionally protected, and looked upon as no unusual thing in the Southern states. Indeed the railroad had made extensive and effective use of slave labor, first for making cuts and fills, later for the handling of materials at the railhead and the laying and repair of track. These laborers were all leased from others; I had no stomach for entering into the status of slave-owner.

My opinion was - and remains - that Southern capital was over-invested in slaves, to the detriment of transport, manufacture and mercantile concerns. I doubted then the wisdom of so heavy a concentration upon one system and one crop, and urged that Southern resources be developed and exploited. I had written an article for Debow's Journal on these topics and was discussing it with a group of friends and associates who had joined me in awaiting the telegram that would confirm the opening of the Montgomery line. One of the men present I did not know well and wish now I never had met; he was then-Congressman Robert Barnwell Rhett. Fire-eater, rabid secessionist, later owner of the 'Mercury' newspaper, failed candidate for the Southern Presidency... odious miscreant! Vain, arrogant, intolerant wretch! He interrupted me before my supposed friends, sneered at my remarks, accused me of wishing to overturn the natural order of the South! I was not accustomed to being spoken to in such a fashion, and our exchange became heated. But Rhett did not stop there, nor did he confine his hateful actions to my own self. Within weeks, the society of Charleston had ceased to call upon my wife, nor was she well received by her former friends. In time Rhett offended others, and my wife's family connections were extended tirelessly in her behalf and so the damage largely remedied, but I never forgave him.




1845 was a time of consolidation for the railroad and expansion of the industrial part of our business. I brought in a noted railroad man, Dermott Gillmore, formerly of the Cleveland Central, for the purpose of improving our scheduling and freight-handling arrangements. For my own part I spent much of the year traveling in the West, but before my departure I refinanced our debt ($4.5 millions) once more, this time at a mere 5% interest. I used the ready supply of capital and our profits to set up a paper mill in Jackson, Tennessee and a textile mill in Mobile, Alabama, having seen the inherent advantages of such on my first visit to this city. You may express surprise that I, who had battled so vigorously to concentrate our capital in transport rather than industry, should make these endeavors. But in fact, our percentage of total investment in industry was slight compared to the railroad. And it was becoming increasingly obvious that to increase our railroad profits we had to do more than haul agricultural produce from farms to ports. We needed new products and finished goods to transport, and there was seemingly no-one else in the Southern states who had the desire - and the capital - to develop manufactures.

For the year, the Great Southern exceeded $3.5 millions in revenue, profited $1.85 millions and thus in finance and in mileage exceeded all the other major rail ways of America, combined.

On Gillmore's recommendation, in 1846 we vastly extended telegraph operations to our stations. Rather, we allowed the Maryland Electric Telegraph Company to install its equipment in our stations and string its lines along our right-of-ways, carrying public traffic in addition to our company business. At first we collected monies from them but soon bought up the business entirely and made it our own.

Early in 1846 I was approached by a group of men, disaffected workers late of the shop of Matthias Baldwin of Philadelphia. A former clock-maker turned locomotive manufacturer, Baldwin had a reputation for solid workmanship and reasonable prices. His current offering was a fine machine with a rigid frame over six big drivers. The even distribution of weight of this type did not give the same high traction as the two drivers of the Norris but did offer a smoother ride and less wear on rails and machinery.

Having found a good solid design, Baldwin was not interested in making improvements, and these men were convinced they could do as well - or better - than their mentor. They did however need capital, an estimated $1 million dollars, to set up a foundry and engineering shop. At first I was dismissive, but they were persistent and met my objections one by one until I was quite convinced the Great Southern could enter upon the manufacture of some or all of its own locomotives and railcars. The chief remaining obstacle was one of location, as this enterprise would need skilled labor, timber, coke and iron ore in quantity, and an extensive tract of property on which to build. Land in Charleston was far too expensive, men skilled in metal work were not to be found, nor were coke and iron ore to be had in South Carolina. My recent travels in the West had convinced me of one location that would admirably suit our needs, but as there was as yet no rail transportation to that site I determined to satisfy that requirement myself while sending my new associates on by ship.

Mobile, Alabama - this city - is situated at the top of a long, large and shallow bay, but the feature of greatest concern to me was the bluff on which the city rests. That rise determines that this is where the rivers must come together to flow into that bay. These rivers, the Alabama and the Tombigbee and their tributaries - are deep and wide enough for navigable commerce for hundreds of miles inland. Timber from the uplands, iron products from the Tannehill furnaces, cotton from the Black Belt and products of all kinds flow in and out of this port. In significance of trade Mobile is second only to New Orleans in importance on the Gulf Coast. More important for my needs, the city could receive quantities of iron from upriver, possessed a comparatively large corps of ironworkers and mechanics, and had no shortage of land available on which to establish our shops.

The great difficulty of building a railroad to Mobile lies in those same rivers that make it so attractive. The rivers are deep and wide and therefore expensive to bridge or ferry over, and they wind for twenty miles or more through a great swamp or mire which is utterly unsuited for a railroad bed. There were two feasible approaches: one direct, south-west from Montgomery to utilize a ferry at Blakely, and the other going directly west from Montgomery, bridging both rivers before turning south along higher, dryer ground. As I saw our westward expansion as the more important, the western route was preferable.



A bond was secured at 5% interest and the work was pushed with all possible speed. Unfortunately much of our good work was wiped out in March of '46 when spring floods on the Alabama River destroyed our newly completed bridge. The damage to the countryside was terrible: homes gone, crops washed out, livestock drowned. From our construction camps we set up tent cities and communal kitchens, distributed clothing and blankets. The cost was frightful, a quarter-million of dollars at least, but I regretted not one penny of it.



No sooner had our work resumed than Polk got his war with Mexico. Had we not had the sympathy of the local people we might have lost the great part of our labor force; even so, our men were hard-pressed until we struck easier going on the solid ground of the west bank of the Tombigbee.



You see, there were a great many men of the South who were concerned - obsessed - with Mexico. The reasoning was that any addition of Northern states would upset the balance of power in Congress, so new Southern - slave-owning - states must be brought in for balance. Sadly for them, the territory west and north of Texas was not greatly favorable to plantation-style agriculture, nor were Northerners eager to allow slavery to spread to those new lands. Hence, if new 'slave' states were to be found, Mexico, Cuba and South America must furnish them, even if invasion and conquest were required.

Polk - President Polk - was as ambitious a man as ever held that office or even aspired to it, and I assure you that makes him a veritable Caesar. He was a Tennessean, western enough to appeal to the North and Southern enough for the South. And he was a compromise candidate, elected mostly because no-one knew anything bad to say about him, which wasn't true of Clay or Van Buren. He decided early on to conciliate the South, sent Taylor with an army down to the Rio Grande to provoke the Mexicans, and got a war when the Mexicans started shooting.

Now, the railroad stood to do good business out of this when we got the Mobile line open. War materials could be railed across the South faster and cheaper than they could be shipped around Florida, and Mobile was a useful enough port for short-haul shipping to Vera Cruz. I took the business and the money, but I never cared much for the war or the peace that followed. It is true that no other transport could match our efficiency. The country in those days was a patchwork of little local lines; to travel more than a few miles might mean changing trains or even walking across town to a different station. No two railroads even had the same gauge of track, it seemed. The Great Southern was different; it was all of one piece. You could put an car on the rails in Richmond and drive it all the way to Mobile without trans-shipment, and that gave us an advantage no combination of other roads could match.

We laid out large work sheds on the north end of Mobile and ran rails off the branch line and on through them. Iron-working furnaces, a smithy, a small furnace for steel, hoists for pig iron, moulds for casting, tools for working wrought iron... all of it had to come in by sea and by rail, all had to be assembled, all new workmen had to be hired and trained. I never thought the toil - or the expense - would end, but the new shops were partly in operation by the year's end. We named the works Providence for my old home and for a blessing.

It seemed best to build a few smaller locos for switchers first, to work the new equipment and men up to shape. That and repairs to our existing locomotives provided valuable experience. The car works also began slowly, chiefly repairing our worn-out timber-framed flat cars, but in no time they were taking orders for more advanced models, passenger coaches and specialty cars of all sorts including mobile kitchens and barracks for our construction gangs.

By the close of 1846, our shops were working full throttle and hiring new men every day as orders came in from our road and from other companies. We were never able to make locomotives as cheaply as Baldwin, or in such quantities, but from that time we never were dependent upon anyone but ourselves.



With that settled, I made some further arrangements and returned to Charleston determined to remove our operations from that place. Rhett had never ceased his attacks upon myself and upon the Great Southern; from the safety of his newspaper he fired salvos of invective to which I could make no comparable reply. And I despised the Charleston men and women who deprecated Rhett yet would not stand up to him in any way. So with great satisfaction I began moving the key personnel of our offices to our new head-quarters in Mobile. Paid for in large part by the generosity of the people of that place, I may say, who were keenly aware of the advantages the railroad would bring. The leading citizens of Charleston were of course horrified to be spurned for such a provincial little town as Mobile, but I was adamant. I had been forced to bow and scrape for every penny in Charleston, forced to beg and plead with men who could not - would not! - see the paramount importance of this railroad! And forced, I must say again, to endure the disdain that prominent Charlestonians felt for anyone who was not a planter or a banker. Caroline was not happy to go, nor her family pleased, but Southern society was a small set and she readily made acquaintance of her relatives in Mobile. It helped no little part that I had already broken ground for a fine new house on Government Street!

Our first locomotives of the Baldwin 0-6-0 type were ready in 1847. So much of our revenue was from passenger traffic that I decided to use these engines to cater especially to that trade. We painted them in bright yellow and deep blue - what later was known as Bonnie Blue. Special screens in the stack kept ash and embers out, and the shape hurled the smoke up and away from passenger coaches. Oh they were fast and smooth, compared to the Norris type, and very popular with our public.



Sadly, 1847 was marked by a less pleasant memory. The express train on the Atlanta to Charleston run struck a rail that had come unspiked, and hurtled down an embankment into a stream. Dozens were killed or died of wounds before help could arrive. Our attorneys argued the case well but the Georgia jury looked unsympathetic so we settled out of court. It was our first great tragedy, but it was not to be our last.



Expansion continued at a breakneck pace as we pushed north through the 'railroad towns' of Meridian and Tupelo and into Memphis by the end of the year. It was as grim and desperate a work as ever I was engaged in - yes, including the great War. We fought mosquitoes and fevers, swamps and forests, gulleyed hills and sandy soil. Worst of all, we fought for the right-of-way as there was no clear claim for much of that land. We needed it - had to have it! - and so we paid claims where we could and recruited our own bands of rough men to protect our interests in a different way when legal recourse failed.



Chapter 4

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