J. Wesley Gephart - Valentine Iron and The Central Railroad

Valentine Iron and The Central Railroad

Gephart began his career as a Bellefonte industrialist at the end of 1890. The Centre Iron Company, operators of Valentine Furnace, went bankrupt and was sold under foreclosure in November 1890. Gephart was named president of the Valentine Iron Company, which was chartered January 23, 1891, to take over Centre Iron's property on behalf of the bondholders and re-open Valentine Furnace. Valentine Iron also leased the Nittany Valley Railroad, which carried ore from Taylor Bank to the Furnace. Gephart became the railroad's general manager. The new iron company soon became enmeshed in a dispute with the Pennsylvania Railroad over the high freight rates on traffic to and from the furnace. The only railroad outlet for the furnace was the Bald Eagle Valley Railroad, which had been leased by the PRR since the Civil War.C This monopoly allowed the PRR to set freight rates to and from the furnace at its pleasure, and the rates it imposed on Valentine Iron were significantly higher than those charged to Centre Iron, its predecessor. The high rates threatened to make the furnace economically uncompetitive, and Valentine Iron began lobbying the PRR for relief. Gephart had become a director of the Bald Eagle Valley in about 1890, perhaps to strengthen his negotiating position.

After eighteen months of negotiations failed to yield a satisfactory result, Gephart was able to persuade Valentine Iron's main stockholders to adopt a new plan to save the company. In February 1893, they agreed to help finance a competing railroad into Bellefonte to carry their iron traffic. Gephart and his backers chose to take over the Central Railroad of Pennsylvania, which had a charter from Mill Hall to Bellefonte but which had only managed to complete 0.5 miles (0.80 km) of grading at the Mill Hall end. Gephart arranged for the issue and sale of $600,000 in fifteen-year bonds of the railroad to Drexel and Company to finance its completion, and he was named superintendent of the railroad in June 1893. Under his direction, construction work resumed in July 1893, and the 27.3-mile (43.9 km) line was completed to Bellefonte. It crossed the Nittany Valley Railroad in what is now the suburb of Park View Heights, established an interchange, and began to operate the Nittany Valley under a five-year lease. In November 1893, Gephart resigned from his law practice to devote his full attention to Valentine Iron and the success of the Central Railroad of Pennsylvania. The railroad ran its first freight train on December 6, followed by its first passenger train on December 18. The Bellefonte Board of Trade celebrated the opening of the railroad with a lavish banquet at the Bush House in Bellefonte on December 22. Attendees included not only local businessmen and officials of the Central Railroad, but officials from nearby railroads such as the Reading, the Beech Creek, the Williamsport and North Branch Railroad and the Buffalo, Rochester and Pittsburgh Railway; E.T. Stotesbury, of Drexel & Co., the Central's bondholder; and two Bellefonte natives and ex-Governors, Curtin and Beaver. As one of the principal honorees, Gephart delivered a speech on the "Future of Bellefonte," and "Canvasback duck à la Gephart" was among the dishes on the menu.

The triumphal completion of the Central Railroad notwithstanding, Gephart was to find the Pennsylvania Railroad was not so easily defeated. In September 1893, as construction on the Central Railroad was still underway, the PRR brought suit against the Valentine Iron Company. In 1887, the PRR, through its Bellefonte, Nittany & Lemont subsidiary, had agreed to help finance the Centre Iron Company in exchange for exclusive rights to its traffic. It argued that this covenant remained binding on Valentine Iron as the successor to Centre Iron. Gephart won a victory in the first round of the case in January 1894, but the PRR appealed to the Supreme Court of Pennsylvania. At some point during 1894, as the litigation wound on, Gephart ceased to be a director of the Bald Eagle Valley. In 1895, the Supreme Court overturned the lower court's verdict and granted an injunction to prevent Valentine Iron from shipping over the Central Railroad. The Central Railroad also surrendered its lease of the Nittany Valley Railroad as a result of the new verdict. Stung by the ruling, Gephart declared that the iron company was "jeopardized" without access to "competitive railroad facilities" and resigned the presidency of Valentine Iron (and from the Nittany Valley Railroad) in an open letter to Bellefonte's business community in November 1895. He remained superintendent of the Central Railroad, which suffered financially by the loss of the iron traffic.

Seeking to boost traffic on the Central Railroad, Gephart was probably also involved in the chartering of the Bellefonte and Clearfield Railroad in December 1895. While not an officer, Gephart was understood to be the principal figure behind this railroad, and its officers included his brother-in-law, Lorenzo Terbal Munson, and John P. Harris, who was a stockholder of the Central Railroad and Gephart's successor at Valentine Iron. This line would have connected the Central Railroad, at Bellefonte, with the Buffalo, Rochester and Pittsburgh Railway at Clearfield, Pennsylvania. By passing through the Clearfield Coalfield, the proposed railroad could have brought bituminous coal and coke down to the furnaces at Bellefonte. However, the projected expense of construction up the Allegheny Front meant that the Bellefonte & Clearfield remained a paper railroad.