Pennsylvania Railroad
The state of Pennsylvania had invested heavily in state-owned canals and short-line railroads. They were neither profitable nor efficient, and the state was falling behind its rivals. The Pennsylvania Railroad, PRR, incorporated in 1847, built a line across the mountains from Harrisburg to Pittsburgh to eliminate the inefficient Allegheny Portage Railroad and the slow-paced canals. The line would give Philadelphia a link to the fast-growing west, allowing it to compete with Baltimore (which had the Baltimore & Ohio) and New York City. The company appointed Thomson as chief engineer at a salary of $5000 a year. Thomson did a brilliant job. With unbounded energy he sought out the best routes, making allowances for grades and river crossings. With Herman Haupt he co-designed the famous "Horseshoe Curve" and built a road with practicable grades. He switched from wood to coal for the locomotives; other lines followed suit, thus opening up a new demand for coal, which the PRR shipped to all railroads. The through line between Philadelphia and Pittsburgh opened for traffic in February 1854, and indeed made Philadelphia a major outlet for long-haul traffic from the west.
Thompson led a faction that ousted the incumbent board in 1852; Thomson now became president and turned his attention more toward finance than engineering. He repeatedly reorganized the company into more efficient subdivisions, and to better cost accounting, paying careful attention to the selection of vice presidents. His organizational model was widely imitated by other railroads, and set the standard for large American businesses. In 1857 he financed the railroad's purchase of the entire system of state transportation works, consisting of 278 miles of canals and 117 miles of railroad, together with real estate and rail equipment. At a cost of $7.5 million the Pennsylvania now dominated the state and took control of most short-haul traffic from the many towns along its heavily populated route.
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