Category Archives: railroad

Financing America’s First Transcontinental Railroad

The roles of the Associates and the Central Pacific’s construction of the western leg of America’s first transcontinental railroad are laid out in detail in the past three articles. While the Associates risked their personal wealth in accomplishing their task, the project required far more in resources than they could muster from individual investors. The same was true of the Union Pacific’s principal owners.

In this painting, a rail official drives the golden spike in Promontory, Utah (Source: Politico.com)

In this painting, a rail official drives the golden spike in Promontory, Utah (Source: Politico.com)

The Associates obtained substantial amounts of funding from California and from municipalities, but the greatest source for the national project was the federal government. It seems only fitting that President Lincoln, a former railroad lawyer, signed the first two major pieces of legislation, the Pacific Railroad Act of 1862 and a significant amendment to the Act in 1864.

The 1862 legislation provided for 30-year federal loans at 6% interest, in amounts that depended upon the difficulty of the grade. The “easy grades” generated bonds in the amount of $16,000 per mile. The track in the extremely difficult mountainous regions generated bonds in the amount of $48,000 per mile. Bonds in the amount of $32,000 per mile were issued for track over the high plains. A portion of the funds were withheld until the entire line was in working order. Failure to complete the entire line by January 1, 1874, would result in forfeiture of all rights, including the entire rail line completed as of that date.

In addition, the companies were granted 6,400 acres of land per mile of line completed. The companies were not entitled to mineral rights, but they were entitled to timber and stone on either side of a 400-foot right-of-way.

The 1864 legislation allowed the companies to float their own 30-year bonds at 6% interest, on which the federal government paid the interest the first year and guaranteed the interest payment for the next nineteen years. Authorized amounts ranged from $24,000 to $96,000 per mile. To enhance the marketability of the companies’ bonds the 1864 legislation gave the company bonds first-mortgage status over the government-issued bonds. The legislation also allowed the Central Pacific to extend its track 150 miles across the Nevada line, assuming the Union Pacific did not get ahead of them. Important to both companies, the forfeiture provision was removed.

It is one of four ceremonial spikes driven at the completion of the Transcontinental Railroad (but is not the final golden spike). (Source: Wikipedia)

This is one of four ceremonial spikes driven at the completion of the Transcontinental Railroad (but is not the final golden spike). (Source: Wikipedia)

An 1865 amendment, signed by President Andrew Johnson on July 3, 1866, dropped the restriction against the Central Pacific going 150 miles beyond the Nevada border, allowing the companies to lay track as far as they could until the two tracks met. The race was on and would not end until the driving of the ceremonial golden spike at Promontory Point, Utah, on May 10, 1869, well before the 1874 deadline set in the 1862 Act (but removed in the 1864 amendment).

One may argue whether the legislation was too generous to the railroad companies, but there is little doubt that few investors would have taken on the task without the government subsidies. Much of the West would have remained isolated without the railroad. Before the railroad, goods were shipped either around the southern tip of South America or across Panama. To put matters in perspective, it took upwards of three weeks just to ship mail between New York and San Francisco. Completion of the transcontinental railroad reduced the time to ten days.

Sources: Bain, Empire Express; Lavender, The Great Persuader; Central Pacific Railroad Photographic History Museum, www.cprr.org.

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Edwin B. Crocker, Railroad Lawyer

Born in upstate New York, E.B. Crocker set out for California in 1852, not to dig for gold or to sell to the miners, but to hang his lawyer’s shingle in Sacramento. His brother, Charles, soon followed, not to practice law but to sell to the miners.

tcrr_ecrocker

E.B. Crocker (PBS.org)

The two brothers made up two of the five “Associates,” the men who guided the Central Pacific’s construction of the western leg of the transcontinental railroad, from Sacramento, California, to Promontory Point, Utah. In my prior article, I provided a brief biography of one of the Associates, Collis Huntington, the most successful railroad man of the Gilded Age. The other Associates were Leland Stanford and Mark Hopkins.

As I stated in an earlier article, the Associates largely got along well, each contributing his talents in a collaborative manner, in stark contrast to the men who headed up the Union Pacific, responsible for completing the eastern leg of the transcontinental railroad. I say largely, because Huntington constantly complained about Stanford’s work ethic.

All five men were instrumental in founding California’s Republican Party, not necessarily a popular position in 1856 Sacramento. Stanford later served as California’s governor and appointed E.B. Crocker to the California Supreme Court. E.B. in later years often was referred to as Judge Crocker.

Ultimately, E.B. Crocker served as the Central Pacific’s legal counsel. In that role, he resolved the company’s many legal issues, including the legal details involved in the acquisition of other railroads. But he was much more than that. He regularly exchanged lengthy correspondence with Huntington, who served the company’s needs in the East (purchasing iron and rolling stock; securing financing; lobbying politicians in Washington).

The pressure was enormous. The Central had the onerous task of almost immediately having to drill through the Sierra Nevada granite. The price of Central Pacific bonds rose and fell with the latest rumor. Government subsidies depended upon laying as much track as possible. It was critical that the railroad “end” in a town or city, not in the middle of the Nevada desert or the Utah salt flats. Judge Crocker had to withstand Huntington’s demands to lay off Chinese and Irish workmen when weather prevented work; he knew that doing so might mean he would never get the workers back.

Huntington’s correspondence often chided his western partners when he thought progress was too slow. In turn, Judge Crocker expressed his exasperation with his Eastern Associate, letting Huntington know when he failed to timely arrange for the shipping of rails and other materials required to move forward.

As much as Huntington relished the railroad business, Judge Crocker often expressed his desire to be done with it. His health suffered from the long hours and the stress. He suffered a minor stroke in the spring of 1868. In June, 1869, only one month after officers from the competing railroads drove the golden spike at Promontory Point, he suffered a second stroke, which left him paralyzed. He was done with the railroad. In August, 1869, he and his family set out for a two-year vacation to Europe, where they went on an art buying spree.

Judge Crocker died in 1875. As one of the Associates, he helped to build the wonder of his age, a network of railroads spanning the continent. His widow, Margaret, contributed to his legacy, in the form of many charitable causes. On May 6, 1885, Margaret presented the Crocker art gallery building, grounds, and the E.B. Crocker art collection to the City of Sacramento and the California Association of Museums. The museum was the first public art gallery west of the Mississippi. It remains a vibrant world-class gallery and is located in historic Sacramento.

crocker-art-museum-photo

Crocker Art Museum (Source: TripAdvisor.com)

Judge Crocker’s most colorful child was Aimee, whose autobiography is titled And I’d Do It Again. She married five times and lived an extravagant lifestyle. Among her marriages was one to a European prince. The marriage of American money to European royalty, as portrayed in Downton Abbey, was not uncommon during the Gilded Age. Huntington’s adopted child Clara also married European royalty.

Sources: Bain, Empire Express; Lavender, The Great Persuader. You can learn more about the Crocker family at http://crockerartmuseum.org.

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Collis Huntington: Restless Railroad Tycoon

Collis P. Huntington (Source: Biography.com)

Collis P. Huntington (Source: Biography.com)

Of all the so-called robber barons of the Gilded Age, Collis P. Huntington reigned as the railroad king. He was born near Hartford, Connecticut, in 1821, the sixth of nine children in a humble household. Huntington received a very limited formal education, a few months here and there. His alma mater truly was the school of hard knocks.

As a teenager, Huntington entered the retail business. He traveled the countryside for a number of years, peddling a smattering of household goods. At twenty-one, he went to work for his brother, Solon, who owned a store in Oneonta, New York. Two years later, the brothers formed a partnership.

When news of James Marshall’s gold discovery reached New York, the brothers decided to extend the reach of their business to the California gold fields. Solon financed the venture and Collis made the trip, joined by five fellow Oneontans. They decided to take the shortcut across the Isthmus of Panama rather than sailing around Cape Horn, the route favored by most gold seekers, who feared the cholera, yellow fever, and malaria of tropical Panama more than the rough seas of the Atlantic and the Pacific.

When Huntington’s group reached the Pacific coast, they had to wait six weeks to catch a steamer to California. Huntington did not idle that time away. He walked all over the region, buying goods on the cheap and selling them at great profit to his fellow travelers. By his estimation, he made three thousand dollars during the six-week layover, an enormous sum when one considers that the average American farm worker earned thirty dollars as a monthly wage.

Huntington & Hopkins Hardware Store (Source: Flickr.com)

In California, Huntington successfully sold his goods to the miners and eventually settled in Sacramento, where he and fellow adventurer Mark Hopkins established Huntington & Hopkins Hardware in 1855. Five years later, Huntington was bitten by the railroad bug, in the form of Ted Judah, who visualized a railroad stretching across the American continent. Judah, the railroad prophet, contracted a tropical fever while crossing Panama and died in New York in 1863. Huntington and his business associates, whom Judah inspired, would see to the execution of Judah’s dream, accomplished six years later (May 1869) at Promontory Summit, Utah.

While the pressures of building the transcontinental railroad ruined the health of Edwin Crocker, one of Huntington’s business associates, it only spurred Huntington to do more. Huntington was instrumental in building and controlling railroads throughout the West. Not content there, he helped revive the Chesapeake and Ohio (C&O) Railroad. Huntington planned to build an eastern railroad that would extend from Cincinnati, Ohio, to Newport News, Virginia. He went on to establish the Newport News Shipbuilding and Dry Dock Company, still actively building ships today.

Thus, Huntington’s reach extended over the entire American continent. It is true that some of his success resulted from lining the pockets of politicians at the national and local levels. But he was not the lone sinner in that regard. He was, however, one of the most successful. He took the big chance and received great financial rewards for successfully doing so.

Huntington’s legacy lives on, not only in the railroads and shipyard that survived him, but in the charitable gifts left by his heirs. Those include Mariner’s Museum in my hometown of Newport News; Brookgreen Gardens near Myrtle Beach, South Carolina; and the Huntington Library, Art Collections, and Botanical Gardens in San Marino, California.

Sources: David Lavender, The Great Persuader (Doubleday 1970); David Bain, Empire Express (Viking Penguin 1999).

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The Men of the Transcontinental Railroad

(Source: WXII)

(Source: WXXI)

Building the first transcontinental railroad was the largest engineering and technology undertaking of that time in U.S. history. In the sequel (coming December 2014) to my historical novel New Garden, the construction of the western leg of the transcontinental railroad serves as the primary backdrop for the story. As a preview of sorts, this article centers on “the Associates” of the Central Pacific Railroad Company, who built and financed the railroad that ran from Sacramento, California, to Promontory Summit, Utah. The eastern leg, built by the Union Pacific, ran from Omaha, Nebraska, to Promontory Summit, where the companies drove the ceremonial golden spike on May 10, 1869.

So who were these “Associates,” and what in their backgrounds prepared them for this engineering achievement, even more important in that time than today’s Internet and social media?

Known as the “Big Four,” the primary Associates were Sacramento grocers and hardware retailers: Collis Huntington, Mark Hopkins, Charley Crocker, and Leland Stanford. The fifth, Edwin B. Crocker (Charley’s brother) was a prominent California lawyer. Although Edwin received a civil engineering degree, he opted for the law, so there was no practicing engineer in the entire group. As was true of most Californians at the time, they had come west during the California Gold Rush. They had made their fortunes by supplying the miners, not by digging for gold themselves. Huntington hailed from Connecticut and all the others came from upstate New York.

Union Pacific workers taking lunch in Utah's Uinta Mountains

Union Pacific workers taking lunch in Utah’s Uinta Mountains (Source: PBS.org)

In addition to the engineering challenges at hand, many geographic barriers impeded the process. The Union Pacific’s initial flatland work over the Great Plains proved to be a piece of cake compared with obstacles the Central Pacific encountered – who almost immediately had to tunnel through the Sierra Nevada granite before reaching the easy work east of the mountains. And it wasn’t as if they had to drill only one tunnel; they had to drill fifteen. The longest, Summit Tunnel, required drilling through 1,750 feet of granite at an elevation of seven thousand feet. The Central Pacific also had to deal with Sierra Nevada winters, often lasting from October to June, when snow fell in feet, not inches.

The federal government subsidized the work based on miles of track laid. Although the government provided a higher rate for mountain work than for the easier prairie work, it did not come close to compensating for the greater difficulty of the task.

While the railroad ultimately made the Associates incredibly wealthy, it just as easily could have driven all of them into poverty. It ruined Edwin Crocker’s health. He suffered two strokes before leaving the railroad business behind in August, 1869, for a two-year vacation in Europe.

Mormon workers digging the Union Pacific Deep Cut #1 through Weber Canyon (Source: PBS.org)

Mormon workers digging the Union Pacific Deep Cut #1 through Weber Canyon (Source: PBS.org)

The Associates operated from the Stanford Building’s second-floor offices (known as “Stanford Hall”) at 56-58 K Street, next door to Huntington & Hopkins Hardware, in Sacramento. Charley Crocker worked on the line with one-eyed James Strobridge, driving the thousands of Chinese and Irish workers who graded the roadbeds. The duo also built the bridges, cut through the granite, and laid the track. Huntington went east, where he twisted arms in Washington and bought the iron and rolling stock that was shipped around the southern tip of South America. Treasurer Mark Hopkins watched prices like a hawk. E.B. Crocker did the legal maneuvering in California, while Leland Stanford handled local politics and negotiated with Brigham Young in Utah.

Once the Central Pacific crossed the Sierra Nevada, the workers laid track at a rate of one to two miles per day. Near the end, Charley Crocker wanted to demonstrate how much track his Chinese workers could lay when really pushed. On April 28, 1869, they laid ten miles of track.

While Charley Crocker puffed out his chest with pride, Huntington, who often questioned why Charley did not accomplish more when funding depended on the number of miles laid, had a different reaction, which he put in a letter to Charley on the same day the other railroad men celebrated at Promontory Summit:

I notice by the papers that there was ten miles of track laid in one day on the Central Pacific, which was really a great feat, the more particularly when we consider that it was done after the necessity for its being done had passed.

That was Huntington, about whom I will say much more in another article.

Sources:

  • Bain, David, Empire Express (Penguin Group 1999).
  • Lavender, David, The Great Persuader, (Doubleday 1969).
  • Central Pacific Railroad Photographic History Museum, cprr.org/Museum/Tunnels.html.

Additional Resources:

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Time Zones

You are walking in downtown Philadelphia. You call your friend in Pittsburgh to trash talk about tonight’s 8:00 p.m. game between the Flyers and Penguins in Philly. When the game starts at 8:00 in Philadelphia, it’s 8:00 in Pittsburgh, too, right? Of course, it is. It’s even 8:00 in most of Indiana. The time is the same because the United States adopted four time zones across the lower 48 in the 1918 Standard Time Act.

Before that time, the cities’ clocks could have read differently – 8:00 in Philadelphia, 7:45 in Pittsburgh. Pittsburgh is roughly 188 miles west of Philadelphia and the “real time” based on the sun’s position in the sky differs one minute every 12.5 miles.

Can you imagine a world where every individual’s clock could vary by minutes rather than by the uniform times largely adopted by most countries? There was a time it was so.

You remember the sun dial. Fortunately, none of us have to go out into our garden (sunny days only) to get a general idea about time. As recently as 1850, it really did not matter that much. Few people traveled more than 12 miles each day. Each town could set its clock tower to “real time.”

Sandford Fleming (thecanadianencyclopedia.com)

Sandford Fleming (Source: The Canadian Encyclopedia)

The railroads changed all that. In 1880, one could travel over 200 miles in a single day. Train schedules were a real mess. A Canadian railroad engineer, Sandford Fleming, deserves most of the credit for cleaning up that mess by promoting today’s generally uniform time zones in North America. On November 18, 1883, the North American railroads adopted Fleming’s recommended standard times for the railways. In the following year, the International Meridian Conference – in which Fleming was instrumental – was held in Washington, DC. The conference proposed using the Greenwich Meridian for longitudinal references, and adopted a system whereby the 360-degree circumference of the planet was divided by 24, the number of hours in each day, resulting in 24 international time zones covering 15 degrees each.

Many town and city leaders chose not to follow the example set by the railroads. Old habits are hard to break. So it was 1918 before the federal government required them to fall into line.

For me, it’s tough enough adjusting between standard and daylight savings time. Forget adjusting the watch every time I travel more than 12.5 miles east or west!

Current time zones in the U.S. (Source: NationalAtlas.gov)

Current time zones in the U.S. (Source: NationalAtlas.gov)

For more time-related information, go to the following sources:

“The Invention of Clocks,” http://inventors.about.com/library/weekly/aa072801a.htm

“Invention of Standard Time,” www.thecanadianencyclopedia.com

“U.S. Time Zones,” http://aa.usno.navy.mil/faq/docs/us_tzones.php

“A Brief History of Time Zones,” http://www.timeanddate.com/time/time-zones-history.html

“Standard Time Began with the Railroads,” http://www.webexhibits.org/daylightsaving/d.html

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