Carole Owens: Whitney's electrifying investments
Cash-strapped, William Whitney attended Yale where — as luck would have it — his roommate was one of the richest men in the United States, Oliver Hazard Payne.
The son of wealth, Payne increased his fortune exponentially by venturing into iron and oil refining. His oil refinery was the first acquired by Standard Oil. Payne served as treasurer of Standard Oil and had interests in US Steel and the American Tobacco Trust.
Whitney married Payne's sister, Flora, and received as a wedding present from his brother-in-law, a home at 871 Fifth Avenue, New York City. The Gilded Age was a time of rapid growth in both the American economy and in individual wealth. The house at 871 Fifth Avenue serves as an example. In just 30 years, the house was built for $400,000, sold to Payne Whitney for $800,000, was renovated by W.C. Whitney for over $1.5 million, went out of the family briefly, and was purchased back by Whitney's son for $3 million.
Not content to live on his wife's money, Whitney set out to establish his own fortune, and carve out a position in business, politics, and society. He was adept at attracting the richest men of the Gilded Age as business partners. He served as secretary of the Navy in Grover Cleveland's administration (1885-'89), and he was listed as one of "the 400" by Ward McAllister. Whitney substantially increased his assets by electrifying the New York City trolleys replacing the old horse-cars.
There is a story, true or apocryphal, about Whitney and his electrifying investments. In April 1899 Whitney walked out of his home bound for Hartford, with $1 million in his pocket to invest in the creation of a nationwide electric vehicle company.
A year earlier, in 1898, George Mole joined Thomas Post in a Lenox law firm. Post invested heavily in electric trolley companies either on his own behalf or on behalf of a client. Horse-drawn trolleys or horse-cars appeared in Berkshire County as early as 1832. The horse-cars were replaced by electric trolleys, and for almost 50 years, from 1886 to 1932, running on recessed steel tracks, trolleys crisscrossed the county.
Era of the trolley
In Berkshire County there were the Pittsfield Electric Street Railway, Housac Valley Street Railway, the Berkshire Street Railway, Pittsfield Street Railway, and at least five more companies. The electric car was fast, efficient, and cheap. It was more comfortable than the buckboard, and soon was the chosen way to go to and from work, shopping, or an entertainment. Even though, in the end, the trolley went the way of the ice box, some locals did make money. Perhaps Thomas Post was one of them or perhaps he was acting on behalf of Whitney.
Whitney first came to the Berkshires as the summer renter of a Berkshire Cottage, Ventfort. It was a love match and the Whitneys returned summer after summer. Soon Post was buying up contiguous property all over South County cobbling together one of the greatest of the great estates, October Mountain Reserve, for Whitney. At the same time Post was buying property for Whitney, he was investing in the electric trolley. Given Whitney's interest in trolleys, it is not a stretch to imagine Post was buying stock on his behalf.
All mass transit leveled the economic playing field and the streetcar was no exception. The masses could get to work and shopping and recreation economically. However there were economic issues. Streetcar companies paid ordinary business and property taxes as well as franchise fees. They maintained at least a shared right of way, provided street sweeping, and snow removable. Many franchise fees were based on gross, not net, ticket sales. The costs created a financial burden that had to be offset by the fares. Unfortunately the fares were fixed.
The Berkshire companies retained the 5 cent fare even as they lost money. In 1915 rates were raised to 6 cents; they added a 2 cent charge for transfers, and continued to lose money. So in 1917 rates in Berkshire County rose as high as 25 and 30 cents per ride. Nonetheless, either the rate per ride or the number of riders did not cover costs.
By 1918 half of the streetcar companies in the United States were in bankruptcy. The trolley was being outrun by the automobile and eventually seen as obsolete and an obstruction to traffic. By the 1930s the era of the electric trolley was over.
Whitney died in 1904 during the heyday of the trolley. He never saw the demise and he died a rich man, leaving an estate of $21 million.
A Berkshire writer and historian, Carole Owens is a regular Eagle contributor.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.