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Blood In The Boardroom

In the city of Chicago, well-organized livery and carriage service companies

An Early Electric Taxi
Photo Library of Congress

took to the streets almost as soon as the city was established. One of the earliest of these companies, Parmelee Transportation Company established in May 1853, would play a key role in the development of America’s most famous manufacturer of taxicabs, pioneer the use of the horseless carriage as inner city taxis, and serve as the foundation for the building of empires.

Franklin Parmelee established his company with a staff of twelve, and a livery of six Concord stagecoaches and thirty horses. Within five short years, he dominated the streetcar, omnibus, and delivery wagon business in the city with only Frink, Walker & Company offering serious competition.

On August 16, 1858, Parmelee secured an exclusive contract with the City of Chicago through an ordinance giving the subsidiary company, Chicago City Railway Company, a twenty-five year license to build and operate a horse drawn railway along State Street. The questionable legalities of the contract and conflict of interests resultant of jurist and attorney Judge Henry Fuller’s partnership in the endeavor, created a litany of legal issues resolved only through a direct petition to the state legislature.

Diversification and contacts with people of influence ensured Franklin Parmelee’s rise to dominance in the closing years of the 19th century. As the city of Chicago evolved as a primary rail hub, Parmelee negotiated exclusive verbal contracts with most of the major railroads and the cities finest hotels that resulted in near complete monopoly of the passenger service market.

Parmelee Transportation Company shuttled passengers and their luggage, provided pick up services within the city, and even provided sightseeing services with their fees paid by hotels and railroad companies. The company’s dominance of services was so entrenched that many railroads offered Chicago bound passengers Parmelee transfer coupons when they purchased tickets and company representatives had the advantage of complimentary offices in railroad terminals.

By the dawn of the new century, the urban and corporate landscape had changed dramatically from that of the 1850s. Symbolizing these changes were the evolving face of Parmelee Transportation Company.

In 1881 the company was capitalized for a half million dollars with stock divided equally among members of the family. Seven years later Franklin Parmelee retired placing his two eldest sons, Charles and John in charge of the company and they almost immediately hired the former circulation manager for the Chicago Tribune, Charles McCulloch, to oversee daily operations.

In 1901, a Chicago based syndicate composed of John C. Schaeffer, John J. Mitchell, President of Illinois Trust & Savings Bank, Roger B. McMullen, C.H. Randle, James B. Wilbur, President of the Royal Trust Company, and Norman B. Ream acquired the entire company with plans to modernize it with horseless carriages and to expand operations into other cities.

Before acquisition by this syndicate, Parmelee Transportation Company and its subsidiaries still dominated the cities passenger and cartage services industry. However, the handwriting was on the wall, technological advancement represented by the horseless carriage would soon challenge companies to invest tremendous amounts of capital to remain relevant, and independent operators could compete with relatively little capital outlay.

In 1897, the Electric Carriage & Wagon Company of Philadelphia built a small fleet of electric taxis that utilized the recently patented taximeter to measure a fares distance and time for a fledgling company in New York City. In 1899, a taxi company initiated operations in Chicago with 100 electric cabs. The following year Woods Motor Vehicle Company of Chicago organized for the manufacture of electric vehicles including delivery wagons and hansom cabs operated through a subsidiary company.

Sensing opportunity for profit in this new market, New York City financier William Collin Whitney bought out the Electric Vehicle Company owned by Isaac Rice in 1899. Whitney then initiated merger talks with Pope Manufacturing Company of Hartford, Connecticut, a pioneering automobile manufacturer, with plans for the production of 2,000 electric taxicabs.

The taxicabs initially produced sold to taxi companies in Chicago and New York City under the Columbia name but the exorbitant price coupled with a complex series of mergers and corporate restructuring ended production in mid 1900.

Another manufacturer that hoped to profit from the burgeoning taxi business was Autocar, a company that later became synonymous for the manufacture of durable heavy-duty trucks. Their venture into the manufacture of taxicabs was brief and in 1907 after the production of about a dozen vehicles, the company abandoned the endeavor in the face of stiff competition.

Another pioneer in the move from electric taxis to gasoline-powered models was Harry A. Knox. In 1905, through a complicated series of financial and legal maneuvers, Knox founded Knox Motor Truck Company after losing control of the Knox Automobile Company that he had established in Springfield, Massachusetts.

Use of the Knox name for the new endeavor resulted in a lawsuit from the owners of Knox Automobile Company. In turn, this necessitated development of a limited partnership with the Sunset Automobile Company of San Francisco, California. Utilization of that companies patented two-cycle engine allowed Knox to commence production of a delivery van and a taxi marketed under the Atlas name in 1907.

As manufacturers large and small battled for a portion of the finite taxi market, the syndicate that controlled Parmelee Company moved quickly to counter the threat represented by the increasing number of taxis operating on the streets of the Chicago metropolitan area.

Special to the New York Times

CHICAGO, November 12, 1901 – Electricity will supplant the omnibus horse in the conveyance of persons to and from the railway stations and the hotels. Such is the belief following the announcement that a syndicate has been formed for the purchase and take over of the property and business of the Frank Parmelee Company, which does almost all of the transfer business.

End of part one

*cover photo Detroit Public Library

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