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Chapter 11

This webpage reproduces a chapter of
The Great Iron Trail

Robert West Howard

G. P. Putnam's Sons
New York, 1962

The text is in the public domain.

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and I believe it to be free of errors.
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Chapter 13
This site is not affiliated with the US Military Academy.

 p148  Chapter XII
Manhattan Transfer

When they spoke of our national debt, I asked them what right England had to monopolize the entire national debt of the world. I told them that one of these days we would roll up a national debt that would make them ashamed of themselves. . . . George Francis Train (1863).

It was azalea time, 1863. But this spring the pink Mississippi earth was pocked by caisson wheels slithering the Union's slipknot around Pemberton's 40,000 Secesh troops on the Vicksburg bluffs. Upcountry near the Tennessee line, Brigadier General Grenville Dodge and his staff were experimenting with racial integration. When the order came through from General Indicates a West Point graduate and gives his Class.Grant's headquarters to "Report immediately to the White House on an important matter," Dodge groaned.

Although President Lincoln had finally issued the Emancipation Proclamation on January 1, and the thousands of slaves fleeing out of the Confederacy were legally "freemen," organizing them into militia units to police their own jungle camps and help patrol the Atlanta-Vicksburg roads seemed to be quite another matter. Richmond and Atlanta newspapers had already demanded that a price be put on Dodge's head. Had  p149 Kentucky and Tennessee politicians kicked up a rumpus in Washington too?

Automatically, Dodge reviewed his career during the past year to determine just what reply he might give when the dressing-down began. There was ample time for it. Southbound trains had the right of way. Although the cars of his train were a nightmare of maimed men screaming their plain at every brake slam, it sidetracked to let the "Grant Specials" clatter through: tarpaulined siege guns on the flatcars, guards atop the ammunition vans, a full company of militia jammed into each freight car.

Creation of the Negro militia had been forced on him by the war itself, Dodge reflected. No matter how you looked at it, war was a madman's profession. A lifetime ago — at least, the two years seemed that long — the order had come to slug south with Grant down the Mississippi Valley and supervise repairs on the twisted rails, burned bridges and blasted tunnels left by the Secesh.

He had received another assignment to organize a network of spies that would determine the strength of Pemberton's forces around Vicksburg and keep an eye on Joe Johnston's divisions in East Tennessee and Georgia. Finally at Corinth the Negroes began to sidle over the hills, often 100 families in one day. Some brought only their mules and hound-dogs. Some drove oxcarts loaded with children and cabin goods. All of them had heard the rumor that "Mister Lincoln's fixin' to make us free." They squatted in jungles of brush huts and dugouts just inside the Union lines. Then a delegation led by a country preacher came to Dodge and offered to organize patrols to police their camp. It worked. Dodge issued them uniforms. They drilled regularly and kept the peace in their shabby "Freedom Town." After the Emancipation Proclamation there was no holding them. They wanted to enlist and be trained as fighting soldiers for the Union. Grant approved the experiment. And now, Dodge mused, Mr. Lincoln was probably being  p150 pressured to dress him down because some Senator was being rabid about "armed Negroes and white womanhood."

If the war would only end. Then he could go back with Peter Dey. Between them they should be able to talk that $2,000,000 stock investment out of the Chicagoans and Iowans so that the Union Pacific Railroad could organize. He fished Dey's last letter out of a pocket and reread it. Back in Council Bluffs from the survey trip to Colorado, Dey had written:

I learned enough to satisfy myself that no railroad will — at least in our day — cross the mountains south of the Cache la Poudre and probably not south of Cheyenne Pass. I know but little of the position or prospects of the Pacific Railroad Company. Into whose hand the management will fall is a serious question. Mr. Farnam would, if ten years younger, take hold of it. I think as a general rule that there was more confidence felt in him at the railroad convention in Chicago than any other prominent railroad man there. We have finished the road to Brooklyn [the Mississippi & Missouri Railroad to Brooklyn, Iowa] and are slowly laying track toward Grinnell, but when we shall reach that place is all in the future, depending entirely on Thomas Durant and how he feels about it.

Dodge folded the letter carefully and tapped it against the window sill. Perhaps if the politicians were pressuring Lincoln — and it must be a serious charge to have the Commander in Chief order a mere brigadier to the White House — perhaps he'd be asked to resign. In some ways he'd welcome it. Dey would understand and give him his old job. Together they might persuade Farnam to take over, free and clear of Thomas C. Durant.

Nevertheless, his lips were dry and his hands trembled when the orderly at the White House waiting room called his name and opened the door to Lincoln's office. Mr. Lincoln seemed to have aged twenty years since that afternoon on the hotel steps in Council Bluffs. The beard made his face longer and gaunter. His eyes were tired and pouched. But his teeth flared white in a grin as the gangly frame lurched up and swung across the room, hand outstretched. "Need you," he said.  p151 "Need you real bad. I want you to help me decide the commencement point for the Union Pacific Railroad."

Dodge could not restrain a gasp, but stood stiffly at attention until the President was back behind his desk and seated. Seemed to be enough railroad lobbyists in Washington, Mr. Lincoln began, to form a regiment. Each group wanted its hometown named the official terminal for the Union Pacific. Every Nebraska and Iowa village in the Missouri Valley was getting its licks in. He shrugged and smiled. Somehow, it didn't stack up with the extremely poor sale of Union Pacific stock. The Council Bluffs delegation, a week or two before, had included Peter Dey. Dey had quoted Dodge and described his 1856‑9 surveys of the Platte Valley route. That had reminded Lincoln of the afternoon at Council Bluffs. So he'd asked the War Department to trace Dodge down and call him in.

Dodge nodded thanks and settled back in his chair. Lincoln reached into a desk drawer, pulled out a roll of maps, then — with droll asides — reviewed the arguments presented by the lobbyists for each community. "I saw," Dodge wrote 30 years later, "that he was very thoroughly posted in the demands of the different places, and I also saw that no other railroad company or place had made any such explorations either east or west of the Missouri River as had we, and that they had no such reliable information."

Sometime during the afternoon Dodge learned about the new decision on track gauge. The official rail gauge for the State of California was 5 feet. Huntington and the Californians had made such an ardent case for it that Lincoln had tentatively approved a 5‑foot gauge for the entire Pacific Railroad. Then, the President grimaced, the Chicagoans and New Yorkers had hollered. The New York City, Michigan Central, Michigan Southern, Lake Shore, Rock Island and Burlington, all used 4′8ʺ gauge. The 5′ gauge, they mourned, would mean adjustable wheel trucks on every through car, or ruinous realignment of roadbeds and enlargement of every bridge and tunnel between  p152 Iowa and the Atlantic Coast. Dodge grinned, recalling that the Missouri Pacific was in just as bad a fix with its broad gauge between St. Louis and Kansas City.

Next, the President went on, the Congressmen began groaning too. The official gauge of the Pacific Railroad was about to be changed to 4′8ʺ. So much for that. Now, what should he do about that official commencement point in Iowa? It was a rough assignment for a Council Bluffs homeowner who had devoted five or more years to surveying and talking up the Council Bluffs-Platte Valley throughway. The President, he gathered from the twinkle in his eyes, realized this, and was challenging him as an engineer. Just the same, he couldn't quite believe that this was the real reason for ordering him to Washington.

Mile by mile, Dodge described the shore bluffs, swamps and gradients down the Missouri's midvalley. Sioux City was too far north and Plattesmouth too dangerous during the spring floods. Inevitably, as any engineer would have, he pinpointed Council Bluffs-Omaha as the logical terminal for the Union Pacific. Lincoln said he would think about it, swung his chair around, and asked Dodge's frank opinion about the disappointing sale of Union Pacific bonds.

"The Pacific Railroad is too big for private enterprise," Dodge replied. "The government should build it — or at least amend the Act along the lines indicated by the commissioners' convention." The Government would do everything in its power to encourage private industry, the President said slowly. His next sentences were so carefully couched that Dodge instinctively leaned forward. Something told him that this was the real reason for his trip to the White House.

Perhaps, Mr. Lincoln drawled, Congress might be willing to shift the Federal loans on the Pacific Railroad from a first-mortgage to a second-mortgage category.

This really was it! Such a revision of the Act would enable Union Pacific and Central Pacific to issue first-mortgage bonds. Lincoln was staring at him expectantly. Dodge blurted the  p153 question: "May I take the news to New York that the White House would consider such a revision of the Pacific Railroad Act?"

Mr. Lincoln nodded.

The Lincoln-Dodge conversation occurred during the third or fourth week of April. Dodge was in New York the next day, reporting its details to Alcott and Poor. Thomas Durant may have sat in. If not, he heard the story within a few days, began a series of conferences with William Ogden, Cornelius Bushnell and H. S. McComb, then offered to finance a lobby to concentrate on a new Pacific Railroad Act.

At 10 A.M. on July 4, President Lincoln announced the decisive victory over Indicates a West Point graduate and gives his Class.Robert E. Lee's Army of Virginia at Gettysburg. At 10:30 A.M. General Grant wired the White House from Vicksburg, The enemy surrendered this morning. After twenty-seven desperate months, the Union could grind from defense to offense. The Civil War might thunder on for years and could still end with an independent Confederacy, but now the New West belonged to the Union.

Every banker, broker and industrialist knew the American Routine: War . . . Depression . . . A massive trek into the West by the jobless and dispossessed. Upstate New York, the Ohio Country, Kentucky and Tennessee were the business depression "run-off" after the Revolution. Michigan, Indiana, Illinois, Alabama, Mississippi and Louisiana took up the economic slack after the War of 1812. California, Texas, Western Missouri and Kansas Territory played the same role after the War with Mexico. Nebraska, Colorado, Utah, Montana and the vast Indian heartland of the Dacotah Territory were destined to attract the unemployed and battle-shocked wanderers after the Civil War. The Pacific Railroad would be their throughway.

Grenville Dodge furloughed home to Council Bluffs with malaria soon after the Vicksburg surrender. "I find they are about to organize the Union Pacific," a friend wrote him from New York on August 20. "Durant is determined that it shall  p154 be organized as to terminate at Omaha. He asked me this afternoon if you could be induced to leave the Army and take hold. I told him you could. He will write you today upon the subject."

This seems to have been the first indication to Dodge, Dey and the other railroad veterans on the Iowa frontier that Durant was plotting to take over the Union Pacific Railroad & Telegraph Company. Dodge turned down Durant's offer and passed the news along to Dey that the New York manipulator was again demonstrating his skill in intrigue and "double talk."

Durant's next move appeared as a news story in the October 7th issue of the Chicago Tribune, under the headline of The Pacific Railroad:

Omaha, Nebraska, Oct. 6. The $2,000,000 of stock required by the charter of the Union Pacific Railroad Company, previous to an organization, has been subscribed and paid to the treasurer, and a meeting of the stockholders has been called to convene in the city of New York on the 29th inst. What is still more important to Omaha, the Mississippi & Missouri Railroad has been selected as the commencement of the Pacific route. The western terminus of that Road is on the bank of the Missouri River, opposite this city. A survey for the great Pacific Route, from Omaha west to the Platte Valley, will be commenced in a few days, under the direction of Mr. Dye [Dey, obviously], Chief Engineer of the Mississippi and Missouri Railroad. Lines will also be run from the Missouri River west to the Platte Valley commencing at Bellevue, Plattsmouth and the mouth of the Platte River. The Engineers who are to run these lines are now in this city.

During the 1870's, in an altercation between Council Bluffs and Omaha about the "official eastern terminal" of the Union Pacific, the Supreme Court ruled that President Lincoln's decision fixing the eastern terminal of Union Pacific "on the western boundary of the State of Iowa . . . within the limits of the township of Iowa opposite the town of Omaha in Nebraska" was dated, "November 17, 1863."

The October 7th announcement in the Tribune must have  p155 been a Durant handout and part of a typically elaborate plan for "hedging the bet" of the $150,000 to $175,000 he had just invested in order to take over the company.

The Mississippi & Missouri's railhead was still more than 150 miles out of Council Bluffs on October 7. The newspaper report about its selection as "the commencement of the Pacific route" tingled through brokerage offices. The stock began to rise. When it reached 149, Thomas C. Durant sold out. Dodge and others later inferred that Durant's profits in the move were "more than $250,000." He reinvested part of it in the Chicago & Galena and other roads that William Ogden was merging into the Chicago & Northwestern. Subsequently, a second publicity campaign shrilled the Chicago & Northwestern's plan to complete, "the most direct Pacific Railroad connection," via Clinton and Cedar Rapids, Iowa. Its stock, too, rose to 150.

Weeks before October 7 Durant had rigged the plan for his take-over of Union Pacific at the October 29th directors' meeting. The plan was intriguingly simple. By September 1, less than $400,000 worth of Union Pacific bonds had been pledged. The remaining $1,600,000 required before a board of directors could be elected called for a 10‑per‑cent down payment of $160,000. Durant went to merchants and brokers in New York and Philadelphia with an offer to underwrite this down payment if they would accept the bonds in their names. Later, if they decided that this was a sound investment, they could reimburse him.

Durant defended the trick during his testimony in 1873 before one of Congress' committees for "investigation of the Pacific Railroad." "Finding it impossible to induce capitalists to engage in the enterprise," he testified, "I succeeded in obtaining subscriptions for the requisite amount only by inducing my friends to subscribe; I advancing the money to pay their first installment of 10 per cent thereon, giving them the option to retain the stock by returning me my advances, or I would find parties to take the stock off their hands. All of this stock, amounting to three fourths of the whole stock required  p156 to be subscribed, was subsequently transferred to me, the parties not choosing, even after the Amendment in 1864, to take any risk in the enterprise."

Again — coincidence. Thomas Durant and Collis Huntington had similar habits and characteristics. Each was a lone wolf, brilliant in economic plotting but ruthless in social relationships. Both were natives of Connecticut. Both, like Judah, Stanford, Crocker, Harte, Dix, Sherman, Montague and Dillon were at the Mohawk-Hudson junction in 1836. Each wrested control of one of the Pacific Railroad companies during the same months of 1863.

During the weeks of the Huntington-inspired showdown between Theodore Judah and The Associates, the ten-year‑old partnership between Henry Farnam and Thomas Durant seethed to dissolution. Farnam had supplied most of the funds for the Platte Valley and trans-Rocky surveys made by Peter Dey and Grenville Dodge. Both Dey and Dodge hoped that Farnam would be elected either president or executive director of Union Pacific when construction began. But Durant's juggle of Mississippi & Missouri stock and the rumors about his Union Pacific takeover brought Farnam to a decision he had been pondering for more than a year. He resigned as president of Rock Island and as a Union Pacific commissioner, sold his Chicago home, and booked passage to England for Mrs. Farnam and himself. During the next three years, while Union Pacific writhed through a series of Durant crises, the Farnams toured Europe, Greece and the Holy Land.

Meanwhile, like was attracting like. A partnership between Durant and George Francis Train developed during the summer or early fall of 1863. During the decade since he had roared out of the Liverpool office of his Uncle Enoch's White Diamond Line, Train had become a millionaire who was as deft at writing essays and delivering lectures as he was at gauging market trends.

In England when the Civil War began, Train charmed London bankers into backing construction of a street-railway  p157 between Marble Arch and Shepherd's Bush. He ballyhooed the project as "the workers' carriage line," designed small coaches that could be drawn by a team of horses, and set up a schedule of trips every half hour. His "tramcar line" was London's first of the horsecars, cable cars and trolley cars that would enable the world's cities to sprawl out to Suburbia. But it was too radical for the Londoners of 1862. Clerks and factory workers decided it was more manly to walk to and from their jobs. Carriage owners sputtered about the iron tracks and the lumbering vehicles' interference with traffic. Also, Train's temper flared against the British government's flirtation with the Confederacy, and the construction of Confederate warships at Liverpool shipyards. He delivered a series of lectures criticizing Prime Minister Gladstone on both issues, then plunked boldly for Ireland's freedom. Her Majesty's Government ordered Train out of the country, and one source contends, threw him in jail until sailing time. London's first tramway went into bankruptcy.

But Train had a passion for railroad promotion. In 1863 he bought a few Union Pacific bonds, made Durant's acquaintance, and began suggesting plans for corporations that would control construction contracts and develop Federal land grants as homestead and industry sites. Durant urged Train to explore the idea. He vaguely recalled that some sort of organization for financing railroads had been set up in Pennsylvania. Train nodded. There was a huge one in France, too, called the Crédit Mobilier.

While Durant completed negotiations for a Union Pacific board of directors that would be representative of the states and territories but pliable to any plans he and Train might decide on, Theodore and Anna Judah were sailing toward New York. George Francis Train may have been one of the "Boston gentlemen" who, as Anna wrote in 1891, were waiting to discuss Judah's plan for purchase of the Central Pacific from The Associates. Train's enthusiasm for the Pacific Railroad and  p158 his vision of a massive realty promotion across Nebraska, Dacotah and Colorado would have exuded into California and Nevada. However, the probabilities are that Judah was negotiating with some of his old associates on the New England railroads plus banker friends of the Pierce family. The name of Cornelius Vanderbilt consistently appears as Judah's principal prospect in New York. Vanderbilt bought up the New York & Harlem Railroad that year, and began the three-year struggle that gave him control over the New York City. Statements on record by Vanderbilt's relatives indicate that he distrusted Thomas Durant, so never invested in Union Pacific. Yet by refinancing Central Pacific and focusing his skills on the Pacific Railroad he could have become its tycoon and changed the outcome of the massive race across the Great Desert. But the identity of any of Judah's prospects is guesswork. Anna never identified any of them. Her 1819 letters are the only source of facts about the twenty-three‑day trip from San Francisco to New York.

The skies darkened, she told, as their train coughed up the mountain ridge at the Isthmus of Panama. Thunderheads glimmered black and gold above the Caribbean. Ted Judah hurried from the train shed at Aspinwall, purchased an umbrella, and when the deluge broke, gallantly escorted women and children from the train to the steamship wharf. "He could not see them exposed to the rain and not try to do his part and more for women and children who had no one to help them," Anna wrote.

At sea that night Judah complained of a headache and began to shiver. The ship's doctor pronounced it yellow fever — one of the nineteenth century's deadliest plagues. Their stateroom was quarantined. At the New York wharf, sometime on October 26, the ship's doctor helped carry Judah to a carriage. Anna sent the Manhattan Hotel's porter with a message to Dr. F. N. Otis, a family friend. Dr. Otis's examination confirmed the ship doctor's analysis. Judah was dying  p159 of yellow fever. "He has overworked," Otis concluded, "and such men fall victims to such a fever."

A few blocks away on Williams Street, during the same hours, Durant and Ogden were greeting the first delegations of Union Pacific commissioners. Since the company was still under the jurisdiction of William Ogden and the commissioners, Durant's role was that of "friend in the back room." His plan for development of the Union Pacific depended on a majority vote in the board of directors. He must have selected 15 or 20 of the nominees for the board — and run a rehearsal or two on nomination and voting procedures.

John A. Dix was Durant's choice as president of Union Pacific. During the quarter century since his appointment as New York's Secretary of State (and school superintendent) Dix had become one of the most powerful figures in the Republican party. He was one of New York's United States Senators in the 1850's. When the John B. Floyd-Pony Express scandal and South Carolina's secession exposed the methodical looting of Federal funds and Army arsenals by the Southerners in Buchanan's Cabinet, Dix was ordered to Washington as Secretary of the Treasury for the desperate two months before Lincoln's Inaugural. At Congress' insistence he moved into the White House and literally became Buchanan's guardian. The confidence he restored enabled Federal loans that financed Lincoln's program and the creation of Union armies during the spring and summer of 1861.

During the 1850's Dix, too, became a railroad enthusiast. The Erie Railroad elected him president. Durant sought him out while the Mississippi & Missouri was being created, introduced him to Henry Farnam, and persuaded him to act as president of that line. Now Dix, like many Republican leaders, held the rank of major general. His war duties would prevent much attention to Union Pacific matters. But his name should do much for its stock promotions, as well as the "more favorable"  p160 Road Act that President Lincoln had suggested to Grenville Dodge.

The October 29th meeting moved smoothly, as per rehearsal. Of the 30 directors elected, 17 were New Yorkers. The total number of shares voted, reported the newspapers, was "2,007 of $1,000 each." On this basis, control of the Union Pacific Railroad & Telegraph Company cost Durant a down payment of $160,700.

The October 30th election of officers was just as routine. Henry V. Poor continued as secretary. John J. Cisco, a New York banker and General Dix's assistant secretary during those grim weeks at the Treasury post, was a logical choice for company treasurer. The election of Dix as president was unanimous. So was Durant's election as vice-president and general manager. Only 16 of the 30 directors were present for the voting, plus the 2 directors representing the Federal Government.

That night, while the new officers drank toasts to "the Road to India" and "the Lifeline of the Union," Anna Judah and Dr. Otis knelt in prayer beside Ted Judah's bed. His face was a livid yellow. His foam-flecked lips opened now and then to mumble phrases about "the road." He died at dawn on November 1.

Again, destiny had readjusted the timetable for the Pacific Railroad. The day after Thomas Durant stole control of the Union Pacific Railroad & Telegraph Company for $160,700, the young genius who had visualized and created the Central Pacific Railroad died in a hotel room a few blocks away. With Judah's death, Huntington rule of Central Pacific and the fantastic future of The Associates was assured.

While a Connecticut Valley train carried Judah's casket toward Greenfield, Massachusetts, President Dix approved General Manager Durant's orders for an elaborate groundbreaking ceremony for the Union Pacific Railroad at Omaha on December 3.

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