Ohio History Journal
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DAVID G. TAYLOR
Hocking Valley Railroad
Promotion in the 1870's: The
Atlantic and Lake Erie Railway
Industrialization had begun in Ohio
before the Civil War, and, after a war-imposed
delay, promised to accelerate rapidly
thereafter. The Panic of 1873, however, stalled
the process substantially and destroyed
many small industrialists and businessmen.
With the elimination of the financially
weaker businessmen, the way was paved for
reorganization of the state's railroad,
coal mining, and iron industries in the 1880's
by larger, stronger, and sometimes
out-of-state or national corporations which ac-
quired at relatively small cost the
remains of the shattered enterprises that had been
initiated by the small-scale operators.
Using their superior financial resources and
organizational skill, the larger
companies succeeded where the smaller firms had
failed. But even though they failed, the
efforts of the small industrialists are worthy
of attenion.1
Ohio was generously endowed with the
coal and iron ore necessary to produce
power and finished products. Bituminous
coal underlaid about twelve thousand
square miles, and iron underlaid about
eight thousand square miles. Almost all of
these resources were located east of the
Scioto River. One of the most richly en-
dowed regions in the state was the
Hocking River and its tributaries, the Sunday and
Monday Creeks, in south central Ohio.
Coal and iron were located in close prox-
imity in this general area, and made it
"the most promising center of iron production
in the state" in 1880.2
The development of Ohio's coal and iron
resources began in the 1820's, and by
1840 Ohio ranked second to Pennsylvania
in the production of pig iron. Through-
out the antebellum period, however,
mines and foundries remained relatively small
enterprises producing for a local,
agriculturally-oriented market. In 1850 only three
of Cincinnati's forty-four foundries
were capitalized at over $150,000, and only one
employed over 200 men. In 1860 the state
produced fifty million bushels of coal
1. Philip D. Jordan, Ohio Comes of
Age, 1873-1900 (Carl Wittke, ed., The History of the
State of Ohio, V, Columbus, 1943), 220-252.
2. Tenth Census of the United States,
1880: Report on the Mining Industries of the United
States (Washington, 1886), 621.
Mr. Taylor is Assistant Professor of
History, Mankato State College, Mankato, Minnesota.
264 OHIO
HISTORY
and 105,000 tons of iron.3
By the end of the Civil War enough
geological exploration and development had
taken place to indicate that the eastern
part of Ohio had immense industrial poten-
tialities. This fact whet the appetites
of entrepreneurs, and in the late 1860's Ohio
became the scene of a multitude of
projects and promotions, chiefly in the interde-
pendent fields of coal mining, iron
manufacturing, and railroads. Railroads not
only contributed to the demand for coal
and iron, but were a necessary factor in
the opening of many veins of coal and
iron, and for the transport of the ore to pro-
cessing points.4
In 1870 an elderly lawyer described with
enthusiasm the industrial transformation
taking place in Lancaster, in the
northern part of the Hocking Valley:
Our staid sober old town is in a
paroxism of improvement. The famous stone Court
house will be under roof this fall. The
Columbus R. R. is doing a large business both
in freight and passengers, and what
shows a sudden and high advance in civilization is a
formidable strike among the Nelsonville
Coal miners.... The R. R. construction trains
run to Chauncey, and it will be open to
passengers and freight in a few days.... So you
see how we go. Nothing is talked of but
coal and iron and R. R.s--and Engineers and
Geologists are our only aristocracy.5
Changes were rapidly taking place, but
in 1870 the Hocking Valley was not yet
a major mining region.6 Before
it could be such, its rich coal lands had to be con-
nected to markets and foundries by
railroads--a task requiring substantial capital.
In the late 1860's and early 1870's
there was a frantic scramble by Hocking Valley
businessmen to acquire mineral rights,
open mines, and project railroads through
the coal fields. The pace of development
is revealed by the fact that employment
of miners in the Hocking Valley rose
from 600 in 1870 to 2,000 in 1874, and pro-
duction of coal increased almost
tenfold, to 1,000,000 tons, in the same period.7 In
1870 the only railroad tapping the
region was the Columbus and Hocking Valley,
a coal carrier which began operations in
1869. Its success revealed the immense
profits that awaited those who would
lead in the industrial development of the valley.
Throughout the 1870's the Columbus and
Hocking Valley paid generous dividends,
and even in 1876, when the depression
caused many railroads to flounder, it re-
ported "net earnings" of
$378,782.90, which was 43.2 percent over declared ex-
penses, and paid dividends of 8 percent.8
3. Harry N. Scheiber, Ohio Canal Era:
A Case Study of Government and the Economy,
1820-1861 (Athens, 0., 1969), 339-342; Peter Temin, Iron and
Steel in Nineteenth-Century
America; An Economic Inquiry (Cambridge, 1964), 199; Carl M. Becker, "Miles
Greenwood,"
in Kenneth W. Wheeler, ed., For the
Union: Ohio Leaders in the Civil War (Columbus, 1968),
268-269. Before the Civil War when hardwood
forests were plentiful, Ohio iron masters com-
monly used charcoal rather than coke as
their source of heat, making a type of pig iron suitable
for the region's manufacturing purposes.
The foundries thus did not greatly contribute to the
demand for coal.
4. Temin, Iron and Steel, 79-80.
5. Thomas Ewing, Sr., to Hugh Ewing,
June 19, 1870. Ewing Family Papers, Library of
Congress.
6. In 1870 only 105,000 tons of coal
were extracted from the Hocking Valley region.
7. Herbert G. Gutman, "Reconstruction
in Ohio: Negroes in the Hocking Valley Coal Mines
in 1873 and 1874," Labor
History, III (Fall 1962), 244-245.
8. Tenth Annual Report of the
Commissioner of Railroads and Telegraphs, for the Year 1876
(Columbus, 1877), 278-285; J. J. Janney to
Thomas Ewing, Jr., June 14, 1872, Thomas Ewing
Family Papers, microfilm edition, Notre
Dame University Archives.
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In the 1870's one of the most active Hocking Valley promoters was General Thomas Ewing, Jr., a native of Lancaster, Ohio, the son and namesake of the former Whig Senator and Cabinet minister. Forty-one years old in 1870, Ewing had been a land speculator and railroad promoter in Kansas in the late 1850's and early 60's, won fame as a Union officer in the West during the Civil War, and thereafter had amassed a fortune of about two hundred thousand dollars as a lobbyist in Washing- ton, D. C.9 In Ohio General Ewing concentrated his efforts in Perry County, a county lacking railroad connections to the coal region in 1870 but having two operating mines which together produced 1,350 tons of coal and showed promise of large resources.10 By February 1872, he was associated with a group of small-scale, southern Ohio entrepreneurs led by a New Lexington land speculator, James Taylor, and by Robert Huston, a New Lexington banker. These men were in the process of buying mineral rights to coal and iron lands in the Hocking Valley (ultimately acquiring over 6,000 acres), especially in Perry County. The men formed mining companies to develop
9. David G. Taylor, "The Business and Political Career of Thomas Ewing, Jr.: A Study of Frustrated Ambition" (unpublished PhD dissertation, University of Kansas, 1970). 10. By 1880 there were twenty-four mines which produced 913,774 tons of coal annually. The pace of development accelerated after about 1880, and by 1889 Perry County was the most important coal producing county in a state which ranked third nationally in the production of bituminous coal. In 1889 Perry County had 110 operating mines which yielded a total of 1,565,786 tons of coal. Another county where Ewing was active--Athens--was the only other to produce over one million tons of coal in 1889. Ninth Census of the United States, 1870: Statistics of the Wealth and Industry of the United States (Washington, 1872), 784; Tenth Census: Report on the Mining Industries, 664; Eleventh Census of the United States, 1890: Report on Mineral Industries in the United States (Washington, 1892), 396, 346. |
266 OHIO
HISTORY
the lands, and founded company towns
(Moxahala, Shawnee, Ferrara, Ewing, Car-
bon Hill) which they hoped would grow as
mines opened in the region. Also, on
June 21, 1869, this same group had
organized the Atlantic and Lake Erie Railway
Company which was projected to run
through these lands, connecting with port cities
on Lake Erie and the Ohio River. In an
attempt at industrial integration, which
was unusual in the Hocking Valley at
this time, the group combined speculation,
mining, railroad building, and town site
promotion to create an industrial complex
designed to achieve economies of scale
and to insure that success in any one sector
would act to increase the value of the
others.11
Ewing was the most important man in the
enterprise, contributing in addition to
his modest fortune his talents as a
lawyer, a name well known and respected in Ohio,
acquaintanceships with some of the
nation's most important business and political
leaders, and experience in making these
acquaintanceships profitable. Essentially
a promoter, Ewing had the ability to
digest a large number of geological, geograph-
ical, and statistical facts related to
his business and present them both orally and
in writing in an imaginative fashion
that appealed to the vision or greed of eastern
capitalists, and attracted their
investments. This was no easy task in an era when
an incredible number of persons, many of
them war heroes or European aristocrats,
were promoting railroad and mining
schemes in the East and in Europe.12
From 1869 through 1872 the Ewing-Taylor
group formed at least eight mining
companies: Ohio Great Vein, Carbon Hill,
Moxahala, Dover, Perry County, Atlantic
and Lake Erie, Briar Ridge, and Sunday
Creek Valley. The companies were orga-
nized on the basis of each share of the
stock representing a certain amount of land-
holdings by the companies. The Ohio
Great Vein and Perry County companies
were capitalized at $1,000,000 each,
while the others were capitalized for only
$100,000 to $150,000. Ninety percent of
the Ohio Great Vein stock was water,
and the same situation probably held
true for the other companies. The first land-
holdings were acquired by the issuance
of stock in the companies sold to local
farmers and land owners, some of whom
were speculating in coal lands, who were
persuaded that they would benefit from
the industrial development of the area. All
of the coal mining companies had
uncertain futures and depended for their success
upon acquisition of transportation
facilities and a favorable price structure.13
The same men served as the directors of
all of the mining companies. Lands
acquired by the group were assigned to
one company or another in almost haphazard
fashion, although an effort was made to
keep each company's lands in close prox-
imity. Options for the purchase of coal
lands were being acquired by many small-
scale entrepreneurs and speculators, as
well as by large operators such as a Pitts-
burgh syndicate which included Thomas
Scott, William Thaw, and other executives
of the Pennsylvania Railroad Company.
Some of these men also had railroad inter-
11. Thomas Ewing, Jr., to Van Doren and
Havens, July 29, September 21, 1871, February 2,
1872; to W. A. Gilliam, June 10, 1872;
to Rathborn and Chapman, December 25, 1872; to
Thacher and Sharp, February 21, April
10, 1873, Ewing Papers, LC.
12. Clark C. Spence, British
Investments and the American Mining Frontier, 1860-1901
(Ithaca, 1958), 236.
13. Cincinnati Enquirer, February
29, 1872; Memorandum entitled "To Sec'y of the Sunday
Creek Valley Mining Co.," June 27, 1874; John F.
Parsons to Ewing, Jr., November 1872;
William McCracken, October 30, 1874; Ewing, Jr., to
Hugh Ewing, December 11, 1872. Ewing
Papers, LC.
Hocking Valley Railroads 267
ests for which they were trying to raise
subscriptions from local farmers and towns-
men.14
There was danger that there would be so
many people promoting pet schemes
that it would be impossible for any to
attract enough capital to succeed. Ewing and
Taylor, nevertheless, persuaded various
small promoters and some farmer-specu-
lators to donate their lands and options
to their mining companies in exchange for
stock. The promoters intended for the
mining companies to subscribe to the stock
of the Atlantic and Lake Erie Railway.15
This railroad, as proposed, was to be two
hundred thirty-seven miles in length and
to run from Toledo on the north through
the eastern part of the Hocking Valley
south to the town of Pomeroy at the Ohio
River. This route would give their
mining companies access to the markets in Cin-
cinnati and Pittsburgh, via the Ohio
River, and to Chicago via Toledo by rail. Rob-
ert E. Huston was chosen president,
James Taylor, secretary, and D. W. Swigart of
Crawford County, provisional
superintendent, with J. P. Weethee of Athens County
as assistant superintendent. The group
then began seeking subscriptions to the
company's stock in the towns along the
proposed line, and received a pledge of a
$100,000 stock subscription from the
city of Toledo. On September 8, 1869, the
first stockholders meeting was held in
Newark, by which time $719,700 of A & LE
stock had been subscribed. A seven-man
board was elected, including a wealthy
mine operator and an important
Republican politico from Meigs County, Valentine
B. Horton; Swigart was elected
president.16
Thomas Ewing, Jr., joined the board of
directors of the A & LE in 1872, as did
Charles Foster, an influential
Republican politician who had extensive investments
in real estate around his home of
Fostoria in the northern part of the state. Little
was accomplished under the presidency of
D. W. Swigart, chiefly because of his
inability to secure further financing.
Swigart unwisely chose not to attempt to collect
immediately on the stock subscriptions
and instead tried to secure a loan by the sale
of the company's bonds. R. W. Jones,
sometimes editor of the Athens Journal, was
retained as an agent to go to London and
attempt to sell the company's five million
dollars worth of bonds. He arrived in
England in 1872, and for more than a year sent
letters to the directors which
invariably were optimistic, cheerily reporting that he
was about to complete the sale of the
bonds and needed only a little more time.
Meanwhile, the directors became restless
and suspicious of Jones, and opposition
mounted in several quarters to the
course pursued by President Swigart.17
The opposition to Swigart was led by
James Taylor, who served as the spokesman
of the mining interests. Taylor accused
Swigart of acting in arbitrary fashion and
refusing to consult with and consider
the interests of the mine promoters--who had
subscribed to much of the A & LE stock.
The mine owners were especially irritated
by Swigart's insistence upon the sale of
the bonds in one block because they realized
that this would wrest management of the
company completely from them. Further-
more, the man whom Swigart had appointed
chief engineer aroused Taylor's ire
because he had recklessly promised local
people that construction of the Chauncey-
14. Cleveland Leader, March 22,
1869. A "free railroad" bill passed by the Ohio legislature
in March 1869 paved the way for entry of
out-of-state railroad companies into the coal field
by allowing them to lease in-state
railways, a practice which had previously been illegal.
15. James Taylor to Ewing, Jr., December
3, 1873, Ewing Papers, LC.
16. Edward Vernon, ed. and comp., American
Railroad Manual (New York, 1873), 412-413;
Minutes of the Atlantic and Lake Erie
Railroad, Ewing, Sr., to Hugh Ewing, June 19, 1870,
Ewing, Jr., to unknown, December 10,
1872, Ewing Papers, LC; Cleveland Leader, July 25, 1871.
17. R. W. Jones to Ewing, Jr., May 15,
1873, Ewing Papers, LC.
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Ewing section of the line would begin long before the mine owners could "manipu- late the interests in the Sunday Creek Valley & Dover Companies so as to realize the $95,000 of railroad obligations.... to prosecute the work." It was felt that care- less statements such as this would just breed cynicism in the towns along the line and make it much harder to sell the company's stock in the future.l8 Swigart also made a tactical error by clearly announcing the railroad's exact route before financing was assured. The towns that were not on the proposed route hoped that a change of management would lead to modifications in their favor, and they sought Swigart's resignation for this purpose. In the summer of 1873 the president was unable to gain a vote of confidence which he demanded from the board, and he submitted his resignation, effective as of August 10, 1873. He was succeeded by Valentine B. Horton.19 Under the presidency of Horton the A & LE became engulfed by the problems which beset all such enterprises during the depression of the 1870's. From 1869 to 1873 the company collected $375,566 from the sale of capital stock, but was able to place very little thereafter. The company used most of its money as it became available. When Horton became president the A & LE had about ninety-five miles of roadbed substantially graded in the section from Toledo to Bucyrus and in Lick- ing, Fairfield, and Perry counties in the coal region.20 After August 1873, the com- pany, lacking cash, was restricted to the employment of construction contractors who were willing to take their pay solely or largely in bonds. On March 26, 1874, the A & LE signed a construction contract with B. B. McDan- ald and Company of Toledo, with the intention that the latter build the entire line and receive payment in coal company bonds and A & LE mortgage bonds. W. C. Lemert, one of McDanald's partners, joined the board of directors of the A & LE in order to represent the construction company's interest. Work proceeded very slowly throughout 1874 and was marked by many delays because McDanald fre- quently lacked the funds to acquire materials and pay workmen. Another setback occurred when the company encountered unanticipated costs and engineering prob- lems in the construction of a tunnel. The coal companies had promised to deliver
18. James Taylor to Ewing, Jr., August 4, 1873, Ewing Papers, LC. 19. H. C. Cashart to Ewing, Jr., August 2, 1873; D. W. Swigart to Ewing, Jr., August 12, 1873, Ewing Papers, LC. 20. Vernon, American Railroad Manual, 413. |
Hocking Valley Railroads
269
bonds to McDanald, stipulating in turn
that the proceeds be used to build the seg-
ment through the coal lands.21 The
construction company refused to do any work
until it had the coal company and the A
& LE bonds-it clearly lacked the resources
to do otherwise. This meant there were
spurts of activity, as bonds were delivered
and used, and then costly delays until
more became available.
The A & LE was unable to arrange for
the payment of its bonds until September
25, 1874, when it signed a mortgage
agreement with a director of the Cincinnati
and Muskingum Valley Railroad. The
latter was a line controlled by the Pennsyl-
vania Company, ran in an east-west
direction north of the coal lands through Perry
County, and would intersect with the A
& LE near New Lexington. Under this
agreement the A & LE secured
$1,500,000 of seven percent bonds, payable January
1, 1880, by the mortgage of its
property. These bonds, however, did little to finance
the railway. In spite of numerous
attempts by various directors who traveled to
New York in attempts to negotiate the
bonds, and on the part of agents overseas,
the A & LE was unable to sell the
bonds or use them to pay for construction mate-
rials.22
By the end of 1874 the company faced the
critical decision of whether to continue
attempts to build the road or to
retrench; i.e., attempt to manage its floating debt
and wait for better times. If the first
decision were made, means had to be found to
accomplish the task. At the end of 1874
the railway was "almost graded" from the
coal field to Lake Erie, seven miles of
track were laid from New Lexington to Moxa-
hala, and the means were available to
complete the grade through the coal field. The
company had $331,000 due from unpaid
subscriptions, but at least one-half of this
could not be collected. The company's
floating debt, including balances due con-
tractors, was about $250,000. Enough had
been accomplished to have enabled
the company to negotiate its bonds under
normal conditions, but in the midst of
the depression this was impossible.23
After Swigart's resignation, Thomas
Ewing, Jr., V. B. Horton, and Charles Foster
formed a triumvirate which was largely
responsible for the decisions made by the
A & LE. For a time, at least, Ewing
enjoyed the confidence of the various factions
within the company, all of which
confided in him, sought his support, and were
encouraged by him to believe they had
his trust also. Even so, the enterprise suf-
fered, especially from April 1873 to May
1874, since Ewing neglected business to
devote his time to work as a delegate to
the Ohio Constitutional Convention and to
the advancement of his political career.
Ewing's absence partially accounted for
McDanald's delays, as his assistance was
necessary for the execution of the coal
companies' bonds.24
The coal mine promoters, led by Ewing,
emerged in 1874 as the strongest advo-
cates of the policy of pushing the
railway ahead to completion, even in the face of
21. "Sunday Creek Valley Mining
Company... Plaintiff vs. B. B. McDanald... and the Ohio
Central Railway Company," in the
Court of Common Pleas, Bucyrus, Ohio, copy in Ewing
Papers, LC.
22. J. B. Gormley to Ewing, Jr.,
December 17, 1874; mortgage agreement between the A &
LE and James Buckingham, September 25, 1874; G. B.
Johnson to Ewing, Jr., May 7, 1874;
W. C. Lemert to Ewing, Jr., July 30, 1874; Ewing, Jr.,
to J. R. Clymer, February 10, 1875,
Ewing Papers, LC. The last letter was written for
publication and circulation among stock-
holders and contains much history of the
events of 1874. The Pennsylvania Company was a
holding company formed by the Pennsylvania Railroad
Company in 1872. By 1880 it controlled
many railroads in Ohio.
23. Ewing, Jr., to Clymer, February 10,
1875, Ewing Papers, LC.
24. Jordan, Ohio Comes of Age, 17-19;
Lemert to Ewing, Jr., May 18, 1874, Ewing Papers, LC.
270 OHIO HISTORY
adversity. Their investments in land
were threatened by the depression, which
reached its trough nationally in 1875.
As one of the most important industrial states
in the nation, Ohio experienced severe
distress. Railroad mileage, which had in-
creased at the rate of 9.52 and 9.93
percent in 1872 and 1873 respectively (from
3,786.61 to 4,162.97 miles), dropped to
5.08 percent in 1874, 1.98 in 1875, and
minus 0.04 percent in 1876. Industrial
activity slumped rapidly after 1873 in Ohio's
mining regions and in its manufacturing
cities along the Ohio River. At the same time
national production of bituminous coal
had increased dramatically from 20,471,000
short tons in 1870 to 31,601,000 short
tons in 1873 and remained at this level for
the next few years. This high production
accompanied by reduced national indus-
trial activity in related fields in the
mid-1870's, sharply decreased the prices of Hock-
ing Valley coal and iron. Thousands of
men lost their jobs as scores of Ohio fur-
naces and mines shut down; other owners
cut wages and precipitated strikes by
their employees. Coal lands valued at
ten million dollars in 1872 were worth only
six million dollars in 1877.25 Caught in
the midst of this economic crisis, Ewing's
group realized that the probability of
failure was great if they tried to push the
A & LE to completion, but it was
also believed that inaction would certainly lead
to disaster. Money was still owed for
lands or mineral rights which had been pur-
chased, and the A & LE had a
floating debt of nearly a quarter of a million dollars.
"If the Company stop[s] where it
is, and wait[s] for better times," Ewing warned
in 1875, "it will be overwhelmed
with its floating debt. The Stockholders will then
lose all they have invested, and may be
called on to contribute more."26
In 1875 there was little chance of
getting any more financial aid from the stock-
holders. They had been disappointed
before, and construction was proceeding much
too slowly to arouse their enthusiasm
now. In Ewing's opinion, the best way to
continue the work was to contract for
the completion of the line with another con-
struction company which had access to
"a considerable amount of ready money
to put into the work, and who will take
pay exclusively in stock, bonds, and such
new subscriptions as may be
obtained." The search for such a company began in
the fall of 1874, when it became
apparent that McDanald was unable to construct
the entire line. Negotiations with a
construction firm headed by James Taylor, styled
the Ohio Construction Company, led to an
agreement by the latter to construct,
finish, and equip a first-class railway
on all sections of the A & LE except those
remaining under contract to McDanald.
The A & LE reserved the right to suspend
or annul the contract as it applied to
the line between New Lexington and Bremen,
and intended to do so if it could
arrange for the use of the Cincinnati and Muskingum
Valley Railroad. A fairly rigid
construction schedule was established, with work
to begin by May 15, 1875, and to be
totally completed by January 1, 1878.27
Before the contract could take effect,
the Ohio Construction Company demanded
25. Rendigs Fels, "American
Business Cycles, 1865-79" The American Economic Review,
XLI (June 1951), 344, fn. 55; Annual Report of the
Commissioner of Railroads and Telegraphs,
for the Year 1881 (Columbus, 1882), 7; U. S. Department of Commerce, Bureau of the Census,
Historical Statistics of the United States, Colonial
Times to 1957 (Washington, D.C.,
1961), 357;
John James, "The Miners' Strike in the Hocking
Valley," Cooper's New Monthly, I (July 1874);
Gutman, "Reconstruction in
Ohio," 248; Irwin Ungar, "Business and Currency in the Ohio
Gubernatorial Campaign of 1875," Mid-America,
XLI (January 1959), 28.
26. Ewing, Jr., to Clymer, February 10,
1875, Ewing Papers, LC.
27. Ibid.: contract between the A
& LE and the Ohio Railroad Construction Company, Jan-
uary 30, 1875, Ewing Papers, LC.
Hocking Valley Railroads
271
that the A & LE stockholders approve
a large increase in the company's stocks and
bonds in order to cover anticipated
construction costs. This was a crucial decision
for the company. Since the market for
securities was very weak, if placed at all,
the new securities would have to be
negotiated at far below par. Northern investors
such as Charles Foster were cautious and
opposed increasing the company's debt,
even if this meant some financial loss.
The mining interests, however, wanted to
gamble on being able to complete the
railway in hopes of avoiding losses entirely
and of placing in operation what
promised to be a lucrative enterprise. The later
position ultimately prevailed at a board
meeting on January 25, 1875, when a motion
to increase the A & LE's capital
stock was adopted unanimously. Directors Lemert
and Foster did not attend the meeting
and expressed misgivings about the policy.28
The proposal to increase the capital
stock and to execute a new mortgage to secure
$7,500,000 of permanent bonds met
opposition from some of the stockholders who
feared the action would plunge the
company hopelessly into debt and destroy its
equity. In an attempt to muster support,
the proponents of the stock increase pub-
lished letters in newspapers along the
line in which it was declared that an Ohio law
of 1873 allowed a company to issue bonds
up to two-thirds of its authorized stock.
Furthermore, the stock increase was to
the benefit rather than the detriment of the
current stockholders. If the company
failed, current stockholders would lose their
entire investment, while these
individuals' liabilities would in no way be affected
by the stock increase. This was also the
predominant sentiment prevailing at the
general stockholders meeting held on
March 17, and motions were passed author-
izing the stock increase and the
execution of a mortgage to secure new bonds.29
General Ewing was unanimously elected
president of the A & LE by the board
on March 18, 1875. In his effort to
build the railway, he faced several formidable
problems. As had the previous
presidents, Ewing had to deal with regional jealousy
and bickering. The northern interests justly
feared that the mine owners in the south
would arrange for an outlet for their
coal with one of the east-west lines that the
A & LE crossed at New Lexington or
Athens, and that once they had gained access
to markets they would adandon the rest
of the line. In spite of Ewing's assurance
that even if an outlet were secured at
Columbus or elsewhere, he intended "to stand
by the road until it is built, with all
the influence I can muster." His actions were
given close scrutiny by the northern
people who believed that his ownership of about
six thousand acres of coal lands as well
as his position as a director of many of the
mining companies constituted a potential
conflict of interest.30
Ewing's major problems, however, were
more general, and to a large extent be-
yond his control. In addition to the
general deflationary conditions caused by the
depression of 1873, investments in
railroads were discouraged by acute rate wars,
which reached their height in 1876, and
by crippling and sometimes violent strikes
which occurred in the Hocking Valley in
1874 (and would again in 1877). As a
result, federal, state, and local
governments were no longer inclined to aid railway
companies financially. Nationally, from
1872 to 1877 the prices of railroad stock
28. "Resolution of Board of
Directors of A. & L. E. Ry Co. as to increase of capital stock,"
Ewing Papers, LC. Board members present
were Ewing, S. L. Johnson, H. Pratt, J. S. Trimble,
W. Weethee, and V. B. Horton. All but
Pratt are known to have had investments in coal lands.
29. Ewing, Jr., to Clymer, February 10,
1875; "Proceedings of Stockholders Meeting Author-
izing increase of Capital Stock,"
Ewing Papers, LC.
30. Ewing, Jr., to Charles Foster, June
19, 1876, Ewing Papers, LC.
272 OHIO HISTORY
dropped from fifty to sixty percent, and
in 1875 almost 800 million dollars of rail-
road bonds were in default.31 In
this critical situation it was impossible for the
A & LE to negotiate its bonds for
cash, either in the United States or abroad, in spite
of vigorous efforts to do so. This point
was plainly stated by Daniel J. Morrell,
the wealthy owner of the massive Cambria
Iron Works at Johnstown, Pennsylvania,
whom Ewing had persuaded to invest in
the A & LE and in some of his mining
companies--provided he found suitable
co-investors:
I find it a very difficult matter just
now to interest business men in any enterprise, however
promising it may seem. Almost every one of
means who had ventured anything in min-
ing or manufacturing operations during
the last 4 or 5 years finds his property either lost,
or so depreciated in value as to be
almost worthless, & hence [is] over cautious now.
Others who have invested in R. R. securities--especially
the coal roads--are sadly
crippled and have no means to invest in
anything. I had a long talk with our friends
the Crocker Brothers, and with several
other good friends of mine, I found it much
harder to get them interested than I
expected. They . .. want to see that the prices are down
to hard pan & that the chances for
profit are sure.32
Ewing's strategy for dealing with the
depression had several components. First,
in an attempt to cut costs, arrangements
were sought for the joint use of segments
of other railways which were operating,
or in the process of construction, through
the region. Ewing was especially anxious
to come to terms with the Cincinnati and
Muskingum Valley Railroad because it was
threatening to build a branch line into
the coal field that would compete
directly with the A & LE. Negotiations between
the two companies began in April 1875,
and in June 1876 resulted in an agreement
in which the A & LE was to have use
of the track between Bremen and New Lexing-
ton, at an annual rate of four percent
of its appraised value plus a proportion of the
cost of maintenance based upon the
respective mileage over the segments by the two
companies involved.33 One
reason that a year was required to reach agreement was
that Ewing had to overcome opposition to
the scheme by northern interests in the
A & LE. Thus by the spring of 1876
the A & LE began operating seven and one-
third miles of line from New Lexington
to Moxahala, while to the north an additional
150 miles was graded but not laid with
rails.34 The completed line combined with
the C & MV to provide
facilities--albeit somewhat inconvenient ones requiring
transfers at short intervals--to mine
operators in the Moxahala region. This opened
"for development an extensive and
excellent coal field ... where mines were opened
sufficient to supply a large tonnage of
first class coal...." Ewing argued that the
arrangement with the C & MV would
not only add to the value of his coal interests
but to that of the railway as well. Once
part of the line was operating and actually
moving coal, it would be easier to place
the company's bonds. This position was
31. Fels, "American Business
Cycles, 1865-79," 347-348; Lee Benson, Merchants, Farmers
and Railroads: Railroad Regulation
and New York Politics, 1850-1887 (Cambridge,
1955);
Ewing, Jr., to unknown, August 11, 1877,
Ewing Papers, LC; Samuel Rezneck, "Distress, Relief,
and Discontent in the United States
during the Depression of 1873-78," Journal of Political
Economy, LXXXVIII (December 1950), 495-496; 0. V. Wells,
"The Depression of 1873-79,"
Agricultural History, XI (July 1937), 240.
32. D. J. Morrell to Ewing, Jr., June
18, 1877, Ewing Papers, LC.
33. Ewing, Jr., to William Thaw, March
23, April 21, 1875, April 15, 1876; Thaw to Ewing,
Jr., April 17, 21, 23, 1875; Minutes of
the A & LE Board, Columbus, June 17, 1876, Ewing
Papers, LC.
34. Annual Report, 1876, pp.
396-397.
Hocking Valley Railroads
273
sharply questioned by W. C. Lemert and
Charles Foster, who feared that once
this line through the coal field was in
operation efforts to complete the A & LE in the
north would be dropped.35 In
spite of opposition Ewing continued to make financial
arrangements to keep the enterprise
alive, but the A & LE discovered it was nearly
impossible to generate interest in the
railroad and gather stock subscriptions--and
it was even harder to collect on the few
subscriptions made. In fact from June 30,
1875, to June 30, 1876, the A & LE
was able to collect only $16,823.18 in addition
to the million one hundred thousand
dollars worth of stock already collected.36
By 1875 both the McDanald and Ohio
construction companies were in serious
trouble because they were unable to sell
A & LE or coal company bonds, acquire
material and equipment, or pay workmen.
Since all of the A & LE's assets were
mortgaged, the construction companies
were unwilling to take a lien on any part
of the railway. It was impossible to
secure bank loans, as western banks were "dry
as capons" and had no funds to
invest even had they desired to do so. One hundred
eighty thousand dollars cash was
"purloined by Lake Div." and hence lost to
McDanald, by "bloodsucking
parasites" who won a law suit against the A & LE in
Toledo. Thus, mounting debts, pressing
obligations, threatening law suits, and the
total inability to raise capital forced
the construction companies to surrender their
contracts late in 1875.37
After this, Ewing emphasized efforts to
complete the line through the coal field,
believing that if this part could be
placed in operation it would facilitate the capital-
ization of the rest. In October 1875, it
appeared that in spite of the many problems
confronting the A & LE, the portion
through the coal field might still be completed
because the strong New York construction
company of Vibbard, Platt, and Ball
took the project in hand. Chauncey
Vibbard, the senior partner, was an important
figure in nineteenth century railroad
industry. An imaginative, able organizer, Vib-
bard helped Erastus Corning effect the
consolidation of New York railways into
the New York Central, of which Vibbard
was general superintendent from 1853
to 1865. After resigning from the New
York Central in 1865 Vibbard engaged in
a variety of businesses, including
railroad construction and sales of railroad supplies.
A second partner, Thomas C. Platt, in
1874 a first-term Republican United States
congressman from New York with most of
an important political career ahead of
him, enjoyed a solid business reputation
as a druggist, lumberman, and banker. On
October 29, 1875, the proposal of the
firm of Vibbard, Platt, and Ball conditionally
contracted to build the northern section
of the A & LE line from Chauncey to To-
ledo, a distance of 194 miles, which it
estimated could be completed in eighteen
months. The A & LE agreed to furnish
all necessary supplies and to issue $25,000
of mortgage bonds to the construction
company for every mile completed.38
Ewing, on the other hand, wanted
Vibbard, Platt, and Ball to give the highest
35. Ewing, Jr., to Thaw, March 23, 1875;
to Foster, June 19, 1876; to T. C. Platt, June 18,
1876, Ewing Papers, LC.
36. One method used by Ewing to raise
money was to sell the heavily watered stock of the
coal companies, and the directors then
invested this money in A & LE securities. Also payment
dates were set when any stock was sold.
J. R. Straughan to Ewing, Jr., September 28, 1875,
Ewing Papers, LC; Annual Report,
1876, p. 396.
37. Lemert to Ewing, Jr., October 21,
1874; Ewing, Jr., to H. P. Clough, February 12, 1876,
Ewing Papers, LC.
38. John F. Parsons to Ewing, Jr.,
September 30, 1874, January 22, 1875; contract between
the A & LE and Vibbard, Platt, and
Ball, October 29, 1875; Minutes of the A & LE Board,
October 5, 1875, Ewing Papers, LC. The
contract would be effective only upon sale of the
A & LE bonds.
274 OHIO
HISTORY
priority to the completion of the
southern section of the railway through the coal
field, and he offered to negotiate a
supplemental contract, granting the construction
company an interest in the coal lands,
if it would vigorously pursue this objective.
He wrote:
Think of this. It is important to fully
develop the coal field as early as practicable....
If the mineral section be promptly built
& mines opened it will be vastly to the advantage
of the northern part of the line when
constructed.... The construction from Moxahala
to Chauncey will probably cost $150,000
cash.39
On November 23, 1875, Vibbard, Platt,
and Ball responded to Ewing by proposing
to contract absolutely for the thirty
miles of line between Moxahala and Chauncey,
to be completed within one year from the
execution of the contract. The A & LE
agreed to furnish "as fast as
required" all rights-of-way, ties, fences, a construction
train, and to pay in cash any cost of
the substructure over $150,000. In addition,
the construction firm was to be paid
$20,000 a mile in mortgage bonds, $20,000 in
cash, and $30,000 in monthly
installments as the work progressed between Moxa-
hala and Ferrara. The A & LE was
also to give the construction company $300,000
of full paid stock when the line between
Moxahala and Chauncey was completed,
and the mining companies had to then
convey to the construction firm 3,000 acres
of mineral lands, or the equivalent in
stock plus fifty dollars an acre in mortgage
bonds.40
The hope was that the firm of Vibbard,
Platt, and Ball could finance its opera-
tions by the sale of A & LE bonds.
Efforts to market the bonds overseas were inten-
sified as new agents were hired and the
promotional literature was revised. Pres-
ident Ewing prepared a prospectus which
probably conformed to the tenets sug-
gested to him by one agent:
If the bonds are sold abroad, the buyers
are about as ignorant of the country as you are
of central or south Africa, and they will
want to know every thing, & will ask more ques-
tions than a child. Puff your
directors--tell them who and what they are, and how
they stand--brag of your large
subscriptions . . boast of your minerals, of your mar-
kets, of the splendid district of
country the road passes through--tell them how much
has been spent and what has been done on
the line, & a thousand other things that will
occur to you. But stick to the truth,
as the chances are the purchasers of the bonds will
look closely into your statements.... 41
The most active agent for the A & LE
at this time was Dr. W. Ernest Friguet,
who became the center of controversy
between the construction company of Vib-
bard, Platt, and Ball and the A &
LE. He was a resident of Paris, with stockjobbing
offices there and in London. On October
28, 1875, the A & LE contracted with
Friguet for his services in selling
$6,250,000 of bonds in Europe. Friguet delivered
many optimistic reports to the company,
but as the months rolled on one effort
after another to arrange the loan
failed. In the meantime the construction company
exhausted its resources and work ground
to a halt. Chauncey Vibbard, who may
well have had better judgment in the
matter than Ewing, wanted to fire Friguet and
39. Ewing, Jr., to Vibbard & Ball,
November 9, 1875, Ewing Papers, LC.
40. C. Vibbard, A. H. Ball, and T. C.
Platt to the President and Board of Directors of the
Atlantic and Lake Erie Railway, November
23, 1875; to Ewing, Jr., November 23, 1875, Ewing
Papers, LC.
41. R. W. Jones to Ewing, Jr., May 9,
1875, Ewing Papers, LC.
Hocking Valley Railroads 275
hire someone else because he considered
the Frenchman "one of the most damnable
scoundrels in Europe" who had
"never succeeded in anything but in getting parties
to make advances upon his agreement to
negotiate securities, which he never ac-
complishes."42
Ewing continued to hold confidence in
Friguet, however, and he was following
the latter's advice in the spring of
1876 when he successfully proposed that the com-
pany's name be changed from the
"Atlantic and Lake Erie" to the "Ohio Central."
As Ewing explained, "the Atlantic
& Lake Erie contained two names of rather bad
repute in Europe--the 'Atlantic &
Great Western' & the 'Erie.'" He [Friguet]
suggested "'the Ohio Central' for a
like reason--to wit, that the Centrals were
generally of excellent repute--the Penna
Central, New York, New Jersey,
Illinois.... "43
Ewing's various promotional efforts
were, ultimately, all in vain as Ohio Central
bonds also proved to be impossible to
sell. By the summer of 1876 the company
was clearly on the verge of failure. The
report the A & LE (now Ohio Central)
filed with the Ohio Commissioner of
Railroads and Telegraphs in June 1876 revealed
how little had been accomplished in 1875
and 1876. Of the projected 237 miles
of line from Toledo to Pomeroy, 150
miles was graded but not laid with rails. From
January to June 1876 only nineteen miles
of main track were graded, three and
one-half miles ballasted, and 808 feet
of trestles built. The company had author-
ized $12,000,000 of stock, of which
$1,510,783 was subscribed, and $1,122,430
collected, mostly during the first years
of the company's existence. The Ohio Central
listed assets of $1,466,623, most of
which ($1,372,066) was in the form of real
estate and equipment. It is unclear how
the figure was derived, and, considering the
depressed condition of Ohio coal lands
in 1875-1876, probably was exaggerated.
Unfortunately, if the company's assets
were in part artificial, its debts were real. The
company had spent $1,372,066 on
construction, most of which ($784,255) was for
grading and masonry. Its net unfunded
debt was $224,967 and its funded debt--
secured with seven percent mortgage
bonds--had risen $44,600 in 1875. The
company was only operating a segment of
7.3 miles from New Lexington to Moxa-
hala. Nothing was going well for the
Ohio Central at this time, and the operation
of carrying 15,423 tons of coal and a
few passengers resulted in a net loss to the
company of $352.95 for the fiscal year
of 1875.44
When the A & LE was unable to place
its bonds, the Vibbard, Platt, and Ball
Company was released from its contract
for the Moxahala-Chauncey line and given
an extension to complete a shorter
Bremen-Granville section. The original contract,
providing for the construction of two
hundred miles of railroad in the north had
already expired because of the time
limitation. When more construction delays oc-
curred and it appeared that even the
Bremen-Granville line could not be completed
on schedule, one of the partners,
Vibbard, abandoned the project completely.
Thomas C. Platt and August Ball retained
an interest in the railway and worked
closely with General Ewing in an attempt
to salvage the enterprise. They still faced
a variety of problems, which in
combination ultimately proved insurmountable.
Throughout most of 1876 Ewing, Platt,
and Ball hoped to be able to finance con-
42. Ewing, Jr., to Hugh Ewing, May 25,
1875; Chauncey Vibbard to Ewing, Jr., June 12,
1876, Ewing Papers, LC.
43. Ewing, Jr., to Thaw, May 2, 1876,
Ewing Papers, LC.
44. Annual Report, 1876, pp.
396-399.
276 OHIO HISTORY
struction and at the same time maintain
control of the Ohio Central. This objective,
however, required financial
manipulation. Somehow more water had to be pumped
into the Ohio Central through new issues
of stocks and/or bonds. The company's
debts already were far in excess of
assets, and such a move was therefore opposed
by the company's many creditors.45
The efforts to manipulate the financial
affairs of the Ohio Central were successfully
thwarted by creditors and northern
opponents, who bombarded the company with
law suits in 1876 and 1877. This
situation made it impossible for the company to
withdraw bonds previously issued, or
otherwise place a new mortgage on the com-
pany. In January 1877, for instance, one
creditor forced the sheriff of Fairfield
County to auction $117,000 of Ohio
Central bonds, and soon thereafter the com-
pany's dock property in Toledo--valued
at over $20,000--was foreclosed by
another. The law suits had a snowballing
effect and threatened to destroy the com-
pany as all creditors tried to get
something before all of the assets were swal-
lowed up.46
The law suits and harassment by
creditors sharpened the conflict of interest
between President Ewing's Ohio Central
and mineral land enterprises. He decided
to try to salvage the mineral lands, and
thereby engendered hostile opposition from
most of the railroad's directors.
Because of this and also because he had been elected
to the national House of Representatives
in the fall of 1876 and would not be able
to devote himself fully to railroad
promotion, he indicated on June 12, 1877, that
he intended to resign from the
presidency of the Ohio Central. However, on July 9,
1877, before Ewing formally resigned, a
Crawford County judge appointed a re-
ceiver for the company in response to a
plea by McDanald and Company. Ewing
admitted that the action was justified,
and advised his colleagues against fighting it.
"The co is in fact insolvent &
unable to earn anything," Ewing informed Platt, "and
is in fact in such condition on our
showing our hand the Court... will not vacate
the order."47
At the time of the receivership action
assets of the Ohio Central consisted of a
roadbed and right-of-way between Toledo
and Pomeroy (about 230 miles); nearly
eight miles of completed line in Perry
County which was in operation; about twenty-
seven miles of roadbed laid with iron
but not ballasted from Bremen in Fairfield
County, north into Licking County; and
one locomotive and twenty gondola cars.
None of these assets produced the income
necessary for the Ohio Central to meet
the interest payments due on its bonds
and other current obligations. In fact, the
primary reason that McDanald forced the
Ohio Central into receivership was its
inability to pay interest on its bonds,
of which McDanald held a quantity with a par
value of $33,800 (with $4,085.29
interest due). The receivership petition made
several other complaints, all more or
less justified. The Ohio Central was getting
deeper and deeper in debt, and seemed
incapable of doing anything to get out. Its
floating debt was increasing at a rate
of about $50,000 a year, without any increase
in assets or in the value of the
property. The floating debt totaled $314,564.43 at
the time a receiver was appointed, and
the bonded debt stood at $1,113,789.91, in-
cluding both principal and interest.48
45. Ball to Ewing, Jr., April 12, 23,
28, 1877, Ewing Papers, LC.
46. H. D. V. Pratt to Ewing, Jr., May 1,
1877, Ewing Papers, LC.
47. Copy of letter of "T. E. to
members of B. of Directors, June 12, '77"; Ewing, Jr., to Edward
Pechin, July 16, 1877; "Order of
Court in Appointment of Receiver, July 9, 1877"; Ewing, Jr.,
to Platt, July 17, 1877, Ewing Papers,
LC.
48. "Referee's Report on
Receivership of Ohio Central, Bucyrus, Ohio, January 22, 1878,"
Ewing Papers, LC.
|
|
|
President Ewing was accused of "gross mismanagement and general dereliction of duty" because he refused to call a single stockholders meeting after May 1, 1876, thereby preventing the election of any new directors who might be hostile to him. Furthermore, Ewing refused to call any meetings of the board of directors after October 1876. Opposition to his actions was thus made more difficult for parties that wanted to complete the northern section before the mineral division. The Ohio Central neglected, or was unable to pay, some $800 in taxes due in Perry County, and the operating line was in danger of being sold by the sheriff to settle the tax bill. Ohio Central property in Crawford County had already been sold for taxes, and a valuable depot and dock property in Toledo had been lost to creditors "at less than one-half its original cost."49 Another justified complaint against the Ohio Central arose from the many delays in construction that left segments of the line in various stages of completion. Much of the roadbed was graded but not laid with rails, and most that did have rails was not ballasted. Such a line was difficult to maintain, especially while the company tried to devote any financial resources that became available to new construction. Many ties were not even piled up, but were scattered along the line where they rotted or were carried off by thieves. The Bremen-Licking County section went six months without ballast, and as a consequence deteriorated in value as embankments washed away and crumbled, excavations filled in, the superstructure settled, and the rails twisted. Bridges, ties, and culverts all suffered from the lack of proper care.50 There were several fundamental reasons for the failure of the Ohio Central. Its management was inexperienced in railroad building. This inexperience contributed
49. Affidavit of Thomas C. Hall in McDanald v. the Ohio Central, Crawford County, Ohio, July 7, 1877, Ewing Papers, LC. Hall was a partner in the McDanald Construction Company. 50. The State of Ohio, Crawford County, in the Court of Common Pleas, Bedan B. McDan- ald, Thomas C. Hall, Horace Rowse, James G. Frayer, and Wilson C. Lemert Plaintiffs v. the Ohio Central Railway Company, and James Buckingham and George T. M. Davis, Trustees, etc. Defendants, Ewing Papers, LC. |
278 OHIO
HISTORY
to several technical errors that cost
the company time and money, such as the accep-
tance of estimates on the costs of
tunneling which proved far too low, or the pur-
chase of iron rather than steel rails.
Also Thomas Ewing, Jr., underestimated the
severity of the depression of the 1870's
and the financial problems it presented.
Unwilling to lose some of his coal lands
by retrenchment, Ewing was able to make
his views prevail within the company.
Hocking Valley enterprise of all kinds was
frought with risks, and, considering the
economic conditions of the 1870's, it is far
from certain that different management
or different policies would have led to suc-
cess; but it is clear, in retrospect,
that Ewing's decisions were unwise.
Although the small-scale Ohio
industrialists who founded the A & LE railway
lost control of the enterprise in 1877
and were ostensibly failures, their efforts did
contribute to the emergence of the Hocking
Valley as one of the most important coal
producing sections of the country in the
1880's. Their work blazed the trail that
other, more realistic, men would
continue. Ewing's integrated approach toward
industrial development served as a model
for a syndicate headed by Samuel Thomas
of Columbus. Included were executives of
the New York Central Railroad Com-
pany, who acquired most of the A &
LE properties in 1877. This company, com-
bined with others to form the Columbus
and Hocking Coal and Iron Company,
emerged in the early 1880's as the
dominant firm in the eastern half of the Hocking
Valley. In an era when many mining
companies had assets of around one hundred
thousand dollars in value, the Columbus
and Hocking Coal and Iron Company op-
erated eighteen mines, owned over 12,500
acres of coal lands, 570 houses, a few
furnaces, and had an appraised value of
$4,494,367 in 1883.51 The firm achieved
in fact the economies of scale
envisioned by the earlier promoters of the A & LE.
The Thomas syndicate also acquired the
remains of the Ohio Central Railway.
Construction of the railroad resumed in
1879, was completed in November 1880,
and the name was changed to Ohio Central
Railroad Company. By June 30, 1881,
the Ohio Central was operating 213.3
miles of track, stretching from Toledo through
the Hocking Valley coal field. The
company reported "earnings" of $126,399.08,
or 37 percent over operating expenses
for the fiscal year 1881. In 1886 the Ohio
Central was partitioned, and passed out
of existence. The northern line became part
of the lucrative Toledo and Ohio
Railroad Company, while the section south of New
Lexington was absorbed by the Kanawha
and Ohio Central. The integration of
mines, railroad facilities, and company
towns forced the re-organization of the entire
mining industry in the Hocking Valley in
the mid 1880's, as independent operators
formed the Ohio Coal Exchange in an
attempt to compete with the Columbus and
Hocking Valley Coal and Iron Company.52
This suggests that in the 1870's the
promoters of the A & LE Railway
Company had vision and imagination, but suffered
from a combination of bad luck and the
absence of the entrepreneurial skill neces-
sary to translate dreams into reality.
51. Ewing, Jr., to Samuel Thomas, March
9, May 14, 1877; to H. D. Whitcomb, February 3,
1883, Ewing Papers, LC; John W. Lozier,
"The Hocking Valley Coal Miners' Strike, 1884-1885"
(unpublished M.A. thesis, The Ohio State
University, 1963), 36.
52. Tenth Census of the United
States, 1880: Report on Agencies of Transportation in the
United States (Washington, 1883), 336-337; Annual Report, 1881, pp.
1145-55; Eleventh Census
of the United States, 1890: Report on
Transportation Business in the United States (Washington,
1895), Part I, 76-77; Lozier, "The
Hocking Valley Coal Miners' Strike, 1884-1885," 37-38.
DAVID G. TAYLOR
Hocking Valley Railroad
Promotion in the 1870's: The
Atlantic and Lake Erie Railway
Industrialization had begun in Ohio
before the Civil War, and, after a war-imposed
delay, promised to accelerate rapidly
thereafter. The Panic of 1873, however, stalled
the process substantially and destroyed
many small industrialists and businessmen.
With the elimination of the financially
weaker businessmen, the way was paved for
reorganization of the state's railroad,
coal mining, and iron industries in the 1880's
by larger, stronger, and sometimes
out-of-state or national corporations which ac-
quired at relatively small cost the
remains of the shattered enterprises that had been
initiated by the small-scale operators.
Using their superior financial resources and
organizational skill, the larger
companies succeeded where the smaller firms had
failed. But even though they failed, the
efforts of the small industrialists are worthy
of attenion.1
Ohio was generously endowed with the
coal and iron ore necessary to produce
power and finished products. Bituminous
coal underlaid about twelve thousand
square miles, and iron underlaid about
eight thousand square miles. Almost all of
these resources were located east of the
Scioto River. One of the most richly en-
dowed regions in the state was the
Hocking River and its tributaries, the Sunday and
Monday Creeks, in south central Ohio.
Coal and iron were located in close prox-
imity in this general area, and made it
"the most promising center of iron production
in the state" in 1880.2
The development of Ohio's coal and iron
resources began in the 1820's, and by
1840 Ohio ranked second to Pennsylvania
in the production of pig iron. Through-
out the antebellum period, however,
mines and foundries remained relatively small
enterprises producing for a local,
agriculturally-oriented market. In 1850 only three
of Cincinnati's forty-four foundries
were capitalized at over $150,000, and only one
employed over 200 men. In 1860 the state
produced fifty million bushels of coal
1. Philip D. Jordan, Ohio Comes of
Age, 1873-1900 (Carl Wittke, ed., The History of the
State of Ohio, V, Columbus, 1943), 220-252.
2. Tenth Census of the United States,
1880: Report on the Mining Industries of the United
States (Washington, 1886), 621.
Mr. Taylor is Assistant Professor of
History, Mankato State College, Mankato, Minnesota.
(614) 297-2300