Two days later, on May 8, Judah called for a meeting of the Senate Pacific Railroad Committee. Once again there were troubles and delays. Representative Justin Morrill of Vermont, who could be farseeing on some matters,II commented sourly that those who were putting up the capital were not interested in building a railroad west from the Missouri River, or in the Central Pacific, if it went farther east than the Nevada silver mines, through uninhabited territories. The railroad, he charged, was interested in grabbing off subsidies at either end. Besides, Morrill grumbled, the nation could hardly afford both guns and railroads. Why not wait until after the war?45
Judah stayed with it. When the war was over—surely not too long now—there would be lots of ex-soldiers looking for work, lots of money from investors seeking profitable ventures, lots of need for the railroad. Robert Russell argues that, because the war had accustomed Congress to appropriations of vast proportions, the bill went through; he adds that it was a matter of pride with many congressmen “to demonstrate that the Union was strong enough to crush rebellion and take measures to insure its future prosperity at the same time.”46
On May 23, 1862, Judah wrote to the editors of the Sacramento Union, “The Pacific Railroad is a fixed fact and you can govern yourselves accordingly.” He added that the bill would come up for a vote “in about 10 days when, should our armies have met with no serious reverses, we may reasonably expect the passage of the Pacific Railroad Bill through the Senate.”47 That same day, Confederate General Stonewall Jackson led eighteen thousand men on an attack at Front Royal in the Valley of Virginia to force the Union forces to retreat to Winchester, where he again struck and routed them on May 25. Jackson then marched north, and suddenly the capital was under threat.
But Jackson was stopped—he had to march toward Richmond because of McClellan’s threat to that city—and the Senate passed the bill on June 20, by a vote of 35 to 5. The House concurred in the Senate amendments a few days later and sent the completed bill forward to the President. Lincoln signed it on July 1, even as Malvern Hill, the last battle of the Seven Days’ Battles in the Peninsula, was being fought, costing McClellan’s army a thousand dead and three thousand wounded and greatly depressing the nation.
THE Pacific Railroad Bill was complicated to an almost incomprehensible degree. It had to be substantially changed two years later, and still was the basis for innumerable lawsuits over the next two decades and eventually the creation of the Populist and the Progressive parties. But its basic outline was what Judah wanted. It called for the creation of a corporation, the Union Pacific (the name being a nice touch in 1862), that would build west from the Missouri River, while the Central Pacific would build east from Sacramento. Capital stock of the UP was to be a hundred thousand shares at $1,000 each, or $100 million. Both roads would have a right of way of two hundred feet on both sides of the road over public lands and would be given five alternate sections (square miles) on each side per mile, or sixty-four hundred acres per mile.III
The railroad corporations would receive financial aid in the form of government bonds at $16,000 per mile for flat land, $32,000 for foothills, and $48,000 per mile for mountainous terrain after they had built forty miles approved by government commissioners. They would also get land for stations, machine shops, sidings, and other necessary structures, as well as whatever they needed in the way of earth, stone, timber, and other available materials for construction.
The corporations could get advance money in the form of 6 percent government bonds. This was a loan, not a gift; the bonds were to constitute a first mortgage on the railroads. The government was loaning its credit, in other words, not its money—the railroads would have to sell the bonds. And pay for them. The contract was that the government should pay the 6 percent interest on the bonds in semiannual payments, but that the whole amount of the loan, principal and interest, should be repaid in thirty years, minus the sum of the value of the services performed for the government during that time in carrying mails, transporting troops, government stores, and so forth.
The Central Pacific was required to complete fifty miles within two years and fifty miles each year thereafter, and the entire road was to be completed by July 1, 1876, under pain of forfeiture.48
That was by no means all of it, but it was enough for Judah to flash the first word to his Sacramento colleagues by the newly established telegraph: “We have drawn the elephant. Now let us see if we can harness him.”
HOW well he had done his work can hardly be imagined today. At the time, forty-four members of the House, seventeen senators, and the secretary of the Senate tried to sum it up. They gave Judah a signed written testimonial of appreciation:
Learning of your anticipated speedy departure for California on Pacific Railroad business, we cannot let this opportunity pass without tendering to you our warmest thanks for your valuable assistance in aiding the passage of the Pacific Railroad bill through Congress.
Your explorations and surveys in the Sierra Nevada Mountains have settled the question of practicability of the line, and enable many members to vote confidently on the great measure, while your indefatigable exertions and intelligent explanations of the practical features of the enterprise have gone very far to aid in its inauguration.49
If any one man made the transcontinental railroad happen, what Horace Greeley called “the grandest and noblest enterprise of our age,” it was Theodore D. Judah.
Henry V. Poor, at the time the editor of the American Railway Journal, said that the North, upon the outbreak of the Civil War, “inferring its powers from its necessities, instinctively and instantly made a bold and masterly stroke for empire as well as for freedom.”50
* * *
I. This was the first public use of the name Central Pacific.
II. He was the sponsor of the Morrill Act, which granted to each loyal state thirty thousand acres for each senator and representative for the purpose of endowing at least one state agriculture college. The “Morrill Land Grant” act made possible the great state universities. It passed on July 2, 1862.
III. Far from costing the government anything, the granting of land meant that the alternate sections retained by the government would increase enormously in value as the railroads progressed and finally joined.
Chapter Four
THE BIRTH OF THE UNION PACIFIC
1862–1864
THE men who founded the Union Pacific were like Lincoln’s generals, some of them good, many of them bad, most of them indifferent. No American president had ever before had to fight a civil war involving hundreds of thousands of troops. No one had founded anything like the Union Pacific, which, like the Central Pacific, had in front of it the most formidable task imaginable.I The wonder isn’t how many things they screwed up, but how much they did right.
THE 1862 Pacific Railroad Act authorized the creation of the Union Pacific Railroad.II The bill mandated the 163 men appointed in the act to serve as a board of commissioners who were to work out a provisional organization of the company. They held their first meeting in Chicago. They were prominent railroad men, bankers, and politicians, with five commissioners appointed by the President. When the three-day meeting opened on September 2, 1862, only sixty-seven of the directors bothered to attend and, like those who were absent, they had deep doubts about how this railroad was going to be built. They selected Samuel R. Curtis as temporary chairman; Curtis at this time was a major general in the Union Army. Mayor William B. Ogden of Chicago was made president, and Henry V. Poor of New York, editor of the American Railway Journal, secretary. Everyone present agreed with Samuel Curtis’s belief that, “notwithstanding the grant is liberal, it may still be insufficient.”1
The directors also agreed that their biggest problem was the first-mortgage nature of the government bonds, which would make it near impossible for the company to sell its own bonds. But there were many other difficulties needing attention. Most of all the project needed promoters who were tough and practical. Men who could lo
bby Congress for a new, more generous bill as well as convince their fellow citizens to buy stocks and bonds in the company. Men who would organize the vastest enterprise ever seen in North America, except for the Union and Confederate armies, and push the railroad across the continent in the face of every obstacle.
GENERAL Dodge, meanwhile, was cutting a swath for himself in the Union Army. He was wounded at the Battle of Pea Ridge, Arkansas (March 6–8, 1862), and it was while he was recovering in the hospital in St. Louis that men interested in the Pacific railroad had visited him and urged him to leave the army. “I have enlisted for the period of the war,” was Dodge’s reply.2
Two months later, he had got another plea to quit the army and go to work for the Pacific railroad. This time it came from Peter Reed of Moline, Illinois, a politician and promoter of the Rock Island line. With the Pacific Railroad Bill on the verge of passing, he reminded Dodge, “You once told me that if we could get the Pacific railroad through you would quit the army and identify yourself with it. In the first place, Dodge, you cannot possibly last where the labor and excitement are so great. . . . The Pacific railroad is a big lick in your affairs and mine, and you can hardly keep out.”3 Dodge again refused.
In June 1862, out of the hospital, Dodge wrote his wife, “I am at my old job again—railroading.” The Union Army had to build its own lines to move troops and supplies in the South, and Dodge was building a road sixty-four miles long, to Corinth, Mississippi. He stayed with building new roads or repairing old ones. In his memoirs, Grant said of Dodge, “Besides being a most capable soldier, he was an experienced railroad builder. He had no tools to work with except those of the pioneer—axes, picks and spades.” He had men making the tools, others working on bridges, others making the grade, still others laying the track. “Thus every branch of railroad building,” Grant wrote, “was all going on at once. . . . General Dodge had the work finished in forty days after receiving his order.”
Grant was destined to play a major role in the building of the American railroad system. Like Lincoln, he was enamored with the trains. He had first seen one while on his way to West Point in 1839. It ran from Harrisburg to Philadelphia. When he got on it, “I thought the perfection of rapid transit had been reached. We traveled at least eighteen miles an hour when at full speed, and made the whole distance averaging as much as twelve miles an hour. This seemed like annihilating space.”4 That last sentence summed up exactly the sentiments of the thinking men of the age.
After Dodge had completed laying the track to Corinth, Grant put him to repairing lines torn up by the enemy. “The number of bridges to rebuild was 18, many of them over deep and wide chasms; the length of the road repaired was 182 miles.”5 As Dodge’s biographer J. R. Perkins says, with only a bit of exaggeration, “Railroading was new; much of the machinery was defective, and the art of road building was all but in its infancy.”6
Nevertheless, Dodge did magnificently, impressing Grant and his other superiors and railroad men. For example, he put in crib piers for the Mobile and Ohio Railroad. When officials of the company, after the war, ordered them taken out and truss bridges put in, one of them examined the wartime work and remarked, “General Dodge must have thought the war was going to last forever.”7
His wife wrote him that she wanted him to resign and take up the $5,000-per-year salary the railroad was offering if he would become the chief engineer for the UP. Dodge wrote back, “My heart is in the war; every day tells me that I am right, and you will see it in the future.”8
BEFORE adjourning on September 5, 1862, the first meeting of the appointed directors of the Union Pacific arranged to open stock-subscription books in thirty-four cities and advertise the sale in numerous newspapers. With the glittering promise of a transcontinental railroad that looked to make tons of money, and with all the loose cash floating around from wartime profits and inflation, the directors were certain—or at least hopeful—that the Northerners would flock to do their patriotic duty and sign up. Alas. In the first four months of sales, a grand total of forty-five shares were sold to eleven brave men.
Brigham Young, leader of the Mormons, was easily the biggest buyer, and the only one to pay in full, for his five shares, which made him the UP’s first—and for a long time only—stockholder “in good standing.”9 Doc Durant, the Wall Street speculator who had apparently put up the money for some of the other purchasers, bought twenty shares (at 10 percent down) for himself and made the rounds of his friends, looking for them to subscribe. George Francis Train, an erratic promoter and self-styled “Champion Crank,” who had earned a fortune in shipping and had been involved with Durant in a speculation on contraband cotton, took twenty shares.
DODGE was a man who had no fear of taking risks. In the spring of 1863, he had in his camp nearly one thousand former slaves who had walked off their plantations to gather around Union troops. Dodge put them to work. Then he said to reporter Charles A. Dana, “I believe that the negroes should be freed. They are the mainstay of the South, raising its crops and doing its work while its able-bodied men are fighting the government.” Dana published the statement. Dodge went further in his actions than in his words. He began arming former slaves, saying as he did so that “there is nothing that so weakens the south as to take its negroes.”10
From the perspective of the twenty-first century, Dodge was exactly right. But among the men of the 1860s era, he created great consternation. They were not at all sure they wanted the slaves to be free, and for sure they did not want the African Americans bearing arms for the Union. Thus Dodge was surprised and worried when, in the spring of 1863, he received a dispatch from General Grant ordering him to proceed to Washington to report to President Lincoln. There was no explanation, and Dodge confessed, “I was somewhat alarmed, thinking possibly I was to be called to account.” But on arriving in Washington, he discovered that Lincoln wanted to talk railroads, even though Robert E. Lee and the Army of Northern Virginia were just then preparing to march into Pennsylvania.
The President had been charged by the act of 1862 with fixing the eastern terminus of the UP. He recalled his 1859 talk with Dodge and wished to consult with him. Nearly every village on the Missouri River wanted the transcontinental to start at its site. Lincoln showed Dodge pleas from towns on both sides of the Missouri, from fifty miles above and below Council Bluffs. “I found Mr. Lincoln well posted in all the controlling reasons covering such a selection,” Dodge wrote, “and we went into the matter at length and discussed the arguments presented by the different competing localities.”
Dodge reiterated his belief in the Platte Valley route, with Omaha as the best terminus. He pointed out that, from a commercial and engineering point of view, there was no other choice. The great Platte Valley extended from the base of the Rocky Mountains in one continuous reach for six hundred miles east to the Missouri River. And, Dodge added, he had surveyed the valley the whole way and then crossed the mountains, and told Lincoln that the divide of the continent at the head of the river ran through an open country not exceeding eight thousand feet in elevation, while to the north and south the Rocky Mountains towered from ten to thirteen thousand feet high.
In his blunt manner, Dodge also told Lincoln that the act of 1862 had many deficiencies in it, which he enumerated, adding that they made it difficult to raise capital. Lincoln agreed and said he would see what could be done. He was very anxious that the road should be built and wanted to do his part. And he agreed with Dodge about the terminus.
Dodge told him it would be difficult at best for private enterprise to build it. He said he thought it should be taken up and built by the government. Lincoln interjected that the government would give the project all possible aid and support, but could not build the road. As Dodge remembered his words, Lincoln said that the government “had all it could possibly handle in the conflict now going on, [but it] would make any change in the law or give any reasonable aid to insure the building of the road by private enterprise.”11 This was un
precedented, beyond anything imagined by either Alexander Hamilton or Henry Clay, the first secretary of the Treasury and the later senator, who had started the promotion of government aid to internal improvements.
ELATED by the President’s reaction, Dodge took the train to New York, where he met Durant (“then practically at the head of the Union Pacific interests,” in Dodge’s words) and told him of Lincoln’s views. Durant “took new courage” at the news, as Dodge recalled.
Durant also asked Dodge once again to resign from the army and go to work for the UP. Dodge once again refused. He had just said publicly, “Nothing but the utter defeat of the rebel armies will ever bring peace. . . . I have buried some of my best friends in the South, and I intend to remain there until we can visit their graves under the peaceful protection of that flag that every loyal citizen loves to honor and every soldier fights to save.” That was a splendid speech, straight from the heart.12 It speaks volumes about Dodge’s patriotism and dedication.
But if he could make a little money out of the war, and out of the railroad, he was willing. He wrote Durant of his desire “to identify myself with the project in some active capacity. But I probably can do you more good in my present position while matters are being settled by Congress and others.” Once Lincoln had announced the terminus, Dodge added, Durant should “telegraph my Brother at Council Bluffs, so that he can invest a little money for me. . . . Bear this in mind.”13
EVEN with Durant and Train out there selling for all they were worth, and even though the Union won a major victory at Gettysburg on July 1–3, 1863, and another when Vicksburg surrendered to Grant on July 4, it was not until September, a whole year after the shares went on sale, that two thousand shares were subscribed at $1,000 each—the minimum 10 percent that had to be put down for a $10,000 share. With the down payment, there was a total of $2 million for a road that was going to cost anywhere from $100 million to $200 million or perhaps more.