Michigan-Peninsular Car Company

Michigan Car Company
Peninsular Car Company

The Michigan-Peninsular Car Company was formed at Detroit, Michigan, in 1892, by the consolidation of the Michigan Car Company, the Peninsular Car Company, the Detroit Car Wheel Company, the Michigan Forge & Iron Company and the Detroit Pipe & Foundry Company. (One early source [  ] includes the Baugh Steam Forge Company in the consolidation.) It was capitalized at $8 million. General Russell A. Alger was the company’s first President.

The company’s three car-building plants employed 5,000 men, and the newly-formed company claimed the ability to manufacture 100 cars per day! ^{245}

The Michigan Car Company was founded in 1863/64 at Detroit, Michigan, by James McMillan and John S. Newberry, together with E.C. Dean and George Eaton, with capital of just $20,000. They established their works in 1865. ^{141}

(It would be interesting to know just what the firm was doing during this period, as we have discovered that Newberry, Dean and McMillan together filed for and were granted a patent for “Improvement in Turn-Tables for Changing Car-Trucks” (Pat. No. 127,095, dated 21 May 1872). This was during a period when narrow gauge railroads had become all the rage, and the shifting of car bodies from trucks of one gauge to those of another was a crucial matter.) [See our article on Ramsey's Car Truck Shifting Apparatus.]

In 1873 the company built a large plant at Grand Trunk Junction (now West Detroit). In 1890 this plant, together with the associated Detroit Car Wheel Company, occupied 30 acres. ^{141}

A city directory ^{255} for 1873-74 shows offices at #2 of the Moffat Block in Detroit. An advertisement in the same directory lists officers —

(An advertisement for the Detroit Car Wheel Company shares the page, with offices at the same location and listing the same officers.)

Within 10 years Michigan Car had grown into one of the nation’s major freight car producers.

In 1877, Michigan Car employed 700 men. White ^{47} has a table showing the breakdown by job. The following excerpt shows only the major categories —

In 1879, Michigan Car employed a 16 year old “mechanic,” fresh off his father’s farm, named Henry Ford. It was Henry’s first job, and the story is told that he was fired before long because he angered older employees by making repairs in ½ hour that usually took 5 hours. ^{150}

In 1881 and 1882, Michigan Car reportedly did a business of $6 million a year. ^{151}

By 1883, the Michigan Car plant had turned out 48,731 cars. According to the source of this information ^{141} —

Business no doubt declined with the stock market collapse of May 1884, with workers getting short hours and pay cuts, as in almost all other industries. The plant even shut down for most of August and September, putting 1,200 men out of work. ^{152}

These bad economic conditions seem to have energized the budding union movement, and in mid-1886 Michigan Car, along with many other industries, experienced its first strike. On the morning of 5 May, 500 strikers gathered outside the Michigan Car shops and then marched to the Peninsular Car Company shops. Additional workers joined the march until there were an estimated 1,500. Their demands included reducing the work day from 10 hours to nine, at the same salary, with a 15 cent per day raise for those working for $1.10 per day or less. ^{153}

Unfortunately for the strikers, Michigan Car, along with many other industries, simply could not afford to increase personnel costs, and most strikers came to recognize this, and most eventually returned to work without having gained anything (except perhaps “union solidarity.”)

In 1890, the Michigan Car and the Detroit Car Wheel Company plants together employed 2,500 men and could turn out 30 cars, 350 car wheels, 100 axles and 60 tons of iron per day. Officers at that time were James McMillan, President; Hugh McMillan, Vice-president and General Manager; Joseph Taylor, Second Vice-president; James McGregor, General Superintendent; W.K. Anderson, Treasurer; W.C. McMillan, Secretary; and J. Hill Whiting, Superintendent of Foundries. Capital had grown from $20,000 to an estimated $1.25 million. The plants production consisted of box, stock, platform, coal, ore and refrigerator cars. ^{141}

The Peninsular Car Company was founded in December 1879 at Detroit, Michigan, by Frank J. Hecker and Charles L. Freer. The corporation’s capital stock was $300,000. Its works were established in 1880 on the Detroit River between Walker and Adair Streets. ^{142}

Hecker had been superintendent of the Rondout & Oswego Railroad in New York state, and Freer had been employed as a bookkeeper in its offices. (Either a few years elapsed between the time Hecker and Freer left the railroad and the time they founded the Peninsular Car Company, or our source used an outmoded name for the railroad, as the Rondout & Oswego became the New York, Kingston & Syracuse in 1872.)

About 1880, Peninsular acquired the Adrian Car Company at Adrian, Michigan, south of Detroit. That same year it built for Swift & Company some of the earliest refrigerated cars.

Peninsular suffered a double whammy in 1884. First, in May, the New York banking house of Ward & Grant collapsed, setting off a severe recession that drastically reduced car orders. Then, in September, its foundry building burned, with losses estimated at $17,000, fortunately, all covered by insurance.

But economic conditions stayed poor for several years. When workmen went out on strike in early 1886, Manager Hecker is said to have told them the company could not afford better pay; that car building in 1884-1886 averaged 25,000 cars per year, against 125,000 per year for 1180 to 1882 (presumably for the industry as a whole). To illustrate his point he said that late the previous year the company lost a bid to competitors for a $1 million job by only $150, but had he won the bid, he would have made only $5 per car. ^{120}

Nevertheless (and perhaps using otherwise idle workmen) Peninsular built a large plant in 1885 on 25 acres (another source says 34) at the Detroit & Milwaukee Railroad (Northeast of downtown Detroit).

During 1887, Peninsular built 8,200 cars, and between then and 1890, 35,297 more. That year it reportedly used 27 million board-feet of lumber and 59,300 tons of iron. In 1890, the plant, together with an associated wheel foundry and a soft casting foundry, employed 1,359 men. ^{142}

In 1888, Hecker was forced by ill health to retire from the business.

The newly established Michigan-Peninsular Car Company had barely gotten off the ground before it was hit with the stock market crash of 1893. This was the worst financial setback yet. Even the mighty Union Pacific was driven to bankruptcy. Car orders completely evaporated. During 1893/94 Michigan-Peninsular was completely closed for 5 months. It was estimated that in Detroit the winter of 1893, some 25,000 workmen were unemployed. ^[145] Before it was all over, nationwide, 15,000 commercial firms, 600 banks and 74 railroads would go down. But somehow Michigan-Peninsular kept going. Even a disastrous fire in the car wheel department in mid-1896 could not keep the company down. ^{143}

But economic conditions required the shut-down of the plant in November, putting 1,500 men out of work. According to the report, the works had been re-opened only six weeks before, and had been running at full blast. ^{146}

In 1898, Michigan-Peninsular and its associated plants employed 9,000 men and their product was valued at $28 million. ^{144}

In 1899, the Michigan-Peninsular Car Company became one of the 13 independent car builders consolidated into the American Car & Foundry Company.

AC&F’s Detroit plant was one of the first to adopt a “progressive” system of construction. In 1902 it began moving a car from work station to work station on its own trucks, with each work station performing the same operations on each car as it arrived, then sending it on to the next work station. The advantages of the system prompted AC&F to adopt this system for its flagship Berwick, Pennsylvania, shop as well. ^{148}

After the 1st World War, the Detroit plant switched from rail car production to building motor coaches.

Cast of Characters —

James McMillan (1838-1902) was born at Hamilton, Ontario, Canada, of Scottish parents. He went to Detroit when he was sixteen, and worked two years as a clerk in a hardware-store. He then managed the business of a railroad contractor building the Detroit & Milwaukee railroad pier at Grand Haven. He was then appointed that railroad’s purchasing agent.

In 1864, with John S. Newberry and others, he organized the Michigan Car Company. This business grew rapidly, and in ten years was one of the largest in the United States. Its success led to the formation of the Detroit Car-Wheel Company, the Baugh Steam-Forge Company, the Detroit Iron-Furnace Company, and the Vulcan Furnace Company.

McMillan became one of the largest owners of the Detroit and Cleveland steam navigation company, and the Detroit transportation company, and became  a director of several banks in Detroit. In 1881, with his business associates, he organized the Detroit, Mackinaw & Marquette Railroad, of which he became president. In 1892, when the Peninsular Car Company merged with McMillan’s Michigan Car Company, his net worth was estimated at $6 million (about $130 million in today’s money).

McMillan began a career in politics as a member of the Michigan Republican State Central Committee from 1876 to 79. He was a presidential elector on the Republican ticket in 1884, and was elected to the U.S. Senate in 1888, where he served until his death in 1902. He was Michigan Republican State Chairman, 1879-80, 1886-87, and 1890-96.

McMillan was chairman of the Senate Committee on the District of Columbia, and he commissioned Daniel H. Burnham, Charles F. McKim, Augustus Saint-Gaudens, and Frederick L. Olmsted, Jr., to make a comprehensive plan for the development of the District of Columbia. Their plan was later adopted as a guideline for future building and planning.

John Stoughton Newberry (1826-1887) was a nephew of Oliver Newberry (1789-1860) who endowed the Newberry Library in Chicago. He was born 1826 in Waterville, NY, but his family moved to Michigan when he was a child. He graduated first in his class from the University of Michigan at Ann Arbor in 1845. He became a civil engineer, and engaged in the laying out and construction of the Michigan Central railroad on its line west of Kalamazoo.

Newberry then studied law in Detroit and was admitted to the Michigan Bar in 1853. He acquired a large practice in admiralty and maritime cases before the United States courts, eventually making it his specialty. He became one of the foremost authorities in the west, and published the first volume of admiralty reports of decisions of cases arising on western lakes and rivers.

In 1863/64 Newberry became associated with James McMillan in the organization of the Michigan car company, and became its first President. With McMillan and others he also founded the Detroit Car Wheel Company. He held the office of president. vice-president, or director in more than a score of companies, and became so absorbed in these that he eventually gave up his law practice.

In 1862 Newberry was appointed provost-marshal for Michigan by President Lincoln and served for two years, during which time he had charge of two drafts, with the forwarding of conscripts and enlisted soldiers to the seat of war. He was elected to congress as a Republican, and served from 18 March, 1879, till 4 March, 1881, but refused a renomination in order to give his attention more exclusively to his business enterprises.

Colonel Frank J. Hecker (1846-1927) was a native of Michigan, served briefly as a Colonel in the Civil War before beginning a career in the railroad industry. He was a co-founder of the Peninsular Car Company, from which he retired in 1888 due to ill health.

At the outbreak of the Spanish-American War (1898), he was appointed chief of the Division of Transportation, Quartermaster’s Department. In this capacity he supervised all rail and water transportation for the army in Cuba and the Philippines.

In 1904 President Theodore Roosevelt made Hecker a member of the Isthmian Canal Commission, but he resigned under allegations by the New York Tribune of mishandling lumber contracts for the canal. Although he did not hold public office again, he remained prominent in Michigan financial and industrial circles.

Charles Lang Freer (1856-1919) was born in New York. He became an accountant and worked as paymaster for the Ulster & Delaware Railroad. He later held a similar position with a small railroad in Indiana. One source says Freer was one of the organizers of the Peninsular Car Works, but another says he joined it about 1880, was made its secretary and later acquired an interest.

In any event, after participating in the establishment of the American Car and Foundry Company in 1899, Freer retired from business and gave much of his time to collecting art works. He became a collector of the works of James McNeill Whistler and other contemporary artists. He acquired the Peacock Room, the dining room of a London resident designed by Whistler. It was paneled in Spanish leather and honeycombed with walnut shelves to hold an assortment of porcelain. It was dismantled and installed in Freer’s home. His collection of Oriental art of all types became one of the finest outside Japan.

Freer bequeathed his entire art collection to the Smithsonian Institution in Washington, D.C., and the Freer Gallery was opened shortly after his death in 1919.

For More Information —

Online —

“Frank Hecker Papers.” University of Michigan — William L. Clements Library. Description of holdings.