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Following the completion of the Pacific Railroad Surveys in 1855, several national proposals to build a transcontinental railroad failed because of the energy consumed by political disputes over slavery. With the secession of the South in 1861, the modernizers in the Republican Party controlled the US Congress. They passed legislation in 1862 authorizing the central rail route with financing in the form of land grants and government railroad bond, which were all eventually repaid with interest. The government and the railroads both shared in the increased value of the land grants, which the railroads developed. The construction of the railroad also secured for the government the economical "safe and speedy transportation of the mails, troops, munitions of war, and public stores."
Authorization and construction
(Left): CPRR Original Chief Assistant Engineer L.M. Clement & Chief Engineer T.D. Judah;(right): 1865 San Francisco Pacific Railroad Bond approved in 1863 but delayed for two years by the opposition of the San Francisco Board of Supervisors
Construction proceeded in earnest in 1865 when James Harvey Strobridge, the head of the construction work force, hired the first Cantonese emigrant workers at Crocker's suggestion. The construction crew grew to include 12,000 Chinese laborers by 1868, when they constituted eighty percent of the entire work force. The "Golden spike", connecting the western railroad to the Union Pacific Railroad at Promontory, Utah, was hammered on May 10, 1869. Coast-to-coast train travel in eight days became possible, replacing months-long sea voyages and lengthy, hazardous travel by wagon trains.
In 1885 the Central Pacific Railroad was acquired by the Southern Pacific Company as a leased line. Technically the CPRR remained a corporate entity until 1959, when it was formally merged into Southern Pacific. (It was reorganized in 1899 as the Central Pacific "Railway".) The original right-of-way is now controlled by the Union Pacific, which bought Southern Pacific in 1996.
Chinese labor was the most vital source for constructing the railroad. Fifty Cantonese emigrant workers were hired by the Central Pacific Railroad in February 1865 on a trial basis, and soon more and more Cantonese emigrants were hired. Working conditions were harsh, and Chinese were compensated less than their white counterparts. Chinese laborers were paid thirty-one dollars each month, and while white workers were paid the same, they were also given room and board. In time, CPRR came to see the advantage of good workers employed at low wages: "Chinese labor proved to be Central Pacific's salvation.":30
Advertisement for CPRR First Mortgage Bonds (1867)
Construction of the road was financed primarily by 30-year, 6% U.S. government bonds authorized by Sec. 5 of the Pacific Railroad Act of 1862. They were issued at the rate of $16,000 ($265,000 in 2017 dollars) per mile of tracked grade completed west of the designated base of the Sierra Nevada range near Roseville, CA where California state geologist Josiah Whitney had determined were the geologic start of the Sierras' foothills. Sec. 11 of the Act also provided that the issuance of bonds "shall be treble the number per mile" (to $48,000) for tracked grade completed over and within the two mountain ranges (but limited to a total of 300 miles (480 km) at this rate), and "doubled" (to $32,000) per mile of completed grade laid between the two mountain ranges. The U.S. Government Bonds, which constituted a lien upon the railroads and all their fixtures, were repaid in full (and with interest) by the company as and when they became due.
Sec. 10 of the 1864 amending Pacific Railroad Act (13 Statutes at Large, 356) additionally authorized the company to issue its own "First Mortgage Bonds" in total amounts up to (but not exceeding) that of the bonds issued by the United States. Such company-issued securities had priority over the original Government Bonds. (Local and state governments also aided the financing, although the City and County of San Francisco did not do so willingly. This materially slowed early construction efforts.) Sec. 3 of the 1862 Act granted the railroads 10 square miles (26 km2) of public land for every mile laid, except where railroads ran through cities and crossed rivers. This grant was apportioned in 5 sections on alternating sides of the railroad, with each section measuring 0.2 miles (320 m) by 10 miles (16 km). These grants were later doubled to 20 square miles (52 km2) per mile of grade by the 1864 Act.
Although the Pacific Railroad eventually benefited the Bay Area, the City and County of San Francisco obstructed financing it during the early years of 1863-1865. When Stanford was Governor of California, the Legislature passed on April 22, 1863, "An Act to Authorize the Board of Supervisors of the City and County of San Francisco to take and subscribe One Million Dollars to the Capital Stock of the Western Pacific Rail Road Company and the Central Pacific Rail Road Company of California and to provide for the payment of the same and other matters relating thereto" (which was later amended by Section Five of the "Compromise Act" of April 4, 1864). On May 19, 1863, the electors of the City and County of San Francisco passed this bond by a vote of 6,329 to 3,116, in a highly controversial Special Election.
The City and County's financing of the investment through the issuance and delivery of Bonds was delayed for two years, when Mayor Henry P. Coon, and the County Clerk, Wilhelm Loewy, each refused to countersign the Bonds. It took legal actions to force them to do so: in 1864 the Supreme Court of the State of California ordered them under Writs of Mandamus (The People of the State of California ex rel the Central Pacific Railroad Company vs. Henry P. Coon, Mayor; Henry M. Hale, Auditor; and Joseph S. Paxson, Treasurer, of the City and County of San Francisco. 25 Cal. 635) and in 1865, a legal judgment against Loewy (The People ex rel The Central Pacific Railroad Company of California vs. The Board of Supervisors of the City and County of San Francisco, and Wilhelm Lowey, Clerk 27 Cal. 655) directing that the Bonds be countersigned and delivered.
In 1863 the State legislature's forcing of City and County action became known as the "Dutch Flat Swindle". Critics claimed the CPRR's Big Four intended to build a railroad only as far as Dutch Flat, California, to connect to the Dutch Flat-Donner Pass Wagon Road to monopolize the lucrative mining traffic, and not push the track east of Dutch Flat into the more challenging and expensive High Sierra effort. CPRR's chief engineer, Theodore Judah, also argued against such a road and hence against the Big Four, fearing that its construction would siphon money from CPRR's paramount trans-Sierra railroad effort. Despite Judah's strong objection, the Big Four incorporated in August 1863 the Dutch Flat-Donner Lake Wagon Road Company. Frustrated, Judah headed off for New York via Panama to raise funds to buy out the Big Four from CPRR and build his trans-Sierra railroad. Unfortunately, Judah contracted yellow fever in Panama and died in New York in November 1863.
CPRR #113 Falcon, a Danforth 4-4-0, at Argenta, Nevada, March 1, 1869 (photo: J.B. Silvis)
The Central Pacific's first three locomotives were of the then common 4-4-0 type, although with the American Civil War raging in the east, they had difficulty acquiring engines from eastern builders, who at times only had smaller 4-2-4 or 4-2-2 types available. Until the completion of the Transcontinental rail link and the railroad's opening of its own shops, all locomotives had to be purchased by builders in the northeastern U.S. The engines had to be dismantled, loaded on a ship, which would embark on a four-month journey that went around South America's Cape Horn until arriving in Sacramento where the locomotives would be unloaded, re-assembled, and placed in service.
Locomotives at the time came from many manufacturers, such as Cooke, Schenectady, Mason, Rogers, Danforth, Norris, Booth, and McKay & Aldus, among others. The railroad had been on rather unfriendly terms with the Baldwin Locomotive Works, one of the more well-known firms. It is not clear as to the cause of this dispute, though some attribute it to the builder insisting on cash payment (though this has yet to be verified). Consequently, the railroad refused to buy engines from Baldwin, and three former Western Pacific Railroad (which the CP had absorbed in 1870) engines were the only Baldwin engines owned by the Central Pacific. The Central Pacific's dispute with Baldwin remained unresolved until well after the road had been acquired by the Southern Pacific.
In the 1870s, the road opened up its own locomotive construction facilities in Sacramento. Central Pacific's 173 was rebuilt by these shops and served as the basis for CP's engine construction. The locomotives built before the 1870s were given names as well as numbers. By the 1870s, it was decided to eliminate the names and as each engine was sent to the shops for service, their names would be removed. However, one engine that was built in the 1880s did receive a name: the El Gobernador.
Construction of the rails was often dangerous work. Towards the end of construction, almost all workers were Chinese immigrants. The ethnicity of workers depended largely on the "gang" of workers/specific area on the rails they were working.
Virginia and Truckee Railroad, though The Dayton was not built for, nor served on the Central Pacific, the engine was one of two locomotives built by the CP's Sacramento shops in preservation (the other being CP 233). Moreover, its specifications were derived from CP 173, and thus is the only surviving example of that engine's design.
Central Pacific's numbers 60, Jupiter, and 63 Leviathan. Although both engines have been scrapped, and therefore technically do not count as having been preserved, there were exact, full size operating replicas built in recent years. The Jupiter was built for the National Park Service along with a replica of Union Pacific's 119 for use at their Golden Spike National Historic Site. Leviathan was finished in 2009, and was privately owned, traveling to various railroads to operate, until sold in 2018 to Stone Gable Estates of Elizabethtown, Pennsylvania. Stone Gable relettered the locomotive as Pennsylvania Railroad No. 331, a now-scrapped steam locomotive that pulled Abraham Lincoln's funeral train, and operates on the estate's Harrisburg, Lincoln and Lancaster Railroad.
June 28, 1861: "Central Pacific Rail Road of California" incorporated; name changed to "Central Pacific Railroad of California" on October 8, 1864, after the Pacific Railway Act amendment passes that summer.
Summit Tunnel, West Portal (Composite image with the tracks removed in 1993 digitally restored)
June 25, 1867: 5,000 Chinese railroad workers went on strike in protest against the longer hours and wage inequality they were facing.
August 28, 1867: The Sierra Nevadas were finally "conquered" by the Central Pacific Railroad, after almost five years of sustained construction effort by its mainly Chinese crew about 10,000 strong, with the successful completion at Donner Pass of its 1,659-foot (506 m) Tunnel No. 6 (a.k.a. the "Summit Tunnel").
December 1, 1867: Central Pacific opened to Summit of the Sierra Nevada, 105 miles (169 km).
June 18, 1868: The first passenger train crosses the Sierra Nevada to Lake's Crossing (modern day Reno, Nevada) at the eastern foot of the Sierra in Nevada.
April 28, 1869: Track crews on the Central Pacific lay 10 miles (16 km) of track in one day. This is the longest stretch of track that has been built in one day to date.
May 10, 1869: The Central Pacific and Union Pacific tracks meet in Promontory, Utah.
May 15, 1869: The first transcontinental trains are run over the new line to Sacramento.
August 22, 1870: Central Pacific Railroad Co. is consolidated with the California & Oregon; San Francisco, Oakland & Alameda; and San Joaquin Valley Railroad; to form the "Central Pacific Railroad Co.", a new corporation.
November 18, 1883: A system of one-hour standard time zones for American railroads was first implemented. The zones were named Intercolonial, Eastern, Central, Mountain, and Pacific. Within one year, 85% of all cities having populations over 10,000, about 200 cities, were using standard time.
Fleisig, Heywood (1975). "The Central Pacific Railroad and the Railroad Land Grant Controversy". Journal of Economic History. 35 (3): 552-566. doi:10.1017/s002205070007563x. Questions whether promoters of the Central Pacific Railroad were oversubsidized. Confirms the traditional view that subsidies were not an economic necessity because they "influenced neither the decision to invest in the railroad nor the speed of its construction." Notes that estimates of rate of return for the railroad developers using government funds range from 71% to 200%, while estimates of private rates of return range from 15% to 25%.
Kraus, George (1975). "Chinese Laborers and the Construction of the Central Pacific". Utah Historical Quarterly. 37 (1): 41-57. Shows how Chinese railroad workers lived and worked, and managed the finances associated with their employment. Concludes that CPRR officials who employed the Chinese, even those at first opposed to the policy, came to appreciate the reliability of this group of laborers. There are many quotations from accounts by contemporary observers.
Lake, Holly (1994). "Construction of the CPRR: Chinese Immigrant Contribution". Northeastern Nevada Historical Society Quarterly. 94 (4): 188-199.
Mercer, Lloyd J. (1970). "Rates of Return for Land-grant Railroads: the Central Pacific System". Journal of Economic History. 30 (3): 602-626. Analyzes the impact of land grants from 1864 to 1890 on rates of return from investment in the Central Pacific Railroad. Results suggest that even without land grants, rates of return were high enough to induce investment. Also, land grants did not pay for the construction of the railroad. Land grants, however, did produce large social returns in western states by accelerating construction of the system.
Mercer, Lloyd J. (1969). "Land Grants to American Railroads: Social Cost or Social Benefit?". Business History Review. 43 (2): 134-151. doi:10.2307/3112269. Uses econometrics to determine the value of railroad land grants of the 19th century to the railroads and to society. The author summarizes and criticizes previous treatments of this subject, and discusses his own findings. Using the Central Pacific and the Union Pacific systems as the basis for his investigation, the author concludes that the railroad owners received unaided rates of return that substantially exceeded the private rate of return on the average alternative project in the economy during the same period. Thus, the projects were profitable, although contemporary observers expected that the roads would be privately unprofitable without the land grant aid. The land grants did not have a major effect, increasing the private rate of return only slightly. Nevertheless, he says the policy of subsidizing those railroad systems was beneficial for society since the social rate of return from the project was substantial and exceeded the private rate by a significant margin.
Ong, Paul M. (1985). "The Central Pacific Railroad and Exploitation of Chinese Labor". Journal of Ethnic Studies. 13 (2): 119-124. Ong tries to resolve the apparent inconsistency in the literature on Asians in early California, with contradictory studies showing evidence both for and against the exploitation of Chinese labor by the CPRR, using monopsony theory as developed by Joan Robinson. Because CPRR set different wages for whites and Chinese (each group had different elasticities of supply) and used the two classes in different types of positions, the two groups were complementary, rather than interchangeable. Calculations thus show higher levels of exploitation of the Chinese than found in previous studies.
Saxton, Alexander (1966). "The Army of Canton in the High Sierra". Pacific Historical Review. 35 (2): 141-151. doi:10.2307/3636678.
Tutorow, Norman E. (1970). "Stanford's Responses to Competition: Rhetoric Versus Reality". Southern California Quarterly. 52 (3): 231-247. doi:10.2307/41170298. Leland Stanford and the men who ran the CPRR paid lip-service to the idea of free competition, but in practice sought to dominate competing railroad and shipping lines. Analyzing the period 1869-1893, the author shows how Stanford and his associates repeatedly entered into pooling arrangements to prevent competition, bought out competitors, or forced rivals to agree not to compete. He concludes that Stanford and his partners viewed laissez-faire as applicable only to government controls, and not to businessmen's destruction of competition within the system.
White, Richard (2003). "Information, Markets, and Corruption: Transcontinental Railroads in the Gilded Age". The Journal of American History. 90 (1).
^By-Laws of the Central Pacific Railroad Company of California, Incorporated: June 28, 1861 "THE INDUSTRIAL AND FINANCIAL RESOURCES OF THE UNITED STATES OF AMERICA, as developed by the official returns of the Northern and Southern States and Territories, with an APPENDIX containing a detailed description of Federal, State, and City securities, railroad and canal bonds and shares, bank shares, etc. from statements nearest Jan. 1, 1863, and the CHARTERS OF THE UNION PACIFIC RAILROADS, the GENERAL RAILROAD LAW OF CALIFORNIA, and the BY-LAWS OF THE CENTRAL PACIFIC RAILROAD CO. OF CALIFORNIA." New York: SAMUEL HALLETT, Banker and Railroad Negotiator. 1864