(erielack) Erie Management

[Njricky2_@_aol.com]

Schuyler,
 
Great input. Yes, Erie/D&H/B&M would have been a very good  combination, 
especially with the Santa Fe connection in Chicago, truly  trans-continental. 
DLW/Wabash? Yup, it could have worked. 
 
Your details on Erie's management make a great deal of sense. If anyone  
wants to read about the "manipulation of the Erie", check out a book called "The  
Scarlet Woman of Wall Street", written by John Steele Gordon. Copyright 1988,  
published by Weidenfeld & Nicholson, New York, a division of Wheatland  
Corporation, New York.
 
It's probably out of print by now. I happened to find a copy in a used  
bookstore here in Manhattan a number of years ago. Truly a very good read that  
offers in-depth insight as to what SGL posted. One could actually make a  great 
movie from the characters who manipulated Erie stock at the time, to their  
infidelities (corporate and personal), murder threats, escaping from Manhattan  
to NJ under the cover of darkness, etc. 
 
A really good chapter is "The Raid on the Albany & Susquehanna". If you  can 
find it, I'm sure you'll enjoy it.
 
Rick
 
In a message dated 2/19/2007 11:20:21 AM Eastern Standard Time,  
schuyler.larrabee_@_verizon.net writes:

In some  part, I write just to get the topic line spelled correctly . . .  8^)

Njricky2_@_aol.com wrote, though not necessarily in this  order:

> Erie had lousy management from Day 1. The "corporate ones"  who controlled  
> Erie were into making money, not into running a  railroad. It's surprising 
that  
> Erie did as well as it did and  overall, it did very well. Erie turned out 
to 
> be  "a survivor".  Erie competed with PRR and NYC and did so  effectively.

That's  almost right.  I believe the management, while it had its problems, 
was  actually about as
competent as any corporation was in those days.   There is a lot of the 
outlines of corporate
structure in use today that was  invented by the ERIE.  I believe that what 
was bad for the ERIE  from
the outset, or almost from the outset, was the financiers who  correctly 
viewed this very large
corporation as something that could be  manipulated, and in the process of 
those manipulations,
because it was so  large (for its day) the amount of money to be extracted 
from it was  enormous.  The
actual management was manipulated just as much as the  more innocent of the 
stockholders.  The end
result was that the  railroad was saddled with huge amounts of debt that had 
been taken on,  while
ostensibly for "improvements" to the railroad, in fact for  improvements to 
the financier's pockets.
Even bankruptcy didn't seem to  change that.  While some (all?) of those 
previous debts might  have
been washed away, the railroad as it existed on the first day of  operation 
under a new financial
regime was a battered,  in-need-of-improvement line, so they were always 
starting out in the  hole.
Look what happened when the Van's took over and started spending  money.

> I often wonder whether or not the EL merger  was  
> a good thing. I think that they had no choice in the end 
>  because things in  the industry were happening quickly.

I think  there's some merit to that idea.  When merger became a concept that 
could  be considered, the
first go-round included the D&H, along with the ERIE  and DL&W.  From what I 
remember my dad and
granddad saying at the  time (I was ~10 years old), the D&H realized they 
didn't want anything to  do
with these two sick puppies, since they were making money . .  .then.  IMHO, 
what would have been
much better for the ERIE (sorry,  DL&W fans) would have been a ERIE/D&H 
merger, especially if  they
could have brought the B&M into the mix, then or later.   DL&W would have 
been better off (as we all
have discussed ad nauseam)  with NKP, or possibly with Wabash, via Niagara 
Falls.  That would  have
taken some work to make a good connection, but if you look at this map  from  
1953
http://home.comcast.net/~wabashrr/images/WabSysMap1949.jpg
(there  are probably better maps available on line) that could have been a 
formidable  competitor for
the other main trunk lines.  It even gets past  Chicago!

> Erie on the other hand could have formed, without  a merger, an  
affiliation 
> with Santa Fe. They were both in the  position to do so. If that took  
place, 
> that would have given  both a trans-continental railroad without having to  
> answer to  the ICC. Again, the Chicago interchange.

Think about that in  conjunction with the D&H idea above.

> Lackawanna on the  other hand, had for the most part, very good management  
> but  again, it was a much smaller railroad and much easier to manage as  
compared  
> to Erie. Although it was smaller than Erie and others  in the Northeast, 
it's  
> feats are uncompared. DLW was the  shortest route between NYC (Hoboken) and 
 
> Buffalo. They did it  well.

I think that, too, is an idea with merit.  I also think that  the DL&W 
management was VERY hands-on
during it's glory years, while  the ERIE, before the Van's interventions, was 
more of a series of
locally  managed divisions.  Having said that, though, I've read minutes of 
the  Board and Executive
Committee meetings from about 1904-1914.  They met  weekly, for the most 
part, and were deeply
involved with relatively minor  expenditures, what I recall as anything much 
over $200.  Right.   Two
hundred dollars.  Even in 1910, that wasn't that much  money.

> The people who worked for both and then for the combined  railway, I think  
> never became one. 

And I think this is  in part due to the fact that they were formerly direct 
competitors, as  opposed
to end-to-end complements.  If the DL&W had merged with  the WAB, I don't 
think you would have seen
the same sort of issues  arising.  Or ERIE with D&H.

There are others on our list who  can refute this and I'd sure  
> like to hear them tell us  otherwise.  Anyone out there who can tell us if 
Erie and Lackawanna  
> employees actually  put differences aside and worked for the  success of 
Erie Lackawanna?
>  
> That's a story that as far  as I know has yet to be  told.

Agreed.

SGL







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