USA > California > A history of California: the American period > Part 33
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When Judah presented his plan to these men in 1861 for a railroad across the Sierras, he was able to hold before them two inducements which made the enterprise less fool- hardy from the financial standpoint than it seemed on its face. The first of these was the prospect of securing govern- ment subsidies of various kinds; and the second, the certainty
2 Huntington once said, "Crocker attended to the construction of the road, and he was a very earnest and
good man. We did not agree in all things-he erred in judgment some- times."
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of monopolizing the California-Nevada trade by the proposed road, even though the line should stop far short of its announced goal.
This Nevada trade, at the time of the Central Pacific's inception, was a prize worth seeking. Two years before, the great Comstock Lode had been discovered in the Washoe Mountains and a mining boom of tremendous proportions was already in progress. Nearly all the food and necessaries for the thousands who flocked to Carson City and Virginia City, as well as the tools and heavy machinery which were required for the mining operations, had to be freighted across the mountains. Literally tons of bullion were also being brought back annually to San Francisco for minting or shipment east; and in addition, the passenger traffic to and from the mines was a bonanza in itself.
Some idea of the value of this Nevada business, which the organizers of the Central Pacific purposed to secure, may be seen from Judah's report in 1862 on the Placerville- Carson road. This, the most famous stage road of northern California, ran from Placerville by way of Johnson Pass and Kingsbury Grade to the Washoe Valley. Over it, in the year of Judah's report, a hundred and twenty tons of freight were carried daily, at rates varying from six to eight cents a pound, yielding an annual total of five and a quarter millions of dollars. A half million dollars additional were received from passenger fares; and Wells-Fargo transported over two hundred thousand pounds of silver bullion not included in the figures for ordinary freight. If the Central Pacific, by building only part way across the mountains, could capture the greater part of this trade, together with that which passed over other stage roads, its directors might well afford to risk even the heavy initial cost of construction.
The second inducement held out by Judah-that of federal subsidies-was of more immediate importance than even the Nevada freight; for it was manifestly impossible to provide the necessary finances for the road without some form of government assistance. In securing this federal aid, the backers of the Central Pacific were by no means dis-
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appointed, and an essential feature of the Pacific Railroad Bill, which Bailey and Judah helped to pass through Con- gress, was the grants of land and credits it bestowed upon the railroad companies. These were sufficient in them- selves to tempt Huntington and his companions to begin actual operations; but two years later, by the Act of 1864, the government proved itself even more generous, and materially increased the subsidies carried in the original bill of 1862. As a result of these two bills, the builders of the Central Pacific stood to receive 12,800 acres of govern- ment land for each mile of tract constructed, and in addition were allowed a credit in United States 6% bonds, pay- able at the end of thirty years both as to principal and interest, of from $16,000 to $48,000 per mile, depending upon the nature of the ground over which the line ran.
Following the example of Congress, the California Legisla- ture also passed various measures to aid the Central Pacific, enacting as high as seven bills in a single session on its behalf. The most important grants were made in 1864. Legislation of that year gave the company the right to issue $12,000,000 in first mortgage, twenty year, 7% bonds, and provided that the state should pay the interest for twenty years on the first $1,500,000 issued, or a total of $2,100,000. A fund known as the Pacific Railroad Fund, was created for this purpose by the levy of a special tax of eight cents on each hundred dollars of taxable property throughout the state.
County subsidies were also granted to supplement those of state and nation. Placer County subscribed for $250,000 of Central Pacific stock, issuing bonds in payment, and under a similar arrangement Sacramento County pledged $300,000. The company also obtained a valuable right of way, certain portions of the water front, and other public lands in the city of Sacramento. San Francisco, after a long struggle fought in the State Legislature, at the polls, and before the courts, donated $400,000 outright to the main road, and $200,000 to its subsidiary, the Western Pacific. The latter road, connecting the Central Pacific with San Francisco
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Bay, by way of Stockton, Niles, San José, and Oakland, also received valuable aid from San Joaquin and Santa Clara Counties; and enjoyed, besides, the federal subsidies pro- vided by the Act of 1864.
Even though these various government subsidies were of princely proportions, the fate of the Central Pacific for two years hung in the balance. From the beginning, the enter- prise was foredoomed to failure by the prophets, and even its sponsors were not over hopeful of the outcome. It was this skepticism that led Huntington to object when others planned a celebration at the laying of the first rail.
"If you want to jubilate in driving the first spike here," said he, "go ahead and do it. I don't. These mountains look too ugly and I see too much work ahead. . . . We may fail and I want to have as few people know it as we can, and if we get up a jubilation, a little anybody can drive the first spike [but] there are many months of hard labor and unrest between the first and last spike."
These "months of hard labor and unrest between the first and last spike," which Huntington foresaw, not caring to boast as he was putting his armor on, were even worse than the builders anticipated. The difficulties of construction, of financing, of securing material, of combating opposition, of securing favorable legislation, were tremendous, and would early have staggered less resourceful or less energetic men.
The route chosen by Judah, and supported by him against all subsequent attack, followed in the main the old immi- grant road from Sacramento to Donner Pass by way of Auburn, Clipper Cap, and Colfax, or Illinois Town, as it was then called.3 From the summit of the mountains the line descended along the general course of the Truckee River to the Nevada plains. A few miles beyond Colfax lay Dutch Flat, from which Judah proposed to build a wagon road to Carson Valley, thus diverting the Nevada traffic to the Central Pacific, until the railroad could be completed to the California boundary.
3 Judah gave at one time thirty reasons for his choice of routes.
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The selection of this route led to one of the first and most violent attacks upon the Central Pacific. Rival lines, such as the San Francisco and Washoe, and the Sacramento Valley, whose history cannot be traced here, joined with an already outraged San Francisco and Placerville public to denounce the whole project. The road was dubbed the "Dutch Flat Fraud," and its builders were accused of secur- ing government subsidies for a line they had no intention of completing across the mountains. Whether or not there was truth in these charges, the fact remains that the Central's wagon road brought to it most of the Nevada trade and enabled it to pay very large returns while still under process of construction.
Rival opposition was the least of the Central's difficulties. The Sierra Nevadas opposed a barrier nearly 150 miles wide, rising at times to an elevation of 7,000 feet. To overcome this, an army of workmen and teams had to be organized, sheltered, fed, and paid. An incalculable amount of grading, filling, trestle building, cutting, and tunnelling, much of the way through solid rock, had to be accomplished. Mile upon mile of snowsheds had also to be built in the higher altitudes to protect the track in winter, so that material could later go forward for the use of construction gangs hurrying the work across Nevada. The responsibility for this phase of the work fell upon Charles Crocker, who as head of the Charles Crocker Construction Company (afterwards superseded by the Contract and Finance Company), was in full charge of building operations.
In reality the companies just mentioned were only the Big Four, and Edwin B. Crocker, operating under another name; for Huntington and his associates saw the advisability from many standpoints of keeping the road's construction in their own hands, as well as the financial advantages to be gained from such an arrangement. But unlike the Credit Mobilier, which served the chief stockholders of the Union Pacific in similar capacity, the construction companies organized by the California builders, whether in connection with the Central Pacific or any of their other roads, never
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revealed the details of costs and profits to inquisitive Con- gressional committes.
Next to Huntington, Charles Crocker had the heaviest responsibility of the four. Upon his shoulders fell the physical burden of the undertaking. The best testimony to his ability is that, along with the chief engineer, Montague, who succeeded Judah upon the latter's death, and Stro- bridge, who served as superintendent of construction, he carried the road over every difficulty mountain, desert, and man could place in its way. When white labor failed or became difficult to handle, he brought in thousands of Chinese coolies, and used these "Crocker's Pets," as they were called, without mercy to himself or them. Even the winter snows were not allowed to check his impetuous ambition.
While Crocker was carrying forward the construction work, Stanford, aided by Hopkins, and an occasional visit from Huntington, was adroitly handling the state and local legislation necessary to secure the subsidies mentioned in a previous paragraph. In the east, meanwhile, Huntington gave himself to three great tasks, any one of which was beyond ordinary capacity. The first was to dispose of enough Central Pacific stock and bonds to finance opera- tions; or, failing that, to borrow sufficient money on the personal security of himself and his associates to keep the road from lagging. His genius along this line was so marked that even in the stress of the Civil War, and its aftermath, he enabled the road to carry a floating debt of $7,000,000, for none of which it paid more than 7% per annum, though the Union Pacific was charged a much higher premium, and the common interest rates in California ranged from two to three per cent a month.4
Besides financing the road, Huntington had also to keep it supplied with material. This meant the purchase of every foot of rail used in the track, of locomotives, of passenger
4 At one time the single house of William E. Dodge & Company held the personal notes of Huntington and his associates for $3,250,000, so
confident were the New York bankers of Huntington's ability to meet the Central's obligations.
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coaches, of flat cars, spikes, powder, shovels, and all other implements from eastern manufacturers (since California at that time had nothing in the way of steel and iron foundries), and the shipment of this material either around the Horn or across Panama. This was an especially difficult task while the war lasted. The government had prior right to most of the supplies required by the railroad; and even when cargoes could be secured, ships were not easily found.
During the war, freight rates increased from eighteen to forty-five dollars a ton; marine insurance, owing to the menace of southern privateersmen, rose from two and one- half to ten per cent. Railroad iron trebled in value. Loco- motives, rolling stock, everything in fact the Central Pacific required, had to be bought at increased prices. Even
after the war, the rivalry of the Union Pacific, in the market for the same material, kept up the cost of rails and locomo- tives and made it hard to fill orders. Yet Huntington's genius overcame these difficulties and kept a steady stream of supplies flowing from the Atlantic sea board to the con- struction camps in the Sierras.
The following is a typical example of the methods by which Huntington accomplished his ends. In 1866 he succeeded in stealing a march on the Union Pacific in the purchase of 66,000 tons of rails, which the latter road badly needed, and at the same time defeated a threatened combine on the part of the steel mills to increase the price. To get these rails to California required a large number of vessels, so Huntington went to a gentleman named E. B. Sutton to charter the necessary bottoms. The details of this interview are best given in Huntington's own words:
"I said, 'Well I want to get a good ship-a good steady ship- safe!' I said, 'You go out and run around and give me a list of what you can find.' He came in with three or four; he said, 'You can have this one for so much and this one for so much-such a price,' said I; 'It is too high, I can't take one of these ships.' 'I am in no hurry,' said I. 'Ships are coming in all along.' Well, he came back; he went out three times and he came back with twenty- three ships. . . I got them all down whilst talking. 'Well,' said I
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suddenly, 'I will take them.' 'Take them,' said he, 'take what?' Said I, 'I will take those ships if they are A1.' 'Well,' said he, 'I can't let you have them. I thought you wanted only one.' He said, 'I will have to have two or three of them myself.' Said I, 'Not of these you won't.' Well, those ships took about 45,000 tons of rails. Mr. Sutton told me afterwards, 'Huntington, you would have had to pay $10.00 per ton, at least, more, if I had known you wanted all those ships. That would have been $450,- 000."
Huntington's third task in the east lay in the field of politics. At this time, or a little later, the Central Pacific maintained an agent in Washington to whom they paid a salary of $20,000 and allowed an unaudited expense account of twice that amount. But this man was only a subordinate. Huntington himself was the real director of railroad affairs in Washington. What he accomplished in this capacity was more important from the standpoint of the Central Pacific than any of his other work.
Aside from the subsidies earlier granted by Congress, one of the measures of most advantage to the California railroad was passed in 1866. By the Act of 1864, the eastern limit of the Central Pacific had been fixed 150 miles east of the California-Nevada boundary. The territory beyond that line belonged exclusively to the Union Pacific. The bill, indeed, went even farther and permitted the Union Pacific to continue its operations westward, if it reached the junc- tion point ahead of the Central Pacific. This clause was of course obnoxious to the backers of the Central, who were secretly determined to carry their line entirely across Nevada into Utah, and enter Salt Lake City ahead of the Union Pacific.
To object to this feature of the bill at the time, however, might have defeated the entire measure, with its large sub- sidies from the federal government. Consequently Hunting- ton accepted the objectionable provision and bided his time, until by the enactment of the bill of 1866 he succeeded in releasing the Central from its limitations and in obtaining the desired right to build eastward until a junction should
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be made with the Union Pacific. The measure was a per- fectly legitimate piece of legislation and deserved the large support which it received in Congress. But Huntington had taken no chances of its defeat by rival lobbyists. In later years, in his own brusque way, he told the following incident relative to the passage of the measure.
"A Congressman by the name of Alley from Massachusetts when the Bill passed, came over to me. . . . he says, 'Hunting- ton,' he says, 'There must have been great corruption, great money used or you could not have passed that Bill.' 'Well,' I said to him, 'Mr. Alley, I am surprised to hear you talk in that way of your associates here. I am very much surprised, but I will be frank with you and tell you that I brought over half a million dollars to use every dollar of it if necessary to pass this Bill. I got a large majority of them I knew that was in favor of it without the use of one dollar. We still had our means and wanted to get every vote, so I went into the gallery for votes, one head after another, I sat right there, I examined the face of every man and I am a good judge of faces; I examined them carefully through my glass. I didn't see but one man I thought would sell his vote and you know devilish well I didn't try that-so I didn't use one dollar."
Of course Huntington's ability did not always secure the enactment of favorable measures or prevent the passage of bills opposed to the Central's interest. One act, for example, was carried through Congress fixing the gauge of the road at four feet, eight and one-half inches, after Huntington had convinced Lincoln that five feet was the proper width, and had secured the issuance of an executive order to that effect. But even in this case Huntington turned defeat to his advantage, and drove a satisfactory bargain with his op- ponents on the issue.5
5 By a presidential decree of January 12, 1864, the western base of the Sierra Nevada Mountains was officially fixed "where the line of the Central Pacific Railroad crosses Arcade Creek in the Sacramento Valley." Opponents of the railroad pointed out that this decree actually
moved the mountains twenty miles west of their true location across a comparatively level plain, thus in- creasing the government's loan to the road from $16,000 a mile to $48,000 a mile, for the twenty miles involved.
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With the passage of the bill permitting the Central to enter Union Pacific territory east of California, the two rivals began a headlong race unique in railroad history. In this contest the Central was contending for a double prize. Every mile of track laid east of the Sierras brought the government subsidy of 20 sections of land and a credit of $32,000. Equally important was the revenue to be derived from the Utah traffic, if Salt Lake could be reached before the Union Pacific built so far westward as to shut its rival away from the Mormon settlements. Huntington, indeed, had set a much farther goal for the Central Pacific's eastern terminus, and later blamed the apathy and opposition of San Francisco for holding the road back, when, with proper support in California, it might have reached the Green River and controlled the traffic of all Utah, Wyoming, and Idaho. Had this object been realized, one might also add, the California road would have been relieved from that thorn in the flesh, the Oregon Short Line; and the building of the Southern Pacific to New Orleans, and of the San Francisco-Portland line might have been delayed for many years.
The stirring details of the race between the Union and Central Pacific, the one building eastward across the Nevada and Utah deserts, the other progressing westward from the Black Hills, cannot be told here at length. On the one side was a corporation backed by almost limitless resources, well entrenched in federal politics, transporting its material from a comparatively near base of supplies over its own line, and relying pretty largely upon Irish labor for construction purposes. On the other side were four men, by this time well enough supplied with funds, skillful as their rivals in the use of political machinery, compelled, however, to ship supplies by long sea voyages, using Chinese coolies by the thousand for grading, track laying, and the innumerable tasks of railroad building, maintaining a secret watch over their rival's affairs, hoodwinking the agents he sent out, stripping the markets wherever possible of material to force the Union's construction crews to stand idle, and obtaining
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government bonds for sixty miles of track to which their opponents laid claim. Around these elements centered the greatest race in the history of railroad construction.
The two roads met at Promontory Point in Utah, an insignificant place some fifty-three miles west of Ogden. Here, on the 10th of May, 1869, in the presence of a thousand spectators, the two tracks were joined; silver and gold spikes were driven in a silver-bound tie of California laurel; speeches were made; an engine from the east touched front with an engine from the west; and the old, old dream of linking the Pacific and Atlantic Oceans became a reality.
"Sir," said the telegram sent by the participating officials of the two roads to President Grant, "We have the honor to report that the last rail is laid, the last spike is driven. The Pacific Railroad is finished."
Finished, too, for California, was much that had made her previous history-Slow going ox wagons no longer crossed the Sierras; the mining counties dwindled in population, while the agricultural regions and the cities took on in- creasing life; great land grants of early days were gradually broken up to make room for a rapidly enlarged population; the cattle baron retired to the foothills and out of the way valleys to make way for grain fields, orchards and vineyards; the San Joaquin and Sacramento Valleys began to fulfill the old prophecies that one day they would become the granary of the Pacific; California products made their appearance in eastern markets; and eastern tourists daily enriched the California merchants. Travel became a source of unity and culture; thousands of persons, long stranded on the coast because of the difficult overland journey, rushed eagerly back to their old homes in the States; and after a brief stay, rushed even more eagerly back to the west, tenfold more enthusiastic for California than ever they had been before. Real estate booms grew to be familiar phenomena; labor problems thrust themselves upon the public notice; the state government failed more and more to meet the demands of its citizens; society and business became more complex.
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On every side new forces-social, economic, political- marked the development of a new day.
In this period of transition the builders of the Central Pacific played a foremost part; for the celebration at Prom- ontory Point was for them the beginning rather than the end of a great task. The line from Sacramento to Ogden was only a single link in a great system yet to be constructed. By means of the Western Pacific, a line running from Sacramento to San José, with a branch from Niles to San Francisco Bay, known as the San Francisco, Oakland, and Alameda Railroad, the Central had an outlet to tidewater. Later, the road got control of most of the Oakland water front and sought to occupy Yerba Buena Island. Deeming it necessary to control every avenue of approach to the city of San Francisco, the Central next absorbed the California Pacific, which ran from Sacramento to Vallejo, and carried it on to Benicia, where ferry connections were established with Port Costa, thus forestalling any competition from that approach to San Francisco. Similarly, the San Fran- cisco and San José Railway, which had been built down the peninsula largely through subsidies provided by the two cities whose name it bore, passed under control of the Central directors and completed the desired monopoly of San Francisco trade. The process was aided by a grant from the State Legislature of sixty acres of land for terminal facilities on the shore of Mission Bay.
While these local developments were in progress, the Central Pacific found itself threatened in two dangerous quarters. The Union Pacific, stopped at Ogden by the Central from proceeding to California, sought an outlet to the Pacific by way of Portland. The building of the Oregon Short Line thus threatened to divert from the Central most of the Oriental trade. By running a line of steamers from Portland to San Francisco-a still more serious menace- the Union Pacific might even take over a large share of the California traffic to the east, unless the Central in some way could protect itself.
But this was not the most serious menace the California
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railroad had to face. Before the Civil War, the best judg- ment of the country, as shown in a previous chapter, favored the extreme southern route for the Pacific Railroad. The proposed line along the thirty-fifth parallel was also highly recommended. The war checked, but did not kill, the interest in these two routes; and before the Central Pacific itself was well established, other companies were at work to build into California along both of these more southerly routes. Should a road reach the Pacific over either route, it meant incalculable loss to the Central, because the latter's long haul across the Sierras, with the heavy grades and winding track, made competition with a southern road impossible on anything like equal terms.
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