E. H. Harriman

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Edward Henry Harriman   1848 – 1909  was an American Railroad executive who got his first experience with railroads here in Sodus Point. The Harrimans lived for a year or two in the old yellow Lummis residence with white pillars now owned by Tom and Martha Lightfoot.

 

From wikipedia:

 

Early Years

 

Harriman was born in Hempstead, New York, the son of Orlando Harriman, an Episcopal clergyman, and Cornelia Neilson. His great-grandfather, William Harriman, emigrated from England in 1795 and engaged successfully in trading and commercial pursuits.

As a young boy, Harriman spent a summer working at the Greenwood Iron Furnace in the area owned by the Robert Parket Parrott family that would become Harriman State Park. He quit school at age 14 to take a job as an errand boy on Wall Street in New York City. His uncle Oliver Harriman had earlier established a career there. His rise from that humble station was meteoric. By age 22, he was a member of the New York Stock Exchange. And, by age 33, he focused his energies on acquiring rail lines.

 

We pick up the story in the book: E.H. Harriman by George Kennan (1922)

 

In 1881, two years after his marriage, he became interested in a small, badly managed, and unprofitable railroad, thirty four miles in length, running from the little town of Stanley, near Canandaigua, to a harbor on Lake Ontario known as Great Sodus Bay, about forty miles west of Oswego. Although this piece of road had been in existence for seven or eight years, and although it connected with the Pennsylvania Railroad at Stanley and with the New York Central at Newark, it had never happened to be absorbed by either of these great transportation systems. It carried a few local passengers and small quantities of freight destined for, or coming from, the lake ports of Canada; but its physical condition was bad, its equipment, in the shape of cars and locomotives, was scanty, and it was regarded by most railroad men and investors as an unprofitable and undesirable piece of property. It was called, originally, the “Ontario & Southern”; but it became bankrupt, went into the hands of a receiver, and was reorganized in the middle seventies as the “Lake Ontario Southern.” In 1881, it was owned or controlled by its president, William Alexander Smith, a stockbroker of New York; but it was again in financial difficulties and was about to go into the hands of a receiver for the second time when it attracted the attention of Mr. Harriman. To that shrewd observer and capable financier it seemed to have strategic possibilities, on account of its location and its connections with the New York Central and the Pennsylvania. If it were rebuilt and properly equipped, it would make a desirable branch for either of those great railroad systems, and to one or the other of
them he believed that it might profitably be sold. In the fall of 1881, therefore, he, with S. J. Macy, of New York, and others, bought the interest of William Alexander Smith in the property, and about a year later reorganized the company as the “Sodus Bay & Southern,” with Macy as president and Harriman as vice-president. This was the turning-point in the fortunes of the road. Betterments were soon undertaken, new equipment was bought, and in April, 1882, Mr. Harriman, in order to encourage the grain traffic and thus increase the road’s business, incorporated the “Sodus Bay Elevator Company” and proceeded to erect a grain elevator on Sodus Point.

 

Before the fall of 1883, the physical condition of the road had been much improved, but its business was still unprofitable, and Mr. Harriman became satisfied that in order to do what he wished to do with the property, he would have to get complete control of it. At a meeting, therefore, of the board of directors in October, 1883, he named a price at which he would either sell his own stock, or buy the stock of the other owners. The price was a fair one, and nearly all of the principal shareholders, discouraged by President Macy’s last report on traffic and earnings, decided to sell. Mr. Harriman thus became practically the sole owner of the property. He immediately reorganized the directorate, had himself elected president in place of Mr. Macy, and substituted George H. Strauss for Silas Stuart as superintendent or general manager.

 

Before the 1st of June in the following year, the road (already much improved) had been put in firstclass condition, and Mr. Harriman, in pursuance of his original intention, offered it for sale to both the Pennsylvania and the New York Central. In making his proposition to the former, Harriman pointed out the desirability of extending the Northern Central to Sodus Bay and thus getting an outlet on Lake Ontario for the coal of the Pennsylvania fields which, he thought, might be sold largely and profitably in Canada. With the Vanderbilt interests, on the other hand, he used the argument that if the New York Central did not buy the road the Pennsylvania undoubtedly would, and that it was sound railroad policy to keep a rival from acquiring it, even if the Central itself did not particularly need it. Great Sodus Bay, he urged, was the best harbor on the southern shore of Lake Ontario, and the railroad that controlled it would have a great advantage over any other line in competition for the rapidly increasing trade of Canada.

 

The officials of both roads were impressed by Mr. Harriman’s arguments, and the president of the New York Central asked for an option which would give him time for investigation. The option was granted — for a substantial consideration — and when, a few days later, President Thompson, of the Pennsylvania, expressed a willingness to take over the rebuilt and reequipped road, Harriman told him that he would have to wait for the decision of the New York Central. The option to the latter expired at noon on the 1st of July; but the Vanderbilt people were slow in taking action, and when, at the last moment, they sent an official to renew the option, Harriman happened to be absent from his office. Before he returned, the specified time had elapsed and the
owner of the road was at liberty to conclude the bargain with the Pennsylvania, which he immediately did. Exactly how much money Harriman made out of this transaction — his first venture into the railroad field  — is unknown; but his profits were large. The purchase was advantageous also to the Pennsylvania, and with the negotiations that preceded it began a friendship between Harriman and President Thompson which lasted until the latter’s death. In speaking some years later of the sale of this road Mr. Harriman said:

 

“This property had great strategic value which nobody seemed to recognize. I knew that if I put it into good physical condition, so it could handle and develop traffic, the Pennsylvania Railroad would jump at a chance to buy it, in order to get an outlet to the lake; and that the New York Central would be equally anxious to buy it, in order to keep its rival out. My experience with this railroad taught me a lesson with respect to the importance of proper physical condition in a transportation property which I have never forgotten.”

 

Harriman was nearly fifty years old when in 1897 he became a director of the Union Pacific Railroad. By May 1898 he was chairman of the executive committee, and from that time until his death his word was law on the Union Pacific system. In 1903 he assumed the office of president of the company. From 1901 to 1909, Harriman was also the President of the Southern Pacific railroad. The vision of a unified UP/SP railroad was planted with Harriman. (The UP and SP were reunited on Sept. 11, 1996 when the ICC approved their merger.)

 

At the time of his death Harriman controlled the Union Pacific, the Southern Pacific, the Saint Josph and Grand Island, the Illinois Central, the  Central Of Georgia, the Pacific Mail Steamship Company, and the Wells Fargo Express Company. Estimates of his estate ranged from $70 million to $100 million. It was left entirely to his wife.

 

Harriman was a notable philanthropist, and founder of the Tompkins’ Square Boys’ Club, now known as The Boys Club of New York. The family’s kind donation of a parcel of land would eventually become the Harriman Park and Public boat launch on route 14 in Sodus Point used by thousands of fishermen each year to access Sodus Bay.

 

Arch Merrill wrote a very good article on E.H. Harriman for the Sunday, September 19, 1954 edition of the Rochester Democrat and Chronicle. To read the article click the link below:

 

https://drive.google.com/file/d/0B1OFecRr7OuPN3loY1haZ0dUVDg