History of Colorado; Volume I, Part 38

Author: Stone, Wilbur Fiske, 1833-1920, ed
Publication date: 1918
Publisher: Chicago, S. J. Clarke
Number of Pages: 954

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sity, promote the rapid colonization of the new West, and, by competition for its trade, stimulate its subsequent growth."

It was taken altogether, a pioneering task based solely upon the faith that would move these mountains, for within them were the riches with which he was certain his land galleons would be loaded. He saw in Pueblo the natural depot for the raw material of the mines and visioned there the multiplied smoke- stacks and whirring wheels of a greater smelting industry.

Out on the prairies of the Divide men had begun to graze small herds of cattle and sheep which were later driven north and sent by rail to eastern markets. But to this visionary the potentiality of these plains was clear. The railroad would make this country teem with vast herds of cattle, even as it had once been filled with buffalo.

He knew too that the railroad must create towns and passenger traffic, for the Pueblo-Denver stage in 1870 carried not more than three passengers daily each way. It was not a glorious outlook, for in 1870 it must be remembered Leadville was still a few years distant and Cripple Creek two decades away. There was hope in the dribbling oil fields of Florence, but that too was but in its beginning and but little had been done toward development. The coal fields of Fremont County and those far below in Las Animas and Huerfano were well worth reaching by rail. Here, as a matter of fact, were the only tangible evi- dences of prospective railroad business.

But the original incorporation in 1870 under the laws of the Territory of Colorado revealed the fact that the great plan of the Denver & Rio Grande Railway was a most carefully considered project. Its articles of incorporation provided for the location, construction, operation and maintenance of the Den- ver & Rio Grande Railway, of the Denver & Southern Railway, of the South Park Railway, of the Western Colorado Railway, of the Moreno Valley Rail- way, of the San Juan Railway, of the Gallesteo Railway and of the Santa Rita Railway. The general route of each was designated, and there were the saving clauses which in the long fight with the Santa Fé over possession of the Cañon of the Royal Gorge finally won out for the Denver & Rio Grande.

The Denver & Rio Grande Company was incorporated October 27, 1870, with the following trustees : Gen. William J. Palmer and A. C. Hunt, former governor of Colorado; William P. Mellen, of New York; R. Henry Lamborn, of Philadelphia; Howard Schuyler, of Colorado. W. H. Greenwood, who became superintendent of construction, was also one of the incorporators. He left the company in 1874, and later met a violent death in Mexico. The directors the first year were William J. Palmer, William P. Mellen, Robert Henry Lamborn, A. C. Hunt and William A. Bell.

The capital stock of the company was $14,000,000, and the road was to be bonded at the rate of $10,000 for each mile constructed. General Palmer was chosen president, and had able aids in J. P. Mersereau, chief engineer ; in W. H. Greenwood, and in Samuel E. Browne and Wilbur F. Stone, attorney.

In March, 1871, the work on a narrow gauge railroad was begun south of the site of the present Union Depot and on October 21, 1871, the last rail was laid covering the seventy-four miles between Colorado City and Denver.

Thus far the road had been built without county, state or federal aid.

In June, 1872, Congress passed an act granting the Denver & Rio Grande

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Railroad the right of way over the public domain, 100 feet in width on each side of the track, "together with such public lands adjacent thereto as may be needed for depots, stops and other buildings for railroad purposes, and for yard room and sidetracks, not exceeding twenty acres at any one station and not more than one station in every ten miles, and the right to take from adjacent public lands stone, timber, earth, water and other material required for the construc- tion and repair of its railway and telegraph lines."

The act also gave the company the rights, powers and privileges (condem- nation rights), conferred upon the Union Pacific by section 3 of the act of July 2, 1864, provided it reached Santa Fé within five, later changed to ten, years after the passage of the act. Another proviso stipulated fifty miles of con- struction below Santa Fé each year. Before the railway replaced the stage-coach from Denver to Colorado Springs the latter ran tri-weekly and carried an aver- age of five passengers per trip, or thirty both ways, weekly. A few "Mexican" and other teams carried all the freight there was before the railway was built. The actual freight hauled by the railroad in 1872 (an average distance of sixty- one miles) was 46,212 tons, or, omitting construction material, 34,892 tons of commercial freight.

By the census of 1870 Denver had a population of 4,800. In 1872 the city directory showed it to have over 15,000. Pueblo when the Denver & Rio Grande was begun had 500 people. In 1872 it had 3,500. Colorado Springs did not exist in 1870. In 1872 it had a population of 1,500.

Pueblo now voted $200,000 in bonds and on June 29, 1872, the town cele- brated the arrival of the first train from Denver. It marked the beginning of the growth and industrial prosperity of the town.

The line to Florence and to the coal field near Canon City, was built in 1872. The people of Canon City were chagrined to find that no plans had been made for the extension of the road to the town-a matter of only eight miles. They appealed to the Santa Fé to build into the Arkansas Valley, but the panic had hit that road as well as so many others. General Palmer asked for an issue of $100,000 in bonds. It was voted but not issued. Finally $50,000 was subscribed to the stock of the Rio Grande and the road was built in 1875, not into the town, but to a point a considerable distance below.

The earnings of the Denver & Rio Grande for 1872, deducting construction material, was $281,400.29; operating expenses deducting cost of transporting construction material, $175,206.32. Net earnings, $106,193.97. Earnings were divided: freight, $172,102.23; passenger, $134,371.56; miscellaneous, $1,645.03. Expense : conducting transportation, $63,160.44 ; motive power, $62,311.73 ; main- tenance of cars, $4,885.95; maintenance of way, $55,060.13; general expenses, $16,526.60.

In the second annual report the "company was able, notwithstanding a panic which caused the failure of seventy-seven railroads in the United States, to meet all of its obligations promptly and survive the gale." The net earnings for 1873 increased 60 per cent over those of 1872.

Out of the wrangle with Canon City grew the struggle for the right of way through the Royal Gorge to the Grand Canon of the Arkansas.

· A local company was formed at Cañon City, and on February 15, 1877, was incorporated as the Canon City & San Juan Railway Company, with Messrs.

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Alling, Locke and Megrue, all of Fremont County, as incorporators. The feud between the Santa Fé and Denver & Rio Grande was then at its height, and the former lost no time in backing the Cañon City enterprise to seize the route through the Canon of the Arkansas. Under the original grant the Denver & Rio Grande was confirmed by Congress in any route which it had specified in its articles of incorporation. Justice Harlan in his famous review of the case at its final hearing in the United States Supreme Court stated: "In 1877 and 1878 it became evident that that pass was of vital importance to any company desiring to reach the trade and business of the country beyond it, whether to the west, northwest or southwest. Discoveries then recently made of mineral wealth in western Colorado gave it immense pecuniary value in railroad circles, since, as the evidence tends to establish, the occupancy of the Royal Gorge by one line of railroad would practically exclude all other competing companies from using it for like purposes except upon such terms as the first occupant might dictate. From the date of the survey made in 1872 down to April 19, 1878, the record furnishes no evidence that the Denver company actually occupied that defile for any purpose whatsoever. On that day, however, Congress having extended the time to ten years from the date of the original act within which to complete its road as far south as Santa Fé, that company did, by its agents, occupy the narrow portion of the canyon known as the Royal Gorge with the avowed inten- tion of constructing its road upon the line of the surveys, made in 1871 and 1872. But during the night of April 19, 1878, the board of directors of the Cañon City company were convened and Robinson and Strong, the chief engineer and manager respectively of the Santa Fé system, were elected to the same positions in the Canon City company. On the morning of the 20th as early as 4 o'clock, a small squad of their employes, nine or ten in number, under the charge of an assistant engineer, swam the Arkansas River and in the name of their company took possession of the Cañon."

The supreme court in this decision gave the Denver & Rio Grande the sole right to construct a railroad through the gorge.

This battle for possession of the Cañon of the Arkansas is one of the great romances of early railroad building in the west. The wonderful discoveries at Leadville proved the lodestone for the Santa Fé directorate which until that time had, like so many other eastern powers, regarded Colorado largely as a mere matter of "scenery." It was for this reason that the people of Canon City, when in 1874 they found the Denver & Rio Grande within eight miles of its town limits, were unable to get a hearing from the Santa Fé. But the Leadville excitement wrought a magic change. Rates of 4 cents a pound were cheerfully paid on freight brought by teams from Canon City to Leadville. Both the Den- ver & Rio Grande and the Santa Fé determined to get to the big mining camp through the only available mountain pass, the Canon of the Arkansas, twelve miles west of Canon City and with hardly fifty feet of width for rail traffic.

The Santa Fé, in February, 1878, had fairly outwitted the Denver & Rio Grande in securing and holding Raton Pass. Thus on the fateful April 19th of the same year it decided to secure a western outlet by the methods which won out at Raton.

Judge Harlan's decision covers the legal phases of the case, the fact that General Palmer had designated the canyon route in his original incorporation,

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that Congress had confirmed his right to this in perpetuity if built within a period of five years, and was about to extend this confirmation for another five years.

William B. Strong, who in December, 1877, had been elected vice president and general manager of the Santa Fé, was one of the great construction geniuses of this period. He lacked the wonderful foresight and knowledge of General Palmer, but surpassed him in a native shrewdness which too often degenerated into mere trickery. With all that, it took men of his calibre to pioneer these early railroads, men who could "vision" towns and industries, mines and manu- facturing in these rugged wildernesses.

The struggles of these great builders were often against the densest ignorance. Thus in the New Mexico Legislature the Mexican faction fought the coming of the Santa Fe for fear it would people the country with "Americanos." Far from granting a subsidy it was largely by subterfuge that railroad and develop- ment rights were at first obtained in New Mexico.

Strong had engineered the fight at Raton. He was the moving spirit in the struggle to win the canyon. At that time the Santa Fe was building southwest from La Junta. W. R. Morley, in charge of construction at El Moro, reached Pueblo on the night of April 18th, only to learn that the Denver & Rio Grande construction force had already gone west to take possession of the canyon.

The people of established towns were nearly all against the Denver & Rio Grande, for General Palmer's policy of building up his own towns had not made him many friends in the side-tracked places. This was the case at Trinidad, which he purposed to surpass by his own town of El Moro. No bonds were voted by Trinidad. It was the case at Cañon City, where he had built to a point away from the center of the town.

Morley, therefore decided to reach Cañon City and get the townsmen to help him seize the canyon. With the best pair of horses he could find in Pueblo he made the distance of over forty miles just as the dawn showed him that the Denver & Rio Grande construction crew was arriving. He rushed to the home of the officials of the Canon City & San Juan Road, was legally empowered by them to occupy the canyon, and leaving then to gather a force of men to follow, rode to the canyon two miles away and began to dig. The officials of the Cañon City & San Juan with a few friends, six or eight in number, all armed to the teeth, came to Morley's aid.

For the time being the Denver & Rio Grande was beaten, for its men came and saw, and to avoid bloodshed, left.

For Morley there was the handshake of Strong and the satisfied smile which to Santa Fé men was like a Victoria Cross. The repeating rifle, elaborately mounted with gold, which was given to Morley for his work in the canyon, was later accidentally discharged, killing this intrepid engineer.

The Denver & Rio Grande took possession farther up the canyon, erected forts, and began actual construction work. The state courts were appealed to, arrests of officials were frequent, but finally Judge Hallett enjoined both parties from work in the canyon until the matter was disposed of in the supreme court.

What Leadville meant in the railroad fight between the Denver & Rio Grande and the Santa Fé can now best be gleaned from the confidential communications made in those years to General Palmer, and in the correspondence of General Palmer. These, through the courtesy of the Denver & Rio Grande officials, are

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now available. On March 23, 1878, Col. D. C. Dodge, then holding the title of general freight agent, began pouring into General Palmer's offices advices of prospective shipments from Leadville. "The Gallagher mine promises twenty- five tons of ore a day after May Ist." "Harrison reduction works could ship 100 tons a day if they had the transportation. Want to contract for shipment daily of 100,000 lbs. of ore and bullion." Here's another from Charles B. Lam- born, a prominent railroad man of that day, written to General Palmer under date April 1, 1878: "Mr. Streeter, freighter, informs me that he has arranged to take charge of the transportation from Leadville across Weston's Pass and South Park, with mule teams. From the Park down to Cold Springs 'bull- teams' are being arranged for. He has agreed to commence during this month and carry over Weston's Pass 50,000 lbs. ore and bullion per day and to increase at any time on notice, to a capacity of 100,000 lbs. per day. Harrison's people expect soon to ship 100,000 lbs. per day, and are only anxious about getting enough transportation. The rate they expect to pay is $18 per ton to Colorado Springs and Cañon City."

One of the earlier "human documents of this period is the letter of General Palmer, dated September 15, 1877, from Colorado Springs, and addressed to R. H. Lamborn, previously if not then treasurer of the Denver & Rio Grande. In this he says: "You will doubtless be surprised to learn that I am satisfied the proper route is from Cañon City up to Oro (Leadville), 110 miles, with a branch of thirty-nine miles if necessary from mouth of Trout Creek to Fairplay, a cheap line to build. We can either run through the Arkansas Cañon or via the iron mines and down Texas Creek, avoiding the worst canyon and at an increased distance of, say, fifteen miles. This would greatly develop Wet Mountain Val- ley, which has a surplus of 5,000 tons best hay, besides oats and potatoes; and Rosita, which is today as important, perhaps, as Fairplay, and is apparently as large as Fairplay, Dudley and Alma put together, and has two reduction works in full blast, with another just going up on Oak Creek, and according to Professor Hill's statement to me is good for twenty tons daily of shipping ore * *

Harrison guarantees at once to a railroad 15,000 tons of the high grade silver lead ore for shipment besides the base bullion (33 to 40 per cent) of product of two furnaces and the coke and merchandise (This guarantee was later in- creased to eighty-five tons of ore, bullion and coke per day, in May, 1878) * Stevens (of the firm of Wood & Stevens) estimates the daily shipment of ore with railroad at 1,000 tons daily; wood, 500 tons daily * * Every gulch in the 120 miles of Arkansas Valley, however, from Grape Creek up to Tennessee Pass, on each side of Arkansas River, seeming to have men working on it in the mines *

* * There are smelting works on Chalk Creek, and another just going up; a mill or two at Granite ; ore smelting furnace at Oro (Leadville) ; ore mill at Printer Boy mine, California Gulch; say three reduction works at

Rosita * * * the fifty tons daily being now mined at Oro average thirty ounces of silver and 40 per cent lead to the ton of 2,000 pounds. Ten bushels of coke are used to one ton of ore; 25 per cent iron ore to one ton of silver ore. This carbonate district extends from Iowa Gulch to Evans' Gulch, say two miles long and one and one-half miles wide. The ore is in three great breaks of the strata. There are said to be six to eight such breaks between South Park River on the east (head of Mosquito Range of South Park Gulch opposite Fair- Vol. 1-23

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play) and the Arkansas River on the west, a distance of say eight or ten miles. * * * In richness, however, the "Gallagher," which abuts against Weed & Stevens properties on the north, far exceeds. Everything appears to pay from time of striking the deposit, which is, say, ten to twenty feet down. The Hays & Cooper mines were discovered a week or two before my arrival within 200 or 300 yards of Harrison's new furnace. There was considerable excitement and Senator Logan and Governor Routt were there and out with picks, search- ing for the treasure * * Fourteen miles down the Arkansas are the Twin Lakes. With a railroad this would be the most attractive summering spot in Colorado, and could not be exhausted of fish * * I doubt if it would be necessary to build for some time the branch to Fairplay so that less than $1,000,- 000 would be absolutely necessary * * * The carbonate of lead district, on present yield. and Harrison's guarantee, would pay as follows, to say noth- ing of any of the numerous mining deposits from Rosita to Tennessee Pass or the South Park, which would come in at Trout Creek.

Rough Estimate-

One hundred and fourteen miles to Cañon City via Arkansas Cañon to Oro (Leadville) $1,000,000

Ten per cent on which is per annum. 100,000

Cost of operating per year. 120,000

Necessary to earn gross yearly, to pay operating expenses and IO per cent interest.

220,000

Ore and Coke business of Oro only ---

Harrison's guarantee, 15,000 tons of high grade, he now pays $18 ($25 per ton paid in winter ) per ton ore to the Mexican wagons, freight to Colorado Springs, by railroad (half pres- ent cost) $

135,000 Forty tons daily of low grade ore reduced in two Harrison's furnaces to thirteen tons base bullion daily, 4,700 tons .... 43,000

Requiring ten tons coke daily, 3,650 tons, for which he now pays freight from Colorado Springs $12 per ton, say by rail- road, half, or $6 ($25 paid for half when ox teams not prac- ticable) 22,000

Omaha works in high grade ores, shipped out ten tons per day 32,000

$232,000

"By building from Canon, 110 miles, we would of course, thoroughly control the trade and carry it to Denver as readily as Pueblo. We could discourage Denver extending the South Park Railroad thus, as readily as by building from Colorado Springs. Denver gets now most of Cañon City and Colorado Springs trade."

General Palmer then goes into the advantages of the Cañon City route, pre- dicting even at that early day the enormous tourist travel of the present day. "From Cañon City," he says, "to Oro (Leadville) the attractions to passenger travel are unusual. The Arkansas Cañon would undoubtedly be traversed by nearly every tourist coming to Colorado, and much of the California travel would come by way of Pueblo and Denver in order to see this bit of grand scenery. The resi-

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dent population of Colorado would mostly manage to see it by means of excur- sions * * * As iron works will be at Pueblo large smelting works, etc., we could supply iron cheaper to the mines in the mountains * * * This would make a real central and national Pacific railroad line good for Oregon and southern California, equally, on the west, and Chicago and Memphis, or Texas on the east. *

* * The most sheltered and appropriate places for consumptives in winter that I have seen are the little warm openings or parks, beside the dashing river which separates the several canyons of the Arkansas from Cañon City up to the South Arkansas (Salida)."

The letter goes on into minute engineering details, of possible production from every existing mining camp, of prospects of raising vast hay and oat crops in Wet Mountain Valley and Texas Park, of the forests of fine timber.

Beauty in nature seemed to have a marvelous appeal for this practical railroad builder. Even in this long letter advocating construction for only solid business reasons he thinks of the health-restorative powers of the mountains. Here is a bit of his description of the scenic wonderland of the Arkansas River: "-above the Arkansas Cañon the ride is mostly through the cultivated park-like valley of the Upper Arkansas, interrupted by dashes into occasional short canyons with rapids and falls. For sixty miles here, the passenger can look up on one side to the 'Con- tinental Divide' which the line runs parallel with, and from whose crest it is but about twelve miles distant between Poncho and Oro. He looks up in this three hours' railroad ride at ten peaks whose elevation exceeds 14,000 feet, and sees fields of snow which drain into two oceans. On the right is the high rim of the South Park. When within eleven miles of Malta he passes the outlet of the Twin Lakes, a mile or two distant, nearly encircled by high mountains, whose height seems doubled by reflection in the blue waters."

Financially the Santa Fé was winning the long struggle with the Denver & Rio Grande, for its resources were immediate-while the Rio Grande was still in the earlier development stages. In that year, 1878, the Santa Fé had earned $3,950,868, while the Denver & Rio Grande was heavily involved. There were quarrels with the Philadelphia backers of the Denver & Rio Grande for whom the vision of General Palmer was not coming to realization rapidly enough.

Dr. John Burton Phillips, professor of economics and sociology at the Univer- sity of Colorado, in his article on "Freight Rates and Manufactures in Colorado," published by the University in 1910, writes as follows of the extension of the Rio Grande system from Pueblo to Cañon City and to Trinidad :

"About 1872, the Rio Grande Railroad was built into Pueblo. General Palmer, the builder, got into difficulty when the road had reached this city and found him- self short of funds. He wished to build the road from Pueblo to Canon City, a distance of forty-two miles. The Colorado Coal and Iron Company had many coal and ore lands in the vicinity of Canon City which they wished to develop. The coal and iron company, therefore, raised the money needed to build the road to Canon City, taking in exchange therefor the stock of the railroad. In this way the road was successfully extended to that point. In a similar fashion, another com- pany bought up the coal and iron lands around Trinidad, Huerfano and some other points, and then turned over one-half of their interests to the railroad and on these properties the funds were raised with which the railroad was built to Trinidad. In 1880 or 1881, in order to develop the resources along the road, General Palmer

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got the men interested in these properties, both at Trinidad and at Cañon City, to put up the capital for a steel plant at Pueblo. All the companies were consolidated into the Colorado Coal and Iron Company. About $2,500,000 was expended at that time. The two contracts which had formerly been made by the railroads by which special favors were granted to the companies in the matter of freight rates were then consolidated into one contract with the combined company. This con- tract extended special favors to the company in the matter of freight rates as the company had united with Palmer in the development of the coal and ore beds and was therefore entitled to a good bargain. This is why, according to the evidence of the receiver of the Rio Grande, no other companies were allowed to sell coal in Leadville except the Colorado Coal and Iron Company."

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History of Colorado; Volume I, Part 38

Author: Stone, Wilbur Fiske, 1833-1920, ed Publication date: 1918 Publisher: Chicago, S. J. Clarke Number of Pages: 954

Author: Stone, Wilbur Fiske, 1833-1920, ed
Publication date: 1918
Publisher: Chicago, S. J. Clarke
Number of Pages: 954