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

by Walter R. Borneman

  What California traffic the 35th parallel line did see was fraught with delays, bungled bills of lading, and misplaced freight cars. Even when California shippers specified a routing via the Southern Pacific–Atlantic and Pacific–Santa Fe line, “freight often became lost or delayed rather mysteriously between Needles and San Francisco.”7

  Then disaster struck the newly completed California Southern. In December 1883 and January 1884, almost seven inches of rain fell at the Fallbrook weather station just downstream from normally arid Temecula Canyon. During February, rainfall of more than fifteen inches was recorded. The “brawling” Santa Margarita River through the gorge became a rising torrent. The man who found the pinecones had been right. The rushing water picked the track clean from its narrow perch and swept away bridges as if they were piles of kindling. San Diego learned the worst of the news on February 20, when passengers stranded by a rock slide near the southern end of the canyon walked into town.

  To some, rebuilding the track in Temecula Canyon was a foregone conclusion. These included the Boston crowd, which footed the repair bill. To do otherwise would have abandoned their Southern California toehold and played right into Huntington’s hand. By late summer 1884, about one thousand men were at work in the canyon putting the rails and bridges right back where they had been. Others weren’t so sure about the decision. “Well,” mused one old-timer, “I have lived here a great many years and I don’t think you can ever put a railroad in that canyon which will stand.”

  The line was finally reopened to through traffic between San Diego and San Bernardino on January 6, 1885, and San Diego’s ten-and-one-half-month isolation—after barely five months of rail service—was over.8

  • • •

  Meanwhile, the Atlantic and Pacific was hardly a road to nowhere, but given the freight situation along the Southern Pacific west of Needles, neither was it a paying concern. With the completion of a substantial and permanent bridge over the Colorado River at Needles in the summer of 1884, the Santa Fe faced one of those crossing-the-Rubicon moments that either make or break great corporations.

  From whichever of its western termini the Santa Fe looked—Deming, Needles, or the Sonora Railway—the Southern Pacific in one manner or another acted as a sieve to filter its traffic and impact its rates. The Santa Fe could continue to operate as it was and attempt to extract some profit from the Atlantic and Pacific’s massive though largely undeveloped land grants. But that was hardly in keeping with William Barstow Strong’s mantra that a railroad must ever expand its markets and territories or die.

  A second option for the Santa Fe was to abandon the Atlantic and Pacific line and retrench the railroad’s core business on the plains and in the Midwest. That, too, was untenable for Strong, although one might speculate which result of this option Strong feared most: Huntington’s taking advantage of the abandoned Atlantic and Pacific route and streaking into the Santa Fe’s stronghold of New Mexico, or Cyrus K. Holliday’s howl of indignation at abandoning the long-held Pacific dream. No, neither the status quo nor a retreat was an option to Strong. That left one other alternative: an all-out attack.

  Leaving the Atlantic and Pacific as its unsteady subsidiary between Albuquerque and Needles, the Santa Fe proposed to strike west from Needles on its own and, if need be, parallel the entire route of the Southern Pacific for 600 miles from there to San Francisco. Huntington was far more concerned by this direct threat to San Francisco than he had been by the struggling efforts of the California Southern. But for once, the man whose partners had tried to rein him in at Yuma, had begged him not to throw out more branches, and had watched in awe as he juggled a myriad of complicated financings, was himself short of cash.

  In part, this was because Huntington had great plans to join a number of eastern roads, including the Chesapeake and Ohio Railroad, to the Southern Pacific at New Orleans to make one single transcontinental line under his personal control. The complexities of Huntington’s plan in the East were mind boggling, but the ramifications in the West were simple and beneficial to the Santa Fe.

  Huntington was never one to fight unnecessary battles, particularly on multiple fronts. His need for cash became even more desperate after the country’s financial markets suffered a sharp downturn. The result was that Huntington sat down with William Barstow Strong—just as he had years before with Tom Scott and later with Jay Gould—and hammered out another compromise.

  First, the Atlantic and Pacific bought the recently completed 242-mile Southern Pacific line between Mojave and Needles for $30,000 per mile on what was technically an extended lease-purchase. This was almost the same as selling the line to the Santa Fe, but perhaps Huntington’s ego required that he preserve the fiction of the Atlantic and Pacific as an independent. Huntington’s own influence in the Atlantic and Pacific disappeared when he sold his shares in the Frisco about the same time as part of his marshaling of cash.

  Second, Huntington granted what once would have been unthinkable. The Southern Pacific gave the Atlantic and Pacific trackage rights between Mojave and San Francisco Bay via its San Joaquin line over Tehachapi Pass for an annual rental of $1,200 per mile, if the Atlantic and Pacific chose to use it. It also offered terminal facilities in Oakland and San Francisco. Both of these provisions were acknowledged to be assignable to either the Santa Fe or the Frisco should it become successor to the Atlantic and Pacific—a likely prospect even then.

  But what was Huntington getting out of this besides cash? The answer was even more cash. The Santa Fe and the Frisco agreed to purchase $3 million of Atlantic and Pacific bonds of dubious marketability that were held by the Southern Pacific. Huntington’s Pacific Improvement Company had bought the bonds at 50 percent of par when it was constructing the Mojave-Needles line, and now Huntington was glad to cash them out for the same amount.9

  The Huntington-Strong agreement became operational on October 1, 1884, and Atlantic and Pacific trains could steam across the bridge at Needles and climb across the ranges of the Mojave Desert to the Southern Pacific line at Mojave. That left an 80-some-mile section between the Atlantic and Pacific’s Mojave line and the railhead of the California Southern at San Bernardino. In between lay Cajon Pass.

  Ten years before, Huntington’s surveyors had faced off here against the men of the Los Angeles and Independence. Now, with perhaps a sigh of the inevitable, the Southern Pacific did not contest the route, as Santa Fe surveyors worked upgrade from the Mojave flats and hacked a line through the piñons and junipers to Cajon’s summit. Much of the grade on the southern side had already been staked in anticipation of the California Southern’s extension from San Bernardino.

  Once work crews repaired the flood damage in Temecula Canyon, they were dispatched north to Cajon Pass in January 1885. Many were veteran Chinese laborers; others were Mexican graders who had been working on the Santa Fe’s Sonora Railroad. Work was slow, and the uphill grade out of San Bernardino reached 2.2 percent. Here, too, the floods of the previous year had sent torrents of water down the canyon. Paying closer attention to the high water line this time, construction engineer Fred Perris moved the originally surveyed route to higher ground above normally dry Cajon Creek Wash.

  By July 19, the right-of-way was graded as far as Cajon Station, about 5 miles from the 3,775-foot summit of the pass. Around what much later came to be called Sullivan’s Curve and along Stein’s Hill, the grade climbed at 3 percent. Just above Pine Lodge, the mouth of the tunnel that the Los Angeles and Independence had started in 1874 was choked with bushes and rockfall. Perris opted to avoid tunneling and instead dug out a series of deep cuts as the line climbed the final miles to the summit.

  Meanwhile, another crew was working south from a little station called Waterman on what was now the Atlantic and Pacific’s Mojave line. Westbound toward Cajon Pass, the grades were easier. The rails were joined on November 9, 1885, just below the summit on the south side, but the ensuing celebrations were not without another test of nature. Perris had moved the g
rade above the high-water line along Cajon Creek Wash, but he had failed to design culverts for the runoff streams that gushed down the smooth side canyons and pooled alongside the fills and embankments. The deep cuts posed a similar hazard and spewed mud onto the tracks before they were properly supported with a framework constructed from timber, or cribbed.

  These problems were soon corrected and the obstacles overcome. In fact, the Santa Fe installed a modified version of the snowshed through some of the deeper cuts. Terraced hillsides were roofed over with wooden structures that angled outward from the center to channel runoff water to the ends of the cut and prevent it from falling directly onto the tracks.10

  Even as this construction across Cajon Pass was completed late in 1885, William Barstow Strong had his share of critics among the normally loyal Boston press. Strong was criticized for having paid too much for the Mojave line. Some said that its very acquisition had been Huntington’s cagey way of blunting the Santa Fe’s drive to build an independent line to San Francisco. Still others found fault with Strong’s rescue of the flooded California Southern. But in the battle for California—which was far from over—one name would in time seem prophetic. The little way station of Waterman, where the Cajon Pass route now cut south from the Mojave line, was renamed not Potter for Huntington’s middle name, but Barstow in honor of Strong’s.11

  Meanwhile, San Diego waited expectantly for regular train service to commence. The San Diego Union could barely contain its enthusiasm: “San Diego is out in the highway of the world’s activity to-day,” an editorial proclaimed, “and needs to make haste to take her position in the onward march. It is an era of new ideas, new methods, new enterprises and new men. It is the day of the nimble dime rather than of the slow dollar. Old fogyism must go to the rear.”

  The first through train to the east pulled out of San Diego on November 16, 1885. The town paraded a little band for its send-off, but the real celebration was at San Bernardino. There the town turned out en masse to speed the train over Cajon Pass and cheer its place on what was at last a transcontinental line through California controlled by parties other than the Big Four.

  Ten days later, the first through Pullman from Kansas City steamed into San Diego, and the San Diego Union predicted in far more tempered tones that the city would enjoy “a period of moderate expansion.” What had happened to cool its ardor? The answer: stark economic reality.

  Huntington, having lost his bid to hold the Santa Fe at Needles because of a need for cash, now sought to parry its further extension beyond the California Southern by granting it trackage rights into Los Angeles. For the same annual rental terms that he had just extended for the line into San Francisco, Huntington gave the Santa Fe the right to operate trains on the 54-mile Southern Pacific line between Colton and downtown Los Angeles. Suddenly Santa Fe traffic descending Cajon Pass into San Bernardino could either proceed directly west to Los Angeles and its port of San Pedro or follow the California Southern line south to San Diego through tempestuous Temecula Canyon.12

  San Diego was outraged even as it cheered the arrival of its first transcontinental train. Three days later, the first Santa Fe train operated over the Colton line into Los Angeles, which could now boast of not one but two transcontinental connections. It was a reminder that San Diego’s own battle with its California neighbors was far from over, its own future far from resolved.

  To the Santa Fe, San Diego had long been an important piece on the western chessboard, but the game itself was still San Francisco. With trackage rights down the San Joaquin Valley and now also into Los Angeles—and less than booming business in San Diego—the Santa Fe relegated the California Southern to a branch line, not the terminus of a great transcontinental system.

  “San Diego should have anticipated from the very start,” the Los Angeles Times lectured, “that this new overland system would make San Francisco its ultimate objective point.” Recognizing its own town’s secondary status, the Times freely admitted, “San Francisco is the Rome of the Pacific Coast: all roads lead to it.”

  And when it came to betting between Los Angeles and San Diego, the choice for the Santa Fe was equally clear. “It doesn’t stand to reason,” a Santa Fe official confessed somewhat apologetically, “that the road can afford to put those little merchants [in San Diego], who have only two or three straight carloads of through freight in a year, on the same footing with men here who have as much in a week … Los Angeles is our natural and inevitable western terminus.”13

  William Barstow Strong had his own take on the matter. It had, in fact, been purely economic. “Railroading is a business wherein progress is absolutely necessary,” he told his shareholders. “A railroad cannot stand still. It must either get or give business; it must make new combinations, open new territory, and secure new traffic.”14

  If the battle for California was only about access into the state’s markets, the Santa Fe had clearly won. But that did not mean that the war between the Southern Pacific and the Santa Fe was over. At the same time, on its eastern flank, the Santa Fe would have to face Jay Gould again.

  15

  Gould Again

  Throughout his business career, Jay Gould was simultaneously engaged on multiple fronts. To the casual observer, his actions all over the chessboard seemed erratic. To disgruntled opponents, Gould’s propensity to anticipate, execute, and usually profit from seemingly unrelated moves was proof that he was an unscrupulous corporate raider in the worst sense of the term. Indeed, generations of business and railroad historians never mentioned Gould’s name without the requisite adjective preceding it: infamous, nefarious, manipulative, and ruthless, to name a few of the kinder ones.

  Thanks in large measure to the insightful investigative work of historian Maury Klein, Gould’s reputation has undergone a reappraisal in recent years. Gould and his so-called “robber baron” contemporaries were no more one-dimensional than similar tycoons today. Certainly, in a choir that included Collis P. Huntington, William Jackson Palmer, and Thomas A. Scott, Gould hardly deserved to be singled out as “the supreme villain of his era.”1

  One might question Gould’s movements, one might be envious of his successes, but on a one-to-one basis, even his adversaries admired his forthrightness. “I know there are many people who do not like him,” his rival and occasional partner Collis P. Huntington remarked, but “I will say that I always found that he would do just as he agreed to do.”

  Similarly, the head of a commission investigating the affairs of the Union Pacific Railroad was obliged to admit, “I have always found, even to the most trivial detail, that Mr. Gould lived up to the whole nature of his obligations. Of course, he was always reticent and careful about what he promised, but that promise was invariably fulfilled.”2

  And General Grenville Dodge, who built the Union Pacific and whose reputation remained largely above cutthroat railroad shenanigans, worked with Gould for two decades without complaint. Dodge, who perhaps had his hand in more railroad construction in the West than anyone, said of Gould, for whom he built the Texas and Pacific and other legs of the Missouri Pacific system, “When we discussed any question and came to a conclusion and Mr. Gould said, ‘General, we will go ahead,’ or do this or that, no matter what it meant or into what difficulties we got, I never had doubts as to where Jay Gould would stand.”3

  Gould’s reputation as somewhat of a loner may have come from the fact that he was leery of people wanting something from him. But that appears to have made him value his closest friends and family all the more. “I appreciate your friendship very highly,” Gould confided to Silas Clark, his longtime business associate, “because I know it is the real stuff.” As for his family, Gould was devoted to his quiet and shy wife, Helen, and their six children, particularly eldest son George and darling daughter Helen. Wall Street may have shuddered at Gould’s approach, but underneath his receding hairline and jet-black beard, Gould’s family knew him as a doting teddy bear.4

  All this is not to say th
at Jay Gould was not a stickler for detail. Indeed, as will be seen some pages hence, Gould frequently held his opponents to the most minute points of a particular contract while using his multiple holdings to overlook its broader spirit. As the 1880s progressed, Gould’s overriding goal became the consolidation of a major east-west transcontinental system under his independent control. He went about it with much the same imperial, entrepreneurial spirit as Collis P. Huntington.

  This meant that the other railroads of the Southwest, chief among them the Atchison, Topeka and Santa Fe, were never quite sure where Gould would strike next. Just as the Santa Fe’s entry into California did not mean that its battles against Huntington and the Southern Pacific were over on the western end of its line, there would never be any rest from the continuing machinations of Jay Gould in the East. Gould’s assault on the Santa Fe was complicated and multifaceted, but it generally occurred in three stages.

  Initially, Gould negotiated with uneasy bondholders to acquire the Kansas Pacific. The Santa Fe had also been interested in the Kansas Pacific, but Gould outmaneuvered the Boston crowd. His leveraged purchase in 1879 and subsequent quick sale to the Union Pacific—a tactic he used frequently—“transformed a rival into a useful ally.” Not only did this impact the Santa Fe across Kansas and into Colorado markets, but Gould and the Union Pacific were suddenly a powerful force within Colorado as well.5

  The second major stage of Gould’s expansion was the completion of the Texas and Pacific and its alliance with Gould’s developing Missouri Pacific system. The result was that the Santa Fe was now shadowed across the plains by Gould lines—the Missouri Pacific to the north and the Texas and Pacific to the south—as well as the Union Pacific–Kansas Pacific system.

  The third stage of Gould’s western puzzle was his version of the “straight west from Denver” theme. After besting the Santa Fe in the Royal Gorge and reaching Leadville, William Jackson Palmer had built over Marshall Pass and beat his rival, John Evans and the Denver, South Park and Pacific, to Colorado’s Western Slope. By 1883, Palmer had pushed the Denver and Rio Grande beyond Gunnison, through the depths of the Black Canyon, and on into Utah and a connection with the Union Pacific at Ogden. (Palmer interests had been building east from Ogden since 1881, and the rails were joined at Green River, Utah, on March 30, 1883.)