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Technological and Managerial Innovation: The Johnson Company, 1883–1898

Published online by Cambridge University Press:  11 June 2012

Michael Massouh
Michael Massouh
Affiliation:
Assistant Professor of the History of Science and Technology, Utica College, Syracuse University
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Abstract

The Johnson Company was initially innovative in both a technological and a managerial sense, but its technically-oriented inventor-managers proved unable to provide creative leadership once the enterprise had passed through its early, technologically creative period.

Type
Research Article
Information
Business History Review , Volume 50 , Issue 1 , Spring 1976 , pp. 46 - 68
Copyright
Copyright © The President and Fellows of Harvard College 1976

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References

1 I wish to thank Dr. William Blanchfield, Dr. Virgil C. Crisafulli, Mark F.Jacox, Dr. James Riccardo, and Dr. Stephen Salsbury for reading earlier drafts and for their critical comments. The decision to include or to delete points and information they suggested was mine, and I take full responsibility for the final draft.

2 The company was originally the Johnson Steel Street Rail Company, but in 1888 after moving the plant and adding a rolling mill, the name was shortened to the Johnson Company.

Material on the Johnson Company can be found in Johnson, Tom L., My Story (New York, 1911)Google Scholar, Chandler, Alfred D. Jr. and Salsbury, Stephen, Pierre S. duPont and the Making of the Modern Corporation (New York, 1971), 23–40Google Scholar, and Massouh, Michael, “Tom L.Johnson: Engineer Entrepreneur (1869–1900),” (Ph.D. dissertation, Case Western Reserve University, 1970), 131–189.Google Scholar

Chandler, Alfred D in Strategy and Structure: Chapters in the History of the American Industrial Enterprise (Cambridge, 1962), 56Google Scholar, suggests that in 1902 DuPont personnel borrowed management ideas from steel and electricity.

3 Chandler, Strategy and Structure, 1–51. A more extensive study of the role of the merchant in nineteenth century American manufacture is Porter, Glenn and Livesay, Harold C., Merchants and Manufacturers: Studies in the Changing Structure of Nineteenth-Century Marketing (Baltimore and London, 1971)Google Scholar.

4 There is not a great deal of scholarly research about the street railway industry. Some information can be found in Mason, E. S., The Street Railway in Massachusetts (Cambridge, Mass., 1932)Google Scholar, Miller, John A., Fares, Please! From Horse-Cars to Streamliners (New York, 1941)Google Scholar, Walker, J. B., Fifty Years of Rapid Transit, 1864–1917 (New York, 1918)Google Scholar, and Hilton, George W., Cable Cars in America (Berkeley, 1971)Google Scholar. Hilton, George W. and Due, John F., The Electric Interurban Railways in America (Stanford, 1964)Google Scholar is about interurbans. A contemporary account is “A Short History of the Street Railway Industry,” Street Railway Journal Souvenir, X (October, 1894), 69–88. Warner, Sam B., Street Car Suburbs: The Process of Growth in Boston, 1870–1900 (Cambridge, Mass., 1962)Google Scholar documents the effects of street cars in the development of Boston suburbs. The role of street railways in stimulating the electric power industry can be found in Passer, Harold C., The Electrical Manufacturers, 1875–1900 (New York, 1972), 216–275, 342.Google Scholar During the last two decades of the nineteenth century urban population grew from 28 percent to 40 percent of the total U.S. population or from 14.1 million in 1880 to 30.2 million in 1900. U. S. Department of Commerce, Bureau of the Census, Historical Statistics of the United States, 1798–1945 (Washington, 1949)Google Scholar, quoted in Chandler, Strategy and Structure, 23.

5 Within a year after the rail was placed on the market, the Bulletin of the American Iron and Steel Association (BAISA), a leading iron and steel journal, described the rail to its readers and commented on its advantages, namely that it “does away with the necessity to stringers and insures a perfect joint, two points of great importance.” It also pointed out that “Already fully 10 percent of all street railways in the country have adopted the Johnson rail.” In 1887, the Street Railway Gazette (SRJ) reported that “Johnson steel rails are being laid everywhere.” Two years later the Gazette stated: “the Johnson Co. stands today without a peer in its line of business.” When a manager of a prominent electric line in New York State said in early 1891 that he thought a newly designed girder rail manufactured by a large supply house was better than any on his line, the Street Railway Journal (SRJ) reminded its readers, “but whether it will prove equal to the new standard girder rail joint of the Johnson Company time alone will determine.” Two years later after winning a Worlds’ Fair medal at the Columbian Exposition, the Journal was still convinced of the superiority of the Johnson Company products because they “had stood the test of time and … [were] considered in so many cities.” The opening sentence of a SRJ article on the company in 1895 was: “Johnson rails are known wherever street railways are in operation.” In a confidential statement “Financial Plan of The Johnson Company of Ohio” it is pointed out: “The Company has furnished and is still furnishing over 70% of all the track material [girder rails and special work] used in the United States for street rail road purposes.” “The News of the Week,” BAISA, XVIII (June 18, 1884), 157. “Notes,” SRJ, II (June, 1887), 120. “Notes,” SRJ, IV (January, 1889), 8. “The Lewis & Fowler Girder Rail in Service,” SRJ, VII (April, 1891), 174–175. “Exhibits of the Johnson Company,” SRJ, IX (July, 1893), 503. “Award of the Judges in Railway Departments,” SRJ, IX (October, 1893), 686–687. “The Works of the Johnson Company in Lorain,” SRJ, XI (September, 1895), 591. “Financial Plan” is attached to a letter from A. J. Moxham to Pierre S. duPont, June 26, 1894. PSDP 26. This letter is included in the collection of Pierre S. duPont Papers located at the Eleutherian Mills Historical Library, Wilmington, Delaware. Items from this collection will be referred to as PSDP followed by the File number.

6 For Johnson's political career see his autobiography, My Story; Murdock, Eugene C., “Buckeye Liberal: A Biography of Tom L. Johnson” (Ph.D. dissertation, Columbia University, 1951)Google Scholar; Faulkner, Harold V., The Quest for Social Justice (New York, 1931)Google Scholar; Mowry, George E., The Era of Theodore Roosevelt, 1900–1912 (New York, 1957)Google Scholar; Warner, Hoyt L., Progressivism in Ohio, 1897–1917 (Columbus, Ohio, 1964)Google Scholar; and Moley, Raymond, 27 Masters of Politics (New York, 1949).Google Scholar

For Johnson's girder rail see Massouh, “Tom L. Johnson,” 41–53, and U.S. Patent Number 272, 554, Street-Railroad Rail, Tom L.Johnson, Indianapolis, Indiana. Filed September 11, 1882, patent issued February 20, 1883. Altogether Johnson patented 31 inventions.

7 The story of Alfred Victor and Antoine Bidermann duPont is in Pisney, Raymond F., “The Louisville Agency of E. I. duPont De Nemours and Company, 1831–1877,”, (Master's Thesis University of Delaware, 1965).Google Scholar For Johnson's work on the farebox see Massouh, “Tom L. Johnson,” 32–40, and U. S. Patent Number 132, 535, issued October 29, 1872 and U. S. Patent Number 143, 698, issued October 14, 1873.

8 Early track construction possessed a number of inherent difficulties owing chiefly to its composite wood and iron construction. The first rails for horse cars were flat pieces of iron nailed to wooden stringers placed on wooden cross ties. Called trams, they were adequate for small horse cars about the size and weight of a large stagecoach and for relatively infrequent traffic. With increased traffic and with larger and heavier cable and later electric cars, tram construction did not provide the necessary vertical support. Further, weather and ordinary vehicular traffic required constant maintenance of the pavement near the tracks and periodic replacement of the wooden stringers. The lack of a rigid joint where two trams came together required additional attention.

T-rails for steam railroads could support the weight and had better joint construction, but they were ill-suited for city streets. They could not very well be placed on top of the pavement for they would obstruct other traffic, and they could not satisfactorily be embedded in the pavement for they did not allow proper spacing between the rail and the pavement for the wheel of the street car. As a result most cities banned the T-rail from its streets and required a wide tram on which the wheel and its flange could ride.

Johnson's rail eliminated the difficulties of tram construction. It was wide like the tram rail, but it was shaped to present little obstruction to normal street traffic. Made entirely of steel, it did not need wooden stringers. By using a splice bar or “fishplate” to join two rails, the rail joint became stronger and rigid. For a fuller account of the difficulties with tram construction see First Annual Report, American Street Railway Association (1882) and Johnson, Tom L., Street Railroad Construction (Louisville, 1883).Google Scholar

9 Johnson had attempted to roll the rail in Louisville, Kentucky and in Birmingham, Alabama. Moxham had been president of the Birmingham Rolling Mill Company when he invented the appropriate rolling mill for the girder rail. Johnson, My Story, 29–30; and “Arthur J.Moxham,” in the Dictionary of American Biography (DAB).

The first commercial American Bessemer steel plant, the Pennsylvania Steel Works, began operations in the summer of 1867. The first steel works using the open hearth process exclusively, the plant of the Otis Iron and Steel Company in Cleveland, began in 1873–1874. It was not until the development of the Thomas-Gilchrist basic process, which allowed the use of phosphoric irons in making steel, that large scale production of steel was possible. Andrew Carnegie bought the rights to the Thomas-Gilchrist process and his Homestead Works were the first to apply the process to regular commercial production in 1888. The Cambria Company, a pioneer in the development of steel, was the second firm in America to roll steel rails. Strassmann, W. Paul, Risk and Technological Innovation (Ithaca, N.Y., 1959), 28–44.Google Scholar

10 An example of special track work was a unit manufactured by the Johnson Company in October, 1891 for the Consolidated Street Railway Company in Syracuse, New York. The unit weighed seventy-five tons and was used at the junction of Salina, Genesee, and Water Streets at the approach of the swing bridge over the Erie Canal. The 222 separate pieces included 113 frogs and fifteen cross-overs. A companion unit was later installed on the north side of the bridge. “A Complicated Piece of Track Construction,” SRJ, VII (October, 1891), 518.

11 “The Boom in Street Rails,” BAISA, XXVII (May 17, 1893), 146. Reprinted from the Boston Commercial Bulletin. An editorial “The Modern Tendency,” SRJ, XI (September, 1895), 582, stated: “The modern tendency in street railway work toward a heavier and more substantial track construction is well illustrated in the case of the Detroit Citizens' Street Railway Company … the weight of rail now being generally laid would have been deemed excessive five years ago, but experience has shown that money spent in that portion of a road's equipment is well worth while.”

12 At their exhibit at the 13th Annual Convention of the American Street Railway Association, the Johnson Co. showed “50 different styles of girder rails.” “American Street Railway Association,” Railroad Gazette, XXVI (October 26, 1894), 744.

13 Also, at this time, Johnson owned a manufacturing company that produced fare-boxes based on his invention. Johnson was ultimately to own and to manage street railway companies in six states, all of which were financially successful. Of the twenty-seven largest lines in 1896 in America, each grossing over a million dollars annually, Johnson owned number fourteen and number twenty-five. “Gross Receipts in 1895 and 1896,” SRJ, XIII (July, 1897), 453–454.

14 Johnson, Tom L., Street Railroad Construction (Louisville, Kentucky, 1883 )Google Scholar. This book argued for the use of girder rail construction, and was a clever sales technique Johnson employed. Johnson served on the committee to write the constitution for the American Street Railway Association, which was established in 1882. Verbatim Report of the Proceeding of the Convention Relative to the Organization of the American Street-Railway Association Held at Young's Hotel, Boston, Mass., December 12th and 13th, 1882. Longstreet, D. F., “Events Which Led Up to the Formation of the American Street Railway Association,” SRJ, VIII (November, 1892) 655–659.Google Scholar

15 Chandler, Strategy and Structure, 25–28. Men in charge of three of the Johnson Co. regional offices patented street railway devices assigned to the Johnson Co. Porter and Livesay, Merchants and Manufacturers, 137–153, detail the change in the last three decades of the nineteenth century in iron and steel distribution from commission merchants to exclusive area agents.

16 Johnson Steel Street Rail Company, Johnstown, Pa., Catalogue No. 5 ( Louisville, Kentucky, n.d. [ca. 1888]).

17 “The News of the Week,” BAISA, XVIII (June 18, 1884), 157. Johnson Steel Street Rail Company, Johnstown, Pa., Catalogue No. 4, (Louisville, Kentucky, n.d.). Johnson Steel Street Rail Company, Catalogue No. 5. The Johnson Company, Catalogue No. 9 (n.p., June 1, 1894). In 1892, the Southern office was moved from New Orleans to Atlanta. “Johnson Co.,” SRJ, VIII (April, 1892), 261.

18 Chandler, Strategy and Structure, 24–36. The Johnson Company may have been indeed the first producers' goods company to develop its own national distribution system. Chandler suggests that the electrical manufacturers in the 1880s and the steel companies by the 1890s had their own marketing organizations. Porter and Livesay, Merchants and Manufacturers, 141, point out that Carnegie started having exclusive agents in the late 1880s. Having a national marketing system as early as 1884 suggests that the Johnson Company was very early. Johnson himself, had earlier acted as his own agent for the sale of his farebox, which he had patented in 1872.

19 This department provided surveys of possible routes, estimates for constructing the railway, and actual supervision of the construction of the line for a street railway company. According to a Johnson Company catalog: “If you want a curve or piece of special work laid out on the street, or plans and estimates prepared, by writing or wiring to our nearest office, a competent engineer will be promptly sent, FREE OF COST, to do this work.” Johnson Steel Street Rail Company, Catalogue No. 5.

20 “At the Convention,” SRJ, V (November, 1889), 374–376; “Exhibits at the Convention,” Ibid., 376–377. “The Johnson Co.,” SRJ, VIII (November, 1892), 704. “Eleventh Annual Meeting of the New York State Street Railway Association,” SRJ, IX ( October, 1893), 658–660; “Second Annual Meeting of the Pennsylvania State Street Railway Association,” Ibid., 663. “The Exhibits,” SRJ, IX (November, 1893), 763. “Street Railway Men at the Convention, “SRJ, X (November, 1894), 715–717; “Some Important Exhibits,” Ibid., 740. “Thirteenth Annual Meeting of the New York State Street Railway Association,” SRJ, XI (October, 1895), 669–674. “St. Louis Convention,” SRJ, XII (September, 1896), 550. “Proceedings of Fifteenth Annual Convention of American Street Railway Association,” SRJ, XII (November, 1896), 673–691; “The Johnson Company,” Ibid., 723–732; “Steel Motor Company,” Ibid., 727. “At the Convention,” SRJ, XIII (November, 1897), 812–817. “The Exhibits,” SRJ, XIV (September, 1898), 509–510.

“The Coming Convention,” SRJ, X (February, 1894), 119. “The Next Annual Meeting of the American Street Railway Association,” SRJ, X (September, 1894), 582. “Note,” SRJ, VIII (July, 1892), 423.

21 In 1888, the Johnson Company was one of the first U.S. companies to install a mitis foundry developed a few years before by Petter Ostberg of Stockholm, Sweden. With a special type of reverberatory furnace using oil for fuel, the mitis process in less than an hour melted wrought iron to which a small quantity of an iron-aluminum alloy had been added to produce a steel. A major property of this steel was that it could be cast easily into the most intricate molds, such as frogs, switches, and other track work where special castings were required. “The Mitis Process at Chester, Pa.,” BAISA, XXII (May 9, 1888), 149. “‘Mitis’ Metal for Street Railway Construction,” SRJ, IV (December, 1888), 331. Johnson Company, Catalogue No. 5. Henry Marion Howe, The Metallurgy of Steel, I (New York, 1891), 87–88, 296–310.

In 1886, Elihu Thomson had accidentiy discovered electric welding while lecturing before the Franklin Institute. By August 1886 he had patented his invention, and by spring 1888 had formed the Thomson Electric Welding Co. The first use for the welding machine was to weld small items like wire and cable.

For the Johnson Company work with electric welding see Massouh, “Tom L. Johnson,” 158–160, 166–169.

22 The standard account of industrial research laboratories is Bartlett, Howard B., “The Development of Industrial Research in the United States,” in National Resources Planning Board, Research – A National Resource (Washington, 1941)Google Scholar, Part II, 19–77. See also Kendall Birr, “Science in American Industry,” in Van Tassel, David D. and Hall, Michael G., eds., Science and Society in the United States (Homewood, Illinois, 1966), 35–80Google Scholar, and David Lewis, W., “Industrial Research and Development,” in Kranzberg, Melvin and Pursell, Carroll W. Jr., eds., Technology in Western Civilization (New York, 1967), Vol. II, 615–634.Google Scholar

The value of the Johnson Company laboratory is discussed in The Johnson Company: Financial Details (n.p., [1896]), 15. PSDP 26.

23 Alvin I. Findley, The Bankers Magazine (April, 1895) quoted in “New Uses for American Iron and Steel,” BAISA, XXIX (April 20, 1895), 89.

24 “News of the Past Week,” BAISA, XXVII (June 21, 1893), 189. “Trade News of the Week,” BAISA, XXVIII (October 3, 1894), 221. There were also moves on the part of the steel pool to “encroach” on their territory. A. J. Moxham to P. S. duPont, January 20, 1894, PSDP 26.

25 The source of the major profit of the Johnson Company in 1893 was in the production of special work (which used the girder rail) and not in the production of rails; $419,277 from the switch works' and allied departments’ average profit per year for 1890–1893 as compared with $528,831 net earnings for all activities in the same period. This was a major factor in adding a steel mill to the existing rolling mill and switch works. See “Financial Plan of The Johnson Company of Ohio” attached to letter A. J. Moxham to P. S. duPont, June 26, 1894, and “Prospectus, The Johnson Company,” attached to letter to P. S. duPont, April 13, 1894, PSDP 26. See also Chandler and Salsbury, Pierre S. duPont, 29. By 1897, when the steel plant was nearly complete, the source of major profit had shifted to rails (undoubtedly for reasons expressed in Footnote #11.): $925,500 for girder rails, $323,325 for Tee Rails, and $341,250 for tin plate bars and billets, making a total of $1,590,075 as compared with a profit of $250,000 from the switch works for special track. Attachments to letter A. J. Moxham to P. S. duPont, April 6, 1898, PSDP 26. Although there was a general drop in early 1897 in the price of steel rails, this was confined, according to T. C. duPont, to T Rails and not girder rails. He felt confident that the drop in prices would increase business. P. S. duPont to T. C. duPont, February 21, 1897 and T. C. duPont to P. S. duPont, February 23, 1897. PSDP 15.

Another reason for building the steel mill was technological – to assure itself of uniform quality steel blooms. A. J. Moxham to P. S. duPont, January 20, 1894. PSDP 26.

26 “News of the Past Week,” BAISA, XXIX (April 10, 1895), 84.

27 “Johnstown, Pa.,” SRJ, III (November, 1887), 969. “News of the Past Week,” BAISA, XXIII (November 27, 1889), 325. “Pittsburgh and Vicinity,” SRJ Souvenir, VII (October, 1891), 66. Massouh, “Tom L. Johnson,” 146–148, 155–156, 177–178. The Johnson Company was among the first steel companies to locate on Lake Erie. The Lorain plant was constructed in record time and was considered one of the most modern and complete ones in the country. “The Works of the Johnson Company at Lorain,” SRJ, XI (September, 1895), 591. “News of the Past Week,” BAISA, XXIX (April 10, 1895), 84.

The Johnson Company may have started out controlling its supply of coal and iron. Two of its major stockholders, A. V. and A. B. duPont owned the Central Iron and Coal Company in Kentucky. PSDP 26. T. C. duPont to Pierre S. duPont, June 6, 1887, P. S. duPont Papers. By early 1896, the Johnson Company owned the Ingleside Coal Company in Johnstown, Pennsylvania, A. J. Moxham to Stockholders of the Johnson Company, March 24, 1896, PSDP 26.

On April 13, 1893, Johnson, A. V. duPont, Moxham, and others applied for a charter in Pennsylvania to extend the function of the Johnson Company to the manufacture of iron and steel, “News of the Past Week,” BAISA, XXVII (April 5, 1893), 101. A. V. duPont died on May 16, 1893, “News of the Past Week,” BAISA, XXVII (May 24, 1893), 157. Orders for ten “horizontal blowing engines” for the blast furnaces were placed with the Southwark Foundry and Machine Company in late fall 1895, “News of the Past Week,” BAISA, 29 (November 20, 1895), 261. Work on the blast furnaces was suspended in July 1896, “Notes From Our Own Correspondents,” BAJSA, 30 (August 1, 1896), 172, and was resumed at the end of March 1898, A. J. Moxham to P. S. duPont, April 6, 1898. On July 5, 1899, the first blast furnace made its first blow and on August 23, 1899, the second one did, “News of the Past Week,” BAISA, XXXIII (November 1, 1899), 189.

28 U. S. Patent Numbers 345,288, July 13, 1886; 369,279, August 30, 1887; 374,525, December 6, 1887; 381,874, April 24, 1888; 423,470, March 18, 1890; and 435,408 September 2, 1890.

29 Alfred began his career in Louisville in 1854.

Raymond F. Pisney, “The Louisville Agency of E. I. duPont De Nemours and Company, 1831–1877.” For the role of commission merchants in nineteenth century America see Porter and Livesay, Merchants and Manufacturers. The value of Alfred's securities found in Louisville amounted to $2,264,823.68 and did not include realty or other property, T. C. duPont to P. S. duPont, June 2, 1893, PSDP 15. According to Chandler and Salsbury, Pierre S. duPont, 25, one half of all his property valued at $2,000,000 was with the Johnson Company.

30 Johnson, My Story, 91–98. Also T. L. Johnson to P. S. duPont, August 17, 1899, PSDP 339, and A. J. Moxham to P. S. duPont, February 25, 1896, PSDP 26.

31 The details of the inheritance are in Chandler and Salsbury, Pierre S. duPont, 27. Pierre's personal inheritance exceeded $170,000. He controlled, in addition, another $500,000 as guardian of his younger brothers and sisters.

32 Coleman had had practical experience in managing his father's coal mines, but little experience in finance. Coleman quickly took to Moxham's and Johnson's style including a strong technological interest in the business. He patented seven street railway devices. Pierre, who had graduated from college in 1890, began work in the powder yard at the DuPont Company. He later wrote that in 1893 he “hardly knew the difference between a ledger book and leger-de-main; at least they were both equally incomprehensible to me.” Quoted in Ibid., 27.

33 For the relationship of Johnson to the duPonts see Chandler and Salsbury, Pierre S. duPont, 17, 24–33. T. C. duPont took full charge at Johnstown in the summer of 1894, “The News of the Past Week,” BAISA, XXVIII (May 2, 1894), 93, “The Latest News,” BAISA, XXVIII (June 13, 1894), 125.

34 “Eleventh Annual Convention of the American Street Railway Association,” SRJ, VIII (October, 1892), 571–573. “The Johnson Electric Co.,” SRJ, VIII (November, 1892), 705. “New Anti-friction Trolley Base,” SRJ, IX (January, 1893), 50; “A Short History of the Street Railway Industry,” SRJ Souvenir, X (October, 1894), 83. “The Steel Motor Company,” SRJ, XI (August, 1895), 547.

35 Strassman, Risk and Technological Innovation, 163–164, 168. When Edison Manufacturing Company and Sprague Motor Company had merged to form Edison General Electric, salesmen for Sprague, dropped because the merged company had no need for a duplicate sales force, had persuaded Westinghouse to enter the street railway market and guaranteed it an already established sales organization. The formation now of General Electric gave Westinghouse an increased amount of business from those who were opposed “on principle” to “trusts.” Walker Manufacturing Company, an established firm manufacturing cable and other supplies for street railways, in 1893 entered the electric traction field with an entirely new system of apparatus designed by Sidney H. Short, whose Short Electric Railway Company, which manufactured electric motors, had been sold earlier in 1892 to General Electric. Siemens-Halske Electric Company of Germany decided to apply their “large and valuable foreign experience to the solution of the various problems met with in American practice,” and the Sperry Electric Company first brought out their electric railway motor in 1892. “A Short History of the Street Railway Industry,” SRJ Souvenir, X (October, 1894), 80–82. Carl W. Mitman, “Sidney Howe Short,” DAB. “Prof. Sidney H. Short,” SRJ, X (March, 1894), 203.

36 It was also assured a significant market through sales to Tom L. Johnson's and his brother's street railway companies. “The Steel Motor Company,” SRJ, X (February, 1894), 139, and (June, 1894), 404. “New Motor and Controller,” SRJ, X (August, 1894), 523. “The Steel Motor Company,” SRJ, XI (January, 1895), 60.

37 A truck was the assembly of wheels, springs, and motors on which the street car body rested. Manufacturers of street car bodies did not usually manufacture the trucks after the introduction of electricity. Trucks were usually manufactured by the electric motor companies.

38 At the St. Louis Convention, the Johnson Company and the Steel Motor Company had separate exhibits, “The St. Louis Convention,” SRJ, XII (October, 1896), 601. “The Steel Motor Company,” SRJ, XII (October, 1896), 668.

Hanchett, George T., “Electric Railway Motors,” SRJ, XIII (December, 1897), 835–840Google Scholar, discusses the four existing American electric motor companies, General Electric, Walker, Westinghouse, and the Steel Motor Company. In The Electrical Manufacturers, 334, 340, Passer is talking about the Steel Motor Company when he refers to The Lorain Steel Company. The Lorain Steel Company was the name that the Johnson Company took in 1898. In referring to the manufacturers of the motors on the existing electric cars in 1902, Passer mentions, G.E., Westinghouse, Walker, and Lorain (i.e. Steel Motor Company).

In 1896, The Steel Motor Company moved to Johnstown to use the vacated larger quarters of the Johnson Company plant since the steel making operation had moved in 1895 to Lorain, Ohio. “The Steel Motor Company,” SRJ, XII (February, 1896), 140. It is not clear from the two references available whether the Berlin office was a commission- type agency or a branch office. The 1897 article calls it “a general European agency” of the Steel Motor Company. The 1898 article gives the German name and says it is the European agent for the Steel Motor Company and The Johnson Company. “The Steel Motor Company,” SRJ, XIII (September, 1897), 577. “An Electric Railway Near London,” SRJ, XIV (July, 1898), 408. In 1897, the Steel Motor Company hired a former assistant manager and salesman, J. A. Rutherford, from Westinghouse: “He is a first class salesman and his many friends will be glad to hear of his advancement,” “Mr. J. A. Rutherford,” SRJ, XIII (March, 1897), 184.

39 “Award of the Judges in Railway Departments,” SRJ, IX (October, 1893), 686–687.

40 Editorial, “Troubles in the Steel Trade,” BAISA, XXVII (May 17, 1893), 148. “Failures in the American Iron Trade from January to June 1893,” BAISA, XXVII (June 28, 1893), 197. Editorial, “A Year of Disaster,” BAISA, XXVIII (January 1, 1894), 4. Editorial, “The End of Two Bad Years,” BAISA, XXIX (January 2, 1895), 4. “The Widespread Business Depression Which All Voters Should Think About,” BAISA, XXX (August 10, 1896), 181.

41 George, Henry Jr, The Life of Henry George (New York, 1930).Google Scholar Letter Henry George to Tom L. Johnson, October 10, 1893. Henry George to T. L. Johnson, October 28, 1893. Henry George to T. L. Johnson, October 31, 1893. Henry George to T. L. Johnson, December 21, 1893. Henry George Papers at New York Public Library.

42 The Nassau Electric Railroad Company of Brooklyn, New York, started in 1894, and by 1896 it ranked number fourteen grossing $1,765,868. The Detroit Citizen's Street Railway Company also started in 1894, ranked in 1896 at number twenty-five grossing $1,040,545. “Gross Receipts in 1895 and 1896,” SRJ, XIII (July 1897), 453–454.

43 “New Uses for American Iron and Steel,” BAISA, XXIX (April 20, 1895), 89.

44 Rawlinson, Gordon Robert, “Tom Johnson and His Congressional Years,” (Master's Thesis, Ohio State University, 1958), 92–102.Google Scholar For the steel trade's reaction to Johnson see “An Out-and-Out Free Trade Speech,” BAISA, XXVI, (April 20, 1892), 105. “Steel Rails and the Steel Rail Duty,” BAISA, XXVIII (January 20, 1894), 20. “Marching Toward British Free Trade,” BAISA, XXVIII (February 1, 1894), 28.

45 “News of the Past Week,” BAISA, XXIX (July 1, 1895), 149.

The following chart of the Johnson Company's profits is taken from The Johnson Company: Financial Details (n.p., [1896]), 4, 21, PSDP 26 and “Bond Issue by the Johnson Company,” SRJ, XII (July 1896), 450. From these figures it is clear that 1896 was a poor year.

46 A. J. Moxham to the stockholders of the Johnson Company, April 3, 1897, PSDP 26, mentions “the paralysis of business” due to President Cleveland's Venezuelan Message. Morison, Samuel E.The Oxford History of the American People (New York, 1965), 797Google Scholar, points out that “panic ensued in Wall Street” after Cleveland's December 17, 1895 message.

Pierre's share of holdings of Johnson Company stock placed him near Johnson's and Moxham's share of holdings, and yet he was asked to raise only $100,000, less than 1/7 of the total amount. The remaining amount was raised with a renewal of two loans from two different street railway companies owned by Johnson ($315,000), an advance from R. T. Wilson ($170,000), and sale of Johnson Company and Nassau Electric Railroad Company (another of Johnson's street railways) bonds ($75,000). The remaining approximately $60,000 was given in credit from friendly banks. A. J. Moxham to P. S. duPont, February 25, 1896, PSDP 26.

47 Koenig, Louis W., Bryan: A Political Biography of William Jennings Bryan (New York, 1971), 188, 231–232, 235, 249–250.Google Scholar Johnson, My Story, 65, 108–109, 200.

48 A. J. Moxham To The Stockholders of the Johnson Company, April 3, 1897. A. J. Moxham to R. G. Dun & Company, September 29, 1896. Moxham was hoping that McKinley would be elected. A. J. Moxham to P. S. duPont, October 20, 1896, PSDP 26. For Pierre's reaction see Chandler and Salsbury, Pierre S. duPont, 31–33. Pierre's inexperience with managing loan renewals in hard times is suggested in a letter from Moxham to Pierre, October 7, 1896, PSDP 26. Moxham suggests three plans in detail as to how to attempt to renew a $50,000 note. Earlier in the year, April 13, 1896, when financial matters were brighter, Moxham had written Coleman asking whether Coleman and Pierre would like to renew the $50,000 note, or should he make other arrangements. Coleman wrote back the next day saying it would be no trouble to renew. A. J. Moxham to T. C. duPont, April 13, 1896. T. C. duPont to A. J. Moxham, April 14, 1896. T. C. duPont to P. S. duPont, April 14, 1896, PSDP 26. On July 18, 1896, Moxham wrote Pierre regarding the next renewal and offering to renew it himself if Pierre could not. A. J. Moxham to P. S. duPont July 18, 1896, PSDP 26.

49 Spinwall Hodge, J. Jr. and Shearer, George L., Editors, “Legal Notes and Comments,” SRJ, XIII (August, 1897), 482–483.Google Scholar “Decisions in the Series Parallel Controller Case,” SRJ, XV (January, 1899), 46–47. Hodge, and Ernest, Robert, “Legal Notes and Comments,” SRJ, XV (March, 1899), 171.Google Scholar When General Electric and Westinghouse in 1896 arrived at an agreement regarding the use of each other's patents, the SRJ was concerned that they would force other manufacturers out of business. Editorial, “The Equities of Patent Ownership,” SRJ, XII (April, 1896), 241–242. “Carnegie Open Hearth Girder Rails,” SRJ, XIII (November, 1897), 811.

“News of the Past Week,” BAISA, XXXI (September 1, 1897), 197. On October 1, 1897, the BAISA reprinted an article from the London Ironmonger in which the correspondent was disturbed by the “severity and the earnestness of the American invasion” of manufactured goods. He discredited the account that an English railroad was negotiating for 100,000 tons of American rails, but believed that the Johnson Company had secured orders for 20,000 tons of rails for electric lines in Ireland. He was warning his countrymen of the various forms of American competition and the need to do something about it. “Foreign Notes,” BAISA, XXXI (October 1, 1897), 219. “Notes,” SRJ, XIII (September, 1897), 566. “The Johnson Company,” SRJ, XIII (November, 1897), 800. A. J. Moxham to the Stockholders of the Johnson Company, April 3, 1897, 4. A. J. Moxham to P. S. duPont, April 22, 1897. A. J. Moxham to E. P. Martin, D. Evans, and E. W. Richards, October 16, 1897; copy of similar letter sent to each. E. W. Richards to A. J. Moxham, October 17, 1897. A. J. Moxham to E. P. Martin, October 21, 1897. E. P. Martin to A. J. Moxham, October 21, 1897. E. W. Richards to A. J. Moxham, October 23, 1897. A. J. Moxham to D. Evans, October 26, 1897. D. Evans to A. J. Moxham, October 27, 1897. A. J. Moxham to P. S. duPont, January 12, 1898. PSDP 26.

50 “The Lorain Steel Company,” BAISA, XXXII (April 15, 1898), 59. “The Latest News,” BAISA, XXXII (April 15, 1898), 61. A. J. Moxham to P. S. duPont, January 26, 1898, with enclosures: A. J. Moxham to T. C. duPont, January 26, 1898; R. G. Hazard to A. J. Moxham, January 21, 1898; H. P. Nash to A. J. Moxham, January 20, 1898; J. Fritz, E. W. Richards, E. P. Martin to Johnson Company, January 26, 1898. Printed Agreement between George Coppell, Walter G. Oakman, and Richard T. Wilson, Jr., and the Johnson Company bondholders, April 2, 1898, PSDP 26.

51 P. S. duPont to T. C. duPont, June 14, 1898. T. C. duPont to P. S. duPont, June 16, 1898. PSDP 15. Johnson, My Story, 56, 106–107. In 1896, Johnson had sold his Cleveland roads. In 1898, he also sold his Nassau Electric Railroad Company, in 1900, his St. Louis road, and in 1901, his Johnstown and Detroit roads. In 1905, he sold his last remaining road in Lorain.

52 Minnesota Iron, Illinois Steel, and the Elgin, Joliet & Eastern Railroad were to exchange their old securities for new Federal Steel stock and options to buy additional Federal stock. Of the cash provided (approximately $14,000,000), $4,000,000 was used to pay for a two-thirds interest in the Johnson Company. “Federal Steel Co.: Terms of Consolidation,” Commercial and Financial Chronicle, 67 (September 24, 1898), 633; 67 (November 12, 1898), 1008–1009.

Holders of Johnson Company stock received Federal Steel preferred and common stock. They also participated in a syndicate to float the Federal Steel securities, for which they earned a commission. General Scheme of Underwriting, n.d.; A. J. Moxham to P. S. duPont, September 13, 1898; A. J. Moxham to P. S. duPont, September 28, 1898; Receipt of J. P. Morgan & Co. from A. J. Moxham, October 18, 1898; A. J. Moxham to P. S. duPont, October 26, 1898; P. S. duPont to A. J. Moxham, November 10, 1898; A. J. Moxham to P. S. duPont, December 20, 1898; P. M. Boyd to P. S. duPont, December 22, 1898, PSDP 26. A. J. Moxham to P. S. duPont, November 16, 1898; J. P. Morgan & Co. to A. J. Moxham, December 6, 1898; A. J. Moxham to P. S. duPont, December 12, 1898; J. P. Morgan & Co. to A. J. Moxham, December 15, 1898; A. J. Moxham to P. S. duPont, December 20, 1898, PSDP 324. In addition they had the option to buy additional Federal stock, and to retain title to the Johnson Company holdings not sold to Federal, which in 1899 paid a 4 per cent dividend. P. S. duPont to H. B. duPont, February 5, 1899, PSDP 19.

One Johnson Company stockholder, P. S. duPont, purchased, through Johnson's connections, 6000 shares of Federal common in January, 1899 at an average price of 54. In April, he sold the entire 6000 shares for 69% per share, clearing over $90,000 in three months. P. S. duPont to H. B. duPont, January 14, 1899, January 15, 1899, January 30, 1899, and April 19, 1899. PSDP 19. P. S. duPont to A. B. duPont, January 29, 1899. PSDP 254.

53 “Consolidation of Steel Interests,” SRJ, XIV (December, 1898), 806. “The Federal Steel Company,” BAISA, XXXII (September 15, 1898), 139. “The Federal Steel Company,” BAISA, XXXII (November 1, 1898), 163.

54 Johnson, Tom L., “Address Before National Anti-Trust Conference, Chicago, February 13, 1900,” The Public, XIV (April 21, 1911), 373–379Google Scholar.

55 A. J. Moxham to P. S. duPont, April 22, 1897, PSDP 26.

56 “More extensive and certainly much more significant was the work he did, also in 1896, for the Lorain Steel Company and its allied concern, the Johnson Company … it was at the Steel Motor Works in 1896, that Taylor devised the first example of a complete classification of accounts … The chief significance of his work … lies in the fact that here, for the first time when he had an opportunity to do something resembling thorough work as a management engineer, he was confronted by a complex product … Here he made his first attempt at stores classification …; here was the first example of the group issuing of stores and worked materials for assembling purposes; and here he devised his first ‘route’ or assembling chart, or one designed to show how all the parts were brought together to build the motor up.” Copley, Frank B., Taylor, Frederick W.: Father of Scientific Management (New York, 1923), I, 445–449.Google Scholar F. W. Taylor to A. J. Moxham, January 20, 1896. A. J. Moxham to F. W. Taylor, January 26, 1896. Agreement between F. W. Taylor and A. J. Moxham dated February 21, 1896. F. W. Taylor Papers, Folder 76J, Stevens Institute of Technology Library, Hoboken, N.J.

57 “News of the Past Week,” BAISA, XXXIII (November 1, 1899), 189. The Johnson Company from a technological, and not a financial, viewpoint was considered one of the most modern plants located at one of the best places in the country. Given the unqualified recommendation of both English and American steel experts, the Johnson Company was a valuable asset for Federal Steel. In the first years of the new century, the Steel Motor Company, strong in railway motor patents, was sold to Westinghouse, weak in railway patents but strong in power generation. Passer, The Electrical Manufacturers, 334.

58 Chandler and Salsbury, Pierre S. duPont, Chandler, Strategy and Structure, 52–113. Dutton, William S., DuPont — One Hundred and Forty Years (New York, 1942).Google ScholarduPont, Bessie G., E. I. duPont de Nemours and Company: A History, 1802–1902 (Boston, 1920).Google Scholar Chandler, Strategy and Structure, 285, refers to the newly organized company as “what might be considered an almost ‘ideal type’ of functionally departmentalized, centralized structure.”

As early as 1894, Pierre had hoped to duplicate the Johnson Company methods and organization at duPont. He was later to write: “Moxham … was a master of cost sheet and orderly management. He visited his plant frequently and was interested in details but he was always accompanied by the line man in charge through whom every question or recommendation passed. His cost sheets were fascinating to me and I became hopeful that the business of [the] duPont Company could be presented in such a clear manner.” P. S. duPont to E. Paul duPont, January 31, 1949. Quoted in Chandler and Salsbury, Pierre S. duPont, 29.

After the Johnson Company sold its steel plant, Johnson immediately offered Pierre the position as president at an annual salary of $10,000 in order to liquidate its holdings in land and securities. Pierre accepted and retained the position until shortly after he became Treasurer of duPont. T. L. Johnson to P. S. duPont, December 7, 1898. P. S. duPont to T. L. Johnson, December 11, 1898. T. L. Johnson to P. S. duPont, January 24, 1899. P. S. duPont to T. L. Johnson, January 27, 1899. PSDP 26. P. S. duPont to Messrs.: E. I. duPont de Nemours & Company, January 20, 1899. P. S. duPont to H. B. duPont, January 27, 1899. PSDP 19. After the steel plant was sold, Moxham went to Nova Scotia as President of the Dominion Iron and Steel Company. His personal secretary there, John J. Raskob, became personal secretary to Pierre in 1900 and later served as Treasurer of the duPont Company. “Arthur J. Moxham,” DAB. Van Gelder, Arthur P. and Schlatter, Hugo, History of the Explosives Industry in America (New York, 1927). P. S. duPont to A. J. Moxham, July 22, 1900. PSDP 26Google Scholar.