Rival Rails: The Race to Build America's Greatest Transcontinental Railroad

by Walter R. Borneman

  By “last winter,” Huntington may have been referring to the Royal Gorge battle. But the Santa Fe had gotten a portion of Colorado’s traffic east of Pueblo without the expense of new construction and had not let the fray divert it from larger goals. “Still,” Huntington told Crocker—perhaps with some element of wishful thinking—“I cannot believe that any set of people that have been slashing around as they have, will ever make a perfect success, and I believe they will come to grief sooner or later.”21

  Huntington rarely underestimated a competitor, but he may have continued to do so with the Santa Fe when he finally sat down with William Barstow Strong in Boston. The two adversaries agreed that the Santa Fe could use Southern Pacific tracks between an undetermined point in southwestern New Mexico and Benson. In retrospect, it appears that Strong was willing to make this agreement on behalf of the Santa Fe because it meant a quick leap forward of approximately 175 miles toward its Sonora Railway subsidiary and the Mexican port of Guaymas. Strong also assumed that the Santa Fe would share in the Southern Pacific’s east-west traffic.

  For his part, Huntington seems to have thought that he had clearly gotten the better of Strong and had blunted further Santa Fe construction westward. “We agreed to this memorandum of contract,” Huntington reported to Leland Stanford, “thinking it would give them [the Santa Fe] time to learn the whole situation of matters on that side, and that as soon as they did, they would hardly think of building through on the 35th parallel, or building the Guaymas road.”22

  Thinking that whatever point the two roads joined was destined to become a great railroad center, Stanford may have had a hand in suggesting that the junction be named after Charley Crocker’s wife, Mary Ann Deming. Exactly where “Deming” would be located was still uncertain during November 1880, as the Southern Pacific built east from Lordsburg and the Santa Fe left the Rio Grande Valley at Rincon and struck southwest.

  “Water, of course, will be the principal thing that will influence them in selecting the point,” general superintendent A. N. Towne reported to Huntington. But that didn’t stop the speculators from swarming. South of Cookes Peak and the old Butterfield Overland stage route, a tent city sprang up that was christened “New Chicago” in anticipation.

  To finalize the meeting point, chief engineers George E. Gray of the Southern Pacific and A. A. Robinson of the Santa Fe met about 10 miles east of the Rio Mimbres in mid-December. This point was a few miles west of New Chicago, so its promoters simply packed up their tents and moved the short distance to Deming. The Southern Pacific inaugurated service into town at the same time.

  Before long, the new town boasted “thirteen saloons, two groceries, two Chinese laundries, one barber shop, one restaurant, one butcher shop, and one cigar store.” It was a typically rowdy railhead town. “Deming morals,” reported a visiting editor, “are not to be discussed in a newspaper—till she has some.”23

  Whatever early Deming might have lacked, the Atchison, Topeka and Santa Fe was eager to arrive there. In its 1880 annual report, the railroad reported that it had increased its total mileage about four hundred miles during the year, “and we shall have reached before the annual meeting the Southern Pacific Railroad at Deming, one hundred and twenty-eight miles further. From this connection, we expect a large business from California and the mining districts of Arizona.”24

  Indeed, when Santa Fe tracklayers reached Deming on March 8, 1881, William Barstow Strong and his associates had little reason to expect anything less. A silver spike was driven not only to join the two lines but also to commemorate the completion of the country’s second transcontinental railroad.

  Yes, it was true. Eleven years and ten months after the golden spike ceremony at Promontory Summit, Utah, the Big Four had done it again. A southern transcontinental line now stretched all the way from San Francisco to Deming, New Mexico, via the Southern Pacific, and from Deming to Kansas City, Missouri, via the Santa Fe. Cyrus K. Holliday’s little road had grown into a key part of a transcontinental system. But few, including Collis P. Huntington, it turned out, paid much attention to the accomplishment.

  Among those who did notice, the Boston Herald—almost a hometown paper for the Santa Fe, given the large numbers of its Boston investors—made a very prophetic observation. “The southern way will without question be the favorite winter route to the Pacific,” the paper predicted. “Tourists for pleasure, who otherwise would like to make a winter trip to California, together with invalids whose delicate lungs have yearned for the balmy air of the Golden State, have shrunk from the hardships of the bleak journey across the snowy plains of the Union Pacific route, with its threatening delays from the furious storms that often block the way and bury the trains in their terrible drifts. But hereafter they may make the journey through the warm air and perpetual sunshine of New Mexico and Arizona direct to Southern California, the most perfect sanitarium on earth …”

  Perhaps a bigger and even more prophetic pronouncement came from the Railway Times of London. “This month witnesses the opening of the new route to the Pacific, an event which is probably of as much significance in American railroad history as anything which has occurred in railroad construction since the opening of the first transcontinental line,” the paper observed. It was to be of great value to general commerce, of course, but it “is also calculated to promote the development of a vast region of the Southwest and Pacific coast …”25

  The Santa Fe’s first through train from Kansas City to the Southern Pacific’s connection at Deming departed late on the evening of March 17, 1881. Behind engine no. 85 was a consist (those cars making up the train) of eight cars: two express cars, a baggage car, three coaches, and two Pullman sleepers. Fares for the first run all the way from Kansas City to Los Angeles were advertised at $105 for first-class passengers and $47.50 for the lowest “emigrant” class—the latter the equivalent of about $1,000 in 2008 value.

  But there was not to be a mad rush to California—at least not now and not over this Santa Fe–Southern Pacific route. There was a very good reason why Collis P. Huntington was not cheering his connection with the Santa Fe. He had his eye on developments in West Texas that he hoped would prove far more lucrative. He simply was not willing to share business into Southern California and Arizona when he could retain control of it via San Francisco.

  To encourage the continuation of such roundabout, cross-country shipping, the Southern Pacific imposed excessive rates on all freight bound for Arizona and Southern California that originated on the Santa Fe. In response, the Santa Fe complained directly to Huntington, asserting, “the steps taken by the So. Pacific seem of the most unfriendly kind.”

  Particularly onerous was a prohibitory tariff from Tucson to Deming that “prevented all business from going east or from coming from the east.” According to the Santa Fe, “a carload of beer coming from St. Louis to Tucson paid $400 to reach Deming, and had to pay $200 from Deming to Tucson.” Within a week of the opening of the line to Deming, “the Santa Fe announced that no coast-bound freight would be accepted over the route.”26

  William Barstow Strong and his Boston cohorts were annoyed by this result, but they were far too experienced and far too seasoned businessmen to throw up their hands in despair. They were far from finished in the transcontinental sweepstakes, but for the moment, about all the Santa Fe got after arriving in Deming was a handshake.

  12

  West Across Texas

  Having brushed off the Atchison, Topeka and Santa Fe at Deming, Collis P. Huntington and the Southern Pacific pushed eastward. At stake were connections with railroads that were rapidly building west across Texas. If Huntington could keep the supply of rails coming and his fidgety partners happy about construction costs, he hoped to meet these competitors as deep into Texas as possible.

  Texas was no stranger to railroads. It had hardly declared its independence from Mexico when the Republic of Texas chartered the Texas Rail Road, Navigation, and Banking Company in December 1836. Its sw
eeping name and authority to construct railroads “from and to any such points … as selected” raised cries of monopoly, and no track was ever laid.

  Prior to its admission as a state in 1845, the Republic of Texas granted three other railroad charters. All envisioned lines from various points near the Gulf Coast to the Brazos Valley, but, again, no rails were put down. The projected line from Harrisburg (on Buffalo Bayou, just east of Houston) to the Brazos, however, became the precursor to a succession of incorporations that by 1853—the year of the western railroad surveys—had constructed a 20-mile segment from Harrisburg to Stafford. This Buffalo Bayou, Brazos and Colorado Railway was the first operating railroad in Texas.

  Other short lines soon followed, although railroad operations and new construction suffered during the Civil War, as they did throughout the South. Among those companies to survive the war with some momentum were the Houston and Texas Central Railway running generally north-south and the westward-bound Buffalo Bayou, Brazos and Colorado.

  Building south from Missouri to tap the Texas cattle trade, the Missouri, Kansas and Texas Railway—the venerable Katy—reached Denison, Texas, on the Red River on December 24, 1872. When the Houston and Texas Central also reached Denison the following year, the spreading web of Texas railroads had its first connection to the nationwide rail network.

  Meanwhile, the Buffalo Bayou, Brazos and Colorado reorganized as the Galveston, Harrisburg and San Antonio Railroad and built into San Antonio by February 1877. By then, its principal stockholder was Thomas A. Peirce, and locals commonly called the road “the Peirce line.” The railroad itself, however, adopted the moniker the Sunset Route. By then, Tom Scott’s Texas and Pacific had cobbled together some lines in East Texas and reached Fort Worth.

  By the end of 1879—as the Southern Pacific was building across Arizona—there were 2,440 miles of railroads in Texas. Fewer than 100 miles, however, lay west of a line generally south from Denison through Fort Worth to San Antonio. East of that line, Texas was crisscrossed by tracks. West of that line, it was an entirely different matter. To understand the railroad moves into the emptiness of West Texas, it is necessary to backtrack a few years and review Thomas A. Scott’s transcontinental exploits.1

  By late 1870, the principal backers of the Union Pacific Railroad—among them brothers Oliver and Oakes Ames and Thomas Durant—had finally stretched their credit to the breaking point. Unable to meet their January 1871 interest payments, they approached J. Edgar Thomson and Thomas A. Scott for assistance. From their early westward expansion of the Pennsylvania Railroad to their postwar investment in the Kansas Pacific, Thomson and Scott had made no secret of their transcontinental interests. Despite their many other commitments, they found the lure of the Union Pacific impossible to resist.

  When a myriad of financial moves were complete, Thomson, Scott, and two of their Pennsylvania Railroad cronies—budding steel magnate Andrew Carnegie and sleeping car innovator George Pullman—were on the Union Pacific’s board of directors, and Scott had been elected to its presidency. This infusion of Pennsylvania Railroad capital and experience gave an immediate boost to Union Pacific stock and the creditworthiness of the railroad’s bonds. The optimism, however, was fleeting.

  The winter of 1871–72 struck with a particularly harsh vengeance and stranded Union Pacific trains from Wyoming across the Great Plains. For almost an entire month, the line sat silent. While Scott struggled to respond, Huntington fumed about the lack of through traffic to the Central Pacific and boasted that his men routinely operated across the Sierras through much worse. It is likely, however, that the Union Pacific’s plight served to harden Huntington’s resolve to control a more southerly transcontinental route on his own.

  But more than blizzards soon overwhelmed Scott. Growing controversy over the Crédit Mobilier scandal, the Missouri River bridge project, and relationships with connecting lines demanded far more attention than Scott was able to give to the Union Pacific. He was simply spread too thin. Scott was “an able man,” Oliver Ames conceded, “but he is so loaded with work that we have but very little of his service.”

  One action that Scott and his Pennsylvania group did take only served to infuriate the Union Pacific old-timers. Having bought in at low stock prices to rescue the road, the Pennsylvanians proved fleeting in their loyalties and were quick to sell at handsome profits. Carnegie even advised Oakes Ames to sell out above $30 per share, claiming the road “was not worth that.” At the March 1872 shareholders meeting, Thomson, Scott, and Carnegie were not reelected to the board of directors.

  Thus “the vaunted Pennsylvania connection,” wrote historian Maury Klein, “departed as abruptly as it had come.” The Union Pacific turned to Cornelius Vanderbilt’s son-in-law Horace F. Clark as its new president. Clark had been running the Lake Shore and Michigan Southern Railroad, which linked Vanderbilt’s New York Central with Chicago. Their alliance with the Union Pacific and a deal with the intervening Chicago and Northwestern Railroad threatened to unify a through line under one group’s control from Utah to the East Coast. It also, of course, continued the historic New York Central–Pennsylvania Railroad rivalry well westward and—most important to the Texas railroad story—pushed the axis of Thomson and Scott’s interests southward.

  One is tempted to speculate what might have happened had Scott been able to manage the Union Pacific juggernaut as well as his other interests. In the end, his brief flirtation with the Union Pacific showed the extent of his insatiable railroad appetite and caused him to redouble his efforts with the Texas and Pacific.2

  The man who stepped into Tom Scott’s shoes as the chief financier of the Union Pacific was none other than Jay Gould. As it turned out, Gould, too, would come to have more than a passing interest in Texas railroads.

  Jay Gould was born in 1836, in Roxbury, New York, in the western hollows of the Catskill Mountains. His given name was Jason, after one of his father’s brothers. He was a sickly lad who followed five sisters into the family, and he grew slowly in body and mind. By his late teens, having been largely self-taught, young Jay worked as a surveyor and map-maker and also published a 426-page history of surrounding Delaware County. Among his circle of friends was John Burroughs, who would achieve almost as much fame as a naturalist as Gould would as an entrepreneur.

  Gould’s first major business ventures were in leather tanneries. They were marked both with a steep learning curve that Gould readily climbed and by strained relations with his partners that gave Jay his first taste of protracted litigation. Unlike William Jackson Palmer, who was the same age, Gould eschewed service in the military during the Civil War and instead spent his time quietly and obscurely learning the ways of Wall Street.

  Along the way, Gould practiced such secrecy in his business dealings that some contemporaries claimed it was proof of chicanery rather than calculating shrewdness. Even his closest advisors were frequently uninformed and oblivious to his plans. As one early business associate complained, “He never disclosed to his lawyers, or to anyone else except the particular ally chosen for the particular venture, what he was about to undertake—and never, to anyone, the full extent of what he had in mind.”

  But Gould would not operate below the public radar for very long. The event that made him anathema to those who detested the power of Wall Street involved the Erie Railroad. Squeezed between Vanderbilt’s New York Central and Thomson’s Pennsylvania Railroad, the Erie had been built to link New York City with the Great Lakes. By 1867, the road was being actively courted by both Vanderbilt and Boston interests who hoped to ally it with the Boston, Hartford and Erie Railroad.

  When the complicated maneuverings of the 1867 annual meeting of the Erie Railroad were done, its board of directors included, among what the Boston Herald called “a batch of nobodies,” a stockbroker named James Fisk, Jr.—so little known that some papers recorded his name as “Fiske” or “Fish”—and another listed simply as “J. Gould.” Within a year, these two nobodies wrestled control of the
Erie for themselves, and Gould assumed the presidency of his first railroad.

  Gould and Fisk next turned to gold. Through a variety of agents, they quietly began amassing a large gold position and watched its price climb. On what came to be called Black Friday, September 24, 1869, Gould sold heavily in anticipation of the government putting $4 million of gold on the market. When that announcement was made midday, prices plummeted. Many investors blamed Gould and Fisk for the debacle. Gould was said to appear “quite depressed,” but subsequent events suggest that his demeanor was simply a façade to mask huge profits made in the run-up.

  “Gentleman Jim” Fisk came out of the attempted gold corner more flamboyant than ever. He was soon wallowing in a torrid love triangle that involved opera star Josie Mansfield and threatened to drag the secretive Gould through the mud with him. When Josie’s other paramour shot Fisk dead on the steps of New York’s Grand Central Hotel, Gould was suddenly without a partner, and he tried to return to a lower public profile.

  But the Erie affair and the attempted gold corner—no matter what Gould’s ultimate proceeds—were enough to mark Gould with disdain in many circles. The immediate result was that Gould was forced out of the presidency of the Erie, although not without a satisfactory settlement. Looking around for another venture—railroads were hard to ignore—Gould began investing in the Union Pacific. When Tom Scott left the Union Pacific in 1872 and his successor, Horace F. Clark, died suddenly about a year later, the Union Pacific faced another leadership vacuum into which Gould readily stepped.