Getty ImagesAmerican railway financier Charles Tyson Yerkes, who funded most of London's underground railway construction.On August 3rd, 1900, Charles Yerkes, an American financier and ex-convict, gazed across London from the top of Hampstead Heath.
His journey through the capital in a horse-drawn carriage had already begun to persuade him that it was a fine place to invest.
The streets heaved with people; Yerkes had never travelled through such a densely populated city. But the view from one of its highest points clinched his interest.
To the south lay spires, crowded terraced houses and congested streets. To the north were pastures, stretches of farmland and a few sleepy villages.
Within two decades that landscape was transformed--thanks to Yerkes. By 1907 elegant redbrick Underground stations had been built to the north at Archway, near Highgate village, and to the north-west at Golders Green, on a site previously dominated by a pig farm and a crematorium. Land values surged. A photograph of Golders Green from 1920 shows an elegant high street lined with four-storey buildings and bustling with cars and buses.
The story of how London expanded so swiftly at the turn of the 20th century is one of financial ingenuity, bold risk-taking and low skulduggery. It is also the tale of one dauntless American who, though notorious in his time, is today unknown in the city he helped shape.
There are second acts in American lives
Getty ImagesParliament Square, London, 1906.America was full of men on the make in the second half of the 19th century. As John Franch observes in "Robber Baron", a biography of Yerkes, he numbered among the "gilded generation" that also included Andrew Carnegie and John D. Rockefeller. Born in 1837, Yerkes grew up in an age of big business, when railways were stretching across the country like arteries and large enterprises springing up along them. By 1851, as Mr Franch enumerates, even the fairly rundown part of Philadelphia where the young Yerkes lived boasted three textile factories, a malt house, a machine shop and a sawmill.
A child who did not care much for books--but had a head for numbers--Yerkes thrived in this atmosphere. He was born into a reasonably well-to-do Quaker family; his father was president of a bank. An indifferent student, he finished his education at 17 to work for a brokerage, and by the age of 28 had set up his own bank and was acquiring a reputation as a canny businessman. Then, in 1871, a fire in Chicago and the ensuing stockmarket collapse undid him: Yerkes was found to have embezzled funds that he was holding for the city of Philadelphia. He was sent to prison for two years and four months, serving seven months.
"By the time I was 35 I had accumulated a fortune of some $1m," he later told an English journalist. "Then, by a stroke of ill luck, I lost it all...This, of course, is nothing extraordinary for Americans." He rebuilt his fortune by investing in the burgeoning tram (or "streetcar") business in Chicago in the late 1880s. His business methods were purposefully obscure: Yerkes would borrow cash, acquire leases and create networks of construction companies, operating companies and holding companies before issuing diluted stock. Bribery of officials was rife, as was the badmouthing of competitors. In one particularly Machiavellian move, described by Sidney Roberts, a historian, Yerkes constructed a tram line in the dead of night--and in four hours--so that fractious Chicago property-owners wouldn't be able to stop him.
Eventually he controlled hundreds of miles of tramway and railway. But his luck ran out again. Infuriated by Yerkes's badly lit trams and occasionally shoddy service, the citizens of Chicago revolted when he tried to renew his franchises. Club-wielding men protested. Local newspapers ran angry editorials: Yerkes was portrayed as a monopolising robber baron who had little regard for his passengers' comfort. Spurned, in 1899 he decided to leave the Midwest. He sold his shares for an inflated $20m and moved to New York, packing up his growing art collection (which included the first Rodin sculpture bought by an American, a sword that once belonged to Oliver Cromwell, and a few flashy portraits of Yerkes himself); he installed it, along with his second wife, in a mansion overlooking Central Park. To the delight of New York gossip columnists, he also set up his 19-year-old mistress, Emilie Grigsby, in a flat two blocks away.
Yerkes could have led an easy life in New York. He was 62 when he arrived, and admitted that he needed a rest. Photographs from the period show a sturdy, rather short man, with white whiskers and fashionably slicked hair, glaring at the camera. He looks fearsome, but also rather tired. His house in the city was magnificent: it had a two-storey conservatory full of rare birds, a penthouse theatre and a marble-clad hallway ornamented with a bust of Nero. It was far more fun to spend money in New York than in Chicago, he once quipped. But Yerkes could never settle anywhere for long. He soon decided to invest in London's transport network; he would spend the next five years travelling back and forth between America and Britain.
The move would help ruin him financially. It would also be the finest idea of his life.
Baron versus baron
In 1900 London was the world's largest city, with 6.5m inhabitants and streets thronged with omnibuses, hackney cabs and horse-drawn carriages. By the time Yerkes visited Hampstead Heath, three Underground lines were already dug and running: the Metropolitan, the District, and the City and South London line, which shuttled businessmen from Stockwell to King William Street in uncomfortable carriages known as "padded cells". But a series of plans for further lines--stretching up from Charing Cross in central London to Hampstead in the north, or from Elephant and Castle in the south-east to Regent's Park in the north-west--had stalled for lack of cash.
Yerkes's decision to invest was not driven by anglophilia. The government's tendency to meddle and the interminable parliamentary processes annoyed him. An "obsolete past" hung over the city like smog, he thought. Compared with Americans, Britons seemed sluggish. They took far too long to board a train, as if they "had a hundred years to do it in", Yerkes huffed. To a man known to work 18-hour days--getting up at five o'clock to cycle 12 miles in his knickerbockers--the locals could seem lazy. In 1903 he told a reporter at the New York Times: "The trouble with the British workman is that he does not work enough. If you pass through London or adjacent places on a Saturday afternoon you will be perfectly amazed by the number of men playing ball." He was willing to concede that "this is an enjoyable way to live. But it is a bit startling to a busy, hustling American." That sort of indolence helped give this particular hustling American his opportunity.
In New York Yerkes had met Thomas Reeves and H.H. Montague Smith, English businessmen who were looking for funding for the Charing Cross to Hampstead railway. Now part of the Underground's Northern line, this had been given parliamentary approval in 1893; a construction contract had been signed in 1897, but finance proved elusive. After his visit to Hampstead in August 1900 Yerkes paid £100,000 to the railway company and became its chairman. A new contract was signed, and two new bills put before Parliament to extend the line farther north to Golders Green and Archway.
The EconomistAs politicians pondered these proposals, and those submitted by rivals, Yerkes took over three other lines, actual and planned, among them the Great Northern, Brompton and Piccadilly railway, a proposed route from west London to Finsbury Park in the north-east (see map).
Altogether these projects would cost £16m. To raise the cash Yerkes created a new company, the Underground Electric Railways Company (UERL), enlisting a bank to help through the issuing of "profit-sharing secured notes".
Most investors were American, but Yerkes persuaded some wary Britons to chip in too. Before he built anything, however, Yerkes would have to see off an even grander American financier: John Pierpoint Morgan.
Morgan's son, J. Pierpoint Morgan junior, had wired his father details of a proposed underground line to run from Piccadilly to north-east London, tracing a similar route to Yerkes's Brompton and Piccadilly railway. Meanwhile London United Tramways (LUT), a separate outfit that operated trams, put a bid into Parliament to create a line serving two tram termini in west London. Morgan and the LUT joined forces to build a line that would stretch under the city from Hammersmith in the west to Tottenham in the north-east.
In 1902 Yerkes won parliamentary approval for his extension up to Golders Green and Archway, as well as for his Brompton and Piccadilly line. Oddly (since the two schemes were so similar) Morgan's plans were also approved; perhaps the MPs thought one of them was bound to collapse--an outcome that, inadvertently, they helped bring about. The politicians were concerned that only the lucrative, central part of Morgan's line would be built, so insisted that the whole thing, from Hammersmith to Tottenham, must be constructed. Still, when Parliament went into recess, it seemed that both the Yerkes and Morgan projects were viable.
But when Parliament returned Yerkes had acquired a majority interest in the LUT. This meant he could prevent it building its part of the Morgan line. The whole proposal promptly fell through. J.P. Morgan described Yerkes's manoeuvres as "the greatest rascality and conspiracy I have ever heard of." Scandalised politicians huffed about this "very dirty transaction".
Paradise by way of Golders Green
In the event Tottenham did not join the Underground network until the 1960s. All the same, Yerkes's cunning and determination were a boon to his adopted city. They meant work on his Underground lines began even as Parliament prevaricated and NIMBYs in Hampstead fretted that the Tube (as the system was soon known) would drain the Heath of moisture. If plans had been left to fester for ten more years, the rise of the motorbus would have made tunnelling under crowded streets seem even less worthwhile. As Christian Wolmar, a railway expert, points out, another deep-level Tube line did not open in London until 1968.
And the monopolistic instinct that got Yerkes booted out of Chicago served a better purpose in London. By the time of the first world war his firm, the UERL, then known as the Underground Group and run by Alfred Stanley (later Lord Ashfield), controlled all but one of the city's Tube lines, all three tram companies and the main bus operator. Its elegant roundel logo is still in use today. London's transport network became a comprehensive system, not a fractured, chaotic one. Rather than leaving stations to switch lines, passengers could zip down escalators to do so instead. This changed the way people got around the city. It also changed the way the city itself developed.
In 1900 Yerkes told a sceptical American journalist that "a generation hence London will be completely transformed...people will think nothing of living 20 miles or more from town, owing to electrified trains." This had started to happen in parts of the city where railway lines had already been built. Large Victorian houses clustered in places such as Clapham Junction, a south London neighbourhood home to a railway terminus since 1863. But Tube lines would encourage more people to move farther out. At a board meeting in 1903 (reported in The Economist), Yerkes asserted: "Cheap fares to the suburban districts is the only thing that will solve the problem [of overcrowding], and other Londons must be built up on the outskirts of London."
Other Londons were indeed built. Land values in Golders Green more than doubled between 1903 and 1904 alone. By 1908 the Underground Group put up posters showing a couple in their garden in Golders Green: a man in a waistcoat, his sleeves rolled up, waters sunflowers; his wife reclines in a deckchair as their child plays nearby. Below are lines from William Cowper's 1784 poem, "The Task", describing how pleasant it is to be at a "safe distance" from "the great Babel". The image is a precursor of the famous adverts that, after the first world war, touted "Metro-Land" as the bucolic domain of aspiring middle-class families.
Mind the gap
The three new lines that Yerkes championed all opened between March 1906 and June 1907. He did not live long enough to see any of them in operation. When he became ill with kidney disease in 1905 he defied his doctor's orders and kept a telephone by his bed. He also chaired meetings of his company, and gave newspaper interviews in which he yet again berated Londoners for being slow moving. But in November of that year he returned to America to die in the Waldorf Astoria hotel, with Miss Grigsby, his mistress, by his side.
British newspapers were generous towards the man "who revolutionised our old-fashioned methods of going to and fro". Americans were more scathing about his rakish behaviour: a serial philanderer, Yerkes cheated repeatedly on both his wives and on Miss Grigsby. His behaviour so outraged his contemporaries that when the journalist Theodore Dreiser based a trilogy of novels on Yerkes's life, he depicted him as a swarthy businessman who seduces female stenographers in his oak-panelled office, and has to break down his wife's door when she tries to strangle one of his mistresses.
Americans were also unimpressed by his apparent lack of philanthropy, which seems mostly to have consisted of splashing out $23,000 on an electric fountain in Chicago in 1890 and, two years later, giving just over $300,000 to fund what was then the world's largest telescope. (As a result, a crater on the moon is named after him.) Yerkes was startlingly blunt about his motives: "Whatever I do, I do not from any sense of duty, but to satisfy myself."
Yet, in a paradox characteristic of many voracious tycoons, he also wanted to leave a legacy. Initially, that seemed unlikely. Many of his other business schemes were ditched. Angry creditors contested his will. Proposals for his mansion in New York to become a museum fell through, and it was sold off along with his art collection. In the 1930s the mansion was bulldozed and replaced with a modern apartment block. Plans to establish a hospital in his name were also scuppered. Yerkes once told his shareholders that the Underground would be "the crowning success" of his life. But, when his lines eventually opened, passenger numbers disappointed, and even that hope looked forlorn.
After his death, though, the concern was saved from bankruptcy by Lord Ashfield, who ploughed money into advertisements, boosting the Tube's popularity. Yerkes's attention to details, such as the decor of his tile-clad stations, survived him, as did his vision of a city surrounded by densely packed suburbs. And, these days, his method for realising that vision is back in fashion.
One of Yerkes's lines is currently being extended; meanwhile Crossrail, a completely new project that scythes through London, is scheduled to open in 2016. Both of these schemes are funded partly by private capital: austerity has made it near-impossible to fund big infrastructure projects with public money alone. The city is coming full circle, suggests Isabel Dedring, London's deputy mayor for transport: back to a model of development based more on Yerkes-style independent finance.
Unlike J.P. Morgan, Yerkes's feted arch rival, today few know of this strange, extravagant individual. His only real monument does not bear his name. At Golders Green station--which still looks much the same as when Yerkes's team built it in 1907--a small brown plaque near the electronic ticket gates notes the date the building opened, and that some original features remain, such as ornate timber handrails in the stairwells. But it does not mention the man who ensured that the station, along with the suburb that blossomed around it, got built.
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