Tracking History

Attempting to break a monopoly

Once you start digging around you never know where things may turn up, or who may turn them up for you. One of the great mysteries of New England railroad history is the proposed Southern New England Railroad – better known to many New England school kids as the “Titanic Railroad” (more on that later).  This line that was the brainchild of the President of the Grand Trunk Railway of Canada, Charles Melville Hays. I’ve known about the railroad for years having first seen evidence of it on elementary school trips since some of bridge abutments and other infrastructure built for the line in the teens and twenties is still clearly visible. The proposed route between Palmer, Massachusetts (and a connection with the New London Northern to Canada) and Providence, Rhode Island, and a connection with a warm water port – truly a necessity in the days before the St. Lawrence Seaway opened, meandered it’s way between the two end points.  A straight line would have taken the route directly through the northwest corner of Connecticut. So why didn’t it go that way? although this last proposed major railroad construction project in New England was hardly a transcontinental route, the answer to that question ties into our reading for this week. 

The reason this railroad went the long way around was the stranglehold held on the Connecticut legislature and the transportation network in New England held by J. P. Morgan, Charles Mellen and company with the New Haven railroad. Some believe the Southern New England was never intended to be built – it was nothing more than a scheme cooked up by Hays to extort money from the New Haven - and the good residents of Boston and Providence who finally saw a chance to return competition to the picture and break the New Haven's monopoly. 

We’ll never know his true intentions as Hays, who regularly went to England to raise money from those poor gullible English investors for his various railroad schemes.  He had some luck generating investments but much worse look making his travel arrangements as he made the poor choice to make his last return trip to the U. S. aboard the RMS Titanic (hence the “Titanic Railroad” nickname). 

Although the legend of the story has the Southern New England dream dying with Hays, in actuality construction started on the railroad in 1914 – more than two years after his death – and was not formally ended until 1931. 

The railroad never was a railroad – there was never an foot of track laid, although millions of dollars in stocks and bonds were bought and sold. The roadbed was graded, and today some of it serves as highways, other stretches as hike-bike trails. The bridge abutments are still there as well, some of the bridges on the line would have been spectacular since the route required lots of cuts, fills, and spans to maintain a relatively level grade. 

Knowing of my interest in the Southern New England a good friend of mine called me last week to let me know he had obtained one or two known complete maps of the proposed route. Considering what I learned about maps last year, I was thrilled when he offered to send me digital pictures of the maps. I’ve included a couple of them here – they’re pretty neat and show that all a true robber baron needed was a map, and a good story, to raise capital for a route that would never generate a cent in revenue. 

  

The Financier . . . or Don't tick off the Irish Garbage Man

I could write at length about The Financier, but I won’t bore anyone here with a plot summary – which can only be as droll and predictable as the novel itself.  I’m sure we’ll discuss it, and Whiskey Rebels, in class this week.  I’m having trouble seeing how to connect these books to the Rise of the American Corporation – Financier was, for me, a tedious read. (But then, I enjoyed Endless Novelty). I don’t care much for fiction – even less for early 20^th century fiction since I find myself constantly waiting for something – anything – to happen.  I think it’s a function of how novels were written 100+ years ago – there was a tendency to use lots of third-person narrative to “set up” the story and explain what was going to happen.  Dreiser is a master at tedious detail – although he apparently fancied himself a writer of riske material. He obviously had mixed feelings about Frank Cowperwood – but for the most part I didn’t get the feeling the author had any strong feelings about his main characters one way or another.  And, if an author doesn’t love or hate his own creations how can the reader be expected to do the same.  I don’t get the same feeling reading any of Clement’s works, perhaps one reason Mark Twain is considered a great American author and humorist and, well, Dreiser isn’t.

 

The one saving grace of this book is not the action paced writing, but instead a look at the way the products of the Gilded Age, like Frank Cowperwood, were viewed by the author, and we must assume, by most of the population in general.  Here was a man who created nothing – merely profited on using other people’s money to his own gain. The scheming, some of it downright illegal and most immoral, was not to serve any greater good, but simply to create the power and influence Cowperwood craved.  In the end, he seems to get what he deserves – but we are left asking if the crime fit the punishment. By the end of the book he had determined to head west and build something – factory, mine, railroad etc . . .

 

I also found the depiction of the female characters in the book interesting.  Like most of their fellow fictional residents of Philadelphia, they were rather shallow and two-dimensional – cardboard people really, although Aileen came to life a little bit at the end. But what little we did see of them through Cowperwood’s eyes was fascinating. They weren’t really objects of lustful desire, but set dressing in a way – merely something he was “supposed” to do on his way to greater power and influence.  Lillian, the shop owner’s widow – seemed like an ideal prospect when he courted and married her.  As his power and influence grew, in his mind Lillian didn’t grow with him.  Aileen was fun, risky, sensual – all the things Cowperwood desired.  But his affair with her, revealed to her father at precisely the day when Cowperwood needed his help the most (what lame story-telling . . .) caused Cowperwood to fail and end up in prison.  His incarceration was not, of course, for true love, but instead a result of his own manipulative rise to power and influence. 

 

Corporate Imagery

I have to admit I've never really bought into this "companies have personalities" argument. Corporations as entities - of course. I'm not sure I buy the concept of assigning gender characteristics to companies - "feminine" traits like above-market compensation, worker housing, company-provided healthcare as compared with "masculine" companies where the emphasis is on "getting the job done" and "making a profit." You're kidding yourself if you think any corporation exists for a purpose other than generating profit - community support is only one way to promote the company - but if things get tough a lot fewer libraries and endowments get created. It's the way of the jungle.

I did find the discussion of corporate imagery in this week's reading to be interesting - I remember one old brick factory in Norwich Connecticut that had large concrete or stone "bottles" at each corner. The bottles seemed an odd shape until I learned it was the former American Thermos plant!

Corporate imagery has become more and more critical in today's visual media world, but logos, strong graphics, and the like are nothing new. As I'm trying to narrow the focus for my final paper I got thinking of a marketing scheme one of the two railroads in the Thames River valley used back in the late 1920s and early 1930s. It was an overnight delivery service (well, next full business day service between New York City and Montreal) using a combination of trains and boats, and for a while in the 1930s, the railroad-owned airline for service throughout the northeast. I don't know a great deal about how this service operated or how successful it was. I've become interested enough in it that I may make it a focus of my paper.

So, what do you call an fast package delivery service in the days before everything became an abbreviation? In the days of Buck Rogers serials and the like? Why, you call it "The Rocket" of course - no one seemed to mind the trains and boats often dated from the 1880s.

Should be interesting to see what, if anything I can turn up about this.

I do know the Rocket service appeared on timetables and other promotional literature - it also appeared painted on some rail cars and trucks.

It even appeared on giveaway promotional items - what we call SWAG today - like this matchbook cover.

Going to the Dogs - PetSmart or Sappy Suckers?

Our discussion last week about the differences between “marketing” and “sales” came to mind as I was reading “Imagining Consumers” and, of all times, during a visit my wife and I paid to PetSmart on Saturday to get some food and other supplies for the two dogs we recently adopted. While there is no mention of pets in Imagining Consumers, our discussion last week left me thinking the folks at PetSmart have done a great job knowing their customers - and in many ways have capitalized on a whole new breed of consumer - the obsessed pet owner.    

We planned to adopt one older dog, and ended up with two very energetic yearlings – sibling Bassett Hounds we christened “Molly” – because my wife picked the name – and “Beauregard” because, as you may know, it’s a law that all hounds not named “Flash,” “Lightning,” or “Trigger,” must be named after Confederate Generals.  But this really isn’t about the pups, as cute as they are.  It’s about the power of marketing – and how marketers can readily take advantage of people’s emotions to create a booming market where there once had been a stagnant, albeit stable, one.  

We went into PetSmart and were amazed at the sales and marketing going on.  We were, of course, allowed to bring the dogs into the store – fun for them but at first I wasn’t sure it was a wise move on PetSmart’s part since I was so busy keeping those two weasels in check that I ignored the designer dog beds.  After all, what dog doesn’t need a $500 bed?  The reason why pets are allowed in the store would become evident shortly. 

Set up in the center aisle of the store we encountered a pet food company sales representative – an old fashioned huckster who had set up a table with little cups of a special dog food (Blue Buffalo, I think it’s called) and was ready with a sales pitch.  “What are your dog’s names?”  “What is their favorite food?”  I couldn’t lie, so I told her – “Pizza.”  We don’t give them pizza, but as anyone who has ever owned a dog knows “Food is fair game” and sometimes the pizza doesn't move fast enough.  

She must have thought I was serious since she launched into her selling points – it’s all organic, includes berries and grains as well as freeze-dried pieces of real lamb and prime beef – no “fillers” or “additives.” (or, apparently, pepperoni).   She eyed the two dogs, saw they were young, and immediately went into a detailed description of how this food is key to developing healthy teeth, strong bones, and will even make their breath smell better.  My wife told him how we’d been feeding them rice and plain ground beef.  “This food is even better – there are many nutrients unique to dogs they’re not getting with food you make yourself.”  That seemed like a strange claim – some days all I get is beef and rice.  More to the point, what special ingredients do dogs need that are so unique?  And do they need designer dog food to get it?  After all, I had a dog that lived to be more than 16 and all he ever ate was table scraps – he also slept on the porch on an old blanket – maybe he’d have reached legal drinking age if he’d had one of those fancy temperature controlled beds? 

But Chris decides to let Molly and Beauregard try a sample.  Mind you, these two are dogs . . . which means they eat anything and afterward, and only then, decide if it was good idea or not.  

“They really love it!” the sales rep exclaimed.  Logic wasn’t going to win the day – so a very expensive bag of very good dog food (apparently, I haven’t tried it so can’t confirm one way or the other) went into the cart.  

If you haven’t been into a large pet store lately I recommend you visit one – for the sheer fun of looking at the assortment of stuff that people will apparently buy for dogs and cats.  Two aisles of dog treats – all promising great taste, healthy teeth and gums, etc . . . There’s even food for vegetarian dogs and cats. Really, it’s food for the vegetarian people to not feel guilty about feeding Bessy the Cow’s innards to their best friend.  Believe me, the dogs or cats aren’t feeling guilty about eating other animals.  I couldn’t help but think the same people buying the vegetarian dog food are also signing up in droves for “pet health insurance.” 

I haven’t bought any yet – I’m waiting for the public option. 

Venturing down the dog biscuit aisle it became obvious why PetSmart is willing to risk having people bring their pets into the store.  It reminded me of the marketing tricks in the cereal aisle at the grocery store.  The colorful packaging on the kid’s cereal is placed at eye level for a four year old.  Pet foods have the same colorful packaging, obviously not designed to appeal to the pets (they never have any money) but to the people. Although I saw one lady showing two boxes to her dog and asking it which one he’d like better . . .  one was vegetable flavor, the other bacon – guess which one he chose?  “Free samples” were available – in an effort to “Let them, according to my wife, “pick a special treat they really like.”  She was getting a little too into this.  By the way, the two dogs weren’t much help since they loved everything they tried.  After all, they are dogs.  

Lest you think this is all puppy chow, there's real money to be made here. The pet industry is truly a growth business, and the U.S. pet industry has surpassed the toy ($21 billion) and candy ($25 billion) industries to rapidly become close to a $40 billion per year.  Pets can now be found in more U.S. homes than ever before (62%) – and Americans spend more money ($9 billion) on Fido and Fluffy's food than they do on their baby food for human babies ($6 billion).   

Pet supplies of all types are a growing market – and marketers are having a field day taking advantage of the human characteristics people assign to animals.  Day care for dogs can cost as much, if not more, than hiring a nanny to watch your kids.  Doggie Day Care is not a kennel – although “luxury kennel suites” are now commonplace for those out of town trips, complete with televisions.  No, doggies – or more specifically their two-legged “parents” can now purchase day care that includes organized “individual play time,” nap time in individual crates, and various organized games like group fetch.  I kid you not. Nothing similar for cats – proving once again how superior dogs  are . . . 

Don’t get me wrong.  I love my dogs.  I don’t abuse them and won’t tolerate anyone abusing an innocent animal.  But this whole pet industry thing is an example of marketing run amuck.  And of manufacturers and retailers actively imagining a consumer and then creating products designed to appeal to those consumers.  Dogs have survived with humans for millions of years on clean water, some leftover food, and a chance to curl up in front of the fire and sit with us.  Suddenly, the need for high-tech medicines, health insurance, gourmet foods, day care, and an endless variety of junk food for dogs are available. Are these really good for the animals or simply a way to profit from pet owners guilt at leaving the animal home alone?  Simple fact is you have to leave the dog alone – it’s the only way you can work enough hours to afford all the stuff and services the marketers have decided you need – and keep those large box pet super stores in kibbles. 

Is there a "there" there???

One of the things I've been thinking about for the past several days is the final paper for this class. One thing I've been interested in studying over the years is the development (and impact of that development) of industry and transportation in Connecticut's Thames River Valley. Some of the "big picture" questions I'm attempting to answer is "why did industry find this region so appealing in the mid-19th century? Was the transportation network (two railroad lines, one on each bank of the river, and numerous steamship lines) developed appropriate for the level of business at the time they developed or was it simply a matter of overbuilding as opportunists took advantage of the willingness of the inhabitants of the valley to succumb to "railroad" and "steamboat" fever? How much of the investment was local? How much was "foreign" to the region? And finally, what happened in the latter years of the 19th century and early 20th century to cause so much of this industry to disappear?

The Thames Valley presents an interesting microcosm - it had little natural resources, other than water and gravity, yet boasted a large textile (specifically thread) industry. 

Which leads to the paper. One suggestion Professor P made was to use this opportunity to develop a corporate history - in my case a history of the New London, Willimantic and Palmer, one of the two railroads in the Thames Valley, may be of interest. Or perhaps a closer look at American Thread in Willimantic, or Continental Canning in Uncasville. 

I do have some original sources for the railroad history, including this original Annual Report from 1851:

This contains the usual assortment of "good and wonderful news and hope for the future" one would expect to find in such a document from the time. But does it, and some similar ones from other years I have access to, offer enough to provide some background? 

Another source are the annual and bi-annual reports required by the New England state railroad commissions. These are filled with lots of numbers, data, and other tidbits that may provide some background details. Many of these can be found at Google Books - here's a link to one:

http://books.google.com/books?id=Ye_Y58Ld9SYC&pg=PA92&dq=annual+report+to+Connecticut+Railroad+commissioners+New+London+Northern&lr=#v=onepage&q=&f=false

Piecing together the monetary story of any of these companies would seem to be readily achievable, but I'm not sure there's a lot of "there" there. It may be interesting, and necessary for a truly complete history, to compare what was reported to the state commissioner with what the corporate books showed. But that may be a little too involved for this semester. 

Digging a little further, I found some interesting notes on the New London Northern RR (corporate successor to the NLW&P) - Fred Lincoln, a brakeman,received fatal injuries by coming in contact with a bridge in Norwich, Connecticut (NY Times, July 1, 1872). I also learned the first female dispatcher in U. S. railroad history worked for the New London Northern. 

These railroads were fairly small operations, so there may indeed be a "there" there. I'm just not sure yet. 

Great man or villain?

Gordon Gekko, expertly played by Michael Douglas in Oliver Stone’s 1987 Wall Street is one of my favorite movie characters of all time.  Douglas steals the show from his co-star, Charlie Sheen, who plays the impressionable young Bud Fox and Martin Sheen, who plays blue-collar union leader Carl Fox. Even President Bartlett is no match for Gekko. But this course isn’t about actors and film reviews, it’s about Corporations in America, and Wall Street attempts to answer some key questions about the nature of big business in America. More to the point, it asks questions what’s better – to make a living building something, or profiting by buying and selling the businesses others build. 

I suppose Stone wanted us to think of Gekko as the epitome of greed and evil – who could take or leave Bud Fox until he figures out Bud can offer him insider information on Blue Star airlines, the company Bud’s father helped build from the ground up. Bud allows himself to believe that he would be the president of the company, and he is, in name only, as Gekko begins sucking the marrow out of the employee pension fund, which is the corporation’s true worth. 

Sorry, but I don’t share Stone’s vision of Gekko. I think of him as one of the true capitalist heroes of old. Perhaps Gekko is not a villain, but a modern-day embodiment of Morgan, Carnegie, Rockefeller and the like. It’s difficult to see any of them coming across a choice property like Blue Star and not maximizing their profit. Gekko isn’t a villain – he’s a hero – a true modern day Robber Baron – a role Gekko clearly sees in himself and as he expresses during his “Greed is Good” speech to the shareholders at Teldar Paper.  I don’t think Gekko sees any of his clearly illegal tricks – wiretapping, insider trading, etc . . . as wrong – to him they’re just good business sense. His hero, Sun Tzu, wasn’t the least bit concerned about fair play – so why should he? 

Gekko violates his cardinal rule – he gets emotional about a deal – and young Bud Fox is able to use that to finally bring him down. 

What of young Bud Fox? Does he redeem himself by working with the SEC to bring Gekko down? Or, did was he simply an excellent student who finally defeated the master? 

I was curious to see there’s a sequel to Wall Street that’s in production right now. Early plot reports indicate Douglas, reprising his role as Gekko, is trying to “regain”  his status on the Street by predicting the impending money crisis and helping prevent it. Heck, the Gekko we know and love should be out there trying to profit from it. 

Silver, Gold and the Yellow Brick Road

I have to admit, I often think about money (who doesn’t?) but the readings for this week have me contemplating the “why” of money. In each of the readings, the author’s make the point (in differing ways) that money is power. That seems fairly obvious. By controlling the elements that give “money” it’s real value you control the value of the currency. But it goes much deeper than that. There’s the concept of “trust” at work here as well. If currency were strictly limited to the actual gold, silver (or, as Michael O’Malley points out, iron in the ancient world) in existence, the economy, and therefore opportunity for growth would be limited. The concept that such intrinsic value, brought on by the perceived rarity of both metals (although there are metals far more rare) is ordained by nature and not man seems logical enough. And the idea that over-inflated currency, caused by overinvestment and over-circulation was in large part responsible for the various economic panics and crises of the 19^th century is also a sound argument. I had trouble, however, making the leap to some of the hypothesis about these issues being tied directly to racial divides. Hopefully, when Professor O’Malley visits the class at our next meeting I can get a clearer understanding of his points.

 

Which brings us to the Wizard of Oz. I always thought it was a strange story, even when I was kid – although I did like the tin man. Oz is certaintly not as crazy as Alice in Wonderland. Apparently Baum didn’t have access to the same mind-altering substances as Jefferson Airplane. But it wasn’t until I read Rockoff’s “The Wizard of Oz as a Monetary Allegory” that I understood the symbolism throughout the story. The strength silver as a Midwestern “ heartland” movement, and the very symbolism of the word “Oz” (for ounce) makes perfect sense. I suppose Baum could have been more literal, but who would read a book or watch a movie called “The Wizard of Au”?

Rockoff acknowledges Baum never specifically mentioned the symbolism of the story in any diary, interview, or letter. Rockoff even mentions the liklihood that the symbolic elements of the story are a series of sly jokes. I would think of them as similar to the various jokes and puns in several contemporary Disney Pixar pictures – the kids think it’s a funny scarecrow talking, but the parents reading the book know what it really means.

Rockoff does establish that Baum had a tendency to make references to current affairs in his later writings. No matter, I’ve arrived at a whole new appreciation for the book, and now really wish Judy Garland had silver slippers instead of ruby ones. 

Finally Back Online

It's been almost two weeks since I've been online - a combination of a bad connection at PMRF in Kauai, where I've been, and issues with my work laptop and the variety of security software that prevents viewing or posting to "Social Networking Sites" has been giving me fits.

Anyway, I'm back home and have been enjoying this week's readings, although I obviously have some catching up to do. Will post on those readings a little later this evening.

Revolutionary Markets

Although this week's readings shared a common theme - the economic causes of the American Revolution outweighed the overtly political, reading them I couldn't help think about how primitive and fragile the world economy was during the mid- to late-18th century. 

It seems logical enough - limited markets meant that in a poor economic climate colonial merchants found themselves with too many imported English goods. To the English manufacturers a customer was a customer, and they spent little time concerning themselves with colonial merchants who felt slighted if their suppliers undercut them when they refused to buy more goods. Ultimately, with their pockets emptying the merchants decide to toss off the economic weight of the Crown  and go it on their own. 

One of the challenges faced at the time was one of limited markets. Primitive transportation, manufacturing, and communications limited not only the expansion of individual businesses but also where, when, and how those businesses could profitably sell their goods. 

In the 1770s Americans were either professionals - lawyers or bankers; farmers; or tradesman (mechanics, was a commonly used term at the time) - smiths, printers, coopers, sail makers and the like. (A fourth category, unskilled laborers, also existed of course, but they aren't german to this discussion.) 

By virtue of the fact these mechanics had limited ability to produce, and a limited market, they had a natural limitation on their potential revenue. The introduction of various mechanized means of production, commonly called the "Industrial Age," meant the downfall of the colonial tradesman. Who wanted to wait months for a rifle when one could be purchased - for less money - off the rack? And that mass-produced rifle could be repaired if needed cheaply and easily anywhere in the country.  A comforting thought if one was leaving Vermont headed out west. 

An how would one get our west? Train or steamboat. Such public works were unheard of in the 1700s, at least in North America. Building a railroad, all the rage in the 19th century, was not a task to be taken on by one tradesman. By their very nature, railroads required tremendous capital to plan, promote, and construct. All that before realizing a single cent of revenue. Corporations, in their various forms were the answer. 

Recently I finished reading Empire Express, David Haward Bain's epic work on the building of the first transcontinental railroad. It offers a far more detailed, and frankly academic, look at this massive project than Stephen Ambrose's "Nothing Like it in the World."  As I read one chapter detailing how the Big Three, in California, communicated with their agent, Huntington, in New York City I was amazed at the detailed telegraphed instructions that specifying how much rail, how many locomotives and cars, and how many spikes and mauls were needed at a specific point in time. Sometimes the wires would cross, literally and figuratively, a specific telegraph would be missed or delivered out of sequence, and Charlie Crocker's famed construction crews ran the risk of grinding to a halt. 

Business structure, namely the corporation, had evolved to meet the demands of the market, but communications were lacking. 

Ten years  ago I was amazed when I participated in a video conference for the first time. People in New Jersey, where the radars were being made and tested, those of us in Washington DC, and representatives from the shipyards in two locations. We were able to review in detail the goals and priorities for that week's work. 

"Sure," you might say, " the government can afford that." 

But times have changed - and this time the communication media is actually creating the market. Last night I participated in a video conference from my home with seven other people involved in an online publishing venture. It occurred to me that I've only met four of them in person. 

So, if those 1760-era producers in England had access to literally a world-wide market, would there have been an American Revolution? I detest "alternative" history, so I won't pursue the question. But it was kind of fun to ask it!

 

A quick test

Just to verify this thing works . . .