On the morning of January 8, 1863, the citizens of Sacramento looked apprehensively eastward to behold the sun rising above the blue Sierra Nevada into a clear sky. Relief triumphed; days of rain were over, leaving swampy Sacramento awash in mud. But the ceremony that noon would now go forward with ample crowds, oratory, and oompah-pah, under a smiling and propitious sky.
Down on Front Street near the levee, just above K Street, laborers swept the puddles off a simple, bare wooden platform and draped flags and patriotic bunting from its railings, while others distributed bundles of hay over the muddy assembly area for relatively drier footing. Two wagons filled with moist earth were driven up, stationed to flank the platform, and then decorated—including their teams of horses—with more flags and bunting. A large banner was unfurled and fixed to one of the wagons: it depicted hands clasped across the continent, the Atlantic joined to the Pacific, with the words MAY THE BOND BE ETERNAL.
By half-past eleven, as expectant crowds began to form, the ten members of the Sacramento Union Brass Band emerged onto the balcony of the American Exchange Hotel and began to serenade the onlookers with lively marches and popular tunes. One current song would be played to the great amusement of all—the ditty “Wait for the Wagon.” The band would repeat the song over and over throughout the festivities to make sure no one missed the joke.
No one did. Nearly all of the population of the capital, and great numbers from outer districts, would soon turn out for the much-heralded groundbreaking of the Pacific railroad. For the most part, with the ground to be broken being so soupy, women ascended to the second-floor balconies of the commercial buildings for drier feet and a better view, or else they remained seated in carriages pulled up behind the crowd. “The great preponderance of pantaloons,” grumbled a reporter for the Sacramento Union, “was a disagreeable necessity of the ‘situation.’”
Shortly after noon, as Governor Leland Stanford appeared on the grandstand, burly, muttonchopped Charles Crocker lumbered forward as master of ceremonies to bring the expectant crowd to order and introduce the governor. In his twelve months in the statehouse Stanford had not improved much as a public speaker, but that day he did manage to rise to the occasion. “The work will go on,” he assured his fellow citizens at one point, “from this side to completion, as rapidly as possible. We may now look forward with confidence to the day, not far distant, when the Pacific will be bound to the Atlantic by iron bonds, that shall consolidate and strengthen the ties of nationality, and advance with giant strides the prosperity of the State and of our country.” Following Stanford, a cleric invoked God’s blessing upon the enterprise and its directors and stockholders, and upon city, commonwealth, and nation.
Then Crocker stepped up again. “The Governor of the State of California,” he bellowed, “will now shovel the first earth for the great Pacific Railroad!” Accompanied by cheers, the two wagons were positioned as Stanford seized a shovel, attacking a pile of dirt “with a zeal and athletic vigor that showed his heart was in the work,” as the Sacramento Union observed, “and his muscle in the right place.” The first clods of earth were deposited for the Central Pacific’s railroad embankment as the beaming Crocker called for “nine cheers.”
A raft of California senators and assemblymen followed Stanford on the grandstand, their speeches frequently interrupted by applause and cheers. One politician, A. M. Crane of Alameda, imagined a rail trip from San Francisco westerly toward the distant Missouri River: breakfast in the Golden Gate city, lunch in Sacramento, dinner in Carson City, and so on, speeding across the desert toward Salt Lake, the Green River in Wyoming, upward through the “magnificent scenery” of South Pass, over to the Platte Valley and the “emerald plains” of Nebraska, arriving finally on the Missouri riverbank some three and a half days after leaving the Pacific coast. Senator Crane did not have to remind his listeners that such a trip had taken him a hundred and more days on foot and by wagon some thirteen years before; nearly every adult man and woman in that Sacramento throng—nearly everyone all up and down the Pacific Slope—had spent up to a quarter of a year overland or at sea to get themselves to that place.
With their pride in their own forbearance and in their new golden land all wrapped up in the bunting of patriotism and piety, as the speeches went on and on (and on and on) they cheered the prospect of a shortened trip to their childhood homes; they clamored at every mention of Abraham Lincoln, the Union, and free soil; they applauded the notion of Nevada statehood, of a cluster of new states—“the happy homes of millions”—rising from the Dakota Territory, of precious metals, progress, and civilization riding the rails in a glorious procession. Dr. Hartwell Carver and Mr. Asa Whitney were at least in spirit in that crowd as one speaker proclaimed that over the road they dedicated that day “the skills of India, the rich tribute of China and Japan, the gold, the wine, and the wool of Australia, the treasures of California, and the spices of the East shall roll in a mighty tide of wealth such as mankind has never realized before. The stormy horrors of Cape Horn shall be forgotten; the sickly terrors of the Isthmus cease to be remembered.”
At least fifteen hundred miles of trackless mountains, deserts, and prairies lay between those first few lumps of railroad embankment at the Sacramento levee and the nearest eastern railhead. In the triumph of the moment, in a collective act of will, that detail was—outwardly, at least, and only for the moment—expunged.1
In contrast to that happy-appearing tumult, four months before, in Chicago at the organizing convention of the Union Pacific Railroad, the mood had been as heavy as those first-flung wet clods of California earth. Organizers hired the capacious Bryan Hall for three days beginning on September 2, 1862, to welcome 163 commissioners whose task would be to elect officers and somehow get the new company moving. Fewer than half of that unwieldy bunch, many of them enemies of the railroad bill, showed up.2
This was probably a blessing. Of the 158 commissioners from twenty-five northern states named by Congress in the Pacific railroad Act (five more were appointed later, in August, by the interior secretary), a fair number were enemies of the bill and of the anointed railroads. Within the sixteen-member California delegation alone, half were, reasonably, allied with the Central Pacific, but the other half included sworn enemies such as John P. Robinson of the Sacramento Valley Railroad, and officials of a number of companies likely to lose business should the transcontinental line go through—such as the Pacific Postal Telegraph Company, the Pioneer Stage Lines, and the California Steam Navigation Company. The composition of other state delegations did not teeter so dramatically with opposing interests, but there were enough unfriendly names to make the prospect of the Chicago convention a potential headache.
Most enemies, however, stayed away from Chicago, finding it too much of a bother or too expensive, as commissioners were not paid. Many friends stayed away, too, including most of the Californians. (One who did attend, and who would continue to play a strong role, was California’s Democratic senator James A. McDougall, chairman of the Senate Select Committee on the Pacific Railroad.) What little debate aired at Bryan Hall touched on issues yet unresolved—such as the eastern terminus on the Missouri River and the official track gauge (both in any case would be decided by President Lincoln). More unanimous was the feeling that the enterprise would never get off the ground—especially in wartime—without more assistance from Congress. Who indeed would be interested in buying second-mortgage bonds of a railroad that did not yet exist? Congress, they felt, would have to amend the 1862 Pacific Railroad Act, though the ink was hardly dry. Dutifully, amid speechifying plainly meant to bolster sagging morale, the delegates elected Mayor William B. Ogden of Chicago, a director of the Mississippi and Missouri Railroad, as president of the Union Pacific; Henry Varnum Poor, editor of the Railway Journal, was named secretary; Thomas Olcutt of Albany was elected treasurer; Peter Anthony Dey, an esteemed engineer associated with the Rock Island and the Mississippi and Missouri Railroads, was appointed chief engineer. President Ogden echoed the mood of the hall when he declared before all that the hard-won railroad act would have to be liberalized “before capitalists will be glad to take hold of it.” He then continued: “This project must he carried through by even-handed wise consideration and a patriotic course of policy which shall inspire capitalists of the country with confidence. Speculation is as fatal to it as Secession is to the Union. Whoever speculates will damn this project.”
Somewhere, the speculators guffawed, and sat back to bide their time. And after the convention closed upon resolving that Union Pacific subscription books be opened on November 1 in thirty-five cities across the United States, the portents of gloom in Chicago came true. There would be no rush of patriotic or evenhanded investors—only a polite knocking could be heard at any agent’s door. Four months of earnest attempts came to this: the company signed up exactly eleven shareholders who spoke for thirty-one shares valued at $1,000 apiece. Only a single investor, one Brigham Young (who was anxious to get a railroad to his Salt Lake City), paid in full for his five shares; the rest paid only the required 10 percent. Of the Union Pacific commissioners—all prosperous men—only two reached for their checkbooks. There remained 1,969 shares to be sold before the company could be legally organized.3
Nearly as dismal was the experience of the Central Pacific, which opened its subscription books in Sacramento and San Francisco in late October, accompanied by a boostering editorial in the Sacramento Union and much energetic solicitation by the company board and its agents. On the first day investors in Sacramento signed for 3,642 shares, at $100 apiece and with 10 percent down. But beyond this promising start, there did not seem to be droves waiting.4
The directors even went out themselves to drum up business, stalking the plank sidewalks of the capital, hand-clasping and back-slapping other shopkeepers and sitting, hats in hand, before the city’s most solid citizens. Charles Crocker recalled the typical response he received: “‘Why, Crocker, are you crazy? You think of building a railroad across these mountains? Why, you have got a good business, what do you want more?’ ‘Well,’ said I, ‘I am going to build this railroad,’ and they ridiculed me, and tried in every possible way to induce me to give it up…. They wanted to know what I expected the road would earn. I said I did not know, though it would earn good interest on the money invested, especially to those who went in at bed-rock. ‘Well,’ they said, ‘do you think it will make two per cent a month?’ ‘No,’ said I, ‘I do not.’ ‘Well,’ they answered, ‘we can get two per cent a month for our money’ [in the Nevada Comstock mines].”5
In San Francisco the story would be even more depressing: only three individuals bought all of fourteen Central Pacific shares. A distance yawned between that and their opening goal of capitalizing $3 million in stock. In fact, by year’s end (as the annual report for 1862 would show) only $24,620 was actually paid into the treasury.
It was, simply put, no season in the Union for any speculation on the future that was not somehow connected to more killing. Twenty-five thousand combatants had been killed, wounded, or missing at Second Bull Run on August 29 and 30, which ended in a sobering defeat for General John Pope’s Army of the Potomac, and resulted in Pope’s replacement by the strutting George Brinton McClellan; two weeks later Confederate forces under the brilliant Robert E. Lee had crossed from Virginia into Maryland, with Stonewall Jackson taking the federal garrison at Harper’s Ferry, before being stalled at Antietam Creek near Sharpsburg, Maryland, on September 17. It became the bloodiest day of the war, with nearly five thousand killed and eighteen thousand wounded on both sides. Antietam was merely a military draw, its only utility being that it drove Lee back off Federal soil and gave Washington a chance to declare a victory in an otherwise dark season. Seizing the political opportunity. President Lincoln released his Emancipation Proclamation on September 22, freeing all slaves in the rebellious states upon the first day of the coming new year.
But still there was little public confidence in the North, still reeling from its human losses. It was clear that from a military standpoint the Union was still adrift. McClellan had refused to press his advantage at Antietam just as he would decline to follow Lee and destroy him when such was possible. In due course he would be removed from command, sent to preen back home in New Jersey. Mistakenly, some mourned when they should have cheered. However, there was little time to cheer. McClellan’s replacement, General Ambrose Burnside, a man long out of his depth, succeeded only in having his army pulverized as it attempted to cross the Rappahannock River at Fredericksburg, Virginia, on December 13. That Burnside would himself be swiftly replaced seemed a foregone conclusion.
Small wonder that patriotic and evenhanded capitalists were in no mood to snap up either stock certificates or mortgage bonds of the Union Pacific and Central Pacific companies, two railroads without a yard of track between them in late 1862. Meanwhile, the speculators so feared by William B. Ogden sat back, content to make their profits from safer industries more closely connected to war, while they waited for Congress to sweeten the railroad pot.
But work had to be started somehow, and for good reason the directors of the Central Pacific were worried. As of November 1 they had formally committed themselves to the government’s terms as specified in the Railroad Act. Somehow forty miles of track, including an expensive bridge over the American River, would have to be constructed—as quickly as possible—before federal aid could commence. There was hope of raising cash in the East from mortgage bonds through intermediaries or through their own efforts. However, expectations of that yield ranged widely. Judah, no businessman, was characteristically optimistic; he put a high value on anticipated revenues from freight haulage and timber sales, which would surely attract capitalists. Huntington’s prediction was, as usual, hard-nosed and conservative; if they unloaded any bonds at all in these tight times, they would be drastically discounted. And intermediaries might prove unreliable. Without any dissension it was decided that Huntington—easily the shrewdest among them—would as soon as possible go East. He would take a headsplitting task: unload their securities at the least humiliating discount, purchase equipment with Central Pacific bonds, and lobby as best he could in Washington and elsewhere to liberalize the 1862 Railroad Act.6
Until Huntington got rolling, what else could be done? Other possible outside funds—aid from the state or from interested counties—would require months of lobbying and snail-paced legislation, and probably public referendums. Even the carrot wielded by Judah to entice the associates into backing him some two years before was thus far producing nothing, although tolls from the Dutch Flat and Donner Pass Wagon Road might someday provide them with operating cash for the railroad. Late the previous May, Huntington had sent Judah’s assistant engineer, Samuel Skerry Montague (formerly of the Sacramento Valley Railroad) up into the Sierra to locate the route, with work commencing later at a slow rate. But they would need to hire an army of laborers in the spring to finish it before anything tangible was realized.
The only immediate answer seemed to be for the directors to dig into their own pockets. Accordingly, Crocker, Huntington, Hopkins, and Stanford each bought 345 additional shares, while Judah, James Bailey, and Lucius Booth subscribed for more modest amounts. Next, hoping to improve upon their mediocre sales (and standing) in San Francisco, the directors moved to solidify an arrangement initiated the previous spring in Washington by Judah and Huntington in return for local political support of the railway legislation. The agreement, which ran outside the 1862 Railroad Act, called for the Central Pacific to assign its rights to land grants and government bonds between Sacramento and San Francisco to four Bay Area businessmen—Peter Donahue, Timothy Dane, Alexander Houston, and Charles McLaughlin—who had incorporated the San Francisco and San Jose Railroad. As the Western Pacific Railroad, they would continue building their road around San Francisco Bay to Sacramento by way of Stockton. The news was released on December 4; they prayed that the news that San Francisco would be the true western terminus of the Pacific railroad would pry open more pockets.7
In the meantime they had to address the question of getting construction started. It would be around this issue that the nearly imperceptible fissure that had opened within the board of directors during the election of company officers in mid-1861 would begin to steadily widen. The usual practice of other railroad companies was to hire outside contractors who would agree to be paid partly in cash but also in railroad securities, easing the cash burden on the corporate treasury. However, this arrangement included an obvious pitfall: all too often, before they finished, contractors had accepted enough stocks or bonds to allow them to wrest control of the company away from the orginators, reaping along the way cash from their inflated estimates. The experience of Colonel Charles Wilson and the Robinson brothers on the Sacramento Valley Railroad was only the closest example of such table-turning.
To Huntington, Hopkins, Stanford, and Crocker—who had taken to calling themselves “the Associates” to distinguish themselves from others on the board with whom they felt less affinity, who had each built himself up from hardscrabble poverty into a pillar of society, who each had a preternatural aversion to being hornswaggled in any deal, grand or petty—there was only one route open. To keep control of the corporation the Associates would have to maintain control of construction. The most obvious answer lay in the massive person of Charles Crocker, physically and temperamentally the best suited on the board to take on such work and the last of the Associates to find himself a useful niche in the Central Pacific: Stanford was clearly the outside political man, Huntington the wheeler-dealer, Hopkins the hawk-eyed keeper of accounts. True, Crocker had spent more than a decade behind a millinery counter. But at forty-one he still looked like a hod carrier; as he would be quick to rationalize later, “I had all the experience necessary. I knew how to manage men; I had worked them in the ore beds, in the coal pits, and worked them all sorts of ways, and had worked myself right along with them.” After striking west from Indiana, he would continue to explain, he had led three combined teams of emigrants through all manners of difficulties all the way to California.8
There was another benefit: as the shrewdest shopkeepers in town, the Associates had always tried to turn, as Crocker often said, one dollar into a dollar and five cents. There were…possibilities inherent in construction contracts, as anyone who had even a nodding acquaintance with civic affairs knew. What public road, what bridge, what municipal building had ever been constructed free of padding? But that could be explored in time.
Almost from the inception of the Central Pacific, the Associates had been meeting separately from the rest of the board. Until December 1862, their fellow directors saw no reason to complain; after all, the four were friends with much in common.9 But when they presented their plan to make Crocker the general superintendent of the line, with his taking on construction of the first eighteen miles of track, the rest of the board—Judah, Strong, Booth, and Marsh—objected strenuously. Beyond the fact that Crocker had no experience as a contractor (the engineer in Judah would not have wanted to ride across a bridge built by Crocker) lay a deeper suspicion which may or may not have been immediately voiced in a full directors’ meeting: Judah and Strong, particularly, suspected that the other Associates stood behind Crocker—and that they intended to bleed the enterprise dry through willful mismanagement and inflated construction charges. By the following month, accusations of fraud would begin to surface in the press; fourteen stockholders (including, it must be noted, grocer Lucius Booth and a “B. R. Crocker,” whose relationship to Charles Crocker is unknown) took it upon themselves to examine the contract, pronouncing it sound and even advantageous to the railroad; however, they did not look into the charge of any illegal interlocking directorship: “The high character of the members of the Board,” they wrote the Sacramento Union, “renders it unnecessary to deny the charge.” Suspicions, though, were hardly laid to rest by their “investigation.”
Despite all objections, Crocker was awarded a $400,000 contract for the first eighteen miles, including the span over the American River; he was to be paid $250,000 in cash and would accept $50,000 in discounted Central Pacific stock certificates and $100,000 in discounted bonds.10 Possibly at Judah and Strong’s insistance, but more probably after consulting with his oldest brother, Edwin Bryant Crocker, who had been retained as the railroad’s attorney, Charles Crocker was apprised of the legal penalties for conflict of interest. So he resigned his place on the board of directors, retaining all his stock, and his brother slipped into his seat. Two days later, on December 27, he put his signature on the construction contract between the railroad and Charles Crocker & Company. (He would cheerfully admit later that there was no “& Company.”) To underscore his total commitment, Crocker began to sell off most of the contents of his store, allowing his clerks to pick up the rest at a good price. Then the directors scheduled their groundbreaking ceremony—with appropriate fanfare—for the eighth day in January.11
By the time Crocker stood puffed up and proud on the speaker’s platform down by the levee, introducing a procession of dignitaries, the new construction boss with no prior experience had subcontracted his work to three builders who knew what they were doing, and who promptly signed on four additional firms to construct parts of their contracted mileage. From the foot of K Street up along eighteen miles of Judah’s little flags to the little settlement of Junction (later Roseville), seven motley construction crews with their pickaxes and shovels and horsedrawn dirt carts would soon be attacking the Sacramento Valley soil, with Charley Crocker riding up and down the line learning what he could by watching. Crocker began to close the ceremony with his own choice words: “It is going right on gentlemen, I assure you! All that I have—all of my own strength, intellect and energy—are devoted to the building of this section which I have undertaken.”12 As he spoke, up the line a steam pile-driver was hammering thirty-foot-long redwood timbers from the Coastal Mountains into the silt at the bottom of the American River for the rail bridge.13
Had an enterprising reporter looked up at that moment at the assembled dignitaries, he might have noted two telling absences among the Central Pacific’s board of directors: where was Theodore Judah? And indeed, where was Collis Huntington? The faithful railroad booster Lauren Upson, editor of the Sacramento Union, was present but made no mention of either in his article; the failure to give a nod in the newspaper columns to his intimate friend Ted Judah almost certainly signifies that the engineer was elsewhere. The only reason why Judah would have missed an opportunity to escort Anna to bask in the commencement of their dream is that he had already sensed that “his” railroad project was in danger of slipping away from him. In such a mood, he would have had no appetite to watch Charley Crocker strutting up and down the muddy platform, mugging for the crowd like a ham actor or a cheap politician and interjecting a comment or a huzzah at every lull in the program. (“It is going right on, gentlemen, I assure you!”) Yes, there was trouble ahead for T. D. Judah.
And Huntington? He had left town two weeks before—for New York and Washington, by sea—head down, poised to charge rhinolike right into the financial nightmare confronting them all.14