Harvard Business School

In the summer of 1895, Harvard University President Charles W. Eliot found himself reviewing the lengthy paragraphs of a short magazine article. The article—in the June issue of the Harvard Graduates’ Magazine—had an unusual premise: that railroad management should be acknowledged as a science. The author of the article, George Bridge Leighton, was a member of the Harvard College class of 1888, a railroad president, and the president of the Associated Harvard Clubs.

“Let us see,” wrote Leighton, “what a responsible official in a railway ought to know, whatever may be his special department. He should know that those who own the property expect and believe that, if properly managed, their investment can derive the usual rate of profit. The railway must have an economic reason for its existence, and be operated to secure economic success. He must understand the relation of the railway to the owners, to the public, and to the state. Again, he must understand the importance of managing men, the results of experience in the organization of departments, and selection of proper and efficient subordinates. The railway official must be broadly versed in the principles of the railway from a mechanical and engineering viewpoint. When called upon to examine a new line, he must be able to pass upon its merits intelligently. He must satisfy himself whether it will be better to build a new line at all; whether it will be better to build a cheap line, but one more expensive to operate, or an expensive one, yet one cheaper to operate. He must know the theories of rates and traffic, must pass intelligently upon such questions as to whether a certain traffic is worth doing or not, the true theory of competition, and the limit of competitive business. He will have to know what to leave to subordinates and how to direct them. These are but a few of the qualifications necessary for an efficient manager. His profession is one of the most versatile of all professions. In a broad way, he must be not only a man of affairs, but lawyer, engineer, financier, economist, accountant.”

Leighton then began lobbying Eliot to set up a “School of Railways” at Harvard. He argued that while building a railroad was a scientific task, running a railroad was “almost entirely economic.” Many schools offered the scientific side, Leighton argued; few deal adequately with the economic side.

Eliot made inquiries around Harvard and Boston, and found little support for a school of railroading—even among men who had made their fortunes in railroads. But Eliot remained interested. “The doubts that some people have,” he wrote in a letter to Leighton, “are to my mind probably just the doubts that were met when the first medical and law schools were established or the doubts that some men have as to the value of colleges at all.”