p135  Chapter XI
Huntington Rule

"The Central Pacific Railroad will be to California and Pacific Coast what the Erie Canal has been to New York. The day is not far distant when the Pacific will be bound to the Atlantic by iron bands that shall consolidate and strengthen the ties of nationality and advance with giant strides the prosperity of our country." . . . from a speech by Governor Leland Stanford at the groundbreaking ceremony for Central Pacific, Sacramento (January 8, 1863).

A showdown between Ted Judah and Collis Huntington was inevitable. Each was intent on domination. This explains Huntington's decision to come to Washington for the final weeks of lobbying on the Pacific Railroad Act. It seems to have been the real reason for their failure to appear at the commissioners' convention in Chicago.

Since 1855, Ted Judah had carried the Central Pacific, literally, in his hat. He was its explorer, engineer, surveyor, promoter, bookkeeper, lobbyist, museum director, purchasing agent and office boy. The question troubling Huntington was whether Judah could now settle into team harness and concentrate his genius on the task of chief engineer.

Subconsciously, of course, other factors operated. Judah  p136 was an aristocrat, born in an Episcopal manse and married into a wealthy New England family; Huntington was a tinker's son, born in a shanty and weaned to a miser's cynicism. Judah was another "little giant" with the little man's usual energy, ego and fox-terrier eagerness; Huntington was a tall introvert, taught by the rowdy frontier to be fox-sly and wolf-ruthless. Judah impoverished himself and probably borrowed funds from Anna and the Pierce family in order to finance promotions for the Central Pacific and the lobbies for the Railroad Act; Huntington, during the same years, grubbed a fortune of a million or more out of nuts and bolts, miners' supplies and canned goods.

Logically then, Huntington took his question to Crocker, the Hopkins Brothers and Stanford. The problem worried them too. Even if the line built only as far as Dutch Flat, every hour of Judah's time should focus on right of way, construction of shops, and assembly of locomotives and cars. This was doubly essential if Central Pacific was ever to master the Sierras. And a full-time master trader and lobbyist in New York, Boston and Washington was just as imperative. Huntington was the right man for the multitude of duties back East, provided he could put up with that Washington pussyfooting.

Huntington slouched silently in his chair during the first few anteroom conferences on Capitol Hill. These members of the 37th Congress weren't really satisfied with the Railroad Act, he decided. They were just scared: — liverish about Confederate victory; liverish about California secession. The Act was a kind of nerve tonic, gulped fast and tremblingly.

Huntington maneuvered a chat with Judah around to the subject of rail, locomotive and blasting-powder purchases. Judah implied that, as Chief Engineer, the decisions were his alone to make. Huntington rumbled back at him. Every dollar spent, he insisted, must be invested as cautiously as if it were the Central Pacific's only one. And that might soon be the case. He knew the freight rates, both via Cape Horn and via the Isthmus of Panama. A ton of iron rail delivered around  p137 the Cape cost $17.50 in freight charges and took six months, New York to Sacramento; the same iron shuttled across the Isthmus might reach Sacramento in two months, but the freight cost rocketed to $50 a ton. Delivery charges on a locomotive via Cape Horn would average $2,300; special handling via the Isthmus could run to $15,000 — almost as much as the manufacturer's F. O. B. price.

Hadn't Judah himself estimated construction costs averaging $90,000 a mile for the •140 miles to the Nevada line? The Government loans — and they were only loans, mind you — were $16,000 for a mile of valley land and $48,000 for a mile of mountain. In other words, more than two-thirds of that money must be raised by two methods: shrewd salesman­ship of stocks, and shrewder purchase and routing of supplies. Judah was chief engineer. Location of the route and perfection of its operations required all his genius. Shouldn't the haggles with Pennsylvania ironmongers, New Jersey and Massachusetts locomotive builders, Delaware explosives makers, New York shipmasters, be transferred to an old hand? Even more critical would be the wrangles with Boston, New York and Philadelphia bankers for bond sales and cash loans. Collis Huntington knew these labyrinths. He hoped Judah agreed?

Ted Judah realized that the scowling, hawk-nosed merchant spoke the truth. He had brooded on the problem ever since the moment that word came back from the White House that President Lincoln had signed the Act. The sputter of Lincoln's pen had transformed Ted Judah from a Galahad with a mission to — what? He was Central Pacific's founder. But, by contrast, he was now only its chief engineer, subject to the orders of Stanford and Huntington. He must make a decision. With Stanford as governor of California, and Huntington, the Crockers and Hopkins all wealthy men willing to invest time and fortunes on the Pacific Railroad, there might never be a greater opportunity for the Donner Pass route — or for Ted Judah. How about, he parried, a shopping trip together to New York and Boston?

 p138  The ironmongers in Pennsylvania knew that they held the business end of the whip. The Railroad Act said that all of the Pacific Railroad's supplies must be "Made in the U. S. A." The gunmakers and ironclad builders — each waggling a Washington priority order — would pay premium prices for every ton of iron the foundries could produce during the next year. Five hundred tons of rails a month? On what security?

Ted Judah began to argue. Huntington interrupted. He'd always been curious to see an iron foundry; wonderfully important place; could they take a tour through? It worked, and Ted Judah grinned in admiration. Huntington was positively garrulous with questions about ore, the proportions of limestone, the necessity for hardwood charcoal, the possibilities of this newfangled anthracite. Could he come back in a week or two? Perhaps there'd be time to chat a bit more about rails? After all, Congress wanted this railroad built.

Ted Judah began to relax. Huntington shopped the same way Anna went after a silk dress. They toured the Baldwin & Company and Norris & Company works in Philadelphia; Danforth Cook & Company at Paterson, New Jersey; and the William Mason & Company plant at Taunton, Massachusetts, before Huntington would agree to a locomotive purchase.

He grumbled most about the shimmers of brass trim, gold scrollwork and hand painted "scenes along the way" on the engines. These things, he snapped, weren't meant to sit in a parlor. All Central Pacific wanted was a plain locomotive that would climb the Sierras without blowing up. That decoration, the salesman explained, was as subtle as it was lurid. The railroads needed the approval of the ladies. Locomotives were being made stylish from headlight to cab.

The blaze of brass began on the headlight stand and dazzled back through the bell to the valves in the cab. The sides of the headlight were painted with pastoral and mountain scenes. The cab, tastefully enameled a gunmetal black or clove brown, was decorated with garlands of enameled flowers beneath the  p139 windows. A vivid scarlet was "standard" for drive wheels, with gold-leaf scrollwork on the spokes.

Still grumbling about "the confounded foofaraw," Huntington agreed to the purchase of six locomotives. Two of them, grossing 50 and 47 tons, would be named Atlantic and Pacific. A 46‑tonner was to honor Governor Stanford. The work-train engines, weighing only 18 tons each, would be the T. D. Judah and the C. P. Huntington.

Central Pacific's tiny cash reserve was already overpledged. Now there was the grim chore of trying to wheedle short-term loans from the New York and Boston bankers. Then the shopping tour must move on to the toolmakers, the bridge designers, the blasting-powder chemists. Ted Judah announced his decision. He was anxious to get on to Sacramento. Anna was waiting in Greenfield. Why didn't Huntington carry on alone?

The hawk nose twitched. The thin lips arched into a smile. Timely idea, Huntington admitted, because he'd been wondering again about the prospects of that wagon road through the Donner Pass. If Judah could find the time to run a survey, somehow paralleling the railroad route — well, it should bring in cash while the railroad was building. A nice, smooth wagon road from Dutch Flat to the Nevada line would certainly wean toll money away from those Downiesville and Placerville routes.

Judah agreed, but began to fret about it during the sail to Panama. Huntington was too slick. He'd never be able to trust the man, let alone like him. Was he scheming to develop a Donner Road . . . somehow manipulate its profits to his own account . . . and then walk out on Central Pacific?

Enthusiasm tingled back when Dr. Strong and other friends brought him up to date on California's response to the Railroad Act. San Francisco's councilmen were readying a bill for a $600,000 bond issue to be used for the purchase of Central Pacific bonds. Placer County and Sacramento County commissioners proposed similar local measures for a total investment of $550,000. Sacramento's City Council saw no problem  p140 in the outright gift of •thirty acres of river-front real estate as the site for the railroad's terminal shops, roundhouse and offices.

As for Governor Stanford, his enthusiasms had become downright embarrassing to Republican leaders. Frederick F. Low, Stanford's successor as governor, told the details in 1883 during an interview with H. H. Bancroft. Lobbying by the Crocker Brothers produced a bill in the California Senate that would give Central Pacific $500,000 outright. Once the bill was in committee, Low said, Stanford "went upon the floor of the Senate and cajoled and bullyragged and got this bill through. It was a sort of neck or nothing at that time. The bill itself was of such doubtful constitutionality that people didn't believe it would hold water — that the state under the constitution could not contract a debt of $500,000 without submitting it to the people, and they had no money in the treasury, and if they built this road it would be an obligation to the state. I told Stanford very frankly, I didn't think that thing would stand at all, and he then went to work and whipped it around, pulled very strongly on everybody, and everybody was then very strongly in favor of the Pacific Railroad. They wanted the state to guarantee this $500,000 absolutely, or pay interest on $2,500,000 bonds of the railroad company."

The bill had still failed to pass, however, when Low won the Republican nomination. "I had a good deal of discussion about it," Low told. "I said I would not sign any such bill as that . . . I would agree if the Legislature chose to pass a bill guaranteeing to pay twenty years interest on $1,500,000 of bonds, but not the principal. That would give them the use of a good deal of money at a time when it was pretty pinching times. And the bill passed in that shape. I signed and the state has paid that amount.

"In the management of affairs then," he mused on, "Stanford showed more ability than ever before — well, he developed. I thought Stanford a very mediocre man then, but he had dogged persistence, and had faith, which is a great deal in this world."

 p141  The governor's obvious faith and open friendship gave Judah the assurance he needed. The Crockers seemed happy in their lobbying. Mark Hopkins remained the impassive bookkeeper. A multitude of engineering problems beckoned. Designs for wharves, storage yards, roundhouse and repair shops on the Sacramento land gift were more important, for the moment, than the location surveys. Crew hiring was his responsibility too. The locomotives would arrive, broken down, in a harum-scarum pile of numbered crates. Master mechanics must be lured away from the Sacramento Valley Railroad, steamship lines — anywhere. Carpenters and blacksmiths must be hired, then trained to the peculiar skills of building passenger coaches, boxcars and flats. Designs must be drawn for way stations, freight houses and water tanks.

The blueprints for the Sacramento shops and other buildings filled one wall of Judah's office when Huntington staged home for the late November directors' meeting. The clearest clues to the Huntington-Judah struggle during the next six months come from the biographical letters Anna sent to H. H. Bancroft's researchers in 1891. "Some of the directors," Anna wrote, "could not take it as an overland enterprise, the magnitude of what they had to do. He used to say when he came from the directors' meetings, 'I cannot make these men, some of them, appreciate the elephant they have on their shoulders. They won't do what I want and must do. We shall just as sure have trouble in Congress as the sun rises in the east, if they go this way. They will not see it as it is. Something must be done. I will not be satisfied before Congress and the world.' "

The directors' meetings began routinely. Judah's official report detailed the Pacific Railroad Act, pointed out its immigrations and responsibilities, then gave estimates of cash values on the land grants that would be earned as Central Pacific built across the Sierra. A fortune could be earned, he correctly predicted, from the vast stands of redwood and fir. These timbering operations could begin any time, in view of the millions of feet that would be needed for ties, stations, warehouses, water  p142 tanks, engine fuel, bridges and tunnel linings. Surplus lumber for sale to home builders, mines, boatyards and farms could, he pointed out, be hauled into Sacramento far more cheaply on the "deadhead" westbound runs of the construction trains than it was then being delivered by the barge tows operating between Oregon and San Francisco.

A glitter came into Huntington's eyes as he questioned Judah on the details. Then, abruptly, he asked about the survey for the Donner pass wagon route. Had it been made? Would it work?

A wall-like ridge, Judah explained, ran all the way to Donner between the Bear and Yuba river systems on the north and the American Valley on the south. Wagon teams could climb the ridge easily, with a minimum of grading. Construction costs shouldn't run over $1,000 a mile, perhaps less. He and Montague had written up full specifications.

Later in the same meeting Huntington introduced a motion that the construction contract for the first •thirty-one miles of Central Pacific be awarded to Charles Crocker. The proposal may have been intended as a strategy move to test Judah's voting strength in the board as well as his willingness to go along on the sharp business practices that had become instinctive with Mother Lode merchants. Crocker volunteered to resign from the board if the contract was approved. Judah argued against it. The motion carried.

Through November, and perhaps December, the Crockers, Hopkins, Stanford and Huntington met evenings in one another's homes and argued late. Huntington had an idea; Attorney Edwin Crocker said it was general and foolproof. In brief, Huntington visualized a holding company that would monopolize all of Central Pacific's contracts, and undertake independent projects such as this Donner Pass wagon road and the retail lumber trade that Judah talked about. Apparently Stanford held out. Yet the facts were frighteningly clear. Huntington had finally wangled rail shipments out of the Pennsylvanians by pledging the personal fortunes of Central Pacific's  p143 stockholders. Actually that meant Huntington, the Crockers, Hopkins and Stanford. A scheme like Huntington's offered them security, whatever happened. Thus "the Big Four," as they would be known to history, moved toward creation of The Associates and its sequential Construction & Finance Company. The first venture would be construction of the Donner Pass wagon road as a property of the Associates. Meanwhile, they agreed, they would start buying up the Central Pacific stock of the more timid shareholders.

Stanford was finally willing to go along, with the understanding that his brother, A. P., would be added to the board of directors. Probably decision was also reached to push the appointment of Edwin Crocker as "general agent," as well as attorney, for Central Pacific. Huntington and Hopkins favored the appointment of E. H. Miller, Jr., a former business partner of Hopkins, as secretary of Central Pacific, if and when it became possible to "unload" James Bailey. Thus with Hopkins as Central Pacific's treasurer, the "arrangements" between the railroad company and the Associates could be handled discreetly.

The ascendancy of The Associates was intimated during the official groundbreaking ceremonies for Central Pacific on January 8, 1863. Governor Stanford was the principal speaker. Five state senators and assembly men orated too. But Theodore Judah was not listed on the program of speakers. Either gossip was eddying about the marked coolness between Judah and some of the directors, or Judah loyally held to his decision to be the chief engineer, and had passed the hint along to editors that news stories should spotlight on Stanford, Crocker and the politicians.

On President Lincoln's birthday anniversary in 1862, Judah had hired Samuel Skerry Montague away from the Sacramento Valley Railroad and made him an assistant engineer. (After his 1836 tail-gate ride through Troy, Sam Montague had grown up in Rockford, Illinois. In 1852 Peter Dey had hired him as a surveyor's assistant for the Rock Island. He worked  p144 with Grenville Dodge for a year before moving over to the Burlington & Missouri as an assistant to Samuel B. Reed. The Pikes Peak gold rush lured him to Denver. In 1860 he joined a wagon train to California and hired out as a location engineer for the Folsom-Marysville extension of the Sacramento Valley Railroad.) Early in 1863, Montague was assigned to handle the location surveys toward Dutch Flat, and soon proved his skills. A few weeks later Judah sent out another young engineer, Lewis M. Clement, a Canadian and former location surveyor on the Welland Canal.

Huntington had returned east to sell bonds, double-check the first shipments of rails and tools, and ferret out the possibilities for a revision of the Railroad Act. His return to Sacramento in midspring marked the renewal of pressures against Judah. On May 13, Judah wrote Dr. Strong that, "I had a blow-out about two weeks ago and freed my mind, so much so that I looked for instant decapitation. I called things by their right name and invited war; but councils of peace prevailed and my head is still on; but my hands are tied, however. We have no meeting of the board nowadays, except the regular monthly meeting . . . but there have been any quantity of private conferences to which I have not been invited."

Charles Crocker was personally supervising the grade gangs on the wagon road from Dutch Flat through Donner Pass. The whisper spread that Central Pacific never did intend to build across the Sierra, but would end at Dutch Flat and serve as a mere feeder line for the wagon road. Newspapers picked up the rumor, San Francisco bankers helped the story gain credence. Home from Union Pacific's commissioners' convention at Chicago, D. O. Mills announced that his bank would "never invest a nickel in that Pacific Railroad." L. L. Robinson and other directors of the Sacramento Valley Road contributed funds to a mail promotion and lobbyist outcry about the "Dutch Flat Scandal." Groups formed in San Francisco and Placer County to fight against local subsidies to the Central Pacific. Both bills were forced into court litigations that delayed their  p145 passage for years and eventually yielded almost as much income to attorneys as they did to the railroad.

But Huntington had a new idea. If it worked it would enable him to raise enough money to finance construction as far as Dutch Flat and thus be in a position to collect the Federal bonds and land grants on the first •40 miles. He went first to J. W. Whitney, the state geologist. His question was simple: Where does the western base of the Sierra Nevada begin? Whitney said that the base of the mountains began, geologically, where the brown earth of the valley's flood plain ended and the red podzolic soil of the Sierras began. A little exploration proved that this occurred at Arcade Creek, only •7 miles east of Sacramento.

Huntington beamed. If Department of the Interior scientists and President Lincoln agreed, Central Pacific's Federal subsidy would jump from $16,000 to $48,000 a mile as soon as the embankment reached Arcade Creek — even though the terrain was pancake flat for the next •15 miles. Those 15 miles meant an additional $480,000 worth of Federal subsidy bonds.

Ted Judah took sharp issue. The base of the Sierras, he exploded, began where the Lord had placed the first granite outcroppings — •22 miles east at Rocklin. The Associates overruled him. Whitney and other state employees prepared statements for submission to Washington. Huntington carried them East. The Department of the Interior agreed. Abraham Lincoln signed an order moving the base of the Sierra to Arcade Creek. Huntington was able to borrow more money in Boston and New York at the standard wartime rate of 3 per cent interest a month.

Then Mark Hopkins asked Judah for a 10‑per‑cent down payment on Judah's subscription of Central Pacific stock. There had been verbal agreement at the time of the incorporation that the stock would be awarded to Judah without payment in appreciation for his seven-year struggle to create Central Pacific, and the lobbying through of the Pacific Railway Act. Hopkins, the proper bookkeeper, shrugged. He had nothing  p146 about this in writing. He was responsible for company records. The stock could not be listed in Judah's name until the 10‑per‑cent cash payment was made.

Similar pressures were being exerted on other Central Pacific stockholders. Some forfeited through nonpayment. Others sold out to the Associates at a fraction of the face values. By early summer of 1863, Judah was contacting friends in New York and Boston about the possibility of buying out the Associates, recapitalizing Central Pacific with Eastern money, and forming a new directorate.

Leland Stanford claimed that Judah remained chief engineer of the road. Huntington, during interviews with H. H. Bancroft's researchers in the 1890's, alleged that Judah was paid $100,000 for his "stocks and interests" in the line. Anna Judah, in her correspondence with Bancroft's staffers, said that her husband "had secured the right and had the power to buy out the men opposed to him and the true interests of the Pacific Railroad at that time. Everything was arranged for a meeting in New York on his arrival . . . gentlemen from New York and Boston who were ready to take their places."

Again, Anna put the dust covers over their furniture and began packing. The couple booked passage on the S. S. St. Louis, sailing from San Francisco on October 3. Ted Judah wrote a final letter to Dr. Strong at Dutch Flat:

Heading into Acapulco, the St. Louis sighted a dingy Cape Horn schooner sloshing north on a San Francisco course. Judah leaned against the rail and watched her gloomily until she slipped over the horizon. It was the Herald of the Morning, carrying the first hundred tons of rail for the Central Pacific.

Crocker's crews laid the first rails along Front Street on October 26. In New York City on the same day, Thomas C. Durant and George Francis Train gleefully finished their plans to take over the Union Pacific Railroad & Telegraph Company at the October 29th directors meeting. Sometime that afternoon, a few blocks away, a ship's doctor helped carry delirious Ted Judah ashore.

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