Oddly enough, at what was apparently the time of its greatest 

 activity, Niles & Company began to reduce their production of 

 locomotives. On March 25, 1854, Coleman Sellers noted in his 

 journal: "Mr. Niles says [he] has made up his mind to cut down 

 the force on Locomotive w^ork and only turn out an engine every 

 two weeks. I am very sorry for it, for I have just got the shop or- 

 ganized to turn out one a week with care." Since railroads, being 

 speculative, were unusually sensitive to any financial disturbances, 

 a short-lived panic caused by a ". . . depression in the monetary 

 affairs of the country . . ." i^o induced the firm to reduce its shop 

 force and inventory. After this time Niles continued to show 

 varying moods of caution and optimism regarding locomotives. 

 One important factor in the firm's indecision was the conflict of 

 the brothers' opinions on the soundness of pressing further into the 

 increasingly competitive and specialized field of locomotive building. 



The Railroad Record reported that because the financial upset had 

 caused many railroads to cancel orders for new equipment and 

 so many shops were entering this line of work, locomotive production 

 was far greater than the existing demand. i^i They reassuringly 

 commented that both Niles and the Cincinnati Locomotive Works 

 were not lacking work. This report, as we have seen, was too 

 optimistic, for business did not pick up fully in that year or the next 

 or, in fact, at all 



In a letter (December 23, 1855) to his mother, Coleman Sellers 

 very neatly summarized the principal difficulties of the trans- 

 Appalachian locomotive builders: 



Locomotive building seems to be a poor business in the W^est — our 

 market is limited to the Western roads, which are all very poor and do 

 not at present seem inclined to find cash to pay for engines when they 

 can go east and buy cheaper machines (which nine cases out of ten are 

 made to sell and not to run) and pay for them in bonds which bonds 

 can be negotiated in the east to much better advantage than they can 

 here — Mr. James Niles seems determined to drive his brother in to 

 giving up the business. It is probable that unless things change wonder- 

 fully they will make some change in their business and sell out their shop. 



The Niles brothers srave constant consideration to closing out the 



^'^^ Railroad Record (October 19, 1854), vol. 2, p. 565. 

 151 Ibid. 



98 



