DR. CLINTON HART MERRIAM was working in his cramped office at the US Department of Agriculture on the morning of March 25, 1899, when Edward H. Harriman arrived uninvited and introduced himself in what Merriam recalled as an “unassuming, matter-of-fact way.” The visitor informed Merriam that he was planning to cruise the Alaskan coast in a private steamer and planned to bring along a party of scientific men. Could Merriam help him select the passengers?
Merriam scrutinized his visitor quizzically, his lips pursed behind his drooping bottlebrush mustache. Contemplating this proposal by a stranger to bring fifteen or twenty eminent naturalists along on a family vacation, he thought at first he must be the victim of a hoax. But in due course he would help launch one of the most unusual ventures undertaken by a business leader entering the prime of his career. At a moment when he had millions of dollars of crucial transactions pending on Wall Street, Harriman absented himself for a two-month expedition to the coastal wilderness of Alaska.
The moment provided a nearly perfect illustration of the differences between Harriman and Pierpont Morgan in their approaches to business and to their avocations outside business. At the same time when Harriman was making arrangements for his Alaska trip, Morgan was preparing for an expedition of his own—in his case a pleasure cruise to Europe. Morgan boarded the liner Majestic, bearing a shopping list of books, manuscripts, and artworks for acquisition, on April 5, only a few days after Harriman had materialized in Merriam’s doorway. For the next ten weeks Morgan “had a grand time” in the marketplaces, Herbert Satterlee reported. He bought two entire libraries—of the private collector James Toovey and of the late third Earl of Gosford—and numerous other antiquarian rarities, including books printed on vellum and illuminated manuscripts from the fifteenth century. He spent his idle hours shopping and dining out, and before the end of the month he had reached Aix-le-Bains, his favorite watering hole in the South of France. Harriman was also on a collecting spree—but his quarries were scientists and scientific knowledge.
As for business matters, Morgan occupied himself in the final years of the millennium with extending the principles of industrial consolidation he had applied to the railroads to new industries, such as steel and electric lighting (efforts soon to culminate in the creation of United States Steel and General Electric). Harriman’s work was devoted to consolidating his own railroad holdings rather than casting his net wider.
In so many ways, Harriman and Morgan seemed to be following divergent paths in this critical period. But their courses would soon converge—and dramatically.
THE PERIOD SPANNING the last half of 1898 and the first few months of 1899 had been the most productive of Edward Harriman’s railroad career. His dominating concern at the time was the Herculean reconstruction of the Union Pacific—replacing equipment, realigning tracks, and shoring up its finances—following his election as its chairman in May 1898. But he also extended his influence deeper into the railroad industry through his involvement in three major reorganizations.
The first was the Chicago & Alton, a once-proud road connecting Chicago, St. Louis, and Kansas City that had fallen far behind its competitors in construction and maintenance. By 1898, when a group of discontented shareholders invited Harriman to take it over, the road was facing extinction. As an expert who examined its condition observed, the Chicago & Alton “had not added one mile of road in seventeen years” and had “little or no reserve capacity to conduct a larger business.” With his new partners—James Stillman of the City Bank and Jacob Schiff—Harriman set the line back on the path to profitability, albeit via a financial restructuring that later would be condemned by his critics as more an act of plunder than of improvement.
Around the same time, Schiff invited Harriman to join the board of the Baltimore & Ohio, the nation’s oldest trunk line, which ran from Baltimore west to St. Louis, with spurs to Detroit and New York, and which also was in a demoralized state. There Harriman first encountered the northwestern railroad tycoon James J. Hill, who would become one of his chief adversaries in the chapter to come. During their joint tenure on the B&O board—which Schiff told Hill he had arranged so “you and Mr. Harriman should . . . join hands” to ensure the success of the property going forward—their relations appeared to be cordial. The good fellowship, however, was at best superficial.
Then there was the Kansas City Southern, which ran from Kansas City south to the Gulf of Mexico and which a maladroit group headed by the steel-wire tycoon John “Bet-a-Million” Gates had tried to reorganize. Gates, a flamboyantly profligate gambler, quickly discovered that he had no aptitude for the railroad business and turned the enterprise over to Harriman, in the prelude to what became one of the most exasperating deals of the latter’s career.
All those transactions were overshadowed by a plan just over the horizon—Harriman’s quest for the Southern Pacific, an immense California railroad. This acquisition would be his biggest of all, with the capacity to catapult him into the forefront of the railroad industry.
But first, Alaska beckoned. At the urging of then–secretary of state William Seward, the government had purchased the vast territory from Russia in 1867; its moniker of “Seward’s Folly” only recently had begun to fade with the discovery of gold in the neighboring Yukon Territory of Canada and the raising of hopes that a similar discovery might be made in Alaska. Still, at the moment, its main interest was still for naturalists intrigued by the prospect of new discoveries of flora and fauna in a land near the very limits of human exploration.
The steamship George W. Elder carried Harriman’s 1899 expedition to Alaska; when it returned to Seattle after the two-month trip, laden with artifacts including a sixty-foot-tall totem pole and a variety of insect specimens, a reporter described it as “a floating curiosity shop.”
Harriman’s impetus for the expedition was a bit murky. Harriman himself later described its original purpose as “a summer cruise for the pleasure and recreation of my family and a few friends.” His youngest son, Roland (who was three years old when the Elder set sail with him aboard), reported years later that his father had been advised by his doctors to take a rest cure from overwork. The true motivating force, however, may have been Harriman’s insatiable curiosity about the world around him—which is where Merriam came into the picture.
Despite his formal training as a medical doctor, Clinton Hart Merriam’s fascination with ornithology as a child growing up in New York’s Adirondack mountains had steered him into a career as one of the foremost naturalists in America. One of the thirty-three founders of the National Geographic Society in 1888, Merriam had been appointed chief of the United States Biological Survey (later the US Fish and Wildlife Service), a body that commanded nationwide scientific respect at the time even though it formally comprised only himself and two assistants.
Harriman’s name was a blank to Merriam, but calls to a couple of industrialists of his acquaintance—for the visitor had mentioned that he was in the railroad business—filled it in. Within the industry, he learned, Harriman was known as “a man of means and a rising power in the railroad world.” Merriam could not have known it at the time, but the trip that Harriman was planning would soon solidify his reputation outside the railroad industry to complement the respect he had gained within it.
That evening, Merriam invited Harriman and his personal physician, Lewis Morris, to dine at his Washington home, where he listened with growing interest to a proposal for a unique scientific venture. Harriman disclosed that he already was refitting the steamship George W. Elder for the Alaska voyage and collecting an onboard library of books, treatises, and maps relevant to the expedition. “He thought there should be two men of recognized ability in each department of natural science,” Merriam recollected—“two zoologists, two botanists, two geologists, and so on,” as though he were assembling a veritable Noah’s Ark of scientific talent. When Merriam mentioned that few scientists could meet the expenses of such a trip, Harriman revealed that all the members would be traveling as his guests.
Despite Harriman’s generosity, Merriam had some trouble filling out the passenger manifest. One holdout was the world-famous naturalist John Muir, who was also unfamiliar with the Harriman name. Muir would confess later that he was “unwilling to accept the hospitality of a person of whom I knew little,” at least before learning what services would be demanded of him in exchange for free passage. Muir hesitated until the last moment, finally signing on when told that the voyage would take him to parts of the Alaskan coast he had missed on his two earlier expeditions to the region. He remained skeptical even after agreeing to go, writing to his fellow naturalist Charles Sprague Sargent, with whom he had explored the forests of northern New England during the previous summer: “Pray for me . . . I wish I were going to those leafy woods instead of icy Alaska.”
The preparations for the two-month, nine-thousand-mile trip underscored Harriman’s aversion to doing anything by half measures. The Elder was equipped with a steam launch, two “naphtha launches” fueled by a sort of kerosene, several small boats and canoes, and a full complement of canvas tents and sleeping bags. The library Harriman had mentioned to Merriam numbered five hundred items. The passenger list of 126 included Harriman, his wife, their three daughters and two sons, Mrs. Harriman’s cousin William Averell and his wife and daughter, and three servants. A cow was brought on board to provide fresh milk for Roland, the baby of the Harriman household. The academic and professional passengers comprised twenty-five renowned scientists; three artists, two photographers, and two stenographers; a surgeon, his assistant, and a nurse; a chaplain; eleven hunters, packers, and camp hands; and sixty-five officers and crewmen. Reviewing a roster of scholars from three museums of natural history, six universities, and four government scientific bureaus—many of whom had national reputations in their fields and some of whom were known even to the lay public—Harriman’s authorized biographer George Kennan judged that “no more distinguished body of American scientists was ever gathered together for an expedition of this kind.”
Harriman transported the East Coast contingent from New York to Seattle, the disembarkation point, on a special train. On the first day of the transcontinental leg he called together the scientists traveling with him to inform them that he was placing the details of the expedition’s itinerary entirely in their hands and to encourage them to form a committee to map out the route.
The Elder left port on May 31. As it made its way into the Alaskan spring, the zoologists were delighted with the abundance of birds and other wildlife, the botanists with a coastline “abloom with wild geranium, columbine, Jacob’s-ladder, iris, cypripedium, shooting star, rhododendron, bluebells, primroses, and forget-me-nots.” And all were enthralled by the sheer beauty of the land. “Day after day,” recorded the naturalist John Burroughs, the expedition’s official rapporteur, “a panorama unrolled before us with features that might have been gathered from the Highlands of the Hudson, from the Thousand Islands, the Saguenay, or the Rangeley Lakes in Maine, with the addition of towering snow-capped peaks thrown in for a background . . . It was along these inland ocean highways, through tortuous narrows, up smooth, placid inlets, across broad island-studded gulfs and bays that our course lay.”
Early in the trip, Muir sounded a few discordant notes. The Elder stopped at Kodiak Island to afford Harriman an opportunity to achieve one of his personal goals, the shooting of a Kodiak bear. He managed to bring down a giant female along with her cub, to Muir’s intense distaste. (The adult animal’s pelt would be repurposed as a rug for Harriman’s office.) A day or two later, a still grumpy Muir listened to his fellow scientists talking “of the blessed ministry of wealth, especially in Mr. Harriman’s case, now that some of it was being devoted to science. When these wealth laudations were sounding loudest I teasingly interrupted them, saying, ‘I don’t think Mr. Harriman is very rich. He has not as much money as I have. I have all I want and Mr. Harriman has not.’”
Someone reported the remark to Harriman, who sat himself next to Muir at dinner that night. “I never cared for money except as power for work,” he told Muir. “What I most enjoy is the power of creation, getting into partnership with Nature in doing good, helping to feed man and beast, and making everybody a little better and happier.”
Muir was unaccustomed to rubbing shoulders with the wealthy, even less so with industrialists who could talk so candidly of aspirations beyond the getting and spending of money. From that point on the skeptical naturalist felt himself being won over by his host. “I soon saw that Mr. Harriman was uncommon,” he would recall. “He was taking a trip for rest, and at the same time managing his exploring guests as if we were a grateful, soothing, essential part of his rest-cure, though scientific explorers are not easily managed, and in large mixed lots are rather inflammable and explosive, especially when compressed on a ship.” But Harriman was as good as his word. The Elder followed the route the scientists dictated; periodically a group would be dropped ashore with provisions for land exploration, and picked up later on schedule.
On the way north they stopped at Muir Glacier, discovered by its namesake in 1879. Muir regaled the group with what Merriam suspected was a “fairy tale about the abundance of wolves in a little snowy valley” some eighteen miles deep into the glacier, which Muir called “Howling Valley.” His curiosity stoked, Harriman organized a hunting foray for himself, Merriam, Dr. Morris, and two companions. (Muir himself begged off, on the grounds that he was “no hunter.”) The men, each carrying a pack weighing twenty pounds, disappeared into the frosty mist, tramping over ice and snow into which they sank first to their ankles, and soon up to their knees. Harriman positioned himself “always either in the lead or near the front,” Merriam recollected. On the first day they hiked until midnight, roped together for protection against hidden crevasses, then rested in their sleeping bags flat on the ice until the penetrating cold forced them back on their feet and on their way. Finally they reached the valley, finding it completely buried in snow and devoid of wolves. Having made it as far as Muir’s valley, Harriman ordered an about-face. The party reappeared at main camp at nightfall on the second day, footsore, chilled to the bone, but unanimous in their admiration for Harriman, who at the age of fifty-one and without having had a day’s training away from an office desk had led them on a thirty-six-mile trek with only a few hours’ sleep.
Back on the Elder, they sailed deep into Prince William Sound, where they discovered a new arm of the waterway, promptly christened Harriman Fiord. Eventually they turned west into the treacherous, fogbound Bering Sea. There the outbound journey should have ended, but Mrs. Harriman had conceived a desire to set foot in Siberia. So they continued on, reaching a settlement known then as Plover Bay and today as Provideniya, where all the travelers disembarked for a few hours to pick flowers and buy trinkets from the local Eskimos. (More than four decades later, in September 1942, when Averell Harriman, Edward’s elder son, was part of an Anglo-American mission to Moscow to discuss supplying the Soviet army against an invasion by Hitler, he confided to Joseph Stalin that he was making his second visit to Russia. The first, he explained, he had made without a passport as a seven-year-old during that stop at Plover Bay. “Oh, that was under the Tsar,” Stalin replied. “You couldn’t do that now.”)
The George W. Elder returned to Seattle on July 30, two months after its departure, laden with samples of six hundred species of flora and fauna previously unknown to science, five thousand photographs, and maps of four glaciers “never before seen by white men,” as recounted in the New York Times. Upon the craft’s landing, an Associated Press dispatch pronouncing the expedition “an entire success . . . both from a scientific and pleasure point of view” ran in newspapers coast to coast. The Elder, it reported, “resembled a floating curiosity shop, stocked with everything Alaskan from a totem-pole five feet through and sixty feet high, to the minutest insect.”
The scientists immediately started sharing their findings with the public. Henry Gannett, a glacier expert from the US Coast and Geodetic Survey, expressed the view that “the glaciers of Alaska are gradually retreating, due . . . to climatic changes.” Dr. George B. Grinnell, editor of Forest and Stream, passed along an observation from Alaska fishermen that “the salmon in the streams of the Territory are being rapidly exterminated” and advised that “some steps for the preservation of this fish should be taken before it is too late.” For years, specialists in natural history and the natural sciences would mine the material, which was compiled into thirteen illustrated volumes. As for Edward H. Harriman, after nearly a decade of his rising renown in the railroad industry, the remarkable expedition had made him a household name.
HARRIMAN HAD BARELY settled back into his office routine after the Alaska expedition when he was forced to unwind the mess that Bet-a-Million Gates had made of the Kansas City Southern. This railroad had a colorful but dispiriting history—one to which Gates had been contributing prolifically.
The Kansas City Southern was originally the brainchild of a handlebar-mustached entrepreneur named Arthur Stilwell. The eccentric Stilwell was perennially in the grip of what he sometimes described as “hunches” and sometimes as ideas planted in his head by fairies or “brownies” visiting him in his sleep. Some of these intuitions were plausible enough, but they were invariably confounded by poor execution. That was the case with Stilwell’s Kansas City, Pittsburg & Gulf Railroad, which ran 778 miles from Kansas City to the Gulf of Mexico at Port Arthur, Texas, a depot Stilwell built and named after himself on the site of a settlement that had been wiped off the map by a hurricane.
Stilwell’s goal had been to capture some of the freight that was either being monopolized by the Illinois Central, the only north-south road in the region, or carried east directly to the Atlantic seaboard. This was a promising plan, initially well-capitalized thanks to Stilwell’s adroit salesmanship. But Stilwell was fundamentally a real estate promoter. Rather than entering population centers his railroad skirted them, on his reasoning that the towns would expand toward the rail line, affording him lavish profits in land speculation. He not only saddled the railroad with uneconomical curves and unserviceable grades, but built it on the cheap—embankments too narrow, bridges and trestles too light, water supplies too meager. A venture that might have succeeded under different circumstances was unable to turn a profit, and in April 1899, when its trains had been running for only a few months, what was then known as the Kansas City Southern went bankrupt.
The struggling road’s receivers had invited Harriman, who already possessed a reputation as someone who could manage a struggling railroad back to prosperity, to join the reorganization committee. He had accepted just before leaving for Alaska.
Strange doings went on in the Kansas City Southern while Harriman was away. After he returned, he discovered that Stilwell had sold a controlling interest in the railroad—or possibly his entire interest—to Gates. Several different versions exist of this transaction. From Harriman’s point of view, Stilwell’s sale to Gates behind his back was a “virtual breach of trust.” Otto Kahn wrote later that he assumed this discovery would end Harriman’s involvement with the line. Instead Harriman told him, “Not so fast! I am not through with this thing yet, by any means. I can’t be played fast and loose with like this . . . I am in it to stay.”
Stilwell’s recollection is more colorful, if less plausible. In his 1912 memoir, Cannibals of Finance, he claimed that Gates and Harriman had conspired to rook him out of his interest. “I sometimes have wondered,” he wrote, “if when Edward Harriman was dying it added one jot to his peace of mind to think that he had for years deprived me of my rightful place as the upbuilder of Port Arthur, of which I was the creator; or that he had for five years controlled the destinies of the Kansas City Southern Railroad, which he had helped seize from me and my stockholders just as the last spike was driven.” (Harriman died three years before the memoir’s publication.)
The reality is that Harriman tried to turn the Kansas City Southern into a going concern. According to Kahn, he refused to give up his position on the reorganization committee, and decided to wait for Gates and company to appeal to him for help. In time, they realized that as novices in the railroad business, their wisest course of action was to let Harriman run the line his own way—especially since the voting trust by which they all held power over the line would expire in April 1905.
The Kansas City Southern resembled the Union Pacific at the time of Harriman’s takeover: a promising enterprise in need of drastic refurbishment. Like the UP, it had been hastily built, was desperately in need of new rolling stock and engines, wider embankments, fewer curves and smaller grades, and modern shops and machinery. Harriman did what he could to accomplish these tasks, spending nearly $5.6 million, but the railroad never generated enough revenue to finish the job and eventually time ran out. When the voting trust expired, the majority shareholders took over and removed Harriman and Gates. Neither fought to stay.
HARRIMAN’S FINAL COMPLETED deal of the nineteenth century was the biggest of his career: the acquisition of the sprawling Southern Pacific. His initial target had been the Central Pacific branch, the remnant of the western portion of the original transcontinental railroad. Originally constructed to only marginally better standards than the Union Pacific, like the old UP it was now hampered by unnecessary curves and grades and equipped with outdated rolling stock. In sum, the Central had aged into a bottleneck that prevented Harriman’s UP from expanding its capacity to the full extent he desired.
The immovable obstacle to Harriman’s quest to complete his line to the coast was Collis P. Huntington. At seventy-eight, the obstreperous old lion was one of the nation’s last surviving railroad entrepreneurs from the era of transcontinental expansion. Huntington had outlived Mark Hopkins, Leland Stanford, and Charles Crocker, his three partners in the building of the Central Pacific. He had combined the Central Pacific with the Southern Pacific, which ran along the California coast before turning east along a southern route (known as the “Sunset Route”), creating the largest railroad line in the United States. Huntington’s holdings of more than four hundred thousand shares of Southern Pacific stock accounted for only 20 percent of the total outstanding, but the combination of that single block and the shares held by his allies Edwin Hawley and James Speyer gave him unassailable authority over the enterprise. Many coveted the Southern Pacific, but Huntington had rebuffed them all. Harriman had offered to buy him out on at least three occasions.
Then, on August 13, 1900, Huntington died unexpectedly at his lodge in New York’s Adirondack Mountains. His death removed the largest hurdle to the acquisition of the Central Pacific but erected another: To obtain the one railroad he wanted, Harriman would have to buy the entire enterprise—the Southern Pacific Company, which was valued at $100 million. The $40 to $50 million needed to acquire a controlling interest in the parent company seemed, superficially, well out of reach of the Union Pacific, which at the time had less than $4 million cash in its coffers.
Nevertheless, Harriman set his strategy in motion by starting to buy up SP shares soon after Huntington’s death. The key to his acquisition plan was an audacious Union Pacific bond issue of $100 million paying 4 percent annual interest, secured by 1,135 miles of improved track and by the value of securities held by the Oregon Short Line and Oregon Railroad & Navigation Company—branches of the UP that had been foreclosed by creditors during its financial crisis, but which Harriman had bought back. The UP board had approved the bond issue that February. The borrowing overleveraged the railroad, but with a provision allowing the bonds’ conversion into UP stock at par (that is, $100 per share) for five years, it was snapped up by investors when it went on the market in May.
Harriman approached Huntington’s heirs with this immense war chest in hand, and promptly acquired their 475,000 shares. Schiff’s firm acquired another 275,000 on the open market. Together, these purchases amounted to 38 percent of the outstanding stock of the Southern Pacific, which Harriman judged to be enough to discourage any competing bidders; later he would add 150,000 more shares of the common and 180,000 shares of preferred. (Preferred shares typically offer fixed dividends that must be paid before dividends on common shares, but have lesser ownership rights, usually not including shareholder votes.) Ultimately, the acquisition of the Southern Pacific cost about $40 million.
At the outset, Harriman’s desire for the Central Pacific was widely assumed to be the driver of the huge transaction. The US Industrial Commission, examining the purchase later in 1901, parroted the standard version that “the Union Pacific purchased control of the Southern Pacific not because it needed the additional mileage, but rather that it might indirectly acquire the Central Pacific and a direct outlet to the Pacific Coast.”
This indicates that the Southern Pacific was not generally seen in the financial community as an unalloyed treasure; while the Central Pacific offered access to the coast, the parent company was weighed down by the Sunset Route. A pet project of Huntington’s, it had extended the Southern Pacific east to New Orleans, contributing negligible profit to the system while presenting a huge administrative burden. Otto Kahn would comment later that if the Southern Pacific could be broken up so that the UP could acquire the Central Pacific and leave the Sunset Route aside, “we would be getting rid of a nuisance.”
The truth is, however, that while some parts of the Southern Pacific may have been more burdensome than others, bringing together the Union Pacific and the entirety of the Southern Pacific created a uniquely powerful combination that plainly fed Harriman’s ambitions. With the Sunset Route included, the Southern Pacific owned the main line running between Portland, Oregon, and New Orleans via San Francisco, Los Angeles, Yuma, Arizona, and El Paso; numerous other lines in Texas and Louisiana; a monopoly road between Sacramento and Portland; a fleet of steamers operating between New Orleans and New York; and the Pacific Mail Steamship Company, which ran steamers from San Francisco to Asia and Panama. What the Union Pacific brought to the marriage were the Oregon Railroad, a steamship line between Portland and Asia, and a half interest in the Occidental and Oriental Steamship Company, which ran between San Francisco and Asia. The only major railroads in California were the Southern Pacific and the Atchison, Topeka & Santa Fe, but as UP historian Nelson Trottman observed, the latter railroad “lacked an extensive system of branch lines and feeders, while the Southern Pacific had built into almost every part of California.”
The scale of the enterprise impressed even railroad veterans jaded by thirty years of daring ventures launched by courageous men. Having pulled these two companies together, Harriman’s properties seemed to span the globe. As the Interstate Commerce Commission described Harriman’s empire in 1907:
Mr. Harriman may journey by steamship from New York to New Orleans, thence by rail to San Francisco, across the Pacific Ocean to China, and, returning by another route to the United States, may go to Ogden by any one of the three rail lines, and thence to Kansas City or Omaha, without leaving the deck or platform of a carrier which he controls, and without duplicating any part of his journey.
The ICC was less than thrilled with Harriman’s acquisitiveness. “It is only the law which prevents the concentration into Mr. Harriman’s hands of every railroad line lying between Canada and Mexico,” the commission observed, referring to the Sherman Antitrust Act, which had been enacted in 1890. On the other side, General Grenville Dodge, who had led the Union Pacific to Promontory, Utah, in 1869, labeled the Southern Pacific purchase “a master stroke.”
Harriman’s fellow railroad tycoons viewed the purchase with suspicion and skepticism. “Some people also say that Harriman is posing as the Napoleon of Railways in New York,” banker John S. Kennedy told his client James J. Hill of St. Paul, “but they think he has at last bitten off more than he can chew and that he ought to be checked.”
Kennedy was unclear who should “check” Harriman or how, but his characterization of Harriman was not far wide of the mark. Contemplating his new possession, Harriman commented to a friend: “We have bought not only a railroad, but an empire.”
Critics would never cease to see that empire as one devoted to crushing its rivals and profiteering from its customers. As it happens, long before Harriman acquired the Southern Pacific, indeed, it had earned Californians’ antipathy. Still fresh in their minds was the Mussel Slough Tragedy of May 1880, when a simmering dispute with homesteaders convinced they had been defrauded by the Southern Pacific in sales of the railroad’s government land grants erupted into a gun battle, resulting in seven deaths. Huntington and Stanford, not Harriman, were the Southern Pacific’s bosses at the time, but that would be forgotten by 1901 when the muckraking novelist Frank Norris published his book The Octopus, a fictionalized account of the episode, whose title echoed what had already become a popular epithet for the Southern Pacific.
As a diversified transportation system, the Southern Pacific was well positioned to exploit all the freight traffic generated along the West Coast and between East and West—timber, grain, cotton, fruits and vegetables, and manufactured goods. By comparison, the Union Pacific on its own was a mere trunk line carrying through traffic along the transcontinental route—but, given Harriman’s efforts, a glittering trunk line fully prepared for a doubling in its traffic. What was needed was to bring the old Central Pacific up to UP standards. The line was not exactly decrepit—it was in better shape than most other western railroads outside the Southern Pacific system—but still needed to be straightened, leveled, and rebuilt with heavier rails and steel bridges.
By 1901, when Harriman acquired the Southern Pacific, the railroad had become known as “the Octopus.” This 1882 cartoon from the Wasp, a San Francisco magazine, refers to its monopoly grasp on farming, mining, and finance, and to the 1880 Mussel Slough Tragedy in which a dispute between homesteaders and the railroad resulted in seven deaths. The figures in the eyes of the creature are Leland Stanford (left) and Charles Crocker (right), two of the Southern Pacific’s original controlling shareholders.
To handle that task, Harriman tapped Julius Kruttschnitt, then serving as the Central Pacific’s general manager. The portly, derby-hatted Kruttschnitt had met Harriman only once before, when he had hosted a reception in San Francisco for Harriman during the latter’s grand tour in 1897. Now it was his turn to be dazzled by his new boss’s preternatural intelligence and decisiveness.
SUMMONED TO NEW YORK, Kruttschnitt discovered that Harriman had already ridden the Central Pacific several times and had gained a working grasp of its inadequacies. Relying on Kruttschnitt’s sixteen-year association with the railroad, Harriman assigned him to supervise the reconstruction.
After dinner one night at Harriman’s home, the new boss “called for blue-prints, maps, and statistics covering the contemplated reconstruction work in Nevada and Utah,” Kruttschnitt recalled. “He asked innumerable questions with great rapidity, always touching the crucial points.” They covered the reconstruction needs of the entire road from Ogden to Sacramento in less than two hours. Harriman then dismissed Kruttschnitt with instructions to be on hand at Union Pacific headquarters the next morning for a meeting of the board.
“The plans called for an expenditure of $18,000,000, and I supposed that there would be no end of arguing and talking, which would result in the approval of only a part of the work,” Kruttschnitt recalled. He was about to discover that Harriman could be as brusque with his board as with his engineers. Harriman outlined the general plan in a few words, outlining its cost and its rationale. The board gave its approval without a single dissenting vote. As Kruttschnitt wrote later,
As I left for the West, I wondered what manner of man it was who in a few hours’ talk could digest the details of an $18,000,000 reconstruction work along a thousand miles of railroad through a mountainous country, expound the general principles of the plan to his executive associates in the course of a few minutes, and obtain the seal of financial approval.
Before departing, he met with Harriman one last time to ask how he should disburse his bounty of capital.
“Spend it all in a week if you can,” Harriman replied.
It was a tall order, but at least Kruttschnitt knew where to begin. The weakest portion of the Central Pacific were the tracks between Ogden, Utah, and Reno, Nevada, a nearly 600-mile stretch of difficult topography that showed most vividly the haste of the original builders as they bulled their way through to the meeting with the Union Pacific at Promontory. Of that portion, the most demanding reconstruction involved 147 miles of track skirting the northern shore of the Great Salt Lake. The route crossed two mountain ranges and rugged country that forced the tracks into sharp curves and grades as steep as ninety feet of elevation in a mile. There seemed no alternative alignments that could appreciably straighten or level the track, so Harriman dusted off an old idea: Instead of going around the lake, he would cross it. The product of this decision would be the legendary Lucin Cutoff.
The cutoff had been a pet project of Collis Huntington, who had mapped out a causeway running almost on a straight line over the water and connecting Ogden and Lucin, a desert outpost located a few miles east of the Nevada state line. Huntington had delayed the project for years, doubting that his staff was up to the project’s demanding engineering and uncertain that the railroad carried enough traffic to make the expenditure pay. Ultimately he approved the work, but died before construction could get underway.
To Harriman, the logic of shaving some forty miles off the railroad’s route and circumventing the steep grades and tight curves of the original route was compelling. Engineering knowledge, he reckoned, had advanced sufficiently to overcome the challenges that had concerned Huntington, and given the growth in the transcontinental line’s traffic he envisioned it was certain that rerouting the railroad would pay off. He ordered Kruttschnitt to build the cutoff without delay.
Bisecting the Great Salt Lake, the Lucin Cutoff, built as part of Harriman’s massive reconstruction of the transcontinental railroad, shaved forty miles off the railroad’s route and eliminated the steep grades and tight curves necessitated by its crossing of the Promontory Mountains.
Harriman may have underestimated the obstacles facing the project, which ultimately would cost $9 million and take three years. The main problem was the lake itself. Huntington’s construction engineers had warned of the frequently severe storms that lent demonic force to waves of the lake’s heavy brine, endangering trestles and fills designed to conventional specifications. Local residents told stories of boats that had been “hammered to the bottom, . . . covered with soda by the spray until they sank under its weight.” Some predicted that the winds sweeping across the surface would blow trains clear off the rails and into the water.
A major difficulty was the lake bottom. Although the maximum depth of the Great Salt Lake was thirty-two feet, the bottom itself was shifty and insubstantial, consisting of silt layered over a salt and mineral crust that would shatter like a pane of glass under the weight of railroad fill. Many times the builders would watch helplessly as an embankment painstakingly built up with rocks and gravel suddenly sank out of sight, often stranding a work train in open water. “The day on which there was not a sink somewhere along the job [was] crossed and starred and bordered with red on the calendars of the engineers in charge,” wrote a participant. One stretch required the labors of twenty-five hundred men working day and night for more than a year before the embankment finally became stable enough to stay permanently dry.
The length of the cutoff would have made for a daunting construction job even under the best conditions. At thirty-two miles from shore to shore, it was longer than any span of causeway and trestle that had ever been built for a railroad. The work required a stupendous amount of equipment and supplies—twenty-five thousand piles each 125 feet long, pounded into the lakebed in search of a firm bottom by twenty-five pile drivers specially constructed in San Francisco and delivered to the work site in sections. To transport fill and deposit it in the lake, four hundred steel dump-cars were built, hauled by eighty locomotives in trains of twenty-five cars at a time. Workers were sequestered from the many temptations of camp life that might foment brawls or cause injuries that could only delay the project. No liquor was permitted in the work camp; all stores and packages for the workers were inspected and contraband alcohol confiscated. Occasionally an entrepreneur would set up a “groggery” on property outside the camp perimeters. Railroad guards had little trouble chasing most of them away; one established at Hogup, a few miles from the western shore of the lake, seemed dug in—until railroad engineers bored holes under the shanty and filled them with blasting powder, prompting the owner to flee ahead of the threatened blast.
The Lucin Cutoff was only one of several refurbishments Harriman dictated for his new acquisition, including a rebuilt approach into San Francisco from the south that also straightened, shortened, and leveled the tracks. This project required five tunnels to be bored on a stretch of only eleven miles.
On the whole, Harriman followed the practice that had raised the Union Pacific from decrepitude: Invest heavily to modernize and improve. In its last eight years in charge of the Southern Pacific, the Huntington regime had spent about $58 million on construction, equipment, and upgrades; in the first eight years of his ownership, Harriman spent $242 million. But he now had a massive, economically viable empire to show for it.
And that empire was still expanding. Having devoted just over $40 million to the biggest acquisition of his career, Harriman still had $60 million in reserve to spend on his most audacious move yet. His quarry would be one of the most troubled railroads in the nation: the Northern Pacific.