In 25 years after the American Civil War American railroad track miles more than doubled, changing the face of America forever. American railroads allowed products made in the East to be shipped to the expanding West less expensively than in previous years. This allowed for an economy of scale – larger, more efficient factories. The agricultural heartland of America was no longer confined to a market of single day’s trip by wagon. Railroad and railroad construction became one of the largest industries during that era. By 1881 one out of 32 people in the United States was either employed by a railroad or engaged in railroad construction.
Starting about 1877, two great railroad developers, William H. Vanderbilt and Jay Gould, began competing for the railroad traffic along the south shore of the Great Lakes. By 1878 William Vanderbilt had a monopoly on rail traffic between Buffalo, New York; Cleveland, Ohio; Detroit, Michigan; and Chicago, because he owned the only railroad linking those cities – the Lake Shore and Michigan Southern Railway. In addition, he was the richest man in America at that time. By 1881 Jay Gould controlled about 15% of all U.S. railroad mileage, most of it west of the Mississippi River and he was considered the most ruthless financial operator in America. Gould’s major railroad east of the Mississippi River was the 335-mile (539 km) Wabash, St. Louis and Pacific Railway (Wabash). The Wabash mainline ran from St. Louis, Missouri to Toledo, Ohio where it was forced to deliver its railroad traffic to William H. Vanderbilt’s Lake Shore Railroad for delivery to the eastern United States.
Jay Gould and William Vanderbilt together oversaw all east-west rail traffic in the mid-west. The Seney Syndicate, owners of a 350-mile (560 km) railroad, the Lake Erie and Western Railroad, were interested in tapping new sources of revenue. The stage was set for the creation of the New York, Chicago and St. Louis Railroad.
The Seney Syndicate, headed by George I. Seney, met at Seney’s New York bank and organized the New York, Chicago and St. Louis Railway Company on 3 February 1881. The original proposal for the NYC&StL was a 340-mile (550 km) railroad west from Cleveland, Ohio to Chicago, Illinois with a 325-mile (525 km) branch to St. Louis, Missouri.
On April 13, 1881, the New York, Chicago and St. Louis Railway Company bought the Buffalo, Cleveland and Chicago Railway, a railroad that been surveyed from the west side of Cleveland, Ohio to Buffalo, New York running parallel to Vanderbilt’s Lake Shore and Michigan Southern Railway.
The idea of an east-west railroad across northern Ohio was very popular with the people of Ohio. They wanted to break the high freight rates charged by Jay Gould and William Henry Vanderbilt. No one was less popular in Ohio than William Vanderbilt since the December 29, 1876 collapse of Lake Shore and Michigan Southern Railway’s Ashtabula River trestle, where 64 people had been injured and 92 were killed or died later from injuries.
Another reason for the popularity of the New York, Chicago and St. Louis Railway was the positive economic impact on cities that any new railroad went through at that time. During a newspaper war to attract the New York, Chicago and St. Louis the Norwalk, Ohio Chronicle Newspaper referred to the New York, Chicago and St. Louis as “… double-track nickel-plated railroad.” The New York, Chicago and St. Louis adopted the nickname and it became better known as the Nickel Plate Road.
It was decided to start building along the surveyed route between Cleveland, Ohio and Buffalo, New York rather than build the branch to St. Louis, Missouri. Five hundred days later the Nickel Plate’s 513-mile (825 km) single-track mainline from Buffalo, New York to Chicago was complete. The railroad was estimated to require 90,000 long tons (80,000 metric tons) of steel rails, each weighing sixty pounds per linear yard (30 kg/m) and 1.5 million oak crossties. Additionally, the railroad required forty-nine major bridges. It was characterized by long sections of straight track, mild grades and impressive bridges. The Nickel Plate ran its first trains over the entire system on October 16, 1882.
During construction, Vanderbilt and Gould had watched with great interest. If either of them could acquire the Nickel Plate, they could end the threat to their railroads. If the Nickel Plate remained independent it would be able to create a substantial dent in both entrepreneurs’ railroad earnings.
Vanderbilt tried to lower the value of the Nickel Plate by organizing a campaign to smear its reputation before a train ever ran on its tracks. If Vanderbilt was successful he could scare the Seney Syndicate into selling to him or drive the railroad company into bankruptcy. However, Vanderbilt’s plan came with two important risks. If he slandered the line he risked chasing the Seney Syndicate into an alliance with Gould. The other risk was that his plan to smear the Nickel Plate’s reputation might fail and it could quickly grow. Vanderbilt claimed the road was being built with substandard materials and it would use unsafe practices once completed. He succeeded in creating long-standing rumors about the line, but failed to devalue the company or scare the investors.
The cost of construction was higher than expected and the Seney Syndicate began to negotiate with Gould to purchase the railroad, but unlike Vanderbilt, Gould lacked the capital. Frustrated at the failing talks, Gould broke off negotiations and gave up on his attempt to break Vanderbilt.