It was 1883 and Robert Sayre had just about had his fill of the Packer boys. Ever since their father, Asa Packer, had died in 1879, his trusted aide had tried to teach Robert and Harry Packer that just because they had inherited a railroad did not necessarily mean they knew how to run one. While their father, spoiling them with one hand, disciplining them harshly with the other, was alive, Sayre had been given the role of keeping his wayward offspring in line. He was not with them in France in 1869 when John Fritz was on an inspection tour of European steel furnaces. It was all Fritz could do to pull “the boys,” as everyone in the family referred to them, out of the cross-dressing antics of Paris’s notorious Art Students Ball.
But now that the former canal boat captain and Lehigh Valley Railroad titan had passed from the scene, they wanted to let him know it was their railroad and they would not take any more lessons from him. “The boys have come after me and have brought the hatchet,” Sayre noted in pencil on the pages of his small, limp-leather diary. A few days later he would be writing that he had been informed by them that they no longer had any use for his services. Sayre was crushed, as he noted, at the ingratitude of the family after all his years of “faithful service.”
But Sayre was never one to be idle and he had a large family to support. He was still on the board of the Bethlehem Iron Company and at his age many men of his social class were talking of retirement and trips to Europe. But apparently Sayre was not ready for that role just yet. It is not known how he heard of the South Penn Railroad project that had been in the railroad press since 1881, but he did and so by the time the Packer boys took “the hatchet” to him, he was ready to offer his services.
There were actually two South Penn Railroad projects. The first was conceived back in 1854. It had a number of names at first, among them the Duncannon, Landisburg and Broad Top Railroad. By 1859 it was given the grandiose name of Pennsylvania Pacific Railway. Finally, in 1863 it was named the South Pennsylvania Railroad. Perhaps because of the Civil War, it was stopped and never completed. By the late 1870’s it existed only as a charter.
This was where the situation stood in 1881. What had changed was the development of western Pennsylvania, and Pittsburgh in particular, as an industrial powerhouse. Iron makers like Andrew Carnegie and the Rockefeller brothers’ oil company were now major industrialists and in order to ship their product they had to use the Pennsylvania Railroad, which had a monopoly on what went out and came into the region. This monopoly was ruled by the imperious George B. Roberts, the Pennsylvania Railroad’s president. It was his freight rates for their products that had the Pittsburgh industrialists up in arms. They not only did not like Roberts’ freight rates, they also did not like his attitude. To bring some “muscle” into the game, they brought into a syndicate they formed William H. Vanderbilt, who controlled the New York Central Railroad.
Vanderbilt was perhaps the most powerful figure in railroading in the country in the 1880s. His father had been Cornelius Vanderbilt, a railroad and ship building pioneer who was said in some sources to be the first American millionaire. There was little love lost between father and son and for most of his early life William H. Vanderbilt was confined by his parent to the family farm. But later they became close and he took on tasks that enhanced the family fortune. When the elder Vanderbilt died in 1877, his son had his own interests and was a force to be reckoned with when he was crossed. And when he heard that the Pennsylvania Railroad had gained control of the New York, West Shore and Buffalo Railway, whose lines paralleled the route of the New York Central between New York City and Buffalo, Vanderbilt saw a challenge he could not overlook. The South Penn’s old charter was dusted off and a railroad war was on.
With that Sayre entered the game as chief engineer. The route would connect Pittsburgh to Harrisburg. It would form a link with Franklin Gowen’s Reading Railroad to the east coast. The route had first been surveyed in the 1840s by the Army Corps of Engineers. It was considered a difficult one when it was re-surveyed in the 1880s as well. It crossed six mountain ridges, required nine tunnels, and involved many sharp curves and steep grades. Sayre worked with a will and by 1885 the workforce he had gathered had achieved what many assumed would be impossible with tunnel construction. It rattled the corporate offices of the Pennsylvania Railroad, which even Roberts could see, so by the summer of 1884, he cut shipping rates.
But as Sayre and his crews worked under the summer sun, posing briefly for a photo by a tunnel with an exultant Andrew Carnegie, his foot on a rail, things were not happy in the financial markets. European investors, who provided most of the capital for railroad building, were not amused by this cut-throat competition that reminded them all too much of what sparked the Panic of 1873 and the worldwide depression that the global economies were just coming out of. Investment banker J.P. Morgan was also not happy. This was a useless waste of resources. Consolidation was Morgan’s mantra. Although he sat on the board of New York Central, he feared a new railroad was the worst thing that could happen to the orderly development of American capitalism.
At the end of May of 1885, Morgan and Vanderbilt, returning together to America from separate European vacations, had a chance to talk over the South Penn project. Gradually it became clear to Morgan that Vanderbilt, feeling over-extended, was looking for a way out. The problem was George Roberts. He had rejected all attempts by Vanderbilt and Morgan for a compromise. But finally, the financier found a way. On a warm July morning, Morgan picked up Roberts and Pennsylvania Railroad vice president Frank Thomson on his yacht, the Corsair, for a day-long cruise up the Hudson and back along the Jersey shore. With them was the silver-tongued attorney Chauncey Depew.
In modern sports speak, they launched a “full court press” on Roberts and Thomson. Between cigars and lunch they showed them how a big railroad like the Pennsylvania and New York were actually allies, not enemies, and that arguments over the same route would in the end lead to chaos. Better to divide up their territories by agreement. Roberts showed no immediate response. But when the Corsair docked at 7:00 that evening, Roberts spoke, and, shaking Morgan’s hand, said, “I will agree to your plan and do my part.” He was as good as his word and agreed to the banker’s plan. Wall Street rejoiced that “the principal of survival of the fittest” had not been tried with the nation’s railroads.
That December Vanderbilt died, leaving a fortune of $200 million to his sons, and $10 million each to his six remaining children. Among those not happy was the Pittsburgh syndicate, particularly Andrew Carnegie. For the next ten years he battled on in the courts and in business circles, allied with local merchants and at times the Rockefellers, till finally the Pennsylvania Railroad gave in.
For Robert Sayre, it was a startling change. In his time at the South Penn, both Robert and Harry Packer had died young, and he was renamed to his old job by Elisha Packer Wilbur. He was to have his own confrontation with the Morgan interests in the 1890s when they took over the Lehigh Valley Railroad.
As for the tunnels, some of them survive today, much modified as parts of the Pennsylvania Turnpike.