Pressed Steel Car Company

Fox Solid Pressed Steel Company
Fox Pressed Steel Company
Fox Pressed Steel Equipment Company
Schoen Pressed Steel Company

The Pressed Steel Car Company was incorporated 13 January 1899 in New Jersey, with an authorized capitalization of $25 million, for the stated purpose of “[manufacturing] passenger, freight and street railway cars and to make trucks, wheels, and other parts of cars.” The incorporators were Adrian H. Larkin, Arthur H. Van Brunt and Francis L. Patton Jr. of Jersey City. ^{186} News reports of the time suggested that Andrew Carnegie might be one of the largest stockholders. They also indicated that “those interested in it have built a number of cars, and some of them are now in use on the Pennsylvania railroad.” ^{187} Within days it was announced that the new company had a contract to build 5,000 cars for the Baltimore & Ohio. ^{188}

The Pressed Steel Car Company of Pittsburgh came into existence 17 February 1899, with capital stock of $25 million, News reports said the company was organized in New York, and that the Schoen (Schoen Pressed Steel Company) and Fox (Fox Pressed Steel Equipment Company) interests were merged into the new corporation. Elected officers were —

Directors of the new company in addition to the officers were —

It was announced President Schoen would be opening offices in New York [City]. ^{189}

The very next day it was announced that a contract had been signed between the Pressed Steel Car Company and the Carnegie interests whereby the Pressed Steel Car Company would buy all its steel from the Carnegie mills, and the Carnegie interests would withdraw from the car building business, ^{190}

Production of the consolidated companies—Fox Pressed Steel Equipment Company, with works in Pittsburgh, Pennsylvania, and Joliet, Illinois, and the Schoen Pressed Steel Company, with works in Pittsburgh—was projected by the following July to be 24,000 steel freight cars, 300,000 bolsters and 180,000 truck frames per year “besides pressed-steel specialties.” ^{191}

Within a few days, another contract was announced for 1,000 more steel cars to be produced by Pressed Steel for the Pennsylvania Railroad. ^{192}

And on 19 May it was announced that the former Fox Pressed Steel plant at Joliet, Illinois, would soon be enlarged to four times its then-present size at a cost of $500,000, giving employment to 2,000 men and increasing the plant’s capacity to more than 100 cars a day. ^{193}

Early in May, at the end of the company’s 1st quarter, it paid a dividend of 1¾ percent on its preferred stock. At the end of its 1st year, it paid a dividend of 6 percent on its common stock. During the year it had manufactured 9,624 cars, 127,656 bolsters, 50,926 trucks, and thousands of other parts. Gross revenue for the year was $13,965,000. Operating expenses were $11,728,000. And orders on hand 1 January 1900 amounted to $16,596,863. ^{234}

The Fox Pressed Steel Equipment Company

In 1887, Samson Fox, an Englishman, had begun to apply his knowledge and experience in building boilers to building iron railway car undercarriages and trucks. His trucks could support 120 tons without failing, and were guaranteed for five years. Perhaps just as importantly, they were all steel and contained just four parts, where the typical American “arch bar” trucks of the day contained as much wood as steel (actually wrought iron) and contained 24 parts. Fox’s truck had become standard equipment on all freight cars in England, and were sold in Argentina, Belgium, Bengal, England, India, Japan and Spain in addition to England.

But North America was the world's biggest market, so in the summer of 1888 Fox came to the United States. But in two months of trying to sell his trucks, he garnered not one order. Among the firms he contacted was the railroad supply firm of Manning, Maxwell & Moore. They were not interested in marketing the Fox truck, but they introduced him to their young salesman, whom they thought might be interested in taking on the Fox truck as a sideline: James Buchanan Brady, known by then as “Diamond Jim.” ^{216}

Fox went back to England with an agreement appointing Brady sole American representative of Samson’s Leeds Forge company, leaving Brady with an agreement to pay him a commission of 33 1/3% on each and every Fox truck sold in North America. ^{233}

Brady got busy. He leased a blacksmith shop in Joliet, Illinois, close to the steel mills of Hammond and Gary, Indiana, and stocked up on the materials necessary to construct Fox trucks. When Clem Hackney of the Leeds Forge arrived a month after Fox left, Jim whisked him off to Joliet, and within another month, Hackney had constructed the machines necessary to press out trucks. ^{233}

Meanwhile, Jim had contacted James Buchanan of the New York Central—its Superintendent of Motive Power and a longtime friend—and challenged him to put the Fox truck through a test run . . . at Brady’s expense. Ten sets of Fox trucks were put under ten derelict cars, they were grossly overloaded and run over the roughest track that could be found. Needless to say, they came through with flying colors, and Brady went home with an for 100 pairs of trucks. Within six months, the Fox truck would become standard equipment on all NYC freight cars. ^{233}

Next, Jim went to George B. Roberts, President of the Pennsylvania Railroad. Having heard about the NYC test, Roberts accepted Brady’s offer of enough trucks to run his own tests, and when the tests proved satisfactory ordered 150 pairs! ^{233}

As word got around that the two biggest eastern lines were running on Fox trucks, Brady soon had more orders than he could possibly fill. Fox sent both men and money, and soon the business was humming. On 17 October 1888, it was incorporated as the Fox Solid Pressed Steel Company. ^{200}

Within two years, the leased blacksmith shop turned into three brick and steel buildings filled with specially-built machinery and occupying 2½ acres. ^{233} By then, 30 railroads were using Fox trucks. ^{194} The Joliet plant’s capacity was 100 trucks a month, but Fox hoped to ramp it up to 100 a day. And Fox had sold pressed steel center plates to more than 15 railroads and was eager to build cars entirely of steel. ^{197} By 1891, there were 40 railroads using Fox trucks. ^{195} By 1896 there were about 60,000 Fox trucks in service, ^{196} but this amounted to less than 3% of the total trucks in service. By 1910 the popularity of the Fox truck was over. But then that’s another story . . .

Then something happened that no one could have anticipated: Andrew Carnegie began to build his empire of steel, and prices began to rise alarmingly. Brady was equal to the challenge. He found two Wall Street men who thought they wanted to get into the steel business. Morell says —

With a “captive” steel mill and a fierce demand for trucks, Samson Fox funded a second plant: this one at Pittsburgh.

Then in 1893 the stock market crashed. While the eyes of the world were focused on the World’s Columbian Exhibition in Chicago, American commerce, industry and transportation literally fell apart. Easy money had encouraged over-expansion of almost every industry, together with gross speculation in the stock market. Businesses failed, banks closed, and jobs vanished. In June, the newly established Interstate Commerce Commission reported 192 railroad companies with almost 41,000 miles of track in receivership. Even the mighty Erie and Union Pacific Railroads went into Bankruptcy. Sales of railroad supplies dropped to nothing. So Diamond Jim Brady went to the Fair in Chicago, stayed a month, and then went on an extended vacation. ^{233}

During a similar vacation, Charles L. Taylor, assistant to the President of Carnegie Steel, while traveling in Europe, had been impressed by the thousands of metal-framed cars in everyday service. He recognized a new market for his company’s product: one badly needed because of the declining orders for steel rail and other railway products due to the peaking of the railroad-building mania of the 1880s and exacerbated by the depressed state of the railroads following the 1893 stock market crash. Taylor found there were just three car manufacturers in the U.S. working toward an all-steel car: the Minerva (Ohio) Car Works, the Fox Solid Pressed Steel Company (Illinois), and the Schoen Pressed Steel Company (Pennsylvania). ^{35}

Because of his prior contacts with Jim Brady, he ordered seven steel flat cars from Fox in 1894 and they were delivered that fall. They were 34'-0" long, weighed 24,150 pounds and carried an 80,000 pound load. But for some reason, they were produced from I-beams, not pressed-steel plates. ^{35}

These cars proved satisfactory, and Taylor decided to try building steel hopper cars similar to the Pennsylvania Railroad’s most modern wooden hopper cars. These cars were 30 feet long, weighed 35,200 pounds, and were rated for a 70,000 pound load. Taylor had these cars built by the Carnegie Steel’s Keystone Bridge Works subsidiary. They weighed 39,950 pounds, but were rated for a 100,000 pound load. In actual testing they supported 125,000 pounds. ^{236}

Aware of these developments, seeing the success of the Schoen Pressed Steel Company, and hoping to be the first to build all-steel cars, Brady and Fox incorporate the Fox Pressed Steel Company in Pennsylvania 8 February 1896. ^{217}

Early in 1897, Carnegie’s Pittsburgh, Bessemer & Lake Erie Railroad (PB&LE) solicited bids  for 200 of Taylor’s steel hopper cars. Three firms responded: the Minerva (Ohio) Car Works, the Schoen Pressed Steel Company (Pennsylvania), and Fox Solid Pressed Steel Company (Illinois), ^{218}

On 26 March 1897, Schoen was awarded the contract, and Brady and Fox were steamed! They watched as Schoen built cars first for the PB&LE, then for the Pennsylvania Railroad, and then obtained orders for more from other roads. Brady worked every contact he had to get orders for the Fox companies.

In 1898, Brady and Fox proposed a takeover of the Fox companies. But Schoen was not interested. Schoen management countered with a proposal to form a trust, “pooling patents on their trucks, their small metal parts, and on certain exclusive pressing machinery.” It took almost six months to work out an agreement satisfactory to all concerned. ^{234}

On 17 April 1897 the Fox Pressed Steel Company (PA) and the Fox Solid Pressed Steel Company (IL) were consolidated into the Fox Pressed Steel Equipment Company. ^{200}

The Schoen Pressed Steel Company

The Schoen Pressed Steel Company was incorporated 25 November 1895, apparently in Pennsylvania. ^{200}

One source ^{234} says —

In April of 1897, Schoen was awarded a contract for 600 steel hopper cars to be built for the Carnegie-owned Pittsburgh, Bessemer & Lake Erie Railroad. After tough negotiations, it was agreed that 400 would be built according to a design worked out the previous year by Charles L. Taylor, assistant to the President of Carnegie, and 200 would be built according to Schoen’s design. ^{218} All were to have 50-tons capacity and cost $1,000. As it turned out, those built to the railroad’s design weighed 37,150 pounds while those built to Schoen’s design weighed only 34,350 pounds. ^{220}

Though Schoen won the bidding for these cars, their profit margin was terribly thin. But it served two purposes: it took the business away from Brady and Fox, and it enabled Schoen to borrow money to increase the size of its works fourfold, thus making them as large as the two Fox companies. ^{234}

White says, “These pioneers proved to be all their designers could hope for. They were instant celebrities.” In 1898 the PB&LE ordered 400 more. And during the next two years they would order another 1700 gondolas and hopper cars. ^{220}

About March of 1898, the Schoen company was incorporated as the Schoen Pressed Steel Company of Pittsburgh, with capital stock of $1 million (equivalent to more than $21 million in today’s buying power). ^{198}

In May, the Pennsylvania Railroad placed an order for 1,000 steel cars—approximating $1 million worth. The New York Times called it the largest single contract ever given for steel cars. It also pointed out that the Schoen plant had been “enlarged to many times [its] original size” and had been “operated night and day for some months past.” ^{199}

The Times writer called the new Pennsylvania cars “the largest and strongest ever built.” He continued at length —

Other roads quickly followed suit, and the sudden surge in orders for steel cars by other roads severely strained Schoen’s capacity to produce them. A huge new plant was hurriedly erected on 180 acres on the Ohio River several miles northwest of center-city Pittsburgh at McKees Rocks, and 4,000 employees were added to the payroll. ^{220}

But all was not well with Schoen. Andrew Carnegie decided that if there was so much money to be made in steel cars, perhaps he would have his own plant to build them. It may have been this threat, together with the overabundance of orders that made a consolidation with the Fox company attractive to Schoen. ^{220}

By June of 1899 Schoen had received orders for 15,000 cars ^{220} But by that time, the Schoen companies were part of the Pressed Steel Car Company.

Returning to the Pressed Steel Car Company

The Pressed Steel Car Company’s application for listing the on the Stock Exchange ^{200} indicated the company had three plants —

It was announced that the Fox plant at Joliet would be enlarged to four times its present size at a cost of $500,000, give employment to 2,000 men, and increase the plant’s capacity to more than 100 cars per day. ^{201} In addition, another plant was constructed on 180 acres at McKees Rocks, a few miles northwest of Pittsburgh, and 4,000 employees were added to the payroll. ^{220}

Not much more than a month after its incorporation, Pressed Steel announced an agreement with Carnegie-controlled steel companies whereby it would buy all its steel from Carnegie mills, and the Carnegie interests would “withdraw” from the building of cars “leaving this business entirely in the hands of the Pressed Steel Car company.” ^{190}

The Washington Post for 14 May 1899 contained an article headlined “CAR OF PRESSED STEEL -- First Made in 1897, Now the Demand Is Enormous.” The following are snippets from that article —

Shortly after this article was published, it was announced that the former Fox Pressed Steel plant at Joliet, Illinois, would be enlarged to four times its then-present capacity, at an expenditure of $500,000, giving it a capacity of more than 100 cars a day. ^{222}

This announcement may never have come to fruition, however, as just 19 months later this same property was “nearly destroyed by fire.” An estimated $100,000 worth of machinery was lost, and the estimated cost of replacing the burned building was $25,000. ^{223} Hardly a ½ million dollar operation!

Samson Fox and his son-in-law Bernard Bagshaw sold their stock and withdrew from the business shortly after the incorporation of the Pressed Steel Car Company, when the stock had reached a substantial level. ^{238}

Jim Brady had been buying Pressed Steel Car Company stock, and in the fall of 1901, once the stock market had recovered from its precipitous drop in May, he sold every bit of it. He then left for a well-deserved vacation in Europe. While he was gone, F.N. Hoffstat and Julius Friend—two Pittsburgh financiers whom he intensely disliked—bought controlling interest in the company, and upon his return Brady resigned. Shortly thereafter, he joined with John M. Hansen, the company’s chief engineer, in forming the Standard Steel Car Company. ^{235}

Charles T. Schoen and his son E.A. Schoen resigned from their Directorship positions and disposed of their holdings of Pressed Steel Car Company stock. Another son, W.H. Schoen, remained as First Vice President. ^{224}

By 1902, Pressed Steel had built more than 60,000 cars and was working day and night to catch up on its orders. ^{245}

Up to about 1903, Pressed Steel had built only freight cars. In that year, it delivered 35 steel underframe passenger cars to the North Western Elevated Railway of Chicago. Presumably someone else built the wooden superstructure. ^{226}

But these cars were just the beginning. Within two years, Pressed Steel had set up a special shop just for passenger cars. It built a mostly-steel car—Southern Railway #1364—in 1906, and then two more to the same plan. White ^{226} describes these cars —

Continued