A Duel to the Death
The second challenge was almost a duel to the death. In 1867 a large group of New York merchants were sold on the idea that express rates were too high and they should set up their own express company to combat this situation. The selling job was so successful that the Merchants Union Express Company was formed with a capital of £20,000,000. As soon as the ink was dry on its charter the Merchants Union went out to get American Express.
The battle lasted more than a year and was conducted with intense bitterness and every weapon at the disposal of the rival companies. They cut rates right and left, enticed away each other's key men, and resorted to all sorts of curious devices to get tonnage. American Express had one hand tied behind it because of an agreement with the railroads that it would not accept goods rated as freight, while the railroads in turn agreed not to solicit express business. The Merchants Union, with no such contract, took anything it could get its hands on. However, United States Express stood loyally by its ally and was a source of considerable strength.
Like all wars, this one was destructively costly. For the first and only time in its history, American Express began to skip dividends. Before the battle was joined it had been earning nearly £100,000 a month. Now its losses soared up to £250,000 a month. Meanwhile, the Merchants Union lost £7,000,000 in little more than a year. In the end the two antagonists almost literally knocked each other out.
On the verge of financial exhaustion, they staggered into each other's arms, agreeing to a merger of the two companies to be known as the American Merchants Union Express Company, capitalized at £18,000,000, to which each contributed equally. The new Board of Directors was composed of men who lately had been bitter enemies. Oddly enough, they managed to work together in considerable amity.
Henry Wells was tired. The fine, broad beard was like the shining silver his coaches carried down from the Comstock Lode, and his eyes were gentle in a network of wrinkles. He had led the American Express Company from its small beginnings to a pre-eminent place while with his left hand, as it were, he had seized the express empire of the West. It was twenty-six years since he had carried his carpetbag into Buffalo. The man was neither young any more nor in a hurry.
He led the fight against the Merchants Union, but when it was over he was ready to say, "Enough!" Shortly before the merger he resigned the presidency of American Express. But he did not resign his interest in life. With the advice of such notable academic friends as Ezra Cornell and Matthew Vassar, he founded Wells College in Aurora, New York, and spent the remaining decade of his life guiding its hopeful beginnings.
William George Fargo was elected President of the American Merchants Union Express Company. During the fat years of the sixties he had not been very active in the affairs of the company while he lived in his great stone mansion in Buffalo, the particular pride of which was a glorious chandelier containing three thousand pieces of crystal. He was prominent there in politics and served four years as mayor of the city. When the alarm sounded for the battle with the Merchants Union, he came charging back to stand beside his friend and partner throughout the fray. Now he took over the reins.
At the time of his election Fargo was only fifty years old, the eldest of twelve children of William C. Fargo of Pompey, New York. He was shorter and more serene than the fiery Wells, with wide-open astonished eyes and a round face fully covered by a shaggy, light brown beard. Though his expression was guileless, he was exceedingly wise in the ways of express and kept an unhurried grip on the affairs of the company.
In the days of stress Henry Wells had called another Fargo to his aid. This was William's younger brother, James Congdell, the seventh child of their prolific parents. "J. C.," as he was generally called throughout his seventy years in the express business, had grown up in American Express. The Fargos always offered their numerous kinsmen jobs in the company, but here nepotism ended. What happened from there on was strictly up to them. Some remained minor employees all their lives; others had the ability to rise. J. C. was outstanding among them all.
He began at the age of fifteen, in 1844, as office boy in the Buffalo office of Wells & Co. Then he became an express messenger and later won the post of superintendent of the company for the state of Michigan.
So successful was he in this post that he went right on up the ladder. In 1859 he was elected a director of the American Express Company. And in 1887 Wells made him general superintendent of all the lines, with headquarters in New York. He was, at the same time, elected a director of Wells Fargo.
From 1867 until he became president on the death of his brother in 1881, he ran the detailed affairs of the company while the president made broad policy decisions. But even in these, the elder man leaned ever more heavily on the advice of his brilliant junior.
BATTLES LONG AGO
THE BRILLIANT SUCCESS and extraordinary growth of the American Express Company from 1850 to the close of the Civil War sounds, in this rapid narration of events, as though it were all too easy. Actually it was the result of unceasing activity and acute acumen on the part of its management. It maintained standards of absolute integrity in handling other people's money and valuables, yet was adventurous to a degree in seizing the opportunities offered by the rapid expansion of the national economy. At the same time it had to be alert against the machinations of unscrupulous competition. The price of survival was eternal vigilance, plus unyielding determination.
During the first decade of its existence the American Express Company survived the attacks of numerous rivals, the most dangerous of which was the United States Express. After doing each other considerable damage the two companies concluded an agreement for a profit-sharing arrangement. They continued... see: BATTLES LONG AGO