March 14, 2006, version

 

THE CHICAGO LITERARY CLUB

 

DID “SUCCESS” SPOIL THEODORE DREISER

 

OR

 

FROM DREISER TO YERKES TO COWPERWOOD - A TRIPLE PLAY

 

March 13, 2006 – The Cliff Dwellers Club

 

Preface

 

            I have become intrigued by the fall of certain of the business Titans of Chicago’s past, each of whom is an example of:

The Evil that men do lives beyond them;

The Good, oft, lies interred with their bones.

            My first close attention to such a man was to George Pullman.  My sister’s first husband had been a member of the Pullman Family – not a descendant of George, but a descendant of his brother Charles – from whom my former brother-in-law received his middle name.  Charles Pullman had worked for his brother George, as an operations officer, but he seems to have ceased doing so before the inception of The Pullman Strike, which demolished George Pullman’s reputation.  The biographies of George Pullman that I have read say nothing of Charles.  I have speculated that, had Charles remained employed by his brother, perhaps, he could have brought some sense into George, with respect to George’s treatment of the Pullman Company’s employees.  That could be a figment of my imagination, as, since George must have financed the creation of the Pullman Company’s car manufacturing facilities and the Town of Pullman by issues of bonds and stock, the pressures on George to maintain his Pullman Company’s credit, by continuing his Company’s payment of interest and dividends, was too great.  George Pullman’s bones are in Chicago’s Graceland Cemetery.  Charles Pullman’s bones are there, as well, but in a much more modest plot.

___________________________

 

Copyright – John K. Notz, Jr. (2006)
            My attention was, next, drawn to Samuel Insull.  In my school days, I had dated a daughter of a man who had been Insull’s personal secretary – when secretaries were male.  My father, in his post-college social circle, had known that man, but, notwithstanding the fact that one of Insull’s companies was my father’s first post-college employer, I do not recall my father mentioning Mr. Insull.  As a teenager, I met Sam Insull, III –Mr. Insull’s sole grandchild.  Until I read the biography of Insull covered by Warren Haskin’s paper of last year, I did not understand Mr. Insull.  In Mr. Insull’s case, too, the pressure to maintain the price of the stock of the Insull companies was too great.  While the bones of Insull’s wife, son, daughter-in-law and grandson are in Chicago’s Graceland Cemetery, his were, at his request, returned to his native Scotland.

            Most recently, I have studied the life of Charles Tyson Yerkes, the financially and socially amoral jail-bird and admitted philanderer, who left Philadelphia for Chicago in 1881 with a second wife – an Irish girl who had been his mistress during his Philadelphia rise and fall.  After Yerkes and the new Mrs. Yerkes failed to attain the social status that he sought in Chicago, he left Chicago in 1900 for New York and London, with an even younger mistress – Emilie Grigsby - the daughter of a woman who had operated a “respectable house for gentlemen” in Louisville.  Yerkes appears to have remained faithful to Emilie, but his health, soon, failed.  After he died in 1905, his creditors took control of his London “Tube” consolidation efforts.  Emilie lived into the 1930’s, acquiring a reputation as a “noted Edwardian hostess”.  Yerkes’ bones are in Brooklyn’s fashionable Green-Wood Cemetery, in a Beaux-Arts mausoleum, with those of his second wife.  I assume that Emilie Grigsby’s bones are in London.

            As in my past papers, there is a Geneva Lake connection for this paper.  That connection is Yerkes Observatory, above Williams Bay, at the Northwest corner of Geneva Lake.  During the last year, or so, well after I decided on the subject of this paper, Yerkes Observatory has been, much, in the public press, as The University of Chicago has decided to get out of the observatory business – get out of maintaining an obsolete – albeit architecturally interesting - observatory – designed by Henry Ives Cobb – who was the University’s first “University Architect”. Yerkes Observatory was built in and around 1895.

            The administrators of the University believe that the costs of maintaining the obsolete Yerkes Observatory and its minimal staff should be devoted to the support of academics in Hyde Park.  While I appreciate that business-oriented academic point of view, I have been asked to make public statements that class me among the opponents to this “academic” decision.  In reality, I question only the terms of the University’s proposed disposition, as I believe that, in the quite special circumstances of the Observatory’s creation and its 110 years of presence, free of real estate taxes, in Williams Bay, the University’s reaching for top dollar from a real estate developer is overreaching.

            I take into account the fact that, starting about 100 years ago, several substantial donors to the University – including several of its Trustees – had Summer homes on Geneva Lake – some of which were true “estates” – some “mansions” – some “cottages” (in other than the Newport sense).  Today, but one University Trustee has a second home in the area.

            In 1912, two of those early Trustees – Mssrs. Ryerson and Hutchinson (the Hutchinson whose portrait by Ralph Clarkson is on the wall behind me - deeming the then desolate site of the Observatory to be unattractive, commissioned Olmsted Bros. of Brookline, MA, to provide a landscape design for the surroundings of the Observatory, a good part of which was executed.  While a great many elms were used, in the archives of the Olmsted firm in The Library of Congress, there is a memo from the Boston office to those at the Observatory’s site:

“Why are we permitting the transplanting of elms?  We know that the elm disease is spreading from the East to the West!”

Answer:  Mssrs. Ryerson and Hutchinson were contributing trees from their own estates. 

As transplanted trees are stressed in the process of transplanting, that stress causes them to be more prone to disease than they, otherwise, would be.  As a consequence, virtually all, if not all, of the elms transplanted from the estates of Mssrs. Ryerson and Hutchinson were lost to Dutch Elm Disease.

            All of the funds for the construction of the Observatory were contributed by Yerkes.  In order to facilitate visitors, other than by the locally monopolistic NorthWestern Railroad.  Yerkes arranged for the construction of an electric railroad, from Harvard, IL, on The NorthWestern Railroad, via Walworth, WI, on The Milwaukee Road, to Fontana.  This so-called Toonerville Trolley started to operate in about 1900 and continued to carry passengers until about 1920, when growing automobile use made its passenger operation uneconomic.  The Trolley reverted to carrying only freight – mostly the diggings from a quarry in Fontana.

            While it lasted, the presence of the Toonerville Trolley was the connecting piece for a pleasant Sunday’s trip from Chicago to the Observatory, starting, on a counter-clockwise route,  by taking The NorthWestern from Chicago to Williams Bay, at the West End of Geneva Lake, walking a few blocks to the Observatory, visiting it and its surroundings, then walking about a mile to Fontana, either on the lake shore of Geneva Lake’s West End or on what was, then, Uihlein Road, to Fontana, boarding the Trolley, for either Walworth on The Milwaukee Road or to Harvard on The NorthWestern.  One could do the same, clockwise – to Harvard or Walworth, then on the Trolley to Fontana, then the walk to Yerkes Observatory, and on to Williams Bay and the train back to Chicago.

            In addition to Yerkes’ funding of 100% of the construction of the Observatory, Yerkes’ Will provided a $500,000 bequest, as an endowment for the Observatory.  ($500,000 in 1906 would be about $10,000,000, in today’s Dollars.)  During the recent months of controversy, the University has not disclosed what happened to this bequest.  Perhaps, in fact, there is no endowment for the Observatory, either because of the insolvency of Mr. Yerkes’ probate estate or because of dissipation of that Endowment by the University.

            In The Titan, by Theodore Dreiser, there is a version of the conversation between a thinly disguised President Harper of the University and an equally thinly disguised Yerkes – Yerkes being Frank Cowperwood of Dreiser’s The Trilogy of DesireThe Financier (covering Yerkes/Cowperwood’s time in Philadelphia); The Titan (covering Yerkes/Cowperwood’s time in Chicago, and The Stoic (covering Yerkes/Cowperwood’s Time in New York and London):

            To promote his business interests in Chicago, Yerkes decided to effect a stunning gift related in some way to Chicago – one that would bring him a reputation for having unlimited access to capital funds.  Someone – probably, Charles Hutchinson - suggested to President Harper of The University of Chicago that Harper approach Yerkes for a contribution that would be the seed money for the premier observatory that The University of Chicago needed, to give it a reputation for excellence in the then most advanced sciences.  Dreiser’s version of the conversation of President Harper with Yerkes, when Harper approached Yerkes for the $40,000 needed only for the purchase of the lens for the telescope, is this, with the names changed, to reflect the real actors:

            YERKES:  “I would have to exact one pledge, Dr. Harper, if I did any such thing.’”

HARPER:  “What might that be?”

YERKES:  “I wish the privilege of giving the land and buildings – the whole telescope, in fact.  . . .  Can I presume that no word of this will be given, unless the matter is, favorably, acted upon?”

Harper arose and eyed him with a peculiarly approbative and grateful gaze.  Harper was a busy, overworked man.  His task was large.  Any burden taken from his shoulders, in this fashion, was a great relief. 

HARPER:  “My answer to that Mr. Yerkes, if I had the authority, would be to agree in the name of the University and thank you.  For form’s sake, I must submit the matter to the Trustees of the University, but I have no doubt about the outcome.  I anticipate nothing but grateful approbation.  Will you let me thank you, again?” [At p. 371]

The result was that, in the course of a few weeks, the proffer was, formally, accepted by the Trustees of the University, and a report of the matter, with Yerkes’ formal consent, was given to the Press.  The gift was sufficient to set Yerkes forth in the light of a public benefactor and patron of science. When Yerkes’ emissaries came around, later, to Chicago’s Aldermen, with a suggestion that the fifty-year franchises about to be voted him, for Chicago’s elevated lines, should be made a basis of bond and mortgage loans, they were, courteously, received, and an arrangement was made with an English-American banking company, by which the majority of the bonds for Yerkes proposed elevated lines were taken by them, for sale in Europe and elsewhere, and he was given ample means, wherewith to proceed.  Instantly, the stocks of Yerkes’ surface lines bounded in price.

THEODORE DREISER AND CHARLES YERKES

            In researching this paper, I discovered that a Professor Philip Gerber of a state university in upstate New York had, in 1973, published an analysis of the treatment of Yerkes by Dreiser, The Financier Himself: Dreiser and C. T. Yerkes.  I have not, yet, been able to see what Professor Gerber’s unpublished work papers may contain.  The following is from what he published in 1973:

            “When Dreiser disregarded actuality, his motive, almost never, was to include major events unverifiable in the Yerkes record,  . . .  The differences between the actual record and their novelized counterparts involve a process of selection, that attribute with which critics have been reluctant to credit Dreiser.  Despite The Trilogy’s inordinate length,  . . .  Dreiser labored towards simplification.  . . .  Throughout his Trilogy, Dreiser, drastically, abbreviates Yerkes’ recorded travels and art collecting,  . . .  Yerkes role in Chicago’s 1893 World’s Fair was considerable – he was on the Board of Directors – but was omitted from The Titan, save for a comment suggesting the Fair’s effect on the Cowperwood car lines.”  [At p. 118]

            I have quoted the reference to Yerkes’ art collecting because Dave Phillips of Chicago Architectural Photographing Company gave me the catalogue of Yerkes’ art collection, in its 1893 state, when Yerkes was loaning paintings and contributing funds to The World’s Columbian Exposition.  Professor Gerber’s widow has told me that she has a copy of the catalogue for the post-death sale of his paintings by his estate.

            The balance of my paper, tonight, concentrates on Yerkes’ Chicago years – Dreiser’s Frank Cowperwood’s Titan years.  Certainly, Yerkes was a Titan of his time, both in Chicago and elsewhere.  There is no biography of Yerkes other than scattered essays that, usually, vent uninformed biases against “The Boodler Yerkes”. 

CHARLES YERKES AND CHICAGO

            By the time that Yerkes reached Chicago, he had been a successful consolidator of horse-car street railways in Philadelphia.  One could argue that Yerkes’ consolidation success in Philadelphia created such retaliation from his less skilled contemporaries that they rigged the judicial process, to see that Yerkes went to jail for his financial dealings with the City of Philadelphia.  Since Yerkes had protected his business friends from loss, as soon as the winds of Philadelphia politics changed, Yerkes’ friends secured his pardon, and Yerkes returned to successful securities trading, divorced his first wife, married his Irish mistress, and, as Yerkes and his new second wife were social pariahs in Philadelphia, left for Chicago.

            Yerkes came to Chicago to be an investment banker, backed by established financial relationships with Peter Widener – the Widener of the Widener Library – and Widener’s brother-in-law, William Elkins – Philadelphia money.  Yerkes, soon, made his Chicago mark by his  consolidation of distribution of illuminating gas, buying out a plethora of individual entrepreneurs. 

            Who of us was not assigned, in school, to read Sister Carrie?  The successful 1900 publication of Sister Carrie took Dreiser out of SUCCESS.  In my second use of “SUCCESS”, I mean the popular 1890’s magazine of that name, for which, in 1898-1899, Dreiser had written admiring profiles of these Chicagoans:  Philip Armour, Marshall Field, Frank Gunsaulus and Theodore Thomas.  Others whose profiles by Dreiser in SUCCESS you will recognize were Thomas Edison and Andrew Carnegie.

            I have speculated on whether Dreiser approached Yerkes, for the raw material for such an essay, concluding that Yerkes would have agreed to the interview and would not have conditioned it on prepublication approval.  From a published interview by Dreiser of Marshall Field before its December, 1898, publication, one can elicit these as questions that Dreiser would have posed to Yerkes:

“My object is to obtain your opinion as to what makes for and constitutes success         in life?

 

“I wish to know something of your early life and under what conditions you        began it?”

 

“Did the character and condition of your parents tend, in any way, to form your             ambition for commercial distinction?’

 

“Had you had early access to books?”

 

“Were you so placed, that your commercial instincts could be nourished by        contact with that side of life?”

 

“Did you attend both school and college?”

 

“Do you consider those years well-spent?”

 

“What was the nature of your first venture in trade?

 

“Was there an inducement to remain there?”

 

“Did you fancy that you were destined for some other field than that in which you           have, since, distinguished yourself?”

 

“When did you come to Chicago?”

 

“Did you foresee Chicago’s growth, in any way?”

 

“What was your equipment for success, when you started here?”

 

“What were the conditions, here?

 

“What contributed, most, to the great growth of your business?”

 

“What were some of the principles that you applied to your business?”

 

“Did you suffer any losses during your career?

 

“Did any Financial Panic  . . .  affect your business?”

 

What do you consider to have been the turning point of your career – the point at          which there was no more danger of poverty?”

 

“What was the one trait of your character that you look upon, as having been the           most essential to your successful career?”

 

“Were you, naturally of a saving disposition?”

 

“Have you, always, been a hard worker?”

 

“Has there, ever, been a time in your life, when you gave as much as 18 hours a             day to your work?”

 

“Do you work as much as you, once, did?”

 

“Do you believe that a man should cease laboring, before his period of usefulness           is over, so that he may enjoy some of the results of his labor, before death,            or do you believe in retaining constant interest in affairs, while strength             lasts?

 

“What do you consider to be the first requisite for success in life, so far as the    young beginner is concerned?

 

“What should be the aim of the young man of today?”

 

“Would you say to the young man, ‘Get wealth.’?”

 

“Would you say to him, ‘Acquire distinction.’?”

 

“Would you say that happiness consists in labor, or in the contemplation of labor            well done, or in the increased possibility of doing more labor?”

 

“What is the greatest good that a man can do?”

 

“What can you give the young men of today, that will be most useful to them, if observed?”

 

            We do know that Yerkes, notwithstanding the opprobrium heaped upon him by the Chicago press (other than his own Inter-Ocean), was willing to talk freely of himself in circumstances in which he could perceive potential advantage to himself, in so doing.  The following is from the 1986 biography of Dreiser by Richard Lingeman,

            “[After the adverse action of the Chicago City Council on Yerkes’ efforts to obtain long extensions of franchises he had,] Yerkes was, barely, scratched by his defeat.  He, immediately, went to The Sunset Club, a meeting place for the City’s power brokers, and, coolly, defended his attempt to bribe the City Council:

            ‘We do not want the eternal sandbagger after us, all the time.  When they say that there is bribery in the City Council, why not give us the 50-year franchise that we ask for and, thus, stop the bribery?’

“Then, he sold his streetcar lines for a reputed $20,000,000 [ca. $400,000,000, in today’s Dollars] and moved on to London, where the unfinished Underground offered a new challenge.  But The Sunset Club scene might have detracted from Dreiser’s romantic climax.”

            The Sunset Club was real, but it has vanished.  While the records of many of Chicago’s clubs and societies (including those of our Club) can be found in the archives of Chicago’s Newberry Library, I have not, yet found those of The Sunset Club.  Consequently, I am unable to assess the friendliness of the audience that Yerkes had had.  As The Press was present, we can assume that The Sunset Club may have been comparable to today’s Commercial and Economics Clubs of Chicago – “black tie” events, with well over 100 diners, wines and (at least until recently) cigars.

            I speculate that Dreiser conceived of a fictionalized version of Yerkes’ life in the course of his SUCCESS interviews.  Dreiser was made aware by libel litigation to which he had been subjected that the English law of libel had had much harsher consequences for him than the American law of libel and took care that his characters had died before publication the novels that contained their fictionalized selves.  Given that Frank Cowperwood was based on Yerkes, Dreiser was motivated to defer publishing The Financier until after Yerkes’ 1905 death.  Lingeman speculates, because some of the London investment bankers with whom Yerkes was forced to deal had lived into the early 1940’s, that Dreiser deferred his efforts to the complete The Stoic until 1945.


YERKES IN CHICAGO

            David Young’s CHICAGO TRANSIT - An Illustrated History (1998) contains a chapter on Yerkes (his Chapter 5 – “The Traction Baron and Straphangers”) that is as balanced a treatment of Yerkes as one can read, and it contains, Yerkes’ famous remark, “It is the straphangers that pay the dividends.”

            By the end of the 1850’s, the omnibus had developed into the horsecar.  After the private toll roads had been converted to public roads, the public bodies responsible for maintaining them had the authority to limit their use to uses that would not cause damage.  Since the installation of rails for wheeled vehicles on streets would cause damage, the permission of the owner – private or public - had to be sought and paid for.  While the vehicle operator was expected to pay all construction expenses, cash payments and other special considerations were necessary to obtain owners’ permission.  In the public arena, this is “graft”.  (Recently, I read that one cannot operate a democracy without graft.)

            In pre-industrial cities – Chicago included, workers lived relatively close to their jobs, and merchant families, craftsmen and their employees often occupied the floors above their stores or workshops.  The factory changed all that.  Managers moved to rural settings that became known as suburbs.  The emerging middle class, the clerical workers and the technicians followed.  The immigrant laborers could not afford the cost of commuting.  The increased duration of the walk to work triggered a response in Chicagoans.  They preferred to pay to ride at five to seven miles per hour in a horse-pulled omnibus than to slog through the mud. 

            The omnibus was a box-shaped vehicle that could seat 20-30 passengers and was pulled by a team of two horses.  Because of the congestion on City streets, speed was not possible.

STREET RAILROADS

            For the first street cars, a light wooden omnibus body was placed on a set of flanged wheels that rode on rails laid in the streets.  The light construction enabled a single horse to pull 20 passengers, although, in Chicago, larger two-horse cars, with a passenger capacity of as many as 30, were more popular.

            By 1880, an active search for a replacement for the horse car began.  The most obvious alternative was the steam engine.  Mechanical traction enabled the street railways to increase the capacity of their cars from 20 in a horsecar to more than double that in an electric trolley, or streetcar.

            When Yerkes arrived in Chicago in 1881, it was with the intention of running a bank, not a street railroad.  Yerkes was, however, an assembler of syndicates who acquired, at minimum risk, independent companies with similar business interests.  The acquisitions were highly leveraged; often, they collapsed soon after he left; but, while he was in the executive suite, Yerkes was an adept manager of both the money and the railway systems.

            In 1882, when the Chicago City Railway Company wished a replacement for its horsecars, it had initiated Chicago’s first cable service – à la San Francisco.  Shortly thereafter, the City’s other two street railways began installing cable service on the North and West Sides.  However, cable could not be used to cross Chicago’s bridges that moved, in order to accommodate the passage of water-borne traffic.

            In 1883, the City of Chicago extended the existing franchises of street railways to 20 years.  (As a practical matter, the 20-year franchise limitation, simply, meant that street railways had to refinance their bonds every two decades; this deadline would have major consequences for Yerkes.)

            There was little competition between the three Chicago street railway systems.  Shortly after the Civil War, each was large enough to buy out potential competitors that sprouted on the edge of the City and wealthy enough, not only to bribe politicians to maintain their geographic monopolies, but, also, to pay off political shakedowns that occurred, when politicians created street railroads for the sole purpose of such extortion.  They were sufficiently profitable to finance the expensive conversion of many of their lines to cable operation in the 1880’s, to replace, within a decade, the cable cars with electric trolleys, and to finance the construction of much of Chicago’s elevated railway system.

            Despite the corruption, lack of coordinated transit planning and the reluctance of the City to embrace new technology, Chicago’s street railway system was, relatively, progressive, by the standards of the day.  Chicago City Railway, serving the South Side, was the best of the lot, a well-managed corporation that attracted investors of considerable importance and was, predominantly, a locally owned company.  It had on its Board of Directors such wealthy and influential Chicagoans as Samuel Nickerson, Benjamin Hutchinson, Silas Cobb, Samuel Allerton, Marshall Field and Levi Leiter.  In 1885, it had 87 miles of track in operation.  Chicago City Railway was consistently profitable from 1860 through the end of the 19th Century.  However, its “relatively progressive” Chief Executive alienated Field and Leiter, when he tried to prevent Yerkes’ West Division Railway from installing a cable line on State Street, parallel to the original Chicago City Railway line.  Field and Leiter wanted residents of the West Side to have accesses to their businesses in the Central Business District. 

            Chicago’s other two street railway systems, the West Division and the North Chicago, were less profitable than Chicago City Railway and less innovative, as well, which may have contributed to the ease with which a Widener/Elkins syndicate represented by Yerkes took them over in the 1880’s.  Until the takeover, neither the West Chicago nor the North system had bothered with the expense of cable, despite Chicago City Railway’s success with the technology.  North Chicago was the one with the worst access to the Downtown area.  It was, also, the system that suffered the heaviest damage in The Great Chicago Fire of 1871. 

            In 1886, to obtain that access, Yerkes acquired, from Chicago’s City Council, the right to use the City’s then little-used LaSalle Street vehicle tunnel under the Chicago River and installed cable for cable cars.  Yerkes, also, converted the City’s Washington Street tunnel to cable car use and formed yet another company to build a tunnel near Van Buren Street.  By the time that the latter opened, however, electric traction had developed to the point that streetcars were more efficient and economical than cable systems, and, once the City relented and allowed overhead wires in the Downtown area, Yerkes electrified the tunnels. 

            Dreiser’s Titan contains a detailed description of the “both fair and foul” means by which Yerkes obtained the rights to run cable under the Chicago River and into and out of the Central Business District.  Marshall Field was caught in the middle of wanting as much custom for his store and wanting to get a financial piece of whatever Yerkes was doing.  If ever anyone played both sides of the street, it was Field.

            In time, Field is said to have said of Yerkes, “The man is not sound.”  I suggest that Field was less motivated by Field’s opinion of Yerkes’ financial skills and integrity, as he was by his envy of Yerkes’ success, without having, ever, dealt him (Field) in.  Field’s views were followed by The Times, the newspaper controlled by the second Mayor Carter Harrison (a portrait of whom is in the entry area of The Cliff Dwellers Club, off to my left).

            In 1888, even as Yerkes was trying to catch up with the Chicago City Railway Company, by converting his West and North Side horsecar lines to cable, electric technology burst on the scene.  Conversion to electricity was abrupt, although, in Chicago, where the street railways had a huge investment in cable systems, it occurred at a slower pace.  The cable systems began by electrifying their powerhouses, converting from steam-powered mechanisms to electric motors, to pull cables, even before they strung wires over the streets for the new trolley cars.  The traction motor made possible the electrification of horse and cable car lines, the construction of an extensive elevated and subway system in the cities and thousands of electrified interurban railways in the countryside.  A system using central generating stations to provide power to electric traction motors slung beneath streetcars could be built at one-seventh  the capital cost and operated at one-half the per mile cost of cable.

ELEVATED RAILROADS

            By 1890, it had become apparent that a reduction of traffic congestion could result from getting the street railways off the streets of Downtown Chicago and onto elevated railways or into subways.

            Although the first electric elevated railway in Chicago was a freight line that had been built in 1892, to serve the Armour & Company packing plant, the event that seemed to precipitate action on the “Ls” was The Columbian Exposition of 1893.  The City began planning for the Fair in 1885, and the Chicago & South Side Rapid Transit Railroad was incorporated in 1888 and used steam locomotives.  Promoters of the Metropolitan West Side Elevated Railway decided, prior to its opening, to convert it from steam to electric traction, and all “L”s designed thereafter followed that lead.  The Lake Elevated was converted from steam to third rail in 1896, and the South Side Elevated was converted two years after that.

            Contributing to the high cost of construction was the State’s property-owner consent law.  Street railways ran on public rights-of-way, but the “L”s, for the most part, had to buy their own.  In 1883, when proposals for elevated railways began appearing, a politician secured passage of legislation that required elevated companies to secure the consent of two-thirds of the property owners along each mile of line – essentially requiring that the street railways to bribe property owners along their routes.  As it turned out, it was less expensive for “L”s to acquire separate rights-of-way, by buying their own alleys, than to bribe property owners to use their streets.  This was the source of the name, the Alley “L”, on the Near South Side, and, even today, explains some of the right angle turns that slow the progress of the elevated trains.

            The South Side Elevated went into bankruptcy.  The Lake Street Elevated would have joined it, were it not that Yerkes, concerned about its impact on the volume of riders on his West Division Street Railway, formed another syndicate in 1894 and bought a controlling interest in both.

            Yerkes was less successful with his Northwestern Elevated, chartered in 1893, to protect his interests on the North Side, than he was with the Lake Elevated.  The Widener-Elkins syndicate originally subscribed for stock but reneged.  Yerkes was finally reduced to offering prospective Northwestern Elevated bond purchasers free stock in Northwestern Elevated and in his Union Loop.  To keep costs down, Yerkes was, also, forced to snake his line through North Side neighborhoods that were willing to give him the most favorable terms on land acquisition.

            As late as 1891, Yerkes, who was, always, looking for ways to make his system more efficient, ordered a “dummy” steam tramway locomotive, for his North Chicago Street Railway Company.  (A “dummy” was a steam locomotive with high sides that were intended to reduce the fright of passing horses.)  The dummy was not particularly successful in Chicago, as the City Council restricted their use to outlying areas or to the suburban lines to Hyde Park, the Stockyards and Lake View’s Graceland Cemetery.  Small locomotives pulling trains on Chicago’s first elevated railways were logical outgrowths of the transit industry’s experience with dummies.  All these steam locomotives were overtaken by electrification.  The Lake Street Elevated electrified its system in 1896.  The Metropolitan West Side Elevated was electrified, when it commenced its service in 1895.  Although Chicago City Railway had begun electrifying new lines for trolley operation as early as 1893, it, by 1905, still, had more miles of cable.  Chicago did not complete conversion of its cable lines until 1906, after the City mandated electrification.

THE LOOP

            Long before construction started on the Northwestern Elevated line, Yerkes had concluded that, to a great extent, the financial problems of the new elevated railways resulted from their failure to get access to Downtown Chicago, where their street railway competitors had a monopoly on service.  The South Side Elevated came only as far North as Congress Street; the Lake Elevated ended West of the River at Clinton Street; and the Metropolitan Elevated was built only to Wells Street.  Yerkes solution – to build a one-mile square elevated Loop over which all of the “L” companies could operate through Downtown Chicago – was both one of the most brilliant and darkest chapters in transit history.  The Downtown merchants were badly divided on the issue; corruption in the City Council was rampant; the elevated companies that would have to use the line, if it were to be successful, were independently owned; and State law and City ordinances, not only imposed onerous restrictions on the project, but, also, encouraged corruption.

            Despite the risks, Yerkes decided to proceed, but he used subterfuge, to conceal his goal, until it was too late to stop the project.  The entire project had to be built over streets, and he was confronted with prohibitively expensive bribery.  He hoped that obtaining piecemeal consent for the system, one segment at a time, would prevent property owners from organizing and driving up the cost of the requisite bribe.

            Yerkes’ initial move was to obtain the franchise to extend the Lake Street Elevated across the Chicago River, as far East as Wabash Avenue in Downtown Chicago.  This would be the first and Northernmost leg of the Loop.  The property-owning merchants along Lake Street immediately saw the potential for new business that riders would provide.  After Yerkes promised that the stairways the elevated structure would be on the sidewalks in front of their stores, the merchants signed the consent forms.

            Yerkes used a proposal to build a Downtown terminal for his Northwestern Elevated Railroad as the excuse for the second, or Eastern, leg of the Loop, above Wabash Avenue.  Although business owners along Wabash Avenue objected, Yerkes was able to obtain sufficient consents from factory and warehouse owners near the River at the North end of the line.  The East and South legs of the Loop posed different problems, since Yerkes did not own the South Side and Metropolitan elevated companies that were the logical users of those segments upon which the entire Loop elevated project depended, for financial success.  As both companies were in financial distress, each agreed to a deal, to gain access to the Downtown area.  By this time, property owners, especially those along Wabash Avenue, had formed a protective association, probably to enable them to keep tabs on the going rate for bribes.

            Yerkes encountered the most concerted opposition to the final, or Southern, leg of the Loop.  Gaining the consent of the property owners required Yerkes’ most Machiavellian skills.  Those opposed to the project included Levi Leiter, a major Downtown property owner and investor in Yerkes’ venture.  Leiter had supported the other three legs of the Loop, but he wanted the final leg to be built over Harrison Street, where he owned buildings, instead of over Van Buren Street, where Yerkes had planned the route.  Yerkes’ Union Consolidated Elevated applied for a franchise, not simply to complete the Loop between Wabash and Wells, but, also, to extend it a mile farther West, across the Chicago River.  The purpose of the added mile, which Yerkes had no intention of building, was to gain the consent of enough property owners, along the Western section, in order to offset the opposition along the Eastern segment.  The ploy worked. The Loop opened for service on October 3, 1897, and was an immediate success.

            In 1899, Yerkes' Union Traction was incorporated, to absorb the West Side’s and North Side’s streetcar systems.  Union Traction quickly issued stock to various investors, including the Widener-Elkins syndicate, and, then, used some of the proceeds to buy out Yerkes' stock interest in the two subsidiaries.  As the West Division streetcar system and the North Chicago streetcar system were in precarious condition, Union Traction suspended dividends in its first year of existence and filed for receivership just before its franchise expired in 1903.

YERKES’ DEPARTURE

            The street railways had become cash cows that everyone was trying to milk – investors, syndicates, politicians, traction barons, property owners and government.  Financial data from the Chicago traction companies indicate that, while there were many failures, from the outset, they were highly profitable ventures.  The street railways were so profitable that, to a large extent, they had financed the construction of the City’s earliest elevated railway lines.

            By the late 1890’s, Yerkes was receiving the brunt of the public discontent over the street railways, although his role in the building of Chicago’s elevated railways had been less controversial.  By 1897, Yerkes, whose street railway franchises were to expire in 1903, controlled two-thirds of the street railways and about half of the elevated system.  When Yerkes induced the Illinois legislature to pass legislation to extend street railway franchises to 50 years, the resulting furor led Yerkes to decide to sell out and leave town.

            The Loop may have been Yerkes’ finest project, but, before he completed it, reformers in Chicago, including its second Mayor Harrison, were clamoring for his scalp.  The fact that the 20-year street railway franchises negotiated in 1883 were about to expire fueled the reformers’ attacks.  As the 19th Century drew to a close, the new elevated system, including The Loop, had proved to be a technological success, but it was a financial fiasco.

            While the public, the press and the politicians of The Gay Nineties in Chicago were dissatisfied with the privately-owned transit system, no one would consider using public funds. 19th Century Chicagoans sanctioned privately controlled mass transit, but they objected to subsidizing it with public funds.  With Yerkes no longer present, as a lightening rod for the opposition, and with a $75,000,000 [$1,500,000,000, in today's Dollars] aggregate cost of purchase of Chicago’s entire transit system, public enthusiasm for municipal ownership began to wane.

            Yerkes left Chicago for New York, sold the bulk of his transit holdings and invested in development and electrification of the London Tubes, a project that rehabilitated his reputation.


CLOSING

            I close with these exchanges between Mssrs. Yerkes and Harrison:  When Harrison’s newspaper, The Times, was attacking Yerkes’ railways, Yerkes strode, one day, unannounced, into Harrison’s office, and said,

            “Carter, I, always, did know that you were a scoundrel.  Good Day, Sir.”

Yerkes, then, closed the door and left before Harrison could utter a word.

            However, in Harrison’s own 1935 biography, he said of Yerkes:

            “He was, really, a gallant – though perverted – soul – a man that looked danger in the face, unflinchingly.  He was the stuff of which great war heroes are made.  With the right moral fiber, he would have been a truly superb character.”  [Harrison, Stormy Years (1935)]

*                      *                      *

THANK YOU!

[Presenter’s Note:  For facilitating the reading of this paper, virtually all quotation marks and elision markings (“. . .”), especially in the text attributed to Mr. Young, have been omitted.  In addition, original text has been much modified and reordered herein, in order to focus the analysis.]


THE CHICAGO LITERARY CLB

 

March 13, 2006

 

CHARLES YERKES AND CHICAGO TRACTION

 

PARTIAL LIST OF SUBSTANTIAL SOURCES

 

Dreiser, Theodore, The Trilogy of Desire

                        The Financier (1912)

                        The Titan (1914)

                        The Stoic (1947)

 

Richard Lingeman, THEODORE DREISER, At the Gates of the City -1871-1907 (Putman,   1986):

 

Richard Lingeman, THEODORE DREISER – An American Journey – 1908-194 (Putnam, 1991)

 

Philip L. Gerber, The Financier Himself: Dreiser and C. T. Yerkes (1973) PMLA 68: 112-121         (PMLA is, currently, published by the Modern Language Association.)

 

Young, David M., Chicago Transit – An Illustrated History (Northern Illinois University Press,                      1998)

 

Moffatt, Bruce G., The “L” – The Development of Chicago’s Rapid Transit System, 1888-1932     (Bulletin 131, Central Electric Railfans’ Association, n.d. – ca. 2000)


Pizer, Donald, Richard W. Dowell, and Frederic E. Rusch.

Theodore Dreiser: A Primary Bibliography and Reference Guide.

 

http://www.library.upenn.edu/collections/rbm/dreiser/

 

Dissertation by “D. Daniels, titled, “A Critical Review of The Third Way for Developing the London Underground”, for The Institute for Financial Management of the Manchester Business School of the University of Manchester, University of Wales, Bangor, UK, under the tutelage of Charles Schell (ca. 1999)


 

1898  "A Talk with America's Leading Lawyer." Success 1 (January): 40–41. Joseph Choate. Reprinted: Little Visits with Great Americans (1905);

 

1898  "A Great Editor's Island Home." Success 1 (January): 45.* Attribution: Signed "S. J. White";  Charles A. Dana.

 

1898  "A High Priestess of Art." Success 1 (January): 55.* Attribution: Signed "Edward Al"; Alice B. Stephens. Reprinted: Little Visits with Great Americans (1905).

 

1898  "A Woman to Run for Congress." Success 1 (February): 6

 

1898  "A Photographic Talk with Edison." Success 1 (February): 8–9. Reprinted: How They    Succeeded (1901).

 

1898 “Anthony Hope [the novelist] Tells a Secret." Success 1 (March): 12–13. Reprinted: Talks         with Great Workers (1901).

 

1898  "A Vision of Fairy Lamps." Success 1 (March): 23.* Attribution: Signed "Edward Al". H.            Barrington Cox.

 

1898  "How He Climbed Fame's Ladder." Success 1 (April): 5–6. William Dean Howells      [American literary figure]. Reprinted: How They Succeeded (1901); Ulrich Halfmann,      ed., "Interviews with William Dean Howells." American Literary Realism 6 (Fall 1973):            339–44.

 

1898  "Fame Found in Quiet Nooks." Success 1 (September): 5–6. John Burroughs [the        naturalist]. Reprinted: How They Succeeded (1901).

 

1898  "Thou Giant." Success 1 (September): 16. Poem.

 

1898  "Life Stories of Successful Men - No. 10, Philip D. Armour." Success 1 (October): 3–4.           Reprinted: How They Succeeded (1901).

 

1898  "Life Stories of Successful Men - No. 11, Chauncey Mitchell Depew [President of The           New York Central Railroad]." Success 1 (November): 3–4. Reprinted: Talks with Great Workers (1901).

 

1898  "Life Stories of Successful Men - No. 12, Marshall Field." Success 2 (8 December): 7–8.        Reprinted: How They Succeeded (1901).

 

1898  "A Leader of Young Mankind, [Chicago preacher] Frank W. Gunsaulus."

            Success 2 (15 December): 23–24. Reprinted: Talks with Great Workers (1901).

 

1899  "Carrying Out a Career." Success 2 (7 January): 86.* Attribution: See W. A. Swanberg,             Dreiser (1965), p. 79. Alexander H. Revell [millionaire furniture dealer].

 

1899  "He Became Famous in a Day." Success 2 (28 January): 143–44. Paul Wayland Bartlett         [American sculptor]. Reprinted: Talks with Great Workers (1901).

 

1899  "His Life Given Over to Music." Success 2 (4 February): 167–68. Theodore Thomas    [Conductor of The Chicago Symphony Orchestra]. Reprinted: How They Succeeded          (1901).

 

1899  "America's Greatest Portrait Painters." Success 2 (11 February): 183–84.

 

1899 "The Career of a Modern Portia." Success 2 (18 February): 205–206. Mrs. Clara Foltz.

 

1899  "Literary Lions I Have Met." Success 2 (25 February): 223–24. James B. Pond.

 

1899  "Women Who Have Won Distinction in Music." Success 2 (8 April): 325–26.

 

1899  "A Monarch of Metal Workers." Success 2 (3 June): 453–54. Andrew Carnegie.          Reprinted: How They Succeeded (1901).

 

1899  "A Master of Photography." Success 2 (10 June): 471. Alfred Stieglitz. Reprinted: Talks           with Great Workers (1901).

 

1899  "American Women as Successful Playwrights." Success 2 (17 June): 485-86.

 

1899  "American Women Who Play the Harp." Success 2 (24 June): 501–502.

 

1899  "It Pays to Treat Workers Generously." Success 2 (16 September): 691–92. John H.     Patterson [President of The National Cash Register Company]. Reprinted: Talks with         Great Workers (1901).

 

1899  "American Women Violinists." Success 2 (30 September): 731–32.

 

1899  "American Women Who Are Winning Fame as Pianists." Success 2 (4 November): 815.

 

1900  "Atkinson on National Food Reform." Success 3 (January): 4.* Attribution: Signed         "Edward Al".

 

1900  "The Story of a Song-Queen's Triumph." Success 3 (January): 6–8. Lillian Nordica       [American prima donna]. Reprinted: How They Succeeded (1901).

 

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CH02/ 22423966.1

DRAFT 12/22/05