Providence and Worcester Railroad

Background and founding

The Providence and Worcester Railroad (P&W) was preceded by the Blackstone Canal, which opened between Providence, Rhode Island, and Worcester, Massachusetts, in 1828. While initially somewhat successful, the canal's business was severely harmed by the completion of the Boston and Worcester Railroad between its namesake cities in 1835, with shippers fleeing the slow and unreliable canal for rail transport. Providence therefore lost much of the business the canal had provided, and residents began to plan a response to the opening of the Boston and Providence. The canal company went bankrupt after its canal was severely damaged by flooding in 1841, and was forced to petition the state of Rhode Island for additional funds. The canal also competed for water with the many mills along the Blackstone Valley, which used water power to operate their machinery. As plans for other railroads across New England began, in January 1844 a group of citizens, primarily from Providence, petitioned the Rhode Island General Assembly for a charter to build a railroad from Providence to the Massachusetts state line. This group also petitioned the Massachusetts General Court for a charter to build in that state from the state line to Worcester.

The railroad was incorporated in Massachusetts as the Providence and Worcester Railway on March 12, 1844, and in Rhode Island as the Providence and Worcester Railroad in May 1844. Two aspects of the charter were unusual. One provision capped the company's maximum dividend at twelve percent; additional profit beyond that amount was to be invested in improving the railroad rather than rewarding shareholders. A second part of the charter heavily curtailed the voting power of larger shareholders – each shareholder got one vote per share for their first fifty shares, but additional shares granted just one vote per twenty shares. In effect, this made it impossible for any one shareholder to control the company, no matter how many shares they owned. Both provisions were designed to ensure the P&W provided effective rail service and remained in the hands of local shareholders.

As their first order of business, the company's founders commissioned engineer Thomas Willis Pratt to complete a survey of the proposed route, which was completed in the fall of that year. The two companies were merged November 25, 1845, as the Providence and Worcester Railroad. The company bought the Blackstone Canal and began construction, partly on its banks, in 1845. The canal was shut down in 1848, shortly after the railroad was completed.