Bellefonte Furnace - Reorganization

Reorganization

The ensuing reorganization of the BRB&BERR brought the railroad under separate management from the furnace. The bondholders did not choose to reinstate Reilly, who remained president of the furnace company. Reilly and the Collins brothers clashed with the railroad, now reorganized as the Bellefonte Central Railroad, over freight rates. The railroad would not ship ore for less than 30 cents per ton, which Phil Collins considered too high to operate the furnace profitably. Despite this dispute, Tom Shoemaker remained superintendent of both the railroad and the furnace company. The two companies were unable to come to terms until July 1892, when a meeting between Reilly and Frazer in Philadelphia persuaded the latter to grant the furnace a rate of 20 cents per ton from nearby banks and 25 cents for those further up the line. With this assurance, Reilly began to repair the furnace, rehire workers, and raise money for payroll. It went back into blast in April 1893. With the furnace starting back up, Shoemaker, who was also running a mining company at Graysdale, found himself overwhelmed with responsibilities and resigned from the railroad in May 1893 to devote his time to his other enterprises. However, shortly after his departure, the Panic of 1893 rattled American industry. In the financial shock that followed, Bellefonte Furnace once again found it impossible to make iron at a profit, and went out of blast again in July 1893. With Bellefonte Furnace out of blast and Valentine Furnace operating only sporadically, the Bellefonte Central began to remove some of the ore mine branches. The Oreland Branch had already been removed in 1892 to lay track into State College, the siding to Johnson Bank was removed in 1894, and the Red Bank Branch beyond Graysdale in 1896. The railroad considered buying the furnace, but found John Reilly's terms unsatisfactory.