How the Central Pacific Railroad was financed and pushed through by a quartet of venal visionaries
Four Capitalists Who Created California
By Richard Rayner
Atlas Books/Norton; 223pp; $23.95
A university, a hotel, a bank, and a world-class research library: Such might be the primary associations today with the names of four commanding 19th century California moguls. But in their time, Leland Stanford, Mark Hopkins, Charles Crocker, and Collis Huntington were as prominent, as powerful, and often as reviled as John D. Rockefeller or J.P. Morgan. The quartet, known as the Associates, were the movers and shakers behind the Central Pacific, the western leg of what became the transcontinental railroad. They "cared only about money" and, to get their way, "bent laws, broke rivals, and bribed governments," author Richard Rayner says, to become "as fabulously wealthy as anybody in American history."
The Associates: Four Capitalists Who Created California is Rayner's astute and literate history of the men's achievements. The author regards his subjects with a mixture of awe and revulsion. There are numerous books on the transcontinental railroad, including David Haward Bain's monumental Empire Express. Rayner focuses more on the moguls' deeds than on those of the surveyors and construction crews, and his artful effort has the advantage of being short enough to read on a California-to-New York flight.
In Rayner's telling, it is Huntington who appears the indispensable figure, though each man had his part to play. All helped come up with seed money—Huntington and Hopkins drawing on the value of their Sacramento general store—although most of the capital was raised through government bonds. Crocker personally oversaw the daunting task of pushing the largely Chinese gangs to lay track through the Sierras and as far beyond as possible. Stanford, elected governor of California in 1861, was an important political wrangler, glad-handing pols across the West and bribing legislators to get a key commitment of $15 million worth of California bonds. But it was Huntington who did the yeoman's service in the East, "fixing Congress and keeping it fixed," buying iron for the rails, and even getting President Abraham Lincoln himself to smooth the way for the purchase of 5,000 kegs of blasting powder.
Nor does Rayner slight an important side character: the "visionary who dreams the dream but sees none of the wealth that rains on others." Theodore Judah was a fanatic for the idea of the transcontinental railroad, publishing pamphlets, badgering congressmen, plotting a route across the Sierras, and even drafting most of the 1862 enabling law. That bill provided much of the riches that the Central Pacific's organizers would glean, notably federal land grants all along the roadbed, ultimately amounting to 20 million acres. Judah saw none of it: He died in 1863.
The railroad's construction pitted the 13,500 workers against winters that brought as many as 44 storms and temperatures of -30F. Tunnels had to be bored through granite that "bent steel drills like licorice," and progress of 10 inches a day was a triumph. Perhaps 1,500 men died in the mountains, victims of mud and rock slides, weather, and excruciating hand labor.
In the meantime, another company, the Union Pacific Railroad, was of course racing its way westward from Omaha. The California moguls had hoped to extend their road farther east, but the two railroads' meet-up point came in Utah, in 1869. Shortly thereafter came a series of events that seem all too familiar today: massive scandals revealed in Union Pacific funding schemes; the implosion of a railroad investment bubble; and the collapse of numerous banks and brokerages, including the august house of Jay Cooke & Son.
The Central Pacific was shaken, but the Associates held on, amassing their greatest wealth in the years that followed as they squeezed merchants and farmers with exorbitant freight rates and profited from the sale of real estate in the Los Angeles basin. One by one, Huntington's partners died—Stanford less than two years after his university opened its gates. Alone, Huntington bore the brunt of an 1890s populist attack stoked by rising media baron William Randolph Hearst, who denounced Huntington's attempts to evade repaying $60 million to $80 million in government bonds. Huntington was forced to pay up, but as president of 11 companies and with a personal net worth in excess of $100 million, it was a sacrifice he was able to endure.