X. From Local Mill to National Prominence
There is little question that the Johnson Company was the dominant manufacturer of street railway track work between 1888 and the turn of the century. Its girder rail design was almost universally adopted by horse car lines, horse car systems converting to electrification, and most cities installing electrified systems for the first time. Competitors, such as William Wharton & Co., hurried to adopt facsimiles of the girder design. Its specialty track work, including custom designing of crossings, curves, turnouts, frogs, and switches, was considered state-of-the-art. And it was inevitable that the Johnson Company would venture into route systems as well, which it did in just its second year of operation and that while still fitting its track work on the open cinder dump in Conemaugh.
Its share of the market as a designer of street railway lines expanded dramatically with electrification of street railways all across the country. The company's ledgers of track work drawings and orders indicate that, prior to the electrification period, the Johnson Company provided track work for two entire railway routes in 1886, six in 1887, and four in 1888, the year in which electrified systems first became operational. In the next three years, it provided the rail and track work for over 85 railway systems. As primary contractor, it designed 25 routes in 1889, 30 routes in 1890 and 19 routes in 1891. During that time, it provided track work for eleven additional railway routes as a subcontractor.
Street railways using electric motive power (rather than the traditional horse or mule, or the more costly and cumbersome cable) had reached the experimental stage in 1886. By early 1888, two electrical manufacturers, Sprague and Thomson-Houston, were competing for market supremacy in the design and installation of the new electrified street rail systems. Both had originally entered the field by overcoming the extensive technical problems associated with the development of electric motors. The Sprague Electric Railway & Motor Company was the creation of Frank Julian Sprague, a former Edison electrical engineer who began wrestling with the problems of operational electric motive power on street railways in 1884. By 1886, he had successfully experimented with electrification on two elevated railroads in Manhattan, though neither road opted at the time to switch from steam. In 1887, Sprague conducted successful experiments with electrification of street rail in Richmond, Virginia, and as a consequence secured a contract to build an entire electrified railway system in that city.
The Richmond system, opened in part by the spring of 1887 and completed by May 1888, demonstrated once and for all that electrified railways could handle urban transit problems only attempted by either horse or cable prior to that time. Constructed along mostly unpaved streets with sharp curves and steep grades, the Sprague electrified railway proved capable of operating thirty cars simultaneously. The notoriety of Sprague's achievement naturally drew street railway investors to Richmond from all across the country to assess whether the new technology could be adapted to their own railway lines.
Sprague's major competitor in the new electric street railway business was the Thomson-Houston Company of Connecticut. The company was formed in 1883 as a partnership of Elihu Thomson and E.J. Houston to develop dynamos and arc lighting systems. By the summer of 1887 they were manufacturing a full range of electric motors up to 15 horsepower and early the next year amended their company's charter to allow them to produce railway equipment and to hold railway securities. In February 1888, they purchased competing patent rights from Charles Van Depoele, a highly innovative railway engineer who had installed the country's first citywide electric streetcar system in Montgomery, Alabama in 1886. Thomson-Houston attempted its first major installation in Lynn, Massachusetts in the summer of 1888, and after additional experimentation, achieved a completely operational system by the fall of that year.
The competition between these two electrical manufacturers was intense, and left smaller companies struggling to remain solvent. By December of 1888, it was estimated that Sprague and Thomson-Houston each had completed or had under construction railway systems in about thirty cities. Over the next year, installations of electrified systems spread like wildfire, with over 180 systems completed or under construction by the fall of 1889. Between them, Sprague and Thomson-Houston accounted for the construction of 144 (or 80 per cent) of those systems, and in many instances purchased their track work from the Johnson Company.
Like many other railway entrepreneurs of the day, Tom Johnson and Fred du Pont had traveled to Richmond in early 1889 to see the Sprague system for themselves. They came back convinced that electrification would replace horse-drawn and cable systems altogether and immediately set in motion plans for the expansion and further integration of the Johnson Company's design and production activities. The company moved quickly to manufacture the heavier rail sections required to accommodate the larger and far heavier electric railway cars. By 1892, the company was producing a full line of the taller and more difficult to roll 7 to 10-inch rail in greatest demand.
It was during this period of transition to electrification that the Johnson Company was uniquely positioned to take over the national market for street railway track work. In 1888, it was a small but profitable track work mill commanding about a 20 per cent and growing share of the limited horse car and cable railway track work market. By 1893, the company had become the dominant producer of street rails in the United States. During that five-year span, the company achieved a staggering degree of market penetration. While company records of rail production and sales have not survived, detailed accounts of the construction of many of the new electrified systems in trade journals like the Street Railway Journal and the Street Railway Gazette constantly mention the use of Johnson rail and specialty track work.
Company records do exist for the specialty track work however and they reveal a significant degree of market penetration. Between 1888 and 1893, the Johnson Company filled orders for specialty track work (mostly custom-designed curves and crossings) for over 370 railway companies, cable roads, and elevated systems (both cable and steam). Virtually all of these companies ordered multiple pieces of specialty track work, and over half ordered track work over a period of three years. The company also produced track work for many steam railroads and industrial producers of various types. In addition, it designed and manufactured the first set of rail switches for the rack (or cog) rail system built up Pikes Peak in 1891.
With respect to the design of entire railway systems, the Johnson Company was responsible for lines built for as many as 94 separate street railway companies, including more than a dozen cable roads, three inclines, and several elevated steam railroads. The list of the company's major clients over this period includes many large and well-known systems, such as the West End Railway in Boston and the Broadway Cable Road in New York City. But more importantly, company records indicate that, between 1889 and 1891 in particular, the Johnson Company was responsible for track work in most of the medium- and small-sized cities in the country that constructed or converted to electrified street railway systems.
Even these impressive numbers understate the company's presence in the street railway track work market. A significant amount of its track design was completed on a subcontracting basis to other private companies, mostly electrical manufacturers. On this basis, the Johnson Company was responsible for the design of major lines in Pittsburgh, St. Louis, Baltimore, Charlotte, Wheeling, and Ottawa. Under subcontract to Thomson-Houston alone, the Johnson Company provided trackwork systems for railway companies in Boston (mostly West End routes), Atlanta, Cincinnati, Newport, and Denver. In 1894, it was estimated that over 70 per cent of all street railway track material in service in the United States had been furnished by the Johnson Company.
There were of course good reasons for the rapid growth and national market dominance of the Johnson Company. Its principal product, the steel girder (Jaybird) rail, was a technologically innovative design that not only addressed most of the pressing market problems associated with street railways in the 1880s, but also was easily adapted to accommodate the heavier types of rail sections needed for electrified systems. Moreover, the Jaybird could be rolled in a wide enough variety of weights and shapes to meet the track work needs of any of the three types of systems currently in use: horse, cable and electric. In short, it was an innovative product brought to production at precisely the right time to meet an emerging market need.
Of no less significance to the company's rise to national prominence was the continued innovative talents of Arthur J. Moxham. An experienced ironmaster and roll engineer, Moxham had experimented with roll mill designs for three years and was principally responsible for bringing the Johnson girder rail to production. From the point of the first successful rolling of the Johnson rail in 1883, Moxham was also involved with the design and production of all of the company's specialty track work and personally designed many of the machines used in the rolling and finishing processes.
After the construction of the Woodvale switch works in 1887, he continued to develop innovative designs for rolls and roll sequences, specialty machinery, dies and other tools, and welding processes, and encouraged other engineers on staff to do the same. To protect their work, the Johnson Company went to great lengths to protect their designs for products and production processes through extensive patenting. Virtually every section design of girder, guard, or groove rail, either side- or center-bearing, was covered by a myriad of patents on section design, roll design, and rolling sequence. Specialty track work, such as frogs, switches, curves and crossings, and track construction implements, such as tie-bars, splice-bars, chairs, clips and spikes, were also routinely patented. Also included in the company's patents were tool designs, machinery, and electric welding processes developed in the Johnson's industrial research laboratory. By 1895, the company held patent rights on over 200 designs of products or processes.
Moxham and Johnson intended that the company's aggressive pursuit and protection of patent rights would foreclose competition in the street rail business. They had a superior product and they knew it. And while the principal protection of the product line lay in Tom Johnson's personal patent on the section design itself (a patent claim that Johnson himself considered to be fairly weak), the company supplemented that protection with its own patents on roll and process design in order to cover every possible method by which competitors might attempt to produce variations or facsimiles of the Johnson rail.
In the early years, the patenting strategy worked perfectly, and the Johnson Company established a virtual monopoly in the production of steel rail and trackwork for street railways. But with electrification, market demand for street railway track work rose so dramatically that other steel producers attempted to break into the market by manufacturing similar types of rail sections. As early as 1888, the company began to actively threaten these interlopers with patent infringement suits.
After 1890, the price of steel railroad rails began to drop, and larger producers attempted a second time to form a pool to divide up market share. The pool succeeded in dividing the market and limiting production, and in the process excluded many smaller steel rail producers, such as North Branch Steel (producer of the Wharton rail), Pennsylvania Steel, and Tidewater Steel-Works. In desperation over lost market share and impending bankruptcy, these smaller companies pressed into the street rail market by blatantly manufacturing product lines they knew were covered by the Johnson Company's patents. This forced the Johnson Company to initiate a series of complicated patent infringement suits.
Earlier attempts by rival steel fabricators to break into the Johnson Company's market monopoly involved searching for incrementally different rolling methods of manufacturing a facsimile of the Johnson girder. Most of these attempts in the mid-1880s were successfully blocked by Moxham's policy of over-inclusive patenting of his rolling processes and machinery and the company's threat of patent infringement suits. The more successful attempts to break the Johnson Company patents, initiated in 1890-91, challenged whether the Moxham rolling process actually constituted "invention," i.e. involved new and innovative machinery or processes.
It is important to note that during the 1870s and 1880s, patents on products and production processes were relatively easy to secure. In fact the Johnson and Moxham patents, on which the company's protection relied, were granted on the basis of fairly imprecise drawings and no models. By the early 1890s however, standards for granting patents had become more stringent and patent infringement law far more precise in determining the degree of invention in a patented process. Court decisions relied less on the good common sense of judges and more on the testimony of experts and careful scrutiny of patent drawings.
Since the technological dimensions of the Moxham rolling processes were commonly known even by the mid-1880s, the federal courts tended to accept the argument that Moxham's rolling process was not really invention, but rather constituted a skillful adaptation of existing knowledge. Consequently, beginning in 1892, the Johnson Company lost most of the patent infringement suits it initiated, and other steel fabricators began to replicate its rolled and cast steel railway products more freely. By 1894, the Homestead Steel Works, the largest primary mill in the United States at the time and seeking to expand into fabrication, began to produce the Jaybird.
And yet, several years before the Johnson Company lost its first patent infringement case in 1892, both Moxham and Johnson realized and acknowledged that the patent protections were of diminishing importance. The quality of its product line was already firmly established throughout the country and abroad, sufficient to guarantee that the company would remain a dominant rail producer well past the turn of the century. Its name had become synonymous with street rail track work.
But the market itself was changing. By the early 1890s, technological advancements in street paving and the demographic profile of cities were diminishing the technological advantage of the Jaybird. Specifically, many city railway companies were beginning to adopt the groove rail design over which the Johnson Company held far less patent control. Groove rails, involving a cupped rather than a flat flange below the surface of the road, presented far less obstruction to other vehicular traffic. The Johnson Company itself manufactured several heights and weights of groove rail, but the Jaybird had always been preferred by cities that experienced wide seasonal variations or cities with few paved streets.
Because of its cupped flange, the groove rail tended to fill with dirt and other roadway refuse where road paving was either unsophisticated or non-existent or roadways were not routinely cleaned. In the harsher winter months, groove rails tended to cake up with ice and proved to be more difficult to clear by plowing and the normal running of cars. Since most of the earlier electrified street railways were constructed in established cities (most of which were above the Mason-Dixon line) or in cities with established horsecar lines, the Jaybird was widely adopted. As street paving became more prevalent in cities and more electrified systems were installed in emerging southern and west coast cities, the groove rail became more accepted.
Also, demand for the Johnson rail was seasonal, with production peaking in the summer months when track construction and repair was traditionally completed, and slackening off in the winter months. As Moxham knew from his years as superintendent of merchant mills in both Birmingham and Louisville, such fluctuations in production compromised a mill's efficiency and cost-effectiveness. A merchant mill could only maintain its profit margin by running at or near capacity year-round.
Moreover, merchant mills had always relied on the market's acceptance of the wide variations in quality of rolled iron rails, with the wear life of either railroad or strap rails anticipated to be anywhere from three weeks to three years. Replacement of iron rails was therefore continuous, and demand in the market fairly constant. Paradoxically, one of the main advantages of the Johnson rail was its durability. Given its design, its method of splicing, and the fact that it was rolled from steel rather than wrought iron, the Jaybird had a wear life of over thirty years. Johnson rail installed in 1890 would not have to be replaced until perhaps the 1920s!
Because of the higher quality of the Johnson rail, the company had to rely on the construction of new routes rather than replacement for its continued market demand. Market trends revealed however that growth in the construction of new railway systems seemed to level off after 1891. Most established cities had already constructed or converted existing street railway lines through their central business districts. Continued market demand for new rail and track work would therefore have to come from the extension of existing street railway lines into newly developing suburban communities surrounding central districts.
In essence, continued high demand for the Johnson rail and track work was dependent on much broader economic trends in the country. The continuing suburbanization of American cities, spurred in large measure the development of electrified street railways, was now a critical factor in maintaining demand in the street railway market. The suburbanization trend itself was the product of changes in the profile of the national economy, including the expansion and integration of a wide range of manufacturing industries whose success or failure ultimately dictated the economic fortunes of most cities by the turn of the century. All of these trends would be severely impacted by the Panic of 1893.
Sensitive to these market trends and dependencies, Moxham began to diversify the Johnson Company's product line beyond the street railway market. He did so by expanding the role of his sophisticated steel and iron foundries. By the early 1890s, the steel foundry was producing mill maintenance parts on a commercial basis for mills replacing the traditionally used cast iron mill parts with cast steel parts. Interestingly, the first good customer for cast steel parts was the Cambria Steel Company, formerly Cambria Iron, which had supplied the Johnson Company with mill parts since the early 1880s. And foreseeing the role the mill would play in the steel industry throughout much of the twentieth century, Moxham began to manufacture cast rolls for other mills, and to experiment with various steel alloys.