Tuesday, May 24, 2011

The B&O Becomes The First Passenger Railroad


Today May 24th, 1830 - The first passenger railroad (the Baltimore and Ohio Rail Road Company) in the United States began service between Baltimore and Elliott's Mills, Md (now known as Ellicott City.)

The fast-growing port city of Baltimore, Maryland faced economic stagnation unless it opened routes to the western states, as New York had done with the Erie Canal in 1820. In 1827, twenty-five merchants and bankers studied the best means of restoring "that portion of the Western trade which has recently been diverted from it by the introduction of steam navigation." Their answer was to build a railroad—one of the first commercial lines in the world. Their plans worked well, as the railroad grew from a capital of $3 million in 1827 to a large enterprise generating $2.7 million of annual profit on its 380 miles of track in 1854, with 19 million passenger miles. The railroad fed tens of millions of dollars of shipments to and from Baltimore and its growing hinterland, thus making the city the commercial and financial capital of the region south of Philadelphia.

Two men — Philip E. Thomas and George Brown — were the pioneers of the railroad. They spent the year 1826 investigating railway enterprises in England, which were at that time being tested in a comprehensive fashion as commercial ventures. Their investigation completed, they held an organizational meeting on February 12, 1827, including about twenty-five citizens, most of whom were Baltimore merchants or bankers. Chapter 123 of the 1826 Session Laws of Maryland, passed February 28, 1827, and the Commonwealth of Virginia on March 8, 1827, chartered the Baltimore and Ohio Rail Road Company, with the task of building a railroad from the port of Baltimore, Maryland west to a suitable point on the Ohio River. The railroad, formally incorporated April 24, was intended to provide not only an alternative to, but also a faster route for Midwestern goods to reach the East Coast than the seven-year-old, hugely successful, but slow Erie Canal across upstate New York. Thomas was elected as the first president and Brown the treasurer. The capital of the proposed company was fixed at five million dollars, but the B&O was initially capitalized in 1827 with a three million dollar issue of stock. Virtually every citizen of Baltimore owned a share as the offering was oversubscribed.

No comments: