RE: (erielack) Morgan and the Erie

["Schuyler Larrabee" <schuyler.larrabee_@_verizon.net>]

Thanks, Bill,  for putting your oar in the water here.  I know you know this history pretty cold.
And if I can offer another book for the ERIE historian's reading list, find a copy of _The Life and
Legend of EH Harriman_ by Maury Klein.  Interesting for his railroad interests, which were manifold,
but also for the rest of his life.  A very interesting man.

SGL

http://www.amazon.com/gp/product/0807825174/sr=8-3/qid=1155174815/ref=pd_bbs_3/002-7084667-1984829?i
e=UTF8


> Subject: (erielack) Morgan and the Erie
> 
> Tim Stuy wrote:
> 
> Morgan was very involved with the railroads.  Probably the 
> biggest reorganization in the 19th century was the 1893 
> Northern Pacific reorganization that J.P. Morgan put 
> together.  From an EL perspective, he had bought up a number 
> of Erie securities in the 1890's.  By 1898 the independent 
> NYS&W with its Wilkes-Barre & Eastern and Susquehanna 
> Connecting Railroads were undercutting the coal rates the 
> Erie could get and were attempting to lease the Erie & 
> Wyoming Valley.  Morgan stepped in and bought control of the 
> NYS&W and then had the Erie lease it.  In 1907 the Erie was 
> near default and Morgan again stepped in - this time getting 
> one of his allies, Underwood to take on the presidency of the Erie.
> 
> Corrections/additions:
> 
> Morgan oversaw the reorganization of the New York, Lake Erie 
> & Western Railroad into the Erie Railroad in 1895 and 
> controlled the Erie for about another decade through a voting 
> trust arrangement that could not be dissolved until the 
> company paid certain dividends more than once.  This control 
> was nearly absolute during that decade.  After the voting 
> trust was dissolved--I am thinking it was in 1904--he still 
> named many of the directors, but Underwood was free to seek 
> other allies, particularly Edward H. Harriman, whom Morgan 
> did not much like, due to the fact that they had tussled 
> during the Erie reorganization.
> 
> Underwood became president of the Erie Railroad in 1901.  At 
> the time he was correctly considered Morgan's man.  As 
> Morgan's interest in Erie waned with advancing age and his 
> preference to focus increasingly on art collecting, etc., FDU 
> was delighted to find that Harriman took an interest in 
> backing FDU's plans for rebuilding the Erie.
> 
> The idea that Morgan stepped in to save the Erie in 1907 is 
> seriously incorrect.  Morgan did not bail out the Erie's 
> improvement projects during the so-called "Rich Man's 
> Panic"of 1907; Harriman did.  This episode is almost never 
> mentioned in general history books.  Then, when some Erie 
> bonds came due in 1908, there came the famous moment when 
> Morgan was asked to refinance them.  After some dramatic 
> scenes, he declined, and Harriman took up the task to "help 
> the general situation" or some such words.  After that, 
> Harriman was basically the leading financier behind the Erie. 
>  Unfortunately for FDU's plans, he died the next year.
> 
> WDB
> 
> 
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