How it was possible to derive any profit from an investment of from $20,000 to $40,000, the principal of which had an average tenure of life of but five years, has puzzled a great many conservative business men from "down east", where "plants" lasted a lifetime, and the profits from which may have been sure, but were certain to be small. A man educated in such an atmosphere would hesitate long, before investing $25,000 in a steamboat that was foreordained to the scrap pile at the end of five summers; or where one out of every two was as certainly predestined to go up in smoke or down into the mud of the river bottom at the end of four years—these periods representing the ordinary life of a Mississippi River steamboat.

From 1849 to 1862 the shipyards of the Ohio, where nine out of ten Western boats were built, could not keep up with the orders. Every available shipwright was employed, and on some boats gangs worked at night by the light of torches at double wages, so great was the demand. Every iron foundry was likewise driven to the limit to turn out engines, boilers, and other machinery with which to give life to the hulls that were growing as if by magic in every shipyard.

If there had not been profit in the business, the captains and other river men who gave orders for these craft would not have given them. By far the greater number of boats were built for individual owners—practical river men who navigated the boats, and who knew just what they were about. Many of the orders were given to replace vessels that had been snagged or burned within the past twenty-four hours—for time was money, and a man could not afford to be without a steamboat many weeks, when twenty weeks or less represented a new boat in net earnings. These men knew from actual experience that if they could keep their craft afloat for two years they could build a new boat from the profits made with her, even if she sank or burned at the end of that time. If she kept afloat for four years, they could buy or build two or three new ones from the profits, even without the aid of insurance. As a matter of fact the boats carrying insurance in those days were the exceptions. It came high, and owners preferred to take their own chances rather than indulge to any great extent in that luxury. How such profits were earned and such results obtained, it will be the object of this chapter to disclose.

In those days every boat made money. A big and fast one made a great deal; those small and slow made little as compared with their larger rivals, but plenty as compared with their own cost. Perhaps most vessel owners began on a small scale. A little boat might cost $5,000. She would run on some tributary of the Great River, and in the absence of any railroads might control all the traffic she was capable of handling, and at her own rates. In the course of two or three years her owner was able to build a bigger and a better boat. By combining with some other river man, the two might build one costing $25,000, and carrying from a hundred and fifty to two hundred tons of freight, and passengers in proportion. With such an equipment there was a fortune in sight at any time between 1849 and 1862, provided always that the boat was not snagged or burned on her first trip.

The doctrine (or science) of averages, is peculiar. In order to get an average of four years for a steamboat's life, it is necessary to keep some of them afloat for nine or ten; while on the other hand you are certain to "kill" a lot of them within a year after they touch water. When the latter happens, the investment is lost and the owner is probably ruined.

For purposes of illustration we will take as a sample one from the best class of money-makers on the upper river, in the flush times of 1857. Minnesota was organized as a territory in 1849, and admitted as a state in 1858. From 1852 to 1857 there were not boats enough to carry the people who were flocking into this newly-opened farmers' and lumbermen's paradise. There were over a hundred and twenty-five different steamboats registered at St. Paul in the latter year. The boats carrying good cargoes all through the season were the money-makers. Some of the larger ones were unable to get over the sand-bars after the midsummer droughts began. The stern-wheel boat of two hundred to three hundred tons was the one that could handle a good cargo on little water, and represented the highest type of profit-earning craft.

Such a boat would be about 200 feet long, 30 feet beam, and five feet depth of hold. She would have three large iron boilers (steel not having entered largely into boiler construction at that time), and fairly large engines, giving her good speed without an excessive expenditure for fuel. She would cost from $25,000 to $30,000, and accommodate two hundred cabin passengers comfortably, with a hundred second-class people on deck.

With such a boat furnished and ready for business, it is the duty of the captain to go out and hire his crew, and fit her out for a month's work. Such an investment in 1857, on the upper river, would approximate the following figures:

With this wage-list and expense-account before them, the captain and his chief clerk, who may also be a part owner in the boat, are face to face with the problem of meeting such expenses from passenger and cargo lists, and at the same time providing a sinking fund with which to build another craft within four years. To the uninitiated this would seem a somewhat appalling problem; with these old hands, the question would no doubt resolve itself down to the number of round trips that they would have to make to pay for their boat. The question of years never enters their heads.

In 1857 there were three principal points of departure on the upper river, above St. Louis. At that time St. Louis itself was the great wholesale centre, but it was not so important as an initial point for passengers for the upper Mississippi. The flood of immigration from St. Louis was for many reasons up the Missouri: furs and gold could be found in the mountains; there was a possible slave state in the farming regions below the mountains. The people who settled Minnesota and northern Wisconsin came from the East, and reached the river at three points—Rock Island, Dunleith (or Galena), and Prairie du Chien. Taking the point with which I am most familiar, we will start the new boat from Galena.

At that time Galena was, next to St. Louis, the principal wholesale entrepÔt in the West. It was a poor trip for the boat which I have taken as a model, when she did not get a hundred tons of freight at Galena from the wholesale houses there. The balance was found at Dunleith, the terminus of what is now the Illinois Central Railway (then the Galena & Western Union); at Dubuque, which was also a big wholesale town; and at Prairie du Chien, the terminus of the Milwaukee & Mississippi Railway.

The freight rates on the river ran from 25 cents per hundred for short distances, to $1.50 per hundred from Galena to Stillwater, or St. Paul. No package was taken at less than 25 cents, however small it was, or how short the distance. In order not to overstate, we will take fifty cents per hundred as the average, and three hundred tons of cargo as the capacity of the two hundred-ton boat.[6] This is relatively the capacity of a vessel of that tonnage after deducting for passengers and fuel, and the 165 166 space occupied by deck passengers. This latter item did not seriously count, for the freight was usually taken first and the deck passengers were then piled on top of it. Their comfort or convenience was never taken into consideration.

The boat can carry two hundred cabin passengers, and a hundred on deck. We will assume that there is another boat competing for this trip, and we do not fill up to the capacity. The clerk studies the rate sheets in vogue in 1857, and finds the following:

UP-STREAM RATES

In 1904, the cabin passage on the Diamond Jo Line boats from Dunleith to St. Paul, was $8.00; from Prairie du Chien, $6.75; from La Crosse, $4.75. This is in competition with six railroads practically paralleling the river. In 1857 there was no railroad competition, and practically none from steamboats. Every boat attained a full passenger list, and was at liberty to charge whatever the conscience of the captain dictated—assuming a conscience. I have known a boat to fill up at Dunleith at the rate of $16.00 to St. Paul, and contract that all the men should sleep on the cabin floor, leaving staterooms for the women. And the passengers were glad enough to accept such conditions, for a detention of two days at Dunleith would cost a far greater sum than the overcharge exacted by the steamboat officers.

In the foregoing table I have included La Crosse, which, however, was not an active factor in river rates until 1859. Before then, hundreds of passengers were landed there from Rock Island, Dunleith, and Prairie du Chien; but as the railroad had not yet reached the river at that point, there were but few passengers from La Crosse for landings farther up the river. When our boat leaves Prairie du Chien, then, the following business is in sight:

A boat leaving Galena on Friday evening usually arrived at St. Paul in time to have her cargo all ashore and ready to start on the return trip sometime on Tuesday—usually about noon. At that time we shall find the chief clerk studying the downstream rate sheets. These differ somewhat from the upstream and are like this, a few principal points being taken to illustrate:

DOWN-STREAM RATES

Downstream rates are somewhat less than the upstream, because, for one reason, it costs less to get a boat downstream. There is a four-mile current pushing the boat along, in addition to the applied power. Going upstream the boat had had this current to overcome before she gained an inch. A four-mile current is one-third of an average steamboat's progress. Again, the passengers do not get a chance to eat as much, and very often they were not served as well, on the down trip. Then, there were fewer people who wished to go down river, with the result that there were many boats bidding for the patronage of those who did make the trip. All these elements, with possibly others, entered into the cutting of the rates by about one-third on the down trip.

The only item besides passengers to be depended upon on the return trip, was wheat. There may have been some potatoes or barley, or, if fortune favored, some tons of furs and buffalo robes from the "Red River train", or some flour from the one mill at St. Anthony (now Minneapolis), or perhaps woodenware from the same point. There was always a more or less assorted cargo, but the mainstay was wheat. We will assume, in order to simplify this illustration, that there was nothing but wheat in sight at the time. There was no question about getting it. Every boat got all the wheat it could carry, and the shippers begged, almost on bended knees, for a chance to ship five hundred sacks, or a hundred, or fifty—any amount would be considered a great favor. Wheat was shipped at that time in two-bushel sacks, each weighing a hundred and twenty pounds. Three hundred tons, dead weight, is a pretty good cargo for a two-hundred ton boat. Wheat is dead weight, and a boat goes down into the water fast, when that is the sole cargo. We get five thousand sacks, all of which is unloaded at Prairie du Chien. The down trip foots up somewhat like this:

Arriving in Galena Friday morning, the clerk figures up his receipts with the following result:

The boat makes four trips during the month, leaving out the extra two or three days, which may have been spent on some sand-bar. At the end of the month the clerk again does some figuring, with this result:

A stern-wheel, light-draught boat such as we have taken for this illustration, was quite certain to get five months' service—between the middle of April and the middle of October. In order not to put too great tension upon the credulity of modern readers, we will assume that she gets only five months of navigation. At the close of the season the captain and his clerk figure up the receipts and expenses, and strike a balance like this:

This is enough to buy a new boat, and have something over for pin money. No one knows better than the writer the elusiveness, not to say the mendacity, of figures. He has often figured out greater profits than this in the nebulous schemes which have from time to time seduced him from the straight and narrow path of six per cent investment—and had them come out the other way. In steamboating in the fifties, this occurred very often. The most careful captain, employing the highest-priced pilots and engineers, would often lose his boat the first season; a snag or a lighted match, or a little too much steam, dissipating the best-laid plans in a few minutes of time. But the figures given above are conservative—made so purposely. The truth lies at the opposite extreme.

If the books of some of the boats of the old Minnesota Packet Company could be resurrected, they would show earnings and profits far greater than I have ventured to claim in my illustration. The "Fanny Harris", for instance, was a boat of 279 tons. Her wage-list and expense-account have been taken as a basis of the illustration above given, partly from recollection, and partly from figures which I made when I was second clerk, and which I have had before me in writing this chapter. We used to tow one barge all the time—most of the time two barges, and both boat and barges loaded to the water line, both ways, nearly every trip.

Of course we sometimes missed it. We landed ten thousand sacks of wheat at Prairie du Chien on one trip. Instead of a hundred and fifty cabin passengers, she often carried three hundred, "sleeping them" on the cabin floor three deep—at stateroom rates; and under such conditions the fortunate winners of such a chance to get into the promised land have risen up and called the whole outfit blessed, when in fact it was the other thing. I have heard of other boats claiming that they had to tow an extra barge to carry the money which they took in on the trip. I have always thought that these men were slightly overstating the case—but maybe not.

An item in one of the St. Paul papers of the time, states that the "Excelsior" arrived from St. Louis November 20, 1852, with two hundred and fifty cabin passengers, one hundred and fifty deck passengers, and three hundred tons of freight. For which freight she received "one dollar per hundred for any distance"; and the net profits of the up trip on freight alone were over $8,000. For two hundred and fifty cabin passengers she would receive $16 each, or $4,000; for the deck passengers, $8 each, or $1,200. These sums added to the $8,000 received for freight, would aggregate $13,200. The "Excelsior" cost not to exceed $20,000—probably not over $16,000. Two trips like this would build a better boat. As this was the last trip of the season, she probably did not get such another. Under that freight rate—"one dollar per hundred for any distance"—a shipment of a hundred pounds from Prescott to Point Douglass, one mile, would cost the shipper a dollar. There were possibilities in such conditions.

Another item, also from a St. Paul paper, states that the "Lady Franklin" arrived May 8, 1855, from Galena, with five hundred passengers. She would accommodate a hundred and fifty cabin people, ordinarily. Figure this trip down to the probabilities, and the net result would be about as follows:

Or, reversing it:

The "Lady Franklin" cost about $20,000. Two months' work at this rate would buy a new and better boat. If I remember aright, the "Lady Franklin" was sunk in 1856 or 1857, but not until she had earned money enough to buy two new boats, each costing twice as much as she did. At the time she carried five hundred passengers she undoubtedly carried a full cargo of freight, worth at least two thousand dollars more to the boat.

An item in a St. Louis paper of that date, announces the departure of the side-wheel steamer "Tishomingo" (Jenks, master), for St. Paul on April 14, 1857, with 465 cabin passengers, 93 deck passengers and 400 tons of assorted freight. This trip would figure somewhat like this:

These rates are estimated at a very low figure. The regular cabin rate at that time, St. Louis to St. Paul, was, for cabin, $24; deck, $12; freight, $1.50 per hundredweight. It is not necessary to amplify at all. The "Tishomingo" had been bought in the spring of 1857, within a month, for $25,000. She paid one-half her purchase price on her first trip that season.

I would not have it understood that all boats made these phenomenal earnings; but many boats did, and all those of the Minnesota Packet Company were in this favored class. There were several conditions precedent, which made these results possible with the boats of this line. It controlled, absolutely, the freighting from the Galena and Dubuque jobbing houses; it controlled, absolutely, the freight business of the Dunleith and Prairie du Chien railroads, and practically all the passenger business of the two roads, as steamboat tickets were sold on the train, good only on the boats of the Minnesota Packet Company. These conditions insured a full cargo for every boat, and a full passenger list every trip. Outside boats did not have such a "cinch", but each had a source of revenue of its own, equally satisfactory. Even the "wild" boats had no difficulty in getting cargoes, and every vessel in that busy era had all the business it could handle.

The term "Company" was something of a misnomer. It was not at first a stock company, in the modern sense of the word. Each boat was owned by its captain, or a number of persons acting individually. In organizing the company, instead of capitalizing it with a certain amount of stock, the controlling parties simply put in their steamboats and pooled their earnings. Each boat had an equal chance with all the others for a cargo; and when the dividends were declared each one shared according to the earnings of his boat. A big boat could earn more than a smaller or slower one, and such a boat got a larger percentage than the latter. The particular advantage, in fact the only advantage, in pooling lay in securing a monopoly of the railroad and jobbing business. In order to do this it was necessary to have boats enough to handle the business at all times, and to have a general manager who would place the craft so as to give the most effective service.

One of the beauties of the pooling system was, that if a captain or owner became dissatisfied and desired to pull out, he could take his boat and the share of profits due him, and leave at any time. A few years later the company was reorganized as a joint stock company. After that, if one wished to get out he was lucky if he could get clear with the clothes on his back. The financiers who controlled fifty-one per cent of the stock retained all the steamboats and all the profits.