Boston Interests Lose the Michigan Central
[Detroit Free Press, June 25, 1878]
It is Now Owned and Managed by William H. Vanderbilt
Particulars of the Annual Election
Who Were Present, What They Did and How They Did It.
Some Character Setches of the Participants and Lookers On.
Votes Cast for the Respective Parties and How The Election Resulted.
Mr. Vanderbilt Owns 99,665 Shares, Which is a Clear Majority of the Whole.
A Visit to the Repair Shops at Grand Trunk Juncton.
Expressions of Opinion b Corneus, William K. and Capt. Jacob Vanderbilt.
Views of Mr. Worcester and Senarre Wagner and Ashley Pond.
The Board to be Conservatively Managed and wt as much Regard as Ever t the Interests of Detroit and Mihigan
Whar Some o he Mechants and Busiess Men of Detroit Think of the New Regime.
An Opinion by Some Business Men In The Interior.
The meeting of stockholders was called for 10:00 AM in the office of Assistant Gen. Freight Agent Baron, though it was near 20 minutes past the time before the gavel came down. When everything was in order, James F. Joy, for many years the one man power of the Michigan Central, called the meeting to order without preliminary flourish, where upon William H. Vanderbilt moved that Augustus Schell take the chair. The motion was seconded and carried, and R. G. Rolston was made secretary. The latter read the call for the meeting.
Mr. Scheel – "Gentlemen, you have heard the reading of the call. What is your pleasure?"
Mr. Joy –"There is no formality required by law in the state as to the manner of voting. We have usually appointed tellers or inspectors and for this occasion ex-Gov. Baldwin, C. H. Buhl and Mr. Catcheon, United States district attorney, have been named. Gov. Baldwin and Mr. Buell are present but I do not see Mr. Catcheon. I suppose, however, he will be here in a few minutes."
W. H. Vanderbilt – "Oh, well, there's no hurry. We will wait for him unless there be objection."
Mr. Schell – "Two of the tellers are on hand. We may as well proceed."
Thereupon, Mr. Schell, who is been aptly described as very much resembling the Lone Fisherman in the expression of his face, moved his chair to be head of the table. At his left and a little back sat W. H. Vanderbilt and Capt. Jacob H. Vanderbilt his uncle, a venereal looking gentlemen, with the characteristics of "the family," conversing together in low tones. James F. Joy sat with his chair tilted against the wall, and with the serene countenance. The natty, snapeyed Ralston occupied a seat directly opposite Mr. Schell, and after Mr. Cutcheon arrived the tellers sat on the right president of the President at the same table. William K. Vanderbilt was sandwiched between Capt. Jacob and Mr. Joy, and young Cornelius stood with his modest straw hat his hand looking over the shoulders of Mr. Buhl as the certificates were called off and passed into the hat. A few stockholders and several representatives of the press, including "Bismarck," of the Chicago Tribune, completed the personnel of that particular room. The business of voting being of a necessity dry, tedious and monotonous, those who had come to ascertain results found themselves without other occupation than the weary one of waiting. However, the process the presence of the Vanderbilt family, under circumstances of revolutionary significance to the great Michigan Central Railroad was in itself a fact of sufficient interest to give the waiting ones plenty to talk about and think about. All sorts of speculation were indulged in, chiefly with reference to what, if any, changes would likely to result from the clearly foreseen Vanderbilt victory. It was the general voice that Mr. Ledyard would be retained in a management capacity, but here and there could be found a man radical enough to prophecy a "complete cleaning out of the whole thing and a new deal all around." One gentleman of athletic taste remarked to his neighbor that Cornelius was an extremely well-built young fellow."
"Y-e-s" was the reply. "Vander-bilt."
The laugh that followed the witty man's bad pun did not stop the counting of certificates, but the gentleman around the board elevated their eyebrows in mild surprise, while the over whelmed and blushing poster intently studied the trademark in the crown of his hat.
Modus operandi of receiving and counting the votes was very simple withal monotonous. The shareholders, 833 in number, who favored the reelection of the old board, had sent in their poxies to Moses Taylor. They were all in prescribed form, being printed blanks, setting forth that A. B. Was the holder of certain shares in the Michigan Central Railroad and that he authorized Moses Taylor, of New York to vote for him the whole number of his shares at the coming election. These blank proxies, a formidable heap of paper indeed, were piled up, hat high, in front of Christian H. Buell.
Some clever clerical hand had arranged the list in alphabetical order and it began with the Adams, of Boston, and ended with the Van Cleaves, of Lewiston.
By the way Mr. Van Clove, like old Commodore Vanderbilt, was originally a steamboat man, beginning in 1816 as clerk of the first steamer that plied upon Lake Ontario. Later, in 1842, in connection with another gentleman he introduced propellers upon the lakes, the screw being then a new invention of Erickson of monitor fame. Capt. Blake and the other old-time commanders of the Lake Erie steamers, could not find language severe enough to express their contempt for the screw method of propulsion of steam vessels, and, lacking words, divisive fully elevated their coattails in the derogation. However, when Capt. Van Cleave loaded down his propeller with thrice the freight that any of the steamers could carry, and saw her triumphantly plow her way through the deep layers of ice flows in Buffalo Harbor, at the early spring months, the slightly changed their tune.
Capt. Vancleave bought his stock in the Michigan Central at par and kept it for many years receiving grand dividends. At length it went down, and kept falling and falling, and when it reached 66 he disposed of it. He subsequently bought it all back at 38, and now only regrets that he did not take more at the same figure.
In contradiction to this class of the old time stockholder of the Michigan Central was another party, with an unmistakably sharp and shrewd air, and with out communicative, who took pains to let it be known that if the election was any where close he had it in his power to break the tie, and to add force to his words, produced a pocket-book containing a large packet of paper. He also caused it to be known that he was trustee for a mining company in one of the Rocky Mountain states. Being interrogated by a reporter, his residence, he said, was between San Juan and State Street, Boston, in which city he was formally a broker.
It did not appear that the election was nearly enough balanced to enable him to sway it either way, and he departed; when he returned the affair was over.
All this, however, is a digression, a side issue, of which the leading actors in knew naught. It was only observable as a bit of by play while less engrossing matters had the boards. Let us return to the voting.
Sullivan M. Crutcheon had the official list of shareholders, from which he read the individual's name and number of shares. The list was verified by ex-Gov. Baldwin, who referred to the transfer book, and seeing that the name and amount corresponded, Mr. Buhl took the proxy and laid it aside. About as easy and progressive a task as counting the ballots on election day.
The Vanderbilt interest had but little to do with the proxies. There were a few, however, thrown carelessly into a stovepipe hat that stood in the center of the table. A mere handful of the most ordinary looking paper in the world, but, at the same time, a handful that were represented a plump ten millions of property.
As the moments go by, broken only by the sound of voices of the tellers, and it is apparent that two or three hours will be required for the count, a motion is adopted that the polls will close at haf-passed one, provided all the votes in hand were counted by that hour.
Cornelius Vanderbilt, a gentleman thoroughly posted in finance, goes into the next room and consults with general and son Steger and Edwin D Worchester, the treasurer of the New York Central, a man whose knowledge of figures is said to be marvelous and intuitive.
William K Vanderbilt takes a little turn about the depot. He has the reputation of being well accomplished in the general traffic business of railroads.
After passing a joke or two with Augustus Schell, exchanging a word with John Newell, general manager of the Lake Shore & Michigan Southern – and enjoying a brief chat with George V. N. Lothrop – William H. Vanderbilt accompanied by Sen. Webster Wagner takes a stroll down the depot yard to inspect a new Wagner sleeping car. Then Mr. Vanderbilt makes a call upon General Manager Ledyard and complements him on the business like appearance of the office. When he returns and the others resume their places it is well high noon. Presently the dispatches from New York begin to arrive. They relate, doubtless, to the price of stocks, and are for the most part, addressed to Mr. Worchester or General Stager. After being read and noted in the inner room they are presented to Mr. Vanderbilt, who shows them to Mr. Schell, who sits beside him.
At length the result appears in this wise: Samuel Sloan, Moses Taylor, George F. Talman, John J. Astor, Isaiah Bell, Roswell G Rolston, Nathaniel Thayer, Edward Austin and Dexter Richards, being the old board, receive 54,125 votes. William H. Vanderbilt votes as his own possessions, 62,000 shares; his sons vote 20,000 and his friends whose names appear below, 17,665 shares. That foots up a total of 99,665 votes for the following board of directors:
- William H. Vanderbilt, New York.
- Cornelius Vanderbilt, New York.
- Samuel F. Barker, New York.
- William K Vanderbilt, New York.
- Anson Stagger, Chicago.
- Ashley Pond, Detroit.
- William L Scott, Erie.
- Edwin D Worchester, New York.
The total number of shares in the company is 187,373, and it will be seen that Mr. Vanderbilt owns a clear majority of the number. It is decided that the transfer book shall remain closed until August 1, and the party adjourn for the dinner in Mr. Vanderbilt's traveling car – conveniently at hand in the depot.
Mr. Rolleston, the four former secretary, bustled about and gathered up his books to retire. A reporter remarked to him that he seemed to be somewhat surprised or disappointed. He responded that he was not at all disappointed; that he was president of the Farmers Loan and Trust Company of New York, and had about all he could attend to. The secretaryship of the Michigan Central had been useful to him in connection with his other business but, being engrossed in other affairs, he could resign it without feeling any disappointment. After dinner the new directors held a meeting at which the following officers were chosen:
- President – William H. Vanderbilt.
- Treasurer – Cornelius Vanderbilt.
- Secretary – E. D. Worchester.
- Executive Committee – William. H. Vanderbilt, Augustus Schell, Cornelius Vanderbilt, Samuel F Barger.
A resolution was adopted discontinuing the salary paid to the president and material materially reducing those paid the treasurer and secretary.
General Manager Ledyard had a car and locomotive in readiness, and Mr. Vanderbilt, passing a facetious remark about Mr. Worchester's increased clerical duties, the meeting adjourned. Getting on board of the car, Mr. David Sutherland acting as conductor, the party proceeded to the Grand Trunk Junction to inspect the repair shops. The entire grounds and all the departments were visited, and much satisfaction was expressed at the capacity of the buildings, and their working equipment, and the good order and general appearance of good management and economy everywhere apparent.
Sen. Wagner inspected some of the sleeping cars that were being repaired, and complemented superintendent Winfield and Master Car Builder Miller on the character of the work.
W. H. Vanderbilt showed a deep interest in everything and exhibited a surprising knowledge of the minutia of railroad work. The same may be said of Mr. Worchester.
During this walkabout the grounds Messrs. Cornelius Vanderbilt, William K Vanderbilt, E. D. Worchester, Augustus Schell, Sen. Wagner and Capt. Jacob H. Vanderbilt gave assurances to a reporter of the Free Press that the road would be managed in a conservative manner; that the people of Detroit and of Michigan would have no reason to complain of the new ownership; that, primarily, it was the intention so to manage the road as to make it profitable to the stockholders and enable them to receive a just interest upon their investment, and nothing more; that this would be accomplished, not by exactions upon the commerce of the city or the state, or by subordinating them to other localities, but by putting an effectual stop to all needless and injurious cutting of rates on through traffic. The fact that competing lines had heretofor been in a position to make rates much below paying figures, and to compel the Michigan Central to take its proportion of such a ruinous figures, was adduced to show that it was a disadvantage to the merchants of Detroit and Michigan.
It was a sort of competition which enabled points more distant from the seaboard to get proportionally lower rates, than in justice, they could claim.
So the gentleman inquired as to the standing of Mr. Pond in Michigan, and were much pleased to have their good opinion of him corroborated by the assurance that the people and business community of Michigan had every confidence in him.
Mr. Pond did not accompany the party to the shops. Previous to the opening of the meeting he said that in conversation with W. H. Vanderbilt, held before the election, he was well satisfied that the interests of Detroit and Michigan would be promoted by the change of ownership, and that he was much impressed by Mr. Vanderbilt's disposition to favor our community to as great an extent at least as it had been favored by former managements of the road. On the whole, Mr. Pond thought it a good thing for Detroit to have the road fall into such good hands.
Capt. Jacob H. Vanderbilt said the people would find that the efficiency of the road would be enhanced and the customers of the company, if possible, better served than ever.
All the gentleman conversed with, expressed satisfaction at the estimation in which General Manager Ledyard is held by those having business with the Michigan Central Railroad.
Mr. Worchester said that no change would be made in removing the accounting departments of the road to New York by reason of his being made secretary. That as those of the Lake Shore and Michigan Southern remained at Cleveland, so those of the Michigan Central Road would remain as they are in Detroit.
Much satisfaction is manifested by our citizens at the election of Ashley Pond as a director, and those who have a business acquaintance with Gen. Stager, of Chicago, are pleased likewise at his election.
The idea was conveyed, but just by whom it is impossible to state, that the office of the General Passenger agent of the road might be removed to Detroit. Such a course, would no doubt promote the efficiency of that department, bring it into closer relationship with the accounting department and materially benefit the immense local traffic of the road. At present there is not that facility for adjusting matters with interior points in Michigan which is desirable, and it may be that good policy would require the head of the passenger department to be located more conveniently to the general management.
Incidentally all the gentleman expressed in complementary terms their opinion of Detroit, its mansions, business houses, beautiful streets, and the appearance of thrift and culture which surrounds it all.
The board of trade on the change.
In no branch of Detroit's trade has the interest over the future management of the Michigan Central Railroad and so keen as in Board of Trade circles which sense the earliest announcement of a possible change have been fully alive to all of the moves and maneuvering of the powers present in those that were to be. The very fact that a new management was possible was sufficient to create a lively interest, but the possibility of such an event might inaugurate an entire change in the future relations of the road to the interest of Detroit and the State of Michigan, but serve to renew their interest and established an anxiety of mind that as yet has filed little to relieve it. No branch of the Detroit's trade does the action of the Michigan Central so primarily affect as it does the grain trade. Four on that road and its tributaries its merchants depend for fully two thirds of their receipts and consequently their business, profit and livelihood. The chance that a new management of the road might turn all this trade from Detroit was the cause of their anxiety whether Mr. Vanderbilt, on acquiring possession, would not, for the sake of furnishing his Eastern lines with freight and to avoid competition with rival routes, give through bills of lading from interior points to the seaboard was the all absorbing question which agitated their minds and cause no little discussion. The fact that June 24 would see a change in ownership, became a settled conviction with the a great majority some six months since and from that time to this is formed little or no part the question under discussion.
Information of Vanderbilt's intended visit to Detroit was received Friday, and Saturday Secretary John G. Irwin was instructed to telegraph the party offering them a reception at the Board of Trade to be held Monday. Replies were received conveying the compliments of the railroad magnate and his friends and stating that owing to the press of, important business which would meet them there, they would obligated to forgo the pleasure. Monday afternoon Walter Bourke, president of the Board, John G Irwin, Secretary, and Alex Lewis, John H Wendell, Morgan Johnson, A. C. Raymond, George W Balch, Thomas Hill and E. G. Newhall, members of the Board, called at the Russell House to hold a short informal talk with the Central's new president, but were disappointed, as the gentleman had but shortly departed on a visit to the company shops, at the Junction.
At the noon session of the board and on the "call board" the all absorbing topic of conversation was Mr. Vanderbilt of the Michigan Central, and a reporter of the Free Press took advantage of the occasion to interview several of the prominent members as to their opinion whether the future course of the Michigan Central and its management would be detrimental to the city and the city's trade or not.
The first gentleman approached was Walter Bourke, President of the Board, whose financial interests lay more especially in flour transported over the Michigan Central. He thought that there would be no radical change in the management of the road, and that its present profitable relations with Detroit and Michigan would be retained in its future conduct. When question for the reasons for such a belief, he stated that he did not think Vanderbilt would consider it politic to fight the Grand Trunk and in a measure the Great Western Railroad and the water interests.
The next one sought was John H Wendel, of John H Wendel & Co., who are credited with being one of the heaviest buying firms, looking at the market from the "bull" standpoint. In answer to the interrogatories of the reporter, he stated that the question allowed of two opinions being formed. In one way it might be to the advantage of Detroit, on the other hand it might work to her disadvantage. Of the ultimate results, time alone could tell.
One thing we are sure and that is that the Michigan Central, under its new administration, will never lack for rolling stock and the deficiency experience in the past will no longer trouble us. For you see he has the New York Central, Canada Southern and the wherewithal to supply any amount of cars, etc., that may be needed in the working of the road and the transferring of our freight.
On the other hand, if he makes through rates from interior points, it will work in injury to not only Detroit but the state. Should he decide on the latter course, the only way left open for Detroit men is to favor the Lansing Road, and others similarly governed. That will be forced into any such position I think highly improbable. The men in charge under Vanderbilt, who counsel and advise, and thereby perhaps influence his decisions more or less have my full confidence and I feel fully satisfied that the interests of Michigan and the City of Detroit will be fully observed in the coming conduct of the Michigan Central.
Bidding his friends adieu the reporter button-holed our R. W. Gillette, of Gillette & Hall, who are heavy dealers in grain – probably the greatest "bears" on the board. Mr. Gillett showed a disinclination to talk, and referred the reporter to Mr. T. P. Hall, his partner. That gentleman, without any hesitation, stated that in his opinion Mr. Vanderbilt's acquisition of the Michigan Central was to be regretted, as it would work to the injury of the city, as he had but little doubt that he would give interior points through rates in order to avoid competition with the Grand Trunk and Great Western Railroads and the water routes, and thus retain the freight for his Eastern connections. As the Central is governed in the past a great share of Michigan's grain was brought to Detroit, and Detroit merchants gain the benefit there from. As to further shipment, this left it open to competition, one branch of which, the water route, open eight months in the year, offered rates that no railroad could afford to shippers. This being the case, and Vanderbilt aiming but to advance his own further interest, would, in his opinion, do what would of necessity be unfavorable for the city – give through rates from interior points.
During the course of Mr. Hall's remarks, Mr. Gillett raised the question whether the profit derived from good local rates from interior points of the Michigan Central to Detroit would not be better for the new president's interest than a low through rate of questionable profitableness this from interior points to the seaboard. The question at once awoke a triangular discussion, in which Messrs. Gillett and Hall and the reporter entered, the latter simply for the purpose of drawing out the opinions of others. The preponder of the question rather favor the "local" side, while his partner adhered to its original position already given. As far as the news gathered was concerned it amounted to nothing, as it brought forth nothing new.
The Free Press Commissioner next interrogated C. K. Norton, of the firm Balch & Norton. Mr. Norton recognized his visitor in his usual suave style, and an answer to the days conundrum stated that he had formed no opinion further that in one way it might work a great injury to the city while the other it by proof of in a steamy a bold benefit. Finding that nothing further could be gleaned in that quarter the reporter sauntered into the office, were Mr. Balch, the senior partner, was found. Esther Balch opened the conversation with the remark that he considered Mr. Vanderbilt one of the best, if not the best, railroad manager in the country, and did not consider there was anything to fear in his acquiring control of Michigan's main railroad.
I think it will be beneficial to the State in business generally, but as to Detroit I do not know. If he decides to compete with the water route it will hurt the city in certain lines of trade, but the grain trade I think merchants can hold their own.
Not as a majority of them do now, he continued, noting the look of inquiry on his visitors face, but as some of us sometimes find it necessary to do, I mean by making purchases and shipments from interior points and not from Detroit. In times where an export demand prevails and shippers at interior points are tendered bills of lading direct to the seaboard they will be inclined to take advantage of that opportunity rather than ship to some local market. In consequence Detroit dealers, and self-preservation, will be obligated to buy at those points.
Alexander Lewis was next visited, and stated briefly that it would seem as though Mr. Vanderbilt would "bill through" from interior points rather than allow competition with the Grand Trunk or the water route.
Strother J. Beeson, of the firm Jacob Beeson & Company, was decided in his opinion that the course pursued by the Michigan Central would be detrimental to the best interest of the city, and further that no greatly distant day, a railroad would be constructed running from Ypsilanti to Grosse Isle, connecting with the Canada Southern at that point, where he had no doubt a bridge would ultimately be built. In both opinions he was fully seconded by the senior member of the firm.
Morgan Johnson, of the firm of Morgan Johnson & Son, and ex-president of the Board of Trade, had formed no opinion but thought appearances were rather unfavorable for Detroit. His answer was the substance of the replies received from C. F. Flinn, J. C. McDonald, of McDonald & Co., H. N. Smith, E. A. Bissell of Bissel & Co., Thomas Hill, of Hill & Co., E. G. Newhall, of Newhall & Co., A. McPherson, of McPherson & Co. and R. H. Anderson given in answer to similar questions.
Businessmen of the interior.
C. F. Mueller, of Raymond & Co, had just returned from a trip through the State when accosted by the Free Press Commissioner. He said that while in the interior he had sounded the businessmen he met on the question and found that a very large share were afraid that it would "wipe" out Detroit, a result that they would greatly regret to see, as it would do away with a market here at home on which they could depend. A point where speed was a desideratum, in realizing, serving them to a great advantage, allowing them to ship and sell on short notice, an advantage that would be lost on through shipments.
A. C. Raymond, of the same firm, had no settled opinion, but was afraid that the new management would give interior points, relatively, better rates than Detroit and shipments to the east. In years when we was in export demand it would affect Detroit to a much greater extent than it would when the call was from the home consumers, that is, from millers and others in our own and neighboring states.
From the tenor of the many remarks made by those visited it will be seen that the grain merchants, with but few exceptions, are inclined to be rather afraid of the future management of the Central, but hope for the best. Conversations held by several Detroit merchants with different members of Mr. Vanderbilt's party, have strength of the belief that Detroit's business interests will be fully subserved in the future. They have been informed that such will be the case and naturally hope for the best. As to whether their hopes will be realized, William H. Vanderbilt and father time alone can tell
The Vanderbilt party will leave this morning for Chicago.