Ohio History Journal

The OHIO HISTORICAL Quarterly

VOLUME 66 ?? NUMBER 1 ?? JANUARY   1957

 

 

 

 

Faith vs. Economics: The Marietta and

Cincinnati Railroad, 1845-1883

 

By JOHN E. PIXTON, JR.*

 

 

In the 1850's Cincinnati was Queen of the American West, and

eastern railroad builders pressed eagerly toward the prize of her

commerce.¹ And even before the rails reaching westward from New

York, Philadelphia, and Baltimore breached the Appalachian barrier,

Ohio promoters were building lines to connect with them. By 1857

four Ohio roads fought for traffic between Cincinnati and the

Atlantic seaboard.

In 1851 a railroad later to become part of the New York Central

thrust down across Ohio from Cleveland to Columbus, where it

connected over the Little Miami Railroad with Cincinnati. In 1857

another local effort, the Steubenville and Indiana, crossed eastern

Ohio and waited fondly at the river for a connection with the

 

* John E. Pixton, Jr., is assistant professor of history at Pennsylvania State University.

This article and the one following it, "The Steubenville and Indiana Railroad: The

Pennsylvania's Middle Route to the Middle West," by Walter R. Marvin, were the

papers given at a session of railroad history specialists known as the Lexington Group

during the annual meeting of the Mississippi Valley Historical Association at Pitts-

burgh, April 19-21, 1956.

1 This article is based chiefly upon the papers of William P. Cutler, the president

of the Marietta and Cincinnati Railroad through most of its independent existence. In

addition to correspondence, Cutler left thirty-two little notebook diaries, covering,

with unequal emphasis, most of his adult life from 1830 to 1888. The manuscripts

are in the Marietta College Library.

Other basic sources were the annual reports of the M & C, issued irregularly from

1851 to 1877, a complete set of which is in the Marietta College Library; the annual

reports of the Ohio Commissioner of Railways and Telegraphs, which begin in 1867;

and other official documents, as well as newspapers and periodicals (especially the

Railroad Record, published at Cincinnati from 1852 to 1872).

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2    THE OHIO HISTORICAL QUARTERLY

 

Pennsylvania. Access to Cincinnati was afforded over the tracks of

the Central Ohio and the Little Miami.

Two Ohio rivals sought the favor of the B & O. The Baltimore

road had hoped to press directly westward to the Ohio River at

Parkersburg, but the decisive influence of Wheeling in the Virginia

legislature compelled it to build first to Benwood, just south of

Wheeling on the river. Here it met the Central, Ohio, which by 1854

had built to Columbus, where the Little Miami provided access to

Cincinnati. Later, when Wheeling's fears of being isolated had

abated, the B & O secured a charter to build to Parkersburg. Into

this highly competitive situation the fourth suitor for the favors of

the Queen City was born, aspiring to displace the Central Ohio as

the B & O's main connection with Cincinnati. With a zeal at first

hopeful, then grim, and finally desperate, the managers of the

Marietta and Cincinnati struggled for its precarious existence.

The Marietta and Cincinnati Railroad was chartered in 1845

as the Belpre and Cincinnati, with a capital of $1,000,000 authorized,

to build from Belpre, across the river from Parkersburg, to Cin-

cinnati. Foremost supporter of the project was the speaker of the

lower house of the Ohio legislature, William P. Cutler. Grandson

of Manasseh Cutler and an Ohio farmer and politician of dis-

tinction, Cutler was a Lincolnesque figure--six feet tall, of swarthy

complexion, and with those rough-hewn features which seem to

testify to reflectiveness, sincerity, and great endurance. More than

anyone else he was the creator of the railroad, and during a long

desperate struggle, its preserver. His vision of the M & C was as

the "Great Central Route of the Ohio Valley." Another supporter

of the M & C, Judge Alphonso Taft, told a Cincinnati audience in

1850 that the railroad would make their city into "the port of

Cincinnati," and that they would no longer "pay tribute to the

merchant princes of the East." It would appear from this statement

that Judge Taft, unlike his latter-day descendant Robert A. Taft,

was not an isolationist.

Here was the vision of the M & C--trunk line of the Ohio Valley,

firmly linking Cincinnati with the Atlantic seaboard and carrying

the burgeoning produce of a vast hinterland tributary to it. This

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MARIETTA & CINCINNATI R. R.      3

 

was the vision and the faith which collided with harsh economic

reality.

Construction of the M & C was delayed by the uncertainty as to

where the B & O would strike the Ohio; the result was a bitter

controversy between advocates of Belpre and advocates of Marietta

as the eastern terminus. Marietta won out, and enabling legislation

was secured changing the name of the company to the Marietta

and Cincinnati Railroad, and authorizing it to build to Marietta

and up the river to Wheeling, from which a connection with the

Pennsylvania would be made over a proposed road from Wheeling

to Greensburg, Pennsylvania. A powerful influence in this decision

to change the eastern terminus was stock subscriptions totaling

$1,500,000 from Washington County (Marietta), Wheeling, and

the Pennsylvania Railroad. Cutler remarked shrewdly to a colleague,

"This tall talk about dollars has a charm not easily to be resisted."

In 1853 construction was pushed vigorously, beginning from Chilli-

cothe westward, and by midsummer the entire road, from Loveland,

near Cincinnati on the Little Miami, all the way to Wheeling was

under contract. This decision to build the entire route almost simul-

taneously, before any part of it was in operation, testifies to the

stupendous optimism of the fast-growing West. Cincinnati's Railroad

Record reported proudly that six thousand men and several steam-

powered excavators were laboring on the line from Marietta to

Wheeling, and the M & C was pronounced financially sound and

"beyond contingencies." In September 1853 the company's shares

were quoted at 70 bid, 75 asked, its bonds at 95.

In the spring of 1854 disaster struck suddenly and with shattering

effect. The M & C's New York investment firm, Winslow and

Lanier, reported that bonds were not selling at any price. Cutler

suspended all work east of Chillicothe, and the Wheeling extension

was abandoned altogether. Today trackless cuts, barren embank-

ments, and masonry for bridges never built remain as mute testi-

mony to the failure of this added endeavor. Negotiations with

contractors and other creditors were begun, some agreeing to take

partial payments in stock or bonds; Noah L. Wilson, an Ohio banker

and vice president of the M & C was sent to Europe to try and

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4    THE OHIO HISTORICAL QUARTERLY

sell the company's bonds; a petition for a land grant was submitted

to congress; violence broke out among the unpaid crews. Cutler

commented gloomily: "A week's anxiety and care results in meeting

about half the claims and estimates we ought to pay.... It is awful-

awful to be thus haunted with obligations which one cannot meet."

The grand vision had been reduced to ashes by the business recession

of 1854. The main hope that it might emerge from the ruins lay

in the fact that the line from Chillicothe west to Loveland was

completed in October and put in operation.

By dint of strenuous efforts various unsecured bond issues,

euphemistically called "income bonds," "sterling bonds," and

"domestic bonds," were sold locally and foisted on reluctant

creditors. One million dollars of second mortgage bonds were also

sold to a Polish banker in Paris, whose only return on this invest-

ment was to have the town of Zaleski, Ohio, perpetuate his name.

These expedients, combined with some perilous economies in con-

struction, enabled the M & C to reach the river.

Notwithstanding the collapse of the effort to connect with the

Pennsylvania, the M & C managers unwisely adhered to their in-

tention to build first to Marietta, and on April 9, 1857, the long-

awaited sound of whistle and bell was heard as a locomotive

pulling a baggage car and one passenger car rolled into town.

Meanwhile, the B & O had completed its line to Parkersburg, and

between the two railroads lay thirteen miles of Ohio River, fraught

with all the hazards of ice, flood, drought, and the acidulous in-

dependence of ferryboat captains.

The B & O was not happy with this uncertain arrangement, and

was also understandably resentful of the M & C's courtship of the

Pennsylvania. Consequently, the B & O's chief engineer, Benjamin H.

Latrobe, proposed to build down the Ohio from Parkersburg to the

Hocking River, and from there up the river valley to Athens.

Besides shortening the distance from Athens to Parkersburg by

about ten miles, this line would enjoy a direct cross-river connection

which sooner or later could be bridged. Such a line would of course

cut severely into M & C traffic east of Athens. "This looks like

trouble," Cutler remarked.

But it was a battle the Ohio men could fight in the comfortable

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MARIETTA & CINCINNATI R. R.        5

 

seclusion of their state legislature. One of the M & C's directors

drew up a bill prohibiting the construction of new railroads in any

county which had already taken stock in other railroads unless a

majority of the voters favored it in a referendum. Since Athens

County had subscribed $200,000 to M & C stock, this bill would

exclude Latrobe's Hocking Valley line unless a majority of the

voters in the county favored it, which was dubious at best, and in

any case took time to arrange.

Cutler appealed effectively to his friends in the legislature, and

the bill passed the senate with only one dissenting vote. In the

house there was angry maneuvering to postpone or amend it, but

it finally passed 58-35. A disgruntled representative of the Hocking

Valley people offered the following sarcastic amendment to the

title of the act:

 

An act to interfere with the railroad policy of the United States and

force trade and travel out of its natural channels by giving to two counties

the right to veto all railroad projects in south eastern Ohio, for the benefit

of speculators in town lots and peddlers of mince pie and ginger-bread in

the village of Marietta.

 

The M & C surmounted this threat only to face more serious ones.

The year 1857 was one of supreme agony for Cutler. The panic

blighted the sale of bonds, depressed freight rates, and threatened

the over-extended directors of the M & C who had endorsed its

notes. Winter storms blocked the road entirely for ten days in

January; unpaid workers left their jobs and obstructed trains, de-

manding their pay. Creditors holding chattel mortgages on rolling

stock appeared and seized twelve locomotives and several cars. In

1858 sixty inches of rainfall on the unballasted track completed the

undoing of the M & C. There were numerous slips, and a passenger

car plunged fifty-three feet from a trestle, killing five. In these cir-

cumstances there was little sympathy for the M & C. Cutler observed

bitterly: "Everybody who can swear profanely curses the road, up

grade, down grade, around the curves, across the trestles, and

through the tunnels. The cars run through a fog of curses thick

enough to stop an Ohio River steamboat."

Cutler's gloomy Calvinism afforded him a meager reconciliation

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6    THE OHIO HISTORICAL QUARTERLY

 

with total calamity. With a strange mixture of submissiveness and

defiance, he wrote: "Have tried earnestly and humbly to submit

this horrid business to the Hand of Him who doeth all things well.

It is hard to feel that He has managed this road well. . . . Submit,

submit, submit is my lesson and I am a dull learner." On this latter

point the Lord may have been inclined to agree.

At the time it surrendered to receivership the M & C had built

157 miles of road from Loveland, where it intersected the Little

Miami, to Marietta. For this work the balance sheet for 1857 shows

funds expended totaling nearly $10,600,000, or $67,500 per mile.

This figure is high compared to that of other pre-war railroads of

the region, but a detailed analysis readily reveals factors which

account for the difference, primarily the $250,000 expended on

the Wheeling extension, and rudimentary accounting procedures

which failed to show bond discount. In short, the high cost of the

M & C was a consequence of the poor management characteristic

of many of the early railroads, not of fraud.

The M & C was reorganized, the first and second mortgage

holders getting six percent first and second preferred stock on

condition that they raise $1,000,000 in new capital. The small

number of third mortgage bondholders were paid one half their

claim in common stock. The stockholders and unsecured creditors

divided about $1,800,000 in common stock, the creditors receiving

twice the percentage of claim which the stockholders received. Thus

the bondholders sacrificed little in paper values; the stockholders

and unsecured creditors sacrificed about $3,800,000. Since the bond-

holders were mostly foreigners, and the stockholders and creditors

were local governments, contractors, car builders, and individuals,

it is no surprise that the arrangement was bitterly challenged in

the courts.

Apparently on the theory that lightning could not strike thrice

in the same place, the M & C directors launched the reorganized

company in 1860 with unchastened visions of grandeur. The Union

Railroad was built to connect Marietta with Belpre; $2,000,000 was

scheduled for improvements of the main line; an extension to

Cincinnati, and a branch line to Dayton were planned. But lightning

did strike again, this time in the form of the Civil War, which

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MARIETTA & CINCINNATI R. R.       7

 

initially had a disastrous effect on through traffic. Cutler's direction

of the M & C was interrupted by a term in congress, and by a period

in which he commanded, as president of the railroad, five companies

of infantry, which he deployed along the M & C to cut off the

escape of fast-moving rebel raiders under John Hunt Morgan.

As if strikes, accidents, bankruptcy, and civil war were not enough,

Cutler had also to face the sublime wrath of four stalwart pioneer

women who regarded his rails as an intrusion upon the sanctity

of property and his locomotives as smoky agents of Satan. To secure

a right of way over their property near Athens the four Currier

sisters forced the M & C to resort to condemnation proceedings,

and, to emphasize their contempt for such legal shenanigans, re-

peatedly tore up sections of track and piled up rails, ties, and brush

in a sort of blockade. Attempts to arrest the formidable foursome

resulted only in indignity to the sheriff, so Cutler, backed by a de-

tachment of troops, mounted a train and sallied forth to remonstrate

with them. The soldiers cleared the inevitable blockade while Cutler

submitted to a torrent of abuse from three of the sisters and

passengers peered from the cars with profound amusement. As the

train was about to start up again, the fourth lady appeared wrapped

in the national flag which, it was said, she had captured single-

handed from an assembly of copperheads, and planted herself

squarely on the track, proclaiming that she was willing to die for

freedom. A detachment of troops was posted there permanently,

but the defiant women were cowed no more by military than by

civil authority, and the track at Athens remained in peril for a

long time.

Unlike the Currier sisters, there were others who thought the

railroad might be a benign influence for spiritual progress. The

minister of a Warren church (between Belpre and Marietta) pro-

posed that the M & C furnish a Sunday local from Belpre to

Warren in the spring when the six miles of intervening mud was a

serious obstacle for the devout. Cutler assented, and the arrange-

ment assumed a permanent rather than seasonal character. It worked

well at first, and the Warren minister enjoyed large audiences. But

when the weather improved the train began to have a larger clientele

than the church. Picnickers and joyriders filled the train, got off at

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8    THE OHIO HISTORICAL QUARTERLY

 

the church and promptly disappeared in the woods or along the

river bank. This experience, wrote the historian of the Warren

church soberly, "exploded the theory that Sunday trains helped

the church." In any case, it cost Cutler twenty-five dollars per trip.

Despite the relative prosperity of the later years of the war, the

debt and interest burden borne by the M & C steadily mounted,

and Cutler was soon again in a desperate struggle for survival. It

was perhaps poetic justice that the B & O, long blamed for the

M & C's misfortunes, twice saved it from foreclosure by purchasing

second mortgage bonds, the proceeds of which Cutler used to make

interest payments and thus stave off bankruptcy. Finally, the B & 0,

seeing the inevitable, bought a controlling interest in the M & C

and guaranteed interest on its bonded debt. Cutler, weary of his

long, losing battle was happy, temporarily, to step out of railroading.

The B & O got no bargain. Revenues remained inadequate to

carry the debt, and enormous expenditures were necessary to build

a cut-off from Parkersburg to Athens and acquire independent

access to Cincinnati, which became necessary after the Pennsylvania

got control of the Little Miami in 1869. In 1878 the M & C again

went into receivership. In 1883 it was reorganized as the Cincinnati,

Washington, and Baltimore, and this company was eventually in-

corporated into the B & O. In view of frequent charges that the

B & O conspired to get the M & C for a song at a foreclosure sale,

one fact deserves to be mentioned. The owners and creditors of

the original M & C property received stocks and bonds of the

succeeding companies equal to or more than the face value of their

securities. John W. Garrett, commenting on these charges to the

B & O's directors at the time it assumed control of the M & C, said,

"As great facts finally govern the judgment of the people, so have

the mis-statements and hostilities to the Baltimore and Ohio Com-

pany melted away." This "great fact" thoroughly discredits these

charges, for, with such a conclusion, it would have been an un-

profitable conspiracy.

As with many of the early railroads, an incurable optimism,

buttressed to some extent by ignorance, contributed to the failure

of the M & C. How else explain Cutler's serene prediction in 1848

that the M & C could earn nine percent on $5,000,000 of capital?

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MARIETTA & CINCINNATI R. R.      9

 

Or Vice President Wilson's triumphant arithmetic, which, by adopt-

ing B & O gross revenues per mile and a fifty percent operating

ratio, showed that M & C profits from the through business alone

would be $1,300,000? Total profits never reached one-fourth this

figure, and the operating ratio was seldom below seventy percent.

Another place where this stubborn optimism was revealed was

in construction cost estimates. Of course, to err is human, and to

err in engineering estimates is inevitable. The renowned Benjamin

Latrobe underestimated the cost of the B & O's Northwestern

Virginia Railroad by over twenty percent, but this was precision

itself as compared with M & C estimates. At various times costs

were estimated at $18,000, $25,000, and $46,000 per mile. Further,

the cost of capital was blithely ignored, though it amounted to nearly

twenty-five percent of the expenditures before the road first went

into receivership in 1858.

Two developments quite beyond the ken of its managers also

doomed the M & C: the rise of northern Ohio, and the eclipse of

Cincinnati and St. Louis by Chicago. Both local and through traffic

flowed by on the northern trunk lines in a broadening stream which

left Cincinnati and southern Ohio in the eddying backwaters.

But there is no reason to believe that if Cutler and his associates

had been better forecasters or accountants the history of the M & C

would have been substantially different. Their faith was as great

as their vision. They believed, as one enthusiast put it, that even

"if there were [east-west] roads ten miles apart from the Ohio

River to the Lake, all would pay." This bouyant belief sustained the

unpaid creditors, the unremunerated stockholders, and the doggedly

persevering Cutler. They poured out about $25,000,000 to build a

railroad before its time. If their optimism was excessive, their vision

and faith have nevertheless been vindicated. The old M & C line,

except for the abandoned section between Athens and Marietta, is

today the profitable main stem of the B & 0, and east-west railroads

cross Ohio, if not every ten miles, at least every twenty miles from

the river to the lake.

Old William P. Cutler kept on building railroads and lived to

suffer through two more panics. Indeed, his entire life was a struggle

to build in the face of forces beyond his power to understand or

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10    THE OHIO HISTORICAL QUARTERLY

 

control. Riding horseback through Ohio snows, wading across

flooded farmlands, remonstrating with the Currier sisters, sullen

workmen, and unpaid contractors, or standing in the family grave-

yard, where all but one of his nine children were buried before

they were six, he is a somber yet inspiring figure.

• 10