sdgar thomson and thomas za. scott: za symbiotic 'partnership?

y. Sdgar Thomson and Thomas zA. Scott:zA Symbiotic 'Partnership?

ADUN & BRADSTREET agent reported to his home office inAugust, 1873, ^ a t Thomas A. Scott was "looked upon as

L. the muscle and backbone of the Penna. RR Corporationand its tributaries while 'Edgar Thomson' Presdt. is the brain."*This early attempt to describe the unique relationship betweenThomson and his vice-president, Scott, set the tone for the othersthat followed. The contemporary public was endlessly fascinated bytheir reputed wealth and power. At the height of their careers inthe late 1860s and early 1870s, Thomson and Scott controlled a railempire that centered around the world's largest corporation, thePennsylvania Railroad, commanding assets of more than $400,000,000. From this road their financial and political influence radi-ated south to New Orleans and the southwest, and into the mid-western cities of Cincinnati, St. Louis, and Chicago. At the outerreaches of their authority, the West, they variously exercised acontrolling influence on such transcontinental giants as the NorthernPacific, Union Pacific, Kansas Pacific, Atlantic and Pacific, andTexas & Pacific railroads. In the nation's financial centers Thomsonand Scott were widely recognized as the nucleus of the so-called"Philadelphia parties." Allied with such prominent figures asAndrew Carnegie, Anthony J. Drexel, Matthias W. Baldwin, andJay Cooke, and with generous lines of credit at such overseas housesas J. S. Morgan and the Baring Brothers, this regional investmentgroup commanded immense resources invested in myriad businessenterprises and speculations.1

* The author wishes to thank Philip S. Klein, the Pennsylvania State University, andJoseph F. Wall, Grinnell College, for their generous assistance in the preparation of thisarticle, and to acknowledge financial assistance from the University of Tennessee at Chatta-nooga Committee on Faculty Research and from the American Philosophical Society.

1 Dun & Bradstreet Credit Ledger, Pennsylvania, Vol. 142, Philadelphia, IX, 187, No. 400,Aug. 14, 1873, Baker Library, Harvard University.

37

38 JAMES A. WARD January

For all Thomson's and Scott's prominence, however, they remainenigmas. Although they were subjects of numerous conjecturalnewspaper articles and later historical works, they were exceedinglycareful businessmen and left little first-hand evidence of theiraffairs. Neither is the subject of a biography, neither left a majorcollection of papers, and Scott was even able, despite a state lawto the contrary, to keep his estate evaluation from the public record.Their surviving business correspondence frequently concluded withthe admonition "destroy this letter/' and apparently more oftenthan not the recipients obeyed. This paucity of evidence has leftthe outline of what they did only partially visible, as the continuingdispute over what part Scott played, if any, in the disputed electionof 1876, that was recently aired in the Journal of ̂ American History,indicates; why they used their financial and political might as theydid will always engender debate.2

Central to an accurate evaluation of Thomson's and Scott's placein the nation's development is an understanding of their continuingrelationship; all else is dependent upon what bound these twoapparently very dissimilar men together. For the twelve-year periodafter the onset of the Civil War the unisonal nature of their partner-ship makes it impossible to divorce the actions or motivations ofone from the other. So close were they that often their collectivepersonality takes logical precedence over any attempt to divinetheir individual courses.

The most common explanation for their mutual attraction restsupon the symbiotic nature of the association's two dissimilar per-sonalities united to create the perfect nineteenth-century business-man, each providing what the other lacked. The interpretation,started while both men lived, and gained credence after Thomson'sdeath in 1874, seemingly by sheer repetition. A thoughtful reporterstruck the theme in Thomson's obituary when he opined that Scottwould deeply "mourn the man whose right arm he has been formany years. . . ." His assessment of the centripetal forces within thepartnership was apt for railroadmen: "Mr. Thomson, grave, taci-turn, deliberate, has been the ponderous, silent, central balance

2 Allan Peskin, "Was there a Compromise of 1877?", The Journal of American History,LX (1973), 63-75; C. Vann Woodward, "Yes, There Was a Compromise of 1877," ibid,,215-223.

1976 J . EDGAR THOMSON AND THOMAS A. SCOTT 29

wheel of the great machine. . . . Mr. Scott has been the earnest,active, daring, untiring force. . . ."3

Upon Scott's death in 1881, the earlier mechanical metaphor wasreplaced by a more human one. After modestly characterizing Scottas "the greatest railroad manager that ever lived," the journalistfelt obliged to explain the "railroad prince's" relationship withThomson, whom the author felt was Scott's "superior in solid fore-sight and mental grasp. . . . He and Thomson formed a combinationof brain and railroad talent greatly diverse, but so harmonious asto be effective of great results on all occasions."4

When J. L. Ringwalt wrote his famous Development of transporta-tion Systems in the United States in 1888, he included an essay on theduties and the importance of railroad presidents that reinforced thejournalists' earlier observations on Thomson and Scott. Curiously,Ringwalt discussed only the personalities of four "distinguished deadrailway presidents," John Garrett of the Baltimore & Ohio, WilliamVanderbilt, and the two Pennsylvanians. Scott's great advantage,Ringwalt thought, was the rapidity with which he made decisionsand "so accurate was his judgment and intuitive his perception thathe rarely erred. Work thus became easy for him. . . ." Thomson,however, "absorbed the knowledge of others, weighed, considered,and digested it thoroughly, and reached conclusions by cool, meth-odological reasoning." When convinced he was right, Ringwaltnoted, Thomson "knew no hesitancy or doubt." Ringwalt consideredthat their divergent personalities intermeshed to form the completerailroad executive.5

In 1896 J. Elfreth Watkins wrote a massive three-volume goldenanniversary history of the Pennsylvania Railroad, and he too feltobligated to include in each of the two executives' sketches at leasta mention of their close rapport and its consequences. Thomsonfound in Scott, wrote Watkins, "abilities of a different order, andthe co-operation then instituted between the two . . . had an im-measurable influence upon the destinies of the Company." WhenWatkins reached Scott's presidency, he thought it incumbent to

3 Philadelphia Evening Bulletin, May 29, 1874.4 New York Times, May 22, 1881.5 J. L. Ringwalt, Development of Transportation Systems in the United States (Philadelphia,

1888), 365.


delve more deeply into their working relationship. Scott's "serviceswere so closely interwoven with those rendered by President Thom-son," he continued, "that it is difficult to name any importantadministrative act or measure connected with the development ofthe Company's interests that does not bear the imprint of ColonelScott's individuality." Watkins then gave a cursory examination tothe binding nature of their partnership. He concluded that threefactors held it together: Scott never "exceeded the authority orstepped beyond the jurisdiction of the office of vice-president"; hewas "always loyal to his chief, to whom he was indebted for manyopportunities for usefulness"; and, as Thomson aged, "he found itnecessary to delegate the solution of many important problems tothe younger man who was to take up the burden when he could layit down." Watkins clearly attempted to integrate the personalaspects of their relationship with emerging corporate organizationaltheory, emphasizing the chain of command, personal loyalty, andorderly transferral of executive power.6

Seven years later, bucking the popular tide of muckraking journal-ism, E. J. Edwards returned to the importance of personalities in anarticle entitled "The Great Railroad Builders" that appeared in<Jtfunsey's ^Magazine. Although the essay dealt with a wide varietyof railroad magnates from Commodore Vanderbilt to the CanadianSir William Van Home, prominently displayed side by side on thefirst page were large portraits of Thomson and Scott. About themhe made two basic assumptions: that Thomson the engineer meldedsplendidly with Scott the financier; and that personalities were animportant ingredient in the relationship. Thomson's engineeringbackground, Edwards contended, "typified the relation which sci-ence and the actual work of railway building have had to thedevelopment of our national systems," while Scott after the war"revealed his financial ability by his part in the creation of thePennsylvania Company, a triumph of financial strategy. . . ."Edwards had little to say specifically concerning Thomson's per-sonality except, repititiously, that he was an engineer which pre-sumably meant he was therefore dull. Edwards, however, depleted

6 J. Elfreth Watkins, History of the Pennsylvania Railroad Company, 1846-1896 (Philadel-phia, 1896), I, Thomson quote 332, Scott quotes 521. This book was never published but afew copies exist in page proof.

1976 J. EDGAR THOMSON AND THOMAS A. SCOTT 4 1

his stock of adjectives describing Scott's outgoing nature. "Thesuperb cavalry leader of the railway army, that inspiring and mag-netic genius who during the Civil War put aside his duties to doinvaluable service to the government/' made Scott, according toEdwards, "the most attractive figure in the intensely exciting rail-way life of his time." These twin assumptions, derived in part fromthe earlier newspaper articles, became, albeit with modification, animportant part of the accepted explanation for Thomson's andScott's business successes.7

That perceptive observer of political events in Pennsylvania,Alexander K. McClure, expanded Edwards' conclusions in 1905.McClure, who had known both men personally and who had beenpolitically allied with the Pennsylvania's officers throughout mostof his political career, thought that "there never was a more fortu-nate combination than that of Thomson and Scott. . . . Thomsonwas naturally conservative, but his conservatism was well leavenedwith practical progress." Then he reached back for almost the exactwords of Thomson's obituary and repeated the "balance wheel"description to explain Thomson's and Scott's amity. McClure, how-ever, could be metaphorically original when he wished: "whileThompson [sic] was a master in planting the firm foundation for ourgreat railway system, Scott was the tireless and heroic architectwho hastened the creation of the structure. . . ." Like Edwards,McClure had difficulty in adequately describing Scott. "ColonelScott was a man of wonderful versatility . . . of physical vigor, ofcompact and symmetrical form, and capable of the most extraor-dinary endurance." As a clincher, at least in McClure's view, Scottwas "one of the most sagacious of politicians."8

Modern historians have continued to build upon earlier attemptsto describe Thomson's and Scott's personal relationship. SamuelRichey Kamm in an excellent study of Scott's Civil War careersurmises that Thomson specifically chose Scott as his vice-presidentin i860 because "the major problems of the Pennsylvania were thenof the type which demanded the talents of a public man. ThatThomson was not." Citing McClure and Herman Haupt, an early

7 E. J. Edwards, "The Great Railroad Builders," Munsefs Magazine^ XXVIII (February,1903), 643-645.

8 Alexander K. McClure, Old Time Notes of Pennsylvania (Philadelphia, 1905), II, 146-150.

4 ^ JAMES A. WARD January

confidant of Thomson's and an abrasive public personality whoseseat on the ruling councils of the road Scott filled in the mid-i85os,Kamm confirms that Thomson's "lack of public qualities was notedby everyone who knew him/ ' while "Scott was the antithesis ofThomson in this respect." Thus does Kamm skillfully converge thedivergent personal attributes of the two into a plausible whole.9

Shortly after World War II the managers of the PennsylvaniaRailroad commissioned the engineering firm of Cloverdale & Colpittsto write a centennial account of the company. In this most dis-passionate corporate history, George Burgess and Miles Kennedytried to explain Scott's relationship with Thomson, and, after re-viewing the evidence, concluded that they "made a practicallyperfect team." The reasons for this assertion brought together theearlier assessments perfectly:

Thomson could be as bold as the occasion demanded, but was inclinedtowards caution; Scott, but for Thomson's caution restraining him, wassomething of a plunger, as indicated by his Texas and Pacific venture. . . .Thomson was an unusually reticent man, unhappy in any public appear-ance and ungifted as a negotiator; Scott was fond of people generally, andhis charm plus his quick intelligence well qualified him for the dutiesThomson disliked to perform.

Burgess and Kennedy did, however, inject a new and discordantnote into the suppositions surrounding the business partnership,averring that "sometimes both were on the reckless side, as whenScott and his friends organized the Southern Railway SecurityCompany to buy up the railroads of the Southeast. . . and Thomsonat least acquiesced in and probably recommended the participationof the Pennsylvania Railroad in the venture," an excellent pointthat deserves later amplification.10

John F. Stover, who in several books has examined Thomson'sand Scott's importance to the nineteenth-century business world,essentially subscribes to the views of Burgess and Kennedy. Stoverhas described Thomson "as the judicious and rather cautious

9 Samuel Richey Kamm, "The Civil War Career of Thomas A. Scott*' (Ph.D. dissertation,University of Pennsylvania, 1940), 8.

10 George H. Burgess and Miles C. Kennedy, Centennial History of the Pennsylvania Rail-road Company (Philadelphia, 1949), 347.


president of the Pennsylvania/' who in tandem with Scott "made aperfect combination for more than a dozen years." Moreover, theyefficaciously joined caution with courage and the public personalitywith the private. As a counterpoise to Thomson's solemnity, Stovercontends that Scott "had a natural charm and a fondness forpeople."11

The acceptance of an hypothesis that seems to explain the affinitybetween Thomson and Scott has taken place over the last centurywithout notable opposition. Essentially, however, this view restsupon one basic contention—that two flawed personalities were pro-fessionally allied to create what almost a century later was called"a perfect combination." This interpretation implies that both menneeded a symbiotic corrective to succeed in the corporate world.All the commentators appear in some degree to accept this line ofreasoning. Moreover, this viewpoint offers many advantages: it hashistorical credibility; it enjoys a consensus; and it offers a coherentexplanation for the "Philadelphia interests" activities. If theirschemes were hastily conceived and ultimately failed, Scott wasjudged to have had the upper hand. If opportunities were missedthrough doubt or hesitation, Thomson's viewpoint was thought tohave prevailed. Their successes were the result of a judiciousbalance of both men's temperaments.

It would be folly to assume that Thomson's and Scott's con-temporaries all misread the two personalities and their mannerisms.The evidence is simply too solid to the contrary. What is bother-some, however, about this interpretation is its very simplicitywhich requires for credibility a firm adherence to the old aphorismthat in human affairs "opposites attract," and its universal applica-tion to account for all their actions and motivations. In the firstinstance, it would seem reasonable that a partnership of more thana dozen years that specialized in supplying venture capital tohundreds of uncertain enterprises and in managing the largest andmost profitable corporation on the continent would require more tohold it together than simply the happy circumstance of two mutuallydisparate personalities joining forces to do battle in the market-place. Something a great deal stronger must have sustained the

11 John F. Stover, The Railroads of the Souths 1865-1900; A Study in Finance and Control(Chapel Hill, 1955), 101.


friendship in the face of disasters such as their Lake Superiorscheme, their abortive takeover of the Union Pacific Railroad,their attempts to establish a transatlantic steamship company, thebattering they took from Standard Oil, and their failures to promotestable rate cartels in the East. None of their financial reversesthrough 1872, however, shook their mutual respect. Secondly, otherimportant factors that help to account for their relationship'sdurability shed more light on the two men's motivations and placethem in a proper, if a more complex context. In the absence ofprimary materials, especially pertaining to Thomson's and Scott'sdecision-making process, this may be the only way to understandthem at all.

Burgess and Kennedy's caveat concerning Thomson's occasionalpredilection to take a financial plunge is the best place to begin ifonly because it is the only chink in an otherwise solid hypothesis.This does not weaken the personality argument; it only puts thepartnership into perspective. A cursory glance at Thomson's estateevaluation is enough to dispel the idea that he was financiallyconservative. If Thomson was as hidebound as accounts indicatethen he would have invested the bulk of his funds in gilt-edgedsecurities, particularly in the stock of his own railroad, which until1873 had missed only one dividend and over which he exerciseddictatorial control.12 Yet, of the more than 88,000 shares he held athis death only 1,400, valued at $72,000, were in the securities ofhis own road.13 His propensity to enter highly speculative schemesat their inception in anticipation of reaping large profits, a methodof operation he refined while chief engineer on the Georgia Railroadfrom 1834 until 1847, was strikingly apparent in his holdings. Whilein the South he bought and sold heavily in that region's commoditymarkets, invested in unfinished Alabama, Mississippi, and Tennesseerailroads, speculated in real estate and budding manufacturingenterprises, and invested in the securities of his own company andthose of the rival Central of Georgia. Throughout his life Thomson

12 James A. Ward, "Power and Accountability on the Pennsylvania Railroad, 1846-1878,"The Business History Review, XLIX (I975), 37-59.

13 Inventory and Appraisement of the Estate of John Edgar Thomson, 1874, Office ofRegistrar of Wills, Philadelphia.


was always an expansive financial figure, quite out of character withhis own personal, social, religious and political philosophies.14

As Burgess and Kennedy correctly observed, Thomson, probablyin tandem with Scott, often invested heavily in projects of dubiousworth. His willingness to court such risks explain his holdings of10,000 shares of Karlhaus Coal and Lumber, 4,600 shares of Vol-canic Oil, $16,000 in the bonds of the Lake Superior and MississippiRailroad, 100 shares in the Horse Creek Oil and ManufacturingCompany, each block estimated at 1874 depression levels to beworth a dollar. Some securities fell below even this level: 10,000shares of Kenzua Petroleum Company worth a total of twenty-fivecents; 50 shares in Hope Mutual Insurance Company declined to ahopeless twelve and a half cents; 200 shares of Susquehanna GoldCompany valued at half a dollar; 80 shares of Live Oak CopperCompany were sold in 1874 for twenty cents; 5 shares in WestBranch Boom Company brought the estate only seventy-five cents;and 25 shares of the Astor House Hotel Company were auctionedoff for a quarter. More than 50 of Thomson's 116 stock investmentsin 1874 were worth less than five dollars. Even considering that ayear earlier some might have been promising investments, that hepaid less than par for many, and that he probably sold off his mostvaluable assets in 1873 t o meet his endorsements on the Californiaand Texas Construction Company certificates, the estate renderingis a fascinating study of how even an intelligent investor could goawry.15 One explanation for Thomson's involvement in these abor-tive schemes was that he was "careless of his private fortune, whichwas left to the care of his secretary and personal assistants." Theone thing Thomson was not, was "careless" of his fortune. His sur-viving correspondence with his early private secretary, WilliamJackson Palmer, indicates that Thomson used his young secretaryas a fact-finder to present evidence upon which to base his invest-

14 Reports of the Directors, Etc., of the Geo. R. R. & Banking Co., to the Stockholders in Con-vention, ISJI, 1852,1853, ̂ 54 (Augusta, Ga., 1851, 1852, 1853, 1854), 31,30, 29, 27; J. EdgarThomson to Lemeul P. Grant, January ?, 1846, L. P. Grant Papers, Atlanta HistoricalSociety, Box 1, Folder 1; Thomson to Grant, Feb. 12, 1843, June 23, 1844, Sept. 12, 1845,ibid.\ James H. Grant to L. P. Grant, May 7, 1848, ibid.; Thomson to L. P. Grant, Oct. i3

1851, L. P. Grant Letter Book, I, Box 3, ibid.15 Inventory and Appraisement of the Estate of John Edgar Thomson, 1874.


ment decisions. There is no indication that Jackson made anyimportant decisions. Moreover, no evidence indicates that his lateramanuensis, R. D. Barclay, was accorded any greater latitude. Infact, Thomson's death was in large part caused by his close atten-tion to detail and his excessive workload.16

If most observers exaggerated the two men's instinctive financialdifferences, all have ignored the broad base of personal likenessesthat underlaid their apparent disparities and served to reinforce thepositive assets each man brought to the combination. It is quitepossible that these similarities, particularly in their backgrounds,outweighed personality factors in their relationship; certainly thenumber of correspondences shared by Thomson and Scott wasstriking. Their similarities began at birth; both men came fromfamilies of local importance. Thomson's father was a surveyor andengineer, much sought after for regional projects, while Scott'sfather was the village innkeeper, the local host and chief purveyorof the latest news and gossip. In a broad sense both men followedin their fathers' footsteps. Thomson became the arch engineer, theman who knew and thoroughly understood things, and Scott, asKamm points out, assumed his father's ease with strangers andmatured with an uncanny insight into and an affinity for people}1

Although Thomson was fifteen years Scott's senior, both menwere raised in parallel settings. The elder partner grew up on a farmlocated ten miles south of Philadelphia on the principal turnpikefrom the Quaker City to Baltimore. The circumstances of the familywere modest and the glitter of the nearby port city was a rare ex-perience for the four Thomson children. Scott, the seventh of elevenchildren, was born in the frontier town of Loudon in FranklinCounty, Pennsylvania, and the family hostelry was located on theheavily traveled road between Baltimore and Pittsburgh. Scott'sfather derived little more than a subsistence income from the inn,for he could afford only a smattering of schooling for his brood.Thomson, also, received little formal education, although excellentprivate institutions existed only a few miles away. Both men weretaught at home, in Scott's case by his older sister and her husband,

16 Watkins, Pennsylvania Railroad, citing Gen. Isaac Jones Wistar, 338.!7 James Hill Martin, Chester {and its Vicinity) Delaware County in Pennsylvania (Phila-

delphia, 1877), vi; Kamm, "Thomas A. Scott," 3.


and their surviving mature correspondence even exhibits like writingstyles. Neither man apparently learned to write from the traditionalBible, as their letters evidence none of the rhythmic style so easilyidentified with that source. Instead they both wrote an exceedinglyspare prose, short, terse, and shorn of adjectives, adverbs, and oftenall pretense to punctuation. Scott may have adapted his form fromThomson; neither had a business style common to the nineteenthcentury, but their letters do illustrate a probable similarity ofthought processes.18

Accounts of Thomson's and Scott's early lives agree that bothwere left on their own at an early age—a prime ingredient in theAmerican Myth of Success. Scott, the sources relate, was orphanedat the age of twelve, and, while living with his sister and later hisbrother, held a succession of clerical jobs. His origins later impressedeven his enemies. Collis P. Huntington in 1877 wrote his "silent"partner David Colton, "do not underrate the power of Tom Scott.He came up from a very small beginning by his own force of char-acter to his position of President and Chief Manager of one of thelargest R. R. organizations in the world." Thomson's claim to theself-made man distinction was more tenuous. Many standard sourcesrelate that the family's impecunious circumstances required him toabandon his hopes for a West Point education to become the prin-cipal breadwinner. The story simply does not stand. Thomson wasnineteen when he obtained his first employment, several years olderthan the incoming cadets' average age and rather late for a boy toenter the job market under any circumstances. Thomson, however,probably enjoyed the status accorded by the story and may haveeven felt it was to a degree true, since he had risen to high positionwithout the benefit of a formal education. In essence, both menheld the highest offices on the railroad by virtue of vast practicalexperience, a wealth of common sense, and the force of their ownpersonalities.19

18 Kamm, "Thomas A. Scott," 3-4; Watkins, Pennsylvania Railroad, 328; Frank HughDixon, "John Edgar Thomson," Dictionary of American Biography, XVIII, 486.

19 Kamm, "Thomas A. Scott," 3-4; Samuel Harden Church, "Thomas Alexander Scott,"Dictionary of American Biography, XVI, 500; New York Times, May 22, 1881; Watkins,Pennsylvania Railroad, 328; Collis P. Huntington to David Colton, May 17, 1877, in EllenColton vs. Leland Stanford et. al. in Superior Court of California in and for the County of Sonoma(!883), III, 1779.


Thomson's and Scott's parallel experiences continued into ma-turity; both men early held jobs on the Pennsylvania State Works,that awkward combination of canals and railroads flung across theCommonwealth from Philadelphia to Pittsburgh to compete withNew York's immensely profitable Erie Canal. Unlike the EmpireState's experiment, however, the State Works from the start werea political boondoggle that drove the state to default during thedepression of 1837. Employment on the project was determined bywhom you knew rather than by ability, and Thomson and Scottboth had the necessary connections. Moreover, after each secured aposition with the state he became the favorite of an older individualwho rapidly advanced his career. Thomson joined a survey in 1827to locate a route for the Philadelphia and Columbia Railroad.Major John Wilson, chief engineer of the project, quickly noted hisaptitude and in a year and a half promoted the young engineer to aposition as his principal assistant. In 1830, when the state tempo-rarily cut off funding for the project, Wilson appointed Thomsonchief engineer of one of the Camden and Amboy Railroad's locationparties. Thomson successfully completed this task and then wentbriefly to England to examine railway technology there, followingwhich Wilson again came to his aid and helped place Thomson,now twenty-six years old, as chief engineer on the Georgia Railroad.When completed that line was the longest railroad in the worldunder one management.20

Scott's rise was more prosaic, since he lacked the vital engineeringskills so necessary to the transportation revolution then underway.He was forced instead to progress by sheer dint of application andthrough an infectious personality. His brother-in-law, Major JamesPatton, a collector of tolls on the State Works, secured Scott aclerkship, and a year later, at the age of eighteen, he was promotedto chief clerk. After subsequent failures in the lumber and ice busi-ness, Scott re-entered the state's employ as a clerk in the Philadel-phia collector of tolls office where, again, he was shortly elevated tothe chief clerkship. Ever restless, he soon quit and accepted a posi-

2 0 Louis M. Hacker, The Course of American Economic Growth and Development (NewYork, 1970), 113; William Hasell Wilson, Reminiscences of a Railroad Engineer (Philadelphia,1896), 329; Minutes of the Directors of the Georgia Railroad and Banking Company, Oct. n ,1834, Office of the Georgia Railroad Bank and Trust Company, Augusta, Ga.


tion as shipping agent for a private freighting and commission busi-ness in Columbia, where he was "discovered" in 1850 by HermanHaupt, then Thomson's protege and superintendent of transporta-tion on the Pennsylvania. Haupt desperately needed a talented manto handle the delicate job of transportation agent at Hollidaysburg,the temporary junction of the Pennsylvania and the State Works.Scott, well versed in both public and private enterprise, handledhis duties so well there that Haupt promoted him a year later toagent at Pittsburgh, and in 1853 to general superintendent of theroad's western division. In this capacity Scott proved an excellentadministrator with an uncanny eye for spotting talent. For example,he selected an immigrant Scottish lad, Andrew Carnegie, as hispersonal telegrapher. Thomson now marked Scott as a man towatch. After Haupt left the road for the Hoosac venture in 1856,Thomson seasoned Scott as general superintendent, starting in 1858,and a short two years later, upon the death of Henry Foster, asvice-president of the road.21

All contemporary accounts indicate that Thomson and Scottbrought to their unique business relationship a prodigious capacityfor prolonged work and an astounding ability to juggle a number ofimportant projects simultaneously. They rarely took vacations, andwhen they did they combined business with pleasure, as when theywent to Saratoga to take the waters with the presidents of the otherthree eastern lines, or when they went to Europe to sell securities.Scott, more mobile than Thomson in the later years of their friend-ship, regularly scheduled business meetings on weekends, often re-quiring all-night travel. A private railroad car helped ameliorate hisdiscomfort but not the ravages of such a pace. Thomson kept amore sedate schedule, at least after the war, usually staying in hisoffice seventy-two hours a week and reserving Sundays to catch upon his work at home. This workload mounted in intensity during aquarter of a century and wrecked both men physically. Both wereplagued by ill-health in the years prior to their respective deaths.

21 Kamm, "Thomas A. Scott," 3-4; New York Times, May 22, 1881; Herman Haupt,"Reminiscences of Early History of the Pennsylvania Railroad Company," n.d., Pennsyl-vania Railroad Company, Miscellaneous, I, 18-19, Hill Railway Library Collection, Univer-sity of Wisconsin Library; Andrew Carnegie, Autobiography of Andrew Carnegie (Cambridge,1920), 63; Solomon Roberts, "Reminiscences of the First Railroad Over the AlleghenyMountain," The Pennsylvania Magazine oj History and Biography', II (1878), 389.

$O JAMES A. WARD January

Thomson was frequently confined to bed with heart trouble, andScott was the victim of three paralytic strokes in as many years.22

Their staggering business responsibilities left them with neithertime nor inclination for personal pleasure and intellectual pursuits.Although Scott was reported by the Dun & Bradstreet agent tohave been "a good liver/' it is hard to understand when he foundthe time. Undoubtedly, the agent based his observation upon Scott's$250,000 mansion in the fashionable Rittenhouse Square district,his attendance at such galas as "the greatest social event in thehistory of Philadelphia" honoring the Grand Duke Alexis, son ofCzar Alexander II of Russia, who was sent around the world in thecare of the Russian Navy to forget an unfortunate infatuation.Scott, however, probably never considered his town house and hisestate "Woodburn" near Darby, Pennsylvania, where he died, asessential to his personal satisfaction. Rather, one suspects he per-formed the public role expected of a "railroad prince." Moreover,nowhere in the extensive contemporary literature does Scott appearas intellectually well rounded, interested in the arts, or an avid readerof anything except favorable copy he had placed in friendly news-papers.23

The same observations, with some qualification, generally holdtrue of Thomson's interests. Owner of a less fashionable house inthe same Philadelphia district, he shunned its high society andmuch preferred to relax at home with small intimate gatherings.Like Scott he was not a devotee of the arts, although he contributedto or invested in the Pennsylvania Academy of the Fine Arts, theDuluth Library, the Historical Society of Pennsylvania, the Acad-emy of Music and Swarthmore College. In 1874 his library wasvalued at a mere $500. Although not inventoried for the publicrecord, most of its volumes were undoubtedly technical works. Amemorialist described Thomson's literary tastes, perhaps with somelicense, as "simple. Pope was his only poet, and in prose he was bestpleased with translations from classic history, especially Herodotusand Tacitus. The Spectator^ it should be said too, was one of his

22 New York Times, May 22, 1881; Watkins, Pennsylvania Railroad, 338-339.23 Dun & Bradstreet Credit Ledger, Aug. 14, 1873; McClure, Old Time Notes, II , 248-249;

Charles S. Hinchman to William Jackson Palmer, Jan. 16, 1868, William Jackson PalmerPapers, Colorado State Historical Society, Denver.

1976 J. EDGAR THOMSON AND THOMAS A. SCOTT 5 I

favorite books." The essayist continued in a vein that casts doubton the foregoing, contending that "nothing had more amusementor interest for him than, for example, the leaders and paragraphwriting of the Ration." When tired, the writer claimed, Thomsonturned to a good novel. Unfortunately no evidence of these interestscrept into his surviving correspondence. He did, however, likeScott, enjoy a good horse race.24

It would be a mistake to conclude that their preoccupation withwork cast them as provincial Philistines. Their interests were toogeographically broad and professionally diverse to nourish a naivelocal boosterism. Moreover, Thomson and Scott were fortunate inthat neither was closely attached nor beholden to the mercantilearistocracy of Pennsylvania's two largest cities. While they acquiredfinancial and political support from these and other centers, theyoften found themselves making decisions inimical to the entrenchedurban interests. Freed from these restraints, both men found iteasier to think in sectional, continental, and even internationalterms. While traditional accounts portray Scott as the more ex-pansionary, Thomson tried in the 1840s to build a rail system be-tween the Tennessee River and the Gulf of Mexico, and another toconnect the Mississippi Valley with the Atlantic Ocean. The follow-ing decade he began a lifelong obsession with the idea of joining theoceans by rails, and for technical and personal reasons advocated asouthern transcontinental route, although he presided over a majornorthern road. Even the outbreak of war did not dampen his en-thusiasm for a grand transcontinental project, it merely changedhis route preference. When the Union Pacific was chartered in 1863,he was among the original subscribers. Scott also invested in theproject and later spent most of his fortune and energies in anattempt to construct the Texas & Pacific along the 32nd parallel,the route Thomson had advocated before the war.25

Along with their transcontinental dreams the two men also in-vested heavily in local resources throughout the country. After thewar hostility from the "Big Four" of the Southern Pacific—Leland

24 Inventory and Appraisement of the Estate of John Edgar Thomson, 1874; " J o n n EdgarThomson," The Penn Monthly (July, 1874), 492-493.

25 Thomson to Alexander H. Stephans, n.d. (1856), Palmer Papers; U.S. Congress, House,Affairs of the Union Pacific Company, 42nd Cong., 3rd Sess., Rpt. 78, p. 741.


Stanford, Collis P. Huntington, Mark Hopkins and Charles Crocker—forced Thomson and Scott to limit their investments to the regioneast of the Rocky Mountains, but within that area their interestsranged from the Atlantic Coast to Minnesota, south to the Gulf,west to Colorado, southwest to Arizona and into Mexico. Theypreferred mineral extraction schemes, especially coal, copper, silver,oil and gold, but they also had a weakness for western bridge com-panies and their connecting railroads, often in league with Carnegiewho was adept at creating his own iron markets. While many ofthese resource development plans came to naught because they wereinstituted far ahead of demand, they do demonstrate that Thomsonand Scott were anything but parochial businessmen. They oftensought their advantages on the outer fringes of the national economywhere the risk factor was high and their political and financialinfluence was low. Scattering their resources gave them a broadernational outlook, but it also created magnificent problems. Theyhad to keep abreast of political developments in dozens of statesjust to protect their investments and try to create favorable climatesin others to promote their schemes. Their experiences in dealingwith territorial legislatures and the Mexican government probablyinfluenced their decision to abandon their grand plan to build arail empire in Java.26

The specter of provincialism was further ameliorated by Thom-son's and Scott's dependence upon overseas capital markets tofinance their far-flung dreams. Their frequent European sojournspointed up the increased foreign ownership of the PennsylvaniaRailroad's securities and the "Philadelphia parties" critical re-liance upon overseas capital to finance the rapid expansion of theirfinancial empire's capstone and their private outside ventures.While these trips provided Thomson and Scott a measure of relaxa-tion, the partner left at home—they never went abroad together—struggled under a doubly onerous workload. Like many of the post-war generation, Thomson and Scott must have instinctively be-

26 See for example Scott's attempt to have Cameron secure the appointment of a friendas Arizona's Territorial Governor. Thomas A. Scott to Simon Cameron, Mar. 16, 1869,Samuel Barlow Papers, The Huntington Library, San Marino, Calif.; also a letter on Javaneseplans from Andrew Carnegie to L. Van Wondrehum Van Vliet, Oct. 3, 1872, in CarnegieLetter Book, 1872-1873, United States Steel Archives, copy kindly loaned to author byJoseph Wall.


lieved that European culture and society were far superior to theindigenous varieties. Between visits to bankers and brokers, bothmen attended social functions and sporting events, and journeyedto all the required landmarks, traits that they did not demonstrateto the same degree back home. For years Thomson's wife kept ascrapbook of their activities and the surviving mementos indicateshe had a keen interest in the latest news about the English royalfamily. While this does not mean that Thomson shared her en-thusiasm, the scrapbook does indicate that she at least persuadedhim to attend social functions. One tangible result of Thomson'sand Scott's continental excursions was that they acquired prestigefor their exposure to what was considered a genuine culture, avaluable overlay for their financial prominence. Moreover, unlikemany Americans, neither man had a reputation as a boorish parvenu.They were simply unsuited by disposition to slip into that mold.Of much more importance to Thomson and Scott were the successfulnegotiations for the securities contracts they sought or for the creditthey needed. As with all else, these trips were first and foremost forbusiness purposes, any social or cultural "returns" were incidental.27

The multitude of personal, familial, intellectual, and culturalsimilarities that helped to bind Thomson's and Scott's symbioticprofessional relationship were strengthened by an obvious psycho-logical bond. Thomson viewed the Pennsylvania Railroad sub-consciously as the family he never had, and in this perspective hisemployees on the road assumed a special importance to him. For along period in his mature years, after the death of his father, Thom-son felt no strong emotional ties. He was never close to his brother,who evidently died sometime during the 1840s, and there is noevidence that he was any nearer to his two spinster sisters. Abachelor until 1854, Thomson died without issue, although on hisdeathbed he adopted his niece. To fill this emotional void Thomsondisplayed an attachment and loyalty to the Pennsylvania Railroadthat normally was reserved for a wife, and toward his employees heassumed a strong paternal image. Undoubtedly, when he bequeathed

27 Lavinia F. Thomson scrapbook, John Edgar Thomson Foundation, Philadelphia. Thepartners' trips abroad and their business transactions there can be followed in Minutes of theBoard of Directors of the Pennsylvania Railroad, Office of the Secretary of the Penn CentralRailroad, Philadelphia.

5 4 JAMES A. WARD January

the bulk of his fortune to care for the orphaned daughters of Penn-sylvania Railroad employees killed in the line of duty, he wasprompted by such motivations. Perhaps nowhere, however, did hedisplay his paternal attitude more forcefully than in his dealingswith his fellow officers on the road, especially with his first vice-president, Scott.28

Too much importance is often attached to psychological conjec-ture, but in Thomson's case several striking situations point stronglyto his benevolent paternalism. For the majority of his twenty-twoyears as president he was surrounded exclusively by officers ageneration younger than himself. In fact, during that period onlyone man close to his age, William B. Foster, reached the executivesuite, and Foster was Thomson's brother-in-law after 1854. Haupt,a decade younger than his mentor, was the next eldest to acquireThomson's trust, followed by Scott almost sixteen years Thomson'sjunior. The other prominent men Thomson introduced to power andgroomed as possible future leaders—George B. Roberts, A. J.Cassatt, Andrew Carnegie, and William J. Palmer—were all bornin the decade of the 1830s, At the time of Thomson's death at theage of sixty-six, Scott, his heir apparent, was the only importantman in the company over fifty, and he had not yet turned fifty-one.Roberts, who succeeded Scott in 1880 was only forty-one, FrankThomson (no relation to J. Edgar), who assumed the presidency in1897, was thirty-three and Cassatt, not destined to hold the highestexecutive post until 1899, was only thirty-five. Perhaps Thomsonunconsciously surrounded himself with youth to fill some void inhis personal life, possibly he did it to insure future officers. Theresult was that a whole executive generation was missing, and itsabsence was not the accident of war or premature deaths. It wasnever there. Thomson, in more than one respect, was the "old man"of the company.29

28 "Summary of John Edgar Thomson's Career," 2, Thomson Foundation; the Will ofJ. Edgar Thomson, Deceased, Dec. 20, 1871, codicil dated May 24, 1874, Thomson scrap-book, Historical Society of Pennsylvania.

29 Burgess and Kennedy, Pennsylvania Railroad, 793; E . H . Talbott and H. R. Hobart,eds., The Biographical Directory of the Railway Officials of America (New York, 1885), 41,206, 240; Robert E. Riegel, "William Jackson Palmer," Dictionary of American Biography>XIV, 195; John F. Stover, American Railroads (Chicago, 1961), 117. Foster's birthdate isunknown, but judging from his childrens' ages he must have been about the same age asThomson.


Thomson must also have noticed that two of his three easterncompetitors enjoyed the luxury of an assured managerial succession.The 1860s and 1870s were still an era when even huge businesses,as yet bereft of entrenched bureaucratic precedents, were informalenough to be dominated by personalities who provided them ameasure of corporate safety. The Vanderbilts owned and cared forthe New York Central, the Garretts dominated the Baltimore &Ohio, and even Jay Gould had a son anxious to continue his father'swork. The only other major eastern trunk line without a son pre-pared to assume the reigns of power was the Erie, surely a corporateexample of disorder that struck fear in Thomson's heart as he lookedto the future. In the absence of a dynastic successor, Thomson musthave concluded that his wisest option was to "adopt" a likelycandidate and prepare him for future presidential responsibilities.Haupt obviously thought this to be the case when he wrote Thomsonin 1861 that if he had not left the road in 1856 "Scott would nothave attained the degree of prominence to which he has fallenheir." This was not a difficult course to pursue as Thomson by theoutset of the war was in an extremely secure managerial position,and had he had a son he probably would have had no difficulty inpassing his mantle to him. Other men, such as Herman Lombaert,related by marriage to an original director, the influential JamesMagee, never really possessed Thomson's confidence, although hewas elevated to a vice-presidency in 1861. Edmund Smith, likeThomson an engineer, and by 1869 a vice-president, was also neverconsidered by the president as a possible successor. Neither manwas active in policy formulation and apparently both were earlyrelegated to the roles of routine functionaries.30

Through a benevolent paternalism Thomson was thus able toinsure a continuation of his policies and provide a measure ofstability and security for the company by selection and promotionof an heir apparent. The principal advantages of this procedurewere that Thomson was assured his own successor would care forthe railroad with an intensity similar to his own and that he set aprecedent for orderly successions in the future. The office did indeed

30 Italics added. Herman Haupt to Thomson, Dec. g, 1861, Herman Haupt Papers, Box 3,Yale University Library. The relationship between Thomson and his two vice-presidents isinferred from a close reading of the Minutes of the Board of Directors of the PennsylvaniaRailroad, 1847-1881.

$6 JAMES A. WARD January

remain heavily dependent upon personal relationships long after thecorporate structure had become strongly formalized. The major dis-advantage to this process was that the informality of the processstultified the inflow of new blood into the corporate executivecouncils and perpetuated, what became in the twentieth century, anoutmoded corporate philosophy. While the Pennsylvania Railroadwas extremely fortunate in attracting bright young men and eventu-ally promoting them to executive rank, it was inevitable that theroad's incestuous merit procedures would increase its resistance tofresh ideas and change—a contributing factor to the road's bank-ruptcy in 1970. Moreover, the jockeying for advantageous positionin the upper corporate ranks, so evident while the Thomson-Scottpartnership ruled, continued long after the elder man's death. Toreplace Scott a three-way race developed between Roberts, FrankThomson, and Cassatt. Roberts, a favorite of both Thomson andScott, was jumped in five years from the fourth to the first vice-presidency. Thomson, a Scott protege, who had followed his superiorto Washington during the Civil War, was the dark horse, andCassatt, an independently wealthy engineer and horse breeder, wasrumored to be running strongly. Four days after Scott's May 1,1880, announcement to the board that he was retiring, a specialcommittee requested Roberts to render himself eligible to becomepresident and on May 5 he was unanimously elected to that office.The brevity of the whole process suggests that Scott nominated hisown successor. Cassatt was given the first vice-presidency as aconsolation prize, but, reportedly angry at losing out to Roberts, heresigned two years later. This opened the way for Thomson tosucceed Roberts and Cassatt did not secure the prize until the lastyear of the century. Until 1907, the year of Cassatt's death, how-ever, Thomson's "progeny" occupied the presidency of the road.James McCrea was the first man to hold the position who was notbeholden to either Thomson or Scott. Interestingly, every presidentthrough the middle of the twentieth century, with the sole exceptionof Scott, resembled the prototypical Thomson; all were engineerswith long experience on the road. The railroad's reputation fortechnical excellence and conservative management was obviously noaccident.31

31 Burgess and Kennedy, Pennsylvania Railroad, 385-387, 453-457, 517-518; Minutes ofthe Board of Directors of the Pennsylvania Railroad, May 1 and May 5, 1880.


Thomson's paternalistic relationship with Scott led to a para-doxical situation in which the father was overshadowed during hisown lifetime by the son. Certainly, Scott was the best-knownpartner, perhaps simply because, as Burgess and Kennedy surmise,"with Thomson's self-effacement in public, people came to look onScott as the Number One man," or, to return to Kamm's thesis,because Scott had the "outside" or "visible" company job.32 Forexample, Thomson was tendered a federal Senate seat in 1868 butthe gesture was more a recognition of his influence as the largestemployer in the state than of his popularity. In an era when Senatorswere elected by state legislatures the honor was no measure of thenominee's public viability. However, when Scott was seriously con-sidered as the liberal Republican presidential nominee in 1872, thepoliticians recognized that he was one of a rare breed of corporateexecutives who commanded a strong public following. Undoubtedly,the fact that his railroad did business in fully half the? states, andthat most of the regaining states had some Thomson-Scott moneyinvested in them, was not overlooked. Moreover, the disproportion-ate newspaper coverage devoted to Scott's affairs indicated hishigher visibility. Scott simply was unable to maintain a privateprofessional or personal life, the very things Thomson was loath tosacrifice. This disparity in their reputations and fame has continuedto the present. Scott has consistently attracted an exaggerated pro-portion of scholarly attention. His pleasing public personality mayaccount for this fact, but it has occurred in the face of considerablyless documentation than Thomson left. While the latter was as wellknown as Scott in business and financial circles, and, quite possibly,commanded more respect in them, the recognition inequality be-tween the two men poses a difficult question; was their relativepopularity any indication of the true distribution of authoritywithin the relationship ?33

The lack of extant correspondence between them makes anyanswer necessarily conjectural, but the father-son analogy suggestsa strong hypothetical possibility; the elder Thomson was in everyrespect the younger man's mentor, providing Scott at all times withhis power base and influence. It is a fact that at his whim Thomsoncould have relieved him of his position, thereby seriously under-

3 2 Burgess and Kennedy, Pennsylvania Railroad, 347; Kamm, "Thomas A. Scott," 8.33 The Republic, Dec. 8, 1868; McClure, Old Time Notes, I, 108-109.


mining his influence elsewhere. The question should also be askedwhether Scott ever independently carried any large-scale projects tocompletion. He did not. Thomson's money and reputation wereinvested in every significant business endeavor in which Scott waspublicly associated, although it was quite possible that Scott'samply attested powers of persuasion were ultimately responsible forinducing Thomson to invest in schemes he might normally haveavoided. Scott's active role in the partnership exhibited the degreeof respect and confidence Thomson maintained in his protege, butthis did not alter the fundamental basis of the relationship; Scottremained dependent upon the "old man" for his business legitimacy,and perhaps his integrity as well. Scott, apparently not at his bestin striking out alone, was nevertheless undoubtedly capable of thebold stroke, the brilliant strategy, and unquestionably he sufferedthe tactical reversals characteristic of the era's businessmen. Un-fortunately, he had only six years to demonstrate what he could doon his own, and, since the majority of them were depression years,he was denied the chance to secure a stronger claim to his abilities.34

Scott's dependency upon Thomson was strongly evident from thevery beginning of their relationship. As chief engineer, Thomson washeavily involved with a number of Pennsylvanians speculatingalong his road's right of way. These investments—concentrated incoal, lumber, real estate, forwarding and express companies, saw-mills, turnpikes and telegraph lines—were all in some degree de-pendent upon the railroad's fortunes. By later standards, the originalfinancial coterie was composed of smalltime businessmen. Many,such as Christian Spangler, James Magee, George Howell, AlexanderJames Derbyshire and, later, John Scott, were members of thePennsylvania Railroad's board of directors. Haupt, Thomson, andScott, although holding seats on the board, were primarily corporateofficials. The remaining investors were either landowners, such asWilliam P. Dysart, who was cut in for a percentage, or men likeJames Martin Bell, an ironmaster and banker with an intimateknowledge of local financial opportunities who, after the road wasopened, received the company's Altoona banking business. Thomsonbrought Scott into this group in the early 1850s, quite possibly

34 Burgess and Kennedy support this hypothesis solely on the narrow grounds that Thomsonwas Scott's superior until 1874. Burgess and Kennedy, Pennsylvania Railroad, 347.


loaning him capital, just as Scott later backed Carnegie. Scottproved an apt student.35

As the Pennsylvania Railroad expanded into the Chicago, St.Louis, and Cincinnati markets, so too did Thomson's and Scott'soutside ventures. By the end of the decade the two men werepowerful enough to break away from their Philadelphia investmentpartners and to rely solely upon their own resources. The newfinancial group, composed of Thomson, Scott, Carnegie and severallesser executives, commanded sufficient capital by 1857 to invest$60,000 in Haupt's Massachusetts Hoosac Tunnel project, to ven-ture heavily into the coal business via their Westmoreland CoalCompany, and to investigate purchasing potential mining propertiesas far west as Illinois. The panic of that year enabled Thomson andScott to buy out those directors who were unable to withstand thefinancial contraction, especially James Magee who collapsed in thecrash. Once on their own, Thomson and Scott showed their daringby branching out in several new directions. Maintaining their in-vestments in Pennsylvania, they established the Western Transpor-tation Company to lease and construct the Pittsburgh & Steuben-ville Railroad, which required a Virginia charter. To obtain it theybrought Simon Cameron into their orbit, a connection that provedinvaluable to the partners for almost two decades. Control of thisroad opened corollary financial opportunities which the two menreadily grasped, such as coal investments along the route of theroad and land purchases in the midwest.36

By the outbreak of the Civil War, Thomson and Scott, freed fromthe fiscal restraints of the conservative Philadelphia mercantile

35 James A. Ward, That Man Haupt: A Biography of Herman Haupt (Baton Rouge, 1973),$3-56; List of Bills Payable to H. Haupt as they Stood Dec. 31st, 1855, Haupt Papers, Box18; James M. Bell to Thomson, Aug. 9,1853, James M. Bell Papers, Duke University Library,Durham; Joseph F. Wall, Andrew Carnegie (New York, 1970), 133fF.

36 Herman Haupt Chapman, "Biography of Herman Haupt," Haupt Papers, Boxes 26,27, Chapter IV, 9; Diary of William J. Palmer, Mar. 15, 1857, Palmer Papers; William J.Palmer's Report on the Coal Valley Mines and the Rock Island & Peoria Railroad of Illinois,Nov. 10, 1857, ibid.\ Scott to Palmer, Feb. 27, 1858, ibid.; Kamm, "Thomas A. Scott," 7;Scott to Simon Cameron, May 18, 1858, Simon Cameron Papers, Library of Congress;Andrew Carnegie's Early Investment File, June 1, 1858, Joseph Wall's Carnegie Collection;William J. Palmer to Isaac Clothier, Sept. 14, 1859, Isaac Clothier, Letters: General William J.Palmer, 1853-1868 (Philadelphia, 1906), 43-45; S. Broadbelt to Palmer, Aug. 8, i860, PalmerPapers.


aristocracy that dominated their board, had established a broadbelt of investments reaching from the Quaker City to across theMississippi River and up as far north as Maine. The war contractedtheir outside activities until 1864, as they struggled to meet theincreased demands of massive troop supply requirements. In thatyear Thomson's and Scott's interest focused on the profitable oppor-tunities in the western Pennsylvania oil regions. They invested inseveral oil companies and kept a watchful eye on the transportationnetwork serving that growing locale. Also in that year, Scott tookhis first flyer in Arizona mineral properties that proved to be theentering wedge for the partnership's later southwestern schemes.After Appomattox, however, the "Philadelphia interests" multi-plied their investments tenfold. This postwar "spree," ending onlywith the 1873 depression, established Scott's reputation as anintrepid financier and manipulator, overshadowing that of hispartner.37 Julius Grodinsky, in his excellent study, TranscontinentalRailway Strategy, recognizing this phenomenon, begins his investi-gation of their activities by explaining that the expansion program"between 1869 and 1871 under the joint leadership of Scott andThomson . . . was truly magnificent." He then portrays Scott asthe partnership's moving force in its penetration of the South, farWest, and the southwest. Joseph Wall, in his biography of Carnegie,continually unearths Thomson's and Scott's backing during thisperiod, concluding at one point that Carnegie "had eagerly acceptedScott and Thomson as his mentors, and their values had becomehis values, their goals his vision of success." Wall seems somewhatbemused over the frequency with which the two men appear. In1868, when the Iowa Contracting Company was formed to build arailway across the prairie from Keokuk to the Missouri River, henotes, "as usual, Scott and Thomson were heavy subscribers." TheDavenport and St. Paul Construction Company, Wall finds, "notonly included the old familiar names of Thomson and Scott, butalso Oakes Ames and John Duff, representing the Union Pacificinterests." "Again J. Edgar Thomson was the central figure," hecontends in Carnegie's Allegheny Valley Railway bond transactions.As late as 1873 Carnegie continued to depend on Thomson and

37 Charles Hinchman to Palmer, June 20, 1866, Palmer Papers; Scott to Barlow, Aug. 28,1864, Sept. 21, 1864, Sept. 22, 1864, Jan. 23, 1868, Sept. 25, 1871, Barlow Papers.

1976 J. EDGAR THOMSON AND THOMAS A. SCOTT 6 l

Scott. He named his steel works constructed that year the EdgarThomson Mill.38

Even a brief survey indicates that the Pennsylvanians' situationwas rather unique in entrepreneurial history. Although other part-nerships were active in the nineteenth century, combinations suchas Rockefeller and Flagler, or Carnegie and Frick, or Huntingtonand Crocker, or Gould and Sage simply do not convey the sameimplications as does Thomson and Scott. The above men, whilemembers of powerful financial groups, all had significant interestsoutside their partnerships. Thomson and Scott, however, perhapsbecause their total personal assets were never exceptionally large, inthe range of only five to ten million dollars, could not afford thesame luxury.

With their rather minimal private fortunes scattered over nearlythe entire continent, Thomson and Scott relied to a great extentupon their connections with the Pennsylvania Railroad for theirsolvency and influence. And this dependence may have been one ofthe strongest bonds in the partnership, for in a real sense the parentcompany's prosperity was crucial to their private projects. Thom-son's authority within the partnership partially derived from hissenior executive position on the railroad, which, in turn, rested uponthe uninterrupted flow of dividends; the financial health of thatcorporation was indisputably their most vulnerable point. The acidtest of this proposition came in 1873 when the partnership disinte-grated. Many details of the conflict that severed their relationship areobscure, but the outline clearly illustrates the partnership's funda-mental basis. Scott's Texas & Pacific Railroad was at the heart of thematter. This ambitious project was undertaken in opposition to theSouthern Pacific and Central Pacific interests and, according tosome, by Scott's prolonged fit of pique at being removed from thepresidency of the Union Pacific in 1872. The Texas & Pacific crosseda wide expanse of uninhabited southwestern territory, and was pre-cariously financed. Following the example of the Credit Mobilierand others, Scott started the California and Texas ConstructionCompany to build his road and to provide him with immediate

38 Julius Grodinsky, Transcontinental Railway Strategy, 1869-1893: A Study of Business-men (Philadelphia, 1962), 15; Wall, Carnegie, 223, 279, 280, 283; Carnegie to Thomson,Oct. 30, 1872, Joseph Wall's Carnegie Collection.


financial returns. Apparently, Thomson was unable to dissuadeScott from investing heavily in the project and, when once under-way, Thomson dropped out. The transcontinental soon developedserious financial difficulties due to Scott's inability to win a federalguarantee for the road's bonds or to acquire a loan of governmentsecurities. To continue construction, which was necessary to thwartthe Southern Pacific's plans to build over the same route, and toproject an active political image in Washington, Scott was forcedto make large personal cash advances. Sometime in 1872, he dis-covered that he was overextended and appealed to Thomson toloan the construction company working capital. Thomson, againsthis better judgment, came to his partner's aid because he realizedhis own reputation and money were already indirectly involved andhe simply could not afford to allow the younger man to fail, par-ticularly in a promotion of this scope. By the summer of 1873Thomson was a co-endorser on unsecured paper to the extent ofbetween $1,500,000 and $1,700,000, while Scott was liable for$7,ooo,ooo.39

Several months before Jay Cooke closed his doors on September18, inaugurating the great depression of that decade, the Texas &Pacific and the Thomson-Scott partnership were in trouble. Inmid-1873 Thomson evidently could not or would not advancefurther funds to the construction company. Strapped for capital,Scott left for Europe in July to raise the sorely needed money.Despite optimistic newspaper reports that he was on the verge ofsuccess, the following month he was forced, undoubtedly behindThomson's back or without his blessing, to attempt what neitherman had ever before considered doing—tap the Pennsylvania Rail-road's treasury. On August 18, with both Thomson and Scottabsent, the California and Texas Company appealed to the Penn-sylvania's directors to sell it $2,000,000 worth of the 7 per centcurrency bonds of the Pittsburgh, Cincinnati & St. Louis Railroadat 80 for an unsecured personal note endorsed by three of the fiveprincipals in the concern, excluding Thomson and Scott, and forthe deposit with the Pennsylvania of $4,000,000 of Texas & Pacificconstruction bonds. The proposition was referred to the board's

39 Unidentified newspaper clipping, Thomson scrapbook; Wall, Carnegie', 298; PhiladelphiaLedger and Transcript\ Nov. 5, 1873; Inventory and Appraisement of the Estate of JohnEdgar Thomson, 1874.


finance committee. While this group debated what must have beenan embarrassingly delicate request, Thomson found himself in per-sonal financial trouble.40 He wrote to Carnegie, who had about$250,000 of his own money invested in the project, asking whetherthe ironmaster could sell some of Thomson's bridge stock, com-plaining "I am short at present/' Thomson was about to be shorter.With the fall of Cooke's banking empire, precipitated by Cooke'soverextension in the Northern Pacific Railroad, in which Thomsonhad also invested, the pressure on Thomson became critical. As hisnotes were presented he was forced to unload securities in a de-clining market. Carnegie took a hard look at the situation andrefused to aid his former tutors. When Thomson, pressed as he was,learned of Carnegie's reluctance to pledge his credit to support thepartners, he wrote a personal plea for reconsideration, placing theentire blame for the California and Texas Construction Company'sfinancial mismanagement squarely upon Scott, who had "acted uponhis faith in his guiding star, instead of [upon] sound discretion."Thomson, who was calling in all his debts, pointedly remindedCarnegie "you of all others should lend your helping hand," adding"I shall be glad to get out of this Texas matter with a loss of onlythree times your subscription."41

At the very moment Thomson was struggling to preserve hisfinancial position, the economic vitality of his badly overextendedPennsylvania Railroad was being sapped by the declining securitiesmarket and the national business downturn. Thomson was in nomood to tolerate Scott's entreaty for the road's help. Scott hadtouched a central nerve in their relationship at the worst possiblemoment. A confrontation between the two men probably ensued,for on November 7 Scott presented his resignation to the board.No formal vote was entered in the minutes but the directors, chairedby Thomson, refused to accept the resignation, declaring it wasneither "necessary" nor "desirable." Undoubtedly, Thomson didnot favor it, for if he had the resignation would have been accepted.Financially, Thomson survived—just barely. But the partnershipthat had withstood other horrendous losses was irretrievably rent

40 Minutes of the Board of Directors of the Pennsylvania Railroad, July 2, Aug. i85 1873;unidentified newspaper clipping, Thomson scrapbook.

41 Wall, Carnegie, 302; Thomson to Carnegie, Sept. 11, 1873, Andrew Carnegie Collection,Manuscript Division, New York Public Library; Thomson to Carnegie, Oct. 3, 1873, ibid.\Henrietta Larson, Jay Cooke: Private Banker (Cambridge, Mass., 1936), 259.


because Scott ignored Thomson's advice concerning the Texas &Pacific and then pulled the "old man" into it, and because Scottdared to attempt to involve Thomson's Pennsylvania Railroad in aprivate speculation. Over the years both men had made investmentswhose profitability was directly dependent upon the road's fortunes,but the company had never been liable for a dollar. And as long asThomson lived it would remain that way. The estrangement be-tween Thomson and Scott became so great that by January, 1874,Carnegie found mediation impossible. Carnegie approached Scottabout guaranteeing Thomson for $150,000. He later explained toThomson that he urged Scott "to see you and make satisfactoryarrangements, based upon bygones being bygones, he [Scott] toabandon all personal undertakings and devote himself to carryingout your views, as he professed himself anxious to do." Scott, how-ever, would not see Thomson about Carnegie's offer, and, instead,attempted to lure Carnegie into a deal in such a way as to seem tosupport Scott's side of the dispute. Carnegie would have nothing todo with the ploy and explained it in full to Thomson.42

Scott withstood the financial crisis, although he had at least onenote protested. Simon Cameron and other friends came up with$2,000,000 to support him and Scott eventually put the pieces ofthe project back together. In 1881 he sold the Texas & Pacific Rail-road to Jay Gould for $2,400,000 and died with a personal fortuneestimated at $17,000,000. Thomson took the financial beating of hislife and his estate, although valued in 1874 at about $1,000,000,was notable for its lack of solid securities. He had sold them tosupport his Texas & Pacific paper. The partners' dispute was dulyreported in the press, and must have added to the discomfort Scottfelt at Thomson's death, which occurred before amicable relationswere restored. Carnegie ever after contended that he was partiallyresponsible for Thomson's death because he refused to grantcredit to an obviously sick friend at a crucial time. Scott cer-tainly must have harbored the same deep remorse since he wasprimarily responsible for Thomson's strained personal financial cir-cumstances. In 1875 Scott purchased from Thomson's estate theremaining $106,000 of endorsed California and Texas Constructionnotes for securities, most of which were guaranteed by the Pennsyl-

42 Minutes of the Board of Directors of the Pennsylvania Railroad, Nov. 7,1873; Carnegieto Thomson Jan. 29, 1874, Joseph Wall's Carnegie Collection,

1976 J. EDGAR THOMSON AND THOMAS A. SCOTT 65

vania Railroad, valued at $217,500. Reportedly, Scott was em-barrassed by the publicity these notes received in the estate valua-tion. Scott's feelings must have exponentially intensified whenThomson made no effort to deny him the Pennsylvania Railroad'spresidency, although the option to make Scott a sacrificial goat toappease a disgruntled stockholders' committee that was examiningthe managers' policies should have appealed to Thomson. His widowonly exacerbated Scott's guilt feelings by her cool attitude towardhim and her willingness to relate to friends the details of the riftbetween her late husband and the new president.43

An upheaval of massive proportions was required to disrupt apartnership that was based upon a complex web of personalityfactors, of shared experiences and values, of a success ethos, ofThomson's paternalism, and of the Pennsylvania Railroad's well-being. Although the Texas & Pacific crisis, Scott's challenge toThomson's authority, the 1873 financial panic, the PennsylvaniaRailroad's fiscal vulnerability, Thomson's illness, and the 1874stockholders' meeting destroyed their former relationship, the eventsfailed to alienate the two men completely. Their likenesses weresimply too strong. Witness Thomson's urgent attempts throughoutthat year to bolster his own and Scott's precarious financial posi-tions, having determined not to withdraw and take his losses. Thestrongest evidence that the estrangement was not total, however,was Thomson's willingness to continue to support Scott for thePennsylvania's presidency. Thomson had little to gain and a greatdeal to lose from Scott's accession, particularly if the younger manrepudiated his policies. While it is quite probable that had Thomsonlived the partnership could never have been restored to its pre-i 873form, Thomson evidently considered that the similarities that forover a decade bound the two men closely together, and the debt ofgratitude that Scott owed him, were sufficient to insure Scott'sfuture loyalty. He was correct.

The University of Tennessee at Chattanooga JAMES A. WARD

43 Unidentified newspaper clippings, Thomson scrapbook; Ledger and Transcript, Nov. 5,1873; Inventory and Appraisement of the Estate of John Edgar Thomson, 1874; New YorkTimes, May 22, 1881; John Wyeth to Haupt, Mar. 16, 1905, Haupt Papers, Box 9; Report 0/the Investigating Committee of the Pennsylvania Railroad Company, Appointed by Resolutionof the Stockholders at the Annual Meeting Held March io, 1874 (Philadelphia, 1874), 3-4;Wall, Carnegie, 305-306.

sdgar thomson and thomas za. scott: za symbiotic 'partnership?

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