Battles Long Ago

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BATTLES LONG AGO

BATTLES LONG AGO

THE BRILLIANT SUCCESS and extraordinary growth of the American Express Company from 1850 to the close of the Civil War sounds, in this rapid narration of events, as though it were all too easy. Actually it was the result of unceasing activity and acute acumen on the part of its management. It maintained standards of absolute integrity in handling other people's money and valuables, yet was adventurous to a degree in seizing the opportunities offered by the rapid expansion of the national economy. At the same time it had to be alert against the machinations of unscrupulous competition. The price of survival was eternal vigilance, plus unyielding determination.

During the first decade of its existence the American Express Company survived the attacks of numerous rivals, the most dangerous of which was the United States Express. After doing each other considerable damage the two companies concluded an agreement for a profit-sharing arrangement. They continued to operate separately, but they were in effect partners. This enabled them to survive a terrific onslaught in the next decade.

An unending source of friction among the rival express companies was the scramble for railway contracts. The men who held the reins of the iron horse had the power of life and death over express, for the simple reason that no goods could move without their co-operation.

All sorts of means were used to appease the new lords of the high iron. The method generally favoured for win-fling a good contract with a railroad was to give its directors subscription rights to a block of an express company's stock. The theory was that these gentlemen would thereafter, in enlightened self-interest, see to it that the company was in a position to earn them some dividends. Another method of gaining face with a railway was to help finance its building or expansion. This was perfectly legitimate, since the extending rails opened up new territory in which the settlers would soon be clamouring for express service. American Express rejected the first method almost from the start, but it liberally subscribed to railroad stocks.

However, the railroads were not always properly grateful. A loud wail came from the Board of American Express in 1862 that the Hudson River Railroad was treating them "scurvily." In 1855 they had transferred their entire business from the North River Steamboat Company to the railroad. They were paying the railroad almost £100,000 a year, which amounted to one ninth of its total freight revenues. And what did they get? "Capricious demands and constantly changing rates!"

The argument was finally settled amicably, and the continuing relationship between the American Express Company and what is now the New York Central Lines was firmly established. Meanwhile, the scramble among the express companies for railroad contracts continued with scarcely abated ferocity for sixty-eight years.

Though these early squabbles seemed sharp at the time, compared to the aftermath of the Civil War the period just preceding it was one of almost perfect peace. The occasional outbreaks of feuding had been sporadic but not too dangerous. Each express company had tended to play in its own back yard, the boundaries of which were set by the railroads with which they were allied. Adams and Southern operated over the Pennsylvania, United States over the Erie, and American, of course, over the New York Central. Competition flared only at common points; that is, in cities where two or more of them operated.

During the war years there was so much business that they were too busy to try to cut one another's throats. But that situation could not last. In addition to the strain of readjustment and deflation after the war, the American Express Company had to face two direct attacks, one of which proved almost fatal.

The first, a minor raid, was the formation of the National Bankers Express Company. It represented a sort of legitimate blackmail, and American Express was able to buy it off before it got well started, by purchasing its interests for American Express Company stock and electing one of its promoters, Edward B. Judson, to its own Board of Directors.


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When it came to serving in the great war, they promised not only to hold his job open for him but to pay him full salary while he served his country.

This enlightened policy was later applied to all employees who volunteered in that they were given half pay. The words of the directors' resolution on this subject are worth quoting: 'It behooves all men who are true and loyal to come forward in their individual and corporate capacity to arouse by every effort in their power the dormant energies of the people, awaken them to a sense of the danger that overhangs us and our liberties, and send men at once to the support of the authorities. The influence of the company we represent is wide and extended over the whole country, its example will stimulate others to like patriotism. Our country's necessity will justify us, our large increased earnings will sustain us."

With the passing of the draft act and the raising of mass armies, the company discontinued... see: A CRISIS MET


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