Success Romances of Railroad Presidents

WILLIAM PHIPPS January 1 1909

Success Romances of Railroad Presidents

WILLIAM PHIPPS January 1 1909

ALL the world loves a clean, successful man in business, whether that business be railroading or manufacturing.

Accountants and book-keepers will be particularly interested in the career of Frank Trumbull, president of the Colorado Southern and kindred lines. Born in a little Missouri town, the son of a schoolmaster, he is a type of the man who has risen through industry in a developing country to a high rank in the field of railroading, and who has come to be classed among the millionaires of the State of Colorado.

When Frank Trumbull took hold of the Colorado and Southern Railway, just fifteen years ago, it was a local ore line in Colorado’s mining district, a little more than a thousand miles in extent. Furthermore, it was bankrupt, in the hands of a receiver and without a cent in its treasury. In fact, just four months later came the great “strike year” of 1894, and the riots in Trinidad, the hotbed of the disturbances in the Southwest, even threatened to disrupt the system.

But the Colorado and Southern of today is a system of more than 2,600 miles, earning close upon $15,000,000 a year, and is one of the few roads in the country that show gains in gross and net returns at the end of as trying a year as our railroads have ever suffered. It is now one of the banner roads of the Southwest, running from the centre of Wyoming through Colorado, New Mexico and Texas to the Gulf, the shortest through line between the Rocky Mountain section and tidewater at Galveston, through which port the exports already rank next in value to those through New York.

Mr. Trumbull believes he has been able to achieve results because he was quick at figures in the red schoolhouse at Pleasant Hill, Mo. He was the “mathematical wonder” of Pleasant Hill. When he was twelve years old he had been through algebra twice, higher algebra, geometry, trigonometry—in fact, he was proficient in mathematics. But he was getting along so fast that he had to quit school because his head was growing faster than his body.

Quickness at figures has ever since been the keynote of his career. It jumped him into promotion from the days of his early bookkeeping to settling freight claims and finally to financing a railroad.

“I left school at twelve,” says Mr. Trumbull, “for a $40 a month job as deputy postmaster. Soon jealous politicians tried to have me ousted, but a Federal inspector who investigated reported than ‘even if the young deputy was only 16 years, he was older in brains.’”

But later he entered the office, of the Missouri, Kansas and Texas as clerk and began to climb in the railway business. When Jay Gould got that road, Trumbull was shifted to the Missouri Pacific. There, at 23, he had 170 men under him, in the freight claim and accounting department.

Later young Trumbull went to the Texas & Pacific, where he obtained a broad grasp on railway financing and accounting.

It was in 1874 that he entered the railway field in service on the “Katy” as a clerk. His record for the ensuing fourteen years is representative of the type of railroad man who rises through the accounting department. He became traveling auditor, then clerk in the general auditor’s office, and chief clerk of freight accounts of the Missouri Pacific; then freight auditor and freight claim agent and general auditor of the Texas & Pacific.

This phase of his railroad career ended in 1888, when he gave up railroading for five years. And he is accustomed to say that during that period he got his broadest railroad experience, because he studied the commercial side of the business from the standpoint of the shipper. He was engaged in the wholesale coal business in Colorado, and in making reports on railroads and other properties for New York and London banking houses.

Thus from the outside, as it were, the railroad man studied the attitude of the man who ships his freight over the road, his rights, his grievances, and his dealings with the employes of the company. Being familiar with the attitude of the railway official, the dual role gave him an insight into the vexatious problems between transportation companies and the shippers of freight which he could have obtained in no other way.

“I took hold of the road,” said Mr. Trumbull, “without a cent of cash in its treasury, in December, 1893.

“Then in June, 1894, came on the Debs strike. The United States judge gave me an order to protect the property. Fifty deputy United States marshals were sworn in on June 30 and sent from Denver to Trinidad, Col., that night, for Trinidad was the hotbed of the strike disturbances in that part of the country. The deputies arrived there on Sunday morning, the strikers captured them and took them off to breakfast.

“Something had to be done quickly then. I got the news on Sunday morning, had it verified, went to the Episcopal Cathedral and caught the judge after services. He went to his chambers with me and wrote a telegram to the Attorney-General at Washington. It was then half-past one o’clock in the afternoon in Denver and half-past three o’clock in Washington.

“Cleveland was President. A meeting was held at once of the President, the Secretary of War, the Attorney-General and the commanding general of the army. Troops were moving from Denver to Trinidad at two o’clock on Monday morning, and on Wednesday forty-eight men were arrested there as rioters by the troops and on their way back to Denver. That was twenty-four hours before the troops arrived in Chicago.

“I think that is pretty quick work, and it was one of the most trying times of my life. Quick action was necessary, because at the beginning of the trouble our first passenger train was taken out of Trinidad by the strikers, who told the crew that they would be killed if they came back.”

This experience formed the basis of much of Mr. Trumbull’s theories and philosophy about railroading and railroad life.

“The solution of the railroad problem,” says Mr. Trumbull, “has got to come about through an individual sense of trusteeship. There are no men higher in the business world than railroad officials, but they should feel that they are trustees not only for their stock and bond holders, but also for the shippers and the employes.

“The relations between the railroad and the population it serves are reciprocal. The people ship their goods over the line, and the line, in turn, transports them and supplies them with the necessaries of life. The railroad management in that sense should be impressed with the sense of trusteeship which has been reposed in it for the welfare of the community.

“But the necessity of the railroad to the community is as great as the necessity of the population’s patronage is to the railroad. Neither can exist without the other. Without transportation facilities the entire effect of the development in the Southwest would be nullified, since agriculture and industry are so largely dependent on the transportation of commodities and manufactured products to the markets that buy or consume them.

“The people of this country are justly entitled to the best railway lines in the world. On the other hand, the men who own the railway companies are anxious to use every endeavor to make their lines the best to be found in the world.

“But the merchant and agricultural shippers should realize that the railroad corporations cannot carry on extensive improve-merits in the way of providing the best of facilities to the residents in every section of their territories in the face of receding net earnings. When a period of depression comes, the railroad companies cannot buy more equipment and lay more rails until business improves and they can obtain more money. And yet, paradoxical as it may seem, business cannot fully improve until the roads are enabled to make their usual purchases.”

A DREAMER AND HIS RESULTS.

Mr. Stilwell is president of the Kansas City, Mexico and Orient Railway, which itself was only a dream in Stilwell’s mind at one time.

It was from his grandfather that he inherited his peculiar tact, energy and ability, in the management of large affairs. This grandfather, Hamlin Stilwell, was a man of affairs. He was head of the canal boat combination that flourished in the days when mule power was rapid transit, and when the canal boat fell from its high estate he was wise enough to get in on the ground floor in the railroad business, and he became a director of the New York Central.

One day the grandfather chatted with the young Arthur after the manner of grandfathers.

“Well, young man,” quoth he, “what are you going to do when you grow up?”

The answer was quick and decisive.

“I am going out West and build a big railroad.” That was his first dream.

Grandfather Stilwell left a big fortune. Before his grandson got big enough to handle any of it unfortunate investments ate it up.

Right here the life story of Arthur Edward Stilwell reads painfully like ditto marks for the careers of those whose names fill Bradstreet’s and Dun’s. Realizing the necessity, etc., he purchased a small printing press and started out.

He was two years a husband when he landed in Kansas City at twenty-one and started a print shop. An attack of typhoid and the advice of doctors to seek a change of scene sent him to Chicago, where he introduced photo-engraving to the West.

And then it was life insurance. Before he had been in the business long it looked mighty bad for that big Western railroad. Life insurance appeared to be the thing for which a beneficent providence gave A. E. Stilwell an especial forte. His salary didn’t climb. It soared. So inoculated did he become with the insurance serum that he invented forms of it that are now used by all insurance companies.

But there lurked in the young man’s mind a germ of honesty that grew and grew. One day he went to the president of the particular company which was dealing out his pay envelope and advised a change of base in regard to certain practices. Arthur Edward was “fired” and “fired” promptly. He wasn’t surprised. In fact, he had expected it. But he had $20.000, and with that he decided to build his railroad.

Stilwell had never given up the idea of making Kansas City the starting point for his railroad. Taking a pencil and a map, he drew a line “straight as the crow flies” from the Western Missouri metropolis to the Gulf of Mexico.

“There is my railroad,” said he.

And so he began to realize on the youthful dream he had dreamed. A company was formed and he began to sell bonds. And he sold them, too, at first. Then the panic of 1893 came along and money flowed in like molasses in January.

And then Stilwell showed the daring and the faith that were in him. Taking passage on a liner, he went to Europe. And of all the Continent he, unbacked, almost a boy in years, picked out Holland—conservative, slow-going Holland—for his field of operations. He talked to the rich burghers of the land of dikes, and when Stilwell talks men believe. Twenty million dollars was the fruit of his effort. Twenty million dollars to an unknown youth from a distant land!

The road was built. George M. Pullman believed in the youthful magnate.

“I will be personally responsible for your equipment to the amount of five million dollars,” said the builder of sleeping cars.

And then George M. Pullman died. To the Kansas City, Pittsburg & Gulf, the Stilwell line, that meant a reorganization. A reorganization meant Wall Street. Wall Street meant the elimination of upstart railway magnates who did not ask its advice. They took Stilwell’s road away from him. They did more. They even rechristened it and called it the Kansas City Southern.

Out in Kansas City they felt sorry for Stilwell. As a sort of salve for his injured feelings it was agreed by the business men of the town that they would give him a testimonial in the form of a banquet. Privately they agreed that they would make the obsequies as cheerful as possible.

So they had flowers and music, and the men who were good at forming pleasant phrases stood up and told -what Stilwell had done for Kansas City and how grateful Kansas City ought to be, and then as a final balm they brought forth a loving cup that was to solace Stilwell as much as possible for the loss of his railroad.

Of course it was up to Stilwell to reply, and the banquetters shifted uneasily in their seats and cast uneasy glances about when the inevitable could not be put off any longer. They were not anxious to be treated to an exhibition of their friend’s grief.

But there was no sign of grief in the face of this man who arose before them to the full height of his six feet and stood smiling at them. There were no tears in his voice when he said :

“I would much prefer to have the friendship of Kansas City than to be president of the Pittsburg & Gulf.”

And before he sat down he remarked :

“I have another project in mind. It’s another road, and I will be in a position to announce its destination in a few days.”

The diners could scarce believe their ears. Talking it over on the way home the consensus of opinion was summed up in the remark :

“Well, I’ll bet he makes it go. You can’t stop Stilwell.”

He had discovered the remarkable fact that a point on the Pacific coast of Mexico was five hundred miles nearer to Kansas City than is San Francisco. Perhaps you are railroader enough to appreciate what a saving of five hundred miles of rail haul means. Stilwell knew.

“There’s my next road,” said he.

And that is the road, the Kansas City, Mexico and Orient, 1,629 miles long, that he is building now. In that road there is not one cent of Wall Street money. There are millions of dollars in it that were put there by the Hollanders who invested in the Kansas City Southern. There are millions in it that were put there by men who bought one share or two shares or half a dozen. There are more millions there that were put there by the rich men of Old Mexico.

For Mexico believes in Stilwell. The doors of Diaz’s palace swing open to him always and when he visits the States of the Southern Republic the Governors have the military bands at the depot to welcome him.

Such is Arthur Edward Stilwell, dreamer of dreams and doer of deeds. When his Kansas City, Mexico and Orient road is finished it will be one of the greatest railroads in the world. It will bring the trade of the Orient to the territory along its route.

CLERK, MANUFACTURER, LAWYER TO PRESIDENT.

There are few railroads so much before the public as the “Reading.” It is one of the very few whose securities are of daily interest to Wall Street, and the only one which has a “post” in the stock exchange.

The reason is that the Reading (its real name is the Philadelphia & Reading R.R.) is the chief anthracite coal owning and carrying road, and its control is important in the national strategy of railways.

The man who has been the president of this road for the last seven or eight years, and who has been very much in the public limelight, is George F. Baer.

The great anthracite coal strike of 1902 brought Mr. Baer before the entire nation, and he has been a national railway figure ever since.

The success-romance of Mr. Baer is very stirring and unique. He was born poor, in the mountains of Pennsylvania, on a farm, and all the education he got beyond his three Rs was won by hard work.

Mr. Baer was a printer’s devil in the office of the Somerset (Pa.) Democrat at 13 for several years, and then went to school for a while. Then, going back to work as clerk at the Ashtola Mills, near Johnstown, he became chief clerk within a year. Once more young Baer quit to go to school—this time to college—and then, at 19, he and his brother purchased the Democrat. Shortly afterward his brother went to war and left Baer to manage the paper alone. He set type by day and wrote items at night. Then he, too, got the war fever and went to the front—returning in 1863 with the rank of captain.

Baer then studied law and when admitted to the bar moved to Reading, Pa., which was then rapidly becoming a considerable railway centre and manufacturing point. The Reading R. R. already was there, and rival roads were building lines there. Baer was engaged by these rival roads, and fought for them so persistently and relentlessly that the Reading company offered him a good salary to become their solicitor.

Ever since then Baer has been the leading counsel for the road, and has done a great deal of very clever work.

But he did not find enough to do looking after the legal interests of the Reading road in those years, and his essentially business mind sought other channels for his energy. He got into the manufacturing business— several kinds of it. He became heavily interested in the manufacture of iron. The Reading Iron Company is a big concern, employing several thousand men, with a number of mills, manufacturing tube and other products—even big wire-bound Brown guns. Of this company Baer was for many years and is now president.

In addition to iron, Mr. Baer became interested in paper manufacture, and still owns a big mill near Reading. Not satisfied with these activities—any one of them enough to keep an ordinary man busy— Mr. Baer became the directing figure in several banks, and even in insurance and coal mining companies.

Now you might imagine Mr. Baer far too busy to interest himself in charity, in industrial education, in literature, or in public parks. But you would be mistaken. Mr. Baer is very much interested in all of these. He is a heavy contributor to intelligent charity; he is a member of Reading’s Park Board, and has done more than any other man for public parks—even contributing much valuable land. Mr. Baer is a great reader, and a thinker of some consequence, and a considerable church worker. He wrote an essay on “Work is Worship,” which ought to be a classic, and in it he disclosed his intimate knowledge of the best literature.

Industrial education finds in him a strong friend. He has built a club house for the employes of the Reading Iron Co. and provided classes in technical training, and has contributed heavily to the railroad Y.M.C.A. work of evening instruction.

“There is a great dearth of intelligent, trained workmen,” says Mr. Baer, “and we must rid the minds of our young men that mediocre clerical work is more desirable than doing things industrially. Technical, thorough training is what we most need, and the young man who says there are no opportunities does not have his eyes open. We are looking for the able, trained man who can do things and get them right.”

The Reading road in his hands has changed from a notoriously mismanaged and unprofitable road to a profitable dividend payer, through Baer’s efforts.