Johnston Livingston, the Express Business, and the California Connection by Sylvie R. Griffiths

One looks in vain for the name of Johnston Livingston in the Dictionary of American Biography, because when that useful reference work was first published in 1930, eco­nomic history was not in vogue. One riAes historical files

associated with the Livingston family for any allusion to his era or occupation with meager result, either because he lived too recently, or because his pursuits seemed too narrowly mercantile. But the winds of change are blowing: in many quarters Marxism and its accompan ying bipolarizations are in retreat; business schools are oversubscribed ; and authors-Fernand Braudel, Daniel Boorstin , W.W. Rostow, and more recently Nathan Rosenberg and L.E. Birdzell, are describing the eco­nomic transformation of western industrialized society in positive, even laudatory terms. One may take a fresh look at the emergence of a business, in this case the express business, and at one of its foremost practitioners, Johnston Livingston , from a middle-of-the-road perspec­tive, searching for illumination not on ly in the periodicals or newspa­pers of his day, but in the board minutes of the numerous partnerships and joint stock companies with which he was so closely associated.

On this occasion, in the interests of brevity and to fit the format of

The Hudson Valley Regional R eview, March 1987, Volume 4, Number 1 2 1

this symposium, I must limit my account to his link to California. Fortu­nately, johnston Livingston 's name does figure in various publications of the California Historical Society, in the Encyclopedia Britannica, 1929 edition, and in other references to the express business. The F.D.R. Library at Hyde Park contains an invaluable store of his early papers and correspondence, and for sixty years he was present and accountable in the financial community of New York, while his business interests spanned our continent and reached across the world .

Origins

Born in 1817 in comfortable circumstances at his father's house, "The Pynes," in Tivoli, New York, johnston Livingston was trained as an engineer, graduating from Union College, Schenectady, in 1835 with distinction at age eighteen. He began his career as a surveyor for the projected New York & Erie Railroad, sharing digs with a cousin, Walter Livingston, in Binghamton, New York, from September 1835 to September 1836. The flavor of their bachelor existence is captured in the many affectionate letters from yet another cousin , Crawford Livingston, who for the ensuing decade (or until his early death from tuberculosis) maintained a copious and unusually loving correspon­dence with johnston, with whom he was closely associated in business as well as through family ties . This pattern of strong and deeply concerned involvement with family members would recur throughout johnston's life and seems to have been a major building block of his character.

Engineering did not long remain his occupation due to an eye dis­ease, said to be opthalmia or inflammation of the eyeball, I which led to his returning home and to being confined to darkened rooms. This may have been a form of conjunctivitis, venereal in origin , that most frequently occurs in sexually active young adults. References in letters from his cousin Crawford certainly suggest he was exploring with relish the charms of the local "village productions," and even his mother had expressed concern about the long interval between his letters. The autumn of 1836 found him in New York City, the spring of 1837 and several years thereafter in Tivoli, executing commissions for his father , his vision impaired and a period of recovery required. How long he was incapacitated remains obscure, but he was not idle ; he attended lectures in medicine that led to his being commissioned a hospital surgeon with the rank of major in july 1842. He never prac­ticed, nor was his eye impairment too serious, because in later life he

22 The Hudson Valley Regional Review

penned a fine strong hand , followed the newspapers closely, and of­ten acted as secretary pro tern at business meetings.

Though trained in both engineering and medicine, johnston was sti ll casting about for a career. His elder brother, Robert Cambridge Livingston , was already a successfu l patent lawyer and man of affairs, while his cousin Crawford had just embarked on a new venture, rout­ing parcels and letters of value between Albany and Buffalo. He him­self gave serious consideration to entering the grocery business, but finally settled in partnership with William A. Livingston, Crawford 's older brother, on purchasing an express business, which would operate between Philadelphia and New York. The year was 1844, and the express concept was generally credited to William A. Harndon , from whom the cousins bought their route. 2 In the next year or so,johnston having moved to Philadelphia to superintend operations, the business expanded north and south: north through a further purchase from Harndon of his New York to Albany deliveries; south through the use of boats to Savannah and Charleston, and upriver therefrom. Expan­sion thereafter was breakneck. After Crawford's death, his interests and his partner, Henry Wells, joined the amalgamation as did an early partner of William A. Livingston's, William G. Fargo.

Tivoli was an active and central location in the 1840s, in part because it was situated approximately midway between Albany and New York, in part because its produce, including its ice harvest,3 was useful to New York City, but in greatest part because of Robert Fulton's steamboat and its ties to Clermont. By 1842, a regular line of day and night boats plied the Hudson River with a landing near Tivoli , while a decade later, in 1851, with the rai lroad completed between Albany and New York, Tivoli became a principal wood and water station for the steam locomotive, providing employment for 150 men from the vi llage. 4 johnston Livingston , familiar through his work on the first survey of the Erie with railroading, well-connected through his Livingston relatives with newly emerging technologies sLlch as steam engines and the te legraph, and knowledgeable about the conduct of business and investments in the financial center of New York City, was perfectly positioned to embark on a great enterprise.

The Express Business

As new modes of transportation were created, a service peculiar to the United States had emerged. Indeed, the very word "express" was

Johnston Livingston, the Express Business, and the Cali fornia ConneClion 23

new and American! Small express businesses began to convey highly valuable articles safely and more reasonably than the post office over long distances. In Johnston's college notebook one finds reference to the Rothschilds and their abi lity to negotiate the many national borders of Europe. No such constraints applied to our continent. Instead, one was called upon to surmount formidable physical barriers, huge dis­tances, and marauders, both Indian and Caucasian, of very uncertain temperament. In a melting-pot nation , lawfulness was not well estab­lished, and it took particular courage to extend a business that dealt with precious commodities and metal across a large continent.

Establishing a successful express line was not an easy task. In the early years the U.S. Post Office fined and arrested express messengers in a vain attempt at eliminating competition. But public sentiment supported the messengers, whose rates were lower and service more dependable. Indeed the feats of early expressmen were often heroic, as a large literature on the topic suggests. It was an occupation for the brave, the vigorous, and the trustworthy, and one had to be ingenious in order to surmount the obstacles weather and man imposed. One of the keys to a successfu l enterprise surely must have lain in the choice of personnel.

Competition was also extensive. "The Postmaster-General in his report of 1841, listed eigh teen expresses operating out of Boston .... Two or three years later there were said to be forty ... nine-tenths of them ... one man or 'coat-pocket' expresses."s To outstrip the others, one also needed a good press and constant reminders to the public of the excellence of one's services-in short, advertising. From the begin­ning expressmen made certain that the press received free copies of newspapers from other cities or overseas, and they were often the first to bring important news from New York to Boston , or from Washing­ton to California.

Another difficulty , especially in ew England, was "the appalling number of little Jerkwater' [railJroads with their numerous ticket bookings and baggage checkings, their varied gauges and missed con­nections.6 Consolidation and extension of rail service was very much in the interest of express companies, providing of course the consoli­dated railroad permitted the express company to do business unim­peded, or at reasonable rates, on its line. At first, express messengers simply paid their own passage, but as business and profits soared, the rai lroad insisted on a share of the express rates-usually forty pe rcent-in return for space and services rendered. In the ensu ing years, relations between railroads and express carriers were generally uneasy, often contentious, and occasionally embittered to the point of

24 The Hudson Valley Regional Review

open warfare. Evidence incontestably suggests that Johnston Living­ston was an active negotiator for the express companies and a key participant in the growth by merger, capitalization, and extension of track of many of the great American railroad systems.

But in the 1840s his career as an expressman was just at its begin­ning, first in Philadelphia, then in New York City and Buffalo, with many refreshing pauses at Tivoli. Little personal correspondence from this period remains , as he may have been too occupied with business affairs or too often in transit to write or receive much mail. What he seemed to do best during this decade was to create small express companies bearing the Livingston name. At the time, his cous­ins Crawford and William A. Livingston were also occupied in form­ing express partnerships, but Crawford unfortunately died in 1847, leaving his share of the Albany to Buffalo route to be first managed, then bought, by Johnston. Meanwhile William A., who had actually started in business with Johnston and branched out from there in partnership with William G. Fargo, continued as a presence in the express hierarchy only until 1859, when he tendered his resignation to the Board of Directors of American Express Company, and disap­peared from the scene, perhaps also to suffer an early death. All evidence points to greater drive on Johnston 's part, and though one may not assign their creation to him with absolute certainty, the six different express firms that sprang up between 1841 and 1851 bear­ing the Livingston name in one combination or another appear to be largely Johnston's. For the record , they were: Livingston Wells & Co. (Crawford's first venture) ; Livingston, Fargo (William A.'s); Haven & Livingston ; Thompson, Livingston & Co.; Livingston , Winchester & Co.; and Livingston , Farrand & Co.

Because of the confusion , one notes with some relief that, after 1851 , the Livingston name was never again used to denote an express business. Marriage to a distant Livingston cousin, prouder of lineage and more European of taste , may have prevented it. Or perhaps as his enterprises enlarged and prospered, a natural modesty and distaste for display prevailed. Certainly the climate of opinion was changing, with mutterings about inequalities and monopolies perceptible in somequar­ters , and this too may have intensified his regard for privacy, his love of family , and his preference for living on the Hudson River at Tivoli.

Whether in this period of expansion he was deploying family funds or his own recently accumulated profits , or whether from the start he was able to attract outside capital to his ventures , is unknown . One source suggests there was an inheritance of $35,000 at a crucial junc-

Johnston Livingston . the Expl·ess Business. and the California Connection 25

ture in his career/ another hints at his having borrowed from his father. 8 The capitalization of $150,000 or $300,000 for the joint stock associations, which succeeded the multiple Livingston partnerships, seems meager by today's standards, but it was critical to survival at the time.

Though initially it seems likely that Johnston and his Livingston cousins were actively engaged as express messengers, and though several other leaders rose to prominence by that route, his forte seems to have resided instead in organizing new businesses and in financing and managing them on Wall Street and its environs. Joint-stock asso­ciations were the preferred form , an interim makeshift between sim­ple partnerships and full-fledged corporations. 9 They permitted a freer transfer of capital through the sale and purchase of stock certifi­cates, and they were a more appropriate vehicle for dealing with a steamship line or a railroad . Their principal disadvantages were that the members were liable without limit and that the association enjoyed a limited life, typically ten years. (These matters need not concern us here, though they led at times to an awkward juggling of assets and books, and inclined Johnston and his partners toward accepting a Col6>rado charter for a long enduring corporation in 1866.)

The interplay between railway and express companies must have been of major concern to Johnston from the very beginning of his career. Ties to the Perth & Amboy RR in New Jersey and to the N.Y. & Erie RR upstate may be readily traced, but almost surely there were others, emanating from family investments, friendships, and proxim­ity. In 1850, with the New York Central RR system on the verge of completion, a coalition of express lines was engineered to match it. Without going into too much detail, three lines were collapsed into two: Livingston , Fargo & Co. to have the earnings west of Buffalo, and Wells, Butterfield & Co. to have the earnings east of Buffalo. Together they would own a new joint-stock association which was christened the American Express Company and was destined to be­come, in point of territory and volume of business, one of the greatest firms of the nineteenth century. Its original foothold on the N.Y. Central Railroad was never relinquished, while it bought its way all over northern New England, thrust lines into Canada, and followed the Great Lakes into the Middle West and Northwest.

Thus Johnston Livingston's attention was already directed west­ward from American Express headquarters in Buffalo, and the expan­sion through merger and acquisition of competing express lines was already established. These methods were not limited to American Express, but prevailed in the other large eastern express company yet

26 The Hudson Valley Regional R eview

to be founded by Alvin Adams, which was closely tied In turn to another great railroad system, the Pennsylvania.

The California Connection

Though the new American Express Company was growing and prospering, its partners were divided on the matter of extending their business to California. John Butterfield in particular opposed the terri­torial expansion and, despite having brought in a committee report with Johnston Livingston on the relative feasibility of the Nicaraguan versus the Panamanian routes, remained adamantly against the ven­ture. But the opinion of five of the trustees-Henry Wells, William G. Fargo, Johnston Livingston, James McKay, and E.P. Williams-had crystallized, and enlisting four friends,lo they formed yet another joint-stock company capitalized at $300,000. On May 20, 1852, at Astor House in New York City, Wells Fargo & Company was formally created. The new agency was prepared to forward gold dust, bullion, specie, packages, parcels, and freight to and from New York and San Francisco; it would buy and sell gold and bills of exchange; and it would pay and collect bills and accounts. Edwin B. Morgan, a finan­cier from Auburn, N.Y.,II was elected president and Johnston Living­ston, treasurer; and offices were located in short order at 16 Wall Street, New York, and 114 Montgomery Street, San Francisco.

Here at last was the California connection! A brave move because several express companies were already well established in the gold fields. The need for cash was immediate, with as little as five percent of the par value of a $100 share of stock accepted, plus another twenty percent secured by suitable stocks or bonds. In effect, a large share­holder of250 out of a possible 3,000 shares of Wells Fargo stock needed to come up with $6,250: $1,250 in cash, $5,000 in pledged securities. The need was for working capital in the amount of $75,000 total with $50,000 of this sum designated for use in California. In this instance large oaks from little acorns grew. Though by May 1853, the subscrip­tion had been fully paid , the need for cash continued, and by 1854 had been increased to $150,000,just for the California operations.

Meanwhile, there was a curious contretemps respecting Living­ston, Wells & Co., one of the earliest of the express partnerships but also one of the most internationally oriented. Dating from 1841, it was originally a partnership of Crawford Livingston , George Pomeroy, and Henry Wells, but Johnston had bought into it, following

Johnston Livingston, the Express Business, and the California Connection 27

Crawford's death. It advertised express connections "Throughout all parts of Eu rope," and actually appeared to have agents at various times in London and Paris. Bent on success, and with a wider world view tha n other express companies, Wells Fargo bought this partner­ship in September 1853 for $15,000 in cash plus $ 15,000 in Wells Fargo scrip. The Board of Directors almost immediately regretted their purchase, which they characterized as due to "fraud and misrep­resentation," and demanded a return of their investment from Henry Wells and Johnston Livingston. How Johnston settled these differ­ences is not clear, but Henry Wells turned over to the Wells Fargo treasurer 48 shares of United State Express Company stock, worth $4,320, which were later returned to him together with their divi­dends "in appreciation.,, '2 Livingston, Wells & Co. never did succeed , but had to close its Paris office after disastrous losses, an event so disillusioning to J ohnston that he was thenceforth extremely skeptical about European commerce. 13

Wells Fargo & Co. moved in to Cali fornia aggressively. Within days of the arriva l of their agent in June, 1852 , a prominent office was procured in San Francisco, and within months a program for purchas­ing rival express lines was launched. Advertisements of Wells Fargo's ability to deliver treasure a nd packages, as far south as Los Angeles and as far north as Oregon, appeared in many newspapers. Uniquely in Cali fornia, Wells Fargo offices became the center of activities in all important towns, gold-mining and otherwise. "By 1855 the firm had fifty-five offices .. . by 1860 there were one hundred and forty­seven.,, 14 And they were engaged not only in the express business but also in banking. Separate departments were organized for each func­tion within the company and a large gold reserve maintained in its vaults. Oversight of the company's operations was in the hands of Henry Wells, who early made a tour of inspection . According to W. Turrentine Jackson, "Wells liked what he saw, became enthusiastic about the firm 's prospects, and strongly endorsed the recommenda­tions of the company's local agents who had repeatedly begged for more resources to expand banking activities and trading for gold. ,, '5

The company prospered from the outset, though its volume of shipments was half that of Adams Express Company and but a quar­ter of that of its largest competitor, Page, Bacon. ' 6 Its smaller volume and more prudent management practices enabled it to weather the financia l crisis of 1855 in Cali fornia, which presaged one of the first fu ll y documented business depressions in the United States, that of 1857.

28 The Hudson Valley Regional R eview

The California panic was triggered by the failure of a railroad in process of construction between St. Louis and Cincinnati, bringing down the bank of Page and Bacon of St. Louis. When word arrived in San Francisco by steamer on February 18, 1855, a week after the news had reached New York City, Page, Bacon & Company of California suffered a protracted run, which soon extended to every bank, closing them down temporarily and bringing all major business in California to a halt. Fortunately, Wells Fargo was able to reopen its banking operations after three days and to maintain its express services with commendable tranquility. Because the West Coast operations of both Page, Bacon and Adams Express Company were irretrievably ruined, never to do business in California again, Wells Fargo thenceforth enjoyed a virtual monopoly of the banking and express services requi­site to the California bonanza.

Back in New York, the Board of Directors, forewarned by a week of the impending financial crisis, met, but could not get word to their Californ ia agents. So they shored up the foundations of their enter­prise by increasing the capital stock for the third successive year. (1,000 more shares were now to be sold for $80 per share in lieu of the earlier $25.) They also decreased the stock dividend to 10 percent from the 15 percent of the prior year. They set up a committee com­posed of James McKay, D.H. Barney, and Johnston Livingston to arrange all insurance matters , with the provision that the company was to continue assuming risk for shipments valued at less than $20,000. And they agreed that an assistant with full powers was needed in California. In June 1856, Louis McLand was appointed general agent with full powers, and two superintendents to serve un­der him , one in charge of exchange, the other in charge of express.

Though the first flush of the California Gold Rush was over, the Comstock si lver bonanza and many promising avenues to prosperity lay ahead. Wells Fargo & Company, with a topflight management team installed, was there to serve-not in the parlance of today-to "service" them. Fortuitously, in the words of a foremost authority on this topic, "the businessmen associated with the company proved them­selves adept at building and managing a large-scale organization un­der conditions of rapid growth and change.,,'7 They were, to be sure, collecting handsome dividends of 10 percent annuall y, and their shares of Wells Fargo stock had appreciated to $ 100 from the modest $25 per share they had originally commanded. The enterprise was very profitable indeed , but neither had it stabilized. For as the value of

J ohnston Livingston , the Express Business, and the California Con nection 29

its gold shipments steadily increased and the number of its offices multiplied, losses from robbery leapt ahead to $31,801 in 1858. This was the same year that ushered in a major change in the officers of the association. Charles Latham, an agent in Philadelphia for only one prior year, replaced T.M. James as treasurer, a position in which he remained for almost a decade. One wonders whether Johnston, who had resided in Philadelphia, had a hand in recruiting him. The associa­tion's secretary, James McKay, also resigned and was replaced at this time. One finds a James McKay serving on the boa rd of the American Express Company from 1850 to 1853, no doubt the same man.

Duplications of this sort were very common among express com­pany officers and directors, so much so that one gains the impression that the same men met weekly, often in the same office, and always in New York. Only the name of the express company changed! As Harlow writes: "The tangle of interlocking relationships which contin­ued throughout express history . . . were for the most part personal and casual and were, as in Livingston's case, the result of one man 's having his fingers in so many pies.,,18 For there were no prohibitions against so-called "interlocking directorships" until the end of the cen­tury, when the abuses of those owners and speculators who exploited the railroad, in particular, had become all too blatant and onerous. Johnston Livingston, who was a founding member of American Ex­press Company, Adams Express Company, National Express Com­pany, Wells Fargo, and in all probability several other major express businesses, and who often acted as officer manager or as secretary pro tem at meetings, was a particularly active participant in the industry during the decade of the fifties.

So one was not surprised to find among his papers, dated May 28, 1859, a receipt for 1,400 shares of Capital Stock of the Overland Mail Company, for which he had paid $3 per share or $1,700. 19 If these were his first shares, he was later than his associates in making the investment. For Overland Mail Co., a joint stock association, had taken shape in 1857, to develop a mail line from California through EI Paso to Memphis and St. Louis, via the "oxbow" route. James McKay, whom we have already tracked , had drawn up its Articles of Associa­tion , while four of its ten directors also served on the board of Wells Fargo & Company, which undertook to underpin it financially. Three other large firms, the Adams, American , and National expresses, were also deeply involved in the formation of Overland Mail, but none to the degree of Wells Fargo. John Butterfield was its president and appears to have been the driving force behind the publicity it achieved then and later. A close friend of President James Buchanan,

30 The Hudson Valley Regional R eview

he won the mail contract from the U.S. Post Office after Horace Greeley, the editor of the New York Tribune, made a vividly publicized transcontinental trip via the Overland. "Go west, young man," is attrib­uted to Greeley.

By 1860 Overland Mail Company was indebted to Wells Fargo for the amount of $162,400, in large part because the U.S. Post Office had failed to receive its annual appropriation from Congress. How­ever, this debt and the expansive management style of its principals led to a real struggle for supremacy in the Board of Directors' meet­ings, and the eventual removal of both the general superintendent and John Butterfield from the presidency. William B. Dinsmore of the board of Adams Express was elected president, a compromise that may have been engineered by Johnston Livingston, who had acted as secretary pro tem during the Overland Mail disagreement and knew Dinsmore well through their service on the Adams board. 20

Having established a close connection between Wells Fargo and the Overland Mail, we may approach gingerly the connection between Johnston Livingston and the Pony Express. Few topics in U.S. history have been examined in such extraordinary detail or received as much media attention, in film and the popular press, as well as in books and monographs, as the Pony Express. We will not attempt to demytholo­gize the feat except to note that racing is as ancient as man's taming of the horse, and that trying to win, or be first to deliver, is the rule rather than the exception. The only real innovations were combining the word "pony" with the word "express," and attempting to over­come such vast distances and formidable barriers as two great moun­tain chains and deserts encompassing one-third of the nation. Many men 's lives and efforts contributed mightily toward the eventual span­ning of our continent; Johnston Livingston 's were modest but key.

In March 1861, Congress passed a law providing for a daily over­land mail on the Central Route and a semi-weekly Pony Express, the compensation for the joint undertaking to be $1,000,000 a year. The Overland Mail Company was the only serious contender. Just as soon as the contract with the Overland Mail Company for the entire route had been signed with the post office, President Dinsmore of the Over­land signed another contract with William H . Russell of the Central Overland California and Pike's Peak Express. 2 1 In general, Russell's outfit would provide service from the Missouri River to Salt Lake City, and the Overland Mail Company from Salt Lake City west to Califor­nia. The Overland, funded and closely supervised by the Wells Fargo Board of Directors and by Louis McLand, their California-based gen-

Johnston Livingston, the Express Business, and the California Connection 3 1

eral superintendent, competently fu lfilled their obligations west of Salt Lake City, but the Russell interests lost their stock, equipment, and tangible assets to Ben Holladay in 1862. This was sad because during the 1850s, Russell , Majors & Waddell had been a great freighting firm, responsible during the Utah (or Mormon) War of 1857- 1858 for the successful fulfillment of a huge Army contract to

carry 8,000 tons of material and supplies to the Army posts west of Fort Leavenworth. However, in 1859, Majors, the more conservative partner, refused to participate in what proved to be a disastrously expanded investment in wagons, oxen, and mules for the Colorado mines. 22 The claim that they bought about 400 light ponies, hired 125 riders , and set to work to build relay stations ten to twenty miles apart may be true, but it seems unlikely that they covered the entire distance between St. J oseph, Missouri, and Sacramento. They almost immedi­ate ly encountered grave difficulties with the Washoe and Paiute Indi­ans, and never did receive a direct post office subsidy for their "Pony Express." T hose who claim that Russe ll , Majors & Waddell were the sole progenitor~"Of the "Pony Express" do not have a credible case, as recent examination of the records clearly shows that the interlocking directorates of the Overland Mail Company and Wells Fargo were also in the saddle.

Among Johnston Livingston 's mementos, one finds the cha·rter of "Holladay's Overland Mail & Express Company," capitali zed at three million dollars. Two copies printed in 1866 suggest more than a pass­ing interest, but when one consults the head minutes of Wells Fargo & Company, one is amazed to discover that 40,000 shares of the Holladay, which engaged in the express business between the Mis­souri River and Salt Lake in Utah Territory, and in points northward and westward, have just been valued at ten million dollars and bought by Wells Fargo. This is actually a legal and accounting ploy known among students of the matter as the "Great Consolidation ." It enabled the Wells Fargo directors to combine, under a Colorado charter, a ll of their holdings with the entire Overland Mail operation and a ll of Holladay's lines and equ ipment;23 and a bonus, the staging lines of the Pioneer Stage Company operating between Virginia City, Nevada, and Dutch Flat, and Folsom, California. Until this time, the Pioneer Stage Company had been the property of Louis MeLand, who, though he was the general superintendent of both Overland Mail and Wells Fargo, operated these well- regarded stage lines as a separate entity. For them he received $ 175 ,000 payable in gold . Apparently, Holladay also was paid off in cash. 24

32 The Hu{/son Valley R egional R eview

Wells Fargo was able to retain its name, and of course its dominant financial position. Its stockholders retained 59 percent of the shares in the consolidation- those in the Overland Mail Company, an addi­tional 15 percent. Now they were "one giant enterprise controlling all transportation and mail facilities west of the Missouri River.,, 25 One of the many interesting features of this consolidation was the buyout of other large express companies. For agreeing to discontinue their ac­tivities west of the Missouri, the United States Express Company re­ceived close to a half-million dollars. A similar transaction took place between the American Express and Holladay Overland Companies, solidifying an arrangement between Eastern and Western interests to divide areas of responsibility geographically.

The officers of the vastly expanded and enriched Wells Fargo & Company remained as they had been in 1858, with Danford H . Bar­ney, president, N.H. Stockwell, secretary, and Charles F. Latham, treasurer. The only change on the Board of Directors in 1866 was the replacement of William G. Fargo by Louis McLand . William G., one of seven brothers, several of whom had been active in the express busi­ness from the start, and a powerful presence in the industry, suc­ceeded Henry Wells to the presidency of American Express Company in 1868. In that year he also returned to the Wells Fargo board where he remained for several more years, even serving as its president. However, Johnston Livingston resigned forever from his Wells Fargo trusteeship in 1869.

B ut we move ahead of our story sequentially precisely because the Great Consolidation would have been impossible without the profits the Civil War created. These profits are not immediately apparent ' from the financial reports contained in the head minutes (available at Wells Fargo Bank's history archives). Net income throughout the de­cade of the 1860s fluctuated according to these statements only be­tween $123,084 (1866) and $213,655 (1863) . It was the stock divi­dends that revealed the profits. For whereas the owners of Wells Fargo had from the beginning been fortunate , they now seemed to have stumbled into a shower of gold. Declared dividends which had comfortably jogged along at 10 or 12 percent leapt in 1862 to 54 percent, and in 1863 to 122 percent! When accompanied by stock appreciation or stock purchase agreements, profits for the insider were enormous, reflecting to some degree the bonanza economy of the era in the West.

Johnston Livingston , the Express Business. and the California Con nection 33

An embarrassment of riches, for where it was acceptable for busi­ness ventures to proceed by spurts rather than incrementally, and to have sudden profit follow risk and no return, as with a ship's cargo, it was highly unusual in the middle of the last century to encounter so mountainous a reward . In mining perhaps, but not in a service indus­try, and certainly not in one over which the post office and Congress maintained some controls. Carriers too, whether railroad promoters or Wells Fargo agents, stagecoach drivers or Pony Express riders, could have demanded their share of the profits. But it was all so new and uncharted: "takeoff" might be one word for it, "exploitation" another.

For men of conscience this sudden access to fortune must have presented a real ethical dilemma. Comparison with the returns earned by the eastern express lines, which from the start were far more competitive with each other and with the railroads they de­pended upon, suggest that nothing quite equalled Wells Fargo's profit­ability. In 1867-1868, it caused Johnston, in common with many other Victorian fortune-makers , to build a church in Tivoli within easy walking distance of the home in which he had been born. Also in the company of other successful expressmen , he anonymously erected a handsome monument to William A. Harndon , founder of the ex­press business, in Mount Auburn Cemetery, Boston. But retribution lay in wait. The cat was too fat, too glossy, too somnolent. Men of industry and foresight, in San Francisco and Sacramento, were eager to keep California silver and gold in California, or rather to ship it East or to Europe in order to stimulate the chain of investment while raking in the profits for themselves.

The debacle came swiftly after the driving of the Golden Spike on May 10, 1869, at Promontory Point, Utah, thereby instituting coast-to­coast railroad service. Perhaps too many shares of Wells Fargo stock had been created in 1866 in the course of the Great Consolidation of express services. For the price per share had fallen from above par of $100 to as low as $13, and had been scooped up by the promoters and builders of the Central Pacific Railroad, among them hard-driving Charles Crocker, who had conquered Donner Summit with Chinese crews. 26 He and his partners, Collis B. Huntington , Mark Hopkins, and Leland Stanford, known as "The Big Four," had joined forces with some shrewd San Francisco-based financiers , Lloyd Tevis and Darius Mills,27 who knew a thing or two about dummy corporations themselves. They proposed retaining the express contract for their newly organized Pacific Union Express Company that had never moved an ounce of freight or mail. With a stranglehold on the only

34 The H udson Valley R egional R eview

rails linking their state to the rest of the nation, the California crowd struck a hard bargain. Those who controlled the newly completed Central Pacific Railroad had not labored intensively for seven years to line other men 's purses. Besides, they had grown accustomed to the fabulous profits emanating from the federal government construction contracts, which they had awarded to themselves on the most liberal terms possible . These construction charges, ranging from $16,000 to $48 ,000 for each mile of rail laid down , and other government subsi­dies had been parlayed into a twenty million-dollar investment and were to form the nucleus of the Southern Pacific Railroad system, one of the most thoroughly hated industrial complexes of the nineteenth century. 28 There is some small compensation in juxtaposing the repu­tation of a Wells Fargo against that of the Southern Pacific "Octopus. "

C ontrol of Wells Fargo & Company passed rapidly into Califor­nian hands. In a maneuver somewhat similar to the 1866 consolida­tion , capital stock was increased to $15 ,000,000 then rapidly reduced to $5,000,000. This was a nominal increase to ensure a one-third stock distribution to the owners of the new but unutilized express company. These new owners, it may logically be assumed, now held a controlling number of shares of Wells Fargo & Company stock, some acquired by recent purchase, some through the foregoing distribution. No divi­dends were declared, but there appears to have been a cash distribu­tion of an unspecified amount to stockholders of record before the stock increase, and a payment to Wells Fargo by the newly enfran­chised stockholders of $175,000, or 3V2 percent of $5 ,000,000. On February 5, 1870, orders were issued to all offices located west of the Missouri River to send remittances to San Francisco rather than New York City, while the composition of the new Board of Directors clearly reflected Californian control, even though William G. Fargo was elected president. More to the point, Johnston Livingston quit the Wells Fargo board in 1869, never to return .

So ends the California Connection with the Hudson River Valley in the middle of the last century! One wonders whether this clash of Titans could have been avoided ; whether the eastern expressmen were sufficiently alert to the characteristic gambling ethic of western­ers. Whether, accustomed as they were to dealing with small compet­ing railroads , often manned by personnel familiar to them, they were well enough prepared to contend with a monopoly. One even won­ders whether Johnston Livingston could have been preoccupied else­where. There is reason to believe he might have been, for he simulta­neously resigned from the boards of both Wells Fargo and American

Johnston Livingston, the Express Business, and the California Connection 35

Express Company in November 1869 to take his ailing wife and two young daughters on a long curative trip to Europe. She died in 1873, butJohnston returned to his duties and lived on until 1911 , ninety-six full years.

He remained at the core of the express industry an incredible sixty­five years. Out of his earliest ventures in Philadelphia in the 1840s came both the Southern Express Company and the Adams Express Company, of which he was a founding member. H e also helped found and gave long service to American Express Company, United States Express Company, Wells Fargo, and the National Express Company, serving as president of the latter from 1865 to 1910. He was a central figure in the consolidation of overland routes from Missouri to Cali­fornia, as his signature on the crucial 1866 minutes of the Overland Mail Company reveal. 29 As secretary of the original , or Butterfield's Overland Mail in 1858, and as a loyal board member of Wells Fargo & Company, he was a key participant in uniting our continent by stageline and Pony Express.

Much more could and should be said about the man and his remark­able role at the hub of the expanding industrialization of our nation, but let us rest our case with a quotation from a Board of Directors ' meeting of American Express Company in 1912.

Mr. Livingston's character added a peculiar value to his long devo­tion to the Company's interests. His high sense of honor and integ­rity, his lofty standards of business ethics, his convictions or justice and fail-ness, not only won for him universal respect and esteem, but rendered his influence in the councils of the Company an active and potent force fot good. His unfailing courtesy, his spirit of tolerance for others, his uniform gentleness and charm of manner were quali­ties which greatly endeared him to his associates and they will ever hold him in affectionate remembrance.300

Notes 1 Roland L. Redmond , Personal Reminiscences, in typescript, 1978. 2 In 1839 Hamdon was the first to ad vertise his express services. Alvin Harlow, Old

Waybills: The R omance of Express Companies (D. Appleton-Century, 1934), p. 13. 3 D. Boorstin , The Americans, The National Experience (Vintage Books, 1965) , pp. 10-

16. 'I Tivoli 1872-1972, An Historical Sketch (jator Printing Co., Rhinebeck, N. Y.) 5 Harlow, op . cit, pp. 56-57. 6 Ibid. 7 Undated newspaper clipping of approximately 1880 . S Letter from brother, Robert Cambridge Livingston, 1843. 9 athan Rosenbe rg and L.E. Birdzell , Jr. , H ow the West C,-ew Rich (Basic Books ,

1986), p. 195.

36 The Hudson Valley R egional Review

10 All four o f the additional directors were already substantia l shareholders in Ameri-can Express Company, and Morgan was a neighbor of Henry Wells in Auburn .

" Ibid . 12 Noel M. Loomis, Wells Fargo (New York: Bramhall House, 1968), p . 67. 13 Promises to Pay: The Story of the American Express Company (Priva tely printed , 1977), p.

59. I. W. T u r rentine J ackson , "A ew Look at Wells Fargo, Stagecoaches and the Pony

Express," California Historical Society Qum·terly, December 1966, p . 292 . I ; W. T urrentine J ackson, "Wells Fargo: Symbol of the Wild West," Western Historical

QuarterLy, Vol. 3 no. 2, April 1972, p . 180. 16 Loomis, op . cil. , p. 70. T his is not the same Adams Ex press Company that Alvin

Adams, J ohnston Livingston , William Dinsmore, Edwards S. anford , and o thers founded July I , 1854 in New York City. T hat com pany ultimately dominated the express business on the Baltimore & Ohio and Pennsylvania ra ilroad systems.

17 W.T. J ackson in Western HistoricaL Quarterly, April 1972, p. 189. 18 Alvin Ha rlow, op . cil. , p. 66. 19 Livings ton-Redmond Collection, Hyde Park , ew York. 20 W.T. J ackson in CaLifornia HistoricaL Society Qum·terly, Dec. 1966, pp. 299-303. In

general we have ad hered to Professor j ackson's itllerp re tation of the relationships that pertained among th e majo r express companies of the period and the fi nal efforts to span the cotllinent by stage and horse. His access to the Overland Mail Company and Wells Fargo mi nutes seemed particula rly compelling and useful.

21 Ibid. , p . 303. 22 Harlow, op . cil. , p. 2. 23 It may have been pu rely coincidental that J ohnston 'S brother-in-law, DeGrasse

Livingston, had spent some months in Colorado the preceding yea r, where he might have fa miliarized himself with useful Colorado laws. A miscellany of deeds, mining claims, poll tax bills, and invita tions from the summer of 1865 a re the only papers of DeGrasse preserved in the Livingston fil e a t H yde Park . one relates specifically to the ex press business.

24 W.T. J ackson, CaLifornia Historical Society Quarterly. 2; Ibid . 26 Harlow, op . cit., p. 456. 27 Whose son Ogden would mar ry Ruth Livingston, move to the Hudson Ri ver Val­

ley, and produce O gden Livings ton Mills, Secretary of the T reasury under Herbert Hoover.

28 Oscar Lewis, The Big F OUl' (New York: Knopf, 1938) , p. 104. 29 W.T. J ackson, Califom ia HistoricaL Society Qum·terL)l, p. 299. 30 Board minutes, 2114119 12, American Express Company.

Johnston Livingston, the Express Business, and the Califo rnia Connection 37