February 16, 2012 12:30 PM
By Lisa Stone, Co-Founder, BlogHer
In celebration of Citigroup's 200th Anniversary, we are sharing stories from our rich history here on this blog. The second installation below covers our investment in railroads, coal-mining, and steamships. Read the first installment about our founding as the City Bank of New York here.
City Bank backs transportation
With the bank's aid, Moses Taylor invests in railroads, coal-mining, and steamships, helping to drive a young nation's economic expansion
Before the invention of the automobile, rail transport played a central role in opening up economic opportunities throughout the United States. It was an important unifying force at a time when the nation's territory was expanding. In seizing the business opportunities that were presented, Moses Taylor and City Bank made their own contribution to infrastructure development. In the early 1850s, Taylor started to invest in the railroads that brought coal to New York. He also bought into the fields where it was mined.
In 1854, he became a director of Delaware Lackawanna and Western Railroad, also known as Lackawanna Railroad, a year after it was formed through a merger of two other companies. Taylor eventually acquired control of the company, which operated a line through the Lackawanna Valley coal-mining area in Pennsylvania and had its own coalfields.
Under Taylor, the rail network and coal-mining capacity was expanded, and Hoboken Terminal, across the Hudson River in New Jersey, became a key transport hub for the company. These lines are now owned by the Pennsylvania Northeast Regional Rail Authority, with both freight and tourist trolley services operated by Delaware Lackawanna Railroad, a subsidiary of the New York-based Genesee Valley Transportation Co. The territory occupied by the United States expanded considerably during the course of the19th century, and Taylor's investments were timely. It was through his initial investment in the transportation of coal by train from Pennsylvania to New York, and his subsequent move into the iron and steel industry, that he was able to acquire interests in the rapidly expanding railroad operators of America's Midwest and South.