-Caveat Lector-
an excerpt from:
Bonds of Enterprise
John Lauritz Larson
President and Fellows of Harvard College�1984
Harvard University press
ISBN 0-87584-155-4
257 pages � First Edition -- Out-of-print
In-print from:
McGraw-Hill Companies
ISBN: 0071032797
--[1b]--
HOME TO A CRISIS
Forbes sailed from China in December 1836 with a modest fortune ("perhaps
$100,000") and the confidence that he could relax at home before taking up
any new business. When he landed in New York in March 1837, his hope for
domestic peace was shattered by a major financial panic that was sweeping the
commercial world. He fell to work immediately, covering his debts and trying
to salvage Russell & Co. The great danger to merchants in this kind of
monetary crisis resulted from the fact that no one in the regular course of
business kept specie on hand to cover a company's total paper debt. Bills and
credits flowed more quickly than merchandise, and the goods usually sold well
enough to make up the balance in time. At the first sign of trouble, however,
prices fell and creditors demanded specie, which sent everyone scrambling for
cash to cover the bills. Half a million dollars in Russell & Co. bills were
refused payment by bankrupt houses in London, and Forbes's only hope was that
Baring Brothers would cover the debts. He warned the China house, how ever,
not to make a formal request, since that would obligate them to reimburse
Barings on demand. Patience and a cool temper were crucial now, and he
advised the residents to stay clear of loans to the Hongs, extend no credits
whatever, and begin assembling what cash they could. At home, Forbes beat a
path between New York and Boston, dunning those whose bills had been
protested and arranging a large shipment of ginseng to get funds in Canton
while specie was suspended in America. The Barings did cover Russell & Co.'s
outstanding bills throughout the spring, and by July all that remained for
the house to do was to ship money to Barings as quickly as possible."[40]
Russell & Co. survived the panic of 1837 because of its solid reputation and
the timely exertions of all the partners. The panic was an intense personal
crisis for Forbes and the others involved because commerce was not yet
covered by limited liability. In such a personal system of business,
creditors holding bad bills pursued each endorser until they found one who
could pay. Even at Canton Forbes had worried about credits, and now with a
wider view from Boston, he could see the full extent of the abuses. After
investigating the causes of the widespread failures, he decided that "the
immense credit which has been obtained on little or no capital" lay behind
"all the late stoppages." The reckless behavior he had managed to restrain in
Canton had run totally out of control in the larger world, and the storm of
retribution struck down the innocent with the guilty.[41]
When the emergency had passed, Forbes realized that the United States was
gradually slipping out of the mainstream of the China trade. He found that he
was no longer in the best position to direct that commerce or to influence
the workings of Russell & Co. Forbes's new role in Boston was not yet clear,
and his judgments were frequently challenged by the Canton residents.
Moreover, his news from Boston was not as fresh as that out of London because
he unaccountably failed to use the overland mail route he had introduced to
the house. He was rebuked for giving Bennet Forbes authority to use the house
signature and was severely reprimanded for charging commissions on house
business while collecting a partner's share as well.[42]
A serious strain in relations among the partners came in the summer of 1838,
when a young man named Joseph Coolidge, working with Baring's agent Joshua
Bates in London, purchased a large shipment of British goods for Howqua in
direct violation of the Hong merchant's orders. Coolidge claimed his
authority through Forbes and Cushing. Forbes denied any part in the purchase
and branded Coolidge a scoundrel. The house threatened to hold Bates and
Coolidge personally liable, while Howqua relieved Forbes of all authority to
trade in his name. By the following summer Forbes had succeeded in mollifying
Howqua, but Coolidge intensified his attack on Forbes, charging him with
misappropriating �50,000. This personal quarrel was exacerbated by the
diplomatic crisis in China over the opium traffic.
Russell & Co. stood firm until February 1839, when it officially abandoned
the drug traffic. Business was at a turning point. War was threatening in
China. The term of partnership was due to expire at the first of the next
year. Forbes saw this as the time to capture Russell & Co. for his own family
interests and then reduce his personal involvement in trade to a minimum.
Although not unresisted Forbes's reorganization was carried through, and in
1840 Robert Bennet Forbes was sent to Canton for the start of the new
three-year term.[43]
It was now clear to John Murray Forbes that the China trade was an
on-the-spot business. More than ever he viewed Russell & Co. as a place for
deserving young men or embarrassed older ones to make a quick fortune and get
out. His interest in controlling the house was in the power to name
succeeding partners and to dip into that well himself should he ever face
bankruptcy. Though safe at home now, he felt strangely vulnerable. His own
fortune was scattered, much of it floating in outstanding personal loans and
accommodation paper for friends or still tied up in foreign trade. He began
collecting his resources and he adopted a very conservative policy toward
trade: Ship only if the chance of gain is "very great but above all the
chance of loss very small"; risk in trade at sea no more than you can afford
to lose in that season.[44] John Murray Forbes appeared to be following the
path of many older China hands who had salted down their fortunes in order to
clip coupons at home by the fire. In fact-he was discovering a richer and
more exciting field for investment on land than he had found in the South
Seas.
It is hardly surprising that a young man who had spent most of his few adult
years in China and had missed the first stirrings of the Industrial
Revolution in America came home in the late 1830s skeptical of the new spirit
of enterprise that preoccupied the nation. In his last years at Canton,
Forbes had demanded that Bennet invest his homebound funds, not in railways
and manufactures, but in safe bank stocks and insurance firms. Once settled
at home, however, he relaxed these restrictions. He began buying land,
creating a large estate in Milton for his own future use. He cautiously built
up a portfolio of land mortgages and interest-bearing securities of local
transportation and manufacturing companies, whose principal owners he knew
and trusted. He became the trustee for a number of family members and
friends, and Howqua sent him nearly half a million in surplus capital to
invest in American enterprises. Forbes slipped comfortably into the
conservative role of investment manager for a much larger capital than his
own fortune. He quickly extended his holdings into several sectors of the
fast-moving American economy.[45]
Forbes's investments in the 1840s were clustered in four major areas of
opportunity which lay at the core of American industrial development: land,
iron, steam, and railroads. Both at home and in the developing West, Forbes
indulged what he thought was a natural Scottish impulse to buy land. Except
for local real estate and land mortgages, his extensive property holdings
corresponded with his other major investments in iron and, later, in
transportation. He intensely disapproved of the "dirty" practice of land
speculation and usually justified his own involvement as being ancillary to
his other developmental investments.[46]
Bennet Forbes's bankrupt Farrandsville Coal and Iron Company introduced John
Murray to the iron business. John assumed the management of this Pennsylvania
nail works after its accounts were lost in the panic of 1837. For two years
he tried to nurse the company back to health, but its poor transportation
facilities, incompetent technical staff, and voracious appetite for Forbes's
capital finally forced him to cut his losses and sell the property. Undaunted
he took an interest in the Mount Savage Ironworks. When this concern too ran
into trouble, Forbes and Erastus Corning of Albany bought the property at
auction, hoping to add "$200,000 in money" and make it "the great Iron Co. of
this Country." Despite the firm's steady calls for capital and consistent
failure to show much profit, Forbes stuck doggedly to Mount Savage until the
late 1850s, when he renounced the iron business altogether. "Its [sic] a big
business," he wrote to cousin Paul Forbes in 1859, "& ought not to be lightly
touched by Amateurs like you & me."[47]
Steamships were a natural interest for a merchant with iron investments.
Robert Bennet Forbes had dedicated his life to the sea, and he designed most
of the ships in which John took an interest. Bennet's technological
pioneering was no more successful financially than his other enterprises, and
John's enthusiasm for ships cooled perceptibly by the late 1850s. Still, he
allowed himself to be dragged into building "one last steamer" after another,
which he hoped to sell in China or to the government in case of war.
Inevitably, this line of business didn't pay well.[48]
Iron and steam, land and trade eventually converged on railroads, but Forbes
entered that field more cautiously than he did others. While still in China
in the middle 1830s, Forbes had concluded that American railways would fail
"after the first few years; the wear and tear proves ruinous." Railroads were
capital intensive and very risky; Forbes's lessons from trade had taught him
to spread his risks even on the best of goods. However, when he returned from
China and found that many of his old mentors like John Bryant and William
Sturgis were involved in Boston's major railroads, his attitude softened. At
first he took bonds in local roads, but within a few years he was buying
stocks and bonds in New England companies for such conservative ends as his
sister's dowry. Although he was still a passive investor with no role in
railroad management, by 1843 he was routinely buying railroad securities for
his trust accounts as well as himself. As the market picked up in the next
two years, and as railroads proved their capacity to earn, Forbes's holdings
spread into Maine, Connecticut, New York, and Pennsylvania, and his railroad
enthusiasm expanded apace.[49]
When John W. Brooks approached Forbes in 1846 with a proposal to buy the
Central Railroad from the state of Michigan, Forbes was not surprised. In the
course of seven or eight years, he had made the difficult adjustment to a new
career at home. He was becoming an ambitious capitalist, actively reaching
out from Boston for the investment opportunities constantly thrown up by the
rapid development of the West and a growing industrial economy. The focus of
Forbes's career was shifting away from Russell & Co. by 1845, and he was
already recognized as a major broker of funds for domestic enterprise. John
Murray Forbes was not forced out of trade by its dwindling prospects; he was
drawn by the positive attractions of the new domestic economy:
I am rather inclined to Sell out my shipping, & turn my attention to Stocks
and other things which I can manage myself. I am now making arrangements to
buy some coal and Iron lands in Pennsylvania which I think very
promising�then there's the
Michigan RR. In fact every day there are openings for invest-ment here which
I think better than Trade & far less troublesome.[50]
As his business career was taking shape, Forbes also set his personal life in
order. He divided his estate in Milton into spacious lots and tried to settle
all his family and friends in a pastoral community there. Those he could not
persuade to settle in Milton, he insisted on helping in business. He
introduced young men to his business connections. He endorsed their notes and
placed several of them for a term in the house of Russell & Co. He rescued
his cousin Paul Forbes from bankruptcy in South America and sent him to
Canton in 1842, where Paul stayed on as American Consul for many years. In
return for his benevolence, Forbes assumed the right to advise and instruct
these quasidependents�a task that he often performed with excessive zeal!
This personal ambition might have been offensive had he not carried it off
with such style and grace that most individuals found it comfortable to
submit to his ministry.[51]
The exception was Bennet Forbes. John adopted a custodial generosity toward
his brother that was nothing short of patronizing, and the offense was not
lost on the older man. Since 1839, when Bennet's finances failed, John had
pressed him to give up his thriftless habits. Failing that, he begged Bennet
to retire altogether in 1843 and live off a trust fund administered by John.
Reminding Bennet that his own fortune was great enough for both their
expenses but not for both their losses, John finally snapped: "I shall never
feel that I am rich & independent till I see you in the only true track�vis a
rigid restriction of all your expenses clearly within your income."
Independence was an obsession with Forbes, and he saw in Bennet that strain
of "ill luck which dogged our Fathers actions."[52]
In his own affairs John Murray Forbes seemed to thrive on tension. His high
brow, deep eyes, and long elegant nose, wreathed in the classical style by
the remnant of his hair, lent a deceiving calm to his bearing that only
partly concealed the nervous energy emanating from his mouth and hands. His
mind would not rest. When he was not forging ahead with some bold new
venture, he was frantically retrenching and clearing out his accounts. He
searched constantly for system and order on the grandest scale, yet he could
bring none to his own activity. He worked himself to exhaustion writing
letters and making arrangements. "I wonder he don't go mad," wrote Bennet,
"with his hurried and disorderly habits." John recognized his weaknesses and
always commanded his correspondents to "Do as I say & not as I do." In the
early 1840s he began a lifelong habit of "retiring." For the next forty years
he periodically withdrew to Milton or Naushon Island for a retirement from
which he soon emerged, each time returning to even bigger business. On his
Milton estate he adopted the style of a country gentleman, a "farmer" as he
insisted. "Squire" Forbes rode into Boston for the two hours at midday when
merchants gathered at the exchange; but this was a pose, for the squire of
leisure regularly sat at his desk at home all day without lunch or half the
night by a taper writing the endless stream of letters that governed his
business.[53]
In time Forbes's intensely personal style would become a liability as
businessmen turned to the cooler bureaucratic methods of corporate
management. But mid-century was a time of heroic entrepreneurs. Forbes
coupled an almost tribal paternalism with the American ideals of republican
virtue and liberal capitalism, pouring the whole into a new corporate mold.
He recognized no clear division between his public and private life. His
personal relationships and sense of duty flowed outward from his wife and
children to relatives and friends, corporate stockholders, and political
allies, blending into a general patriotic feeling for the nation as a whole.
He began employing the limited liability corporation in business, but he
perceived it as an extension of the family firm and the well-tempered
commission merchant. Through the corporate device he could see himself
performing a great public good, making a fortune building railways, and
remaining in essence a merchant "in a liberal sense of the word."
John Murray Forbes was entering a period of global change more rapid and
thoroughgoing than anyone had ever seen. By the 1840s the application of iron
and steam and human ingenuity to systems of industry and transportation were
causing almost daily changes in the commercial marketplace. Opportunities for
gain (or loss) were multiplied as the revolution in transportation opened
markets that had been closed to competition by geographic barriers. The
productivity of labor was not only increased but revolutionized by the new
methods of manufacturing, and agriculture in the United States-was extended
beyond the limits of imagination a generation before. Historically such
extraordinary changes had been resisted by people who found their security in
organic continuity and order, but in Forbes's generation the excitement of
the possibilities overwhelmed the fear of disorder and a spirit of progress
was born. The railroad became the symbol of a new world coming, and as Forbes
embraced the future his vision soared: "I should like to build the first Rail
Road in China!" More prosaically, he wanted to "join Boston to the
Mississippi River!" With almost delirious confidence, men like Forbes began
to redirect the flow of trade and annihilate the/ 'boundaries of space and
time.[54]
pps. 1-24
Notes
CHAPTER ONE NOTES
1. Robert Bennet Forbes, Personal Reminiscences, 2d ed., rev. (Boston:
Little, Brown, 1882), pp. 3-24.
2. Mary Caroline Crawford, Famous Families of Massachusetts, 2 vols. (Boston:
Little, Brown, 1930), 1: 295-96; Robert Bennet Forbes, Personal
Reminiscences, pp. 1-2; Letters and Recollections of John Murray Forbes, 2
vols., ed. Sarah Forbes Hughes (Boston: Houghton Mifflin, 1899), 1: 3-4; Remin
iscences of John Murray Forbes, 3 vols., ed. Sarah Forbes Hughes (Boston:
Geo. H. Ellis, 1902), 1: 6; Letters of John Murray Forbes, suppl., 3 vols.,
ed. Sarah Forbes Hughes (Boston: Geo. H. Ellis, 1905), 1: 24; Carl Seaburg
and Stanley Paterson, Merchant Prince of Boston: Colonel Thomas Handasyd
Perkins, 1764-1854 (Cambridge, Mass.: Harvard University Press, 1971), pp.
270-72.
3. Seaburg and Paterson, Merchant Prince, pp. 285, 295-96; Crawford, Famous
Families, 1: 296; Letters and Recollections of J.MF, 1: 40-43.
4. See M. A. DeWolfe Howe, Life and Letters of George Bancroft, 2 vols., (New
York: Charles Scribner's Sons, 1908), 1: 162-74.
5. Letters and Recollections of J.M.F., 1: 42-51; Letters of J.M.F., suppl., 1
: 14-15; Reminiscences of J.M.F, 1: 13.
6. See Letters and Recollections of J.M.F., 1: 45-46.
7. Reminiscences of J.M.F., 1: 71-72, 119-20; Letters and Recollections of
J.M.F., 1: 49-50.
8. Reminiscences of J.M.F., 1: 119-24.
9. See John King Fairbank, Trade and Diplomacy on the China Coast, rev. ed.
(Stanford, Calif: Stanford University Press, 1969), chaps. 2 and 3; and
Michael Greenberg, British Trade and the Opening of China, 1800-1842
(Cambridge: Cambridge University Press, 1951), chaps. I and 3.
10. Fairbank, Trade and Diplomacy, pp. 33, 50-5 1.
11. Ibid., pp. 51-53. Greenberg denies that the Cohong ever worked well
enough to set prices or truly monopolize the trade (see British Trade, p. 52).
12. See Greenberg, British Trade, pp. 3-15.
13. Ibid., pp. 18-38, 161-65; see also Jacques M. Downs, "American Merchants
and the China Opium Trade, 1800-1840," Business History Review 42 (1968):
434. American bills were of minor importance before the late 1820s, but after
that time they fueled the opium business and inextricably tied all parties to
the drug traffic. In Downs's words, by the 1830s "opium was balancing
EastWest trade through the American commerce in London bills."
14. The formation and growth of the Perkins firm receives full treatment in
Seaburg and Paterson, Merchant Prince, pp. 155-60, 263-67, but their handling
of the opium business is superseded by Jacques Downs, "American Merchants,"
pp. 422-29. The Lintin system was initially a British innovation and became,
after 1823, a "model of efficiency, security and profit" for British and
American smugglers alike (428). Opium ships called at "outside anchorages" at
Lintin Island, dropped their drug cargo, and proceeded upriver to Whampoa.
Chinese smugglers bought opium chits from Western merchants at the Canton
factories, paying in silver. The chits were presented at Lintin and the drug
was delivered.
15. Downs, "American Merchants," pp. 429-30; Greenberg, British Trade, pp.
29-30; see also Crawford, Famous Families, 1: 295; and Seaburg and Paterson, M
erchant Prince, pp. 263-317.
16. For a good discussion of the evolution of the agency house at Canton, see
Greenberg, British Trade, especially chap. 6. See also Downs, "American
Merchants," and Henrietta Larsen, "A China Trader Turns Investor," Harvard
Business Review 12 (1934): 345-58.
17. Downs, "American Merchants," pp. 430-35; Larsen, "A China Trader," pp.
350-51.
18. Larsen, "A China Trader," pp. 350-51; Letters and Recollections of
J.M.F., 1: 60-61.
19. Letters and Recollections of J.M.F., 1: 63.
20. Ibid., 1: 69; see also 63-70; and Reminiscences of J.M.F., 1: 14-21.
21. Howqua to J.M.F., [Feb., 1834]; Howqua to Robert Bennet Forbes, April 14,
1834; J.M.F to Captain Bancroft (of the Logan), Aug. 15, 1834; in Forbes
Family Papers, Baker Library, Harvard University, Cambridge Mass. (hereafter
cited as Forbes-Baker). See also Reminiscences of J.M.F., 1: 190-91.
22. J.M.F to Sarah Hathaway Forbes, Feb. 20, 1835; in Forbes-Baker; Reminiscen
ces of J.M.F., 1: 192.
23. Reminiscences of J.M.F., 1: 147, 214, 236-37. J.M.F to Thomas Handasyd
Perkins, Jan. 1, 1835; J.M.F to Sarah Hathaway Forbes, April 20, 1836 and
journal letter April 30-May 17, 1836; in Forbes-Baker.
24. Letters of J.M.F., suppl., 1: 29; Reminiscences of J.M.F., 1: 194-95,
215. J.M.F to Sarah Hathaway Forbes, journal letter April 30-May 17, 1836;
J.M.F to Samuel Cabot, April 27, 1835; in Forbes-Baker. Forbes likened the
commission merchant to a tavern keeper, always trying to stay "on the right
side of his customers!!! "
25. Howqua to J.M.F., [Feb., 1834]; Russell & Co. for Howqua to John Cushing,
Feb. 18, 1834; J.M.F to Cushing, Oct. 29, 1834; J.M.F to Joseph Ballestier,
April 21, 1836; in Forbes-Baker.
26. See Downs, "American Merchants," pp. 437-39; Letters and Recollections of
J.M.F., 1: 62-72.
27. Letters and Recollections of J.M. F., 1: 63 - 64.
28. J.M.F to Joshua Bates, Oct. 28, 1834 and Nov. 25, 1835, in ForbesBaker.
29. J.M.F to Robert Bennet Forbes, July "3 say 4th," 1835, in ForbesBaker
(emphasis original).
30. Letters and Recollections of J.M.F., 1: 160; Fairbank, Trade and
Diplomacy, pp. 168-72.
3 1. See Russell & Co. to Parish & Co., Jan. 20, 1834; Howqua to John P.
Cushing, Oct. 29, 1834; see Letterbook "F-5" generally for December,
1833-February, 1834, for countless examples of the routine reliance on
personal judgment and faithful service; in Forbes-Baker.
32. See J.M.F to Bates, Oct. 28, 1834 and Nov. 25, 1835, in Forbes-Baker. See
also J.M.F to Joseph Ballestier, Jan. 26, 1836; and J.M.F to John P. Cushing,
Jan. 3, 1835; in Forbes-Baker.
33. J.M.F to John P. Cushing, Jan. 3, 1835, in Forbes-Baker.
34. J.M.F to William Sturgis, Aug. 17, 1835, Oct. 26, 1835, Aug. 21, 1836;
J.M.F to Samuel Cabot, Aug. 21, 1835, Aug. 28, 1836; in Forbes-Baker.
35. J.M.F to William Sturgis, Sept. 5, 1834, in Forbes-Baker.
36. Letters of J.M.F., suppl., 1: 22-23. J.M.F to Robert Bennet Forbes, Jan.
2 7, Mar. 12, April 4, Sept. 28, and Oct. 28, 1836; J.M.F to John P. Cushing,
Mar. 13, 1836; J.M.F to Samuel Cabot, Mar. 21, 1836; in Forbes-Baker.
37. J.M.F to Samuel Cabot, Mar. 13, 1836, in Forbes-Baker.
38. J.M.F to Joshua Bates, Nov. 20, 1836, in Forbes-Baker.
39. J.M.F to Sarah Hathaway Forbes, July I I - 12, 1835, in Forbes- Baker; Rem
iniscences of J.M.F., 1: 52, 141. Fairbank explains the Confucian code of
right conduct as a belief that virtue is power and that the "virtuous ruler
gained prestige and influence over his people merely by exhibiting his
virtue." (Trade and Diplomacy, pp. 26-27.)
40. Reminiscences of J.M.F., 1: 52. J.M.F to Russell & Co., April 21, May 3,
and July 25, 1837; J.M.F to A. A. Low, May 18, 1837; J.M.F to W. C. Hunter,
May 18, 1837; in Forbes-Baker.
41. J.M.F to Russell & Co., April 5, 1837, in Forbes-Baker.
42. Russell & Co. to J.M.F., July 3, Oct. 20, and Nov. 19, 1838, July 12,
1839, in Forbes-Baker.
43. See generally letters from Russell & Co. to J.M.F., May 5, 1838, through
July, 1839 (case 1, folders 12 and 13), in Forbes-Baker. On Forbes's strategy
for controlling Russell & Co., see J.M.F to Robert Bennet Forbes, Mar. 8 and
April 5, 1839; J.M.F to A. A. Low, April 5, 1839; J.M.F to Joseph Cabot, [c.
June 9, 1839], and several following in Letterbook 8; in Forbes-Baker.
Forbes's control of Russell & Co. was not yet really secure. Bennet was not
entirely welcomed on his own terms, and John had to press through Howqua to
get his cousin Paul S. Forbes employed there in 1842. Bennet retired at the
end of the term in 1846, at which time Paul took his share. By 1849 John was
looking toward control "for some time to come," and recommended sending out
partners who would do the work but "not rule the roost." The dynasty was
finally secured in 1857, when John got legal possession of the Russell & Co.
name from old Samuel Russell for the consideration of a fresh supply of tea
as long as the old man lived. See Robert Bennet Forbes to Paul S. Forbes,
April 10, 1838; J.M.F to Howqua, Dec. 31, 1842; in Forbes-Baker; J.M.F to
Paul S. Forbes, June 5, 1849 and April 7, 1857, in John Murray Forbes
Letters, Typescript, in Forbes-Baker (hereafter cited as J.M.F. Typescript).
See also the articles of partnership for Russell & Co. for each term, in
Forbes-Baker.
44. J.M.F to Robert Bennet Forbes, Jan. 19, 1840, in Forbes-Baker. See also
J.M.F to "Gov." Swain, April 7, 1839; J.M.F to Robert Bennet Forbes, Dec. 20,
1839 and Jan. 19, 1840; in Forbes-Baker; and Duncan Yaggy, "John Forbes:
Entrepreneur" (Ph.D. diss., Brandeis University, 1974), p. 181 and note 44.
45. J.M.F to Robert Bennet Forbes, Sept. 26, 1836, in Forbes-Baker. Yaggy's
thesis outlines many of Forbes's investments in the first few years after his
return from China (see especially chapter 3). See also J.M.F to Paul S.
Forbes, June 21 and Nov. 14, 1844, Oct. 31, Nov. 30, and Dec. 31, 1846, in
J.M.F. Typescript; Robert Bennet Forbes to Paul S. Forbes, Sept. 25 and Oct.
31, 1846; in Forbes-Baker. John Murray Forbes's own estimate of the amount of
Howqua's capital entrusted to him at this time-about one-half million-is
recorded in Reminiscences of J.M.F., 1: 273. The exact details and scope of
Forbes's investments after 1838 can be reconstructed from the Ledgers,
journals, and Trial Balances which are still housed at J. M. Forbes & Co.,
Boston.
46. Reminiscences of J.M.F., 1: 255.
47. J.M.F to Paul S. Forbes, Nov. 29, 1847, and Dec. 21, 1851, in J.M.F
Typescript, Forbes-Baker; Robert Bennet Forbes, Personal Reminiscences, pp. 13
8-39. Bennet estimated his losses in Farrandsville Coal & Iron at $100,000,
which he claimed drove him back to China in 1840. On subsequent investments
see J.M.F to Paul S. Forbes, Nov. 29, 1847, and Dec. 21, 1859, in J.M.F.
Typescript, Forbes-Baker; and Yaggy, "John Forbes," pp. 219-30.
48. See Robert Bennet Forbes, Personal Reminiscences, pp. 208-16, on
steamboat ventures with John.
49. J.M.F to Robert Bennet Forbes, Jan. 9, 1836, in Letters and Recollections
of J.M.F., 1: 81; J.M.F to Mary A. Forbes, Dec. 30, 1842, in Forbes-Baker.
J.M.F to Paul S. Forbes, Nov. 30, 1845, in J.M.F. Typescript; J.M.F to Paul
S. Forbes, [August], 1845, and Sept. 1, 1845; in Forbes-Baker. See also
Arthur M. Johnson and Barry E. Supple, Boston Capitalists and Western
Railroads (Cambridge, Mass.: Harvard University Press, 1967), pp. 37-39,
48-49.
50. J.M.F to Paul S. Forbes, April 3, 1846, in Forbes-Baker.
51. J.M.F to Paul S. Forbes, Oct. 31 and Nov. 30, 1846, in J. M. F.
Typescript; J.M.F to Paul S. Forbes, Jan. 31, 1839, July 3, Nov. 11, and Dec.
11, 1842; J.M.F to Robert Watson, Aug. 7, 1839, Feb. 17, 1840; J.M.F to Mary
A. Forbes, Aug. 30, 1842; J.M.F to W. G. Eliot, Aug. 11, 1842; Robert Bennet
Forbes to Paul S. Forbes, Sept. 25 and Oct. 31, 1846, Feb. 22, 1848; Paul S.
Forbes to Robert Bennet Forbes, June 10, 1839, Oct. 14, 1838; J.M.F to
Howqua, Dec. 3 1, 1842; in Forbes-Baker.
52. J.M.F to Robert Bennet Forbes, [torn, 1843]; J.M.F to Paul S. Forbes,
Mar. 26, 1837; see also J.M.F to Robert Bennet Forbes, Jan. 30 and Feb. 16,
1839, Jan. 3, 1844; in Forbes-Baker.
53. J.M.F to Paul S. Forbes, Aug. 31, 1846, in J.M.F. Typescript,
Forbes-Baker; Robert Bennet Forbes to Paul S. Forbes, Oct. 29, 1848, quoted
in Yaggy, "John Forbes: Entrepreneur," p. 243; see also Yaggy, pp. 129, 202.
Any dip into the Forbes correspondence for the 1840s is likely to turn up a
"retirement," a protestation of laziness, and a comment about late hours and
missed meals.
54. J.M.F to Paul S. Forbes, Oct. 31, 1847, May 10, 1848, in J.M.F.
Typescript, Forbes-Baker.
=====
2
An Assault on Space and Time
JOHN MURRAY FORBES'S years in China coincided with the pioneer decade of
railway building in the United States. The late 1820s and early 1830s saw the
first railroads constructed near seaboard cities and witnessed the emergence
of a new spatial vision among commercial men. In the ten years before 1837,
critical experiments in railroad technology were carried out. Engineers
quarreled over the technical details of railway construction, while the
public joined in a lively debate over the relative merits of railroads and
canals. Forbes's absence from the American scene during this experimental
decade left him ignorant of many details, but it also spared him the
embarrassment and bitterness that many innovators felt when the panic of 1837
swept away the fruits of their labors. By the time the nation's economy had
righted itself in the early 1840s, Forbes was in a position to see, with the
clarity of a novice, that the structure of commerce in the American interior
would be raised on footings of parallel iron rails.
By the middle 1840s, real evidence of the success of railroad technology was
combined with a new excitement over industrial progress to produce the first
American railway mania. Intense debates over the merits of railroads and
canals, locomotives and horses, ensued. These stemmed from qualitatively
different attitudes toward opposing systems of technology and culture. One
was slow paced and and required only modest energy inputs; the other was
vigorous and energy consuming. The two technologies offered as marked a
contrast in styles as the popular images of a fire-breathing locomotive and a
languid mule on a towpath. The men of Forbes's generation who embraced the
new transportation system could scarcely predict its consequences, but the
view from the foreground was benevolent and marvelous.
INVENTION BY INCREMENT
No such radical change in cultural values as the railroad engendered could be
made by a single decision, and the key to the influence of railroad
technology was its incremental development. The railroad emerged from
longstanding efforts in England and America to improve the conditions of
overland transport. In the United States the railroad was born of a popular
campaign for internal improvements that began after the Revolution.
Interregional trade in the new republic was frequently more expensive,
uncertain, and time consuming than communication with London and the ports of
Europe. In fact, in 1790 the free navigation of sailing ships set the
standard of excellence in transportation: Canals, turnpike roads, river
improvements, and the earliest railroads were all designed to bring inland
routes up to the level of efficiency of overseas travel.
The first improvements followed established routes, eliminating sandbars,
swamps, muddy roads, or short necks of land that blocked obvious lines of
travel and trade. Seaboard cities also turned their attention inland to
extend their market radius with turnpike roads, canals, or river
improvements. New York City set the competitive pace, first with steamboats
that offset the downstream flow of the Hudson River, then with a
revolutionary canal along the unique water-level route to Lake Erie in the
West. For American port cities the race was on even before 1825, when the
Erie Canal was completed. American engineers and entrepreneurs explored every
means of improvement with uncommon energy. The lure of the continental
interior was irresistible; the transportation revolution was at hand.[1]
Forbes was still a schoolboy at Round Hill when the first contest to open the
West began. By 1825 Boston, Philadelphia, Baltimore, and cities down the
coast had reached into their immediate hinterlands with turnpikes and canals.
But the opening that year of an interregional waterway from the Great Lakes
to New York City posed a serious threat to the future expansion of these
marketing centers. To compete for the inland trade, these cities must create
routes where none existed. In 1826 Pennsylvania launched its massive
ill-fated effort to cut a canal through the rugged mountains in the center of
the state. Virginia interests set to work on a similar canal through the
Cumberland Mountains to connect the Ohio Valley with Washington City.
Charleston, Baltimore, and Boston, with less geographical encouragement than
the Pennsylvania and Cumberland regions, pinned their hopes on railroad
projects, which before 1830 were even bigger technological gambles than
canals through the mountains.[2]
The concept of the modern steam railroad combined contemporary ideas about
turnpikes and canals, the old hardware of the colliery tramway, and tenuous
new experiments in steam locomotion. Like the canals a generation before,
railroads were first considered special feeders to the established channels
of trade and only gradually were recognized as general purpose thoroughfares
in their own right. The British experience, which was contemporary with the
American efforts, offered only the slightest precedent. Although the Stockton
& Darlington Railway opened in England in 1825, steam power was not perfected
until 1830, when the Liverpool & Manchester placed a locomotive in general
service. Americans were seldom more than a few months behind the British in
their experiments, and Boston men were among the first to study the question
even if they were slow to build their first railroad.[3]
pps. 25-27
--[notes]�
CHAPTER TWO NOTES
1. In the vast literature on early railroads and transportation improvements,
the starting point is still George Rogers Taylor, The Transportation
Revolution, 1815-186P (New York: Holt, Rinehart, and Winston, 1951). Edward
C. Kirkland, Men, Cities and Transportation, 2 vols. (Cambridge, Mass.:
Harvard University Press, 1948); Ulrich B. Phillips, A History of
Transportation in the Eastern Cotton Belt to 1860 (New York: Columbia
University Press, 1908); Robert G. Albion, The Rise of New York Port (New
York: Charles Scribner's Sons, 1939); Louis C. Hunter, Steamboats on the
Western Rivers (Cambridge, Mass.: Harvard University Press, 1949); and Alan
R. Pred, Urban Growth and the Circulation of Information: The United States
System of Cities, 1790-1840 (Cambridge, Mass.: Harvard University Press,
1973) all have made special contributions to the interpretation given here.
2. See Kirkland, Men, Cities and Transportation, 1; Julius Rubin, Canal or
Railroad? Imitation and Innovation in the Response to the Erie Canal in
Philadelphia, Baltimore and Boston (Philadelphia: American Philosophical
Society, 1961); Edward Hungerford, The Story of the Baltimore & Ohio
Railroad, 2 vols. (New York: G. Putnam & Sons, 1928); and Stephen Salsbury, Th
e State, The Investor, and the Railroad- The Boston &Albany, 1825-1867 (Cambri
dge, Mass.: Harvard University Press, 1967).
3. Older works, such as Henry Varnum Poor, History of Railroads and Canals of
the United States of America (New York: J. H. Schultz, 1860) and Charles
Francis Adams, Jr., Railroads: Their Origin and Problems (New York: G. P.
Putnam & Co., 1878), were more sensitive to the complexities of early
technological development than are more recent studies. For the British
situation at this time, see H. J. Dyos and D. H. Aldcroft, British Transport (
Leicester: University Press, 1969); W. T. Jackman, The Development of
Transportation in Modem England, 4 vols. (Cambridge: University Press, 1916);
and Harold Pollins, Britain's Railways: An Industrial History (Newton Abbot:
David and Charles, 1972).
-----
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Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations,
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
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