Tuesday, September 22, 2015

How D.H. Byrd's Uncle and Cousins Met G.H. Walker

Abraham (Abe) Ruddell Byrd (born 1851) operated Stephen  Byrd's farm in Jackson County, Mo., at least until 1878, when he began to engage in other business pursuits, particularly flour milling. He and his wife Sallie Hunter Byrd lived in Cape Girardeau in the "bootheel" of Missouri, described as follows:
gum and bald cypress
Before a series of large levees were constructed by the federal government to harness the Mississippi River, its flood waters regularly spilled across much of southeast Missouri. The Missouri Bootheel once was a natural basin to catch all of this water, a swamp unsuitable for any kind of habitation.
Abe Byrd had four sons, the two eldest of whom entered business with their father in 1904. The next eldest, Carlisle Oliver (likely named for the head of Carlisle Training School in Jackson where the older boys received their preparatory education), was almost six years younger than A.R. Jr. and the youngest, Edward Russell, was not born until 1897. By 1910 A.R. had relocated his wife and younger children to San Antonio.

Joseph Hunter Byrd, was at the University of Texas by 1900, where he was elected to the Cactus staff. The second son, A.R. Byrd, Jr., began in 1899, graduating from U.T. in 1903. The brothers then left Austin to take up ranching and mining near El Paso, Texas--on lands in both Old and New Mexico. Returning to Missouri after only a year, the brothers became serious about assisting their father in his two businesses: (1) flour milling; and (2) the sawmill or lumber road business. The mining business in which these elder sons and their younger brothers were involved in is more mysterious and will be dealt with later.

As early as 1900 Abe Byrd had owned Cape County Milling Co. along with a nephew, Ruddell Monroe McCombs, son of his sister, Elizabeth "Betty" Byrd McCombs, who died when her son was only a boy. In 1905 Cape Co. Milling was said to have "luxurious offices" located "near the [Gould-owned] St. Louis, Iron Mountain and Southern Railway station in the eastern part of Jackson," less than ten miles northwest of Cape Girardeau. After the college-educated sons went into business with him, A.R. Byrd organized the Alsop Process Co. of St. Louis, Inc. to acquire from James N. Alsop flour patents the inventor had obtained from Great Britain in 1904, and subsequently from the United States, covering machinery to bleach flour.

A.R. Jr. worked as sales agent for Alsop, but quickly became an officer within the St. Louis Alsop Process Company. While they began manufacturing the patented machines, they also sold franchises to other flour mills to use the Alsop Process. The company's first St. Louis office in 1904 was on S. 7th Street near railroad loading docks and warehouses, but by 1912, the company had moved its headquarters to the heart of St. Louis' financial district--506 Olive Street, today within the block called Metropolitan Square. Although still associated with the Alsop Process at that time, A.R. Jr. had joined his brother in their own brokerage company at 420 Olive, a block east of the Alsop office. Today the Federal Reserve Bank of St. Louis takes up the entire block at N. 4th and Locust, only a block to the north. Near their offices was another notable St. Louis stockbroker, G.H. Walker & Co. at 307 N. 7th Street.[1] We will hear more about him below.

Under the corporate name of American Forest Co., Abe Byrd, also owned timber in the swampy area around Cape Girardeau, employing his son J. Hunter Byrd as president. Working in 1911, Byrd met with promoters who wished to construct the "sawmill and lumber" infrastructure of the Portland & Southeastern railway from a point on Gould's St. Louis, Iron Mountain & Southern railroad in southeastern Arkansas to link with the old Vicksburg, Shreveport & Pacific, as shown in the Engineering and Contracting magazine, Vol. XXXV, No. 15 (at page 32). One court case indicated that American Forest had been incorporated in New York, and that certain financing came from the St. Louis Union Trust Co. Intriguingly, QJ revealed previously that the original builder of the Vicksburg line had been Charles G. Young, ancestor of David Atlee Phillips! [2]

Read full article.
Houck's consolidated system was owned by a syndicate of investors from southeastern Missouri, who sold the St. Louis & Gulf Railroad to the St. Louis & San Francisco Railway (the Frisco) in 1905. As one of Houck's large investors, A. R. Byrd got a tiny Missouri town named for him:
At the urging of Abe R. Byrd, who owned a sizable tract of land south of Senath, Missouri, and in part with Byrd's financial backing, Louis incorporated the Kennett and Osceola Railroad to extend south from Kennett toward Osceola, Arkansas, running roughly parallel to the St. Francis River in the Bootheel's most remote corner. Inside of a year, crews painstakingly carved out a line nearly fifteen miles long through Senath to a junction point with the Paragould and Eastern Railroad that Louis simply called Arbyrd.[3]
Click map to enlarge. See original at website.


       
American Forest Co.
Houck had therefore managed to build a series of railway lines connecting Cape Girardeau to St. Louis, as one part of a dream that envisioned a railroad which would span from St. Louis directly south to the Gulf of Mexico. Perhaps Abe convinced his eldest son to take over construction where Houck left off, partly we assume because such a project would provide a constant market for railroad ties milled by the American Forest Co.

J. Hunter Byrd, as president of the lumber mill, had become ever more involved in the securities business. Even before 1913, when, according to Louis Houck's biographer, Byrd "stepped forward to help facilitate the sale" of his father's friend's railroad interests. J. Hunter first approached the Goulds' Missouri Pacific without success.

Jay Gould of MoPac had died in 1892, leaving control of his railroad interests in the hands of an inept son, George J. Gould and his crew of advisers, including three directors and numerous executives who lived in St. Louis (E.B. Pryor, Sam F. Pryor, and Charles S. Clarke). When Pryor left St. Louis for the New York area, he rose quickly in the business world, according to Karin Crooks:
(Sam) Frazier Pryor (1865-1934), arrived in Greenwich to start a new career, uprooting his family from their life near St. Louis, Missouri. At 48, Sam Pryor was a self-made man who, after high school, had worked his way up through the railroad supply business to become president of Southern Wheel Company. Sam’s new employer, the family of William Rockefeller (1841-1922), was already established in Greenwich and famous worldwide for its wealth. In his new position as General Manager and Vice President of Remington Arms-Union Metallic Cartridges Co. (Remington), Sam would report to two bosses: William’s second son, Percy A. Rockefeller (1878-1934), the young head of the family business; and William’s son-in-law, Marcellus (Marcy) Hartley Dodge (1888-1963), the sole stockholder of Remington.
Hunter Byrd then approached the Frisco and, according to biographer, Joel P. Rhodes, he had the following results:
By deftly maneuvering himself into the Frisco camp [composed of B.F. Yoakum, B.L. Winchell and Thomas West], the young entrepreneur ultimately acted as the big railroad's proxy in the execution of a familiar contract with Louis in February 1913. Immediately after consolidating the Gape Girardeau and Thebes Bridge Terminal Railroad, the Chester, Perryville and Ste. Genevieve, and the Saline Valley Railroads into one Cape Girardeau Northern, Houck sold this entire new corporation and all his interest in it to a syndicate headed by J. H. Byrd.[4]
A. R. Byrd, Jr., Secretary
A bond issued by the Cape Giardeau Northern, shown here, contains the signature of A.R. Byrd, Jr. as the secretary. Louis Houck clearly believed that J. Hunter Byrd was acting on behalf of the Frisco Railroad at the time Byrd formed the corporation and merged Houck's lines into it. When, in 1913 the Frisco went into receivership and the receiver refused to take over maintenance of Houck's former railroads, Houck sued on behalf of the bondholders.

The Texas & Pacific at first had leased its existing lines to Jay Gould's Missouri Pacific network, but, after Gould acquired a majority of stock in the T&P in 1885, the two roads simply continued to work together as a system through Gould holdings in both companies.

However, in 1911 the Gould-owned Missouri Pacific made a high-dollar deal with B.F. Yoakum, of the St. Louis and San Francisco Railway (Frisco) Company, who then purchased for himself a huge estate in west-central Long Island, New York. Only two years later the Frisco was placed in receivership, with a young man born and reared in St. Louis emerging as a top officer in the creditors' hierarchy. George Herbert (Bert) Walker's career as a railroad man is not nearly as well known as is the career of his namesake given by his daughter to her son, George Herbert Walker Bush after her marriage to Prescott Bush in 1921. But the Walkers had begun to relocate to Long Island as early as 1919, according to Doug Wead's biography of Bert's grandson, The Raising of a President.

The Byrds Fly to Texas

In 1907 A.R. Byrd, Jr. married Elise, a daughter of Hungarian-born engineer, Otto Kochtitzky, who had formed the Little River Drainage District in Southeastern Missouri to drain the wetlands where hardwood cypress proliferated.



Southern Merchant
As a member of the Alpha Tau Omega fraternity at the University of Texas, A.R. Jr. may have had contact with its sponsors, Walter Bremond and T.W. Gregory, who were close friends of Colonel Edward M. House, the man who had elected numerous governors in Texas before turning his sights toward electing U.S. President Woodrow Wilson. Alpha Tau Omega sponsor, Thomas Watt Gregory, became Attorney General in 1914 in President Woodrow Wilson's Cabinet, which was mostly hand-picked by Col House. One man selected to work with Wilson's Attorney General in gathering intelligence information was the banker, railroad receiver, G. H. Walker of St. Louis, who was Chief of the St. Louis division of the American Protective League, which reported directly to the Department of Justice.[5] We only mention this fact in passing to show Walker's powerful political and intelligence connections to the Democratic establishment of that era.

Louis Houck "constructed a network of five hundred miles of track through the wilderness of wetlands known as 'Swampeast Missouri'." The first railroad Houck built connected Cape Girardeau to the Iron Mountain Railroad, and by 1902 many of Houck's lines had been sold to the Frisco. Access into the rail network was of great importance to the Byrds, who sought an affordable distribution medium for their processed flour.

As a consequence the value of the lands within the district, including not only Abe Byrd's timber land, but Houck's railroad land as well, increased dramatically, as did the taxes assessed on the land by the drainage district. Louis Houck's railroad sued Kochtitzky's district, contesting its taxing authority. Houck lost in the Missouri Supreme Court in 1911, forcing him to either pay his ever-rising taxes or lose his lands. In desperation Houck sought a buyer for his railroads. Houck was approached by Abe Byrd's eldest son, J. Hunter Byrd, mentioned earlier, who was a financier as well as the brother-in-law of Otto Kochtitzky's daughter, Mrs. A.R. Byrd, Jr., nee Elise Westmore Kochtitzky. (Note: It is possible Houck did not know that Kochtitsky's daughter was in fact the sister-in-law of the man who sought to rescue him from this desperate situation. They did remain married until 1925, when they divorced without children.)

It was a somewhat intricate plan. They set up a new corporation Byrd had formed, Cape Girardeau & Northern Railroad Co., of which Hunter Byrd was president. The new corporation absorbed the five existing railroads through a purchase from Louis Houck, paying for them with proceeds of bonds issued by the new company and guaranteed by the St. Louis & San Francisco (Frisco) Railroad. At least $1,200,000 of the $2,500,000 in bonds were sold to innocent purchasers in reliance upon the guarantee, and it was that fact which influenced the Court in its final decision to hold the railroad liable in the amount of $1,200,000.

However, when Houck had not received payment by February 1914, he sued the Frisco, which had guaranteed the bonds in 1913, which had almost immediately been placed in receivership by its creditors, chief among them being another St. Louis investment banker, George Herbert Walker. One lawsuit was filed in the U.S. District Court for the Eastern District of Missouri and heard in June 1918 (253 F. 123), in which the Frisco intervened to prevent plaintiff, J. M. McElvain, from pursuing a claim against for a debt he claimed predated the appointment of receivers.

Morton & Co., Inc. - 1920
Attorneys for the Frisco included Cravath & Henderson, the firm which a few years later would employ John J. McCloy. It is interesting to note that Carl A. DeGersdorff, a future partner in the firm, was a director of a subsidiary railroad at the same time as G.H. Walker, Benjamin Yoakum and Robert J. Kleberg. Another subsidiary of the Frisco had Walker on the board with lumbermen J. H. Kirby and J. F. Keith of Beaumont. Keith's daughter Olga married Houston oil tycoon Harry C. Wiess.

As early as March 1920 Walker was named as president of Morton and Company, Inc., a Guaranty Trust investment bank subsidiary, along with Averell Harriman, Sam Pryor and Percy Rockefeller.

We will end this segment at this point. Studying the Byrd family's deep roots has helped to reveal something we never dreamed we would find. In hoping to explain how D. Harold Byrd became such a close friend of Lyndon Johnson, instead we learned how closely tied his father's family was to the grandfather of George H.W. Bush. Small world!

END NOTES:

1. See also J. Hunter Byrd's biography in St. Louis, the Fourth City, published in 1909.

2. Young had moved to Texas and chartered the Houston and Great Northern railway before his tragic accidental death in 1871. The HGN would later continue to build north in Texas, connecting to the Shreveport line at Mineola, and in 1873 became part of the International & Great Northern Railroad, acquired by Jay Gould in 1880 for his Missouri Pacific Railroad. Gould would also acquire the Texas and Pacific and the St. Louis Southwestern (Cotton Belt) and owned "one-half of the mileage in the Southwest" by the time he died in 1892. Gould's biggest competitor in the region was the Frisco, which attempted to merge in 1922 but the purchase was refused by the ICC.

3. Joel P. Rhodes, A Missouri Railroad Pioneer: The Life of Louis Houck, p. 190University of Missouri Press: "In telling the story of his railroading enterprise, Rhodes chronicles Houck’s battle with the Jay Gould railroad empire and offers key insight into the development of America’s railway system, from the cutthroat practices of ruthless entrepreneurs to the often-comic ineptness of start-up rail lines."

4.  Joel P. Rhodes, A Missouri Railroad Pioneer: The Life of Louis Houck, p. 252.

5. Emerson Hough, The Web (Reilly & Lee Company, 1919), p. 293.]



1 comment:

Bob Lyon said...

Wow, thanks ever so much. Hunter Byrd was brother in law to my Aunt (Jean Harris Byrd). My family knows little of the Byrds, so your article was fascinating. Wheeling and dealing ran in that family as my uncle (Carlilse Oliver Byrd) made his living flipping mineral rights deeds for oil leases.

Bob Lyon