Pennsylvania Railroad Company. Financial Dept.

The Pennsylvania Railroad's Financial Dept. was created on May 2, 1851. On November 23, 1852, it was divided into a Treasury Department and an Auditor's (later Accounting) Department. The Treasury Department was generally considered a subdivision of the General Office Department until 1887. The Treasury Department was renamed the Financial Department on November 1, 1955, and on March 1, 1958, it absorbed the Accounting, Insurance, and Employee Benefits Departments as divisions. At the same time the tax function, which had been previously spread over four departments, was consolidated in a new Tax Division. An Economic Unit for forecasting was also created in 1958. The Electronic Data Processing Division was created on March 1, 1962, and the Employee Benefits Division was merged into the Accounting Division on March 1, 1963. Between 1958 and 1964 the Department also handled the corporate work and stockholder relations normally performed by the Secretary's Department.

The Treasury Department handled the receipts and disbursements from the sales of all stocks and bonds, the payments of dividends and interest, and the safeguarding of all the company's cash and valuables. Until 1871 it kept all the account books for the company. Between 1874 and 1925 it kept separate books for the capital accounts, while the Accounting Department kept the books for the operating accounts. All bookkeeping was consolidated in the Accounting Department in 1925.

The operating head of the department from 1852 to 1955 was the Treasurer. The Vice President supervising the Treasury Department also had supervision of the Employees' Savings Fund (1887-1924) and its successor, the Provident & Loan Association (1923- ). Executive supervision of the department was in the hands of the Board of Directors, the President and the Finance Committee until 1874. Supervision was then entrusted to a series of Vice Presidents: Edmund Smith (1874-1888); Joseph DuBarry and John P. Green together (1888-1897); and John P. Green alone (1897-1904). Between 1889 and 1904, Vice President Samuel Rea also had supervision of Finance as it pertained to new construction projects.

With the capital-intensive construction projects of the early 20th century, the company went outside its own ranks and appointed a banker, Henry Tatnall, to supervise the Treasury Department as Sixth Vice President on June 1, 1904. Tatnall was given the formal title Vice President in charge of Finance on May 8, 1912, and served until his retirement in 1925. Supervision then passed to Albert J. County as Vice President in charge of Treasury, Accounting & Corporate Work (1925-1929) and later as Vice President in charge of Finance and Corporate Relations (1929-1938), after the Accounting Department was given its own vice president.

County was succeeded by George H. Pabst, Jr., as Assistant Vice President--Finance and Corporate Relations (1938-1940); Vice President-Finance and Corporate Relations (1940-1946); and Vice President-Finance (1946-1951). During the tenures of County and Pabst the department had been steadily downgraded.

In May 1951 the PRR again went outside its own ranks and selected an experienced banker, David C. Bevan, as Vice President-Finance. Profit margins in the eastern railroad industry were so low that it was impossible to raise capital through stock sales. The company was in the midst of a large capital improvement program to compensate for the extensive wear and deferred maintenance of the war years, all of which had to be financed by borrowing. Bevan completely overhauled the department, bringing in new talent from GE and IBM and introducing modern concepts of accounting, forecasting and budgeting. He also gradually gathered all of the financial and accounting activities under his control, particularly in the departmental reorganization of 1958. Bevan was elevated to the post of Chairman of the Finance Committee and Chief Financial Officer in October 1963, after which the post of Vice President-Finance remained vacant. Assistant Vice President-Finance Paul D. Fox handled the day-to-day administration of the department.

Bevan eventually became convinced that it was imprudent to invest more in the railroad, when the loans could not be repaid out of earnings. He began a diversification program to transfer the company's investment into areas with a higher rate of return, including development of the company's urban real estate, and investing in Sun Belt real estate and energy companies. President Symes, however, had pegged the company's survival on a merger with the rival New York Central Railroad, which was consummated on February 1, 1968.

From the description of Records, 1899-1971. (Hagley Museum & Library). WorldCat record id: 86119202