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Discussion in 'Getting Started' started by csxengineer, Dec 25, 2003.
If the Trans-continental RR was UP-Central Pacific, what became of the Central Pacific?
Correct me if I'm wrong, but it seems that the Central Pacific was leased to the Southern Pacific around 1884, and definitively consolidated around 1959.
By 1884, the Central Pacific and the Southern Pacific Railroad were controlled by the "Big Four" (Collis P. Huntington, Mark Hopkins, Charles Croker and Leland Stanford) and, according to "The Historical Guide to North American RRs" (Kalmback Books), they tried to consolidate both companies, in order to simplify operations. When the consolidation was rejected, they formed a new Southern Pacific Company to replace the Southern Pacific Railroad. The Central Pacific Railroad leased its properties to the "new" SP, and was reorganized as the Central Pacific Railway.
Later, the SP stock was purchased by the UP (1900). Around this time, President Roosevelt forced some big enterprises (UP one of them) to downsize, and the UP had to sell its SP stock and the SP had to justify its retention of Central Pacific (divestiture of CP would have ripped the central network of SP in California and Oregon). Followed several "law wars" around the ownership of CP by the SP.
It seems that the CP corporate existence continued until 1959.
Hope to have been of help.
UP - Central Pacific never made it further east than Chicago AFAIK. CP (Canadian Pacific) was the 1st true trans-continental railway as it lines reached from the Atlantic coast all the way to the Pacific coast.
The Southern Pacific was created as a company to build a southern transcon route, by the same (nasty) fellows who created the Central Pacific. Eventually, as they gobbled up every western road they could get their hands on --- they were firm believers in monopoly --- they merged the Central Pacific into the SP.
It may be of interest to note that the monopoly enjoyed by the Western roads of the time were not a result of capitalism, but rather the effect of the government policy of granting hundreds of acres(thousands, perhaps)of land for each mile of track layed. By granting large tracts of land, the opportunity for monopoly was created, as the land was owned by the railroad, and that road would certainly not allow another to build on its land. Of course the reasoning at the time was that the land involved was unihabited (except by Indian tribes, I imagine) and the National interest was to secure California and the rest of the southwest. The government had urged the prosperous and privately funded railroads in the east to build west with the desire to tie the west coast by rail to the east, to consolidate what was a somewhat fragile territory. The eastern roads declined, siting the large expense of building projected road, and lack of any traffic sources. The government, wanting its road, eventually decided on the land grants as a way to make the road more attractive to potential builders. The great race to join the trans con line was really a race to grab as much land as possible. The men who choose to build those lines weren't railroaders so much as con artists. They wouldn't have been possible in the busy Northeast industrial area. There, relatively short hauls and dense traffic made the business profitable and attracted those who intended to run a railroad, rather than those who envisioned holding thousands of immigrants effectively as slaves on land they owned, for building a relatively shoddy railroad and providing inferior service.
So it was a govenment action which created the awful monopolies of the western railroads (with notable exception of J Hills Northern Pacific, who built his road without a penny of gov't money, and was prosecuted by the gov't for monopoly, while the other "govt roads" enjoyed a brief period of prosperity). But it is not the govt who bears the blame, it has been Capitalism.
Interesting to note that a good deal of that land granted to railroads staid in railroad ownership well into the 1990's.
Most of the lands granted to the Oregon & California Railroad (mostly in southeastern Oregon) eventually came back into government hands and are now managed by the Bureau of Land Management (Dept. of Interior). Those lands granted to the Central Pacific across Nevada are still in private ownership...they were under the Southern Pacific Land Company until the time of the failed SPSF merger of the late 1980's, then they were stripped from the SP and retained by ATSF (along with all of SP's other non-rail assetts) after the breakup. ATSF held the lands for only a few years before selling them off to Nevada Land & Resource Company, who still owns them and is actively trying to sell what they have now.
Land grants did not automatically exclude competition...in my corner of the world (northeastern Nevada) both the Western Pacific mainline across northern Nevada and the Union Pacific branchline that used to run from Twin Falls, ID to Wells, NV were built partially on CP land grants. The greatest difference seems to be the right-of-way width...especially on the UP line. It was removed in the late 1970's but the right-of-way fencing is still up...where the railroad crossed public lands they had a 100-ft wide right of way, and where they crossed the CP land grants they had a 75- or so foot r-o-w...the result is that the distance between the fences changes every mile up the old grade.
These lands were also not a giveaway. Those railroads who elected to receive grants were required to move government freight (mostly military) at vastly reduced rates. By the time Congress got around to ending the program the value of the discounted freight rates granted to the government exceeded the value of the land grants by several times.
Also it could be argued --- and seemed apparent at the time --- that no private company would have undertaken the construction of (at least the first) transcontinental RR without the potential for profit from the land grants.
The grants also were considered to be in the public interest in the sense that the RRs, in the quest for immediate profit as well as the desire to build future customer base, created and promoted towns along the lines, on grant land.