The Twelfth Engine: Tracks of the Mohegan

21 Pages Posted: 17 Sep 2019 Last revised: 15 Oct 2019

See all articles by Michael J. T. McMillen

Michael J. T. McMillen

Curtis, Mallet-Prevost, Colt & Mosle LLP; University of Pennsylvania Law School

Date Written: September 13, 2019

Abstract

The Philadelphia & Reading was conceived to transport anthracite coal from the mining regions of Pennsylvania to the tidewater at Philadelphia. It built its roads and other system infrastructure during one of the worst economic depressions in U.S. history (the Panic of 1837, Crisis of 1839, and Collapse of 1842) by incurring massive amounts of indebtedness, which was in default for nonpayment of interest by 1842 when, teetering on bankruptcy, the P&R commenced operations. The P&R needed locomotives to generate revenue but had no cash to expend on engine purchases. In 1843 Locks & Canals agreed to build twelve engines for the P&R on a deferred payment basis. Despite its critical need for the engines, and rather curiously, in 1844 the P&R sold one of the precious engines (the twelfth engine), which was only fifteenth months of age. More perplexing, the engine was sold to the Central Railroad of Michigan, which was also in diminished financial circumstances, unable to pay cash for the engines, and in the process of being sold by Michigan.

The twelve engines are given passing mention in the literature. Some railroad historians, even those focusing on P&R engines, ignore them completely. The failure to explore the sale of the twelfth engine and the superficial treatment given all twelve engines in the literature are a bit surprising because they were among the first locomotives purchased by the P&R as it became operational and because the financing arrangements for their sale to the P&R were critical first steps in the developmental lineage of the equipment financing structure that has predominated continuously from the mid-1800s to the present.

This paper is one of two exploring a story not previously told: sale of the twelfth engine. This paper focuses on identification of the twelfth engine and its fate. The companion paper focuses on related questions. From the perspectives of the P&R and the Central Railroad, why was the engine sold and purchased?

Keywords: Nineteenth Century, Equipment Finance, Railroads, Locomotives

JEL Classification: N6, N61, N7, N71, N81, N91

Suggested Citation

McMillen, Michael J. T., The Twelfth Engine: Tracks of the Mohegan (September 13, 2019). Available at SSRN: https://ssrn.com/abstract=3454171 or http://dx.doi.org/10.2139/ssrn.3454171

Michael J. T. McMillen (Contact Author)

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