BORN: February 20, 1848 • Hempstead, New York
Edward Harriman built a fortune investing in failing railroad companies and nurturing them back to life. He also had an adventurous streak and set sail on a scientific expedition to Alaska in 1899. Harriman is remembered as much for his even temper and ability to maintain his composure under stress as he is for his business sense and massive fortune.
Edward Henry Harriman was born on February 20, 1848, to Cornelia and Orlando Harriman, residents of Hempstead, New York. His mother came from the upper-class society of New Jersey, but she had married a man of lower social status. Harriman's father was an ordained deacon (church leader) in the Presbyterian church. Harriman looked upon his father with dismay as an example of a man who, despite his extensive studies and knowledge, had done very little with his life.
"I never cared for money except as power for work."
Never a strong or an interested student, Harriman dropped out of school at the age of fourteen to find for himself the financial security he had never known but always wished for. What he lacked in interest in school, he made up for in ambition. The usual procedure for learning about business was to secure a job in a store or to apprentice (study alongside an experienced professional) in a trade and progress to better positions. Instead, Harriman went straight to the center of business: Wall Street, home of the stock exchange, where men invested money in businesses and either expanded their wealth or lost their savings.
From Wall Street to railroads
Harriman began his business education as an office boy in a brokerage firm (a business that buys and sells stock in companies). From there, he became a messenger boy and carried securities (stocks) between firms on Wall Street. After that, he was promoted to the position of "pad shover." In the days before electricity, all stock prices and buy-or-sell orders were recorded on paper. Pad shovers ran these price and order records between buildings and companies on Wall Street. This experience allowed them to learn every aspect of the stock-market industry. Harriman, with an eye for detail and an excellent memory, quickly became recognized as an asset to Wall Street brokers. He was trustworthy and dependable, two qualities not easy to come by in a cut-throat industry. Before long, he was promoted to managing clerk.
By the time he was twenty-one, Harriman knew he wanted to get involved in Wall Street on an investment level, but he had little money to invest. He approached his uncles—all successful businessmen—and was given a loan by one of them. On August 13, 1870, at just twenty-two years of age, Harriman bought a seat on the New York Stock Exchange. Memberships that year cost between $4,000 and $4,500, plus a one-time $500 initiation fee. He was officially a stockbroker.
In 1879, Harriman married Mary Williamson Averell, daughter of the president of the Ogdensburg & Lake Champlain Railroad Company. Harriman's new relationship with his father-in-law stimulated the stockbroker's interest in the railroad industry. Within two years, he began his career as a reviver of failing railroads. His first acquisition was a 34-mile (54.7-kilometer), broken-down line called the Lake Ontario Southern, which he renamed Sodus Bay & Southern and sold for a profit to the Pennsylvania Railroad. From that point on, Harriman's name was linked to railroads.
Takes over the Union Pacific
Harriman continued to buy, fix, and sell smaller railroads, but it was not until 1883 that he got involved with a major line. He took a seat on the board of directors of the Illinois Central (IC) line that year. Within a few years, he left his brokerage firm and became vice president of the IC. He spent the next decade expanding the IC line into the west. Harriman would maintain control of it the rest of his life.
Harriman became a director of the Union Pacific (UP) Railroad in 1897. By 1898, he was chairman of the executive committee. As such, he traveled the railroad from the Missouri River to the Pacific Ocean, inspecting every train car and station. In an effort not to miss any small problems, he traveled only during daylight. He paid attention to the tiniest details, down to the railroad ties and bolts. Everything that needed fixing got fixed. After several months and $25 million in repairs, the UP was running smoothly. Harriman's insistence on safety made him well liked among the railroad's superintendents and workers.
The Harriman Expedition
Such intense work in a short time period took its toll on Harriman's health, and he was ordered by his doctor to take a relaxing vacation. Harriman followed the doctor's suggestion and decided to take his family to Alaska. Before plans were made, he broadened his scope and decided to turn the vacation into a full-blown scientific expedition. No one except Harriman knows for certain why he chose to take a two-month cruise to Alaska. Some historians believe he planned to build a railway into Alaskan territory; others believe he was hoping to supplement his inadequate formal education. Harriman himself had always wanted to hunt grizzly bear, so perhaps this was his motivation toward an Alaskan destination.
Whatever the reason for his decision, 126 passengers and crew joined Harriman on the ship George W. Elder. The group, which included famous scientists (see box) and had enjoyed newspaper coverage since the planning stages, took a train to Seattle, Washington, and left the dock shortly after 6:00 pm, May 31, 1899. The ship included newly renovated staterooms, a library stocked with more than five hundred books about Alaska, research spaces, and even livestock stalls.
The two months spent traveling 9,000 miles (14,481 kilometers) along the coast of British Columbia and Alaska proved invaluable to scientists and researchers interested in that region. They made more than fifty stops along the way so that the research team could go ashore to collect and study animal life and plant specimens. The information they collected filled thirteen volumes and took them twelve years to compile and publish.
Harriman found the expedition immensely satisfying, as he shot a grizzly bear mother and cub. Naturalist John Muir (1838–1914; see entry) and ornithologist Charles Keeler took issue against the hundreds of animal specimens that were killed on the expedition, including Harriman's grizzlies.
On Board the Elder
Edward Harriman could afford to make his expedition the largest of its kind, and he spared no expense. Cargo on the ship even included an organ and piano for relaxation and entertainment on the long voyage.
Although the trip was a mere vacation for Harriman and his family, he made sure a team of the era's finest scientists was assembled for the expedition. The team itself was unusual for the time in that it comprised scientists from several areas of study rather than several scientists from the same field. The twenty-member team included:
C. Hart Merriam (1855–1942): As a Yale- and Columbia-educated scientist, Merriam revolutionized the study of biological specimens. Merriam was given the responsibility of organizing the scientific team. After the voyage, he took charge of assembling the collected data. Harriman felt so indebted to Merriam that he set him up with a $12,000 annual allowance for life.
John Burroughs (1837–1921): The most famous nature writer of his time, Burroughs wrote and published twenty-seven books, which sold more than two million copies. In addition, he wrote and published hundreds of magazine articles on birds, flowers, and other natural wonders.
John Muir (1838–1914): Chosen for his previous experiences on Alaska expeditions, Muir was recognized as an authority on glaciers in that region. Muir and Harriman developed a friendship based on mutual admiration and respect.
Charles Augustus Keeler (1871–1937): Director of the Natural History Museum at the California Academy of Sciences, Keeler joined the team as an ornithologist (one who studies and watches birds).
George Bird Grinnell (1849–1938): Editor of the era's leading natural history magazine, Forest and Stream, Grinnell helped establish several nature organizations, including the Audubon Society. Glacier National Park was founded primarily through his efforts.
Edward Curtis (1868–1952): This photographer snapped more than five thousand pictures of the voyage, often risking his life to do so.
From a scientific standpoint, the expedition was most successful in its discovery of information on glaciers. From the photographs and observations gathered, scientists were able to develop theories about glacial climates and topography. Prior to the expedition, very little was known to Americans of the Alaska-British Columbia coastline, its environment, or its people. Harriman himself was responsible for a major discovery of a fiord (glacier valley between steep cliffs), which was mapped and named "Harriman Fjord." Its largest glacier was called "Harriman Glacier."
Goes up against James Hill
Harriman's motivation to own a large portion of American railways was not unlike the ambitions of other railroad tycoons of the Gilded Age and the Progressive Era. (The Gilded Age was the period in history following the Civil War and Reconstruction [roughly the final twenty-three years of the nineteenth century], characterized by a ruthless pursuit of profit, an exterior of showiness and grandeur, and immeasurable political corruption. The Progressive Era was the period that followed the Gilded Age [approximately the first twenty years of the twentieth century]; it was marked by reform and the development of a national cultural identity.) One such tycoon was James J. Hill (1838–1916), who owned several large and important railroads. Harriman bested Hill in one area: He was willing to take risks. One of the risks Harriman took was to begin a policy of shipping large-volume freight for long distances at a reduced rate. Both men maintained high standards within their railroads, but Harriman's consolidated lines of the Union Pacific and the Southern Pacific, which he acquired in 1901, made his the largest transportation system in the world.
In 1900, Hill owned the Northern Pacific and the Great Northern, two profitable lines. He wanted to own more, however, and went after the Chicago, Burlington & Quincy (commonly referred to as the Burlington or the Q), the last independent railroad in Iowa. If he owned that line, Hill could compete with Harriman. The owner of the Burlington knew he could not survive in the railroad industry without merging with either Harriman or Hill. In 1901, Harriman tried to gain control of the Burlington by buying up as much stock as possible. This caused a panic on the stock market, but it did not win him control of the Burlington. That victory went to Hill.
All was not lost, however, as Hill and Harriman—along with financier J. P. Morgan (1837–1913)—established Northern Securities, a holding company (a firm that owns enough shares in another company to secure voting control). The men joined forces so that they could control shipping rates. Between them they had total control of all railroad traffic between Chicago and the Northwest. This control made them a trust (company with total control without fear of competition), which was not legal because such power often led to unfair practices and rates. Northern Securities was ordered disbanded as a result of the 1904 U.S. Supreme Court ruling in Northern Securities Co. v. United States.
Death comes early
Harriman died in 1909, at the age of sixty-two, at the family estate known as Arden. At the time of his death, he controlled the Union Pacific, Southern Pacific, Illinois Central, Central of Georgia, Saint Joseph, and Grand Island lines; the Pacific Mail Steamship Company; and the Wells Fargo Express Company. He died an incredibly wealthy man. Estimates of his estate ranged from $200 million to $600 million. In 2006, Forbes.com ranked Harriman the eighteenth most influential businessman of all time.
Harriman left his entire fortune to his wife. In 1910, she donated $1 million and 10,000 acres of land to the state of New York to start Harriman State Park. In the twenty-first century, that park claims 42,500 acres (172 square kilometers) and boasts thirty-one lakes and reservoirs as well as 200 miles (321.8 kilometers) of hiking trails. It is the second-largest park in New York's state park system. In his lifetime, Harriman was a financial sponsor of boys' clubs (organizations to keep teenagers off the streets and involved in productive pastimes). In his honor, Harriman's widow created the E. H. Harriman Award in 1913, to be given out each year in recognition of outstanding achievements in railway safety.
In 1912, John Muir wrote a short book titled Edward Henry Harriman. Available online at SierraClub.org, Muir's recollection recalled his friend's explanation of his views of money. "I never cared for money except as power for work. … What I most enjoy is the power of creation, getting into partnership with nature in doing good, helping to feed man and beast, and making everybody and everything a little better and happier."
For More Information
Klein, Maury. The Life & Legend of E. H. Harriman. Chapel Hill: University of North Carolina Press, 2000.
Mercer, Lloyd. E. H. Harriman: Master Railroader. Boston: Twayne, 1985. Reprint, Washington, DC: Beard Books, 2003.
Muir, John. Edward Henry Harriman. New York: Doubleday, Page and Company, 1911. Also available at Sierra Club: John Muir Exhibit.http://www.sierraclub.org/john_muir_exhibit/frameindex.html?http://www.sierraclub.org/john_Muir_exhibit/writings/edward_henry_harriman.html (accessed on September 2, 2006).
"A Brief Historical Sketch of the Illinois Central Railroad." Illinois Central Historical Society.http://icrrhistorical.org/icrr.history.html (accessed on September 2, 2006).
"Edward H. Harriman (1848–1909)." Forbes.com.http://www.forbes.com/business/2005/07/06/harriman-railroads–northern-securities-cx_0706harriman.html (accessed on September 2, 2006).
Moody, John. "The Life Work of Edward H. Harriman." In The Railroad Builders: A Chronicle of the Welding of the States. New Haven, CT: Yale University Press, 1919. Reprint, Washington, DC: Ross & Perry, 2003. Also available at http://www.cprr.org/Museum/Railroad_Builders/Railroad_Builders_11.html (accessed on September 2, 2006).
PBS. Harriman Expedition Retraced: A Century of Change.http://www.pbs.org/harriman/1899/1899_part/participantharriman.html (accessed on September 2, 2006).
PBS. "People & Events: James J. Hill, 1838–1916." American Experience: Streamliners: America's Lost Trains.http://www.pbs.org/wgbh/amex/streamliners/peopleevents/p_hill.html (accessed on September 2, 2006).