Charles Tyson Yerkes was an American financier and traction magnate. He was the one to put together the syndicate of companies that built Chicago’s mass-transit system.
Background
Yerkes was born on June 25, 1837 in Northern Liberties, Philadelphia, the son of Charles Tyson and Elizabeth Link (Broom) Yerkes, Quakers. His father was president of the Kensington National Bank; one of his ancestors, Anthony Yerkes, was settled in Germantown as early as 1702.
Education
Yerkes left Central High School at the age of seventeen.
Career
At seventeen, Yerkes began his business career as clerk with James P. Perot & Brother, commission brokers. He opened his own brokerage office in 1859 and joined the stock exchange. Three years later he had made enough money to start his own banking house, and in 1866 his feat in disposing of a Philadelphia bond issue at par when the city bonds had been selling at 65 established his reputation as a brilliant dealer in municipal securities. During these years he mastered the secrets of the connection between politics and finance.
By 1871, the financial dictatorship of Philadelphia was practically within his grasp, but the Chicago fire of that year brought panic on the Philadelphia stock exchange which caught him over expanded. Called upon to deliver up money Yerkes had received as the city's agent in the sale of municipal bonds, he was unable to do so, and after trial was sentenced to two years and nine months in the penitentiary for technical embezzlement. He served seven months of his term before he was pardoned.
Coming out of prison to face a hostile and gossipy world, he managed somehow to re-establish himself financially and, when the failure of Jay Cooke & Company precipitated the panic of 1873, Yerkes made a bold plunge and recouped his former losses. He expanded his railway investments and in 1875 helped organize the Continental Passenger Railway Company, of which he was the largest stockholder until it was absorbed in the Union Railroad system in 1880. But in spite of his financial success his position in Philadelphia society was uncomfortable.
He moved in 1882 to Chicago, where he started a brokerage firm, but his eye was on bigger game. With the help of a loan from Peter A. B. Widener and William L. Elkins, the Philadelphia traction kings, he got an option on a North Chicago street-railway line, and with further borrowings on the stock as collateral he found himself, in 1886, in majority control of all the major North Chicago and West Division street-car companies. For some fifteen years after that he extended and entrenched his hold upon the Chicago transit system. He replaced forty-eight horse-car lines with cable traction, increased the surface lines by five hundred miles, applied electricity to 240 miles, and built the ingenious Downtown Union Loop. These physical improvements, however, were only by-products of his financial activity.
His methods were so devious that his empire of street-railway enterprises became known as the "Chicago traction tangle. " It was a network of construction companies, operating companies, and holding companies, of interlocking directorates and friendly contracts, of financial manipulation and political corruption. The record of his corporate activity was a palimpsest on which was written reorganization after reorganization, with a heavy admixture of stock watering in each. Yerkes' primary concern, however, was with politicians; his whole fortune depended upon getting and extending public franchises for the use of the city streets and he became a master of the arts of political bribery and legislative manipulation.
In the early nineties, maneuvering himself into control of the state nominating conventions, he saw to it that a safe legislature was elected and in 1895 secured the passage of the Humphrey bills, renewing his franchises for a century without any payment to the city. Governor John P. Altgeld refused to be bribed, however, and vetoed the bills, and subsequently the legislature reversed itself by a large majority. In revenge Yerkes saw to it that Altgeld's radicalism was so publicized as to prevent his re-election. Governor John R. Tanner, who succeeded him, was more pliant and in 1897 the Allen bills became law, authorizing the Chicago City Council to do what the Humphrey laws would have done directly. The immediate effect of the new legislation was to send the Yerkes stocks soaring on the exchange. This was the moment of Yerkes' triumph, but it marked also the beginning of his loss of control over the city and state legislative bodies. His methods had become too blatant to be suffered any longer. The city legislators who had helped Yerkes were dubbed the "Boodle" aldermen. Indignation mass meetings were held and there was marching in the streets.
On the night when the aldermen were to vote on putting the Allen law into effect for Chicago, the City Hall was surrounded by a crowd armed with guns and nooses. The vote went against Yerkes. In the fall elections every one who had voted for the Allen law in the state legislature was defeated and in the winter of 1899 the law was almost unanimously repealed. Yerkes' attempt to extend his franchises had cost him a round million in bribes and had proved unsuccessful. By 1901, largely because of this episode, bills were being introduced into the state legislature calling for municipal ownership and control of the street railways. Yerkes found himself not only politically blockaded but socially ostracized as well. Opposed by powerful financiers who considered his business methods dangerous and regarded him as a menace to stable finance, he sold his holdings to his friends Widener and Elkins in 1899 for something less than $20, 000, 000.
Before he left Chicago he made public his business accounts, in which students have since found amazing revelations of buccaneering methods. Returning first to his Fifth Avenue mansion in New York City with $15, 000, 000 in cash, he went in 1900 to England, where he became head of the syndicate which built the London subways. Things did not go entirely well, however, and although he was still planning to build the greatest system of urban transportation in the world, he was a broken old man, sailing close to bankruptcy, when he died in 1905.
Achievements
Membership
Yerkes was a Chairman of the Underground Electric Railways Company of London (1902-1905).
Personality
Yerkes loved to surround himself with beautiful and expensive things, ranging from a gold bedstead, formerly belonging to the King of the Belgians, to a magnificent conservatory. His New York mansion had two immense art galleries where he hung the paintings gathered in his European travels--collections which were sold after his death--and he had medieval stained glass in his office windows.
Connections
On December 22 Yerkes married Susanna Guttridge Gamble. This marriage - to which six children had been born - was proving unhappy and gossip linked his name with that of the daughter of a prominent Philadelphia politician. Having obtained a divorce from his first wife and married (September 23, 1881) Mary Adelaide Moore, a well-known beauty, he moved with her in 1882 to Chicago. During the last years of his life Yerkes was estranged from his wife and at his death it became known that he was about to divorce her to remarry.