In the decade following the election of 1871 the dynamics of territorial strategy reached their logical culmination. The superiority of the L & N in the quest for southern markets had always depended in part upon its virtual monopoly over north-south transportation. But the company’s stranglehold over that one vital gateway was in jeopardy. The change of gauge on the Short Line convinced many Cincinnatians that a southern connection through Louisville would never suit their commercial needs. Unwilling to abandon their vision of capturing the southern market, they fell back upon a long dormant alternative: construction of their own road through central Kentucky. The obstacles to such a project were herculean enough to discourage the most zealous adherents, but the Cincinnati interests met every trial with unflagging energy. The fight against this northern invasion preoccupied the L & N’s management for much of the decade.
During the same period, the L & N’s own southern invasion dominated the company’s version of territorial strategy. The pressure from the north spurred the road’s determination to sew up important markets and tap hitherto unexploited regions to the south. Other southern carriers were developing similar ambitions by the 1870s, but once again the L & N’s stronger financial position and energetic management gave the company an insurmountable lead. When attempts to revive the Lebanon extension proved futile, the management transferred its attention to an unexpected opportunity in northern Alabama. Confronted by a chance to develop the yet infant mining industry in that state, the L & N gradually sidled into the largest commitment of its brief history.
In 1865 the isolation of Cincinnati from direct connections to the South was virtually complete. Not a single railroad crossed the entire region between Harper’s Ferry and Nashville except the L & N. That road subjected Cincinnati merchants to rate and scheduling discriminations, and the Short Line controversy clearly demonstrated the futility of seeking an adequate route through Louisville. That left two alternative arteries: eastward by rail to Baltimore, coastal steamer to the South Atlantic seaboard, and inland by rail, or down the Ohio and Mississippi rivers and thence inland by rail.
Neither route was satisfactory. The first was circuitous and therefore time-consuming. The second appeared more promising because the Cincinnati-based boats could neutralize Louisville by rate discrimination. As long as the rivers reigned supreme Cincinnati did well, but Louisville (and other commercial centers) built the railroads precisely to end dependence upon the rivers. Even before the Civil War it was evident to any keen-eyed observer that the water carriers no longer held sway. Between 1865 and 1872 steamboat arrivals at the Queen City declined by over 33 per cent. The once heavy flow of traffic down the river to New Orleans was shifting steadily to the new east-west rail lines. In addition the circuitous transshipment of goods by water-rail routes caused northbound traffic on the Mississippi to absorb an ever larger share of the total tonnage.
When the Short Line fell under Louisville control and changed its gauge, Cincinnati interests were forced to rethink the central Kentucky route alternatives. Some skirmishing in that region had already taken place. The citizens of Richmond, in Madison County, asked the L & N in 1867 to extend the Lebanon branch thirty-four miles to their town. The company offered to construct a branch from Stanford to Richmond if the citizens of Madison, Garrard, and Lincoln counties agreed to purchase $750,000 worth of L & N stock and donate both the right-of-way and grounds for a depot. On those terms the L & N agreed to build the road immediately and integrate it into the system.
Hearing of this offer, certain Cincinnati interests made a counter proposal. Merchants of the Queen City had already promised a donation of $1,000,000 to any road connecting their city to the southeast through central Kentucky. As a stimulus to that link, they offered to build a line from Lexington through Richmond to a junction on the Lebanon branch near Mount Vernon. Since the cost of this road would amount to $2,000,000, and since it represented the first concrete section of a line through central Kentucky, the Louisville press sneered derisively at the proposal and urged its rejection. In March, 1867, the Louisville Board of Trade lent its weight against the invaders, and the city council responded with a $100,000 subscription to the L & N branch proposal. Even that pledge provoked an outcry for the Board of Trade had recommended a $200,000 subscription.
A bitter fight ensued. The Cincinnati interests argued that their proposal would put Richmond on a through line instead of a mere branch. In the end the L & N offer prevailed, however, because of its lower cost, assured financing, and promise of immediate construction. The tide turned on April 27, 1867, when citizens of Madison County pledged $350,000 to the L & N route. The Louisville Journal, gleefully recording the victory, observed that the people of Madison County “had been divided by the machinations of vulturelike Cincinnati and her aiders and abettors in Lexington.”1 Construction began in July, 1867, and the Richmond branch opened for business on November 8, 1868.
Elsewhere the L & N fended off potential encroachments from both Cincinnati and Evansville. In mid-1866 the latter town, shut out of its southern markets by the L & N’s growth, launched an energetic campaign to recoup its losses. Within a year interested parties had advocated construction of a railroad through Henderson, Kentucky, to a connection on the L & N’s Memphis branch and purchased the Edgefield & Kentucky and Henderson & Nashville roads as connecting links. A charter was then secured from the Kentucky legislature under the name of the Evansville, Henderson & Nashville Railroad (E H & N). In it the company also received the right to erect a bridge across the Ohio River at Evansville.
Galvanized by the Louisville press and afraid of any penetration of western Kentucky, the L & N quickly took steps to neutralize the invasion. It promptly subscribed $100,000 to a rival project whose interests more nearly complemented those of the L & N, the Elizabethtown & Paducah Railroad. This road, which traversed the heart of western Kentucky, ran perpendicular to the E H & N. Its connection with the L & N would nullify any advantages the latter road could give Evansville merchants over Louisville merchants. Not surprisingly the Board of Trade and the city council promoted the road. The city subscribed $100,000, residents of Louisville another $103,000, and all of the original directors hailed from Louisville. But the basic route of E H & N opened in April, 1871, while the Elizabethtown road took over a year longer to complete. Until it opened, Evansville’s merchants continued to nibble at Louisville’s (and the L & N’s) western flank.
Evansville was not the only river port casting covetous glances at southern markets, but Cincinnati’s threats made the others pale by comparison. By 1870 the Queen City’s southern aspirations were in a desperate plight. Its shrinking southern trade scarcely reached the Tennessee state line, while its strong influence in the deep South eroded steadily because of poor transportation facilities. Baltimore merchants retained a firm hold on Virginia and the southeastern region, and the L & N’s monopoly over rail connections through Kentucky threatened to drive Cincinnati merchants from the trade altogether. Unwilling to lose that lucrative prize, the Queen City’s merchants swallowed their defeats in the Short Line and Richmond branch controversies and plotted a new invasion of central Kentucky.
One enormous obstacle confronted them in the form of their own state constitution. In the speculative frenzies of the 1830s and 1840s numerous Ohio towns and counties had lavished generous subscriptions upon transportation projects of all kinds. Too often this overextension of credit had led to default, repudiation, and a disastrous loss of confidence in town and county securities. To safeguard against future abuses of public credit, a special provision was inserted into the Ohio constitution of 1851. This clause specifically forbade the state legislature from authorizing any city, town, or county to become a stockholder in any corporation, association, or joint stock company. Nor could any municipality even raise money or lend its credit to any such ventures.
The constitutional restriction doubtless strengthened public credit in Ohio, but it now threatened to strangle Cincinnati’s commercial ambitions. Any railroad through central Kentucky to a connection in Tennessee would require a lot of capital, and it was highly unlikely that entrepreneurs would undertake so formidable a project without some guaranteed financial support from the Queen City. Private investors in the city were willing to put up money, but their contributions could only be minimal without some assured financial arrangement for the entire project. Any such road would necessarily be a high risk venture, for its value (like the Lebanon extension) would be relatively small until the completed line opened. The burden of initiative, therefore, had to come from the city, but the constitutional limitation tied its hands.
This crippling handicap killed off several attempts to push a central Kentucky project, and accounted for Cincinnati’s burning desire to win the Short Line controversy. When that hope perished and no fresh miracles occurred, Cincinnatians grimly determined to meet the constitutional obstacle head-on. They could either amend the constitution or circumvent it with a bill that met the letter of the law but ignored its spirit. Most citizens naturally preferred the first approach, but agitation for a suitable amendment during the early months of 1869 brought no response from the legislature. Reluctantly Cincinnatians took up the second possibility.
During the fall of 1868 Edward A. Ferguson, a brilliant corporation lawyer and solicitor for the Cincinnati Gas, Light and Coke Company, uncovered a possible loophole in the constitutional limitation. In brief Ferguson argued that the state could not lend money to a privately owned railway, but it could construct a road as a municipal enterprise. On this premise he drafted a bill authorizing cities with a population of 150,000 to build railroads; by coincidence Cincinnati was the only city in Ohio having that large a population in 1869. On May 4, 1869, the bill received the governor’s signature after passing the Ohio senate 23–7 and the house 73–21. Later that summer Cincinnati’s citizens approved the project in a special election and voted $50,000 for preliminary surveys.
The Ferguson Act transformed the central Kentucky road from a wistful vision into a concrete reality. The survey of possible routes narrowed quickly to three southern termini: Nashville, Knoxville, and Chattanooga. Delegations from a host of Kentucky and Tennessee communities flocked to Cincinnati to press their arguments along with interested emissaries from towns in the deep South. The committee considering routes quickly discarded Nashville because the proposed road would parallel the L & N too closely. After an early split over the remaining two cities, the committee agreed unanimously upon Chattanooga. Having arranged a special election for June 26, the committee, the Cincinnati Board of Trade, the Chamber of Commerce, and the city council waged an intensive campaign in favor of the project. It paid off handsomely. The voters approved the road, now known as the Cincinnati Southern Railway, and approved a $10,000,000 bond issue for its construction.
Some Cincinnati interests balked at the project, objecting to its enormous cost and the dubious constitutionality of the Ferguson Act. The loudest complaints were silenced by a freight blockade in Louisville during autumn of 1869. A much more serious opposition arose in Louisville, where the Courier-Journal took the lead in denouncing the proposed road. Though Louisville’s criticisms were deeply partisan, they bared genuine weaknesses in the project. The bill that would be placed before the Kentucky legislature deliberately left the final route shrouded in ambiguity. It asked blanket permission to build a road through any of thirty-nine counties and to cross the Tennessee line at any point along a 120-mile border. Moreover the new company would seek financial aid from Kentuckians, but the constitutional proviso barred the company from issuing any stock to contributors. The Louisville press made much of the argument that Cincinnati was asking Kentuckians to support the Queen City’s commercial ambitions with no promise of return.
The most difficult task of the Cincinnati Southern’s advocates was to obtain charters from the Tennessee and Kentucky legislatures. If the Louisville and L & N interests were going to scuttle the project, they had to make their stand at Nashville and Frankfort. Upon this clash of well fortified lobbyists hinged the future of Cincinnati’s commercial future in the South, and both sides mobilized every available talent and financial resource for the battle. Early in the campaign it became apparent that Tennessee was indefensible. Although a party of prominent Louisvillians appeared to lobby against the bill, and some Tennesseans opposed it (notably representatives from Knoxville and Nashville), the act was approved late in 1869 and signed into law on January 20, 1870.
After that brief skirmish the scene shifted to the main battlefield. The Kentucky legislature convened on December 6, 1869, and was immediately besieged by the contending parties. The crucial House Committee on Railroads was sharply divided. Its chairman, the handsome, articulate General Basil W. Duke, often served as the L & N’s chief lobbyist and actually led the campaign against the Cincinnati Southern bill. W. B. Caldwell, of the L & N board, also sat on the committee, and one other member consistently opposed the bill. Three committee members strongly supported the measure; the other four members took no firm stand during the early stages.
Relying upon his superb oratorical and manipulative gifts Duke marshalled the defenses with magnificent élan. But he was not the only illustrious name on the premises. The Cincinnati forces enlisted John C. Breckinridge of Lexington, former Confederate general and cabinet officer, and perhaps the most popular man in the state, to lead their offensive. Discussion on the measure began in January, 1870, at which time Ferguson and R. M. Bishop, another Cincinnati Southern trustee, joined the Cincinnati contingent in Frankfort. When Breckinridge’s brilliant rhetoric made a powerful impact upon the legislature’s joint railroad committees, the Louisville city council hurriedly engaged Isaac Caldwell, one of the city’s most prominent lawyers, to reinforce their ranks. After some complex maneuvering Duke managed to report the bill out of committee without recommendation. On February 15 it came before the Committee of the Whole House and touched off a furious debate.
While the rhetoric flowed, the Ohio River Bridge opened. With blithe disregard for the political repercussions the Louisville city council invited the entire state legislature to participate in the festivities. The Cincinnati forces promptly accused the city council of trying to bribe the legislature, and the Queen City lost no time in extending its own invitation to the lawmakers. Cincinnati’s Kentucky suburbs, Covington and Newport, soon followed with overtures of their own. The house at first refused all invitations only to reverse itself when the senate accepted the whole lot. The placing of all the invitations on an equal footing provoked considerable grumbling in the Louisville press. After all, it was their city that had a bridge to open!
Cincinnati won the entertainment battle handily. The Louisville excursion, plagued by foul weather throughout, ended in a disastrous rout salvaged only by a gala banquet at which the bourbon flowed freely. By contrast the Cincinnati festivities went smoothly and elegantly. At the concluding banquet George H. Pendleton, a nationally prominent Democratic leader, presided. Amidst the wave of toasts, politics and economic aspirations intermingled freely. On their way back to Frankfort the legislators stopped off at Covington, Newport, and Lexington for short receptions. Most observers agreed that Cincinnati had pulled an impressive coup, at a cost to the city of $6,200. For its debacle Louisville had spent $4,371.
Unfortunately for the Cincinnati interests, hospitality played a minor role in the final deliberations. The Committee of the Whole amended the bill beyond all recognition, and in early March the house tabled the measure by a 49–43 vote. Efforts to revive it during the session failed, whereupon Senator John Sherman of Ohio tried to obtain authority for a right-of-way from the federal congress. His attempt proved abortive, however, and for the moment the Louisville forces had successfully repelled the northern invaders.
There is no doubt that the contending lobbies expended a lot of energy and money in trying to sway the legislators. The amount of public and private funds spent ran into many thousands of dollars on each side, not including the junket mentioned earlier, and for a short time Frankfort became the entertainment center of the state. What effect the lobbyists had upon the final outcome is impossible to measure. The precise role of the L & N in that lobby is no less difficult to determine. By 1900 the L & N would acquire a reputation for meddling in state politics that rivalled the public image of the Pennsylvania Railroad.
However accurate that reputation might be, and it needs careful qualification, it can be misleading to project it back into the company’s entire history. There is evidence to suggest that the city of Louisville and its mercantile community opposed the Cincinnati Southern bill much more actively (and openly) than did the L & N. In fact the conflict in Frankfort occurred just at the time when the quarrel between the city and the company was ripening. One historian has even offered the intriguing opinion that the city council opposed the incumbent L & N board in the election of 1871 partly because it felt that Newcomb’s administration had been too lethargic in its fight against the Cincinnati Southern bill.2
After the bill’s defeat, the Louisville community of interests tried to close ranks and seize the initiative. New transportation projects were unfolded and received the city’s enthusiastic backing. While some of the projects eventually became realities, their main purpose from Louisville’s point of view was to undercut the Cincinnati Southern. In Ohio dissension threatened the project from within as a bill to repeal the Ferguson Act was introduced into the legislature. Once again the twin issues of cost and constitutionality bedeviled the project’s advocates, and for a time Louisville seemed to have driven its foe from the field. But Cincinnati’s position in southern markets continued to shrivel, the L & N began to prosper from its own expansion program, freight blockades and rate complaints mounted steadily, and no relief appeared from any quarter. Relying upon the blunt logic of commercial necessity, the Southern’s advocates braced for a second assault upon the Kentucky legislature.
Well supplied with funds, the Cincinnatians invaded Frankfort in January, 1871. It became apparent early that bribery and other chicanery would be tolerated, even approved; the only morality on the subject pertained to the source of money. Most of the lobbyists agreed that the war chest should come from private contributors rather than from the public coffers. Ferguson noted candidly that “it was his opinion, and he did not care who knew it, that if a . . . corruption fund was to be used at all, it should be raised by private subscription.”3 Once again the Southern carefully selected its agents for the canvass.
After an acrid struggle in committee the bill came up for vote in the house on January 25. Despite the agitation (or perhaps because of it) thirteen members absented themselves as the measure went down to defeat by one vote, 44 to 43. Then, to everyone’s astonishment, a member of the victorious faction moved successfully to reconsider the bill. The sergeant-at-arms herded in as many bewildered legislators as he could find, and this time the bill passed by one vote, 46 to 45. While the lower body gasped in disbelief, the storm of controversy transferred to the senate. There opposition to the Southern was more cohesively organized, and on February 8, 1871, the bill suffered a decisive defeat by a margin of 23 to 12.
Their hopes quashed again, the Cincinnati and central Kentucky newspapers lashed out at both the Louisville interests and the L & N. In typical fashion the Lexington Kentucky Gazette dismissed the Kentucky senate as “merely a legislative committee in the interest of the Louisville & Nashville Company.”4 The attempt to blame the L & N for the Southern’s defeat appealed to the rising emotions of central Kentucky at the expense of distorting that company’s actual role. Here again the L & N, though active in its opposition, seems to have played a lesser role than the various Louisville interests. But the affair helped nourish the developing image of the L & N as a ruthless, monopolistic corporation.
Once more the disappointed Cincinnatians sought federal relief. Ferguson and the other Southern trustees took their case directly to President Grant, while separate envoys from Atlanta and Chattanooga hustled the congressional delegations. Nothing came of the agitation. Then on January 4, 1871, the Southern’s advocates got their first break when the Superior Court of Cincinnati ruled the Ferguson Act constitutional. The elated Cincinnatians and their Kentucky allies now decided to switch tactics. Having failed to breach the legislature, they tried to influence the composition of that body in the elections of 1871. Since half the state senate and the entire house were up for election, the Southern’s supporters worked to make their project a major issue in the campaign. The Queen City poured money and agents into the canvass and received unexpected help that summer when the L & N was again charged with rate discriminations. The rival camp was in fact badly split, for that summer the Louisville city council was busily trying to seize control of the L & N’s board.
In the state elections the powerful Democratic party retained its hold, but the Southern’s adherents gained ground in both houses of the legislature. When the new legislature convened on December 6, both sides curiously retrenched their lobbies, evidently feeling that their agents would do more harm than good. The new composition of the house made victory for the bill’s advocates there a foregone conclusion; the measure passed by a 59–38 margin on January 13, 1872. The Louisville interests took their last stand in the senate where, after some confusion, the vote ended in a 19–19 tie. Lieutenant-Governor John G. Carlisle cast the deciding ballot in favor of the measure, and the battle was over.
When the governor signed the final bill on February 13, the L & N’s rail monopoly was officially broken. The end did not come quickly, for the Cincinnati Southern faced enormous construction difficulties. The final route required no less than twenty-seven tunnels and 105 bridges. Delayed by the Depression after 1873, the road did not reach Chattanooga until 1880. Nevertheless, the mere existence of the project wrought a profound influence upon the L & N’s strategic thinking. It reinforced the hand of men like Fink, who felt that the old strategy was no longer viable. The L & N’s prime territory had been breached and could never again be sealed off. Unwilling to discard the territorial strategy entirely, Fink and his supporters pushed their argument that the territory must be enlarged and stabilized at all costs. That meant in essence that the invasion from the north had to be met by an energetic invasion of the South.
The prolonged struggle over the Cincinnati Southern, coupled with the disputed election of 1871, put an intense pressure on the L & N to fulfill some part of the southern expansion program. The monopoly over the north-south rail route had been broken; relations with the city of Louisville and a large portion of its mercantile community were disintegrating; and the growing wrath of certain interests toward the L & N was threatening to evolve into regulative legislation. So rapidly was the economic environment changing that the L & N, if it wished to maintain its lead over other southern roads, would have to renovate its concept of territorial strategy.
As matters stood, the road to Memphis had been secured, but the Lebanon branch remained an impotent spur line. Except for the clogged artery through Nashville, Chattanooga, and Atlanta, the L & N lacked a reliable through line to the sea. Meanwhile competitors seemed to be springing up everywhere. The E H & N completed its line in 1872 and promptly sold out to the St. Louis & Southeastern Railway (S L & S E), which could then haul freight from East St. Louis to Nashville. To the south, the Central of Georgia was beginning to extend its influence into Alabama, and new roads in the Gulf states were combining to vie for through traffic. The gradual penetration of the interior by roads terminating in such Gulf ports as New Orleans and Mobile intensified the existing struggle for markets in the region south of Tennessee. In 1870 a road linking New Orleans to Mobile opened and, together with the existing Mobile & Montgomery (M & M) Railroad, created a formidable rail- water line for through traffic into the interior.
Beseiged on every flank by the frenetic growth of transportation facilities, the L & N searched desperately for some effective counterstroke to extend and protect its territory. All the logistics of the situation pointed to the region due south of Nashville. Northern Alabama abounded in undeveloped mineral and agricultural resources needing only a fresh transfusion of capital to exploit them. No major railroad line had yet invaded the area, and the local projects there were floundering, anemic operations. Any southern penetration by the L & N would not only develop a promising local business but also construct a vital link in a through line to the Gulf.
Such a southern offensive, if conducted promptly and vigorously, might bring rich benefits to the L & N. No less important, however, were the defensive considerations, in which the real essence of postwar territorial strategy can be clearly observed. If the L & N ignored the opportunity or even hesitated, some rival company might invade the region. A truly powerful adversary to the south, developing a profitable local business and serving as a link in a through system, could effectively shut the L & N out of the lower South. That could render the company a fatal blow, for it had little chance of penetrating the areas north of the Ohio, west of the Mississippi, or east of the Cumberland Plateau. Surrounded by strong, expanding systems the L & N would be reduced once again to a local road and might eventually be absorbed by one of its encroaching rivals.
Fink resolved to avoid this gloomy fate. His opportunity came during the spring of 1871 in the form of a proposition from James W. Sloss, president of the Nashville & Decatur Railroad. In essence Sloss offered the L & N a chance to extend its influence as far south as Montgomery, where connections could be made for a through line to the major Gulf ports. The stunning impact of his invitation grew out of a bizarre sequence of events unfolding in northern Alabama.
These events traced their roots back to the very settlement of the state. From its beginning Alabama was sharply divided in its economic activity. During the antebellum period the central and southern counties emerged as an important sector of the cotton belt. Most of the region’s commercial activity centered around agriculture, and Montgomery soon became a leading cotton market. By virtue of their wealth, influence, and initiative, the cotton planters thoroughly dominated the state government and gave scant attention to the mountainous northern counties. That area, though not lacking in good farming land, never achieved the agricultural prosperity of its southern neighbors. It did happen to possess one of the world’s richest deposits of coal, iron, and other mineral ore. In a preindustrial age, however, such potential sources of vast wealth went largely unnoticed and unappreciated.
Nothing better symbolized the plight of northern Alabama in the early nineteenth century than the fabulous Red Mountain, located near what is now the city of Birmingham. A huge, rich depository of iron ore, the mountain was for decades known only to the Indians and travellers crossing it on the old road to Montevallo. In some spots the churning wagons ground rocks into a fine red powder that mystified the observers who examined it. The story of the strange red powder spread throughout the region, but it served only as entertainment. The powder was considered to have no other value than for dyeing breeches.
Some settlers in the northern counties discovered coal and iron as early as the 1790s, however, and made earnest if somewhat primitive attempts to exploit it during the next five decades. Significantly, the state’s first blast furnace, situated in Franklin County, opened in 1818, a dozen years before Alabama’s first cotton mill went into operation. Relying exclusively upon cedar charcoal for fuel, the furnace did a thriving local business in iron until 1820, when an unknown epidemic decimated the work force and forced a shut-down. During the next two decades similar enterprises sprang up in surrounding counties. The Roupes Valley Iron Works in Tuscaloosa County opened in 1836, Talladega County began mining coal in 1831, and by 1850 some 200 men were employed in the coal trade in Shelby County alone.
These early ventures were all local enterprises catering to the needs of settlers for tools, cookware, stoves, and other iron products. The marketplace was severely limited by the crude roads and fickle waterways. The only major river, the Tennessee, disrupted traffic at the great Muscle Shoals rapids, and new or improved turnpikes came to the region at a glacial pace. Despite these handicaps, coal mines, furnaces, forges, and related works continued to develop. The growing migration into the area and the final ousting of the Indians increased the local demand for iron products and fuel. The coal business especially required both energy and patience, for the settlers knew nothing of the mineral’s value. One early Jefferson County miner, David Hanby, laboriously floated his coal down to Mobile in flatboats as early as 1840. At first the residents of that town refused to buy it. In desperation Hanby gave some of it away and hired a Negro to teach people how to burn it. By 1844 he had a modestly prosperous business, but the treacherous river claimed a heavy toll of his flatboats.
By 1850 the fame of Alabama’s mineral deposits had spread overseas. Sir Charles Lyell, the English geologist, visited the Tuscaloosa region in 1846 and wrote an enthusiastic description of the bituminous beds there. Two years later the state legislature appointed Alabama’s first state geologist. The appointee, Michael Tuomey, made invaluable contributions to the scientific exploration of the state. For his services, however, he received no compensation or even expense money beyond his meager stipend for teaching at the University of Alabama. Not until 1854 did the legislature grant any appropriation for geological work, at which time Tuomey resigned his professorship and undertook an exhaustive two-year survey of the state’s mineral resources. His death in 1857 cut short a brilliant career and left Alabama without its most knowledgeable expert on mineral deposits. During the few remaining years before the Civil War, the planter-dominated legislature showed no further interest in minerals, and Tennessee remained the leading producer of iron in the antebellum South.
The Civil War wrought a striking change in Alabama’s attitude. Having neglected its mineral resources for years, the state soon became one of the South’s few industrial bastions. Much of the credit for this transformation belonged to General Josiah Gorgas, the Confederacy’s ingenious and energetic chief of ordnance. A native Pennsylvanian, Gorgas married a Mobile girl and so knew a great deal about Alabama. Painfully aware that the South lacked every facility for fighting a modern war Gorgas waged a herculean campaign to develop industrial resources. He exerted every pressure upon Alabama to encourage mining and manufacturing enterprises. After a sluggish start the state responded and soon became a vital arsenal for the southern cause. During the war sixteen blast furnaces with a daily capacity of about 219 tons and six rolling mills with a daily output of eighty-five tons operated until northern invaders destroyed them. Innumerable coal mines, forges, foundries, bloomeries, and blacksmith shops also contributed their output to the South’s small industrial backbone.
The exigencies of war did much to create the modest beginnings of an industrial economy in Alabama; the devastation of war nearly destroyed it. Federal troops or retreating Rebels demolished every furnace and rolling mill in the state along with most of the forges and foundries. But the conflict clearly outlined the vast industrial potential of the region, and in the debris of reconstruction a small corps of energetic entrepreneurial visionaries determined to exploit it. In every case these men ran up against one immutable fact: no industrial development could take place in Alabama without first creating a decent transportation system to reach key markets. Inevitably, then, Alabama’s postwar entrepreneurs blended a variety of railroad schemes into their mining and manufacturing activities. Once again they faced the hostility or indifference of the powerful planter interests.
During the Civil War six counties—Bibb, Jefferson, St. Clair, Shelby, Tuscaloosa, and Walker—furnished nearly all the state’s coal supply. Nine counties—Bibb, Calhoun, Cherokee, Jackson, Jefferson, Lamar, Shelby, Talladega, and Tuscaloosa—produced virtually all of its iron. These counties formed a bowl-shaped tier across the northern part of the state and were doomed to isolation without a viable railroad connection. The most politic way to rally support for such a road was to appeal simultaneously to the state’s patriotism and self-interest. The perfect project for such an appeal would be a north-south railroad traversing the entire state. The road would link the disparate extremes of the state together and allow a profitable interchange of goods between them.
The most important antebellum railway projects ignored this rationale. Early attempts at internal improvements proved disappointing and were devoted largely to the needs of the cotton belt. Alabama’s first railroad, the Decatur & Tuscumbia, originated in 1830 as an effort by a planter to haul cotton around the Muscle Shoals rapids. A railroad through the mineral region had been sought in vain since 1836, but most of the struggling local lines under construction were anchored to the cotton region. By 1852 the state possessed only 165 miles of track, all of it in three lines. In 1840 the people of Alabama expressed a preference for macadamized roads instead of railways even though the Internal Improvements Commission that same year expressed doubt that such roads could be built. The state’s lagging progress on railway construction prompted a stern rebuke from that apostle of southern economic development, J. D. B. DeBow: “God may have given you coal and iron sufficient to work the spindles and navies of the world, but they will sleep in your everlasting hills until the trumpet of Gabriel shall sound unless you can do something better than build turnpikes.”5
Within a decade Alabama took DeBow’s admonition to heart. The legislature granted charters to several rail projects designed to give the state an efficient if skeletal system. The Tennessee & Alabama Central Railroad (chartered 1853) would construct a road from the Tennessee- Alabama state line to Montevallo, Alabama. At Montevallo, near Calera, it would intersect the Alabama & Tennessee River Railroad (chartered 1848), which was to run from Selma to Gadsden. A third road, the Northeast & Southwest Alabama (chartered 1853), would build from Meridian, Mississippi, toward Chattanooga. The point at which this road crossed the Tennessee & Alabama Central naturally became a source of intense interest to planters, industrialists, shippers, and speculators alike. A final project, the South & North Alabama (chartered 1854), would construct a road from Montgomery to meet the lines converging upon either Montevallo or Calera.
Unfortunately the state’s good intentions did not translate readily into effective action. The conflict between northern and southern interests retarded legislative appropriations, and the companies failed to generate much capital on their own. The Tennessee & Alabama Central completed the twenty-seven-mile stretch between the state line and Decatur, on the Tennessee River, in 1860. By that time two connecting roads in Tennessee, the Central Southern and the Tennessee & Alabama, had finished construction between the state line and Nashville. On the eve of the Civil War, then, three independent companies were operating a line between Nashville and Decatur. But the Tennessee & Alabama Central made no effort to crack the rugged mountain country south of Decatur. On December 13, 1860, it surrendered all rights for constructing that portion of the line to the Mountain Railroad Contracting Company.
The other companies did no better. The Alabama & Tennessee River built only a section from Selma to Talladega by 1861, and the Northeast & Southwest scarcely got off the ground. The South & North Alabama finally organized in 1858 and made preparations for work, but little track went down before the war. The Mountain Company actually commenced construction south of Decatur but made little headway before the outbreak of hostilities. Still the north-south roads claimed the most attention and controversy. In 1858 a young engineer, John T. Milner, was assigned by the legislature to survey a practical route for the Central road. Entranced by Red Mountain and the surrounding region, Milner realized the potential for growth if a railroad could be pushed through. In his 1859 report he emphasized that “the Central Railroad occupies the most important position for the people of Alabama of any enterprise that ever came before them.”6 His report was a carefully reasoned panegyric of the region and its resources, and Milner subsequently became an ardent supporter of the project.
Two other men led the long fight for a north-south railroad in Alabama. The foremost advocate of. the road was Frank Gilmer, a wealthy merchant and cotton planter residing in Montgomery. When he migrated to Alabama at age 21, Gilmer crossed Red Mountain and was profoundly impressed by the powdery red dust. Taking some rocks in his saddlebags to Montgomery, he learned that they were solid iron ore. By 1850 he amassed a small fortune in the mercantile business, but the vision of Red Mountain’s vast potential haunted his mind. Like others before him, he saw that a railroad through Jefferson County would allow large-scale mining enterprises; unlike others, he threw his support behind every project seeking that route. The South & North Alabama became his first love and gradually absorbed most of his time and fortune.
James W. Sloss, a native of Limestone County, rose from humble origins to a fortune in mercantile trade and land speculation. He owned several plantations, had extensive investments in the northern counties, and wielded considerable influence in state and local politics. Recognizing the value of rail connections early, he became president of Tennessee & Alabama Central and built the northern end of that line. When he saw that the company could never complete its southern line, he joined Gilmer in organizing the Mountain Company to build the central road with state aid. Eventually the South & North road absorbed that company and undertook the task of constructing the entire route from Montgomery to Decatur.
The project itself was a devilish undertaking. The northern mountains ran perpendicular to any north-south route, which meant a lot of expensive blasting. Deeply influenced by the well-planned Georgia system of roads, Milner had suggested in his 1859 report that the state furnish most of the necessary capital as Georgia had done for the strategic Western & Atlantic. Despite some opposition the legislature adopted Milner’s report and his proposed route, which intersected the Northeast & Southwest road at Elyton, near Red Mountain. Not until 1860 did the legislature make its first appropriation for the road, a scant $663,135, whereupon Milner joined Gilmer, Sloss, and other Alabama businessmen in the venture. By that time, however, the sectional crisis overshadowed every activity and reinforced the reluctance of Alabamans to invest in risky ventures. Limestone County reneged upon its subscription, as did some lesser holders. Doggedly Gilmer took up the defaults on his own until he held 75 per cent of the South & North.
Work plodded along slowly through the mountains. Some track was laid and more grading was completed, but construction soon stopped for lack of funds. The secession crisis briefly distracted everyone’s attention. Most of the coal and iron men voted against seceding only to devote their full energies to the war effort once the issue was resolved. The Confederate government, desperately in need of mineral resources and transportation facilities, provided some aid for Gilmer’s struggling enterprise. With this help he managed to operate a patchwork local road during the latter stages of the war. He also tied his interests together by joining with certain wealthy Montgomery stockholders in the South & North to erect a blast furnace near the road at a place later called Oxmoor. By 1863 Gilmer had firmly cemented his future to the Red Mountain district.
The war treated Gilmer’s vision cruelly. The skimpy roadbed of the South & North lay in ruins, the Oxmoor furnace was destroyed, and his personal fortune had been wiped out. Then, with incredible swiftness, the landscape shifted. The first postwar Alabama legislature passed a state- aid law designed to help exploit the state’s mineral resources. Hopefully Gilmer renewed his shoestring work on the South & North. The Reconstruction Acts of 1868 brought a new legislature to Montgomery, and with it came John C. Stanton, a Chattanooga promoter with extensive interests in Tennessee rail and mining operations. Stanton wielded enormous influence in railroad matters and used it to displace Gilmer as president of the South & North. John Whiting, a Montgomery cotton factor, took his place, but Milner kept his post as chief engineer.
There followed a lengthy and complex game of cat and mouse. Stanton did not share Gilmer’s vision of north Alabama’s latent wealth; his ambition was to harness Alabama to Chattanooga and develop his own interests there. Accordingly he proposed changing the South & North’s route. Instead of running the road to Decatur he wanted to terminate it at Elyton. The only connections there would be the Alabama & Chattanooga Railroad (formerly the Northeast & Southwest) straight into Chattanooga. The idea appealed to Whiting, who was interested in cotton markets, but it meant total disaster for the entire mineral region and all its promoters. Gilmer, who had lost his majority of South & North stock, worked furiously behind the scenes to reclaim it. At the November, 1869, board meeting he appeared triumphantly with the majority in hand and was reelected president. Stanton sullenly conceded defeat and withdrew to await another day.
On December 30, 1868, the South & North obtained a charter amendment permitting it to build to Decatur instead of Calera. The following April Gilmer signed a contract with Sam Tate and associates for construction of the entire line from Montgomery to Decatur. Mindful of his lean treasury, Gilmer ordered Tate to build the road as cheaply as possible. Tate complied only too well. To skirt the mountains he knotted the roadbed into looping curves and avoided tunneling, expensive grading, trestle work, or anything that smacked of expense wherever possible. The highminded Milner cringed at the jerry-built work but, seeing the necessity, kept barking, “More curves, more curves, more stiff grade.”7
Tate’s crews finished the sixty-three miles between Montgomery and Calera in November, 1870, but did not reach Elyton, thirty-three miles beyond, for another year. While work progressed Gilmer busily worked at his grand vision: the creation of a major workshop town in the heart of the mineral district. He persuaded Stanton, now president of the Alabama & Chattanooga, to join him in purchasing a large tract of land around the point where their railroads crossed. On that site, Gilmer prophesied, a great industrial city would rise. The two men signed an agreement and took out options on nearly 7,000 acres of land in Jones Valley near Village Creek.
Then, without warning or explanation, Stanton pulled another fast move. He quietly shifted the Alabama & Chattanooga’s route slightly so that it ran closer to Elyton and away from Village Creek. He grabbed up options on all the farm land in Jones Valley around Elyton and then triumphantly reneged on the Village Creek agreement. Gilmer was livid, since Stanton’s play threatened to eliminate him from any share in the projected city. The directors of the Alabama & Chattanooga also had a share in the game, but the South & North people were left in the dark.
Still, all was not lost. Stanton’s crowd had taken sixty-day options on the Elyton land and, knowing the poverty of their enemies, was in no hurry to pay. Until Milner located the precise crossing of the two roads, no one could be certain of anything. With ingenuous care Milner proceeded to locate possible crossing points at every conceivable point above and below Elyton. While the unsuspecting Stanton cursed Milner’s apparent indecision, Gilmer desperately tried to raise a war chest. The sixty days expired, Stanton’s agents did not pick up their options, and the seemingly oblivious Milner went right on marking new crossings. The law allowed a three-day grace period on options. At the moment when that grace time elapsed, one of Gilmer’s friends calmly handed over $100,000 to claim the 4,150 acres selected by Stanton and his friends. The newly formed Elyton Land Company included Gilmer, Milner, Tate, and nine other associates. They had bought themselves a town without a single building or inhabitant. A short time later they named it Birmingham.
With unabashed enthusiasm the company began laying out its new town. Meanwhile the South & North plodded deeper into a quicksand of debt. The cost of construction had been set at $5,014,220, payable in company bonds. Some $2,200,000 in these bonds had been hypothecated to a group of financiers that included the notorious Russell Sage and Vernon K. Stevenson, president of the Nashville & Chattanooga Railroad. Under this arrangement the financiers could either take the bonds up or sell them if the interest was not met. Stevenson had heavy commitments in Chattanooga rail, mining, and manufacturing enterprises. He was also a business associate of the wily Stanton and shared his desire to capture the Alabama market for the Tennessee city.
This convenient situation gave Stanton one last trump card. The struggle over options had exhausted Gilmer’s financial resources. In vain he ransacked every available source to find money for meeting the April, 1871, interest payments on the state bonds. When the legislature refused to advance the funds, the Chattanooga financier made his move. The South & North had been completed to Birmingham, but a 67-mile gap between that town and Decatur remained unfinished. Stanton came to a quick agreement with Sage and Stevenson, and the three financiers summoned Gilmer and his friends to a conference at the Exchange Hotel in Montgomery. There, in his cold, analytical manner, Sage spelled out the terms. He demanded an immediate settlement of the bonds and due interest. If it were not forthcoming, the financiers would transfer the South & North to the control of the Nashville & Chattanooga, cease all work beyond Birmingham, and make the road a mere feeder to the Alabama & Chattanooga.
Gilmer sat in stunned silence. “You know I’ve exhausted every resource in New York,” he said wearily to his colleagues. “We’ve raked that city and this state with a fine-tooth comb for funds, and it’s no use. I don’t see but that we’ve got to accept this proposition as it stands.”8
Milner and the others disagreed loudly, whereupon Stevenson lost his temper and roared belligerent threats. Sage alone remained calm, reciting a precise litany of inevitable ruin unless his terms were met. The stormy session broke up shortly after midnight, with Gilmer and his associates wandering into the street not knowing where to turn.
In true melodramatic tradition, however, help was already on the way. James Sloss had been watching the South & North’s unraveling thread with an uneasy eye. He had in 1866 consolidated the three independent roads between Nashville and Decatur into one company, the Nashville & Decatur Railroad. The future of his still shaky enterprise depended heavily upon completion of the South & North road. Together the two roads and their connectors would create a through line from the Ohio River to the Gulf, a possibility that excited Sloss’s imagination. If the South & North were scuttled, however, Birmingham and most of the mineral region would be left in isolation and the Nashville & Decatur would remain an impoverished local road.
Getting wind of the Stanton-Stevenson scheme Sloss hurried north to Louisville on his own initiative. With little fanfare or advance warning he sought out Fink and laid before him the proposition mentioned earlier. Briefly he offered to lease the Nashville & Decatur to the L & N for thirty years if the Kentucky road would take up the South & North’s hypothecated bonds, pay the interest on them, and complete work on the 67-mile gap between Birmingham and Decatur. The L & N could then operate the two Alabama roads as one line. It would have the better part of a through route to the Gulf and a potentially tremendous local business from the mineral district. The stockholders in both Alabama roads would salvage their investment and realize a nice profit on it. The unborn city of Birmingham would be redeemed from obscurity, and Gilmer’s vision of a great industrial town might yet be fulfilled.
Visibly excited by the proposal, Fink called a special meeting of the L & N board. Predictably the directors split over the question, but Fink could not wait. While the board haggled he journeyed to Montgomery, where he informed Sage, Stanton, and Stevenson that the L & N might well claim the bonds before the deadline. Afterward he returned to Louisville with a committee of South & North men that included Gilmer, Milner, and Tate. Fink took Milner to his house for breakfast and an exploratory talk. It did not take long for Milner to infect Fink with his enthusiasm over northern Alabama’s potential. After a conference with Newcomb, Fink scheduled a meeting between the L & N board and the South & North committee for that same evening.
The session convened in the Blue Parlor of the Galt House. Three of the L & N directors favored the proposal and three opposed it. Only Newcomb remained uncommitted, but Fink was obviously influencing the president’s decision. The discussion rambled over the merits of the case for more than an hour with no change in the vote. Suddenly Tate stood up. A tall, double-jointed Tennessean, he had been silent until this moment. Now, as representative of the contracting company, he demanded a bonus of $100,000 and the right to complete the job. The choleric Newcomb turned white with rage. His gnarled hands trembling, he jumped to his feet, screamed “D’ye think I’ll stand for any highway robbery!” and declared the meeting adjourned.9
Tate sprang at Newcomb with his stick raised, but then retreated with the remark that he would not give the likes of Newcomb even the small end of his stick. He had already arranged a transfer with Sage and Stevenson, he added, but was willing to negotiate with the L & N. Newcomb went livid and grappled harmlessly with Tate until the giant Fink planted himself between the two men. “Colonel Tate, you stop this!” he barked in broken English. “Colonel Newcomb, you come along with me.” Fink ushered Newcomb from the room while the South & North people pleaded with Tate to relent. The Tennessean refused to budge an inch.
Returning to the Blue Parlor and its funereal atmosphere, Fink rang for some good Kentucky bourbon. Amidst raised tumblers he managed to restore a semblance of harmony before adjourning the meeting until the next day. At Fink’s request, Sloss came up for that session and announced that Davidson County, which held a majority of the Nashville & Decatur’s stock, would unanimously support a lease to the L & N. Tate relented somewhat and scaled his demand down to $75,000. Finally Newcomb agreed and cast the deciding vote in favor of the entire Sloss proposition. The final contracts were signed in April and May of 1871 and approved by the stockholders at the eventful annual meeting of that year, 46,155 to 10,111.
The L & N had made its commitment to coal and iron. Work on the gap between Decatur and Birmingham was completed on September 24, 1872, and five days later the first through trains left Louisville for Montgomery. Both Alabama roads required enormous amounts of capital for improvements and wallowed in deficits for several years. The Nashville & Decatur did not even connect with the L & N at Nashville until the latter road built a connector. Overall, the investment in Alabama roads became an immediate and continuing drain on company funds, with little relief or return on the horizon.
But the L & N’s commitment went far beyond mere renovation of the two roads. The invasion of northern Alabama compelled the company to protect its investment by a systematic exploitation of the mineral district. No other activity occupied the management’s attention or claimed more of its treasury than the development of mineral and agricultural resources in Alabama. Joining forces with coal and iron men, manufacturers, and other businessmen, the L & N became a dominant force in Birmingham and the surrounding counties. The power it wielded later evoked alternating spasms of praise and protest.
Equally important, the commitment to coal and iron meant the final triumph of Fink’s expansion policy. Despite later adverse reactions to that policy, the momentum generated by the southern invasion made it impossible for Fink’s more conservative opponents ever to reverse his program. The L & N had staked its claim to the southern market and declared its future to be there. Inevitably, as the dynamics of territorial strategy further changed the economic environment, the company would extend its commitment again—always under the twin sanctions of defense and progress. The entrance of the L & N into Montgomery, for example, only impelled the company to complete its line to the Gulf.
Territorial expansion fed upon its own impetus. Each step was deemed by management as the last step, as a kind of “final solution” to defend the company’s realm. But every final solution provoked counter thrusts from rival lines, which changed the competitive situation again and forced the company to seek yet another final solution.
In short, the southern invasion was significant not only for what it brought to the L & N but also for what it did to management’s thinking. For that reason it was probably the most important single step in the company’s history. It was the Rubicon crossed, and there could be no turning back.