John Edgar Thomson
John Edgar Thomson | |
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philanthropist | |
Known for | Chief engineer and third president of the Pennsylvania Railroad |
John Edgar Thomson (February 10, 1808 – May 27, 1874) was an American civil engineer and industrialist. An entrepreneur best known for his leadership of the Pennsylvania Railroad (PRR) from 1852 until his death in 1874, Thomson made it the largest business enterprise in the world and a world-class model for technological and managerial innovation. The railroad's first chief engineer became its third president.[1]
His sober, technical, methodical, and non-ideological personality had an important influence on the Pennsylvania Railroad, which in the mid-19th century was on the technical cutting edge of rail development. The railroad was known for its conservatism and steady growth while avoiding financial risks. His Pennsylvania Railroad became the largest railroad in the world, with 6000 miles of track, and was notable for generating steady financial dividends, for high-quality construction, constantly improving equipment, technological advances (such as replacing wood with coal as locomotive fuel), and innovation in management techniques for a large complex organization.[2]
Childhood and early career
John Edgar Thomson was born in 1808 in
Thomson began his railroad career at age 19 as a rodman working in a survey crew locating the
Career
At the age of 26 in 1834, Thomson was hired as the chief engineer of the newly chartered Georgia Railroad. He located the road, negotiated and oversaw construction contracts, operated portions as they opened, and promoted possible connections to the north and west. Thomson became nationally known for his expertise; his salary was $4000 in 1837.
By 1845, he had completed the railroad from
Pennsylvania Railroad
The state of
The company appointed Thomson as chief engineer at a salary of $5000 a year. He sought out the best routes, making allowances for grades and river crossings. With Herman Haupt, he co-designed what became famous as "Horseshoe Curve" and built a railroad with practicable grades. He switched the fuel from wood to coal for the locomotives; other lines followed suit, thus opening up a new demand for coal, which the PRR shipped to all railroads. The through line between Philadelphia and Pittsburgh opened for traffic in February 1854, and made Philadelphia a major outlet for long-haul traffic from the west. This connection also strengthened its port, which had access to the Atlantic Ocean.[3]
Thomson led a faction that ousted the incumbent board of the Pennsylvania Railroad in 1852; Thomson became president and turned his attention more toward finance than engineering. He repeatedly reorganized the company into more efficient subdivisions, and to better cost accounting, paying careful attention to the selection of vice presidents. His organizational model was widely imitated by other railroads, and set the standard for large American businesses.[4] In 1857 he financed the railroad's purchase of the entire system of state transportation works, consisting of 278 miles of canals and 117 miles of railroad, together with real estate and rail equipment. At a cost of $7.5 million the Pennsylvania now dominated the state and took control of most short-haul traffic from the many towns along its heavily populated route.[3]
Thomson expanded the railroad to the west, into Ohio and beyond. In 1856, Thomson arranged for the consolidation of several western lines into the Pittsburgh, Fort Wayne & Chicago Railway. It was formally leased to the Pennsylvania in 1869 and, in 1870-71, the Pennsylvania Company, one of the first of the holding companies, was created to take over the properties west of Pittsburgh, which were developing into large northwest and southwest systems.[3]
In 1860, the Pennsylvania represented only the main line from Philadelphia to Pittsburgh, with a few short branches. By 1869 it had expanded within Pennsylvania alone to nearly one thousand miles and also controlled lines northward to the shores of Lake Erie, through New York State. In 1869 it purchased the Pittsburgh, Fort Wayne and Chicago line, giving it a connection with Chicago through Ohio and Indiana. In 1870 the Pennsylvania began to expand on the east coast also, obtaining an entry into New York City by acquiring the United Railroad and Canal Company, which owned leased 456 miles of railroad and 65 miles of canals in New Jersey.
In 1871–1872, the Pennsylvania expanded into the Midwest by astute purchases. It bought the Cleveland and Pittsburgh Railroad in 1871 as well as smaller lines in Ohio, merging them into the system. The most important acquisition during this period was the purchase of the Pittsburgh, Cincinnati, Chicago and St. Louis, with lines extending westward from Pittsburgh to St. Louis, and branches reaching southward to Cincinnati, and northward to Chicago. This system included over 1400 miles of road, giving the Pennsylvania Railroad a second line to Chicago, a direct line to St. Louis, a second line to Cincinnati, and access to territory not previously tapped.
By 1873, Thomson also had links to the South. Thomson then built up Philadelphia as a transatlantic port, creating the American Steamship Company in 1870 under the control of the Pennsylvania Railroad. Steel was becoming available at moderate cost, and Thomson contracted with industrialist Andrew Carnegie for steel to replace all the wooden railway bridges, and to replace iron tracks with stronger steel tracks. With such infrastructure in place, trains could be designed to be heavier, faster, and more efficient.
Technology
Besides expanding the system and putting it on a solid financial basis, Thomson made the Pennsylvania the technological leader of the industry. It took the lead in changing its engines to run on coal rather than wood burning, and from iron to steel (in constructing rails, bridges and cars). With Philadelphia emerging as the center of the locomotive industry, new innovations were offered first to the Pennsylvania Railroad, which embraced them.
Management
Thomson developed a new kind of management suitable for a large dispersed corporation with many functions, partly based on the work of Daniel McCallum.[5] Specicifically, he devised a decentralized system based on geographical districts, as well as the staff and line system that became synonymous with American management. Line executives handled people and hourly operational decisions on traffic, while staff executives handled finance and paperwork.[6]
Business
As a conservative, risk-averse financier, Thomson avoided disaster during the panics of 1837, 1857, and 1873, while rival lines often went bankrupt. His Pennsylvania Railroad was worth about $400 million in the early 1870s (before the
Alfred D. Chandler Jr., a Harvard Business School professor, stated in 1965 that the large-scale problems of management became obvious in the middle of the 19th century with the rise of the great railroad systems, such as the Pennsylvania and the Baltimore and Ohio. New methods had to be invented for mobilizing, controlling, and apportioning capital, for operating a widely dispersed system, and for supervising thousands of specialized workmen spread over hundreds of miles. The railroads solved all these problems and became the model for all large businesses.
The main innovators were three engineers,
Personal life
Thomson married Lavinia Frances Smith in 1854.[3] They had no children together, but adopted a daughter. By the time of his death in 1874, after the national financial Panic of 1873, Thomson's fortune had declined by three-fourths, to $1.3 million. He bequeathed most of it to charity, including a fund to help orphans whose fathers may have been killed in the course of their railroad duties.
Death
Thomson died in Philadelphia on May 27, 1874.
Legacy
A historic marker commemorates the location of his birth in his hometown of Springfield Township, Pennsylvania, and a street in the community is named for him. The city of Thomson in McDuffie County, Georgia, was named for him.
In 1975, Thomson was inducted posthumously into the Junior Achievement U.S. Business Hall of Fame.
Notes
- ^ Elliott (2009).
- ^ a b Ward (1975).
- ^ a b c d e f Ward (1980).
- ^ Alfred D. Chandler, The Visible Hand (1977) online p. 105-9, 151
- The Visible Hand: The Managerial Revolution in American Business. p. 105.
- ^ Chandler (1965)
References
- JSTOR 3112463.
- ISBN 978-0674940529.
- Coleman, Kenneth; Gurr, Charles Stephen, eds. (1977). Dictionary of Georgia Biography. Athens: University of Georgia Press. OCLC 8847178.
- Elliott, Alan R. (July 30, 2009). "Edgar Thomson Led The Railroad Revolution". Investor's Business Daily. Archived from the original on June 7, 2011.
- Ward, James A. (Autumn 1997). "John Edgar Thomson and the Cult of Personality on the Pennsylvania Railroad". Railroad History (177): 68–77.
- Ward, James A. (1980). John Edgar Thomson: Master of the Pennsylvania. Westport, CT: Greenwood Press. pp. 265. ISBN 0-313-22095-6.
- Ward, James A. (1975). "Power and Accountability on the Pennsylvania Railroad, 1846-1878". Business History Review. 49 (1): 37–59. JSTOR 3112961.
External links
- Guide to Railroad History online Archived 2015-08-01 at the Wayback Machine
- Georgia Railroad History
- Railroad Extra website
- Pennsylvania Historical Marker, birthplace.
- John Edgar Thomson at Find a Grave