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Northern Bankers put the Central Back on Track

by Conrad Cheatham

The Civil War left the railroads of the South in shambles. To rebuild would require thousands of dollars. Unfortunately the banking systems of the South were also in shambles. The resources of most banks were in Confederate dollars which had no spending value in 1865. In order to find the needed financing railroads were forced to look outside the area. Their options were limited: the financial centers of the Northeast (former enemies), or the financial centers of Europe.

The new president of the Central Railroad & Banking Company was William Wadley. Wadley was faced with this option and after some consideration chose the Northeast. Wadley went to New York City and made the acquaintance of Moses Taylor who was then head of the National City Bank. Wadley impressed Taylor with his railroad knowledge and desire to restore the Central. Under Taylor's direction the National City Bank made a loan of $100,000 to the Central.

Moses Taylor was a good choice as a source for railroad money. By the time Wadley arrived in the summer of 1865 Taylor had been involved in financing for some 15 years. He had developed his railroad interests in the early 1850s through his financial ties with coal and iron companies. He had been associated with the Scranton brothers, John Insley Blair, the Dodge brothers, and others in developing coal and iron businesses. Both industries needed railroad services and these gentlemen expanded their financial investments into railroads.

In 1854 Taylor purchased 1,400 shares of stock in the Delaware, Lackawanna & Western railroad. By 1865 he had 20,000 shares of stock and control of the D.L.&W. He invested also in the Warren Railroad, the Central Railroad of New Jersey, the Philadelphia & Reading, the Michigan Central, and others.

When Wadley met Taylor he met a man already heavily involved in railroads. This contact with Wadley stirred Taylor's interest in the railroads of the South. He purchased his first Central stock in 1868 and by 1873 was its largest stockholder with 3,000 shares compared to 20 for Wadley.

Taylor bought stock and bonds in the Mobile & Girard, the Western Railway of Alabama, the Macon & Western, etc. He provided funds for the Central's Ocean Steamship Company. Taylor's bank gave Wadley the money to purchase the Montgomery & Eufala before the L&N could get it. When Wadley could not persuade the Central board to lease the Georgia Railroad the Taylor connection made it possible for Wadley to lease the GAR in 1881.

Moses Taylor was involved in the western expansion of railroads also. Railroad construction was often too expensive for Midwestern communities. So the builders were forced to turn to the same options which Wadley faced in 1865 -- Europe or the Northeast. Often they turned to what were called Eastern capitalists, or Eastern money men. Taylor, Blair, the Dodges, and others invested in various roads which later became parts of the Chicago & Northwestern, the Rock Island, the Burlington, and others, including the original Union Pacific effort in 1862. Even after Taylor died in 1882 his estate continued to hold railroad stock. Taylor's chief assistant and son-in-law (the relationship developed in that order) Percy R. Pyne took care of the estate's interest.

Moses Taylor helped the Central Railroad of Georgia get back on its feet and expand beyond its Savannah to Macon core.

Source: "The Business Career of Moses Taylor" by Daniel Hodus, New York: New York University Press.

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Last updated June 13, 2006