Modern history

15

Gould Again

Throughout his business career, Jay Gould was simultaneously engaged on multiple fronts. To the casual observer, his actions all over the chessboard seemed erratic. To disgruntled opponents, Gould’s propensity to anticipate, execute, and usually profit from seemingly unrelated moves was proof that he was an unscrupulous corporate raider in the worst sense of the term. Indeed, generations of business and railroad historians never mentioned Gould’s name without the requisite adjective preceding it: infamous, nefarious, manipulative, and ruthless, to name a few of the kinder ones.

Thanks in large measure to the insightful investigative work of historian Maury Klein, Gould’s reputation has undergone a reappraisal in recent years. Gould and his so-called “robber baron” contemporaries were no more one-dimensional than similar tycoons today. Certainly, in a choir that included Collis P. Huntington, William Jackson Palmer, and Thomas A. Scott, Gould hardly deserved to be singled out as “the supreme villain of his era.”1

One might question Gould’s movements, one might be envious of his successes, but on a one-to-one basis, even his adversaries admired his forthrightness. “I know there are many people who do not like him,” his rival and occasional partner Collis P. Huntington remarked, but “I will say that I always found that he would do just as he agreed to do.”

Similarly, the head of a commission investigating the affairs of the Union Pacific Railroad was obliged to admit, “I have always found, even to the most trivial detail, that Mr. Gould lived up to the whole nature of his obligations. Of course, he was always reticent and careful about what he promised, but that promise was invariably fulfilled.”2

And General Grenville Dodge, who built the Union Pacific and whose reputation remained largely above cutthroat railroad shenanigans, worked with Gould for two decades without complaint. Dodge, who perhaps had his hand in more railroad construction in the West than anyone, said of Gould, for whom he built the Texas and Pacific and other legs of the Missouri Pacific system, “When we discussed any question and came to a conclusion and Mr. Gould said, ‘General, we will go ahead,’ or do this or that, no matter what it meant or into what difficulties we got, I never had doubts as to where Jay Gould would stand.”3

Gould’s reputation as somewhat of a loner may have come from the fact that he was leery of people wanting something from him. But that appears to have made him value his closest friends and family all the more. “I appreciate your friendship very highly,” Gould confided to Silas Clark, his longtime business associate, “because I know it is the real stuff.” As for his family, Gould was devoted to his quiet and shy wife, Helen, and their six children, particularly eldest son George and darling daughter Helen. Wall Street may have shuddered at Gould’s approach, but underneath his receding hairline and jet-black beard, Gould’s family knew him as a doting teddy bear.4

All this is not to say that Jay Gould was not a stickler for detail. Indeed, as will be seen some pages hence, Gould frequently held his opponents to the most minute points of a particular contract while using his multiple holdings to overlook its broader spirit. As the 1880s progressed, Gould’s overriding goal became the consolidation of a major east-west transcontinental system under his independent control. He went about it with much the same imperial, entrepreneurial spirit as Collis P. Huntington.

This meant that the other railroads of the Southwest, chief among them the Atchison, Topeka and Santa Fe, were never quite sure where Gould would strike next. Just as the Santa Fe’s entry into California did not mean that its battles against Huntington and the Southern Pacific were over on the western end of its line, there would never be any rest from the continuing machinations of Jay Gould in the East. Gould’s assault on the Santa Fe was complicated and multifaceted, but it generally occurred in three stages.

Initially, Gould negotiated with uneasy bondholders to acquire the Kansas Pacific. The Santa Fe had also been interested in the Kansas Pacific, but Gould outmaneuvered the Boston crowd. His leveraged purchase in 1879 and subsequent quick sale to the Union Pacific—a tactic he used frequently—“transformed a rival into a useful ally.” Not only did this impact the Santa Fe across Kansas and into Colorado markets, but Gould and the Union Pacific were suddenly a powerful force within Colorado as well.5

The second major stage of Gould’s expansion was the completion of the Texas and Pacific and its alliance with Gould’s developing Missouri Pacific system. The result was that the Santa Fe was now shadowed across the plains by Gould lines—the Missouri Pacific to the north and the Texas and Pacific to the south—as well as the Union Pacific–Kansas Pacific system.

The third stage of Gould’s western puzzle was his version of the “straight west from Denver” theme. After besting the Santa Fe in the Royal Gorge and reaching Leadville, William Jackson Palmer had built over Marshall Pass and beat his rival, John Evans and the Denver, South Park and Pacific, to Colorado’s Western Slope. By 1883, Palmer had pushed the Denver and Rio Grande beyond Gunnison, through the depths of the Black Canyon, and on into Utah and a connection with the Union Pacific at Ogden. (Palmer interests had been building east from Ogden since 1881, and the rails were joined at Green River, Utah, on March 30, 1883.)

But the Denver and Rio Grande’s finances were again in dire straits, and Palmer got into a dreadful battle with the road’s outside investors over continued expansion. The general was finally forced to resign as president. He would, however, remain involved with the Utah portion of the line, the Rio Grande Western, and be a major competitor to any road building out of Colorado.

In this setting, Gould renewed his designs on the Rocky Mountain West. In just one example of his transcontinental reach, Gould convinced the Union Pacific to acquire a derelict narrow gauge called the Nevada Central that ran south from the Central Pacific into played-out silver mining country. The line was never rejuvenated, but its purchase showed Gould’s willingness to throw himself into the terrain between Palmer’s westward advance and Huntington’s California fiefdom and attempt to block the continued expansion of both.6

The best way for Gould to defeat Palmer, threaten Huntington’s Southern Pacific, and strike a blow against the Santa Fe was to build straight west from Denver. William H. Loveland’s Colorado Central had never made much progress in that direction, although not for lack of trying. The aftermath of the panic of 1873 found the Colorado Central short of cash and the Union Pacific reaching out to it—for the price of control, of course. With plenty of grumbling in Colorado, but local opposition useless in the face of eastern proxies, the Colorado Central’s board of directors cast its lot with the Union Pacific. In 1875 it voted “that the Colorado Central should be leased permanently to the Kansas Pacific, which now meant the Union Pacific, which now meant Jay Gould.”

With this infusion of capital, the Union Pacific supervised the completion of the Colorado Central line north to its main line west of Cheyenne in 1877 and contemplated work on what was to be called its Julesburg Cutoff across the northeastern corner of Colorado. Both of these standard gauge lines were built with one eye toward Denver but the other toward the mineral wealth of the mountains to the west. To that end, the Colorado Central’s narrow gauge rails were continued up Clear Creek to Georgetown, yet another town with dreams of becoming a silver queen.7

But the siren call to the Colorado Central—just as it was to the Rio Grande, Santa Fe, and South Park roads—was Leadville and the San Juan Mountains, as well as the long-awaited line straight west from Denver. In 1878 Gould incorporated the Georgetown, Leadville and San Juan Railroad. William Loveland was elected president—one of Gould’s usual tactics in nurturing local alliances—but there was no doubt where the true power resided. Gould was in Colorado twice the following summer and each time took a special from Golden to the end of track at Georgetown to ponder the terrain beyond.

Only 2 miles separated Georgetown from the mining town of Silver Plume, but the elevation difference in that distance was 638 feet. To gain that amount of elevation in 2 mere miles required an average grade in excess of 6 percent, far beyond the capabilities of even the most powerful narrow gauge locomotive. To solve this problem, the Union Pacific’s chief engineer, Jacob Blickensderfer, devised what came to be called the Georgetown Loop.

Immediately at the Georgetown station, Blickensderfer pushed the line above Georgetown on a series of rock retaining walls. Entering the narrow mouth of upper Clear Creek Canyon at a place called Devil’s Gate, Blickensderfer surveyed the line to ascend Clear Creek, cross it, and then double-back on the opposite side of the creek, recrossing both the creek and the lower track via a spindly, high bridge.

Once across the bridge, which was to be built both on a grade and a curve, the line continued up the Clear Creek Valley and gained the additional elevation required to reach Silver Plume via an extensive cut and one large fill. The loop and its assorted curves stretched the distance between the two stations to 4.5 miles and reduced the maximum grade to 3.5 percent.8

As was so often the case in railroad surveys, it was one thing to stake out a line and quite another to construct it. The task of implementing Blickensderfer’s proposed route fell to a man equal to the task. Robert Brewster Stanton was born in Woodville, Mississippi, in 1846. His father was a Presbyterian minister who became president of Miami University of Ohio. Young Robert graduated from Miami in 1871, and after a summer surveying the Atlantic and Pacific’s tentative extension into Indian Territory, he determined to become a civil engineer.

Much later, Stanton wrote that John Wesley Powell’s report of his Colorado River explorations through the Grand Canyon made an early impression on him and “created in me the first ambition of my engineering life … that I should some day throw a single span railway bridge across that chasm!” Stanton received a graduate degree in engineering from Miami, and by 1880, he was a division engineer on the Union Pacific, working for Jacob Blickensderfer, who had been his engineering mentor on the Atlantic and Pacific.9

Stanton spent much of 1881 re-surveying Blickensderfer’s route and then supervised grading operations and the construction of the stonework for four main bridges. Spring floods washed out some of the grade in 1883, but tracklaying began, and by the end of September, it reached the abutment of the high bridge at Devil’s Gate. Jay Gould was aboard the first special passenger train to the site. Given the relatively slow pace of construction and the reduced speeds that the line would require, Gould may have wondered whether he was building a main line west or a tourist attraction.

To be sure, the high bridge was a spectacular achievement. Four massive towers, each with four iron legs of riveted quarter-rounds 8 inches in diameter, rose to support eight 30-foot box girder sections. A 60-foot lattice girder completed the center span over Clear Creek. The bridge was 300 feet long and 75 feet above the lower track. It was built on a 2 percent grade, which in its length meant that the upgrade abutment was 6 feet higher than the downgrade one. Photographs of the bridge frequently failed to show that it and its approaches were also built on sharp curves.

All of this was completed by November 25, 1883, but when Robert Brewster Stanton inspected the structure, he refused to accept it. Not only did Stanton find some of the riveting defective but also, incredibly, the order of the support towers had been reversed. The towers at the higher, or upgrade, end of the bridge (toward Silver Plume) had been placed at the lower Georgetown end, causing the bridge to run suddenly downhill at a 2 percent grade rather than continuing the climb uphill. Who was to blame for the error was a matter of considerable debate.

“The bridge builders say this is not their fault,” reported the Georgetown Courier, “but the fault of the railroad company, and hold that the company’s officials gave them the wrong end to start.” The defective riveting was also explained. First-class riveters were hard to come by, and “a number of men engaged for that purpose refused to work on the bridge when they arrived here and viewed the dangerous structure, not withstanding that high wages were offered.…”

That Gould was anxious to press ahead after three years of delay became obvious from the speed with which Stanton directed the remedial efforts. The entire structure was dismantled, the support towers exchanged and placed in their proper positions, and the faulty riveting redone. This was accomplished during the dead of winter.

After the anticipation, the Georgetown Courier took less than two column inches under a perfunctory “The Devil’s Gate Bridge Completed” headline to advise: “ ’Tis done at last. The last stroke on one of the most wonderful viaducts ever constructed in the Rocky Mountains was made yesterday. The structure is now complete and ready for the ties.” On March 11, 1884, the first locomotive steamed into Silver Plume and inaugurated more than fifty years of service over the Georgetown Loop. The following month, track was laid an additional 4 miles up Clear Creek to Graymont, present-day Bakerville.10

But what now of the lure of Leadville and a transcontinental line? Part of the answer lay in the geography west of Graymont. Piercing the Continental Divide in any realistic manner would require a tunnel far longer than the 1,400- to 1,600-foot bore first projected by Blickensderfer. But in the final analysis, Jay Gould’s foray west of Georgetown ground to a halt at Graymont because there was no prize lucrative enough to summon the same caliber of engineering as the Georgetown Loop to surmount the Continental Divide.

By the time the Georgetown Loop was finally built, the Leadville trade had plateaued, and the town was tapped by the Union Pacific’s South Park line over Boreas Pass as well as the original Denver and Rio Grande line. The latter, in fact, would soon continue west from Leadville, over Tennessee Pass, and down the Colorado River toward Utah. Gould himself was spending less time with the Union Pacific—although he remained a shareholder—and concentrating more and more on his Missouri Pacific system. The reality of the situation west of Georgetown was that even as the Georgetown Loop was completed, the compelling reasons for its construction no longer existed.

So there was still no direct transcontinental link straight west from Denver. Only the Denver and Rio Grande had managed to pierce the inner Rockies, albeit by a circuitous route south from Denver. In the process, it had forced the axis of the Santa Fe south after the Royal Gorge battle. But it is ironic that the narrow gauge system William Jackson Palmer championed proved an albatross in the end. Its smaller size simply could not compete economically as freight volumes swelled. Worse, its narrow gauge was a major impediment to transcontinental traffic—switching from standard gauge cars to narrow gauge and then back again—between Pueblo and Utah. (A third rail was added in 1881 between Denver and Pueblo to accommodate both gauges on that section.)

South of the Colorado battleground, it was a different story. The Santa Fe had built a standard gauge line across generally easier terrain and linked Chicago and Los Angeles. The Denver and Rio Grande would persevere, but it would never be able to compete with the speed and high volume that the Santa Fe was able to push across Raton Pass. Perhaps the Santa Fe had won the battle of the Royal Gorge after all.

Meanwhile, as Jay Gould was entrenching his position in the midsection of the country with the Missouri Pacific, Collis P. Huntington completed his end run around Gould’s southern flanks. Despite the Huntington-Gould agreement of 1881 at Sierra Blanca, Gould and the Texas and Pacific were not enjoying a boom in California trade via the Southern Pacific. The agreement had contemplated that El Paso to New Orleans traffic would pass over the Texas and Pacific via Fort Worth and Shreveport and then into the Crescent City. Huntington, of course, had other plans.

“Portions of the agreement originally made between Messrs. Gould and Huntington affecting the traffic between El Paso and New Orleans, were not complied with on the part of the Huntington system,” the Texas and Pacific reported to shareholders. The reason was that after linking up with the Texas and Pacific at Sierra Blanca, Huntington pushed the Southern Pacific southeast across Texas toward San Antonio.

On January 12, 1883, outside a long tunnel near the confluence of the Pecos River and the Rio Grande, construction crews of the Southern Pacific met those of Huntington’s ally, Thomas A. Peirce of the Galveston, Harrisburg and San Antonio. East of Galveston, Huntington and Peirce had acquired the Louisiana and Texas Railroad and Steamship Company, with rails into New Orleans. The company had long enjoyed a monopoly on the Texas-to-New Orleans trade as well as steamers on a water route between New Orleans and New York. The result was that by February 1883, one could ride Southern Pacific cars on the Sunset Route from San Francisco to New Orleans and continue on to New York City by steamer—all under the control of Collis P. Huntington.11

The Atchison, Topeka and Santa Fe did not stand by and idly watch this competition for the Gulf Coast. In many respects, William Barstow Strong was the antithesis of Huntington and Gould. Strong was not a grand-scale promoter or a wheeler-dealer. He did not personally invest—indeed, he did not have the personal financial capacity to invest—large amounts of capital.

Strong was subservient to his Boston crowd of investors. He was their manager, not a knight errant riding ahead of his partners like Huntington or a lone wolf prowling on his own like Gould. Strong was an able railroad operator, “bold and skillful in the acquisition of operating properties,” as one of his contemporaries wrote, but discerning in his movements and methods.12

Under Strong’s leadership, the Santa Fe continued many of the same conservative business principles that had been in evidence since the road started west across Kansas. Territory was crucial, Strong saw to that. The road had not hesitated to seize Raton Pass, contest the Royal Gorge, and claw its way into California. But the Santa Fe also paid particular attention to its operations: locomotive power, rolling stock, and the condition of its roadbed and required facilities. What this meant was that while competitors continually battled its advance or nipped at its flanks, the Santa Fe strengthened its corporate core and was able to compete no matter where the battleground.

In 1886 Strong stabbed deep into Texas against the empires of both Gould and Huntington. Part of Cyrus K. Holliday’s early vision for the Santa Fe had been that it would reach the Gulf of Mexico as well as the Pacific. As the Santa Fe built branch lines into Indian Territory, mostly reaching out to the cattle trade, its railheads advanced south from Arkansas City, Kansas, toward Purcell, Oklahoma, on the Canadian River and southwest from Kiowa, Kansas, bound for the Texas Panhandle. As Strong looked ahead across the vastness of Texas, he came up with a bold plan: Why build through the growing maze of Texas railroads if he could simply acquire a relatively straight, existing route to the gulf?

The likely candidate for acquisition was the Gulf, Colorado and Santa Fe Railway. The road had never been very profitable. To the north, it was beholden to Jay Gould for connections to the Katy, while Huntington’s allies siphoned traffic off along the coast. Its purported main line had built west from Galveston past Temple to Brownwood. This was the natural direction to get the road to Colorado and the town of Santa Fe, but of greater interest to Strong were its branch lines running north to Fort Worth and Dallas.

Strong smelled a bargain in the making. For $8,000 per mile of Santa Fe stock, the Atchison, Topeka and Santa Fe acquired the Gulf, Colorado and Santa Fe’s existing 625 miles of track, plus another 70 miles that was under construction. But then Strong showed his real strategic genius. Rather than merely buying the existing trackage, Strong contracted at the same price to buy an additional 300 miles of new track to be constructed by the Gulf, Colorado and Santa Fe within a year. There would be no worries about corporate entities, new surveys, or rights-of-way; the Santa Fe would simply use its purchase of the Gulf, Colorado and Santa Fe to finance that road’s existing plans.

From the Gulf, Colorado and Santa Fe railheads at Fort Worth and Dallas, this new construction was to extend the arms of a Y and reach north to the Santa Fe’s projected railhead at Purcell and the Santa Fe’s allied Frisco railhead at Paris, Texas. When complete, Holliday and Strong’s Santa Fe would have lines through to the gulf competing with Gould’s Katy and the larger Missouri Pacific system, as well as challenging the Southern Pacific’s dominance in southern Texas.

Building 300 miles of new track in one year was a major undertaking for the Gulf, Colorado and Santa Fe, but its construction crews proved themselves up to the task as they worked north toward Purcell. Meanwhile, the Santa Fe’s Southern Kansas Railway subsidiary built south toward Purcell. Even though they were now allies, a race developed that proved good for worker morale as well as construction efficiency.

Walter Justin Sherman, the construction engineer of the Gulf, Colorado and Santa Fe, first promoted his own internal contest. He laid out enough materiel for more than a good day’s work and told his crews that they could have the rest of the day off when that amount of track was laid. The hammers flew and the spikes clanged home, and inevitably the men finished a few minutes early—even though they had managed more than a normal day’s work. Finishing early had its rewards, not the least of which was Sherman’s daily whiskey ration: a dipper of liquor dispensed to each man.

Soon attention shifted to the oncoming Southern Kansas crews. Each team cheered its day’s progress as rails converged on Purcell from north and south. When the junction at the town was finally reached on April 26, 1887, the Gulf, Colorado and Santa Fe won the race by hours or minutes, depending on who was telling the story. Of course, there wasn’t much at Purcell at the time, and places such as Guthrie, Edmond, and Okalahoma City were no more than tiny railroad sidings. All that would change in only two years with the Oklahoma land rush and subsequent discoveries of oil and make Strong’s push for the gulf look even more lucrative.13

So the reach of Gould’s empire had been checked. Jay Gould and his son George would cast a huge shadow over American railroading for another two decades, but a combination of Colorado’s mountains west of Denver and William Barstow Strong’s expansion into Texas put limits on their transcontinental reach. Jay Gould would continue to exert enormous pressures in the Midwest, but it was the Atchison, Topeka and Santa Fe that reached beyond that region and expanded its system not only eastward to Chicago and westward to San Francisco but deeper into Mexico as well.

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