by Jill Jonnes
When Lee received the telegram from Cassatt, he was visiting the Panama Canal, another wonder of the new century. Lee cut short his stay and hastened north to New York by ship. “The Pennsylvania job gets bigger every day,” rhapsodized Lee to his father that fall. “The activities of the Pennsylvania are of an exceptionally high order, everything they do being carried out in the best way possible, regardless of expense. The consequence is that we have beautiful raw material with which to work.” Certainly, stories like the impending completion of the North River tunnels were easy sells since they remained a mystery, largely unseen by reportorial eyes. Not only was Jacobs finishing the North Tunnel a year ahead of schedule, the two halves of the South Tunnel had been joined only a month later.
Five grueling years had passed since Alexander Cassatt and Charles Jacobs had debarked from the S.S. Celtic, two engineers afire with huge ambitions, determined to tunnel deep under the Hudson, Manhattan, and the East River and bring the Pennsylvania, the nation’s greatest railroad, at long last into the heart of New York. Over these years, Cassatt had endured no end of naysayers and skeptics jeering at what they viewed as reckless “Cassatt madness.” Nowhere was that more vividly reflected than in the PRR’s stubbornly undervalued stock. In the first year of Cassatt’s reign, before the New York Extension was announced, PRR stock had hovered above $170, already less than the $185 most financiers thought its underlying worth.
By late 1903, as Cassatt began his high-profile borrowing and his feud with George Gould festered, the stock had sunk to an anemic $110. The nation’s economy boomed, the PRR’s income and profits swelled, and the stock gradually inched back up to $145. But Cassatt’s monumental expansions demanded vast financings, a $50 million stock offering here, a $100 million convertible bond sale there. The latter, floated in May 1905, was the largest of its kind in railroad annals. Only 10 percent was subscribed by existing stockholders before Kuhn, Loeb stepped in to sell the rest. By the dreadful spring of 1906, further gigantic borrowings, combined with the Interstate Commerce Commission hearings and the East River tunnel troubles, made for chary stockholders. The PRR stock price sank to $129.
The editors of the Stockholder heatedly denounced Cassatt for “the most deplorable management of this great property…Conservatism thrown to the winds, and money perhaps wasted like water. Additional income from these costly improvements is a matter of the distant future…How does the Pennsylvania expect to make $6,000,000 a year net out of the New York tunnels?” It seemed to make no difference that the PRR earned greater profits than ever, hauled fully half the nation’s coal, and faithfully paid its 6 percent dividend. Back in June 1906, when Cassatt was floating his latest $100 million in bonds, reported the Wall Street Journal, “A dozen of the best bond houses of Wall street are advising, coaxing, even imploring their clients to buy these bonds, as one of the best and safest issues of the market. The clients turn from them.”
The problem, explained the newspaper, is that “The Pennsylvania [Railroad] is too vast to be grasped by the lay mind…Its growth is too big to be understood…The tradesman, the clergyman, the country lawyer or doctor out in Pennsylvania, who has owned Pennsylvania stock for twenty years, does not think in hundreds of millions at once. He hears that the New York terminals are to cost $100,000,000…It is an ‘awful lot of money.’ He hears of a $50,000,000 flotation in New York, and another, the next week in Paris. He thinks the Pennsylvania must be hard up…In the end he sells the stock, and buys a mining stock with the proceeds.”
The PRR’s main Wall Street investment banker, the courtly Jacob Schiff, just back from a journey to the Far East, cautioned Cassatt in that benighted summer of 1906, amidst the lingering torments of the ICC graft investigations and the stalled East River tunnel diggings, “Do no more financing in this market for some time to come. We must not shut our eyes to the fact that your company’s immense requirements are beginning somewhat to frighten its shareholders.”
Such was the brouhaha in the business world over Cassatt’s expensive ambitions that in the early fall of 1906, the eminent English railroad expert, W. M. Acworth, crossed the pond to “form for myself a definite opinion whether the Pennsylvania Railroad is, as I have always believed, an ultra-conservative company, or whether, as many people in England and some in America believe, it has abandoned its old traditions, been badly bitten with megalomania, and gone in for a policy of reckless extension which may end in imperiling the modest 6 per cent dividends of its common stockholders.” Acworth scrutinized the PRR from top to bottom, noting the road’s excellent infrastructure, starting with its far-flung tracks and lines, all serving prime industrial territory and of the highest quality construction: “the most solid and modern type with masonry viaducts, stone ballast, 100-lb. rails.” And then there was the Pennsylvania’s well-built equipment, a vast fleet made up of “3,000 locomotives, 2,000 passenger cars, and 63,000 freight cars.”
So immense was the American industrial heartland served by the PRR, and so rich the nation’s current business boom, Acworth heretically concluded that Cassatt and the PRR could be expanding faster and Cassatt spending more. Moreover, reasoned Acworth, “If it is worthwhile for the New York Central to spend seventy millions to remain where it is [and build a new terminal], it surely must be at least as well worth while for the Pennsylvania to spend a hundred million to get there.” Nor was Acworth the only expert to extol Cassatt’s PRR. In 1905, broker James T. Woodward had issued a detailed study and hailed gross earnings that rose during these years of Cassatt’s reign from $152 million to $238 million, a rise of 57 percent, while net earnings had risen from $45 million to $67 million, or 49 percent. Thanks to Cassatt’s “community of interest,” the PRR’s average freight rates per ton mile had risen 25 percent, leading this Wall Streeter to hail the PRR as “the highest type of an American railroad company, and because of this, unequalled in the world.”
And then there was the windfall that came from ending the free pass. When the White House moved north for the summer to Oyster Bay, William Patton wrote President Roosevelt’s secretary, William Loeb, on May 29, “all arrangements have been made for the shipment of the President’s horses, carriages, etc…. a bill for which will be rendered later.” Like all politicians of any importance, it had been a long while since Teddy had paid his own way to ride a train. The president was shocked by the bill for $150.29 that arrived. William Patton responded to Loeb with a detailed rendering of costs, perhaps relishing this small infliction of distress on Roosevelt, whose ICC had so thoroughly humiliated him. He signed off, “My best wishes to you for a pleasant summer.”
Cassatt made no exceptions. When his own daughter traveled with her family to Bar Harbor that August, he paid the $168 bill for her use of his private car. After all, for decades he had itched to make the self-important nabobs pay full freight. And his road had higher earnings for passenger travel in the first half of 1906, thanks to “the cutting off of free passes,” a situation he found “very satisfactory.”
To some extent, the shareholders were mollified—especially when Cassatt raised the dividend to 7 percent. Through the late summer and fall, the stock inched back up to $145. Samuel Rea, who was vacationing in England, wrote Cassatt in late August, “I am very glad to see our stock advancing—& hope it will get above 150.” But at $145 it stubbornly remained.
All that October, William Randolph Hearst barnstormed the state in his private Pullman car, Reva. He and his powerful newspapers blasted away at the Republicans, exhorting the voters to elect a governor unbeholden to corruption or corporations. Even his enemies credited Hearst and his crusading newspapers with bringing to heel the Ice Trust, the Coal Trust, the New York water board, the New York gas board, and all manner of “corporations caught trying to sneak under or around a law.” But they also loathed his autocratic ways and slippery notions of truth. Roosevelt and the Republicans resolved to destroy the publisher once and for all. Roosevelt was well aware of the power of Hearst’s appeal. The president und
erstood the rising public anger against the “money power,” but he intended to deal with the nation’s “malefactors of great wealth” in his own way. As for the office of the governor of New York, it was far too important to cede to a Democrat.
The agent of Hearst’s ruination was Roosevelt’s secretary of state, Elihu Root, a brilliant corporate lawyer. At a political rally in his hometown of Utica, the tall, thin Root took the podium, introducing himself as an emissary of the popular president. In the dark days after President McKinley’s assassination, Root reminded the crowd, Roosevelt had blamed those who “appeal to the dark and evil spirits of malice and greed, envy and sullen hatred.” Now, Root revealed, Roosevelt “had Mr. Hearst specifically in mind.” It was a sensation. The president of the United States was blaming Hearst’s vitriolic anti-McKinley stance for provoking the president’s murder! “ROOSEVELT CALLS HEARST INCITER OF THE ASSASSIN” blared the morning paper.
With this, Tammany leader Charles F. Murphy chimed in about his party’s candidate, “I don’t like Mr. Hearst anymore than Mr. Hearst likes me.” Hearst had, after all, tagged Murphy “The Colossus of Graft.” For Hearst, these were staggering blows. Come Election Day, a hostile Tammany did not bestir itself, and the voters of the Empire State rejected Hearst. But in a warning to the status quo, Hearst lost by only 60,000 votes of 1.2 million cast.
TWENTY-TWO
“THE ONLY RAILROAD STATESMAN”
Charles McKim stood on the deck of the S.S. Provence as it sailed toward Manhattan under late October skies. He was slipping quietly back from Europe with the widowed Bessie White and her son Larry. The view that met his gaze as the liner steamed into the harbor was one of aggressively tall buildings. As H. G. Wells, a contemporary ocean voyager, described the vista, “The sky-scrapers that are the New-Yorker’s perpetual boast and pride rise up to greet one as one comes through the Narrows into the Upper Bay…[They] stand out, in a clustering group of tall irregular crenelations, the strangest crown that ever a city wore. Happy returning natives greet the great pillars of business by name, the St. Paul Building, the World, the Manhattan tower.” Wells marveled, too, as did every visitor, at the frenetic crowded chaos of Gotham, first palpable on the busy waterways. “Across the broad harbor plies an unfamiliar traffic of grotesque broad ferry boats, black with people, glutted to the lips with vans and carts, each hooting and yelping its own distinctive note, and there is a wild hurrying up and down and to and fro of piping and bellowing tugs and barges, and a great floating platform, bearing a railway train…Everything is moving at a great speed and whistling and howling.”
McKim, who had turned fifty-nine while in France, leaned into the breeze watching Gotham come closer, observing the skyline with unhappy heart. These ever-taller behemoth buildings that now dominated his adopted metropolis offended his sense of aesthetics. But worse was the melancholy prospect of a world bereft of one of his oldest, dearest friends. In the wake of Stanford White’s murder, McKim had found solace in his leisurely shooting holiday on the moors of Scotland and “the simple diet of fresh air and oat-meal of my Highland ancestors.” He had then lingered in London, feeling under the weather, before rejoining Bessie and her son in Paris for further recuperative travels motoring through Normandy and Touraine. Now, as their French liner steamed toward Manhattan, there was little illusion about what lay ahead. “I fear nothing—anymore,” Bessie had written one of her sisters, “and am laying in a good stock of strength and courage to be ready for the winter which is bound to be a hard one.”
Manhattan skyline in 1908.
McKim and the Whites landed and emerged with their trunks from the perils of the U.S. Customs shed into the pleasant day, threading their way through the melee of West Street. Each dreaded Harry Thaw’s impending trial for murdering White—sure to be a lurid and painful legal circus. Bessie quickly departed to live in Cambridge, where her son would begin his final year at Harvard. McKim settled back into his third-floor apartment at 9 East Thirty-fifth Street and faced the Augean task of untangling White’s large and labyrinthine debts, and somehow salvaging something for Bessie. McKim, Mead & White alone was reportedly owed $600,000. Before departing, McKim had ordered that in their own offices all White’s “pictures, tapestries, bronzes, marbles, stuffs, objects, whatsoever, in the reception rooms (large and small), as well as in Stanford’s office, should at once be placed in storage.”
With White dead and his treasures packed away, McKim returned to find his firm’s offices sadly altered. “Our sense of personal loss,” wrote McKim to a friend, “and loss to the office and the profession, is only exceeded by Mrs. White’s courage and fortitude under so crushing a blow.”
McKim’s immediate professional concern when he returned to work were certain pressing Penn Station design questions. He was aghast to learn about the siting of the station’s planned powerhouse. He protested to the PRR, “There can be no question that the construction of two steel chimneys of a height of 180 feet, in such close proximity to the terminal would strike a fatal blow at the new station.” And yet the evolving site of his magnificent railroad temple—just eleven blocks north of his office—had become one of the wonders of Gotham.
The vast Penn Station canyon was rimmed by brownstones bedecked with clotheslines and family laundry, a homely contrast with the monumental enterprise below. All day and night, onlookers were omnipresent, drawn by the spectacle of legions of men and powerful, noisy machines working around the clock to gouge away at this gaping valley now nicknamed “The Culebra Cut,” after the similar digging underway at the Panama Canal. “As quickly as the buildings disappeared from this once closely populated district,” observed a journalist from the New York Herald, “an immense amount of excavating machinery was installed. Railroad tracks were laid in every direction [to remove spoil] and the ground soon lost all semblance to its former civilization. Today the resemblance to the canal zone is complete. The land…has been ridged and furrowed until its original topography is but a memory. Long, uneven alleys stretch east and west upward of half a mile in length, through which noisy [work] trains pass on a very busy schedule. The depths of these valleys at many points completely hides the trains from the surrounding country. At several points the tract is dominated by several hills which rise twenty feet or more above the level of the valleys. There are several miles of railroad tracks in constant use, with switches and crossings—a complete railroad system.” The public was beguiled by the sheer bold scale of the enterprise.
A May 7, 1908, Harper’s Weekly illustration of the Penn Station excavation shows a propped-up Ninth Avenue Elevated and the locomotive pulling a train of debris toward a Hudson River pier.
While in Britain and France, McKim had heard the rumors that Alexander Cassatt, now sixty-seven, was in poor health, but found them hard to believe. After all, the PRR president was a big, physically powerful man, a lifelong athlete and equestrian, equally at ease charging across the hedgerows foxhunting and handling the demands of driving a four-in-hand. Yet, word had it, the indomitable Cassatt was far from well. Any man would have felt the accumulated strain of Cassatt’s outsized labors. For six years now, he had been engaged in gargantuan corporate undertakings. He had fought battles with Andrew Carnegie, George Gould, Tammany, and all those who opposed Teddy Roosevelt’s railroad rate regulations.
The revelations of the Interstate Commerce Commission had exacted a toll, but the PRR’s internal investigation had found the kickbacks limited to a handful of cases: Of “more than 300 operators of bituminous coal mines, situated on the lines of the Pennsylvania Railroad, less than 10 operators in all have testified that they believed themselves to have been unfairly discriminated against.” The fifty trained accountants unleashed to delve into the holdings of 2,501 PRR officers and employees concluded that “few, if any” of the ICC charges of rate discrimination and favoritism bore up under detailed study. This was, Cassatt wrote from Bar Harbor, a great relief. “I have been somewhat fearful all along that the result might be t
he reverse…[and] might be used in evidence in suits.” Cassatt had not had the heart for any further firings, certainly not his own longtime assistant and aide-de-camp, William Patton. Instead, every PRR employee was ordered to divest himself of all coal holdings. And so, as the summer had waned, Cassatt could feel that the worst of the ICC firestorm was behind him and he could enjoy his sojourn in Maine.
The Bar Harbor summer colony preferred its money quiet (automobiles were banned from town) and its social life genteel—tennis, picnics, regattas, and dog and horse shows. Its summer “rusticators” were substantial men like Cassatt, publisher Joseph Pulitzer, financier Jacob H. Schiff, former New York mayor Seth Low, and distinguished lawyers, physicians, and professors. Their large picturesque shingle-style “cottages” lined the seashore, set amidst manicured lawns, flowerbeds, and rambling gravel paths. Some years J. P. Morgan caused a stir by sailing in with guests (none his wife) on his yacht, the Corsair. Here the excesses of Newport, Rhode Island, evoked scorn. In Bar Harbor, no bored millionaires in Versailles-like palaces hosted dinner parties to meet one Prince del Drago, who turned out to be a monkey. Nor would any local hostess fete one hundred pampered dogs as her guests of honor, some reportedly dining in fancy dress.
The Cassatt family had arrived on July 5 at Four Acres, their Arts and Crafts mansion overlooking the jagged coast of Bar Harbor. On the best of days, when the morning fog lifted, the Maine sky scintillated blue, the sun warmed, and the copses of towering pines perfumed the air. Cassatt always brought his horses and carriages north, but on summer mornings he liked nothing better than heading to the Yacht Club to sail his thirty-foot sloop, Scud. With all the sailing and sea air, Cassatt felt better every week.
