robber barons

 

The following is the second in a two-part series. To read the first part, click here.

In July of 1879, Austin Corbin put pen to paper to spell out his thoughts. As he addressed a delicate matter, he didn’t want any confusion about where he stood. “We do not like the Jews as a class,” he wrote.

That began his formal attempts to prevent Jews from visiting his new hotel on Coney Island. By this point, Corbin was the president of the Long Island Railroad and the Manhattan Beach Railway and Hotel. He got both positions, not surprisingly, through theft and corruption.

Corbin first took interest in Long Island shortly after returning from the Midwest and establishing his New York banking firm. (We wrote about it in the first installment of this series.) A doctor advised the sea air would benefit his sickly child. So while visiting what is now Coney Island, he saw the opportunity to build an oceanfront resort at Manhattan Beach inthe Town of Gravesend.

Gravesend had poor management, but there were property claims to all the beach land – just not terribly well-defined claims. Corbin had a solution. He hired the town’s corrupt surveyor. Then he had him buy parcels by hook or by crook. Some he bought, others he just needed to survey out of existence.

Coney Island

In the 1870s, Coney Island had an unsavory reputation, populated by muggers, gamblers and petty thieves. Boss Tweed, the corrupt political leader of New York’s Tammany Hall political machine, had turned it into a mess.  Though Tweed was exiled from power by 1877, the power of Tammany persisted. One of its minor operators, John McKane, ran Gravesend when Corbin took an interest. Corbin almost certainly proceeded with McKane’s blessing.

Once Corbin had title to the Manhattan Beach properties, he constructed the Manhattan Beach Hotel, opening it in 1877. And it was grand: 108,000 square feet, 250 rooms, with a veranda 30-feet wide and 600-plus feet long. President Ulysses S. Grant helped cut the ribbon on the hotel at ceremonies on July 4. Over its 25-year life it would host musicians such as John Philip Sousa and Victor Herbert, along with wealthy and famous New Yorkers of the day.

Corbin tightly controlled access to its grounds and beaches. He retained the Pinkerton guards, as he had in the Pennsylvania mines. They patrolled the property and kept out undesirables from the less ritzy end of the beach. Visitors were subject to search and inspection before entering.

And only two years after the hotel opened, Corbin tried to bar all Jewish patrons.

Austin Corbin, Bigot

Anti-Semitism was hardly unheard of at that time, but it was not uncontroversial. The prior summer, hotel operator and judge Henry Hilton (no relation to the Hilton hotels of today) made headlines. He refused to admit a Jewish patron to his Saratoga Springs Grand Union Hotel. Corbin’s similar stance resulted in a Puck cartoon featuring him and Hilton churlishly harassing a Jewish caricature.

For what it’s worth, Corbin’s bigotry was not confined to anti-Semitism. He made headlines again in the later years of his life for barring a Chinese passenger from the cabin on one of his ferries. While it doesn’t seem to have been a major element in his life, Corbin did take his point of view seriously. He served as a founding member in the short-lived, but ominously named, American Society for the Suppression of the Jews.

Controversy aside, the Manhattan Beach Hotel prospered and Corbin set his sights on establishing a second hotel on the ocean: The Oriental. He turned to Tammany gangster John McKane again for assistance. Despite ongoing scandals, the Tammany machine was difficult to topple. The same interests controlled both Democrats and Republicans (very much like today), and both parties embraced Tammany. Tammany thrived by demanding kickbacks for government contracts, licenses and favors. But it would faithfully deliver on promises – taxpayers and the public be damned. Though Tammany started as a Democratic apparatus, it took money from anyone, regardless of affiliation.

Sodom by the Sea

McKane, while successful in cleaning out the lesser criminals from Coney Island, was not successful in improving the overall image of the island. Under his control, it became known as ‘Sodom by the Sea.’ Home to three racetracks, it was a destination for pleasure-seekers of all sorts. Eventually McKane would be sentenced to prison for his corruption, but in the 1870s he was still the boss of Gravesend. McKane advised Corbin that he could acquire from the town the property on which to build his second hotel through a simple town meeting vote, which McKane could deliver for a price.

On the night of the town meeting, Corbin and McKane packed the town hall with his guards and employees, blockaded Corbin’s opponents from entering the building, and voted him the land to build the hotel on for $1,500, roughly one one-hundredth of what it was worth. The controversial land grab would be the subject of lawsuits and legislative investigations, but Corbin and his friends beat back every challenge and the Oriental opened its doors, as planned, in 1880. This time President Rutherford B. Hayes was guest of honor.

Port Plans

The illegal tactics Corbin used in acquiring the land were part of the pattern of his life. In 1880, he gained control of the Long Island Railroad, bringing it out of bankruptcy. As its president for 16 years, he expanded it dramatically, with little regard for the property rights of those who stood in his way.

The most notorious case involved the theft of lands owned by the Montaukett Indian Tribe by Arthur Benson, a friend and business partner of Corbin’s. Benson successfully strong-armed the Native Americans off their land at Montauk, and partnered with Corbin to build resorts, housing and a shipping terminal at the tip of Long Island.

Corbin’s hope was that trans-Atlantic passengers would arrive at Montauk and use his railroad to reach New York, a full day faster than they could on a ship. The ill-conceived plans were flawed in many ways, most significantly by the fact that the proposed port at Montauk was too shallow to serve as the competition that Corbin envisioned for New York Harbor.

Nevertheless, Corbin was on the verge of winning Congressional approval for a duty-free port at the time of his death. Had not repeated lawsuits by the Montauketts over the tactics used to get control of their land slowed the developments, Corbin’s plans might have moved further. Nevertheless, his port plans provide the punctuation mark at the end of his railroading career.

Austin Corbin Embraces Plantation Economics

Perhaps one of the oddest business ventures Corbin undertook was operating an Arkansas plantation. How did a New Hampshire Yankee wind up running a southern plantation? No surprise, it was politics and land speculation that took Corbin down this road.

In 1869, John C. Calhoun, grandson of the South Carolina senator of the same name, acquired Sunnyside Plantation in Chicot County, Ark., with Corbin’s backing. In the post-Civil War period, Calhoun had become convinced there was a lot of money to be made operating plantations using former slaves as a labor force. His business model worked once, and so he and his brother Patrick looked to replicate the success.

Sunnyside, however, was never a great success. The Calhouns owed substantial debts to their backers. Their system of paying for labor through sharecropping and tenant-farmer relationships, as well as traditional wages, was effective enough. But there was nothing they could do about the vagaries of agriculture. Creditors expected payment, regardless of whether the crop was a good one or the market price for the crop was weak.

Prison Labor

After several reorganizations, the property finally reverted to Austin Corbin in 1886. The Calhouns concluded that the path to easy money lay not in the hard work of farming, but in New York, so they extracted what profits they could from their properties and set out for the city.

At the start, the project was a bust for Austin Corbin. The African American populace that had been willing to work with Calhoun balked at working for skinflint Corbin. In addition, the farming economy was depressed. So for several years, the bulk of the plantation properties went unused. By the early 1890s, however, Austin Corbin found the cheap labor he wanted: Prison inmates. Arkansas’ legislature employed a system of leasing prisoners to farms, and later it agreed to a sharecropping arrangement with Corbin, further insulating him from the risks of farming.

Why did Austin Corbin win such a favorable arrangement from the government? Railroads. With his usual grandiosity, Corbin established a tiny rail system to bring his cotton from the field to his gin. And he stationed his personal steamboat, the “Austin Corbin” on Lake Chicot, where it impressed the residents. Most importantly, he the charmed the Arkansans with his plans to build a railroad that would both serve the local needs and add a much needed east-west line to the state.

Prince Ruspoli

But Austin Corbin had an even more profitable scheme in mind. He struck a bargain with the mayor of Rome, a socialite-loving gadabout known as Prince Ruspoli. For a fee Ruspoli would recruit struggling Italian peasants to come to America and send them overseas to the U.S., where Corbin would fleece them. He charged them inflated prices for everything from boat passage to the tools and equipment they would need to work the land assigned to them when they arrived. If they made it 20 years, they would own their plot.

After some political tap dancing to get around the laws that made it illegal to bring foreign contract labor to the country, Corbin put his plan in motion in 1895. The plan did manage to establish some pockets of Italian-Americans in Arkansas, but did not accomplish one of his central goals – directing Italian immigration away from New York and toward the center of the country.

Returning to New Hampshire

By now it will come as no surprise to learn how Austin Corbin accumulated his 20,000-acre park in New Hampshire. Corbin and Benson started his collection of exotic animals on land he acquired on Long Island. It was part zoo, part hunting preserve, part animal-breeding operation. By the late 1880s, however, Corbin decided he needed more room and began looking to his native New Hampshire for land. In 1889, his agents began acquiring struggling farms and assembling his acreage in the depressed region. The few who held out had their land blocked in on all sides, and Corbin persuaded the towns to stop maintaining their roads. They eventually sold.

He then began stocking the park with a wide variety of deer, elk, bison, and wild boar. Not surprisingly, the vast majority of animals that Corbin imported were dead within a year because they were not suited to the climate and conditions. But some of the herd lived on, and the park was a popular stop for Corbin’s wealthy and famous friends who would visit for a day or two of shooting.

Austin Corbin Suffers Setbacks

By this point, Austin Corbin was still an energetic man. Toward the end of his career he suffered some setbacks. He lost control of the New England Railroad, and failed to buy the New Hampshire Railroad. And on a broader scale he was widely reviled. The satirical magazine Puck in 1890 highlighted him again, this time among a pack of his wealthy colleagues bidding to buy the United States presidency and vice presidency.

Nevertheless, Corbin still pursuing his schemes well into the 1890s: his seaport, his plantation and his railroad expansions. He scoffed at the notion he might retire right up until June 4, 1896. On that day, while riding in a carriage on his expansive New Hampshire estate, he popped open an umbrella to shade himself from the sun. But he spooked his horses. They bolted and dumped him eight feet onto a rock wall that cracked open his head. The carriage driver died quickly. Corbin survived another six hours, as his family and physicians made their way to Newport. Naturally they took private trains, arriving in time to watch him expire.

After Austin Corbin

Austin Corbin’s death was a shock. At just 68, few expected to be rid of him anytime soon. The newspapers of the day recounted his business successes.

His estate, however, soon got tangled in litigation. His wife’s one-time maid, Mathilda Nelson, sued the estate in October 1896. Apparently Corbin’s mistress, she claimed he was a “frequent visitor” to her apartments. She said he had promised to provide $50,000 for her.

The estate lawyers claimed Nelson was trying to blackmail them. The Brooklyn Eagle chastised Nelson, who they described as a pretty blonde Swede, in an article headlined: An Affliction of Millionaires. “Women of a certain class seem to delight in notoriety of this kind. They will proclaim that they had irregular relations with rich men and make claims upon the property which was left.” The estate settled an unspecified amount on Nelson to resolve the matter. Four years later, Nelson committed suicide.

Corbin Family Infighting

More significantly, Austin Corbin’s daughter, Anna Corbin Borrowe, also sued the estate. She had been on the outs with the family because they didn’t approve of her marriage. In 1898, the estate executors made a filing showing that the estate worth $1.6 million after settling Corbin’s debts. But initially its value was placed at $4.9 million. Where had all the money gone, she wanted to know?

So she sued her mother, brother and brother-in-law. Borrowe directed her charges largely at her brother-in-law, Corbin Edgell. She claimed he had squandered more than $200,000 on the Sunnyside Plantation. She also charged he had not properly managed the Corbin Park property in New Hampshire. Finally, she claimed, he had sold off stock in the Long Island Railroad and other interests at a bargain price in an effort to further his own interests. She ultimately could not prove malfeasance, but the suit was costly. By the time the case was settled in 1904, the value of the estate had plummeted further to just $290,000. At least that’s what the Corbins told the tax collectors.

Not So Sunny

Sunnyside Plantation suffered badly after Corbin’s death. None of his children took interest in the property. Promised improvements to the irrigation system were never completed, and the Italian immigrant laborers were beset with malaria, as a result. Disillusioned by the unfair treatment and illness, many simply moved on. Within a few years, the plantation was a wreck. The planned railroad, of course, was never built until others developed it years later.

In 1906, the corporation that owned the Manhattan Beach Hotel stopped making payments on its $5 million mortgage. It went for $3.5 million at auction, and operated for several more years until 1910. The Legislature that year banned racing on Coney Island.

The Manhattan Beach was unceremoniously torn down in 1911, its owners assuring that the Oriental was strong and would continue operating. The Oriental then went the way of the Manhattan Beach in 1916.  In 2007, residents of Corbin Avenue on Coney Island successfully petitioned to strike Austin Corbin’s name from the history of their street. In an attempt to sweep away the stain of Corbin’s anti-Semitism, the city declared it renamed the street in honor of revolutionary war hero Margaret Corbin (no relation).

Since Corbin’s time at the helm of the Long Island Railroad, it returned once more to bankruptcy in 1949. Then the state took it over in 1966. The Pennsylvania and Reading Railroad, which came to symbolize the speculative bubble that caused the 1893 financial panic, continued its up-and-down history until 1976. Then the last of its rail assets, known then as the Reading Railroad, were sold to Conrail. It lives on as a space on Monopoly boards, and its shell corporation went through a rebirth as a movie theater chain.

Corbin Park

Corbin Park remains a non-profit wildlife preserve used for hunting by its members. In 1902, Teddy Roosevelt visited.  Other famous guests included presidents Grover Cleveland, Herbert Hoover and Woodrow Wilson. Yankee Joe DiMaggio (you know they weren’t Red Sox fans) showed up, and sp. of course, did financiers including Jay Gould, Cornelius Vanderbilt and J.P. Morgan.

In 1908, the Corbin family furnished the National Park Service with buffaloes from the park to help repopulate the species in the western states. The Corbin family retained control over the park until 1944, when it transferred the property to a group that included Mortimer Proctor of the Vermont Proctor political dynasty.

It is one of two Corbin Parks in the U.S. today. Spokane, Wash,, also has a Corbin Park named for Daniel Chase Corbin, Austin’s brother. A railroad magnate in his own right, equally prosperous, though perhaps a bit less venal. He married his Swedish maid. Daniel’s Spokane home, the Corbin House, still stands today. It very nearly disappeared, however, since Corbin’s widow in 1921 plotted to burn it down in an insurance scam that went wrong. But that’s another Corbin story for another day.

This story last updated in 2024. 

In the history of New Hampshire, Austin Corbin stands out as probably the most loathsome blight the state ever produced.

So perhaps it’s fitting that his Newport mansion sold in 2019 for a fraction of the asking price. Corbin built the estate around his childhood home, which he razed except for his old bedroom. The house measures 7,500 square feet with four bedrooms and six bathrooms, and the owners asked $3.75 million for it. In September 2019 it sold for $612,733.

Born on July 11, 1827, Austin Corbin made his mark on the world as a railroad man, plantation owner, resort operator and banker. His success came mostly in places outside New England, such as Arkansas, Iowa and New York. And he carefully cultivated the image of a prosperous businessman who summered at his New Hampshire mansion.

A Monument to Greed

The mansion was his birthplace, but he gradually tore it down over the years. In its place he erected a monument to his greed, complete with a private rail siding for his personal rail cars. You can see it here as it was when the Wall Street Journal featured it as the House of the Day in 2012.

Austin Corbin continued visiting New Hampshire his whole life, and died on his estate in 1896. He was much lamented by the press of the day, which regurgitated the pleasant fiction of the self-made business success.

Scratch the surface of Corbin, however, and you unearth a long and sordid history of corruption, swindling, bribery, thuggery and anti-Semitism. It’s hard to imagine that one man could possess all these traits and in such full measure — but he did.

Austin Corbin

Austin Corbin is largely forgotten in New Hampshire now, but one odd memorial to him remains: Corbin’s Park. You’d need to look a little bit to find it. Even if  you did you couldn’t get in (because it’s fenced off and private). But it still exists, taking up 20,000-plus acres – roughly half the size of Lake Winnipesaukee. You’ll find it in Sullivan County near Claremont on the borders of Grantham, Croydon, Cornish and Plainfield.

The park was odd even when it was conceived in 1888, and it’s odder still today.  Once upon a time it was open to public visitors; it now remains silent for most of the year. It serves only as a local curiosity and private animal preserve for canned hunts. It’s made the news in the last 20 years only once — when a hunter mistook one of his companions for one of the park’s boars, shot at him (twice) and killed him.

Still, Austin Corbin and his park remain a subject of interest. Brian Meyette, a neighbor of the park, has created an authoritative and informative history of the park at his website. He writes on the site, and rarely does a day go by, even now, when someone doesn’t land on the site looking for information.

Widely Despised

And if you read about the robber barons who did so much to crash financial markets and corrupt governments in the 1800s, you’ll find Austin Corbin generally makes an appearance. In the photo below from the satirical magazine Puck from September 1882, Austin Corbin is depicted in a Louis XV-style party cavorting with other unscrupulous businessmen of his ilk, such as Jay Gould and Russell Sage. A host of senators, including Massachusetts’ George Hoar, are dressed as their courtesans. Corbin stands to the rear of the group with his back to us and a bag of money slung over his shoulder.

 

Though not as prominent as some of the wealthier robber barons, Austin Corbin was well-known and widely despised in his day. And the story of that black hole of forest in the middle of New Hampshire and the man who created it provides some stunning parallels to the corruption we are surrounded by Austin today.

Friends in High Places

Austin Corbin’s business success is indisputable. He made a long career out of marrying his political connections with his business interests to his benefit and the to benefit of his investors. After learning law at Harvard Law School, he went to work with Ralph Metcalf, Newport’s politically connected lawyer and former New Hampshire secretary of state. Metcalf would later go on to serve two terms as New Hampshire governor.

In 1851, Austin Corbin struck out for the western frontier, which at the time was Iowa. He was armed with his and Metcalf’s connections and investor cash. Metcalf alone had loaned him $1,200. Arriving in Davenport, Iowa, he began working as a lawyer. However, he quickly jumped into the more lucrative real estate and banking trades. Here he got his first experience in the profitable business of selling mortgages to the flood of people relocating to the Midwest.

Banking in mid-1800s was a state-by-state business, with banks each issuing their own currencies supported by their gold reserves and their own credit from lenders. The system was unstable, open to a host of threats such as banks overextending themselves and counterfeiting. The result was a system where anyone accepting currency had to question first if it was real and, if so, was it actually worth anything?

Banking on Success

Austin Corbin succeeded in this rough-and-tumble business. He ran one of the few banking concerns in Davenport that did not have to shut its doors during the 1857 financial panic. However, he was also intimately familiar with the weaknesses of state-by-state banking. At one point, he and his banking partner caused a minor panic in Davenport when they began refusing Illinois currency because of their suspicions about its soundness.

Such decisions were difficult. Accept a weak currency and a bank could be out a lot of money. Refuse it and its customers would revolt. When the Congress passed the National Banking and Currency Act of 1863, Austin Corbin and a group of associates received the first charter for the First National Bank of Davenport. It was the first national bank anywhere under the new rules, according to the bank’s published history.

The national bank system and uniform currency were highly unpopular with established banks. They were accustomed to making money off their own currencies. But the politicians of the day desperately needed to stabilize the financial markets and gain a new source of revenue for the fast-accumulating Civil War debt. The national banks, operated by the Republican-friendly businessmen who won their charters, would provide a much-needed supply of customers for that debt.

Austin Corbin, always politically plugged in, saw the opportunity. He and his colleagues in the First National Bank of Davenport wasted no time in sending off their application to Washington, D.C., seeking the charter. In addition to his political insights, Corbin also had another asset that may have helped clear the way for his banking venture. President Lincoln’s Treasury Secretary Salmon Chase.

Another Friend

Chase, who wrote the National Banking and Currency Act and issued the charters, was also a fellow son of New Hampshire. Originally from Cornish, Chase had moved to Cincinnatti, Ohio, in the 1830s. The he won election as both senator and governor before Lincoln chose him as his treasury secretary. He was also Austin Corbin’s cousin.

No strong record  details the relationship between Corbin and Chase, who sought the presidency three times and failed at each attempt. On at least one occasion, however, Corbin repaid the kindness of his cousin. Chase’s daughter had married the governor of Rhode Island and the two had a turbulent and scandalous marriage with infidelity on both sides. On one well-documented occasion,  Chase’s daughter was driven from their Rhode Island mansion. Corbin gave her shelter and, more importantly, stepped forward to defend her in the press.

For two years Corbin acted as the Iowa bank’s president, and when he resigned in 1865 the bank’s assets had grown from $100,000 to more than $500,000. The national charter had been a goldmine for those banks that seized the opportunity. With their single, uniform currency they were wildly popular with the stability-seeking public. Local currencies, soon subject to discounts by anyone accepting them, gradually left circulation.

The future for the national banks looked bright, but Austin Corbin decided his interests would be better served in New York. And so he took his now-considerable fortune to Manhattan where he could profit by connecting eastern capital with western farmers.

Friend to the Farmer

Corbin’s devious brain saw an opportunity in the rewritten banking act. Congress had restricted commercial banks from holding mortgages. While this protected the currency from being tied to institutions conducting profligate lending, it also created a business opportunity for Corbin. He worked with mortgage companies and a network of brokers to sell mortgages to farmers in the frontier states. The mortgages would be profitable enough, paying 7 to 10 percent. Austin Corbin,though, found a way to improve on that.

His mortgage brokers also kept a portion of the loan as a fee. For instance, someone borrowing $1000 would pay the regular payments with 10 percent interest to Corbin’s mortgage company until the $1000 was repaid. In addition, the borrower would pay a fee to the broker of perhaps $200 from the loan itself.

Corbin’s practices were illegal. He was sued and convicted of usury for the scam, but he succeeded in hoodwinking the farmers more often than he got caught. He became a millionaire in the process and earned his investors far more of a return.

Still, to any ambitious, flimflam man of the era, mortgage scams amounted to small potatoes. The mortgage processing machinery that Wall Street used to destroy the economy in 2008 hadn’t been invented yet. In Corbin’s day, the real action was in railroads, and that’s where he focused his energy.

Railroads

Railroads in the late 1800s were booming. There was no quicker, nor more corrupt, way to make big money fast. States, counties and municipal governments would grant millions of acres to the roads to lure them in. Financing was readily available for the sexiest venture of the age. And the western frontiers had a tremendous appetite for moving freight and goods.

In addition, the constant mergers and the possibilities for fraud and speculation were tailor made for the Wall Street hustlers. Some of America’s biggest fortunes were made, at least in part, off the railroads. Vanderbilt, Gould, Corning, Harriman and Fisk all profited mightily off the boom, and Austin Corbin intended to join the party.

He is described as a reluctant participant in his first venture — bringing the Indiana, Bloomington, and Western Railroad out of receivership as its president. Corbin quickly saw how the industry worked. The I.B.&W was born out of the financial mismanagement and corruption of the smaller lines brought together to form it. It connected Indianapolis with points in Illinois.

After Austin Corbin shepherded the railroad from receivership in 1870, it racked up a remarkable $13 million in new debt. Then it collapsed into default again in July of 1874. Furious bondholders were left picking through the ashes of the company that now consisted of an inventory of decrepit equipment and little cash. The books were a tangle of self-dealing, and there was little to recover. It gave Austin Corbin a taste for what railroading could be, though, and he went on to own or control numerous railroads in his lifetime.

Philadelphia and Reading

Compared to Frank Gowen, Austin Corbin was a saint. But that’s not saying much. Gowen assumed the presidency of the Philadelphia and Reading Railroad in 1870, at the age of 33. The Reading had a profitable business in transporting anthracite coal from the Schuylkill County region of Pennsylvania to Philadelphia. There it could be loaded out to other destinations.

Cowen believed that Reading could enhance its profit if it could also own the coal mine and the ships that carried it. The Reading’s charter, however, prevented it from engaging in mining. So one of Gowen’s first acts as president was to convince the Pennsylvania Legislature to create a special entity that would be formed to develop coal in the Schuylkill region. Its stock would be available for purchase.

No sooner did the law pass than the Reading Railroad began buying the stock and pouring its money into the region’s mines. Eventually, the Reading would be the major coal operation in Schuylkill, operating as the Philadelphia and Reading Coal and Iron Company.

The coal miners’ lives were a bitter struggle.  The pay was low and the work extremely dangerous. A quarter of the workers were children between 7 and 16. The Irish immigrant miners had formed the Molly Maguires, who used guerilla tactics against the mine owners.

Molly Maguires

When Gowen took control of the Reading in 1870, it was at the heart of the Molly Maguires disputes that had rocked the region since 1833. Gowen decided to escalate. He reduced wages for his workers, guaranteeing a high level of violence in the region. He hired the Pinkerton Detective Agency to infiltrate the group. The Pinkertons passed along information to vigilantes who murdered the Maguires and their families if the state couldn’t execute them legally.

Throughout the period, the railroads and mines persistently sought to lower wages. All the while the railroad executives traveled the rails in luxurious private rail cars and vacationed abroad. The excess and inequality frequently caused strikes. No sooner would one strike end then the companies would cut wages and prompt another strike. One particularly long strike in 1877 included a massacre of railroad men in Reading.

Throughout the chaos, the Reading held a virtual monopoly on anthracite coal. During this period it used dubious means to make money: It fixed prices with other mines, delayed and limited shipments from competitors that would not cooperate, and manipulated its stock both up and down. One of the company’s clever tricks was to charge exorbitant shipping fees to the mining company that it owned to carry its coal. The mining company would borrow the millions to pay the fees, and then the railroad would record the loan proceeds as revenue even though it would need to repay the loans.

Gowen took the company into bankruptcy twice, and after 10 years he began losing his grasp on it. J.P. Morgan finally ousted him. In 1887, with the railroad in receivership, Morgan created a trust to run it with Austin Corbin as president. Corbin reorganized the line to much fanfare, but his tenure would not last long.

Hiring Scabs

Virtually his first act as president was to reignite old fights with the miners, and he managed to extend the fight to the more reserved railroad engineers. From December 1887 to April, 1888, the Reading was beset with strikes. Corbin managed to bring in strikebreakers.

Congress hauled him to Washington to face charges that he provoked a strike by lying that he would raise wages. That let him push coal prices higher and hire scabs at lower wages. Congress exposed the Reading’s fiddling of its books and rigging of coal prices. The company subsequently took a beating in the press.

Austin Corbin also infuriated the congressional committee members by offering to take them to Reading in a posh, private rail car. In that era, people viewed such blatant efforts at bribery as at least somewhat shameful.

People who worked for a living viewed Austin Corbin with derision. The Locomotive Firemen’s Magazine, for example, published an article about the strike. In it, Austin Corbin was described as belonging to ‘that tribe of human monsters who prey upon poor men, who combine the natures of hog and shark, who, being influenced by greed, make war upon the weak, regardless of right.’

For Austin Corbin, however, criticism from his own kind caused greater problems. While Morgan had cleared out the competition for the Reading once, the remnants of the old management weren’t entirely silenced. The trust had control, but the stockholders were still eager to play games with the company.

Critics

Corbin’s critics constantly needled him. They accused him, for instance, of filling coal cars and putting them on sidings. That way he drove up coal prices by preventing competitors from using them to ship coal. And his critics damaged him seriously when they uncovered another example of his self-dealing.

As the Reading struggled, it could not maintain lease payments to a New Jersey railroad over which it shipped coal. That resulted in a loss to the Reading and a gain to the New Jersey line. Using this information, Corbin heavily invested in the New Jersey rail line.

This kind of manipulation was commonplace among railroad barons, but it resonated with investors who perceived management was more interested in personal profit than the operations of the company.

Austin Corbin beat back his critics, and shareholders selected him to continue on as president. But in 1890 he did an about-face and resigned. It’s unclear why. Did he face new allegations? Had Morgan lost faith in him? Or had he simply realized the company was headed for disaster once again? Because in 1893 the Reading again defaulted.

This time, it signaled the start of the nationwide depression of 1893, which brought years of hardship for the country.

It would be impossible to catalog or reconstruct all of Corbin’s railroading schemes. However, in part two of this article we look at some of his other ventures.

To continue to part two of this article, click here. This story about Austin Corbin was updated in 2024.