I. Tom L. Johnson, Inventor and Entrepreneur
The year was 1869. Much of the South was still reeling from the devastation rent by over five years of Civil War. In many of the Southern states, both agricultural and industrial production continued to sputter helplessly for lack of investment capital and a rooted, skilled labor force. Late the previous year, Albert W. Johnson moved his family, his wife Helen and two young sons Thomas and Albert, to Louisville, Kentucky where he had relatives. Even before the War, Johnson had been an itinerant entrepreneur, constantly moving his family around in search of economic opportunities and never really putting down roots of his own. In the 1850s, he moved back and forth between a summer home in Blue Spring, Kentucky where his family had long owned property, and his winter residence in Beaver Bayou, Arkansas where he maintained a cotton plantation with over one hundred slaves.
Though he owned slaves himself, Johnson had, according to family accounts, a personal aversion to the institution of slavery. When the Civil War broke out, however, he readily joined the Southern Cause and organized a company in the Confederate Army in Helena, Arkansas. Initially appointed a colonel, he would by the end of the war hold the rank of brigade commander. In late 1861, he moved his family south toward Atlanta to join the Kentucky regiment of General John C. Breckinridge. After spending a year in Atlanta, Johnson's military assignments took him and his family in a rather aimless path northward, and by the time of Lee's surrender, found them in Staunton, Virginia.
Unemployed and practically penniless, as were many of the Confederate officers after the War, Johnson moved his family later that year to the Louisville area, where his brother Jilson still maintained a farmstead and his sister Dulcenia had married securely. After failing in several business enterprises and borrowing from family and friends, he returned to Arkansas in an unsuccessful attempt to reestablish cotton farming with hired freedmen. He and his family then wandered into Indiana where he pursued several unsuccessful enterprises in Evansville. Late in 1868, his energies and spirit all but exhausted, Johnson moved his family back to his brother Jilson's farm eighteen miles south of Louisville.
By this time, Johnson's eldest son Tom was in his fourteenth year and had completed only one year of formal schooling. In January 1869, a position was secured for him in the Louisville Rolling Mill by Dulcenia, who was married to one of the principal owners of the mill Captain Thomas Cooper Coleman. After four months in the offices of the rolling mill, Tom was offered a bookkeeping job in the Fourth and Walnut Street office of the Central Passenger Railway Company, the smallest of Louisville's three horse-drawn street railways. The enterprise had been recently acquired by a business partner of Coleman's, Alfred V. du Pont, and placed under the management of his younger brother Bidermann. The next year, Bidermann du Pont made Tom's father Albert superintendent of the line.
Starting in the street railway business just shy of his fifteenth birthday, Tom Johnson quickly mastered all aspects of the business. During the day he was assigned to bookkeeping tasks, while evenings were devoted to making up change packets of paper money for car drivers. Quickly, Johnson displayed not only a real acumen for the intricacies of company balance sheets, but a genuine fascination with the more technical aspects of the business as well. His management skills and experimentation with equipment, routes and fares led the company into the black, and du Pont promoted him to the position of secretary of the line within the year. In 1873, when Albert Johnson secured a political appointment as the Chief of Police in the City of Louisville, his son Tom, at the age of nineteen, assumed the position of superintendent of the Central Passenger Railway Company.
By that time, coin money was coming into use and Tom Johnson had invented and patented an innovative coin fare-box for street railway cars. Until that time, horse-drawn railways equipped their drivers with change packets of paper money for passengers embarking without the exact fare, it being far too costly for the small, usually low-profit lines to employ a second person (later called a conductor) on each car simply to take tickets and make change. Instead, companies laboriously counted the day's receipts and made up the next day's change packets at night, as Tom Johnson had done for the Central Passenger Railway.
Johnson's fare-box was a glass-plated, coin-operated, automatic registering box which allowed the driver to see the exact coins deposited by embarking passengers. It not only thwarted the use of counterfeit tokens or coins, but also allowed the driver to make exact change, thus eliminating the task of making up change packets. Moreover, the fare-box register kept an exact accounting of receipts, thus keeping drivers honest, and maintained a record of the number of passengers utilizing each route at particular times of the day. That type of information could be used by a street railway company to restructure its routes and fares to accommodate the most patronized and profitable lines.
The fare-box invention was an instant success. Johnson formed a manufacturing company to produce it and personally began to merchandise it by traveling to several Midwestern cities with established horse car lines. On one such trip to St. Joseph, Missouri, his route brought him through Indianapolis where, while attempting to sell his fare-box to William English, owner of the small, dilapidated Citizens Street Railway Company, he was offered instead majority stock in the company for $50,000. Having already accumulated over $20,000 from his fare-box patents, Johnson was able to secure the remaining $30,000 on a personal loan from Bidermann du Pont. He thereby purchased controlling interest in the line from English and became owner of his own streetcar line at the age of twenty-two.
He immediately took leave of Louisville and moved his young wife Maggie and infant son to Indianapolis in 1876. With great ingenuity, drive and perseverance, he set about to rebuild the mule line, reorganized its routes, and rationalize its fare structure. Within a year, he brought his father and brothers William and Albert to Indianapolis to administer the line, naming his father as superintendent. Though the move puzzled local officials who knew Tom Johnson to be the real owner and manager of the line, it was more than just an act of family loyalty. The move allowed Tom Johnson the freedom he needed to work on his various railway inventions.
With expert planning and management came increased ridership, and the Indianapolis line prospered dramatically. By 1882, Johnson had liquidated not only his outstanding personal loan to Bidermann du Pont but also the sizable mortgages he had acquired with the original purchase of the line. When minority stockholders in the line and Indianapolis municipal officials balked at Johnson's proposal to electrify the line in 1888, he sold his majority stock for $800,000.
The Indianapolis experience revealed what would become a pattern for Johnson's early street railway career. While supervising the operations of the Central Passenger line in Louisville, he had developed a sophisticated understanding of the cost structure of operating street railway lines. He recognized that the basic value of a street railway line was not in its capital stock, but in the location and durability of its right-of-way franchises. Throughout the early part of his career, Johnson would search out unprofitable, rundown or fragmented horse-drawn street railway lines in growing cities, analyze the earning capacity of their franchises, and, in selected circumstances, proceed to purchase all of the railway company's outstanding stock. He would then expand and/or combine existing routes between suburban communities and the downtown center of the city until through-routes were established, reorganize both the line's operations and its fare structure, and, more often than not, rebuild the line's track work.
When electrification brought the operation of street railways within the financial reach of most modestly-sized cities, Johnson's unique understanding of their operation became even more valuable. The demand for electrification of existing horse car (and later cable-powered) systems seemed unlimited, while many other communities rushed to build streetcar lines from scratch. At this point, Johnson's understanding of the technical aspects of the design of railway cars and track structure, combined with his understanding of street railways as a business enterprise and object of investment opportunity, solidified his status as innovator as well as entrepreneur.
While in Indianapolis, Johnson had designed a girder-based rail for street railways that he believed would both strengthen and prolong the structural life of street railway rails while providing a more comfortable ride for passengers. The rail design had offset flanges and was early-on dubbed the "Jaybird" after its peculiar profile. Johnson maintained that adoption of the design by street railways would both reduce their capital costs and generate revenues through expanded ridership. Patented several years later in 1883, the Johnson girder rail was to dominate rail design for street railway systems for the next thirty years. Originally designed for horse car systems, the rail section was so technologically advanced and versatile that when street railways converted to either cable or electric motive power, the section could be easily redesigned.
Johnson's place in street railway history was therefore secured by his inventions in the 1870s. His early car fare-boxes, designed in 1872-73, and the Johnson girder rail itself, which he probably designed in 1877-78, both endured as dominant designs through the 1890s and became identified with the emergence of electrified streetcar systems after 1887. It is somewhat ironic that Johnson's most inventive work in the 1880s was actually tailored to the development of cable-powered systems. Extremely costly to construct and difficult to maintain, cable systems were better adapted to steeper grades than horse cars and enjoyed a brief period of attractiveness in the mid-1880s before electrified systems became operational. Often characterized as "magnificently impractical and obsolete almost as soon as they were built," cable systems continued to be attractive to cities even after 1888 when various municipalities resisted installation of overhead wires in downtown areas.
By 1886-87, when many cities with hilly terrains were either seriously considering or had already begun installing cable systems, Johnson had designed and patented an impressive amount of specialty track work for cable systems, notably yokes, crossings, curves and frogs. He had also designed and patented braking systems for cable cars, and a shallow conduit cable system that avoided the costly construction and maintenance associated with the more accepted deep conduit Hallidie system, first introduced in San Francisco in 1873.
In the spring of 1879, Johnson unsuccessfully bid for a new suburban street railway franchise in Cleveland, Ohio. Beaten out by established local interests, he decided instead to gain entry into the Cleveland market by purchasing the Brooklyn Street Railroad, a small suburban line. He soon discovered, however, that his plan to establish routes through the downtown section of the city to other suburban communities was blocked by the franchise holdings of the Mark Hanna-owned West Side Street Railway Company, which commanded all routes in the city center itself.
Johnson was not deterred. He initially connected his suburban horse car lines through the city center with omnibus (local coach) service, and later successfully sued to use Hanna's own rights-of-way, running horse cars over Hanna's West Side track through downtown Cleveland. The institution of a simple and cheap transfer system, based on a single uniform fare, made the line extremely popular and ridership grew steadily. Over the next five years, Johnson expanded his existing lines, developed new routes, secured the city's first through-line franchise in 1883, and marked his presence in Cleveland's street railway market by gaining an unprecedented 25-year franchise renewal for the Brooklyn line in 1885. With electrification between 1888 and 1890, the investment value of Johnson's street railway holdings in Cleveland skyrocketed.
Until electrification, his investments in street railway companies had proven profitable because he had secured undervalued franchises on potentially valuable routes, upgraded the systems' track work, cars, and shops with state-of-the-art equipment, and reorganized (and thereby made more efficient) the systems' routes and fare structures. Electrification quickly increased the value of street railway investments through the reduction of operating costs. Ridership increased on existing routes as they became noticeably cleaner, faster and more reliable. Electrification also allowed extension of new routes into growing or planned residential sections of cities. To those holding control of street railway franchises and having access to sizable pools of capital, electrification offered an opportunity to gain either significant returns in interest on railway bonds or greatly expanded capital value on railway stocks. To convert existing horse car systems, an entrepreneur would have to build a power plant and car barns, string wire along established routes, and purchase new motorized cars and trailers. To accommodate the larger, heavier motorized cars, all existing rights-of-way had to be re-railed with heavier track work. All that was needed was a flexible source of capital.