Re: (erielack) Morgan and the Erie

[ELRRco_@_aol.com]

To add to the points by Messrs. Stuy and Burt, Harriman and Morgan had  
differences that went back to an episode where Morgan brushed Harriman off early  
in the latter's association with railroads (which began with a small carrier in 
 upstate New York that served Plattsburgh, if I'm not mistaken, and continued 
 with the Illinois Central).
 
Also, Morgan reorganized the Richmond Terminal system and in 1894,  
established the Southern Railway which 110 years later (now called Norfolk  
Southern--and yes, it IS the original Southern Railway) acquired most of  the former Erie 
Lackawanna lines when the reorganization of Conrail properties  was completed 
by CSX and Norfolk Southern (required EL content!).
 
Phil Bell
_ELRRco_@_AOL.com_ (mailto:ELRRco@AOL.com) 

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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