WHO WERE THEY ? -- #114 -- Sidney F. Tyler - SV RR
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Great work on Sidney Tyler and the sorted mess of the finances of the SVRR. When I wrote the Shenandoah Valley Book my source was the book of minutes of the BOD, which at that time was at Virginia Tech. There was also a scrap book there, in which they kept of every newspaper clipping in which the Shenandoah Valley was mentioned. It makes very interesting reading. With the movement
of the material from Virginia Tech, I do not know where it is now, but I know you would enjoy looking at it.
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Subject: WHO WERE THEY ? -- #114 -- Sidney F. Tyler - SV RR
OTHER MEN WHO NEED CONSIDERATION,
NOT LISTED IN
BIOGRAPHICAL DIRECTORY OF RAILROAD OFFICIALS OF AMERICA:
SIDNEY FREDERICK TYLER (Dec. 23, 1850 – June 3, 1935,) Receiver and President of Shenandoah Valley RR.
Sidney Tyler does not appear in any editions of the Biographical Directory of Railway Officials of America. But he served as both Receiver and President of the Shenandoah Valley RR, and had charge for wrapping up the affairs of that railroad and closing the doors for good, and therefore he certainly merits a closer look.
The back-story of the father / son team of George Frederick Tyler (1822-1896,) first President of the N&W 1881-1883, and Sidney F. Tyler (1850-1935,) Receiver and President of the Shenandoah Valley RR, is shrouded in mystery. There are few references to either of them in the outstanding literature, save for Poor’s Hand Book of Investment Securities and other items of banking literature. The Tylers would, no doubt, have preferred this anonymity.
The origins of George F. Tyler are not known to me. But in 1863, he was one of the founding directors of the First National Bank of Philadelphia, along with father and son Enoch and Clarence H. Clark, principals in firm of Clarence H. Clark & Co, a Philadelphia private bank. It was E.W. Clark & Co, controlled by Clarence H. Clark and possibly other relatives of Enoch Clark, which bought the AM&O at a sheriff’s sale in 1881. The Clark interests made George F. Tyler President of the newly established Norfolk & Western Railroad, and he remained the President until succeeded by Frederick J. Kimball in June 1883. (Remember, Kimball was a nephew of the Clark family.) The exact nature of George F. Tyler’s involvement with Clarence H. Clark, or the E.W. Clark & Co. bank, is not known to me.
One source indicates that George F. Tyler made his fortune as a “coal and iron dealer” (Banking Modern America, Jesse Stiller, 2016, p. 40.)
Sidney Frederick Tyler, son of George Frederick Tyler, is also elusive figure of whose life no consistent account seems to have been published. He was an extremely wealthy Philadelphia banker and financier, was in the high society of that city, and yet left few visible footprints in the public record. He was a founding partner and first President of the Philadelphia Stock Exchange, a founding partner of at least one national bank, and served on the board of several other banks and numerous other prestigious institutions in Philadelphia at various times. With his second wife being the daughter of Philadelphia traction magnate and Standard Oil partner William Lukens Elkins, Tyler could not have been better connected to the absolute pinnacle of Philadelphia society and wealth. One source states his residence was in Wyndmoor (on the Reading, between Germantown and Chestnut Hill,) while another lists his residence as Wynnewood, on the PRR's ritzy Main Line west of Philadelphia. Both locations were popular for estates of the elite. Sidney's one son, yet another George Frederick Tyler (1883-1947,) inherited both the Tyler money and the Elkins fortune, built a 60 room mansion on a three square mile estate in affluent Bucks County, north of Philadelphia, apparently died without issue, and his lands and mansion were eventually gifted to a university.
The first foray into a railroad job for Sidney Tyler appears to have been in March 1885, when the Shenandoah Valley RR defaulted on interest payments of bonds held by N&W and others, and Sidney Tyler, at age 33, was appointed Receiver “on the application of Fidelity Insurance & Safe Deposit Co of Philadelphia.” (The Commercial & Financial Chronicle, hereinafter cited as “C&FC,” Railroad Stocks & Bonds Supplement, p 91, March 1887.) Tyler’s Role as Receiver was “to examine the affairs of the road and determine what course should be adopted to insure the interests of the bondholders. The action was taken with a view to the general reorganization of the company. “ (C&FC, Railroad Stocks & Bonds, 3-28-1885, p. 394.)
CF&C states that it was Judge Blair, of the Circuit Court of Roanoke, Va., who appointed Sidney Tyler receiver of the SV RR. (C&FC, 4-8-1885, p. 427.) The Judge probably just blessed the decision of the Money Men in Philadelphia who had already settled on a competent banker to clean up the Shenandoah Valley mess and protect their investments.
In the same month (March 1885) that Sidney Tyler was appointed Receiver, he was also appointed President of the Shenandoah Valley RR. “At a meeting of the directors, held on March 20th, Sidney F. Tyler was elected president, in place of F. J. Kimball, resigned. Mr. Kimball had found that he could not attend to the business of the position, being also president of the Norfolk and Western Railroad. He (Kimball) was, however, elected a member of the board of directors (of the SV).” (Railway World, 3-26-1885, vol. 29, p. 296.)
The result is that Sidney Tyler was both Receiver and President of the Shenandoah Valley from 1885 to 1890, which is a rather unusual combination and, in today’s world such might be construed a conflict of interests.
The Railway Times (March 26, 1885) states that, “It had previously been considered advisable to separate the management of this company (the Shenandoah Valley RR) from that of the Norfolk & Western Railroad Company.” Another source suggests that the financial situation of the SV RR was putting pressure on the E.W. Clark & Co. bank, and this was an attempt to move some the potential liability (losses) off Clark’s books.
The financial press clearly lays out the reasons the SV RR defaulted on its April 1885 bond interest payment. In 1883, the SV RR grossed, $854,415, and netted $192,257, but was facing annual interest charges of $375,905. (C&FC, Feb 1885, vol. 40, p. 78.) From 1883 to 1884, revenues had declined 16% (although those of the N&W had risen 6% in the same period.)
The financial press credited “the decline in mining traffic” for the squeeze on SV RR revenues, but the business of the whole country was in a depressed state. The real truth about the “iron business” in Virginia, Maryland and central Pennsylvania was that Pittsburgh was coming on line as a steel producer, and Pittsburgh was close to coal and not far from much higher grade iron ores in the mid-west. Pittsburgh had fully integrated steel mills producing a full line of steel products, whereas Virginia’s small furnaces generally produced pig iron billets for reworking. Production from the small, low-grade ore deposits elsewhere in the east was no longer economical (the exception being the massive Cornwall Ore Bank at Lebanon, Pa, which supplied iron for George Washington’s cannon balls and then supplied Bethlehem Steel and continued to produce until it was flooded by Hurricane Agnes in 1972.)
I have not found a complete listing of the SV’s indebtednesses. C&CF (March 1890, p. 127) lists a General Mortgage, a Lien of $1.56 million on the First Mortgage bonds, and Third Mortgage income bonds. Since there were First and Third Mortgages, there was probably a Second Mortgage, too, although it is not mentioned.
An additional heavy expense to the SV RR was repaying construction (?) loans made by the Central Improvement Company (PRR) and Cumberland Valley RR, which had been secured by a claim on revenues. These loans were being repaid by 20 per cent of the gross receipts of the SV until October 1, 1885, then 15 per cent for five years after that date, then 5 per cent until the loans were paid off. These loan repayments, combined with the interest on the bonds, were more than the new railroad could handle. The details of all these convoluted financing arrangements can be found in the various editions of C&FC and Poor’s Hand Book of Investment Securities. It would be good if someone worked them all out in a synopsis paper. The documentation is available. (For the terms of the construction indebtedness to Central Improvement Co., see C&FC, 3-22-1890, vol. 50, p. 423.)
At the time SV RR entered receivership, stock outstanding amounted to $3,696,200 (of which N&W owned $3,057,100, the N&W having been buying SV stock held by the PRR) and total bonded indebtedness amounted to somewhere around $8 million. In addition to its bonded indebtedness, the SV owed the N&W $135,000, which had been advanced in 1884 to make up the SV’s losses and help meet the payroll. (The N&W also made “cash advances” to the SV several more times during Sidney Tyler’s attempt to reorganize the company, 1885-1890.)
During the final full year of the railroad’s operation (1889,) it netted $45,905 on gross receipts of $968,720. The previous year’s net and gross had been $13,343 net on $831,947 gross. (C&FC, Feb 22, 1890, vol. 50, p. 263.)
At the end of 1885, the SV RR owned only 2 of the 41 locomotives it operated, 6 of its18 passenger cars, 25 of its 275 box cars, 25 of its 248 gondolas, 12 of its 25 flat cars, and all 4 of its combine-express cars. Operated under car trusts or rental agreements were 2 postal cars, 13 flats, 6 baggage, 225 box cars, 248 stock cars, 223 gondolas and 13 flats. In other words, the SV owned 20 per cent of its locomotive roster, and 9 per cent of its car fleet. The total amount of the principal of the car trusts at the close of 1885 was $661,306. There were also 428 transfer trucks on hand, for which there was no longer any use after the N&W’s change to standard gauge. (Railroad Gazette, 8-13-1886, p. 570.)
The funded debt in 1885 included $2,270,000 first-mortgage 7% bonds; $4,113,000 general mortgage 6% bonds; and $2,500,000 income 6% bonds (approximately $232 million in today’s money.) Of these bonds the company itself owned $119,000 general mortgage bonds and $910,000 incomes bonds, most of which are pledged as collateral for loans. The average passenger journey that year was 54.7 miles; the average freight haul was 92.7 miles. North-bound business furnished 61.6 per cent of the ton-miles, and south-bound business 38.4 per cent. The average rate on local freight was 1.404 cents per ton-mile and on through freight 0.836 cent per ton-mile. (Railroad Gazette, 8-13-1886, p. 570.)
It was this quagmire which Sidney Tyler was sent to straighten out, in March 1885.
In May 1885, the N&W announced that it had written off $300,000 on its SV stock holdings and loans to the SV RR.
The SV limped along in receivership until Dec. 15, 1890, when its property and franchises were conveyed to N&W for $7,000,000 in preferred and common stock. I have found no account of how the bold holders were compensated. Why it took five years to close up a hopelessly indebted railroad is a mystery. It appears that Sidney Tyler made a valiant attempt to save the business, almost against odds. Mr. Mason Cooper observes that during its life, the SV had accrued $14.9 million in debt, and repaid $2.1 million. (Mason Cooper, Norfolk & Western’s Shenandoah Valley Line, 1998, page 64.)
The $7 million dollar sale price was probably arrived at because that was the amount of money needed to satisfy the bond holders, and possibly the other creditors. I have seen no indication of how the N&W raised the $7 million to buy out the SV.
We must assess Sidney Tyler as having been successful at the task he was assigned. When the railroad could not be turned into a going enterprise, he saved it from liquidation or sheriff’s sale by putting it in friendly hands (and hands friendly to the Clark Banking interests, as well.)
( A COMMENT: The PRR and the B&O both consumed huge amounts of capital during their construction and expansion years. The PRR succeed and prospered, but the B&O went into repeated receiverships. Financial people who study the two situations say that the PRR succeeded because it financed its expansion by issuing stock to raise capital, and the B&O failed because it issued debt (bonds) to raise capital. Bonds have to be redeemed by repayment; stocks do not have to be redeemed or repaid at all. Where were the Clark bankers while this SV RR debt-bomb was setting itself up…? The Clark Bank had been financially involved with the SV since 1877. )
Sidney Tyler does not receive a single mention in Raymond Barnes’ History of the City of Roanoke. Which probably means that he did not appear in the Roanoke newspapers, almost certainly indicating that he had virtually no presence in Roanoke. In the Jack and Jacobs 1902 History of Roanoke County, George F. Tyler, receives but a one line mention, and son Sidney receives no mention at all. Which probably indicates the same thing about both Tylers… absentee landlords.
Of the remainder of Sidney Tyler’s life, we know very little. His roles as Receiver and President of the SV came to an end when the company was finally bought out by the N&W in December 1890. Tyler continued to live in Philadelphia and died June 3, 1935. His years between 1890 and 1935 are as opaque to inquiry as his formative years. Someone with subscriptions to Ancestry.com and the newspaper archives could perhaps do better than I have done.
A research into the Enoch H. Clark, Clarence Clark and Edward W. Clark private bank(s) should be undertaken. All were heavily involved with the early N&W. But beware, you will have to sort out Enoch White Clark, Edward White Clark, and Clarence W. and Clarence H. Clark, and a whole dynasty of Clark sons and grandsons. It is not even clear whether Clarence (the first one) continued to operate under the name of the original firm, E. W. Clark & Co., or whether he established a banking firm under his own name. The last Clark private bank sold out in 1960, and I am confident all the heirs lived happily ever after.
-- abram burnett
Sent to You from my Telegraph Key
Successor to the MAGNETIC TELEGRAPH LINE of 1844
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