Lessons from the Nickel Plate Road, 1881 to 1916: A railroad built to be sold

Abstract

This study examines the operation of the New York, Chicago & St Louis Railroad Company, which is better known by the name, the Nickel Plate Road (NKP). The operations and financial reports from its inception through the period under study provide evidence that management adopted practices that contributed to a populist view of behaviour akin to the robber baron image. This added to social disruption, and the need for anti-trust regulation. Monopolistic tendencies of U.S. large-scale enterprises in the last decades of the nineteenth century motivated speculative investors to build the NKP for selling it to ensure anti-competitive aims of the acquirer. This article, based on the annual accounting reports, asserts that enabling such a structure guided NKP's activities. This demonstrates that laissez-faire business policy alone was failing to meet developing social constructs for an industrial society. Disclosure of accounting numbers became an expectation with the rise of the Interstate Commerce Commission and regulation demonstrating the public use of private interest. Regulating the socio-economic force of railroads and addressing the ‘railroad problem’ would require decades for government officials to effectively address.