Baltimore and Ohio Railroad

BALTIMORE AND OHIO RAILROAD

In February 1827 the Baltimore and Ohio was charted as the first railroad company in the United States of America by a group of Baltimore businessmen. Its establishment was a response to an emerging commercial rivalry and to a complex series of social, economic, and technological changes that were transforming the country in the first half of the nineteenth century. The settling of the agriculturally rich Ohio Valley and the rapid expansion of the population on the eastern seaboard, which generated chronic food shortages, demanded that a swift means of transportation be found to ship produce from the Midwest to the coast. The construction of the Erie Canal in 1825 gave New York City a gateway to the interior and a decided edge on Baltimore in their struggle for U.S. economic supremacy. In the 1820s Baltimore was a thriving commercial center of about 80,00 people with an aspiration to become the nation's leading emporium. Until then it had depended upon the National Road to gain access to markets, but turnpikes were slow and expensive compared to water routes.

In 1826 two brothers, Evan and Philip Thomas, who were important members of Baltimore society, began to solicit support for the establishment of a railroad. In 1827 they were able to convince a number of leading businessmen to "construct a railway between the city of Baltimore and some suitable city upon the Ohio River." The Maryland legislature approved the incorporation of this enterprise on February 21, 1827. The $3 million needed to support the venture was to be raised by the sale of 15,000 shares of stock at $100.00 a share. Ten thousand would be offered by the state of Maryland and 5,000 by the city of Baltimore. The entire subscription was sold out in 12 days, and almost every family in Maryland brought shares in the company. Philip Thomas was its first president.

It was originally envisioned that either horses or the wind would provide the power for the train. On January 7, 1830, when the Baltimore and Ohio made first run, teams of horses pulled the cars, which ran on a narrow gauge track, the width of an English carriage. Evan Thomas, however, had been inspired to build a railway by the success of the Stockton and Darlington, an English company that in 1825 became the first to use a steam-powered locomotive to carry freight. Its performance impressed him on a trip abroad. So the Baltimore and Ohio began to experiment with steam engines almost from its inception. Peter Cooper built the first American-built steam locomotive, the Tom Thumb, in the shops of the B & O, and in August 1830 he demonstrated his invention on the company's tracks. Steam power soon became the standard means of propulsion, and as steam engines improved rapidly in the 1840s and 1850s, the cost of transporting freight dropped significantly.

In spite of its willingness to innovate, the Baltimore and Ohio had a rather slow start because of political problems and difficulties in laying track. It planned a 380-mile route that would cross the Allegheny Mountains and connect Baltimore with Wheeling, West Virginia, a city on the Ohio River. Although experts were hired to help with this difficult engineering project, there were many delays. By August of 1830 the line stretched only 13 miles to Elliot Mills, and Washington D. C. was not reached until 1835. The line did not arrive at Wheeling until 1852.

The rail line grew rapidly in the second half of the nineteenth century. Its extension to Parkersburg, West Virginia in 1857 allowed the railway to connect with local lines and gain access to Columbus, Cincinnati, and St. Louis. Coal from Ohio and West Virginia now became an important cargo, the hauling of which was responsible for a third of the company's revenue by 1860. The Baltimore and Ohio served the Union well during the Civil War (1861–65), and although it sustained damage, it recovered rapidly and continued to expand after the war. The 521 miles of track that existed in 1865 grew to 1,700 in 1885. The B & O was hurt in the panic of 1893 and went bankrupt in 1896. But, the Pennsylvania Railroad bought the majority of its stock and it was able to reorganize successfully. It regained its independence in 1906, when the Pennsylvania Railroad, fearing anti-trust action on the part of the government, sold its controlling interest. Daniel Willard, who was president of the company from 1910 to 1941, improved equipment and service, and by 1935 the B & O possessed about 6,350 miles of track, its high-water mark.

From the 1930s to the 1970s, however, the Baltimore and Ohio, like many railroads, had a difficult time. The Depression, the popularity of the automobile, and the rise of the trucking industry, all contributed to its demise. Except for a brief period of prosperity during World War II (1939–45), track mileage and profits declined, while inflation and the demands of strong unions increased labor costs. Between 1932 and 1952 no dividends were paid on its common stock. In the mid-1950s the Baltimore and Ohio petitioned the public service commissions of New York and Maryland to suspend its service between Baltimore and New York because of the "enormous deficits" that this route was generating.

As the Baltimore and Ohio continued to lose money, it began to seek a financially sound company with which to merge. After previously having received permission from the Interstate Commerce Commission, another railroad with roots deep in American history, the Chesapeake and Ohio formally took control of the company on February 4, 1963. The combined railroads became the Chessie System in 1972.

In spite of the setbacks that afflicted the industry in the first half of this century, American railroads were far from dead. Since a single railway line can be as productive as a ten-lane expressway, trains remain an efficient way to carry large quantities of bulk products, like ore, coal or grain. The use of large containers to hold finished products and flatcars that can transport piggyback truck trailers helped the railroads compete with other means of transport. The financial atmosphere improved, and the Chessie System attained revenues of $1.5 billion by 1978. In order to gain access to the booming southeastern United States, it merged in 1982 with Seaboard Coastline Industries, Inc., which was then the eighth largest railroad in the United States, and a component of which, the Petersburg Railroad, was charted in 1830. The Chessie System and Seaboard formed the CSX Corporation, a holding company that controlled one of the largest rail systems in the country. Coincidentally, like the B & O in 1860, the CSX Corporation earned a third of its revenue in 1990 by hauling coal.

See also: Coal Industry, Erie Canal, Interstate Commerce, Maryland, National Road, Railroad Industry

FURTHER READING

Douglas, George H. All Aboard!: The Railroad in American Life. Seattle: Superior, 1958.

Fishlow, Albert. American Railroads and the Transformation of the Ante-Bellum Economy. Cambridge, Mass.: Harvard University Press, 1965.

Fogel, Robert W. Railroads and American Economic Growth: Essays in Econometric History. Baltimore: The Johns Hopkins University Press, 1964.

Hungerford, Edward. The Story of the Baltimore and Ohio Railroad. New York: G.P. Putnam's Sons, 1928.

Stover, John F. American Railroads. Chicago: University of Chicago Press, 1961.