Whispering Pines: Roots, Rails, and Ratings

In this month’s column, John Cross ’76 examines the career of Henry Varnum Poor of the Class of 1835-namesake of half of the famous Standard & Poor’s credit rating agency.

In 1899, sixty-four years after his graduation, Henry Varnum Poor of the Class of 1835 did not look back on his days as a Bowdoin undergraduate with affection. In response to a request to write an article for The Quill on his recollections of Bowdoin of the 1830s, Poor did not mince words. He shared with most of the student body (and faculty members such as Henry Wadsworth Longfellow) a profound dislike of President William Allen’s doctrinaire approach to religion. He also chafed under the limitations of a curriculum heavily weighted towards Greek, Latin, and mathematics: “In my whole business life…I have not needed any higher ‘mathematics’ than the knowledge that two and two make four…A fair scholar and a student of exemplary life I was never on any occasion invited into the house of President or Professor, except on the occasion of my graduation; nor was I ever, during my whole college course, spoken to by either President or Professor in a friendly or social way, nor ever spoken to at all outside the recitation room.” Only Professor Parker Cleaveland, with his commitment to scientific inquiry, fared well in Poor’s account. What a difference 175 years can make in attitudes and in practices!

Upon graduating, Poor returned to his home town of Andover, Maine, then moved to Bangor to practice law, and subsequently became involved in his brother John’s efforts to develop the railroad system in the state. When John acquired The Railroad Journal, an industry publication in New York, Henry became its editor. Henry’s analytical mind turned towards devising measures of the costs, risks, and potential rewards of building and operating railroad lines during the last half of the 19th century. He published a landmark history of railroads and canals in the United States in 1860. Soon after the outbreak of the Civil War Poor published a report on the industrial and transportation capacities of north and south, a study that confirmed with quantitative data the economic and logistical advantages of the Union side in the conflict. In 1862, when Congress authorized the construction of the Union Pacific Railroad to link with the Central Pacific and create a transcontinental rail system, Henry V. Poor was chosen as secretary for the Union Pacific.

Henry opened the Henry V. and Henry W. Poor Publishing Company with his son in 1869 and began publishing an annual almanac of railroad information for the entire country. The target audience included investors who might benefit from the presentation of comparative data on cash flow, the per-mile costs of laying track, anticipated obstacles of terrain and weather, expected freight volume, passenger traffic, operating costs, and the value of existing equipment/rolling stock. Given his direct involvement with the operation of the Union Pacific and a number of other rail lines, Henry walked a fine line between being a financial stakeholder and serving as an impartial reporter of the relative strengths and weaknesses of railroad ventures across the country. Careful scrutiny by a historian might reveal instances where an occasional step may have strayed from that fine line.

In the political and economic climate of corruption during the Gilded Age-where the prevailing attitude was captured by presidential candidate James G. Blaine’s comment on the Union Pacific railroad that “to make the wheels revolve we must have grease”-Henry V. Poor managed to maintain his reputation as an honest broker. He avoided the taint of the 1872 Crédit Mobilier scandal that ensnared other Union Pacific officers and U.S. Senators and Congressmen in an elaborate web of bribes, shell companies, and exorbitant construction charges. As debates raged in the national press over the appropriate economic, legal, and ethical boundaries between private enterprise and government intervention (e.g., federal subsidies and land grants to privately-owned railroads, mergers, monopolies, taxes, and tariffs), Henry continued to publish his almanac of the railroad industry, and even included an analysis of “…the debts of the United States and of the several states.” He lobbied Congress to reduce tariffs on English steel for rails, wrote essays championing the gold standard, and authored several books on currency and tax reform. In his retirement he formed Poor & Co. with his son, an insurance and banking firm that was a Wall Street fixture for 30 years. In 1905, at the age of 93, Henry fell and broke his ankle outside his Brookline, Massachusetts, home. He died three weeks later, as Bowdoin’s oldest alumnus.

Henry continued to publish his almanac of the railroad industry, and even included an analysis of “…the debts of the United States and of the several states.”

The story doesn’t end there, however. A series of ill-timed investments brought down the Poor & Co. banking and insurance firm in 1908, and the successor to the H.V. and H. W. Poor Publishing Company was forced into bankruptcy by the stock market crash of 1929. Standard Statistics, a company founded in 1906 to report on non-railroad stocks and bonds, merged with Poor’s Publishing in 1941 to become the Standard & Poor’s corporation that we know today. Earlier this summer the downgrading of the credit rating of the United States from AAA to AA+ by Standard & Poor’s grabbed headlines around the world. I have no idea how Henry Varnum Poor might have viewed this action by a company that traces its own roots back to the publication of his history of railroads in 1860. However, as the example of Henry’s own career demonstrated, “the knowledge that two and two make four” can lead-sometimes correctly and sometimes in error-to some of the biggest issues of the day.


With Best Wishes,

John R. Cross ’76
Secretary of Development and College Relations