The Life and Legend of E. H. Harriman

The Life and Legend of E. H. Harriman

Maury Klein
Copyright Date: 2000
Pages: 544
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    The Life and Legend of E. H. Harriman
    Book Description:

    To Americans living in the early twentieth century, E. H. Harriman was as familiar a name as J. P. Morgan, John D. Rockefeller, and Andrew Carnegie. Like his fellow businessmen, Harriman (1847-1909) had become the symbol for an entire industry: Morgan stood for banking, Rockefeller for oil, Carnegie for iron and steel, and Harriman for railroads. Here, Maury Klein offers the first in-depth biography in more than seventy-five years of this influential yet surprisingly understudied figure.A Wall Street banker until age fifty, Harriman catapulted into the railroad arena in 1897, gaining control of the Union Pacific Railroad as it emerged from bankruptcy and successfully modernizing every aspect of its operation. He went on to expand his empire by acquiring large stakes in other railroads, including the Southern Pacific and the Baltimore and Ohio, in the process clashing with such foes as James J. Hill, J. P. Morgan, and Theodore Roosevelt.With its new insights into the myths and controversies that surround Harriman's career, this book reasserts his legacy as one of the great turn-of-the-century business titans.A UNC Press Enduring Edition -- UNC Press Enduring Editions use the latest in digital technology to make available again books from our distinguished backlist that were previously out of print. These editions are published unaltered from the original, and are presented in affordable paperback formats, bringing readers both historical and cultural value.

    eISBN: 978-0-8078-3803-7
    Subjects: Business, History

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. Acknowledgments
    (pp. xi-xii)
  4. Introduction
    (pp. xiii-xviii)

    At this end of the twentieth century the name of E. H. Harriman may be less familiar than that of his son W. Averell Harriman, who followed an already impressive career in business with long and distinguished service in diplomacy and politics. To any American living in the first years of this century, however, the name and face of E. H. Harriman were as familiar as those of his fellow titans J. P. Morgan, John D. Rockefeller, and Andrew Carnegie. Like them, he had become to the public the very essence of what he did. Morgan stood for banking, Rockefeller...

  5. Prologue: Mr. Kennan Writes a Biography
    (pp. 1-24)

    If in the bleak winter of 1913–14 George Kennan had paused to draw a balance sheet of his life, he would have found cause for the anxiety that gnawed at him. To all appearances he had enjoyed great success in his mixed career as explorer and journalist. At sixty-nine he was an elder statesman in the literary, diplomatic, and scientific circles that had been his home for three decades. Presidents and editors alike had long considered him the foremost American authority on Russia and sought his views on every turn of that country’s erratic political wheel.¹

    “George Kennan,” said...

  6. Part I. Duchy, 1848–1898

    • 1 Sources of Pride and Strength
      (pp. 27-35)

      For a time early in the nineteenth century the Harriman family seemed destined to an inglorious end in a watery grave. Three of William Harriman’s sons met with death at sea in very different ways. The eldest, William, died in a naval clash between English and French ships. Alphonso drowned in the waters off the Battery after the family moved to New York, and Edward simply vanished. His father had made him master of cargo on one of the vessels he fitted out for the West Indies, but the ship never reached port and was never heard from again. Three...

    • 2 Sources of Advancement
      (pp. 36-47)

      The firm of E. H. Harriman began life in a cramped office on the third floor of a building at the corner of Broad Street and Exchange Place. Henry did not long stay at the top of two flights of stairs, thanks to Richard Schell, a prominent operator who had close ties to Commodore Vanderbilt. The portly Schell came to like young Harriman as a broker but hated to wheeze his way up the stairs. He offered to give Henry enough business to cover his rent if he would move to the ground floor. Henry did so willingly and became...

    • 3 Sources of Growth
      (pp. 48-60)

      Railroads were the obvious arena for a man of ambition in the 1880s. As the largest and most dynamic industry in the nation, they were the catalyst for an industrial revolution that was transforming American life with bewildering speed. More track would be laid during the 1880s than in any other decade. Expansion wars of unparalleled ferocity raged well into the depression of the 1890s, giving rise to the systems that would dominate the railroad scene for much of the next century. A man entering the field during these years could find himself overwhelmed and confused by the sheer rush...

    • 4 Sources of Education
      (pp. 61-70)

      No photograph ever captured the true Wall Street of the nineteenth century because it could not record the sheer energy of a spectacle in constant motion. Wall Street was a still life only under the mantle of darkness or in those few fleeting moments of morning gloom when Trinity Church loomed like a nagging conscience above its empty streets.

      Through these narrow, crooked streets Harriman wound his way most days, still the financier looking to expand his horizons, released at last from the prod of failure and driven now by mounting ambition to climb beyond his firm into broader realms...

    • 5 Sources of Revelation
      (pp. 71-87)

      Harriman in Chicago was a fish out of water, a stranger in a strange land where he could not monitor Wall Street directly. Although the family traveled extensively, this was the first time they had lived for any time outside New York. Chicago struck their eastern eyes as a crude cowtown despite the progress it had made as a city. To make matters worse, tragedy struck only a few months after their arrival in Chicago. Little Harry, not yet five years old, contracted diphtheria and died in February 1888.¹

      The sudden, wrenching loss of his only son devastated Harriman just...

    • 6 Sources of Opportunity
      (pp. 88-102)

      The black hole of Harriman’s career lies in the years between the crisis of 1890 and 1898, when he emerged as a factor in the newly reorganized Union Pacific Railroad. It is, like his boyhood, a time about which he never spoke in later years, as if he had willed it out of existence. His biographers and critics touch these years only in passing because they can find little in them to unlock the most vexing riddle of all: how did the financial wizard and failed vicepresident of the Illinois Central Railroad emerge from obscurity to become the most dominant...

  7. Part II. Kingdom, 1898–1900

    • 7 Going West
      (pp. 105-117)

      Most of what has been written about Harriman bears a tone of inevitability, as if he was destined to have a spectacular career. This same tone carries over to his use of the Union Pacific as the vehicle for his leap to greatness, but there was nothing inevitable in either case. Nobody seems to have asked the obvious question of what first attracted Harriman’s attention to the Union Pacific. Nor has anybody raised an even more basic question: what drew Harriman’s attention to the West?

      Given Harriman’s later career, it is easy to forget that he had no experience with...

    • 8 Going for Broke
      (pp. 118-129)

      Nothing has done more to shape the Harriman legend than the myth that he found the Union Pacific a dilapidated wreck. What better way to demonstrate Harriman’s genius than to portray him as the Merlin whose magic touch transformed a decrepit antique into the very model of a modern railroad? Everyone from journalists to Schiff to Kennan perpetuated this story over the years. Averell Harriman, who was only six years old when his father took charge of the Union Pacific, insisted late in life that “its rusting rails were sinking into mud; its ties were rotted and broken, its rolling...

    • 9 Going Modern
      (pp. 130-147)

      Harriman understood earlier than most men the basic formula for success in the new era: to make money, a road had to haul greater loads at lower rates as cheaply as possible. This prime directive was simple but costly, especially in the vast, lightly populated West, where roads had been built as cheaply as possible to handle a modest traffic at high rates. To capitalize on the economic revival, they had to be made into modern lines like those in the East, where traffic density had always been much heavier. Since western roads were much longer, the cost of reconstruction...

    • 10 Going Back Together
      (pp. 148-161)

      Harriman’s rage for order extended into every corner of his life, including his family. No one was a more devoted or attentive father even at the busiest times. Every evening after supper, before Harriman plunged into work, he played with the boys in the study of the brownstone at One East 55th Street in New York, where the family lived for a time. One of their games required scattering pieces of paper around the room. Afterward Roland had to pick them all up and put them in a special drawer of his father’s desk.¹

      The children knew their father’s demand...

    • 11 Going Elsewhere
      (pp. 162-180)

      When Harriman joined the Union Pacific in 1897, he was an obscure banker whose only railroad connection was the Illinois Central. Three years later he stood on the threshold of a business empire that would catapult him into being the dominant figure in the transportation industry. While his achievement with the Union Pacific would have satisfied the ambitions of most men, it was for him merely a prelude to the foundation of an empire.

      Like an alert scout, Harriman had struck a promising trail through the dark and tangled forest of the modern industrial system. He already understood the symbiotic...

    • 12 Going North
      (pp. 181-200)

      Between October 1898 and April 1899 Harriman solidified his hold on the Union Pacific, launched his improvements program, went after the Short Line and Navigation companies, plunged into the intricate diplomacy of the Northwest, secured control of the Alton, bought into the Gulf line, and joined the board of the B&O. He had formed an alliance with Schiff and Stillman in which the bankers furnished the capital for buying or merging railroads and put them in Harriman’s charge. Despite all these moves, Harriman was still largely unknown to the public. His name seldom appeared in the papers and attracted scant...

  8. Part III. Empire, 1900–1904

    • 13 Seeking Order
      (pp. 203-213)

      The America to which Harriman returned from Alaska was a new world hurrying to be born. “The decade from 1896 to 1906,” enthused banker Henry Morgenthau, “was the period of the most gigantic expansion of business in all American history. . . . In that decade the slowly fertilized economic resources of the United States suddenly yielded a bewildering crop of industries. . . . All these swift growths demanded money: money for new plants money for expansion money for working capital. The cry everywhere was for money more money and yet more money.”¹

      The bankers were happy to furnish...

    • 14 Seeking an Advantage
      (pp. 214-224)

      The business giants of the Victorian era were notorious for their slavish devotion to work. It was said of Harriman’s good friend H. H. Rogers of Standard Oil that the only vacation he needed was “a shave and a trip up the Sound.” One railroad president told a friend wearily, “I have been working for fourteen years without a break. I think I deserve a vacation and I am going to take one, a real long one. I am going right away now.” A couple of days later the friend stopped by the office on business and was surprised to...

    • 15 Seeking Trump
      (pp. 225-239)

      One requirement for those who aspire to greatness is the ability to think the unthinkable, conceive plans so audacious that no one suspects they are even being considered, and then execute them fearlessly. During the frantic spring of 1901, as the Burlington slipped into Hill’s hands, Harriman jumped to a response that seemed as logical to him as it did fantastic to others: if he could not buy the Burlington directly, he would get it by buying one of the buyers.

      The Great Northern was out of the question; Hill and his friends clutched it too tightly. The Northern Pacific...

    • 16 Seeking Hegemony
      (pp. 240-253)

      The spectacular fight over the Northern Pacific earned Harriman another honor: his first extended profile in a New York daily. His name had drifted through the press with mounting frequency since 1899, but this was the first time a reporter bestowed on him the kind of personal portrait reserved for big newsmakers. The illustration accompanying the profile was an example of the bad generic art used by newspapers before the use of photographs became common. Its well-stuffed body looked more like Morgan than Harriman, and the fleshy face with its neatly trimmed mustache bore a mild resemblance to William Howard...

    • 17 Seeking the Perfect Machine
      (pp. 254-271)

      One clue to Harriman’s management style eluded all but a few observers sharp enough to look more at what than who his officers were. Nearly all the men who oversaw his roads had been trained as engineers: Horace Burt on the Union Pacific, Samuel Felton on the Alton, S. R. Knott of the Gulf line, and Julius Kruttschnitt of the Southern Pacific. Harriman wanted not merely top engineers to do the work but managers who understood what the engineers were telling them.

      As the newest member of this team, Kruttschnitt had to undergo the usual Harriman rite of initiation. The...

    • 18 Seeking the Perfect Organization
      (pp. 272-282)

      The mighty Pennsylvania Railroad took immense pride in calling itself the standard railroad of the world, but its officers were never so arrogant as to believe that they had nothing more to learn. They were always on the lookout for new ideas and techniques and kept a close watch on what other roads did. In 1908 the Pennsylvania sent a two-man team to inspect the Union Pacific. Their report, based on careful observation, carried a weight of authority far beyond public tributes in newspapers and magazines. It was the opinion of experts, it was private, and it was glowing in...

    • 19 Seeking the World
      (pp. 283-291)

      Railroad tracks might stop at the water’s edge, but transportation systems did not and neither did Harriman’s imagination. He emerged as a railroad man just as American interest in the Far Eastern trade was reviving in the wake of the depression. The Open Door policy formulated in the last years of the century signaled a clear American intention to seek its share of the China market.

      The flow of goods to and from the Orient passed over the transcontinental railroads and was growing steadily. A long haul could be made even longer if this traffic crossed the Pacific in American...

    • 20 Seeking Relief
      (pp. 292-304)

      The more prominent Harriman became, the harder it was for him to live anything resembling a normal life. The upper class had always lived in a world apart, but American culture was undergoing a profound change by the 1880s. Industrialization had swollen the ranks of the wealthy and near wealthy just as immigration had increased the legion of the poor. There emerged a new material civilization in which business figures replaced politicians and soldiers as national heroes. The proliferation of cheap urban dailies fostered this process by splashing the exploits of tycoons across their pages and titillating readers with accounts...

  9. Part IV. Immolation, 1904–1909

    • 21 Fighting the Tide
      (pp. 307-316)

      Harriman sat atop the largest transportation empire in the world and presided over so many systems and companies that his associates had trouble remembering which one he served at any given time. Fish once asked him to read a letter and treat it “as written to you as Director of the Illinois Central R.R.Co., rather than any other capacity, as it would not do for me to go about telling tales concerning the alleged shortcomings of Officers of other Railroad Companies.” This conceit of partitioning the self among corporate roles was typical of the era, but few titans had as...

    • 22 Fighting Formidable Foes
      (pp. 317-328)

      Sitting with a well-known financial writer in the dregs of a gray afternoon, indulging himself in a rare moment of introspection, Harriman toyed with a familiar question: was it his withering candor that made him so unpopular? Did he pay a steep price for his lack of tact? “I suppose people think so because I don’t truckle or toady to any of the big men,” he answered earnestly. “I don’t have to. Why should I?”¹

      The writer choked back a laugh at the idea of Harriman truckling to “big men” like Morgan or Hill, but knew he was dead serious....

    • 23 Fighting Others’ Fights
      (pp. 329-343)

      “The history of Harriman,” proclaimed one of an endless procession of Harriman watchers, “is a history of battle.” Given his combative nature, this was hardly a revelation. What is surprising is the number of fights that came to him rather than emanating from him. “If there was any fighting going on within earshot, however little it might concern him,” mused Otto Kahn, “he was tempted to take a hand in the fray, and the greater the odds against his side, the better.” Three bitter, highly publicized struggles did much to blacken Harriman’s name between 1905 and 1907. All were forced...

    • 24 Fighting a Former Friend
      (pp. 344-355)

      If the Equitable fight had been an isolated incident, Harriman might have escaped with no more than the bruises of a distasteful experience. But it triggered an inextricable chain of events that together would create what Otto Kahn called the “Harriman Extermination League” and transform his reputation from builder to cold-hearted wrecker, a second-generation robber baron. The Harriman of legend, which had been slowly congealing since 1900, emerged as a bizarre Jekyll-Hyde creature mingling doses of good and evil in every deed.

      This legend fit the schizoid character of American material civilization at the turn of the century. Victorian society...

    • 25 Fighting a Formidable Friend
      (pp. 356-371)

      On a wall in Harriman’s office hung a picture taken during an inspection trip through Mexico. The party had paused to examine a small railroad servicing a copper mine, and the photographer captured a dozen men, including Stillman, William Rockefeller, and Epes Randolph. By far the most inconspicuous figure in the group was Harriman, who was ignoring the camera in favor of a Mexican policeman with whom he was shaking hands. The policeman towering above the slight man in the baggy clothes and battered felt hat looked far more important and impressive.¹

      Anonymity had served Harriman well for many years,...

    • 26 Fighting Nature
      (pp. 372-385)

      Amid his trials of 1906, Harriman found to his dismay that the list of foes arrayed against him included nature itself, which unleashed its wrath in the form of two major catastrophes. Although the last thing Harriman needed was more fights, these offered a refreshing difference. They were clean and elemental, pitting force against force with the stakes clear and the outcome uncluttered by human conniving. Or so Harriman thought when he took up the challenges.

      Information was vital to the running of a far-flung empire. To get it reliably and privately, Harriman had in 1901 leased a private wire...

    • 27 Fighting for Survival
      (pp. 386-402)

      All the disparate forces bearing down on Harriman in this worst year of his life came together in December 1906 like strands of a tapestry woven by a malevolent fate. Against this inescapable weave Harriman fought with dwindling strength but undiminished resolution. To his friends he made no complaint regardless of how much pain and frustration he endured, but those near him saw the agony in his eyes and the drawn, pinched features. The fight was taking its toll; for the first time Harriman began to look like an old man.

      The month opened on a gloomily prophetic note with...

    • 28 Fighting Back
      (pp. 403-419)

      James Stillman never forgot the evening he had settled comfortably into his box at the opera to enjoy a pleasant evening of music. As the performance swelled, Harriman appeared suddenly at the entry and said, “Stillman, I want to see you a minute.” Reluctantly, Stillman left his seat and went into the hallway. “Come this way,” Harriman motioned, leading him downstairs past the cloakroom to the street, where, to Stillman’s surprise, a brougham stood waiting. They got inside, and the driver pointed the horses toward East 55th Street. “Well, Harriman,’” asked the perplexed Stillman, “what is it you want of...

    • 29 Fighting the Inevitable
      (pp. 420-442)

      During the turbulent winter of 1907, as Harriman prepared to testify before the ICC on his fifty-ninth birthday, he had remarked that another year might well find him ready to quit the game. When that milestone approached in February 1908, however, he told a reporter that things were too unsettled for him to call it a career. “It isn’t a case of changing my mind,” he explained, “but of not having had time to think about retirement.”¹

      Talk of retirement was very much in the air that winter among Harriman’s friends. Stillman and Schiff both felt an urgent need to...

  10. Epilogue: The Good That Men Do
    (pp. 443-448)

    The workmen who had been Harriman’s most constant companions during his last days turned their efforts to a less cheerful task after his death: blasting and carving a place in the ledge of solid rock for his crypt. Years earlier, when the Harrimans had first come to Arden, they had chosen a family plot in the far corner of the churchyard at Arden parish. It was the only spot in the enclosure where a ridge of bluestone rose to the surface. Little Harry had been buried there, and now his father was to join him. It was only fitting that...

  11. Notes
    (pp. 449-504)
  12. Index
    (pp. 505-522)