Modern history

12

West Across Texas

Having brushed off the Atchison, Topeka and Santa Fe at Deming, Collis P. Huntington and the Southern Pacific pushed eastward. At stake were connections with railroads that were rapidly building west across Texas. If Huntington could keep the supply of rails coming and his fidgety partners happy about construction costs, he hoped to meet these competitors as deep into Texas as possible.

Texas was no stranger to railroads. It had hardly declared its independence from Mexico when the Republic of Texas chartered the Texas Rail Road, Navigation, and Banking Company in December 1836. Its sweeping name and authority to construct railroads “from and to any such points … as selected” raised cries of monopoly, and no track was ever laid.

Prior to its admission as a state in 1845, the Republic of Texas granted three other railroad charters. All envisioned lines from various points near the Gulf Coast to the Brazos Valley, but, again, no rails were put down. The projected line from Harrisburg (on Buffalo Bayou, just east of Houston) to the Brazos, however, became the precursor to a succession of incorporations that by 1853—the year of the western railroad surveys—had constructed a 20-mile segment from Harrisburg to Stafford. This Buffalo Bayou, Brazos and Colorado Railway was the first operating railroad in Texas.

Other short lines soon followed, although railroad operations and new construction suffered during the Civil War, as they did throughout the South. Among those companies to survive the war with some momentum were the Houston and Texas Central Railway running generally north-south and the westward-bound Buffalo Bayou, Brazos and Colorado.

Building south from Missouri to tap the Texas cattle trade, the Missouri, Kansas and Texas Railway—the venerable Katy—reached Denison, Texas, on the Red River on December 24, 1872. When the Houston and Texas Central also reached Denison the following year, the spreading web of Texas railroads had its first connection to the nationwide rail network.

Meanwhile, the Buffalo Bayou, Brazos and Colorado reorganized as the Galveston, Harrisburg and San Antonio Railroad and built into San Antonio by February 1877. By then, its principal stockholder was Thomas A. Peirce, and locals commonly called the road “the Peirce line.” The railroad itself, however, adopted the moniker the Sunset Route. By then, Tom Scott’s Texas and Pacific had cobbled together some lines in East Texas and reached Fort Worth.

By the end of 1879—as the Southern Pacific was building across Arizona—there were 2,440 miles of railroads in Texas. Fewer than 100 miles, however, lay west of a line generally south from Denison through Fort Worth to San Antonio. East of that line, Texas was crisscrossed by tracks. West of that line, it was an entirely different matter. To understand the railroad moves into the emptiness of West Texas, it is necessary to backtrack a few years and review Thomas A. Scott’s transcontinental exploits.1

By late 1870, the principal backers of the Union Pacific Railroad—among them brothers Oliver and Oakes Ames and Thomas Durant—had finally stretched their credit to the breaking point. Unable to meet their January 1871 interest payments, they approached J. Edgar Thomson and Thomas A. Scott for assistance. From their early westward expansion of the Pennsylvania Railroad to their postwar investment in the Kansas Pacific, Thomson and Scott had made no secret of their transcontinental interests. Despite their many other commitments, they found the lure of the Union Pacific impossible to resist.

When a myriad of financial moves were complete, Thomson, Scott, and two of their Pennsylvania Railroad cronies—budding steel magnate Andrew Carnegie and sleeping car innovator George Pullman—were on the Union Pacific’s board of directors, and Scott had been elected to its presidency. This infusion of Pennsylvania Railroad capital and experience gave an immediate boost to Union Pacific stock and the creditworthiness of the railroad’s bonds. The optimism, however, was fleeting.

The winter of 1871–72 struck with a particularly harsh vengeance and stranded Union Pacific trains from Wyoming across the Great Plains. For almost an entire month, the line sat silent. While Scott struggled to respond, Huntington fumed about the lack of through traffic to the Central Pacific and boasted that his men routinely operated across the Sierras through much worse. It is likely, however, that the Union Pacific’s plight served to harden Huntington’s resolve to control a more southerly transcontinental route on his own.

But more than blizzards soon overwhelmed Scott. Growing controversy over the Crédit Mobilier scandal, the Missouri River bridge project, and relationships with connecting lines demanded far more attention than Scott was able to give to the Union Pacific. He was simply spread too thin. Scott was “an able man,” Oliver Ames conceded, “but he is so loaded with work that we have but very little of his service.”

One action that Scott and his Pennsylvania group did take only served to infuriate the Union Pacific old-timers. Having bought in at low stock prices to rescue the road, the Pennsylvanians proved fleeting in their loyalties and were quick to sell at handsome profits. Carnegie even advised Oakes Ames to sell out above $30 per share, claiming the road “was not worth that.” At the March 1872 shareholders meeting, Thomson, Scott, and Carnegie were not reelected to the board of directors.

Thus “the vaunted Pennsylvania connection,” wrote historian Maury Klein, “departed as abruptly as it had come.” The Union Pacific turned to Cornelius Vanderbilt’s son-in-law Horace F. Clark as its new president. Clark had been running the Lake Shore and Michigan Southern Railroad, which linked Vanderbilt’s New York Central with Chicago. Their alliance with the Union Pacific and a deal with the intervening Chicago and Northwestern Railroad threatened to unify a through line under one group’s control from Utah to the East Coast. It also, of course, continued the historic New York Central–Pennsylvania Railroad rivalry well westward and—most important to the Texas railroad story—pushed the axis of Thomson and Scott’s interests southward.

One is tempted to speculate what might have happened had Scott been able to manage the Union Pacific juggernaut as well as his other interests. In the end, his brief flirtation with the Union Pacific showed the extent of his insatiable railroad appetite and caused him to redouble his efforts with the Texas and Pacific.2

The man who stepped into Tom Scott’s shoes as the chief financier of the Union Pacific was none other than Jay Gould. As it turned out, Gould, too, would come to have more than a passing interest in Texas railroads.

Jay Gould was born in 1836, in Roxbury, New York, in the western hollows of the Catskill Mountains. His given name was Jason, after one of his father’s brothers. He was a sickly lad who followed five sisters into the family, and he grew slowly in body and mind. By his late teens, having been largely self-taught, young Jay worked as a surveyor and map-maker and also published a 426-page history of surrounding Delaware County. Among his circle of friends was John Burroughs, who would achieve almost as much fame as a naturalist as Gould would as an entrepreneur.

Gould’s first major business ventures were in leather tanneries. They were marked both with a steep learning curve that Gould readily climbed and by strained relations with his partners that gave Jay his first taste of protracted litigation. Unlike William Jackson Palmer, who was the same age, Gould eschewed service in the military during the Civil War and instead spent his time quietly and obscurely learning the ways of Wall Street.

Along the way, Gould practiced such secrecy in his business dealings that some contemporaries claimed it was proof of chicanery rather than calculating shrewdness. Even his closest advisors were frequently uninformed and oblivious to his plans. As one early business associate complained, “He never disclosed to his lawyers, or to anyone else except the particular ally chosen for the particular venture, what he was about to undertake—and never, to anyone, the full extent of what he had in mind.”

But Gould would not operate below the public radar for very long. The event that made him anathema to those who detested the power of Wall Street involved the Erie Railroad. Squeezed between Vanderbilt’s New York Central and Thomson’s Pennsylvania Railroad, the Erie had been built to link New York City with the Great Lakes. By 1867, the road was being actively courted by both Vanderbilt and Boston interests who hoped to ally it with the Boston, Hartford and Erie Railroad.

When the complicated maneuverings of the 1867 annual meeting of the Erie Railroad were done, its board of directors included, among what the Boston Herald called “a batch of nobodies,” a stockbroker named James Fisk, Jr.—so little known that some papers recorded his name as “Fiske” or “Fish”—and another listed simply as “J. Gould.” Within a year, these two nobodies wrestled control of the Erie for themselves, and Gould assumed the presidency of his first railroad.

Gould and Fisk next turned to gold. Through a variety of agents, they quietly began amassing a large gold position and watched its price climb. On what came to be called Black Friday, September 24, 1869, Gould sold heavily in anticipation of the government putting $4 million of gold on the market. When that announcement was made midday, prices plummeted. Many investors blamed Gould and Fisk for the debacle. Gould was said to appear “quite depressed,” but subsequent events suggest that his demeanor was simply a façade to mask huge profits made in the run-up.

“Gentleman Jim” Fisk came out of the attempted gold corner more flamboyant than ever. He was soon wallowing in a torrid love triangle that involved opera star Josie Mansfield and threatened to drag the secretive Gould through the mud with him. When Josie’s other paramour shot Fisk dead on the steps of New York’s Grand Central Hotel, Gould was suddenly without a partner, and he tried to return to a lower public profile.

But the Erie affair and the attempted gold corner—no matter what Gould’s ultimate proceeds—were enough to mark Gould with disdain in many circles. The immediate result was that Gould was forced out of the presidency of the Erie, although not without a satisfactory settlement. Looking around for another venture—railroads were hard to ignore—Gould began investing in the Union Pacific. When Tom Scott left the Union Pacific in 1872 and his successor, Horace F. Clark, died suddenly about a year later, the Union Pacific faced another leadership vacuum into which Gould readily stepped.

Gould was elected to the Union Pacific’s board in March 1874 and quickly took command of its finances. Some assumed—and others involved with the Union Pacific feared—that Gould would simply bull its stock, strip its resources, and then exit with huge profits. But while the Erie and gold-corner chapters of his life would forever color his reputation, Gould was to show considerable loyalty and staying power with the Union Pacific. And as for railroads, Jay Gould was just getting started.3

Jay Gould did not let his interest in the Union Pacific keep him from other railroad ventures. He invested in the Kansas Pacific and eventually engineered its absorption by the Union Pacific. He invested in the Denver and Rio Grande and the Denver, South Park and Pacific, and determined to profit from whatever company thrived. And he tied together several Midwest short lines into what would become the Missouri Pacific system and then aimed a line toward Texas. In June 1880, the Missouri Pacific leased the Katy, giving Gould a railhead at Denison, Texas, and putting Tom Scott’s Texas and Pacific next in his sights.

Scott’s interest in the struggling Texas and Pacific had long cast a huge shadow across southwestern transcontinental maneuvers. The panic of 1873 spawned the legend of Scott’s vote to save the Texas and Pacific at all costs. But it was Oliver Ames’s characterization of Scott as “so loaded with work” that may have said it best when it comes to evaluating his final transcontinental accomplishments.

Within two years of Scott’s departure from the Union Pacific, J. Edgar Thomson, the patriarch of the unified railroad system and Scott’s personal mentor, was dead at sixty-six. Scott was on his own. In addition to his many western ventures, he became the president of the Pennsylvania Railroad, a role he had managed unofficially as Thomson’s health declined. At the time, the Pennsylvania Railroad was the largest corporation in the world, and it would seem to have been enough of a challenge for Scott.

But Scott was never satisfied with a regional role for the Pennsylvania any more than he was satisfied with being president of only one railroad. Try as Scott might, however—whether with his early efforts in Southern California to preempt the Big Four in their backyard or to wrestle a subsidy as well as a land grant from Congress to push the line west across Texas—he came up short with his transcontinental dreams.

“You know I never had much respect for Tom Scott’s ability to accomplish any great undertaking,” the Big Four’s David Colton confessed to Huntington a year before Colton’s own death. “He can give everybody a Pass, and get them to say he is a ‘big Injun’ and good fellow—but he is not the man to lay down a Hundred or Two Hundred Thousand Dollars Cash, to carry a scheme of his own.”

According to Colton, Gould was a different sort: “the reverse of Scott; he is a one man power; consults no one, advises with no one, confides in no one, has no friends, wants none—is bold. Can always lay down Two or Three Hundred Thousand Dollars to accomplish his plans and will do it if he thinks it will pay.”

Given that Colton had his own demons to fight—dubious financial dealings at the expense of the Big Four during the last year of his life being just one of them—one wonders if he was not overly harsh on Tom Scott or perhaps too quick to underestimate him. Huntington’s own advice to Colton about Scott was more cautious. “You write that you think you have Scott beaten,” Huntington ventured, “but allow me to suggest that you do not go to sleep while he is awake.”4

Now, awake or asleep, Tom Scott was carrying an ever-increasing amount of debt. Because of Huntington’s blocking maneuvers in Congress, Scott had never been able to wring a subsidy from Congress for the Texas and Pacific to go along with its land grants. He still needed to find funds for construction. By the time that Scott was seeking funds to build west from Fort Worth, one of his investors was Jay Gould.

Stretched thin as he was, Scott’s staying power with the Texas and Pacific gradually ebbed, and Gould’s power—as was his tendency—expanded to fill the void. By the spring of 1881, Scott had worn himself physically and emotionally to the breaking point. He approached Gould to cash out his remaining position in the Texas and Pacific. All too willingly, Gould acquired Scott’s controlling interest in the line.

Four years earlier, when the Southern Pacific was barely across the Colorado River at Yuma, David Colton had accurately prophesied this result. “Disagreeable as the medicine is,” Colton then advised Huntington, “it is better for us to have Gould buy Scott out, and get rid of him and all of these double contests, and then try to take from Gould the West End of the T. and P. Road.”5

A month after he sold out to Gould, Thomas A. Scott was dead at fifty-seven. Supposedly, Huntington genuinely grieved at Scott’s death because he had been “a mighty adversary.” He died a wealthy man thanks to his Pennsylvania Railroad shares, but others would complete his transcontinental vision. Thus, it was Collis P. Huntington and Jay Gould who squared off in round two of the battle for the 32nd parallel route.6

• • •

Even after Gould took over the Texas and Pacific, Huntington and the Southern Pacific appeared to have the edge in what was shaping up to be another race of construction. Certainly the Southern Pacific had the momentum. Having brushed off the Santa Fe after their meeting at Deming, the Southern Pacific rushed eastward toward El Paso, while the Santa Fe continued another line of its own straight down the Rio Grande.

But as the Southern Pacific and Santa Fe bore down on El Paso from slightly different directions, they were definitely focused on different destinations. For the Santa Fe, El Paso was a secondary gateway into Mexico; the railroad had no interest in building across West Texas. But for the Southern Pacific, El Paso and West Texas were essential to Huntington’s goal of a southern transcontinental completely under his control. That, of course, brought him face to face with Jay Gould.

Gould, however, was not the only railroader with plans to build west across Texas. Thomas A. Peirce’s Galveston, Harrisburg and San Antonio paused at San Antonio only because of the proverbial lack of funds, not any lack of ambition. Peirce, in fact, was quite eager to continue his line westward from San Antonio, but he sorely required additional capital. At some point, Peirce reached a secret agreement with Huntington that Huntington would provide him with capital in exchange for a share in Peirce’s road.

Charley Crocker was among those who pushed Huntington to do so. Fearing rumors that Gould’s Texas and Pacific was marshaling graders to occupy “our line down the cañon” east of El Paso, Crocker urged Huntington to take action and strike any alliance that would counter the Gould threat—even if that meant a belated handshake with the Santa Fe. “It seems to me,” Crocker further counseled, “that if you cannot do anything with the Atchison and Topeka people, you had better at once conclude with Peirce.”

Exactly when this Peirce-Huntington agreement was made is uncertain. But whenever the date and whatever the initial investment, it seems clear that Huntington allied himself early on with Peirce, thus hedging his bets for a route across Texas against whatever might transpire with Jay Gould. Much as Gould appears to have done with his purchase of Texas and Pacific stock, Huntington used this initial investment to exert an increasing influence over the Peirce line.7

But the first problem that Huntington faced as the Southern Pacific neared El Paso was that the railroad lacked the legal authority to operate in Texas. Given the past influence of Tom Scott with the Texas legislature, it had not granted the Southern Pacific a Texas charter, and with Gould now at the helm of the Texas and Pacific, it was unlikely that such authority would be granted any time soon.

With no authority to cross the Rio Grande and build into Texas, Huntington and Crocker nevertheless sang a refrain reminiscent of the bridge battle at Yuma. “I do not suppose,” Crocker haughtily told Huntington early in 1881 as he eyed El Paso, “that anybody would interfere with our building it except the A.T. and S.F. people.”8

As it turned out, both the Southern Pacific and the Santa Fe had to ask the War Department for permission to cross portions of Fort Bliss as the two roads neared El Paso. The Santa Fe graded right down the middle of the post’s parade ground, while the Southern Pacific right-of-way passed behind the main buildings. “They really damage the Post,” Crocker complained to Huntington, “whereas our line would not.”

The Santa Fe line stayed on the east side of the river all the way from Las Cruces to El Paso. Coming from Deming, the Southern Pacific first had to cross the Rio Grande via a substantial bridge. “We crossed the bridge with the track yesterday, and Strobridge will pass through El Paso the latter part of this week,” Crocker soon reported to Huntington. The first Southern Pacific train steamed into El Paso on May 19, 1881. The Santa Fe arrived in town three weeks later on June 11.9

The Southern Pacific did not intend to linger there for long. In typical fashion, Huntington quickly found a way around the lack of a Texas charter for the Southern Pacific. He was certainly not content to fund Peirce’s expansion westward from San Antonio and then wait patiently at El Paso to see whether it or Gould’s Texas and Pacific would arrive first.

So, by July 1881, the Southern Pacific took over a controlling interest in the Galveston, Harrisburg and San Antonio. The former Peirce line then contracted with the Southern Pacific’s construction company to work out of El Paso on its behalf—which, of course, was really Collis P. Huntington’s behalf. Using the same crews that had built across Arizona and New Mexico, these contractors hastily pushed the de facto Southern Pacific line southeast from El Paso along the Rio Grande.

Crocker was determined to control as much ground as possible. Looking to extend at least 100 miles within two months, the construction boss of the Big Four balked at any talk of a joint operating arrangement with the Texas and Pacific. The road “should be ours and controlled by us,” he told Huntington. “I am afraid of any entangling alliances with that little fellow on Broadway [Gould]. If he should get any hitch on us, he would drive us to the wall any time he could.”10

For his part, Gould was not convinced that Huntington would show any more loyalty to the Texas and Pacific than Huntington had toward the Santa Fe at Deming, and Gould, too, was determined to push the meeting point as far westward as possible. But as the Texas and Pacific built west at a mile a day, Gould discovered that he held a weapon far more potent than a-mile-a-day construction.

In its rush eastward, the Southern Pacific had built a portion of its line through southern Arizona and New Mexico on the right-of-way originally awarded to the Texas and Pacific by its congressional land grant. Gould visited his legal counsel and posed his question rather casually.

“If one man builds a house on the lot of another, without the consent of that other and especially against his protest, to whom does the house now belong?”

“It becomes annexed to the land and belongs to the landowner,” the lawyer replied.

That was all Gould needed to know. He ordered a suit commenced against the Southern Pacific to claim that portion of track that Huntington had built over the Texas and Pacific land grant. For once, Huntington was caught off guard. If Gould won his case and also continued the Texas and Pacific westward to El Paso, not only would Huntington have to relinquish miles of track west of that point, but his new construction eastward from there would be paralleled by the Texas and Pacific through an area in which Crocker dismally noted, “there is no local business.”11

Quoting the same Right-of-Way Act of 1875 that William Jackson Palmer had ignored to his detriment, Southern Pacific officials quickly countered that regardless of the Texas and Pacific land grant, a right-of-way through the public lands of the United States was available to any railroad duly organized under the laws of any state or territory. Despite the neatly sidestepped question of authority in Texas, the Southern Pacific had in fact organized legal subsidiaries to operate in both Arizona and New Mexico.

“I do not believe the Texas and Pacific can steal our road through New Mexico and Arizona,” Crocker professed to Huntington. But if the uncertainty made him nervous, he had the Southern Pacific’s usual answer: “we shall go right on building, regardless of negotiations.”

For his part, Huntington thought that Gould was running a strong bluff. “My own opinion,” he told Crocker, “is that this move to contest our rights west of the Rio Grande is got up as a basis to negotiate on our stopping at the Rio Grande …” But with characteristic bravado, Huntington added that he thought the threat would disappear once the Southern Pacific had laid a few hundred miles of track into Texas.12

For all the Big Four’s own machinations, Crocker remained highly suspicious of Gould and told Huntington that he wanted “as little to do with him as possible.” Referring to Gould, Crocker warned Huntington to “do more watching than ‘praying,’ when you come in contact with him.”

When Huntington replied that Gould and his associates had been cordial with him despite the pending suit, Crocker growled back, “Their friendship is evidenced by the petitions which they filed … to steal what little road we have built in Texas. I assure you that I shall never go to sleep on their smiles …”13

Throughout October and November 1881, as the construction crews of the Southern Pacific and the Texas and Pacific raced toward each other across West Texas, Huntington and Gould carried on a delicate dance. “At our last meeting you were to prepare some suggestions concerning the basis of an arrangement,” Gould wrote Huntington in a brief letter marked “Personal,” adding, “I will be glad to confer with you any time.”

Huntington, of course, was hardly anyone’s dupe. But he also knew when to accomplish his objectives by making peace rather than by declaring war. Now there was too much at stake to risk losing a war. Gould, who had stared into just such a possibility of an annihilating war in Colorado the year before and forced the Treaty of Boston upon the belligerents, was also of a mind to secure his southern flanks with as little financial bloodshed as possible. Compromise was not a word that Huntington and Gould used often, but here was a situation where it served both of them well.

On Thanksgiving Day 1881, Huntington and Gould met in New York and hammered out a railroad compromise more sweeping than the Treaty of Boston. The Texas and Pacific dropped its suit and transferred its right-of-way claims and land grants west of El Paso to the Southern Pacific. The two roads agreed to joint operations on the 90 miles of track that the Southern Pacific had by then built east of El Paso and an equal share of the earnings on through business from the Pacific coast.

The Texas and Pacific also promised never to build west of El Paso, and the Southern Pacific agreed not to parallel the Texas and Pacific east of El Paso or to build competing lines to the north or east of its line. Significantly, there was no mention of new construction to the south because Huntington had already covered his bases in that direction by controlling the Galveston, Harrisburg and San Antonio.

Despite his warnings, Crocker crowed that Huntington had gotten the best of the bargain, but it was to serve both moguls and their railroads well for almost fifty years. South of the new Southern Pacific–Texas and Pacific alliance, Huntington was free to continue his straight-line transcontinental eastward toward New Orleans. North of that line, Gould and Huntington momentarily joined as allies to keep the Atchison, Topeka and Santa Fe at bay. Paramount to Huntington’s thinking was any strategy that would keep the Santa Fe dead-ended at Deming and prevent the construction of any railroad that would infringe on the Big Four’s monopoly in California. 14

There was, however, one benefit of the Gould-Huntington bargain that the Southern Pacific never received. When the railroad asked Congress for title to the original Texas and Pacific land grant west of El Paso, the legislators refused to approve the transfer. Officially, the stated reason was that the original grant did not provide for an assignment and that the Southern Pacific had built the line “not because of Congressional wishes but rather its own desires.” More likely, the real reason was Huntington himself.

In the heat of the lengthy battles with Tom Scott over land grants and subsidies for the southern route, the Big Four’s man in Washington had often boasted that the Southern Pacific didn’t need federal assistance to build east from Yuma. Now, with the tide having turned against the largesse of land grants, Congress held Huntington to it. In 1885 Congress declared the western part of the Texas and Pacific land grant forfeit.15

Huntington fumed, but he had still gotten the best of the bargain. On December 1, 1881, 82 miles east of El Paso, the rails of Gould’s Texas and Pacific and Huntington’s Southern Pacific met at the high desert mountain town of Sierra Blanca. When the daughter of chief engineer General Grenville Dodge drove “an ordinary railroad spike” into a hole bored in the final tie, it completed what was ostensibly the nation’s third (giving the Santa Fe the benefit of the doubt at Deming) transcontinental railroad.

There wasn’t much hoopla, but rails now spanned the old oxbow route of John Butterfield’s Overland Mail from St. Louis to San Francisco. “What should have been made a memorable occasion in the history of this city,” the Lone Star of El Paso complained, “was, by some inexplicable lack of appreciation of its importance, allowed to pass without even a demonstration.”16

For the Texas and Pacific, the junction at Sierra Blanca was the end of its line west. But the Southern Pacific veered southeast and continued toward its advancing Galveston, Harrisburg and San Antonio subsidiary. Huntington had needed no encouragement once past Yuma, but it was Leland Stanford who put their new goal into a few words.

In that pivotal year of 1881, the governor sent Huntington a map showing lines “such as will sooner or later need to be built.” It might be of service, Stanford suggested, “in making the owners of other lines of railroad comprehend that, when our line is completed through to the Gulf of Mexico, we will have the shortest line for all the country west of the Rocky Mountains to tidewater on the Eastern Coast, and the cheapest route for all that section of country to Europe.”17

There was one railroad, of course, with no intention of bending to such bravado.

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