III. Alfred V. and Bidermann du Pont, Louisville Capitalists
Transshipment of any goods from the Atlantic coastal cities to Louisville was a long and tedious affair. The original route, by coastal ship to New Orleans, then by flatboat or keelboat through either St. Louis or Memphis to Louisville, was opened up by 1831. After the completion of the 395-mile Pennsylvania canal system in 1834, the faster and cheaper routes ran from either Philadelphia (after 1838) or Baltimore (after 1841) by the canal system to Hollidaysburg, over the Allegheny Mountains by the steam-powered, inclined plane Portage Rail Road to the canal basin at Johnstown, by canal again to Pittsburgh, then by riverboat down the Ohio to Louisville. By the mid-1850s, transshipment could move via the Erie Canal to the Great Lakes and then by one of the many canal systems running south from Lake Erie to the Ohio River. After 1855, shipments could be carried by the Baltimore and Ohio Railroad as far as Wheeling and then floated down to Louisville.
Louisville's relative isolation in the interior of the country, accessible only by water routes, added high shipping costs to any products brought into the city. At the same time, it guaranteed a virtual monopoly for any merchant or agent who would risk the financing of transshipment. Such was the circumstance surrounding the development of the Louisville agency of the Du Pont Powder Company, of Wilmington, Delaware. Commissioned in 1830, the Louisville agency had a lackluster sales record and high agent turnover until 1844, when it was sold to Isaac Cromie. Through aggressive sales policies, Cromie developed a solid business for the agency for ten years, when he offered to sell the agency back to the parent company.
With capital provided by both relatives and the Du Pont Company itself, the agency was purchased from Cromie by two young cousins, Charles I. du Pont II and his cousin Alfred V. du Pont, in 1854. Fred, as he came to be known, was the third son and fifth child of Alfred V.P. du Pont and Margaretta Lammot. He had graduated from the University of Pennsylvania at age 18, and now, three years later, was discouraged with his slow movement through the lower ranks of the family-owned Du Pont Powder Company on the Brandywine. He and cousin Charles moved to Louisville and took up the growing powder sales business under the name of the C.I. and A.V. Du Pont Company. Fred's 17-year old brother Bidermann (Bid) also went with them, starting in the agency as a part-time clerk. Their arrival was to mark the beginning of a four decades of highly successful entrepreneurial activities in Louisville for the du Pont brothers, a period during which both would rise to prominence in the business and financial circles in the local economy, not to mention in the opening up of southern iron, steel and railroad markets.
Under the management of the two cousins Charles and Fred, the powder agency's business improved. True entrepreneurs, they were able to eliminate their only competitor for black powder sales in the Louisville market, the Hazard Powder Company of Connecticut, by becoming the local agent for Hazard as well. In 1859, Charles du Pont returned to the parent company in Delaware and Fred reorganized the agency as the A.V. Du Pont Company. His younger brother Bidermann was taken on as a partner.
The original purchase of the Cromie agency carried with it a partial interest in a small local paper mill. As demand for paper in the west was expanding, Fred proceeded to buy up controlling interest in the paper mill in 1859. Within the next ten years, the paper mill would be the du Pont's main enterprise, and a highly successful one at that. At one time, du Pont drilled for usable water for the manufacture of paper on the mill property and inadvertently tapped into a pool of high-sulphur mineral water. Though the water was unusable for manufacturing purposes, du Pont attempted to capitalize on the find by forming an artesian water company and building a local health spa. And while the paper mill became a growing and highly prosperous enterprise, the water company and spa languished and were quickly abandoned.
Fred du Pont was well aware that the market for black powder was beginning to decline even before the Civil War. Both sales figures and sheer common sense dictated a reappraisal of their powder agency business. The railroad building and mining boom of the 1840s and early 1850s, which had sustained the agency at healthy profits for over a decade, had begun to fade. Seeing this, both Fred and Bid began to diversify their capital investments into other enterprises in the Louisville area. Bidermann purchased controlling interest in the smaller of Louisville's two morning newspapers, the Daily Commercial, in 1869. He would take over sole ownership of the paper in 1874, converting it from Republican to Independent in political orientation. By 1884, Bidermann had purchased the Evening Postas well, and chartered a publication company, the Louisville Press Company, to handle both newspapers.
It was common knowledge in Louisville that neither newspaper made a profit. Some estimated the revenue losses at the Daily Commercial as high as $50,000 a year. The publishing company however did not confine its business to printing of the two newspapers. It was used as well to print advertising, promotional material and catalogues for many of the other du Pont businesses. The du Ponts used the papers, particularly the Commercial, to advance their growing and diversified economic interests in the city, often involving them in caustic political wrangling with competitors in street railways and the other daily newspapers. In many cases, local elected officials were caught in the cross-fire and political careers made or lost on how du Pont interests were affected.
Also in 1869, Alfred and Bidermann du Pont purchased a majority share in the Central Passenger Railroad Company, at that time the smallest of the three horse-drawn street railways in Louisville, and known mostly for its use of bob-tailed mules. Bidermann himself took over management and development of the line, taking with him, on the recommendation of his brother-in-law Thomas Cooper Coleman, a young office boy from Coleman's Louisville Rolling Mill, Tom Johnson. As we have seen, Johnson displayed great ingenuity, invention and business sense beyond his years, and would ultimately reorganize the line, the routes, and the fare structure to make the line marginally profitable within three years. Undoubtedly, the street railway purchased strap rails for the horse car line from Coleman's Louisville Rolling Mill Company.
In addition to the paper mill, the du Ponts made their most significant investments in lead, ore and coal mining around the Louisville area. In 1872, they invested close to $40,000 in a lead mine west of the city, realizing large returns over the next five years. In what would become their largest mining endeavor, they purchased 4,000 acres of mineral lands in western Kentucky and formed in 1882 the Central Coal and Iron Company. The large mining operation produced over 600 tons of bituminous coal per day and employed over 250 men. With its main office in Louisville and branch offices in Nashville and Memphis, Central Coal provided coal to iron mills in Louisville and to the south and west. Both the coal mines and the 2,000-lot company town of Central City that the du Ponts developed near them were supervised by Bidermann's eldest son Thomas Coleman du Pont. Barry Coleman served as the secretary of the company.
To gain access to the coal fields, the du Ponts developed the Elizabethtown-Paducah Railroad which Bidermann owned and operated as a captive railroad of the coal company. The long-range plans to build iron furnaces in Central City were, however, never realized. Instead the du Ponts chartered the Central Rolling Mill Company as a subsidiary of Central Coal and Iron, and leased the Brook Street mill from the Louisville Rolling Mill Company. There they continued to manufacture merchant iron using coal from their own mines in Central City. To diversify their holdings into the mining of iron ore, they also purchased the Green River Iron and Coal Company. The powder agency, the original enterprise in the du Ponts' long and prominent business presence in Louisville, was sold to their cousin Alexis I. du Pont in 1874.
By the early 1880s, the du Ponts were two of the most prominent capitalists in the city. They had developed working partnerships with many of the significant banking and financial interests in the city, and had made themselves a major force in local politics. Fred had by all accounts become one of the wealthiest men in the city, accumulating a net worth of close to $3 million by 1890. He never married. In the early years, he had looked after his younger brother and the interests of the powder agency and paper mill. At the death of his father in 1856 and his brother Lammot in 1884, he took an active role in the affairs of his mother Margaretta and Lammot's nine minor children. Upon arrival in the city in 1854, Fred had taken up residence with his brother in the Louisville Hotel, but when Bid married in 1861, he moved over to the Galt House, the premier hotel in Louisville at the time. After the Galt House burned down in 1865, it was rebuilt one block away as one of the most elegant hotels in the country. There, in Room 422, Fred lived in frugal fashion for over twenty years until his death in 1893.
After their marriage in 1861, Bidermann and Ellen Coleman du Pont moved into a house on Sixth Street and had six children over the next ten years. The eldest of their three sons, Thomas Coleman du Pont, worked in his father's mining business for ten years before moving to Johnstown where Fred and Tom Johnson had established a steel rail mill. He would eventually move to Wilmington in 1902 to take over the Du Pont Company. Bid's other two sons, Ermann (A. B., Jr.) and Evan, spent most of their careers involved in various street railway companies constructed, managed and owned by Tom Johnson.