Two months later, he had got another plea to quit the army and go to work for the Pacific railroad. This time it came from Peter Reed of Moline, Illinois, a politician and promoter of the Rock Island line. With the Pacific Railroad Bill on the verge of passing, he reminded Dodge, “You once told me that if we could get the Pacific railroad through you would quit the army and identify yourself with it. In the first place, Dodge, you cannot possibly last where the labor and excitement are so great…. The Pacific railroad is a big lick in your affairs and mine, and you can hardly keep out.”3 Dodge again refused.
In June 1862, out of the hospital, Dodge wrote his wife, “I am at my old job again—railroading.” The Union Army had to build its own lines to move troops and supplies in the South, and Dodge was building a road sixty-four miles long, to Corinth, Mississippi. He stayed with building new roads or repairing old ones. In his memoirs, Grant said of Dodge, “Besides being a most capable soldier, he was an experienced railroad builder. He had no tools to work with except those of the pioneer—axes, picks and spades.” He had men making the tools, others working on bridges, others making the grade, still others laying the track. “Thus every branch of railroad building,” Grant wrote, “was all going on at once…. General Dodge had the work finished in forty days after receiving his order.”
Grant was destined to play a major role in the building of the American railroad system. Like Lincoln, he was enamored with the trains. He had first seen one while on his way to West Point in 1839. It ran from Harrisburg to Philadelphia. When he got on it, “I thought the perfection of rapid transit had been reached. We traveled at least eighteen miles an hour when at full speed, and made the whole distance averaging as much as twelve miles an hour. This seemed like annihilating space.”4 That last sentence summed up exactly the sentiments of the thinking men of the age.
After Dodge had completed laying the track to Corinth, Grant put him to repairing lines torn up by the enemy. “The number of bridges to rebuild was 18, many of them over deep and wide chasms; the length of the road repaired was 182 miles.”5 As Dodge’s biographer J. R. Perkins says, with only a bit of exaggeration, “Railroading was new; much of the machinery was defective, and the art of road building was all but in its infancy.”6
Nevertheless, Dodge did magnificently, impressing Grant and his other superiors and railroad men. For example, he put in crib piers for the Mobile and Ohio Railroad. When officials of the company, after the war, ordered them taken out and truss bridges put in, one of them examined the wartime work and remarked, “General Dodge must have thought the war was going to last forever.”7
His wife wrote him that she wanted him to resign and take up the $5,000-per-year salary the railroad was offering if he would become the chief engineer for the UP. Dodge wrote back, “My heart is in the war; every day tells me that I am right, and you will see it in the future.”8
• • •
BEFORE adjourning on September 5, 1862, the first meeting of the appointed directors of the Union Pacific arranged to open stock-subscription books in thirty-four cities and advertise the sale in numerous newspapers. With the glittering promise of a transcontinental railroad that looked to make tons of money, and with all the loose cash floating around from wartime profits and inflation, the directors were certain—or at least hopeful—that the Northerners would flock to do their patriotic duty and sign up. Alas. In the first four months of sales, a grand total of forty-five shares were sold to eleven brave men.
Brigham Young, leader of the Mormons, was easily the biggest buyer, and the only one to pay in full, for his five shares, which made him the UP’s first—and for a long time only—stockholder “in good standing.”9 Doc Durant, the Wall Street speculator who had apparently put up the money for some of the other purchasers, bought twenty shares (at 10 percent down) for himself and made the rounds of his friends, looking for them to subscribe. George Francis Train, an erratic promoter and self-styled “Champion Crank,” who had earned a fortune in shipping and had been involved with Durant in a speculation on contraband cotton, took twenty shares.
DODGE was a man who had no fear of taking risks. In the spring of 1863, he had in his camp nearly one thousand former slaves who had walked off their plantations to gather around Union troops. Dodge put them to work. Then he said to reporter Charles A. Dana, “I believe that the negroes should be freed. They are the mainstay of the South, raising its crops and doing its work while its able-bodied men are fighting the government.” Dana published the statement. Dodge went further in his actions than in his words. He began arming former slaves, saying as he did so that “there is nothing that so weakens the south as to take its negroes.”10
From the perspective of the twenty-first century, Dodge was exactly right. But among the men of the 1860s era, he created great consternation. They were not at all sure they wanted the slaves to be free, and for sure they did not want the African Americans bearing arms for the Union. Thus Dodge was surprised and worried when, in the spring of 1863, he received a dispatch from General Grant ordering him to proceed to Washington to report to President Lincoln. There was no explanation, and Dodge confessed, “I was somewhat alarmed, thinking possibly I was to be called to account.” But on arriving in Washington, he discovered that Lincoln wanted to talk railroads, even though Robert E. Lee and the Army of Northern Virginia were just then preparing to march into Pennsylvania.
The President had been charged by the act of 1862 with fixing the eastern terminus of the UP. He recalled his 1859 talk with Dodge and wished to consult with him. Nearly every village on the Missouri River wanted the transcontinental to start at its site. Lincoln showed Dodge pleas from towns on both sides of the Missouri, from fifty miles above and below Council Bluffs. “I found Mr. Lincoln well posted in all the controlling reasons covering such a selection,” Dodge wrote, “and we went into the matter at length and discussed the arguments presented by the different competing localities.”
Dodge reiterated his belief in the Platte Valley route, with Omaha as the best terminus. He pointed out that, from a commercial and engineering point of view, there was no other choice. The great Platte Valley extended from the base of the Rocky Mountains in one continuous reach for six hundred miles east to the Missouri River. And, Dodge added, he had surveyed the valley the whole way and then crossed the mountains, and told Lincoln that the divide of the continent at the head of the river ran through an open country not exceeding eight thousand feet in elevation, while to the north and south the Rocky Mountains towered from ten to thirteen thousand feet high.
In his blunt manner, Dodge also told Lincoln that the act of 1862 had many deficiencies in it, which he enumerated, adding that they made it difficult to raise capital. Lincoln agreed and said he would see what could be done. He was very anxious that the road should be built and wanted to do his part. And he agreed with Dodge about the terminus.
Dodge told him it would be difficult at best for private enterprise to build it. He said he thought it should be taken up and built by the government. Lincoln interjected that the government would give the project all possible aid and support, but could not build the road. As Dodge remembered his words, Lincoln said that the government “had all it could possibly handle in the conflict now going on, [but it] would make any change in the law or give any reasonable aid to insure the building of the road by private enterprise.”11 This was unprecedented, beyond anything imagined by either Alexander Hamilton or Henry Clay, the first secretary of the Treasury and the later senator, who had started the promotion of government aid to internal improvements.
ELATED by the President’s reaction, Dodge took the train to New York, where he met Durant (“then practically at the head of the Union Pacific interests,” in Dodge’s words) and told him of Lincoln’s views. Durant “took new courage” at the news, as Dodge recalled.
Durant also asked Dodge once again to resign from the army and go to work for the UP. Dodge once again refused. He had just said publicly, “Nothing but the u
tter defeat of the rebel armies will ever bring peace. … I have buried some of my best friends in the South, and I intend to remain there until we can visit their graves under the peaceful protection of that flag that every loyal citizen loves to honor and every soldier fights to save.” That was a splendid speech, straight from the heart.12 It speaks volumes about Dodge’s patriotism and dedication.
But if he could make a little money out of the war, and out of the railroad, he was willing. He wrote Durant of his desire “to identify myself with the project in some active capacity. But I probably can do you more good in my present position while matters are being settled by Congress and others.” Once Lincoln had announced the terminus, Dodge added, Durant should “telegraph my Brother at Council Bluffs, so that he can invest a little money for me…. Bear this in mind.”13
EVEN with Durant and Train out there selling for all they were worth, and even though the Union won a major victory at Gettysburg on July 1-3, 1863, and another when Vicksburg surrendered to Grant on July 4, it was not until September, a whole year after the shares went on sale, that two thousand shares were subscribed at $1,000 each—the minimum 10 percent that had to be put down for a $10,000 share. With the down payment, there was a total of $2 million for a road that was going to cost anywhere from $100 million to $200 million or perhaps more.
It was too risky a proposition for most American capitalists. No one knew if a train could be run over the Rockies in winter, or what the road over the mountains and through the desert would cost to build. With a war on, there were too many, too fat, profits to be made in shorter-term, less risky investments. People could not imagine how big this project was going to be, or the potential returns.
But with the 10 percent in hand, the UP was able, on September 25, 1863, to call for a meeting of the stockholders for October 29, 1863. On that day, the original commissioners were discharged and a board of thirty directors elected. The next day, the board elected General John A. Dix, who had been associated with the M&M Railroad, as president-Dignified, polite, but at sixty-five years of age an old man by mid—nineteenth century standards, Dix was known to everyone of note in New York and most of those in Washington. But he was a titular chief only.
The real leader of the corporation was Doc Durant, who took the title of vice-president, with Henry Poor as secretary. Durant had in his hands reports of the earlier surveys by Peter Dey and his then assistant Grenville Dodge. Durant told the board that two months earlier he had sent Dey west again, with four parties of engineers and a geologist, to survey the entire route, all paid for by his own money.14
So the Union Pacific was born, more than a year after Congress passed the Pacific Railroad Bill and Lincoln signed it.
VICE-PRESIDENT Durant went right to work. “Want preliminary surveys at once to make location of starting point,” he telegraphed Peter Dey in Omaha. “Delay is ruinous. Everything depends on you.” On November 5, 1863, Dey hurried to New York. Over the next two weeks, Durant pressed Lincoln to make his decision on the starting point. He finally did so on November 17, a day when the President was distracted: in two days, he was to make some remarks at the dedication of the Union cemetery at Gettysburg. Nevertheless, Lincoln managed to scratch off an executive order defining the terminus as “so much of the western boundary of the State of Iowa as lies between the north and south boundaries of … the city of Omaha.”
Lincoln put more thought into what he would say in Gettysburg, and it came out much better. Still, Durant was satisfied. Despite the lack of a railroad running to Council Bluffs, not to mention a bridge there over the Missouri River, the Union Pacific would make Omaha the starting point.15
DURANT wanted to get started yesterday. The Central Pacific had already had its groundbreaking ceremony, eleven months earlier. Doc decided the UP must have a ceremony of its own in Omaha, if only to get some publicity. He ordered Dey to rush preparations and be ready on December 1, 1863. On November 30, he sent a telegram to his chief engineer: “You are behind time for so important an enterprise. Break ground on Wednesday.”16
Dey did so, and the ceremony was grand. Citizens of Omaha flocked to the bottomland near the ferry landing at Seventh and Davenport Streets. The governor of Nebraska Territory turned the first shovel of dirt. There were bands, whistles, cannon, flags, and fireworks. George Francis Train was the orator, wearing the only white suit west of the Mississippi. He was described as “visionary to the verge of insanity.” His speech put to shame any previous hyperbole. “America possesses the biggest head and the finest quantity of brain in the phrenology of nations,” was one of his opening stretchers. He was said to be “a man who might have built the pyramids.” He read congratulations from Lincoln and other dignitaries. Secretary of State William Seward, a longtime promoter of the Pacific railroad, had written: “When this shall have been done disunion will be rendered forever after impossible. There will be no fulcrum for the lever of treason to rest upon.”17
Later, the mayor hosted a banquet and ball at the Herndon House. Train wired Durant: “Five (5) o’clock the child is born.” The Doctor was not impressed. “May as well have had no celebration as to have sent such meager accounts. Send full particulars.”18
The groundbreaking had brought the speculators into Omaha in droves, and the local residents tried to accommodate them. Train bought five hundred acres, some of it for as much as $175 per acre.19 Dodge’s brother Nathan wrote him, “Every man, woman and child who owned enough ground to bury themselves upon was a millionaire, prospectively.”
But then it turned out that Omaha might not be the terminus after all. Durant was exploring a line north of the city, through Florence, and another south of Omaha, at Bellevue; indeed, on the same day as the groundbreaking he had chosen the Florence line.
A week after the groundbreaking ceremony in Omaha, Lincoln, in his Annual Message to Congress, praised the Central Pacific and the Union Pacific, with what most railroad men would regard as little cause, when he referred to “the actual commencement of work upon the Pacific Railroad, under auspices so favorable to rapid progress and completion.”20
• • •
DURANT was into this thing to make money, not to build a railroad. He was as flamboyant as the most freewheeling man on Wall Street could be. He would bet a fortune on almost anything. He moved too fast for other fast-money boys to keep up with him. In this case, he had bought land north and south of Omaha and wanted to play the three contenders against each other. In January 1864, Durant ordered Dey to survey yet another line, this one from De Soto (more than twenty miles north of Omaha) west. Dey was furious. He wrote Dodge that Durant was “managing it as he has everything else that is in his hands. A good deal spread and a good deal do nothing. He considers it a big thing, the Big Thing of the age, and himself the father of it.”
Instead of deciding on a line, Durant bombarded Dey with new possibilities. “If the geography was a little larger,” Dey wrote Dodge, “I think he [Durant] would order a survey round by the moon and a few of the fixed stars, to see if he could not get some more depot grounds.”
It was Dodge’s turn to grow furious. “Let me advise you to drop the De Soto idea,” he wrote Durant. “It is one of the worst.” Logic, nature, and President Lincoln dictated that the route run from Omaha to the Platte River and then west along the Platte Valley.21
Still the Doctor persisted in his bewildering variety of schemes. He was negotiating with the businessmen of Omaha, Bellevue, Florence, and De Soto all at once, demanding they give the railroad land for depots, rails, water storage, and more, and he had them in competition against each other.
On January 1, 1864, President Dix signed a document formally appointing Peter Dey the chief engineer of the UP. He named Colonel Silas Seymour the consulting engineer, also at Durant’s suggestion. Seymour was a crusty, overweight, eccentric, domineering dandy with little railroad experience and was later referred to as the “interfering engineer.” But his brother Horatio was governor of New York and a lead
ing Democratic candidate for president, and Durant thought it wise to have friends in both parties.22
Engineer Dey wanted to get going on his surveys. He had hired two fine engineers, Samuel B. Reed and James A. Evans, to run a line from the Black Hills* to Salt Lake—that is, across the southern part of today’s Wyoming and northeastern Utah, They needed to start at once if they were going to finish by the autumn of 1864. But Durant would not approve their expenditures—or Dey’s salary, for that matter.
On April 4, 1864, Dey wrote Dodge, “Durant is vacillating and changeable and to my mind utterly unfit to head such an enterprise…. It is like dancing with a whirlwind to have anything to do with him. Today matters run smoothly and tomorrow they don’t.” If the men in charge back in New York would only give him the money to run the operation and otherwise leave him alone, Dey said, “I could build the work for less money and more rapidly than can be done the way they propose to do it.” But of course that couldn’t be done.
As Maury Klein, author of a two-volume history of the Union Pacific and easily its finest historian, comments, “Thus was the Union Pacific charged with mismanagement before it had laid a single rail.”23
THIS was hardly a surprise, because conservative capitalists (the majority) would not risk their fortunes or reputations on the road. They regarded its stocks and bonds as a reckless gamble for high stakes at long odds. Who was there among them willing to wager on long shots?
George Francis Train was one. He knew that construction would require an enormous amount of capital, that it would be years before the road could return any dividends, and that therefore some way had to be found to raise money and provide short-term profits. He further knew that a construction company would attract investment, because it could make money through the government loans plus the company’s sale of the land grant and of its own stocks and bonds. A separate construction company would also limit the liability of investors to the stock they held. Moreover, as stockholders in both the construction and the railroad company, the investors could make a contract with themselves. “I determined,” Train said later, “upon introducing this new style of finance into the country.”24
Nothing Like It in the World The Men Who Built the Transcontinental Railroad 1863-1869 Page 10