the story of the first trans-continental railroad

The Story of theFirst Trans-continental

Railroad

Its projectors, constructionand history

"I Fed the Men who Built It"

Compiled and Publi.W byW. F. BAILEY

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Copies of this work may be procured at $2.00 eachfrom either the Compiler, Fair Oaks, California,or from the Printers, the Pittsburgh Printing Co.,518-520 Seventh Avenue, Pittsburgh, Penna.

COPYRIGHT 1906

BY

W. F. BAILEY

PKItt OFPITTSBURGH PRINTING CO.

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TABLE OF CONTENTS.

CHAPTER PAGE

I. The Project and its Projectors) - . . . 9

II. The Proposition in Congress, 21

III. Mostly Financial, 31

IV. Commencement of the Work, 42

V . Progress Made, 50

VI . Indian Troubles during Construction, G9

VII. The Builders 79

VIII. Completion of the Line, 92

IX. The Kansas Division (Kansas Pacific Ry.) - 103

X. The Denver-Cheyenne Line (Denver Pacific

R.R.) - - 117XI. History of the Line since its Completion, - - 123

XII. The Central Pacific Railroad, 133

APPENDIX.

p

(1) Roster of Officials, - - 141(2) Statistics, 146(3) Nomenclature, - - - - - - - - 148(4) Paddy Miles' Ride, 153(5) Copy Report Engineer in Charge of Survey, -

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For some reason the people of today are not near-ly as familiar with the achievements of the last fiftyyears as they are with those of earlier days.

The school boy can glibly recount the story ofColumbus, William Penn, or Washington, but askedabout the events leading up to the settlement of theWest will know nothing of them and will probablyreply "they don't teach us that in our school"—andit is true. Outside of the names of our presidents,the Rebellion, and the Spanish-American War, thereis practically nothing of the events of the last fiftyyears in our school histories, and this is certainlywrong. "Peace hath her victories as well as War,"and it is to the end that one of the great achieve-ments of the last century may become better knownthat this account of the first great Pacific Railroadwas written.

It was just as great an event for Lewis and Clarkto cross the Rockies as it was for Columbus tocross the Atlantic. The Mormons not only madefriends with the Indians as did Penn, but they also"made the desert to blossom as the rose/' and Wash-ington's battles at Princeton, White Plains, andYorktown were but little more momentus in their re-sults than Sandy Porsythe's on the Republican, Cust-er's on the Washita, or Crook's itv \Yv*

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The construction of the Union Pacific Railroadwas of greater importance to the people of theUnited States than the inauguration of steamshipservice across the Atlantic or the laying of the At-lantic Telegraph. Yet the one has been heraldedfrom time to time and the other allowed to sink intotemporary obscurity.

To make good Americans of the coming genera-tion all that is necessary is to make them proud ofAmerican achievements and the West was and is afield full of such.

t h e building of the Pacific Railroad was one of thegreat works of man. Its promoters were men ofsmall means and little or no financial backing outsideof the aid granted them by the Government. Ittook nerve and good Yankee grit to undertake andcarry out the project. How it was done it is hopedthe succeeding pages may show.

' Fair Oaks, California, 1906.

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Poem read at the Celebration of the opening

of the Pacific Railroad, Chicago,May 10th, 1869.

Ring out, oh bells. Let cannons roarIn loudest tones of thunder.

The iron bars from shore to shoreAre laid and Nations wonder.

Through deserts vast and forests deepThrough mountains grand and hoary

A path is opened for all timeAnd we behold the glory.

We, who but yesterday appearedBut settlers on the border,

Where only savages were rearedMid chaos and disorder.

We wake to find ourselves midwayIn continental station,

And send our greetings either wayAcross the mighty nation.

We reach out towards the golden gateAnd eastward to the ocean.

The tea will come at lightning rateAnd likewise Yankee notions.

From spicy islands off the WestThe breezes now are blowing,

And all creation does its bestTo set the greenbacks flowing.

The eastern tourist will turn outAnd visit all the stations

For Pullman runs upon the routeWith most attractive rations.

—From the Chicago Tribune, May nth, 1869,

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The First Trans-continental Railroad.

CHAPTER I.

The Project and the Projectors*

PRESIDENT JEFFERSON FIRST TO ACT ON A ROUTE TOTHE PACIFIC—LEWIS AND CLARK EXPEDITION—OREGON MISSIONARIES—RAILROAD SUGGESTED—MILLS 1819—THE EMIGRANT 1832—PARKER1835—DR. BARLOW'S PLAN—HARTWELL CAR-VER'S—JOHN PLUMBE'S—ASA WHITNEY—SEN-ATOR BENTON'S NATIONAL ROAD.

It would appear that Thomas Jefferson is entitledto the credit of being the first to take action towardsthe opening of a road or route between the easternstates and the Pacific Coast. While he was in Francein 1779 a s American Envoy to the Court of Versailleshe met one John Ledyard who had been with Cap-tain Cook in his voyage around the world, in thecourse of which they had visited the coast of Califor-nia. Out of the acquaintance grew an expeditionunder Ledyard that was to cross Russia and the Pa-cific Ocean to Alaska, thence take a Russian tradingvessel from Sitka to the Spanish-Russian settlementon Nookta Sound (Coast of CaUiotxvva^

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io First Trans-continental Railroad.

there proceed east overland until the settlements thenconfined to the Atlantic Seaboard were reached.

Through the efforts of Jefferson the expeditionwas equipped and started. The Russian Govern-ment had promised its support but when the partyhad crossed Russia, were within two hundred milesof the Pacific, Ledyard was arrested by order of theEmpress Catherine, the then ruler of Russia, and theexpedition broken up.

Jefferson became President in 1801. In 1803 onhis recommendation, Congress made an appropria-tion "for sending an exploring party to trace theMissouri River to its source, to cross the highlands(i. e. Rocky Mountains) and follow the best routethence to the Pacific Ocean."

So interested was Jefferson that he personally pre-pared a long and specific letter of instructions andhad his confidential man placed in charge. "The ob-ject of your mission," said Jefferson, in this letter ofinstruction "is to explore the Missouri River andsuch other streams as by their course would seem tooffer the most direct and practicable communicationacross the continent for the purpose of commerce."This expedition known as the Lewis and Clark, madein 1804—1806, brought to light much informationrelative to the West and demonstrated conclusivelythe feasibility of crossing overland as well as the re-sources of the country traversed.

As a result the far West became the Mecca of the

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First Trans-continental Railroad. n

fur trappers and traders. Commencing with the As-toria settlement in 1807, for the next forty years oruntil the opening of tne Oregon immigration in 1844,they were practically the only whites to visit it out-side of the missionaries, who did more or less explor-ing and visiting the Indians resulting in the Rev.Jason Lee in 1833 and Dr. Marcus Whitman in 1835having established mission stations in Oregon.

The next record is of one Robert Mills of Virginiawho suggested in a publication on "Internal Im-provements in Maryland, Virginia, and South Caro-lina," issued in 1819, the advisability of connectingthe head of navigation of some one of the principalstreams entering the Atlantic with the Pacific Oceanby a system of steam propelled carriages. (H. R. Doc.173, 29th Cong.) This was before there was a mileof Steam Railroad in the world, and under the thenexisting circumstances was so chimerical as to hardlywarrant mention.

In a weekly newspaper published in 1832 at AnnArbor, Michigan, called "The Emigrant," appearedwhat was probably the first suggestion in print onthe advisability of a Pacific Railroad. The articlesuggests the advisability of building a line from NewYork to the Mouth of the Oregon (Columbia River)by way of the south shore of Lake Erie and LakeMichigan, crossing the Mississippi River between 41and 42 north latitude, the Missouri River about themouth of the Platte, thence to the \JLoctey \^o\w\\axc^

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12 First Trans-continental Railroad.

near the source of the last named river, crossingthem and down the valley of the Oregon to the Pa-cific. It further suggested that it be made a nationalproject, or this failing the grant of three millions ofacres to a Company organized for the purpose ofconstructing it. No name was signed to the article,but the probabilities are that it was written by S. W.Dexter, the Editor of the paper.

With the Whitman party leaving the East for the farnorthwest to establish a Mission Station was theRev. Samuel Parker, a Presbyterian minister, whowas sent under the auspices of the Missionary Boardof his Church to investigate and report on themission situation and to suggest a plan for Christian-izing the Indians. He crossed the continent toOregon and on his return in 1838, his journal waspublished. It presented a very correct and interest-ing account of the scenes he visited. In it he says,"There would be no difficulty in the way of con-structing a railroad from the Atlantic to the PacificOcean * * * * and the time may not be so far dis-tant when trips will be made across the continent asthey are now to Niagara Falls to see Nature's won-ders."

To just whom belongs the credit of being the firstto advocate a railroad to the Pacific Coast is in dis-pute. No doubt the idea occurred to many at thetime they were being introduced and successfullyoperated in the East. The two items referred to

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First Trans-continental Railroad. 13

seem to be the first record 0/ the idea or possibility.About the same time, although the date is not

positively fixed, Dr. Samuel Bancroft Barlow, a prac-tising physician of Greenville, Mass., commencedwriting articles for the newspapers, advocating aPacific railroad and outlining a plan for its construc-tion.

His proposition contemplated a railroad from NewYork City to the mouth of the Columbia River. Asillustrating the lack of knowledge regarding the costand operations of railroads, we quote from his writ-ings "Premising the length of the road would bethree thousand miles and the average cost ten thou-sand dollars per mile, we have thirty million dollarsas the total cost, and were the United States to en-gage in its construction, three years time would beamply sufficient * * * * At the very moderate rateof ten miles an hour, a man could go from New Yorkto the mouth of the Columbia River in twelve daysand a half."

Another enthusiast was Hartwell Carver, grand-son of Jonathan Carver the explorer of 1766. Hisproposition was to build a railroad from Lake Michi-gan (Chicago) to the South Pass, with two branchesfrom there, one to the mouth of the Columbia River,and the other due west to California. South Passreceived its name from being South of the pass ingeneral use. Strange to say his "true Pacific Route"formulated without knowledge of the lay oi t t e taoA



was absolutely the best and the one that today isfollowed by the Union Pacific Railway and affiliatedlines, substituting Granger for South Pass. Carver'sproposition was to build the line by a private cor-poration who were to receive a grant of land for theirright of way, the whole distance, with the privilege oftaking from the public lands, material used in con-struction, with the further privilege of purchasingfrom the United States Government, eight millionacres of selected lands from the public domains atone dollar and twenty-five cents per acre, payable inthe stock of the Company. His road was to be laidon stone foundations and to be equipped with sleep-ing cars, dining cars and salon cars. His ideas asto the cost of the work were far too low, but outsideof this he was seemingly inspired. At the time hewas writing 1835, there were seven hundred andninety-seven miles of railroads in operation in theUnited States. Passenger coaches were patternedafter the old stage coach, the track iron straps onwooden stringers, yet here he was outlining what to-day is an accomplished fact. A railroad with stoneballast from Chicago to the South Pass (Granger,Wyo.) one branch diverging from there to the mouthof the Columbia, (Portland, Ore.,) the other to Cali-fornia, (San Francisco and Los Angeles, Cal.,) tra-versed by trains comprised of sleeping cars, diningcars and buffet cars. The Union Pacific and its con-nections.

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Carver spent the best years of his life and whatwas in those days an ample fortune in endeavoringto further his project. The great opposition to hisplan arose from the proposed diversion of the publiclands and the stock feature, neither Congress nor thepublic taking kindly to the idea of the Governmentgiving lands for stock in a private corporation.

A third proposition was fathered by John Plumbeof Dubuque, Iowa, who suggested at a public meet-ing, held at his home town in March 1838, that a rail-road be built from the great lakes to the ColumbiaRiver. His plan contemplated an appropriationfrom Congress of alternate sections of the publiclands on either side of the right of way. The com-pany to be capitalized at one hundred million dollars,twenty million shares at five dollars each. Twenty-five cents per share to be paid down to provide a fundto commence operations and subsequent assessmentsof like amount to be paid as the money was neededuntil the full amount had been paid in. One hun-dred miles to be constructed each year and the wholeline completed in twenty years.

All of these propositions were more or less vision-ary and advanced by men of theory with little on nocapital. They had the effect of awakening publicinterest and paved the way for a more feasible plan.The question of a Pacific railway, its practicability,earnings, and effect, were constantly before thepeople. In 1844 the idea had become firmly fixed,

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the leading advocate being a New York merchantnamed Asa Whitney, who has been called the "Fath-er of the Pacific Railway/' Mr. Whitney had spentsome years in commercial life in China, returning tothe United States with a competency. Becomingenthused with the idea, he put his all,—energy, time,and money into the project of a transcontinental rail-road, finding many supporters. At first he advo-cated Carver's plan, but becoming convinced that itwas not feasible, he sprung a new one of his own.He proposed that Congress should give to him, hisheirs and assigns, a strip of land, sixty miles wide,with the railroad in the center, this from a point onLake Michigan to the Pacific Coast. This land heproposed to colonize and sell to emigrants fromEurope, from the proceeds build the line, retainingwhatever surplus there might be after its completion,as his own.

Whitney was an indefatigable worker, thoroughlyin earnest, a fluent speaker, both in public and pri-vate, well fortified with statistics and arguments.He personally travelled the whole country fromMaine to fifteen miles up the Missouri River. Thelegislatures of Maine, New Hampshire, Vermont,Rhode Island, New Jersey, Connecticut, New York,Maryland, Ohio, Indiana, Illinois, Michigan, Ten-nesee, Alabama, and Georgia, all endorsed his planby favorable resolutions.

The Senate Committee on public lands made a re-

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port recommending his proposition. Thus stronglyendorsed, his plan was brought before Congress in1848 in a bill entitled "Authorizing Asa Whitney, hisheirs or assigns, to construct a railroad from anypoint on Lake Michigan or the Mississippi River hemay designate, in a line as nearly straight as practic-able, to some point on the Pacific Ocean where aharbor may be had." The road to be six foot gauge,sixty-four pound rails. The Government to estab-lish tolls and regulate the operation of the line, Whit-ney to be the sole owner and receive a salary of fourthousand dollars per year for managing it.

The proposition was debated for days in theSenate and then was tabled on a vote of twenty-sevento twenty-one. The opposition dwelt largely on thelength of time Whitney would necessarily require.Say he could colonize and sell a million acres a year,this would only be funds enough to build one hun-dred miles and consequently the two thousand mileswould require at least twenty years. The defeat waslargely owing to the opposition of Senator Benton ofMissouri, the most pronounced friend of the West inthe House, who used the argument of the power andcapital it would put in the hands of one man, Whit-ney's. This he characterized as a project to giveaway an Empire, larger in extent than eight of theoriginal states, with an ocean frontage of sixty miles,with contracting powers and patronage exceedingthose of the President.

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18 First Trans-continental Railroad,

Upon the defeat of Whitney's project, Bentonbrought forward in 1849 one °f h*s own> f°r a greatnational highway from St. Louis to San Francisco,straight as may be, with branches to Oregon andMexico. The Government to grant a strip one milewide, so as to provide room for every kind of road,railway, plank, macadamized, and electric motor, orotherwise constructed where not so practicable oradvantageous. Sleighs to be used during thosemonths when snow lay on the ground. Funds forits construction to be provided by the sale of publiclands. Bare in mind this was only fifty-six yearsago, but eighteen years before the Union PacificRailway was completed, and was the proposition ad-vocated by the recognized leader of the Senate inmatters western.

Up to the year 1846 when by the treaty of Guade-loupe-Hidalgo, Mexico, ceded to us California,our only territory on the Pacific Coast was Oregonand Washington. The acquisition of California,followed very shortly by the gold discoveries and theconsequent influx of people, gave that state a largepopulation and furnished a prospective business fora Pacific railway. This had heretofore been a matterof theory, very questionable, to say the least, beingbased on very hazy estimates of the prospec-tive volume of trans-pacific business. With an act-ive and aggressive population of three hundred thou-sand in California, practically all of eastern birth and

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affiliations the situation became materially changedand the necessity of railroad communication ap-parent. Both great political parties pledged theirsupport in their quadrennial platforms. Presidents—Peirce, Buchanan, and Lincoln, in their several mes-sages to Congress, strongly recommended its con-struction. The matter had been thoroughly dis-cussed, both in and out of Congress and the wholecountry was convinced of the advisability of its con-struction, and only awaited a leader and a feasibleplan. From 1850 to i860 the question vied withthat of slavery in public interest. Survey after sur-vey was undertaken by the Government and privateparties. Senator Benton being the first to introducea resolution looking to the appropriation of sufficientmoney to pay for a survey. This being in 1851.The question of the North and South, entered intothe matter, as it did everything else in the days pre-ceding the Rebellion. "You shall not build throughfree soil," said the South and "we won't permit it torun through the Slave States," said the North.Compromise was out of the question, and it was notuntil the southern element had been eliminated fromCongress by their secession was any action possible.

It was found that private corporations, duly aidedby land grants from the Government, were able tobuild the necessary connecting links through thecomparatively level country, between Chicago andSt. Louis, and the Missouri River. From \3&fe \&»r



souri River west it was felt that the undertaking wastoo great for any one set of men or corporation, be-sides local interests in California were already in thefield, consequently two companies were determinedupon, one of them working eastward, the other west-ward, and it was thus arranged.

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CHAPTER II.

The Proposition in Congress.

SITUATION 1861—CURTIS BILL OF 1862—AMENDEDCHARTER OF 1864—FURTHER AMENDMENTS—1866—LEGAL COMPLICATIONS IN NEW YORK—CONTROVERSY WITH CENTRAL PACIFIC.

Commencing with the session of 1835, when amemorial on the subject of railroad communicationbetween Lake Michigan and the Pacific Coast, waspresented by Hartwell Carver, up to the present, thePacific Railways have been ever present in Congress.The Catalogue of Government Publications givesone hundred and eighty-five having the Union Pa-cific or Pacific Railroads as their subject.

It is not necessary to recount the many schemesfor the construction of these roads that were pro-posed to Congress. We have already outlined theprincipal ones previous to 1861.

At this time our country was in the midst of itsgreatest difficulties. The North and South unable toharmonize over the slavery question, had recourse tothe arbitration of arms. The Union forces had metwith numerous and severe reverses. The people ofthe Pacific Coast were loud in their demands for bet-ter means of communication. The

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straining to what seemed the breaking point, theircredit and resources to carry on the war and as aGovernment enterprise the building of a Pacific Rail-way was out of the question. All were convinced ofnot only the desirability of such a line but of the ab-solute necessity thereof, and it had resolved itself in-to a question of ways and means. Previous discus-sions had thrashed out the chaff and it now remainedfor Congress to winnow the wheat. Governmentsurveys had demonstrated the existence of five feas-ible routes through or over the Rocky Mountains.The Northern, now followed by the Northern PacificRailroad, the South Pass, Snake and ColumbiaRivers, now traversed by the Union Pacific Railroadto Granger, thence the Oregon Short Line and Ore-gon Railway and Navigation Company. The MiddleRoute-Union Pacific Railroad in connection with theSouthern Pacific Company (Central Pacific Rail-road). The thirty-ninth parallel route, now followedby the Santa Fe Route and the Southern via El Paso,now followed by the Sunset Route. The first twowhile available, could be eliminated owing to theirnot reaching California direct, as could also the twolatter, on account of their traversing in part at least,country that was then in a state of insurrection.

These reasons were in themselves sufficient to de-termine the selection, but with the many other argu-ments advanced, there was no trouble in bringingCongress to adopt practically unanimously the

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"South Pass" "Middle" "True Pacific" Route as itwas variously called. For years this had been theroute of the fur traders and trappers, the emigrant,the Overland Stage, and the Pony Express, and ifthese various interests had agreed as to this beingthe shortest and best route it was evident there weregood and sufficient reasons for their decision, it be-ing incontrovertible that it was the shortest one thatreached the desired territory. Especially as theirdecision was reinforced by the result of numeroussurveys made by the Government.

The bill creating the Union Pacific Railroad wasknown as the "Curtis Bill" from its author, Con-gressman S. R. Curtis of Iowa. It carried the titleof "An Act to aid in the construction of a railroadand telegraph line from the Missouri River to thePacific Ocean and to secure to the United StatesGovernment, the use thereof for postal, military, andother purposes."

This act passed the Senate, June 20th, 1862, by avote of thirty-five to two and became a law July 1st,of that same year. In addition to creating the Un-ion Pacific Railroad Company it also authorized theCentral Pacific Railroad Company to build a railroadfrom Sacramento to the eastern boundary of Cali-fornia, where it was to connect with the Union Pa-cific Railroad. The bill also recognized a Companychartered by the legislature of Kansas under thename of the Leavenworth,

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Railway Company, later known as the Kansas PacificRailway. This latter line was to be built fromLeavenworth west to a junction with the Union Pa-cific Railroad at or near the hundredth Meridian orabout two hundred and fifty miles west of Omaha.

The principal features of the bill so far as the Un-ion Pacific Railroad were concerned, were, the crea-tion of a Board of Commissioners consisting of onehundred and fifty-eight commissioners to representthe interest of the United States Government andwho were to be named by the Secretary of the In-terior. These were to constitute a preliminary or-ganization.

The Union Pacific Railroad proper was to com-mence at a point on the hundredth Meridian, west ofGreenwich, between the Valley of the Platte Riveron the north and the Valley on the Republican Riveron the south, with branch lines to be known as theIowa Branch from said point to the Missouri River.On the west it was to extend to the Eastern bound-ary of California, where it was to connect with theCentral Pacific Railroad.

The Capital stock of the Company was to consistof ten thousand shares at one thousand dollars each,not more than two hundred shares to be held by anyone person. Right of way through public lands wasgranted with the privilege of taking therefrom, with-out charge, earth, stone, lumber, or other materialfor construction purposes. The Company was

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granted every alternate section of land as designatedby odd numbers to the amount of five sections permile, on each side of the road within the limits of tenmiles, not sold, reserved or otherwise disposed of bythe Government, and to which a pre-emption orhomestead claim had not been made up to the timethe road was finally located, mineral lands being ex-cepted. All lands thus granted, not sold or disposedof three years after the line was completed, were tobe sold by the Government at not to exceed one dol-lar and twenty-five cents per acre, the proceeds to ac-crue to the Railroad Company. Nothing but Ameri-can iron was to be used in the rails. As fast as sec-tions of forty miles were completed and accepted bycommissioners appointed by the Government forthat purpose, one thousand dollar bonds of theUnited States bearing six per cent, interest, payablein thirty years, were to be issued to the Companyconstructing the line. Sixteen thousand dollars inbonds to the mile for the distance east of the RockyMountains and forty-eight thousand to the mile forone hundred and fifty miles for the mountain portionof the line. Three-fourths of these bonds were to bedelivered to the railroad Company as the sectionswere accepted, the remaining fourth to be retainedby the Government until the entire line was com-pleted. The bonds to constitute a first mortgage onthe entire line equipment, terminals, etc? The roadto be completed within twelve years, the fast

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hundred miles within two years. Five per cent, ofthe net earnings, together with the entire amountaccruing on transportation furnished the Govern-ment was to be applied to the payment of thesebonds, principal and interest.

The Bill which in reality constituted a Charter,also provided that the gauge of the road and its east-ern terminus should be left to the President of theUnited States to determine.

These somewhat onerous conditions were acceptedby the promoters. Subscription books opened butcapital fought shy of the proposition. Two yearssolicitation only resulted in subscriptions to theamount of two million dollars being paid up in cash.

It being evident that the necessary funds could notbe procured on the terms of the original act, an ap-peal was made to Congress resulting in a supple-mentary act passing the House of Representatives,July 2nd, 1864, a nd soon thereafter becoming law.This increased the amount of the Land Grant to theodd numbered sections within ten miles of either sidethe track, and made the bonds of the Government asecond mortgage instead of first, they to be issued onsections of twenty miles instead of forty, two-thirdsof the bonds being available as soon as the gradingwas done. The limit extended in which the linemust be completed, and but one-half the earnings onGovernment business withheld to meet the bonds.The Company was also authorized to maintain a

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ferry or ferries across the Missouri River at Omahaas a means of connection with the Iowa Lines untilsuch time as they could construct a bridge suitablefor this purpose. Coupled with these favorableamendments were two provisions that eventuallymilitated against the Company. One of them per-mitting the Kansas Pacific Railway to connect withthe Union Pacific Railroad at any point its pro-jectors saw fit at or east of a point fifty miles west ofDenver, Colo., instead of at the hundredth Meridian.This created a competitor instead of a feeder. Thesecond was allowing the Central Pacific RailroadCompany to build on east one hundred and fiftymiles to meet the road from the East instead of stop-ping at the California State line. The restriction toone hundred and fifty miles was withdrawn in subse-quent legislation. This resulted in a race as towhich Company should cover the most ground andinvolved both of them in much additional expense.With the Charter thus amended, the Union PacificRailroad Company which had not thus far done anyreal work, commenced active construction. TheCredit Mobilier was formed to do the actual building,and with many trials, discouragements, and unfore-seen expense, the work was continued to its comple-tion.

The initial eastern point had been fixed by theCharter two hundred and forty-seven miles west ofOmaha—at the hundredth Meridian, branches being

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contemplated to connect it with the Missouri River.In 1866 Congress authorized commencement atOmaha without reference to this fact,—the line toextend from Omaha to a connection with the CentralPacific Railroad.

The question of the gauge or width of track wasanother matter that occupied the attention of Con-gress. The question had by the Charter been left tothe President. There was a divergence of opinionsas to the best gauge for railroad tracks. At thistime the J£rie, and Ohio and Mississippi Railroadsused a six foot gauge. The California legislaturehad fixed five foot as the gauge in that state, whilethe principal eastern roads including the Baltimoreand Ohio, New York Central as well as the Chicagoand Iowa lines, were what is known as standardgauge (i. e. four feet, eight and a half inches.) Acommittee of Parliment had settled on five feet, threeinches as the gauge in England. President Lincolnhad announced himself as in favor of five foot and theCentral Pacific people had ordered their equipmentof that width. The influence of the Chicago-Iowalines as well as that of the Union Pacific people, wasthrown in favor of the so called standard gauge, andon March 2nd, 1863, Congress passed what is one ofthe shortest laws on the Statute Books, namely,

"Be it enacted by the Senate and Houseof Representatives of the United States inCongress assembled, that the gauge of the

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First Transcontinental Railroad* 29

Pacific Railroad and its -branches throughits whole extent from the Pacific Coast tothe Missouri River, shall be and hereby isestablished at four feet, eight and one-halfinches."

In 1869 about the time the Credit Mobilier Com-pany was about to turn the finished road over, dis-gruntled stock and bondholders under the leadershipof "J im Fisk" endeavored to wrest possession fromthe Union Pacific Railway Company. Certain stockwas recorded in his name and although paid for witha check that was refused by the bank on which it wasdrawn, Fisk went into court and secured an injunc-tion preventing the board of directors acting until hisrelations with the Company had been adjudicated bythe Courts. Under cover of these legal proceedingsin the state courts, the New York Offices were forc-ibly entered, the books and securities of the Com-pany removed and a feeling of insecurity and uncer-tainty aroused that caused a serious depreciation inthe value of the securities they were endeavoring tomarket. W. M. Tweede being appointed receiverby the State Courts of such property of the Com-pany as was to be found within its jurisdiction. Itis said the trouble cost the Company some six orseven million dollars. Appealing to Congress, theywere granted authority to remove its eastern office*from New York City to Boston. The next appear-ance in Congress was made necessary by a dispute

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with the Central Pacific Company over the point ofconnection. The Union Pacific Company claimedtheir grade extended to Humboldt Wells, five hun-dred miles west of Ogden, while the Central Pacificin reprisal claimed the line to the western end ofWeber Canon some thirty miles east of Ogden. Thefacts were the two completed lines met at Promon-tory Point fifty-three miles west of Ogden, April28th, 1869. By act of Congress, it was decided thatthe Union Pacific Railroad Company should buildthe line to Promontory where the two roads shouldconnect but that the Central Pacific Railroad Com-pany should pay for and own the line west of Ogden,This was "settled out of Court" and the action ofCongress simply ratified an agreement made by thetwo Companies.

The above covers the more important matters sofar as the action of Congress was concerned. Manyother minor matters received attention at theirhands—both before and since the completion of theroad. As is stated in the opening paragraph of thischapter, the Pacific Railroads have been ever presentin Congress. The more important questions beingreferred to in their order later.

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CHAPTER III.

Mostly Financial.

PRELIMINARY ORGANIZATION—BOARD OF COMMIS-SIONERS—COMPANY ORGANIZED—DIRECTORS ANDOFFICERS ELECTED—HOXIE CONTRACT—CREDIT

• MOBILIER—AMES' INTEREST—COMPROMISE CON-TRACT—DAVIS CONTRACT—COST OF LINE—LANDGRANT.

When the Pacific Railroad Bill passed Congressand received the President's signature in 1862, therewas a well organized company to take hold of thewestern or California end. The Union Pacific or east-ern end was not in such good shape. Thomas C.Durant, who was afterwards Vice" President of theCompany had with a few associates taken a promi-nent part in the matter but no regular organizationexisted.

Under the Charter there were one hundred andfifty-eight persons named, who, together with five to beappointed by the Secretary of the Interior we*-e to con-stitute a "Board of Commissioners" to effect a prelimi-nary organization, open books for the subscriptionof stock and to call a meeting of the stockholders toelect a board of directors as soon as two thousandshares had been subscribed and ten dollars per sharepaid in.

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When the board of directors had been elected, theproperty or rather the proposition was to be turnedover to them and the duties of the Board of Commis-sioners should cease and terminate.

The Company thus organized, should follow estab-lished precedents, stockholders should hold annualmeetings, elect a board of directors, and adopt by-laws and rules for the conduct of its affairs. Thedirectors thus elected to be not less than thirteen innumber, two to be added to their number by appoint-ment of the President of the United States. TheBoard of Directors to elect the officers of the com-pany and exercise supervision.

The Board of Commissioners met in Chicago inSeptember, 1862, and organized, electing W. B. Og-den, President and H. V. Poor, Secretary, as calledfor in the charter, and subscription books were dulyopened. There was no disposition on the part ofmoneyed men to subscribe for the stock and it wasonly owing to a few public-spirited men coming inand taking the two thousand shares that the Charterdid not lapse. When the necessary stock had beensubscribed, a meeting of the stockholders was heldin New York City, in October, 1863, a t which aBoard of Directors were to be elected,—a strangesituation confronted them, there being no man or setof men who were able to assume control, althoughthere were no lack of cliques who were desirous of

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doing so, but these were largely irresponsible partieseither lacking in the necessary capital or not com-mand the confidence of those who did have it.

Something had to be done, and accordingly thirtymen of more or less prominence were elected to theposition of directors, some of them without theirknowledge and some declined to serve. The Com-pany was accordingly organized October 30th, 1863.General John A. Dix, who was elected President, hadbeen a member of the Cabinet and later a general inthe United States Army, was a man who was uni-versally respected. The position was not of his seek-ing, and he gave notice he had neither the time norinclination to give active attention to its affairs andthe burden was practically assumed by the Vice-President Elect, Thomas C. Durant. But two hun-dred and eighteen thousand dollars the ten dollarsper share called for by the Charter on two thousandone hundred and eighty shares had been paid in andfurther funds were not obtainable. Agitation waskept up and due representation made to Congress,resulting in an amendment to the Charter beingpassed. After the passage of the SupplementaryAct in 1864 made necessary by the failure to securefunds, it was still regarded as an unpromising invest-ment for the reason that investors could not feel anyassurance that they or their friends would have anyvoice in the management of affairs or control of theCompany. The capital of the Company ^3& foA&Vj



the supplementary act at one hundred million dollars,(one million shares at one hundred dollars each),consequently any interest holding over fifty millionsof the stock would be paramount and vice versa.Until it was determined who would be in control, in-*vestors fought shy. Under the Charter the sub-scription books must remain open until the comple-tion of the road, making it possible for outsiders towait until the road was near completion and thenstep in and by large subscriptions acquire control.

As there were some funds available, a contract wasentered into in May, 1864, with H. M. Hoxie, tobuild the first hundred miles. This contract was ex-tended to cover from Omaha to the hundredth Meri-dian, two hundred and forty-seven miles, on October3rd, 1864, and on the 7th of the same month assignedto a company (simple partnership) composed ofVice-President Durant and six others, all stockhold-ers of the Railroad Company. The capital of thispartnership consisted of four hundred thousand dol-lars (but a small percentage of the amount necessaryto carry out the Hoxie contract). The members ofthe firm were unable or else unwilling, owing to theimmense personal liability involved, to put up furtherfunds and some other action was necessary.

Durant and his friends accordingly purchased theCharter of a Pennsylvania Corporation of limitedliability and elastic powers, known as the "Pennsyl-vania Fiscal Agency" changed its name by legisla-

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tive enactment to the Credit Mobilier of America.Subscribers of the two million one hundred andeighty thousand dollars of Union Pacific Stock weregiven the option of either exchanging Union Pacificstock for that of the Credit Mobilier, sell their UnionPacific stock to the Credit Mobilier, or turn it backto the Union Pacific Railroad Company and have itredeemed. By this the stockholders of the CreditMobilier became the sole holders of the Union Pa-cific stock.

The Hoxie contract was reassigned to the CreditMobilier who duly completed the work, finishing theline to the point specified October 5th, 1866. Owingto their inability to raise funds, it seemed as thoughthe two companies, Union Pacific and Credit Mobi-lier, would fall down. There was no sale for theFirst Mortgage bonds of the railroad, the Govern-ment bonds were but little better, being worth butsixty-five cents on the dollar. Durant and his friendswere not men of wealth nor did they command theconfidence of wealthy men. The Company had be-come greatly involved and was compelled to sellsome of its rolling stock to pay pressing debts. Itwas at this junction that Oakes Ames entered thefield, being persuaded, it is said, to do so by Presi-dent Lincoln who desired to enlist his well-knownexecutive ability and capital in the enterprise.Through the efforts of himself and associates thepaid up subscriptions were increased to two and ahalf million dollars.

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36 First Trans-continetital Railroad.

The original or first contract made with Hoxiefor a hundred miles had been extended to cover upto the hundredth Meridian, and the line to that point,two hundred and forty-seven miles from Omaha, wascompleted October 5th, 1866.

The second contract made was with a Mr. Boomerfor one hundred and fifty-three and thirty-five hun-dredths miles from the hundredth Meridian west, atthe rate of nineteen thousand five hundred dollarsper mile for that part of the distance East of theNorth Platte River and twenty thousand dollars permile west thereof. Bridges, station buildings, andequipment to be additional. This contract was alsoassigned to the Credit Mobilier. On this, fifty-eightmiles were completed when dissensions arose, oc-casioned by financial stringency among the stock-holders of the Credit Mobilier. Vice-PresidentDurant going into court, compelled suspension ofaction on the third contract, made March 1st, 1867,with one J. M. Williams who had assigned it to theCredit Mobilier. This covered two hundred andsixty-six and fifty-two hundredths miles, commenc-ing at the hundredth Meridian at the rate of fiftythousand dollars per mile. For a time matters wereat a standstill, injunctions preventing the.completionof present or the making of new contracts.

Finally a compromise was affected between thetwo factions, Durant and his friends on the one side,and the Ames interests on the other.

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Under this, a fourth contract was made withOakes Ames for which he was to receive from forty-two thousand to ninety-six thousand dollars per mileor forty-seven million nine hundred and fifteen thou-sand dollars for six hundred and sixty-seven miles,commencing at the hundredth Meridian. This it issupposed is the largest contract ever made by one in-dividual. It was later transferred by Oakes Ames toseven trustees acting for the Credit Mobilier, he andhis brother Oliver Ames being among the number.This last contract carried the line to nine hundredand fourteen miles from Omaha.

The fifth contract was made with J. W. Davis forone hundred and twenty-two miles at twenty-threemillion four hundred thousand dollars, and was inturn assigned to the same seven trustees for com-pletion. In adjustment of accounts the Union Pa-cific Railroad Company would turn over to the Cred-it Mobilier or the Trustees for the Credit Mobilier inpayment for the work as fast as it was completedFirst Mortgage (Union Pacific Railroad) Bonds,Government Bonds, Union Pacific Railroad IncomeBonds and Union Pacific Railroad Stock, these beingsold or hypothecated by the trustees, furnished themthe necessary funds required to pay for the construc-tion work.

As the Union Pacific Stock could only be sold forcash at par according to act of Congress, notwith-standing it was only worth thirty cents on the

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market, the Railroad Company would give theircheck to the Credit Mobilier on construction ac-count and this check could then be used in paymentof stock, making it a cash transaction.

In settlement of the several contracts, the UnionPacific Railroad Company paid the Credit Mobilier:

Hoxie Contract MilesOmaha to iooth Meridian.. 247 $12,974,416.24

Ames Contractiooth Meridian West 667 57,140,102.94

Davis ContractTo point five miles west of

Ogden 125 23,431,768.10

I°39 $93*546,287.28

These figures represent stocks and bonds at parand deducting amount of depreciation, would bringthe actual cost of the Main Line Omaha to Ogden toabout seventy-three million dollars.

There were issued in payment for this construc-tion, equipment, station building, and the expense ofthe Company during the construction period.

Government Bonds $ 27,236,512.00First Mortgage Bonds . . . 27,213,000.00Income Bonds 9,355,000.00Land Grant Bonds 9,224,000.00Union Pacific Stock 36,000,000.00

$109,028,512.00

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the story of the first trans-continental railroad

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