CHAPTER 27A Hansom Cab Smashup

Albert Pullman disliked British culture and the mostly staid, inflexible people he met on his visits, but he did enjoy taking hansom cabs plying the streets of its principal cities and towns. When an anonymous entrepreneur introduced these agile, one-axle, horse-drawn conveyances to Chicago, Albert engineered a takeover of the new company. Hansoms would have many competitive advantages on Chicago's clogged thoroughfares. Using bursts of speed and a slight profile to navigate through or around traffic, hansoms provided fast carriages for one or two passengers on crowded city streets. His dalliance with hansom cabs proved to be Albert's last major investment. Here, at the apex of his entrepreneurial career, he lost out to one of the country's most notorious financiers, Charles Yerkes. Once again Albert's timing and business sense betrayed him.

It all started so well. Chicago's avenues and boulevards offered multiple means of transportation but no hansom cabs before 1884. Chicagoans were not unaware of the equipment, however. As early as 1874, a short newspaper article promised that “a fortune is waiting” for anyone willing to bring hansom cabs to the city. Although “always in a hurry,” Chicagoans suffered from “the slowest imaginable conveyances” because “our street-cars seem to be drawn by some large species of snail.” Hansom cabs would be a vast improvement, the writer suggested, and the initial investment would be lower than anything needed for larger carriages because they required only a single animal and could travel at least twice as fast as streetcars.¹ Quick and cheap, they would prove a boon to the brave investor who took the plunge and introduced them to the city's obstacle-strewn streets.

Movement was a perpetual phenomenon in Chicago, something visitors like French actor and singer Sarah Bernhardt had noted with a mixture of wonder and vertigo, but Chicago's roads had long been congested with vehicles and people. Like most large cities, no single railroad depot existed to serve all passengers because individual companies had built their own separate termini. Taking advantage of this decentralized system, Frank Parmelee inaugurated a new era in the city's transportation history in 1853, and added to the congestion, when he introduced horse-drawn omnibuses to transfer people and their possessions among Chicago's railroad stations and hotels.²

Mass transit began with Parmelee's carriages, but horse-drawn vehicles giving smooth rides on iron rails embedded in the streets followed within a few years. These streetcars offered the added advantage of overnight service, sometimes as frequently as every fifteen minutes.³ During the day, however, they operated along a small number of routes already choked by slow-moving vehicles and sometimes heedless pedestrians. Even worse, the rails were buried into the roads and became virtually impassable when snow or ice blanketed the city. For thirty years, before the arrival of elevated railroads, equine energy dominated intracity transportation despite the mess, odor, and short working lives of the beasts.⁴

Investing in hansom cabs attracted Albert in part because he simply enjoyed horses. One of his first purchases upon arriving in Chicago had been a horse-drawn carriage, and the Pullman workforce had presented him with a horse and buggy to commemorate his promotion. Albert and Emily were friends with Samuel W. Allerton, the stockyard owner known for his love of harness racing and for entertaining “the most distinguished and well-known of our Chicago elite.”⁵ A fellow Universalist who attended St. Paul's, Allerton introduced Albert to the Chicago Derby.⁶ This event stamped aristocratic approval on horse racing and gave gambling an aura of respectability after decades of hiding in the underworld.⁷ Toward the end of his life, Albert copied George and rented a box at the American Horse Show, held at the Exposition Building and treating Chicago's upper class to a feast of races, jumping, demonstrations, and appearances by celebrity horses.⁸

Albert's enjoyment of horses extended to racing. He was an early member of Washington Park, created in 1883 by subscription as another social institution designed, like the Union and the Chicago clubs, to bind wealthy Chicagoans together through conversation and shared leisure pursuits. George Pullman was an original subscriber, as were Marshall Field, Potter Palmer, and other leading businessmen. Pullman's own Solon Spenser Beman and Nathan Barrett designed the complex. The promoters of Washington Park, which was located close to George's Prairie Avenue mansion, promised publicly to provide a clubhouse with a “trotting track” and a bucolic feel accentuated in the design by line drawings of grazing sheep. Aware that proposing to build a haven for gambling between an elite neighborhood and the Central Business District would alarm Puritanical worthies, the organizers submitted plans to the city council showing an artificial lake and a small forest, promising a “private track” and avoiding any hint of gambling.⁹

By 1884, the exact nature of the facility was well known, as was the exclusion of Jews from membership.¹⁰ Neither caused adverse comment among the city's elite as clubs reinforced the deep-seated anti-Semitism of the American upper class. Though Albert showed no outward signs of discriminating against Jews, his attitude no doubt mirrored that of his associates in finding Jewish people useful when needed but otherwise socially beyond the pale. After the Great Chicago Fire of 1871, Chicago's Jewish population moved away from the Central Business District to settle in neighborhoods south of the city. By the time Washington Park opened, the Jewish population of Chicago was ten thousand out of half a million, or about 2 percent.¹¹

The Washington Park racetrack, ranked by sports historians as “one of the finest in the Midwest,” was a boon for Chicago's turf industry.¹² Albert attended races and festivities, including an annual reception for Chicago business and political leaders.¹³ A prominent member, he was one of “those whose equipages were especially noticeable” at the track.¹⁴ Albert enjoyed the annual American Derby and in 1889, he joined the crowds setting an attendance record of 42,000.¹⁵ Opening day became a Chicago spectacle, with people lining Michigan Avenue to watch members, Albert included, in their sartorial splendor, riding and driving to what would be renamed the Chicago Derby.¹⁶

For Albert, however, the business of horses would prove far less enjoyable than the pastime. He was contemplating a large new investment when he heard about plans for the Chicago Hansom Cab Company (CHCC) and decided to jump in. Incorporated in 1883 with a capital of $100,000, the company promised to put fifty cabs “patterned very closely after those in use in London” onto the streets of Chicago, with another fifty to be brought into the city at a later date. CHCC planned to copy the London business model of “owning the vehicles, horses, &c., and taking entire charge of the outfit, and the cabmen paying the company rental by the day.”¹⁷ This was much like the Pullman approach to renting its cars with which Albert was already familiar. The cabs, built in England by Forder of Wolverhampton, arrived in the summer of 1884. After being assembled and tested, they were in operation by the autumn, giving sightseers a way to enjoy the city and business leaders a means to meet appointments.¹⁸

Even before the sound of hansom hooves could resonate in Chicago's Central Business District, a group of investors led by Albert removed the original CHCC directors, installing Albert as president. Fast horse-drawn cabs in a growing city seemed a low-risk proposition. Alas, as with so many of his investments, Albert's logic was impeccable but his timing incredibly poor. He also underestimated the challenges his company would encounter. Chicagoans claimed to want alternatives to the much-hated streetcars, but hansom cabs proved to be a bad choice. Civic disgust with three independent horse-car companies monopolizing different sections of the city culminated in demands for a municipal cable-powered tram system. When they arrived, Chicagoans embraced cable cars with a fervor rarely equaled outside San Francisco. City-operated cars began running on a nine-mile route down State Street and, by 1886, three tramways operated in Chicago. The cable cars circumnavigated downtown in a series of rectangles before returning to the residential districts forming the termini of their runs.¹⁹

FIGURE 10. A typical hansom cab of the type Albert Pullman's Chicago Hansom Cab Company (CHCC) used. Library of Congress.

Undeterred by competition from a government-owned transportation system, CHCC erected a barn on South Clinton Street for its equipment and offices and established a communications infrastructure to attract customers. It placed call boxes inside theaters, near hotels, and in railroad stations to enable customers to order cabs directly using the exciting new technology of the telephone.²⁰ The company also placed its cabstands outside hotels and at the corners of main streets downtown, where hansoms would wait for clients. This astute marketing gave the new company much-needed visibility in the city center.

CHCC was an innovator, the first company to use hansom cab equipment in Chicago, but almost as soon as it began carrying customers, a challenger appeared with a strikingly similar name, the Chicago Cab Company. Albert's still-new CHCC complained to the state government about the incorporation of this nominatively intrusive competitor, protesting that the usurper was “unlawfully assuming their name in such a manner that it will deceive the public and interfere with their corporate rights.” Maintaining a distinctive identity, CHCC directors understood, was important in any business. An attempt to nullify the charter of the imposter failed, but the interloper did not survive long. Reorganized, like CHCC, soon after incorporation, the Chicago Cab Company temporarily caused angst for Albert and his business partners but made no mark on the city's streets before disappearing.²¹

At first, Albert's hansom cab company seemed to flourish, presenting itself as “a pioneer in the field,” but it did not enjoy a particularly good reputation. Letters to the newspapers complained about unpredictable rates, unreliable drivers, and overworked horses being whipped to the point of exhaustion.²² Nevertheless it bred imitators, and within a year of beginning operations, independent hansom cabs appeared in Chicago. These driver-owned vehicles led to, as one report put it, “diminished earnings for all.”²³ Property tax assessments and lawsuits by pedestrians and passengers injured in accidents also nibbled away at CHCC income.²⁴ As president, Albert tried to combat the criticism, especially the accusation that drivers charged passengers whatever they wanted. The company publicly and repeatedly told patrons to pay the fare demanded, obtain a receipt, and, instead of engaging in “the unseemliness of a dispute on the public streets”—which would further damage the brand—report the driver to the office and obtain a full refund.²⁵ Educating clients in the rituals of customer service, CHCC promised “all overcharges or incivilities by the drivers of this company promptly attended to.”²⁶

Disciplining drivers and refunding customers did not improve CHCC's public image, and the company began selling books of prepaid, discounted tickets. It also installed electronic meters in and signs identifying its cabs. But complaints about overcharging continued and, in 1885, the City of Chicago License Committee drafted an ordinance regulating cab fares.²⁷ Matters deteriorated when Albert, who had learned from his brother how to spy on employees, paid fake passengers to report on the habits and actions of drivers. When the company fired some for stealing from the fare boxes and failing to keep accurate accounts, the rest threatened to strike at the beginning of the busy opera season. They also demanded a reduction in the bond they paid the firm from $25 to $15 and a hearing for their sacked colleagues. A strike was averted, but relations between company and drivers remained tense.²⁸

Competition and passenger complaints would be the least of CHCC's problems, and its brief existence illustrated one of the recurring themes in the history of American capitalism: the litigious nature of capitalists. Fraught labor relations and imminent municipal regulation proved insignificant compared to the machinations of Charles Yerkes. Nationally known as a Philadelphia financier jailed for embezzlement, Yerkes moved to the Windy City upon release from prison and decided he would monopolize Chicago's mass transit systems.²⁹ One early, but far from isolated, victim of his climb to the top was Albert Pullman.

Desperate to buy into the Chicago transportation sector, Yerkes cast about for investment opportunities. He appears to have been a driving force behind the short-lived Chicago Cab Company, but when that enterprise failed, he turned his attentions to CHCC.³⁰ The move was opportunistic on both sides.³¹ A new type of cab was proving to be a particularly formidable competitor, and Albert had precious little capital with which to combat it. Hansom cabs were fast and light, but they carried only one or two passengers with limited space for luggage. In 1883, Theodore Gurney patented a cab similar to the hansom, moving the driver to the front instead of being perched at the rear. More commodious than hansoms and sometimes equipped with four wheels to lend added stability, the Gurney Cab was a very real competitive threat. By 1885, CHCC operated 51 cabs, competing against 29 other hansoms, 101 Gurneys, and 63 other types of cabs. They fought for a slice of a relatively inflexible market consisting mostly of wealthy people in a hurry.³² At five times the cost of a streetcar ride, cabs remained expensive even after fare regulation began.³³ Yerkes lurked in the shadows, waiting for his moment to grab the cab company and make further gains in the Chicago transportation market.

Needing an injection of cash, CHCC directors accepted Yerkes's request to purchase shares and join the board. Albert's inability to spot a predator was on full display.³⁴ Yerkes was attracted not to the cab company itself but to its operating license and real estate, especially the stables. Backed by a syndicate of Philadelphia-based investors, Yerkes had just concluded deals giving him a monopoly on Chicago's gas supplies and a sizable share of the city's growing electrical industry, demonstrating his ability to neutralize opposition.³⁵

If Albert believed Yerkes would provide funding but remain otherwise disengaged he was badly mistaken. Within two years of joining CHCC, Yerkes sued his fellow directors following a series of actions he interpreted as an attempt to remove him from the board. These suspicious (to Yerkes and his attorneys) activities began in May 1889, when Albert concentrated all but the 375 shares owned by Yerkes in a few hands. Albert and two other directors followed that by purchasing CHCC shares nominally valued at $100,000 for $60,000. Then, acting as a newly constituted board, they sold CHCC property to Rose Abernathy, niece of company director Warren Springer. Abernathy gained title to company property, which she then leased for a small fee to Charles Needham, CHCC superintendent.³⁶ This ruse, the directors believed, would allow them to bypass Yerkes when making decisions about the future of the struggling company.

Yerkes sued. His lawyers argued that the sale had been made with neither his knowledge nor his consent. Needham countered that the discounted sale had actually been Yerkes's idea. According to Needham, Yerkes had advised winding up the company because it had paid $2,500 in damages and faced further lawsuits potentially totaling $25,000. Needham testified that he and Albert then followed Yerkes's advice by purchasing CHCC stock and had simply done what Yerkes had recommended. They claimed Yerkes wanted them to sell the company because it was losing money, leading them to conclude that he hoped to “get the land owned by the company for his cable [rail]road for a low price.”³⁷ That was not an unreasonable conclusion.

Unfortunately for Albert and his fellow investors, the court sided with Yerkes. Not lost on the bench was the manner in which Pullman and Needham sidelined the Philadelphian. Ruling that “the whole affair was a mere jugglery to get the land for less than its value and to freeze Mr. Yerkes out of the company,” the judge declared CHCC bankrupt, appointed a receiver, and voided the asset sale.³⁸ The company lost on appeal, with the court ruling that it was illegal for directors to authorize the sale of company property to themselves at a discount. This fraudulent transaction had been conducted through surrogates like Needham's niece to gain control of the corporation and to jettison Yerkes. Following the ruling, Yerkes bought the CHCC barn out of receivership, one of the fifty or so companies he purchased on his way to creating a Chicago traction empire.³⁹ Albert's dubious—in this case, patently illegal—business practices had once again fallen afoul of the law.⁴⁰

The loss of the cab company barely dampened Albert's enthusiasm for investing. Perhaps his portfolio, no matter how badly battered, provided solace from his personal life. Running concurrently with the cab company debacle were Emily's fatal illness, Allie's sudden death, and Emma's divorce. Cast out of the Pullman Company, Albert had no alternative but to look elsewhere for income. Following the collapse of the cab company, his search turned fruitful and interesting, leading him into an astonishing array of new technologies. The next few years brought Albert into contact with a variety of future-shaping inventions on the cusp of being monetized, including electricity and telephones. Perpetually restless and eternally inquisitive, Albert nonetheless remained on the margins.