The Railroad Builders Part 4

The rolling stock had run down until it could not handle even ordinary business. While the company had been depleting its credit and paying out all its cash in dividends, the equipment had been going into the sc.r.a.p heap. For two years the receivers made large expenditures on equipment and roadbed, borrowing money for this purpose; the result was that when, in 1898, the courts surrendered the property, it was in splendid condition to take advantage of the tide of commercial and industrial prosperity which was just then beginning to flow throughout the United States.

While the reorganization of the Baltimore and Ohio was not so drastic as that of many other systems which went through the courts during this period, it was thorough enough to meet the situation. The fixed charges were cut down radically and the stockholders were a.s.sessed in large amounts. In all, more than thirty-six million dollars was raised by a.s.sessments and the sale of new securities; the liabilities of the Company were greatly reduced; and its credit was promptly restored.

Formerly the Baltimore and Ohio had been struggling under a burden of floating indebtedness, with so little money in its treasury that it could not even put a new coat of paint on the pa.s.senger cars and had to continue to use oil lamps to light some of its best trains. But now the floating debt was replaced by a large available cash capital, and as a result of the liberal policy followed by the receivers, the equipment and roadbed were brought fully up to the standards required for handling the traffic of the road both economically and effectively.

With the reorganization of 1898 finished, the Baltimore and Ohio Railroad entered a new period in its history. The strong, progressive interests which now took control concentrated their energies on developing traffic, increasing earnings, and rounding out the general system. They adopted careful measures for unifying the system by adding other lines and connections of value; they paid much attention to the improvement and development of terminals; and they spent many millions in acquiring and expanding the terminal properties of the company at Chicago, St. Louis, Philadelphia, and Baltimore.

The financial history of the Baltimore and Ohio since the close of the nineteenth century is interesting chiefly in connection with changes in the control of the property. After the reorganization a group of prominent financiers, including Marshall Field, Philip D. Armour, Norman B. Ream, and James J. Hill jointly purchased a large interest in the stock. But this purchase, while perhaps representing a dominating interest, did not involve actual control. Soon afterward, interests identified with the Pennsylvania Railroad began to appear in the Baltimore and Ohio, and before long the Pennsylvania had a strong representation on the board. As a consequence, the Baltimore and Ohio almost lost its individuality and for a time was popularly regarded practically as a subsidiary of its old rival line.

The purpose of the Pennsylvania in obtaining this ascendency over the Baltimore and Ohio was to regulate the soft coal traffic. Already it had acquired dominating interests in the Chesapeake and Ohio, the Norfolk and Western, and other soft coal properties. These purchases were merely manifestations of that "community of interest" policy which at this time led several large systems to acquire interests in competing lines.

Several of the railroad leaders of that time, notably James J. Hill and Edward H. Harriman, believed that if these great systems actually owned large blocks of stock in each other's properties, this common a.s.sociation would ipso facto end the compet.i.tion that, if continued, would ultimately ruin them all. The Supreme Court had decided that the "pooling" arrangements which had so long prevailed among great competing roads violated the Sherman Ant.i.trust Act; and the American public, which now was cultivating a new interest in railroad problems, believed that the "community of interest" plan was merely a scheme to defeat the Interstate Commerce Act and the Sherman Act and to maintain secretly all the old railroad abuses. These inter-railroad purchases therefore became so unpopular that the Pennsylvania sold its Baltimore and Ohio stock.

At this time Edward H. Harriman of the Union Pacific, who had at his disposal vast funds of the latter property which he had obtained by the settlement of the Great Northern and Northern Pacific deal, decided to acquire control of a system of roads in the East in order to establish a complete transcontinental line in the interest of the Union Pacific. It was the theory that such a purchase by the Union Pacific would not defy the law or outrage the popular conscience because the Union Pacific, unlike the Pennsylvania, did not compete with the Baltimore and Ohio, but was only a western extension of that system. Harriman in August, 1906, therefore purchased nearly all the Pennsylvania holdings in the old Garrett property and thus obtained virtual control.

At this same time the Baltimore and Ohio had been developing a "community of interest" plan on its own account. In the year 1908, it acquired a substantial stock interest in the newly reorganized Reading Company, which controlled the Philadelphia and Reading Railroad and the Philadelphia and Reading Coal and Iron Company. It did not obtain a majority interest but, with the Lake Sh.o.r.e and Michigan Southern Railroad of the New York Central system, it now controlled the Reading system. The Reading Company meanwhile had secured control of the Central Railroad of New Jersey, over the lines of which the Baltimore and Ohio reached New York City.

In the following years the Baltimore and Ohio property was still further rounded out by purchasing the Cincinnati, Hamilton and Dayton, a small system of doubtful value radiating through the State of Ohio and, by additional extensions, into the soft coal fields of West Virginia. New energy was put into the expansion and improvement of the southwestern lines to St. Louis, while the eastern terminal properties were still further improved.

The practical control of the Baltimore and Ohio remained in the hands of the Union Pacific interests until 1913. In that year, however, the Union Pacific liquidated its holdings by distributing them to its own individual stockholders in the shape of a special dividend. The Baltimore and Ohio thus became once more an independent property.

The story of the Baltimore and Ohio for the past decade has been mainly a record of a growing, well-managed, and efficient business. It is closely identified with the personality of its notable and efficient president, Daniel Willard, a conspicuous example of the modern type of railroad manager. In the earlier days of railroading, and especially in the long period which came to an end with the death of Harriman, the typical railroad president was usually a man of great wealth who had secured his position by owning a large financial interest in the property. The country was full of "Wall Street Railroad Generals." But in recent years the efficient railroad head has come more and more to be the practical railroad man who has risen from the ranks, who has no important personal financial interest in the property but who is paid an adequate salary to operate a system in a purely businesslike way.

Notable examples of this modern type of railroad president are, besides Daniel Willard, Edward P. Ripley of the Atchison, Topeka and Santa, Fe, Benjamin F. Bush of the Missouri Pacific, and Fairfax Harrison of the Southern.

The efficient management of today is abundantly shown in the recent record of the Baltimore and Ohio. President Willard has been unmolested by financial interests and has been continuously backed up in his policies by the owners of the road. As a result the Baltimore and Ohio of the present decade has reached an enviable position as one of the great Eastern trunk lines, comparing well with other progressive properties like the Pennsylvania, the New York Central, the Southern, the Illinois Central, and the Louisville and Nashville. Millions have been poured into the property in the past fifteen years; its main lines have been largely rebuilt; its rolling stock is chiefly of the most modern types; and its terminals and structures are such as modern conditions demand.

CHAPTER VI. LINKING THE OCEANS

In 1862, when the charter was granted by the United States Government for the construction of a railroad from Omaha to the Pacific coast, the only States west of the Mississippi Valley in which any railroad construction of importance existed were Iowa and Missouri. During the three decades which had pa.s.sed since the first railroad construction, the earlier methods of transportation by boat, ca.n.a.l, and stage coach gave place in the Eastern half of the United States to more modern methods of transportation. As a result of these new conditions, the States, cities, and towns were welded together, and population and prosperity increased rapidly in those inland sections which had formerly languished because they had no means of easy and rapid communication.

The construction of extensive railways, however, and particularly the consolidation of small, experimental lines into large systems, dates from the days of the discovery of gold in California. The nation did not begin to realize the extraordinary possibilities of the vast Western territory until its attention was thus suddenly and definitely concentrated on the Pacific by the annual addition of over fifty million dollars to the circulating medium. The wealth drawn so copiously from this Western part of our continent had a stimulating effect on the commerce, manufactures, and trade of the entire Eastern section. People began to understand that with the acquisition of California the nation had obtained practically half a continent, of which the future possibilities were almost unlimited, so far as the development of natural resources and the general production of wealth were concerned.

The public conviction that a railroad linking the West and the East was an absolute necessity became so p.r.o.nounced after the gold discoveries of '49 that Congress pa.s.sed an act in 1853 providing for a survey of several lines from the Mississippi to the Pacific. Though the published reports of these surveys threw a flood of light on the interior of the continent, they led to no definite result at the time because the rivalry of sections and groups of interests for the selection of this or that route held up all progress.

The Act of 1862, which created the Union Pacific Railroad Company, together with the amending Act of 1864, authorized the construction of a main line from an initial point "on the one hundredth meridian of longitude," in the Territory of Nebraska to the eastern boundary of California, with branch lines to be constructed by other companies and to radiate from this initial point to Sioux City, to Omaha, to St.

Joseph, to Leavenworth, and to Kansas City. * Provision was made for a subsidy of $16,000 a mile for the level country east of the Rocky Mountains; $48,000 a mile for the lines through mountain ranges; and $32,000 a mile for the section between the ranges. The original plan to secure the government subsidies by a first mortgage on the lines was amended so as to allow private capital to take the first mortgage, the Government taking a second lien for its advances. In addition to these subsidies the several companies were to receive land grants of 12,800 acres to the mile in alternate sections contiguous to their lines. Upon the same terms the Central Pacific, a company incorporated under the laws of California, was authorized to construct a line from the Pacific coast, at or near San Francisco, to meet the Union Pacific Railroad.

* These ambitious designs were never fully realized. The main line ran eventually west from Omaha, meeting the Sioux City branch at Fremont. The only other branch which was constructed to connect with the Union Pacific was that from Kansas City and it ran first to Denver.

The public was quick to realize the significance of this huge enterprise, for the papers of the day were full of such comments as the following:

"It is useless to enlarge upon the value and importance of this great work. It concerns, not the United States alone, but all mankind. Its line is coincident with the natural and convenient route of commerce for the world.... Over it the trip will be made from London to Hong Kong in forty days, over a route possessing every comfort and attraction, which takes a continent in its course, and which, from the variety and magnitude of its sources, from the race which now dominates it, and from the extent of their numbers, wealth and productions, must soon give law to the commercial world."

Notwithstanding these and similarly optimistic sentiments, the meager financial support given to the enterprise by the public at large had been very discouraging. Although the construction had been liberally subsidized by the Government, gross extravagance had promptly crept in; juggling of accounts for the purpose of securing profits on the government advances was freely indulged in, and after only a small section of the line had been completed it was announced that more capital must be forthcoming or the work would cease. Out of this situation grew the plan for subletting the work to a construction company known as the Pennsylvania Fiscal Agency--a name which was afterwards changed to that of the Credit Mobilier of America. The story of the Credit Mobilier, with its irregularities involving conspicuous politicians, is one of the most disgraceful in American history. The detailed history of these operations need not be considered here; it is sufficient to say that finally, in spite of political scandals, the Union Pacific lines were brought to completion. Within two years after the letting of the contracts to this new company, in 1866, over five hundred miles of road were completed and in operation. An advertis.e.m.e.nt published late in 1868 announced that "five hundred and forty miles of the Union Pacific Railroad, running west from Omaha across the continent, are now completed, the track being laid and trains running within ten miles of the Rocky Mountains.... The prospect that the whole grand line to the Pacific will be completed by 1870 was never better."

As a matter of fact, the line through to the coast was finished earlier than had been predicted. One fact which increased the rapidity of construction was the growing financial difficulty of the company. It was absolutely imperative that the through line be completed in order that the resulting business might make the operation of trains pay. But aside from this, another influence was at work to encourage rapid construction. The Act of 1862 provided that the Central Pacific might also build across Nevada to meet the Union Pacific, on condition that it completed its own allotted section first. As the Central Pacific also was receiving a heavy government subsidy per mile, and as there was great profit in construction undertaken with this government subsidy, there was naturally a strong incentive for both companies to build all the mileage possible and as rapidly as possible.

The Central Pacific enterprise was backed by a group of men who were awake to the possibilities of the situation and who had made large fortunes in the gold-mining boom of previous years, such as Leland Stanford, Collis P. Huntington, Mark Hopkins, and the Crockers. The rivalry between them and the Union Pacific interests woke the whole continent and formed a chapter in American railroad history as startling and romantic as anything in the stories of the Vanderbilts and Goulds with their financial gymnastics.

As the contest proceeded, public interest increased and the entire country watched to see which company would win the big government subsidies through the mountains. Through the winter of 1868 the work continued on the Union Pacific with unabated energy, and freezing weather caught the builders at the base of the Wasatch Mountains; but blizzards could not stop them. The workmen laid tracks across the Wasatch on a bed of snow and ice, and one of the track-laying trains slid bodily, track and all, off the ice into a stream. The two companies had over twenty thousand men at work that winter. Suddenly the Central Pacific surprised the Eastern builders by filing a map and plans for building as far as Echo, some distance east of Ogden. The Union Pacific forces, however, were equal to the occasion. At first, one mile a day had been considered rapid construction, but now, even with the limited daylight of the winter months, they were laying over two miles a day, and they finally crowned their efforts by laying in one day between sunrise and sunset nearly eight miles of track.

In the meantime the Central Pacific also had stopped at nothing. The company had a dozen tunnels to build but did not wait to finish them.

Supplies were hauled over the Sierras, and the work was pushed ahead regardless of expense. On May 10, 1869, the junction was formed, the opposing track layers meeting at Promontory Point, five miles west of Ogden, Utah. Spikes of gold and silver were driven into the joining tracks, and the through line from the Missouri River to the Pacific Ocean had been completed; the first engine from the Pacific coast faced the first engine from the Atlantic. The whole country, from President Grant in the White House to the newsboy who sold extras, celebrated this achievement. Chicago held a parade several miles long; in New York City the chimes of Trinity were rung; and in Philadelphia the old Liberty Bell in Independence Hall was tolled again.

The cost of the Union Pacific Railroad from Omaha to its junction with the Central Pacific formed a subject of controversy for a generation.

The saving of six months of the allotted time for completing the road no doubt increased its cost to the builders, for at times they borrowed money in the East at rates as high as 18 and 19 per cent. Besides, in pushing the line far beyond the bounds of civilization without waiting for the slower pace of. the settler and the security which his protection afforded, it often became necessary for half the total number of workmen to stand guard and thus reduce the working capacity of the construction force. Even so, hundreds were killed by the Indians.

Governmental restrictions of various kinds also increased the cost of the road. For example, the stipulation that only American iron should be used increased the cost by at least ten dollars for every ton of rail laid. The requirement that a cut should be made through each rise in the Laramie plains, thus giving the track a dead level instead of conforming to the natural roll of the country, ultimately resulted in a waste of from five to ten million dollars. Extraordinary costs such as these, combined with the extravagant methods of construction and financing, brought the total cost of the property up to what was in those days a fabulous sum of money. The records indicate that the profits which accrued through the Credit Mobilier and in other ways in the construction up to the time of the opening in 1869 exceeded fifty millions of dollars.

While the Union Pacific was being built, from 1862 to 1869, other railroads were not idle, and many were rapidly reaching out into the Central West. Not only had the Chicago and North Western reached Omaha and made connection with the Union Pacific, but the Kansas Pacific had penetrated as far west as Denver and had joined the Union Pacific at Cheyenne.

The close relationship between railroad expansion and the general development and prosperity of the country is nowhere brought more distinctly into relief than in connection with the construction of the Pacific railroads. With the opening of a transcontinental line the vast El Dorado of the West was laid practically at the doorstep of Eastern capital. Not only did American pioneers turn definitely toward the West, but foreign emigrants bent their steps in vast numbers in that direction, and capital in steadily increasing amounts made its way there. Towns sprang up everywhere and soon developed into busy centers of trade and commerce. Caravan trains, which a few years before had followed a single westward line, now started from points along the railroad artery and penetrated far to the north and south. The settlers knew that the time was not far distant when all the vast territory west of the Missouri, from the Canadian border to the Rio Grande, would be reached by the rapid spread of the railroad. In the sixties and seventies there sprang up and rapidly developed in size and importance such centers as Kansas City, Sioux City, Denver, Salt Lake City, Cheyenne, Atchison, Topeka, Helena, Portland, Seattle, Duluth, St. Paul, Minneapolis, and scores of smaller places. The entire Pacific slope was soon dotted with towns and cities, and even the great arid plains of the West--as well as the "Great American Desert" covering Utah, Arizona, New Mexico, and parts of Nevada--began to take on signs of life which had not been dreamed of a decade before.

But the development of this great section of the country during the next few years was even more notable. By 1880 four different lines of railroad were running through to the Pacific States, and a fifth, the Denver and Rio Grande, had penetrated through the mountains of Colorado and across Utah to the Great Salt Lake. These were the years when the modern industrial era was really beginning. Man's viewpoint was changing, and instead of remaining content with the material achievements of the Atlantic and Central sections of the continent, he began to realize that the vast Western regions and the thousand miles of Pacific coast line were destined to be America's inexhaustible patrimony for the years to come.

In 1880 the Union Pacific began its expansion to the eastward and acquired control of the Kansas Pacific, which had come upon evil days, and of the Denver Pacific, a most important connecting link. In January, 1880, these two companies were absorbed by the Union Pacific, which thus obtained a continuous line from St. Louis westward. In the meantime the Central Pacific, operating from Ogden west to the coast, had added many branches, while a new company--known as the Southern Pacific Railroad of California--had for some years been constructing a system of lines throughout that State south of the Central Pacific and by 1877 had penetrated to Yuma, Arizona, 727 miles southeast of San Francisco. It had also built lines into Arizona and New Mexico and soon joined the Santa Fe route, which had for some time been working westward.

During 1881 the Southern Pacific continued its eastern extensions along the Rio Grande to El Paso, Texas, where it formed a connection with a new road under construction from New Orleans. A junction was also made at El Paso with the Mexican Central, which was under construction to the City of Mexico. The Southern Pacific Railroad was closely allied with the Central Pacific interests headed by Collis P. Huntington, and in 1884 the great Southern Pacific Company was formed, which acquired stock control of the entire aggregation of railroads in the South and Southwest. At the same time the Central Pacific came under direct control of the Southern Pacific through a long lease.

During these eventful years, while the Southern Pacific properties were penetrating eastward through the broad stretches of country to the south of the Union Pacific lines, equally interesting events were occurring in the north. In 1879 a consolidation was formed of the Oregon Steamship and Navigation Company with several short railway lines in Oregon and Washington, under the name of the Oregon Railway and Navigation Company.

These railroad lines extended east from Portland to the Oregon state line, and north to Spokane, and they finally made connection with the new Northern Pacific. At the same time, another road, known as the Oregon Short Line Railroad, was built from Granger, Wyoming, on the line of the Union Pacific to a junction with the Oregon Railway and Navigation Company at Huntington, Oregon, on the Snake River. The Oregon Short Line came under the control of the Union Pacific and was opened for traffic in 1881. Later a close alliance was made with Henry Villard, the controlling spirit in the Oregon Railway and Navigation Company.

Ultimately the entire system of Oregon lines pa.s.sed under Union Pacific control, to be lost in the receivership of 1893, but later recovered under the Harriman regime.

When, after ten more years of expansion, the great Union Pacific property went into the hands of receivers in 1893, it had grown to a system of more than 8000 miles. It completely controlled the Oregon railway and steamship lines, the lines to St. Louis, and also an important extension known as the Union Pacific, Denver and Gulf Railroad, running from a point in Wyoming across Colorado to Fort Worth, Texas. The financial failure of the system was due to a variety of causes. Its management had been extravagant and inefficient, and construction and expansion had been too rapid. The policy of building expensive branch lines where they were not needed and of obligating the parent company to finance them had been a grievous mistake and had contributed largely to the downfall of the company. Further than this, the credit of the Union Pacific was steadily growing weaker because the time was drawing near when its heavy debt to the United States Government would fall due. In all its history of more than twenty years the company had never paid any interest on the government debt nor had it maintained a sinking fund to meet the princ.i.p.al when due.

Consequently, the accruing interest had mounted year by year and, should the Government enforce payment at maturity in 1897-99, the company would be doomed to bankruptcy. This government debt, including accrued interest, amounted to the sum of $54,000,000.

Attention should not, however, be diverted from the fact that during all these years a vast expansion of compet.i.tive lines had been going on far southward of the Union Pacific. Under the guiding genius of Collis P.

Huntington, the Southern Pacific Company in 1884 had consolidated and solidified a gigantic system of railways extending from New Orleans to the Pacific and throughout the entire State of California to Portland, Oregon, with branch lines radiating through Texas and making close connection with roads entering St. Louis. In addition to these railroads, Huntington acquired control of a steamship line operating from New York to New Orleans and Galveston, and subsequently of the Pacific Mail Steamship Company, operating along the coast from Oregon south to the Isthmus of Panama and across the Pacific Ocean.

The ever-growing effects of this powerful and well-managed compet.i.tor--combined with the large development of the Santa Fe system during these years, the compet.i.tion of the completed Northern Pacific, and the possibilities of the new Great Northern Railway or Hill line, now completing its main artery to the Pacific--were far-reaching enough in themselves to bring the Union Pacific upon evil days. Consequently few were surprised when, under the great pressure of the panic of 1893, the property was forced to confess insolvency. The Union Pacific had simply repeated the story of most American railroads; it had been constructed in advance of population and had to pay the penalty. Yet it had more than justified the hopes of the daring spirits who projected it. It may have made individuals bankrupt, but it magnificently fulfilled the part which it was expected to play. It had opened up millions of acres to cultivation, given homesteads to millions of people, many of whom were immigrants from Europe, developed mineral lands of incalculable value, created several new great States, and made the American nation a unified whole. Its subsequent history belongs to another chapter of this story--a history that is richer than the first in the matter of financial success but that can never surpa.s.s the early pioneering years in real and permanent achievement.

CHAPTER VII. PENETRATING THE PACIFIC NORTHWEST

It is only when one reads such a book as Francis Parkman's "Oregon Trail" that one fully realizes the vast transformation which has taken place within little more than half a century in the great Northwestern territory beyond the Mississippi and the Missouri. In that fascinating history we read of the romantic and thrilling experiences of Parkman and his companions in their summer journey across the plains of Nebraska and through the mountain ranges of Wyoming, Montana, and Oregon. We read of their hairbreadth escapes from the Indians; their chase of the buffalo and other wild animals of the far Western country; of the wearisome weeks that they spent in crossing the deserts where absolute loneliness reigned; and finally of their arrival, after months of hardship, in the vast Oregon country, which with its great natural resources, splendid climate, and large extent has come to be known in these modern days as the Empire of the Northwest.

It was to penetrate and bring this great virgin region within reach of the East that the Northern Pacific Railroad Company was chartered by Congress in 1864, just prior to the closing of the Civil War. During this same period the Union Pacific route was being surveyed, and the first ground was broken in December, 1863, for the line which was later to connect Omaha with San Francisco.

Like the Union Pacific charter, that of the Northern Pacific also contained an extensive land grant. From the modern viewpoint, such land grants look colossal, but in those days the general opening up and development of the Western country had progressed to so slight an extent that the significance of giving away millions of acres of the public lands to encourage a precarious railroad enterprise was then no more than the pa.s.sing over to capitalists today of exclusive rights in extensive tracts of territory in Brazil and the other South American Republics. Even these great opportunities to acquire almost an empire of fertile lands or rich forests were not as a rule looked upon as attractive enough to tempt capital into the wilderness. The old saying that capital is the most timid thing in the world and does not like pioneering is strongly emphasized by such instances as this, and no doubt in 1864 the enormous grants of free land made by Congress did not appear especially attractive to the man who had money to invest.

Whatever the public att.i.tude may have been, the Act of Congress of July 2, 1864, creating the Northern Pacific Railroad, gave that Company the right to construct a line from some point on Lake Superior, either in Minnesota or in Wisconsin, westward and north of lat.i.tude 45 degrees, to or near Portland, Oregon. The land grant consisted of forty alternate sections of public land for each mile within the Territories penetrated and twenty alternate sections within the States through which the railroad might pa.s.s.

The hazardous character of this undertaking will be realized when it is remembered that at this time no railroad had yet penetrated the Rocky Mountains; that the entire railroad system of the United States was less than 40,000 miles; and that west of the Mississippi there was no mileage worth mentioning. It was still less than a generation since Parkman and his companions had made their four months' journey from St. Louis to the mouth of the Columbia River, and between the fringe of civilization along the Pacific slope and the region about Chicago and St. Louis lay almost a third of the continent uninhabited, undeveloped, and unknown.

The scheme languished for several years until finally, in 1869, the firm of Jay Cooke and Company of Philadelphia undertook to raise the necessary capital.

The story of the Northern Pacific for the next few years was closely bound up with that of Jay Cooke, who was one of the most conspicuous characters of his time in the financial world. He was a man of commanding personality, great energy, unusual resourcefulness, and with a large personal following. He had built his reputation through his great success in financing United States government loans during the Civil War. He now undertook to raise more than one hundred million dollars to carry through the Northern Pacific enterprise. He achieved remarkable success for a time and within three years had built over five hundred miles of the main line to the Pacific coast. But the outbreak of the Franco-Prussian War and the consequent financial stringency abroad, the difficulty of marketing bonds on an uncompleted enterprise, combined with the poor showing made by those sections of the line completed and in operation, brought matters to a crisis, and in September, 1873, Jay Cooke and Company were obliged to close their doors. The affairs of the railroad were so closely involved with those of the banking firm that, although strenuous efforts were adopted to save the railroad, its revenues were inadequate. As a result, in April, 1874, General Lewis Ca.s.s was appointed receiver.

The uncompleted property was operated for some years thereafter under the protection of the courts and no plan of reorganization was devised until 1879. During the receivership only a moderate amount of additional mileage was constructed, and it was not until many years had pa.s.sed that the system penetrated the mountains and reached the Pacific coast. But when the new company took possession in 1879, aggressive building was resumed, and for a time it looked as though the project would be promptly finished. However, in 1882, the company still had about one thousand miles to construct in order to complete its main artery. At this time financial difficulties appeared, and the days of stress were tided over only by the help of a syndicate and the Oregon and Transcontinental Company.