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HERMAN HAUPT,
HE COAL BUSINESS ON HE PENNSYLVANIA RAILROAD. A COMMUNICAION ADDRESSED O HE PRESIDEN, DIRECORS, AND SOCKHOLDERS OF HE PENNSYLVANIA RAILROAD, ON HE COS OF RANSPORAION
1857
Herman Haupt,
Te Coal Business on the Pennsylvania Railroad. A Communication Addressed to the President, Directors, and Stockholders of the Pennsylvania Railroad, on the Cost of ransportation
(Philadelphia, PA: . K. and P. G. Collins, 1857).
Te Philadelphia and Reading Railroad’s experience in the anthracite elds o Pennsylvania proved that the transportation o coal over rail could be quite pro-itable. When the Pennsylvania Railroad received its charter to construct a line across the state, coal traffi c was not a major consideration. By the 1850s, though, the thriving bituminous coalelds in western Maryland, Pennsylvania and Ohio all lay within striking distance o the Pennsylvania Railroad’s major line. How-ever, as coal was a heavy and bulky commodity, its value as a major source o traffi c was debated among railroad engineers. Some argued that the prots made in carrying anthracite coal relatively short distances to heavily populated areas could not be replicated in the bituminous trade. Others, like the ormer chie engineer o the Pennsylvania Railroad, Herman Haupt (1817–1905), believed that the industrial and domestic markets or bituminous coal would continue to grow, making the carrying trade in that mineral quite protable. As the Penn-sylvania Railroad was running under its total reight capacity in the mid-1850s, Haupt also argued that boosting its coal tonnage would promote the long-term nancial prospects or the line. In 1857 Haupt made his case directly to the management and stockholders in a pamphlet entitled
Te Coal Business on the Pennsylvania Railroad
, reproduced here. As an engineer, he employed a close quantitative analysis o the costs involved in the coal trade and determined that carrying bituminous could pay handsomely. Haupt’s argument in this document
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Te American Coal Industry, 1790–1902: Volume 2
also reected one o his general theories o railroad management – that lines should charge low tolls but encourage high volumes in order to maximize their reight capacity. Tis strategy paid off or the Pennsylvania Railroad; its reight tonnage in 1859 doubled the amount carried in 1855, and earnings increased by more than 20 per cent. As other railroads rushed to copy the Pennsylvania Railroad’s success in low tolls/high-volume reight, the national integration o mineral uel markets accelerated.
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Herman Haupt,
The Coal Business on the Pennsylvania Railroad. A Communication Addressed to the President, Directors, and Stockholders of the Pennsylvania Railroad, on the Cost of Transportation
(1857)
INRODUCORY.
P, February 3, 1857.
o the President, Directors, and Stockholders of the Pennsylvania Railroad Com- pany
.H been instrumental in the organization o various coal and lumber companies now in operation, or about to commence operation on or near the Pennsylvania Railroad; having exerted mysel or years to encourage the invest-ment o capital in such companies or the purpose o establishing a business which I considered essential to the success and satisactory operation o your road, I hope that no apology will be required or this communication. A period o service embracing nearly ten years in the various offi ces o Assistant Engi-neer, Superintendent, Chie Engineer and Director,
1
has now terminated, and my connection with the road has ceased. I have also withdrawn either entirely or partially rom several o the companies which I assisted in organizing.
Personal interests
have not suggested this communication; but I still retain a desire to see the Pennsylvania Railroad become an instrument o more extended utility to the public, a means o urther developing the resources o the State, and a source o ample remuneration to its stockholders.
2
I eel also under imperative obligations as ar as possible to protect those who have invested capital on my recommen-dation rom the consequences o the erroneous views which are prevalent in reerence to the cost o transportation upon the Pennsylvania Railroad.Tis communication has been addressed to the Stockholders as well as to the President and Directors, because the / opinion is prevalent amongst them that no prot can be derived rom the transportation o coal on the Pennsylvania
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