† Which made it the first corporation chartered by the national government since the Second Bank of the United States (created in 1816, it lost its charter in 1836).
* The easternmost thrust of the Rocky Mountains, in eastern Wyoming, not to be confused with today’s Black Hills of South Dakota.
Chapter Five
JUBAH AND THE ELEPHANT 1862-1864
IMMEDIATELY after the Pacific Railroad Act of 1862 had passed the Congress and been signed by the President, Judah had gone to New York to purchase materials and supplies for the Central Pacific. Three weeks later, on July 21, he had left matters in the hands of an agent and, together with Anna, set sail for California. His intention had been to make certain that the merchants from Sacramento who owned or controlled most of the bonds and stock of the Central Pacific Railroad Company—Crocker, Huntington, Stanford, and Hopkins (the Big Four, as they were beginning to be called) could indeed harness the elephant.
They couldn’t do it without Judah. As he had told them in his report, “The principles which produced this result were control and harmony.” On June 30, 1862, he had already filed with the secretary of the interior a map of the route he had picked, because the bill provided that, upon such filing, the federally owned lands for fifteen miles on either side of the projected route would be withdrawn from pre-emption, meaning that a citizen could not buy or make a claim on them. This was a first step in clinching the bargain between the CP and the federal government.1 Judah had gotten started.
There were many people depending on him. Word of the passage of the Pacific Railroad Bill had spread through Sacramento, causing great excitement. On July 12, the Sacramento Union reported that “the firemen’s parade last evening in honor of the passage of the bill was the most brilliant affair of its kind that has ever taken place in this city. The procession was a mile long and the route was one blaze of torches and fireworks … and there were 100 mottoes carried in the line, all of them appropriate and pithy.” One read, “Little Indian Boy, Step Out of the Way for the Big Engine.” Another said, “The Pacific Railroad—Uncle Sam’s Waistband.” And a third: “Fresh No. 4 Mackerel, Six Days from Belfast.”2
On his way to California, Judah had written a report on his activities in New York after the bill passed. He said he had found that prices had advanced rapidly with the coming of war. Iron rails, for example, that went for $55 a ton in 1860 now cost $115 a ton and were going up. Common spikes had climbed from 2.5 cents per pound to 6.5. Blasting powder had risen from $2.50 to $15 a keg. Shipping was costing much more: each ton of rails fetched $17.50 in shipping charges to San Francisco. Insurance premiums had also soared. Huntington had gone to New York to handle purchases “upon the best terms he could get, before further advances [in prices] took place.”3
Judah hoped to lay the first fifty miles of track by the fall of 1863, more than a year away. His agent had managed to get a contract for eight locomotives, deliverable in January 1863, to be paid for entirely in government bonds—when these were issued. Also a contract for five thousand tons of rail, and for eight passenger, four baggage, and sixty freight cars. Huntington had paid for all this with pledges from himself and the others, relying on his and the other members of the Big Four’s reputations for never walking away from a debt. But although he had fistfuls of stocks and bonds, he had no buyers. Besides, the federal law making paper money (“greenbacks”) legal tender almost killed the bonds: the value of the paper money sank with each Union Army reverse, sometimes to as low as 35 cents on the dollar, and in California, by legislative fiat, only silver or gold could be used in contracts, to pay workers, or to buy goods.
Huntington was described by an acquaintance as a man who was “something tigerish and irrational in his ravenous pursuit. He was always on the scene, incapable of fatigue, delighting in his strength and the use of it, and full of love of combat…. If the Great Wall of China were put in his path, he would attack it with his nails.”4 But he still couldn’t get anyone in the East to buy his railroad bonds.
In 1862, Huntington worked New York, Washington, and Boston, spending three days in New York, two in Boston, and two in the capital, where he “borrowed, hocked and huckstered.” In Boston, he walked into the office of Oliver Ames, older brother of Representative Oakes Ames and fellow owner of the Ames shovel factory, the biggest and best in the country, from whom Huntington, Crocker, and Hopkins had bought thousands of shovels for California’s gold miners. The Ames shovel was declared to be “legal tender in every part of the Mississippi Valley” and was known even in South Africa. At the beginning of the Civil War, the business was valued at $4 million, and the war enormously increased its prosperity.
Huntington didn’t try to sell Ames any bonds. Instead he offered a fistful of them as security for a loan of $200,000, promising that he and his partners would guarantee the interest payments on the bonds if the CP failed to meet its semiannual obligations. Huntington had with him “a paper testifying to our responsibility and our honor, as men and merchants, that whatever we agreed to we would faithfully adhere to.”
Ames told Huntington to come back tomorrow. Meanwhile, he checked on the record and found not a single instance of an overdue bill. The next morning he made the loan and gave Huntington a letter of introduction. On a similar promise, Huntington managed to purchase $721,000 worth of rolling stock.5
IN mid-August 1862, Judah arrived at Sacramento. McClellan was pulling the Union troops out of the Virginia Peninsula, and the Second Battle of Bull Run was less than two weeks away. Still, two pieces of good news greeted Judah. First, the secretary of the interior had telegraphed the government’s acceptance of his location map and withdrawn from sale, pre-emption, or private entry the federal land and the promised land-grant acreage along the route. Second, the city of Sacramento had given to the CP thirty acres along its levee (thirteen hundred feet of riverfront) for the company’s headquarters, depots, shops, and roundhouse.
That gift brought on the first dispute between the Big Four and their chief engineer. Judah insisted that the company build a handsome office building in Sacramento, and he personally designed an impressive brick edifice that he claimed could be built for $12,000. He was peremptorily voted down at a board meeting. Instead, at Huntington’s telegraphed orders, an unpainted shack was raised in one working day at a cost of $150. CP business was as always conducted in an office over Stanford’s grocery store on K Street.6
At the same time Judah was disagreeing with Huntington and Stan-ford, the Central Pacific was being criticized by men who had a monopolistic interest in this or that aspect of the railroad. For example, the company that brought ice from Alaska to the San Francisco market feared that the CP might replace it with ice from the Sierra Nevada. Those who ran freight lines within the state, most especially the Sacramento Valley Railroad, jumped on various aspects of the CP. A major criticism, repeated by the state’s most prestigious newspaper, the Daily Alta California, charged that all the CP intended to do was build its line to Dutch Flat, where it would end, and from which everyone would have to use the wagon road owned by the Big Four to get to the sprawling markets in Nevada. On August 22, 1862, just after arriving, Judah took out an advertisement in the Sacramento Union asking anyone who knew of a better route over the mountains to step forward with the facts. No one did.7
JUDAH spent the early fall working on his annual report. Meanwhile, the Battle of Antietam had been won by the Union, but the Confederate Army of Northern Virginia had escaped. And on September 22, 1862, Lincoln had issued the Emancipation Proclamation.
Judah issued his report on October 22, 1862. It was primarily a puff piece designed to sell shares and bonds. He claimed, for example, that the government’s use of the road would be so great as to repay the company’s own bonds, along with other stretchers. He badly underestimated the cost of driving tunnels through mountains ($50 a foot, he said; $1,000 per foot was closer to the reality). He said that the CP had been given the privilege from Congress of building i
ts line easterly from the California-Nevada line until it met the UP’s line coming from Omaha, which wasn’t true but allowed him to write, “I am positive in the opinion, that it will be found advisable to undertake the construction of about 300 miles easterly”—that is, halfway to Salt Lake City. He also noted that the CP would make a fortune from the business within California and from the Nevada trade. “The conditions which produce these results are extraordinary,” he admitted, “unlike those which govern the business conditions of any other railroad ever built.”8
Judah believed what he said. He wanted more stock. So did others. In November, he and his friends James Bailey, who had accompanied him to Washington, and grocer Lucius Booth purchased more stock (Judah was being paid as chief engineer in small amounts of stock), although not nearly so much as Charles Crocker, who, along with Huntington, Stanford, and Hopkins, “resolved [in Crocker’s words] that we would go in and subscribe enough stock to organize the company and control it.”9 Each bought an additional 345 shares. Crocker eventually ended up with a hundred thousand shares.
JUDAH spoke of the Central Pacific as “my railroad,” but it wasn’t, any more than the railroads back east he had built, or the Sacramento Valley Railroad, were his. He had thought of it, dreamed of it, laid out the line for it, gone to Washington to convince the Congress and the President to get behind it. He had invited in the men who financed it. But it wasn’t his.
With the onset of winter in 1862-63, the men whose railroad it was went to work. The Big Four wanted to make big money, just like Doc Durant, George Francis Train, and their cohorts. Big money meant the same as with the UP, milking the construction. So Charlie Crocker drew up a contract awarding the Charles Crocker Contract and Finance Company and several minor companies the right to build the first stretch of the road. That would be Sections 1 to 18, from Sacramento to today’s Roseville. This was later amended, but its essence remained.
It was an almost identical device to the Crédit Mobilier. The Big Four awarded to Charles Crocker & Company the contract for building the road as well as for supplying all materials, equipment, rolling stock, and buildings. Even better than the Crédit Mobilier, according to railroad historian Robert E. Riegel, was the ability of Crocker & Company “to get its accounts into such shape that no one has ever been quite able to disentangle them.”10
All the Big Four were involved in Crocker’s company, but not Judah. Huntington was in New York, which became his permanent home as he raised money and bought needed equipment and supplies, leaving Hopkins with his power of attorney. Judah and Bailey protested, and Judah said at a board meeting of the CP that he openly doubted Crocker’s ability to do the work. But two days after Christmas, the board awarded Crocker & Company the contract. Two days after that, Crocker resigned from the CP board (keeping his stock) to avoid charges of conflict of interest.* His contract named him the general superintendent and called for paying him $400,000 for the first eighteen miles of track, with $250,000 in cash, $100,000 in CP bonds, and $50,000 in stock.
This was almost too much for Judah. He felt “his” railroad was being stolen from him. He suspected, correctly, that all the Big Four were owners of the construction company. He feared they might bankrupt the CP to profit from its building. He wondered why the CP’s treasury was either low or bare while there was always plenty of money for the wagon road out of Dutch Flat, in which he had no interest.11
Judah had a right to complain and he used it often, but, then, the Big Four were also putting in their time and reputation, plus their money. In an interview years later, Crocker pointed out, “We actually spent our own money building that road up to Newcastle [beyond Roseville] and it left every one of us in debt.”12 (Crocker sold his store for the money.) Stanford was trying to get funds from cities—Sacramento and San Francisco especially—and counties and the legislature. Huntington was selling stocks and bonds in the East. But except for loans from the Ames brothers and a few others, the Big Four were operating on their own.
But operate they did. On January 8, 1863, the company had its groundbreaking event. Governor Stanford was there, and Crocker—but Huntington was in New York, Hopkins declined, and Judah was in the Sierra Nevada. Though it rained and was otherwise miserable, there was a large crowd representing every section of the state, high officials, preachers to bless the work, and many ladies. The Sacramento Union called attention to the stands, with the national flag adorning each end, a brass band playing “Wait for the Wagon,” and a large banner bearing a representation of hands clasped across the continent from the Atlantic to the Pacific, with “the prayer of every loyal heart, ‘May the Bond Be Eternal,’” printed on it.
Crocker introduced Stanford. The governor gave a long and dull speech, including this pledge: “There will be no delay, no backing, no uncertainty in the continued progress.” After he was done and a prayer made, Stanford took up a shovel and turned the first earth for the road. Then Crocker turned a spadeful and made a short speech. He promised, “All that I have—all of my own strength, intellect and energy—are devoted to the building [of this road].”
The rhythmic “thud, thud,” of the CP’s steam pile driver—its only modern technology—could be heard working on the banks of the American River. The little ten-horsepower driver was lifting a nineteen-hundred-pound hammer three times a minute and placing thirty-foot pilings into the riverbed at the rate of seven a day. Crocker picked up on the sound and told the audience, “The work is going right on, gentlemen, I assure you.”13
After four decades of agitation, promotion, boosters, politics, demands, concerns, embarrassments, alarm, consternation, delays, and more, the first transcontinental railroad was under way. As the Sacramento Union put it, “Everybody felt happy because, after so many years of dreaming, scheming, talking and toiling, they saw with their own eyes the actual commencement of a Pacific Railroad.”
NOT until February did the ground dry out sufficiently for Crocker to get to work making a grade for the road. The only other work actually under way was the construction of the bridge over the American River at Sacramento. Getting laborers was devilishly difficult. “Most of the men working on the road were merely working for a stake,” Stanford recalled. “When they got that, they would go off to the mines, and we could not hold them, except in rare instances, more than a very little while.” Small wonder in California, where their base pay was less than $3 a day. The Union announced that there were two hundred men at work on the grading, but the work they did was widely separated, and as the diggings went upriver and thus got closer to the gold and silver deposits more men walked off the job.
Crocker decided to take charge himself. He would learn railroad construction by doing it. He later said, “If it becomes necessary to jump off the dock in the service of the company, instead of saying, ‘Go, boys!’ you must pull off your coat and say, ‘Come on, boys!’ and then let them follow.”14 He put all of his 250 pounds into it, bringing energy and dynamism to the job. And he so loved doing it he even gained weight over the next few years.
He shortly had redwood pilings up to thirty feet long stacked on the Sacramento levee, waiting to support the future railroad bridge over the American River, along with timbers for trestles, and imported ties as well Soon the materials were coming in at the rate of a schooner-load a day. Judah, meanwhile, in New York, had ordered forty-two freight cars, six locomotives, six first-class passenger coaches, along with switches, turntables, and other track equipment for the first fifty miles of the CP—leaving Huntington to find some way of paying for them, which he did, despite having to bid against the federal armies.15
THE Pacific Railroad Bill specified that the Sierra Nevada would commence where Lincoln said they commenced. This was a matter of great importance to the men paying the bulk of the cost of building the line. They decided to work on Lincoln, the man responsible, first of all through officials in California. Governor Stanford asked the state’s official geologist, Josiah D. Whitney (after whom California’s hi
ghest mountain is named), where was the point at which the mountains began.
Whitney set off in a buggy with Charles Crocker as his guide. Whitney felt that of course the Sacramento River was the ultimate base of the region’s tilt, and thus the place where the mountains began, but the land to the east was as flat as it could be. Crocker took him to Arcade Creek, about seven miles to the east, and there showed Whitney a fan of reddish earth that came out from the foothills. Whitney said that seemed to him as fair a place to begin as any, and put that opinion down on official paper.
If the CP could get Lincoln to accept that opinion, it would move the Sierra Nevada fifteen miles west, thus bringing the railroad an extra $240,000 in government bonds.
Aaron Sargent, Judah’s old friend, was no longer in the Congress but still in Washington, and he took the information to the President. He showed Whitney’s report to Lincoln and argued for Arcade Creek as the beginning point for the Sierra. Lincoln said that seemed about right to him. As Sargent commented, “Here you see, my pertinacity and Abraham’s faith moved mountains.” (Another report has Lincoln saying, “Here is a case in which Abraham’s Faith has moved mountains.”)16
Judah was opposed. There was no way the mountains began at Arcade Creek. He refused to sign an affidavit, telling Strong he could not because “the foothills do not begin here.”17 But his protest went unheeded. The Big Four were glad to get the extra subsidy. Judah complained to Anna, “I cannot make these men appreciate the ‘Elephant’ they have on their shoulders, they won’t do what I want and must do.” He went on, “We shall just as sure have trouble in Congress as the sun rises in the east if they go on in this way. They will not see it as it is. Something must be done.” But as to what, he couldn’t figure. He certainly couldn’t come up with the money to pay for that something. Nevertheless, he told Anna, “I have brought them a franchise and laid it at their door. Rightly used it gives them unlimited credit throughout the world, and they would beggar it!”18
Nothing Like It in the World The Men Who Built the Transcontinental Railroad 1863-1869 Page 12