In this 12th episode, we explore the primary means of Robert F. Stockton’s wealth accumulation, the Delaware and Raritan Canal.
When the Duke died, Captain Stockton turned to his new father-in-law, Col. Potter for advice. Robert’s father had left him property in New York State near the newly completed Erie Canal. The waterway was a commercial success, moving goods from New York to the west. The state had approved a canal project but it lingered without private financing. The state did not want to borrow to finance the construction.
The Stevens family also stood in the way. Col. John Stevens owned much of the land that became the City of Hoboken, where the family home, Castle Point overlooked Manhattan. The estate which later became Stevens Institute of Technology housed John’s industrial laboratory. The inventor had developed the first steam ferries and ran them between Manhattan and Hoboken. He also designed and built a model railroad, which he ran around his land to prove its viability. He also sent the first steam-powered ferry on the open ocean to Philadelphia.
Col. John Stevens in 1830 National Portrait Gallery
The Stevens proposal was a steam railroad accomplishing some of the same goals as a canal, a way for goods and people to travel between Perth Amboy and Camden.
Stockton countered by proposing his own railway to run alongside his canal. State legislators rejected this out of hand. The Stephens were as politically connected as the Stocktons and acquired exclusive rights to the route.
The stagecoach companies lined up behind Stockton’s canal plan. They thought he would fail, and it could politically delay or defeat the railway men. The horse held the true monopoly of the day.
There were four main coach routes in New Jersey, and they dominated commerce. The Lower Road (also called Lawrie’s Road) which ran through Burlington, Bordentown, Walnford, Hightstown, and Cranberry to Amboy. There was the Upper Road which ran through Trenton, Princeton, New Brunswick, and Elizabethtown to Amboy. And there was the Old York Road, to the northwest of the Upper Road, which ran from Philadelphia and then New Hope to Coryell’s Ferry (present-day Lambertville) and to Flemington, Somerville, Plainfield, Scotch Plains, and Newark.
The coaches were the only practical way to get to Philadelphia, and their owners controlled a series of toll roads, taverns, and inns, increasing the network of people with a strong economic interest in seeing the Stevens brothers fail. Both the rail line and the canal would need rights of way, river access and other approvals at the state and local level and the coach industry wanted to stop or delay the improvements.
Carriages were also improving, but the roads were poor and conditions difficult to overcome. A few stage lines billed their faster vehicles as “Flying Machines”, emphasizing rapid transport, although a little mud would jam them up. Personal travel from Philadelphia to New York still took at least two days in good weather; heavy goods took much longer. Both the train and the canal would be far superior.
Stockton struggled to capitalize his company, while Steven’s stock sold out in ten minutes. Potter stepped up and put in almost $500,000 to Stockton’s company, an unbelievable amount for the time. Now with both companies moving toward building, they each sought legislative protection. But Stockton, seeing that the state legislators lined up with either him or Stevens decided to get them all with a move no one expected.
Stockton’s father lost elections for Governor of New Jersey multiple times and John Stevens was the most powerful man who had lobbied against him. The rival families had been vocal in public, placing letters in the newspapers arguing against the other’s projects and appearing bitter enemies. So it was a shock when Stockton ‘bumped into’ the two Stevens brothers outside the Park Theater in New York, and convinced them that the way to profits was to combine forces and together they would defeat the interests of the stagecoach companies, toll takers and innkeepers.
They convinced the legislators by committing 1,000 shares of stock to the state and agreeing to a state surcharge on goods and passengers.
The Camden and Amboy Railroad and the Delaware and Raritan Canal would be operated as The Joint Companies. In doing so, each used their legislative persuasion to attain a thirty-year tax-free monopoly for their united enterprise. The concept of a monopoly, while illegal federally was fair game since the pathway was contained to one state. Despite a financial crisis back home, Captain Stockton went to London and raised plenty of capital to complete the Delaware and Raritan Canal. He had the walls lined with brick to keep erosion down, and the grade was flat enough to limit time in the locks. The trip for goods, particularly coal, was shortened by two days with no cargo lost on the sea, and the rail passengers saved the overnight stay at an inn, making the trip in 10 hours.
Joint Company Stock Certificate
The stagecoach men were upset. From a Princeton newspaper dripping with sarcasm:
“Married today at Trenton on the 15th
inst. By the Honorable the Legislature of New Jersey,
Mr. Magnus Fluvius Canal to Miss Agilis Rail Road.
The peerless pair their jealousies forego,
Unite their stocks, and thus their wisdom show;
Embrace the state within their circling arms, And teach the world the magic of their charms”
A letter was published in the Monmouth Democrat, written by leading men of Ocean County complaining about the monopoly, Robert replied in long prose about why the limiting of building roads and canals made sense, how the state had avoided debt, and why his intentions were pure.
“My chief ambition is to be remembered as one of her sons (NJ), who honestly and assiduously devoted himself to her welfare. There is a monitor within my breast, which assures me that, whatever be the views of my fellow citizens in relation to me now, however harsh their judgment, however unrelenting and unforgiving enmity and hostile their attitude, the time will come, when after my poor remains shall repose beneath the sods of New Jersey, with those of my ancestors, that my memory will be cherished with respect, that my name will stand on the page of New Jersey’s history, associated forever with those whose chief ambitions was the promotion of her happiness, prosperity and glory.”
The “problem child” no more, Robert was on his way to becoming the most powerful man in New Jersey. The companies never paid less than a 6 percent dividend and once paid at 30 percent. The surcharge to the state was so great that when the monopoly ended, the state facing a loss of 70 percent of its revenues, imposed a real estate tax.