Reorganization of the Beaver Meadow Rail Road & Coal Co.

Note: Information in this page draws heavily upon the upon the B. M. R. R. Corporate Reports and the B. M. R. R. Minutes Book.

1839 – Financial Difficulties Arise

In August of 1839 a special meeting of the stockholders of the BMRR was convened for the purposes of disclosing that the company was operating at a deficit and to recommend steps that should be undertaken to rectify the situation.

The argument made was that the supply of coal that was available through mines that were already developed was sufficient to supply the company needs for 26 years. Therefore, development of new mines should be suspended. As a result it was recommended that the mining staff be reduced by 60% - from 164 to 65 miners.

It was further argued that until the market picked up, the staff in the workshops and on the railroad be reduced to the lowest level consistent with maintaining the existing property. Thus it was recommended that this staff be reduced from 91 to 52.

Thus, the total workforce was reduced from 255 to 117.

Additionally, arrangements were made to authorize the borrowing of loans to maintain operations and to increase the capital stock for the same purpose.

In the Annual Report of activities conducted in the year 1839. It was written that the circumstances that led to this depressed situation was “the general prostration of trade and the ‘derangement’ of the currency.” In other words, the effects of The Panic of 1837 were still be experienced in the world of commerce. The Board of Managers was, however, hopeful that prosperity would soon attend the Company’s operations.

A reading of the annual reports for the subsequent period makes no mention of S. D. Ingham (other than a reference to the payment of money owed to him). Ingham had been the president of the company since its inception in 1830. Thus it would appear that the downturn in the financial affairs revealed at the August 1839 meeting resulted in Ingham’s departure. Ingham’s successors, all apparently moneyed Philadelphians, were:

Joseph H. Dulles (1839)

Joseph Scully (1840)

Robert Pearsall (1841)

Henry Budd (10/1842)

It would appear from this turnover at the top corporate position that there was some turmoil as the makeup of a corporate organization that could profit from the operation of the mines, railroad and the sales of coal.

Efforts to reorganize the company’s operations are reflected in a March 7, 1840 entry in the Minute Books when it was resolved that proposals be sought from qualified parties to operate the mines and railroad so as to deliver a specified tonnage of coal to the Parryville landing. Transport from Parryville to the markets and the sale and distribution of the coal would presumably be left in the hands of the BMRR Co.

In this same entry it was resolved that the salaries of all officers at Beaver Meadow and the Weatherly shops be reduced 20% and that further discharges of the workforce be undertaken. Two exceptions to the salary reduction were specified – A. H. Van Cleve and Mr. Van Hagen. Van Cleve was clearly the man that the corporate officers thought could run the operation. (There was no information included that would identify the position that Van Hagen held.)

1840 - Van Cleve & Co. Contract To Operate the Roads and Mines

Later in the month of March 1840 the BMRR received a proposal from an organization named Van Cleve & Co. to operate the mines and railroads. Van Cleve & Co. was comprised of:

A. H. Vancleve

Hopkin Thomas

Jacob Thomas

William R. McKean

No information on the functions of the latter two individuals has been located. Presumably, one of these men took charge of the maintenance of the railroad and bridges. It is mentioned that in August of 1840 the traffic on the road had increased to 20 trains per day.

The annual report for the year 1840 indicates that Van Cleve & Co. started operating the mines and railroad on April 21, 1840.

Thus Hopkin Thomas entered a new phase of his career – as a partner in an entrepreneurship which could profit by improving the efficiency of mining and railroad activities. It is most likely the case that he continued in the role of Master Mechanic of the shops, but he also undertook activities to improve the mining operations. A specific example was the development of a new coal breaker in the year 1843.

Drawing of Hopkin’s coal breaker – see U.S. Patent No. 3368

During the period (1840 – 1845) when Van Cleve & Co. were running the operations, there were periods and operations that were outside of the normal activities. In 1840, the number of coal cars was increased by 20 – 25 units. Van Cleve & Co. undertook this construction a a separate contract. With respect to the locomotive fleet, there appeared to be no increase in number. Bridge maintenance was a constant effort – mention is made in August, 1840 of the need to strengthen the 5 bridges over the Quakake and to expand the bridges to double track. The company also took on the responsibility for maintaining the dwelling houses in Beaver Meadow that the BMRR provided for the miners.

Operations from 1841 Through 1845

In January of 1841 severe floods destroyed as many as eleven of the BMRR bridges, so the contract with Van Cleve & Co. for transporting coal had to be suspended. Van Cleve was put back on salary with the assignment of conducting the necessary repairs. At this point, the railroad operations to Parryville were closed as the road had been washed away in the floods and a new port for loading coal on canal barges was erected at Shipping Port – across the Lehigh River from Mauch Chunk. These activities appeared to have mid completed in mid-August of1841 and a contract with Van Cleve & Co. was re-instituted.

It was in November of 1842 that the BMRR Co. amended their contract with Van Cleve & Co. to initiate coal-breaking activities. The coal breaker, see above, was designed to produce Egg and Nut sizes. ( Egg coal is to pass through 2 in. by 2-1/4 inch and over 1-3/8 inch square mesh; the nut coal to pass through 1-3/8 inch square mesh and over 7/8 inch square mesh.)

The annual report for 1843 discloses that thought was being given to the renting of the mines to private parties rather than contracting with Van Cleve & Co. This was in reaction to the continuation of adverse financial conditions. Apparently the competition was employing this method and had a price advantage over the BMRR Co. Therefore requests for proposals were issued. As it turned out, not a single proposal was received. Therefore the contract with Van Cleve & Co. was continued. The 1843 report concludes with a statement on the most satisfactory performance achieved by Van Cleve, especially with regard to the operation of the new coal-breaking equipment.

Difficulties for the BMRR Co. intensified during the following year. A special stockholder’s meeting was called in July of 1844 where complaints were voiced that the stockholders were not being fully informed by the directors. Insufficient votes were cast to pursue this subject and the meeting was adjourned.

At the annual meeting of stockholders held the following January, a motion to reduce the salaries of the corporate officers by 25 percent was raised, but not passed. Clearly discontent with the profitability of the company was a widespread issue among the stockholders. A motion was made to appoint a committee of stockholders to independently ascertain the profitability of the company and to consider the propriety of closing the business. The discontent resulted in James Rowland being appointed president of the company, replacing Henry Budd.

The following somewhat provocative statement was included in the formal report:

[The Managers and Officers] have had to contend with frequent difficulties, not only those peculiar to the uncertainties attendant on an extensive coal transportation business, but others of a character equally onerous and unpleasant, but which cannot properly be included in a report of this nature.]

Was this a reference to a stockholder revolt?

A statement was included in the 1844 report concerning the “evil policy” of the company’s competitors regarding the pricing of coal. The feeling was that the contract for 1844 that had been negotiated with Van Cleve & Co. had produced a “comparatively favourable contract “, but the price cutting had eaten into the corporate profits. Evidence of the superiority of the coal produced at Beaver Meadows was presented (taken from a report by the noted professor W. R. Johnson), and the hope that this scientific information would find its way to the market place was expressed, so that future price increases could be achieved.

A quite eloquent statement regarding the plausibility of suspending operations of the company until the price of coal recovered was included. Essentially the point was made that this approach was useless. Reference was made to the fact that the company’s difficulties were in large measure due to the “ever memorable flood of 1841”. This discussion was concluded thusly:

“We must continue our exertions, and success, let us hope, will finally sanction our efforts to act will, justice to those who are entitled to it from our hands, and eventually benefit to ourselves, who have persevered unfalteringly to accomplish it.”

There follows in this report for the year 1844 a detailed account of the operations of te mines, the condition of the assets and even the following detail concerning operations:

“Two engines are used above the planes, of seven tons weight each, six wheels with one pair of driving wheels. Load eighteen cars of three tons weight each. Three engines are used below the planes. The weight of two of them is thirteen tons each, with adhesion of all the wheels, (three pair). The road is regulated by the number of empty cars that they can take back, usually about thirty-five cars. The other engine is something smaller. The road cars are without springs, and usually load seven thousand pounds each. The freight of the road is almost entirely down, and almost exclusively coal.”

It is noted that a contract extension for the following year had been negotiated with Van Cleve & Co.

Finally a plug for a stockholder excursion to the area was included: “a summer excursion there would amply repay them, in the renewed health and vigour resulting from the pure air of the mountains.”

The annual report for the following year, 1845, strikes a different tone. Apparently the market had recovered to a significant degree and operations were more profitable. It was noted that there had been only one disruption to the operations, that being caused by a freshet (flood) on the Lehigh and Delaware canals in October of 1845. It was noted that the railroad was in excellent condition, but the heavy use had resulted in a deterioration of the strap-iron rails and that these would soon have to be replaced. However, the major news item, for the purposes of The Hopkin Thomas Story was:

“During a visit of the President and a committee to Beaver Meadow early in November last for the purpose of making arrangements for the business of the succeeding year, it was announced to them by the firm of Van Cleve & Co., the then contractors, that was their desire and determination to settle up their account with our Company and not again to contract.”

No further information is provided as to why Van Cleve & Co. wished to terminate the agreement.

A contract with Wm. Milnes & Co. was negotiated – William Milnes was quite familiar with the BMRR operations. A three-year contract was negotiated with Wm. Milnes & Co. for that company to carry on operations in the same manner as had Van Cleve & Co.

Thus ended in 1845 the involvement of Hopkin Thomas in the affairs of the Beaver Meadow Railroad and Coal Co. Hopkin had been heavily involved with the BMRR from 1836 through 1845 – a span of nine years.

[A side note – Hopkin Thomas would no longer have been Master Mechanic at the BMRR after 1845. Histories have Phil Hoffecker taking over in 1852. There is no information on who performed this task in the intervening years.]

So for Hopkin Thomas and family, what now?

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About The Hopkin Thomas Project

Rev. July 2010