Louisville and Nashville Railroad
The Louisville and Nashville (L&N) Railroad achieved national recognition as one of the most profitable and influential railroads in the southern market from the second half of the nineteenth to well into the twentieth century. The foundation for the company's success began with the Kentucky and Tennessee state legislatures' granting of charters in 1850 for a railroad line to be built between Louisville and Nashville. Recognizing that a rail line was needed did not prevent conflict, as both Kentucky and Tennessee sought controlling interests in transportation for the prized Upper South commercial industry. The agreement to construct a line connecting the two cities resulted out of the desire to restrict competitors such as Cincinnati, Atlanta, and New Orleans from flooding the market. Still, due to construction problems and financial concerns, the first train did not travel from Louisville to Nashville until November 1, 1859.
Shortly after these territorial squabbles and building complications ended, the L&N faced an even larger dilemma with the onset of the Civil War. Its two major terminals were at Louisville and Nashville; this physical proximity meant that the L&N was literally caught in the middle of the war. In the early days of the war, L&N President James Guthrie spoke out in defense of the South, and the L&N shipped vital supplies for the Confederate army. But, after the ban on trade with the Confederacy, the company reduced its southern shipments and shifted support to the Union. The L&N's assistance to the Union turned out to be profitable as the company emerged from the war in comparatively stable physical and economic condition.
L&N's postwar stability enabled the company to push forward in expansion and development. In Tennessee, the L&N incurred the debts of the Memphis and Ohio and Clarksville Railroads in exchange for management control. This led to an eventual consolidation between the L&N, Clarksville, and Memphis and Ohio Railroads by 1872. Then in 1880 the company moved quickly to take control of the Nashville, Chattanooga and St. Louis (NC&St.L) Railway, when Edmund Cole's ambitions for the Nashville competitor proved too threatening. By the 1880s L&N maintained a stronghold on the Kentucky and Tennessee markets and had expanded into numerous other southeastern territories. With an increase in rail mileage from 921 miles in 1873 to 1,840 in 1880, L&N established itself as a major player in southern transportation.
Despite continued expansion in the early 1880s, questions arose regarding the L&N's financial status. By 1880 localized control of the L&N decreased, and most financial decisions came down from financiers in New York. This change to “big city” control, questionable expansion decisions, and perceived financial incompetence by company president C. C. Baldwin, led to a downward spiral in the company's reputation. This damaged public image, along with the overall decline in security prices, reduced L&N stock value per share from $99 in late 1881 to $31 in late 1882.
By 1884 the L&N was seeking a savior to restore its financial stability and public confidence. Longtime railroader Milton Hannibal Smith accepted the challenge and took over as president of the company, a move which was well received in Louisville, Nashville, and the entire southeastern region. Regarded as a “representative of the people,” Smith helped reestablish the L&N as a transportation leader through his managerial insight and dogged determination. Smith's presidency lasted from 1884 to 1886 and from 1891 until his death on February 22, 1921. In his tenure, L&N track mileage expanded over 60 percent, mostly through developing eastern and western Kentucky as well as central and eastern Tennessee, rather than through major acquisitions. In Tennessee the L&N constructed a 94-mile line from Brentwood to Athens, Alabama, via Lewisburg and built a new line from Knoxville to Atlanta. Other Tennessee expansions included the acquisition of the Gallatin and Scottsville Railway and the Middle and East Tennessee Railway in 1906. Smith's stubborn style proved less effective in facilitating the management-labor relations, however. In the 1890s Smith's unwillingness to compromise with unions landed the L&N the reputation of a company unfriendly to labor.
As was the case with many United States railroads, World War I federal control policies and the subsequent Transportation Act (1920) left the L&N financially restricted. The L&N responded to federal control by cutting back train service and reducing its labor force by approximately ten thousand workers. For remaining workers, the impact of company cutbacks most noticeably affected African Americans, who were often paid reduced wages for performing the same jobs as whites. Because African Americans continued to value railroad jobs, most accepted the conditions, albeit unwillingly. The company, however, fought through the tough times of the 1920s and 1930s, suffering only one year with a deficit net income from 1920 through the depression era.
Leading the L&N from the depression to the 1950s were two former presidents of the NC&St.L, W. R. Cole and J. B. Hill. Because both were native Tennesseans and familiar with railroading in the state, Cole and Hill maintained an overall understanding of the importance of Tennessee to L&N success.
During the 1940s the L&N enjoyed the fruits of the World War II-generated business and industrial expansion that developed along company rail lines. In Tennessee, the Milan ordnance plant, the ALCOA plant, and the Tennessee Valley Authority helped increase L&N net operating earnings more than twofold to $50 million. These tremendous increases, combined with the need to replace employees now serving as soldiers, created a broader job base for women and minorities. However, the railroad brotherhood's continual rise in power reserved desirable skilled labor for white males only. The L&N was very much a part of these discriminatory practices, as indicated by the 1946 U.S. Supreme Court case of black employee Steele v. the Louisville and Nashville Railroad. The case, won by Steele, established the principle that a majority union could not make a contract with a railroad company which unfairly discriminated against nonmember minority workers.
The L&N continued as a major southeastern railroad company through the 1950s, giving it over one hundred years of activity and influence in the railroading industry. In 1957 it formally merged with the NC&St.L; in the early 1970s it became part of the Seaboard Coast Line. In 1986 it merged into an even larger corporation, CSX Railroad, which continues to maintain the line and rail facilities today.
Thomas D. Clark, The Beginning of the L&N (1933); R. S. Cotterill, “Southern Railroads, 1850-1860,” Mississippi Valley Historical Review 10 (1923-24); Leonard Curry, Rail Routes South (1969); Maury Klein, History of the Louisville and Nashville Railroad (1972)