History 445 MIDTERM #3: CALIFORNIA RAILROADS

Hiram Johnson

A progressive reformer of the early 1900s. He was elected the republican govenor of California in 1910, and helped to put an end to trusts. He put an end to the power that the Southern Pacific Railroad had over politics.

self-made man

A nineteenth-century ideal that celebrated men who rose to wealth or social prominence from humble origins through self-discipline, hard work, and temperate habits. "Pull yourself up by your Bootstraps" mentality

Benjamin Redding

Chief of land management in CA. Also helped with agricultural resources through research and papers

Who determined the placement of the Western Slope, and the beginning of the railroad construction for CP? Why is it significant?

State Geologist Mr. Whitney determined this starting point. This is significant because he is connected to Sanford (one of the big 4) so Daggett implies this determined point was for CP's benefit rather than true geography

What is the 4th rate of return determined by Mercer?

nominal market rate or the annual average earnings-price ratio of all common stock on the NY stock exchange from 1871-1889

What was the goal of the Populist Party in their 1892 campaign?

- Nationalizing the RR - Government ownership of telegraph and telephone - Unlimited coinage of silver - eight -hour work day - Federally owned savings banks - Political regulation of referendum, secret ballot, and elections of Senators

Associations/Organizations formed during Agrarian Revolt

- Reformist Noble Order of the Knights of Labor - Craft-oriented American Federation of Labor - Radical unions like: *Marxist union led by Daniel DeLeon *Socialist union led by Eugene Debs -Organizations formed including: *Granges (1870s) or Nationwide Patrons of husbandry *National Farmers Alliance

3 Parts of the Corporate Agenda

1. avoid taxes 2. avoid increased regulations 3. gain as much government subsidies and gifts as possible

according to Daggett, how much did the RR's make off of land grants from 1863-1919

10 million net (17 million-7 for related expenses)

by 1880 how much land did CP own in acres?

11.5 million

Refunding/Funding bills

1890s the 30 year construction loans railroads took out for the TCRR come due. SP has absolutely no money set aside to pay for these loans and pleads that the repayment would bankrupt them. RR's advocated for new loans to pay off previous ones, some with ridiculous terms like 100 years at 1% interest

What was Daggett's bottom line in terms of the RR's earnings from bonds/loans?

20.735 million from government bonds + 20.75 from company bonds = 41.485 million

RR Subsidies (Desert rate)

32k per mile of tracks laid

RR Subsidies (Mountain rate)

48k per mile of tracks laid

by 1880 how many employees did CP have?

6800 (largest in CA)

By 1880 what percentage of all CA railroads did Central Pacific (SP) own?

85%

Frank Norris

A leader of the naturalism movement in literature, he believed that a novel should serve a moral purpose. Wrote The Octopus in 1901 about how railroads controlled the lives of a group of California farmers during the Mussel Slough tragedy.

Tehachapi Loop

A rail line that was built during the 1870s and 1880s by Southern Pacific Railroad (SPR), which succeeded the Central Pacific Railroad (CPR). The line rises from the San Joaquin Valley through the Tehachapi Mountains, as the last leg of the first railroad linking San Francisco with Los Angeles.

Santa Fe Railroad

Arrived in California in 1885 and provided short-lived competition for the Southern Pacific railroad monopoly. ended in a pooling agreement

Spite Towns

Bully power of the railroad. Towns built by the railroad to spite towns that refused to cooperate with their demands.

Significance of 1869 to RR's

Completion of the Transcontinental railroad incentivized by the Civil war as a means of national security

Free Harbor Fight

Debate regarding government funding for port of Los Angelos. Huntington and his company favored the harbor Santa Monica bc SPR controlled the real estate in this area. Politicians end up getting caught with the Big 4 and they end up changing the bill from Santa Monica to San Pedro, of which the peoples party supported due to the monopoly in Santa Monica.

Richard Orsi Thesis

Despite the irreconcilable conflict traditionally assumed to have existed be tween the railroad and the public good, many lines of self-interest bound the Southern Pacific to the welfare of Californians. Norris' "terror of steel and steam," which left "blood and destruction in its path," was also a major force for agricultural expansion and change.

Railroad Subsidies

Government grants of land or money to railroad companies to build railroads in the West. Granted free land, open utilization of resources on the land, and grants per mile of tracks laid (16k/mile)

California "Big Four"

Group of four American merchants, Leland Stanford, Mark Hopkins, Collis Huntington, and Charles Crocker. Funded the Central Pacific Railroad

Why was Leland Stanford able to create a political career despite the controversy of the Big 4?

He was elected in 1861 at a time where the big 4 were still public heroes for their project creating the first TCRR

What railroads did the Big 4 consolidate into their company Central Pacific?

In August 22, 1870, Central Pacific Railroad Co. was consolidated with the California & Oregon Railroad, the San Francisco, Oakland & Alameda Railroad, and the San Joaquin Valley Railroad to form the "Central Pacific Railroad Co.", a new corporation.

Cliometrician

Math historians

Clio

Muse of history

Agrarian Revolt

Overextension and overproduction contributed to issues of economic sustainability for farmers, as well as issues with the rising cost of transportation attributed to the RR and tariffs imposed by the US making imports very expensive. "Crime of 1873" or the demonetization of silver also limited financial resources for the average individual causing an even larger uproar

Monopoly Railroads (board progression order)

Pennsylvania, B&O, Reading, and Short Line.

Promontory Point, Utah

Place where Union Pacific RR (E) tracks connected to the Central Pacific RR (W) tracks

Pacific Railroad Act (1862 and 1864)

Provided federal subsidies in land and loans for the construction of a transcontinental railroad across the United States. The first Pacific Railway Act (July 1, 1862) authorized the building of the railroad and granted rights of way to the Union Pacific to build westward from Omaha, Neb., and to the Central Pacific to build eastward from Sacramento, Calif. The act also granted 10 alternate sections of public domain land per mile on both sides of the railway, and it provided loan bonds for each mile of track laid. The loans were repayable in 30 years, and the dollars per mile escalated in accord with the difficulty of the terrain. Two years later, the railroads were still hampered in their quest for sufficient capital for the vast construction project. Congress obliged with the second Pacific Railway Act (July 2, 1864), which doubled the size of the land grants and allowed the railroads to sell their own bonds. After the transcontinental railroad was completed in 1869, congressional investigations revealed that some railroad entrepreneurs had illegally profiteered from the two Pacific Railway Acts.

Southern Pacific Railroad

Railroad into Southern California that then (once reaching Los Angelos in 1876) headed east through Yuma, AZ -> El Paso, TX -> New Orleans, LA (finished in 1883). Technically a reconstruction measure connecting the west coast to southern states

Theodore Judah

Railroadman from Connneticut who was the first serious dreamer of a transcontinental railroad. He created a partnership with wealthy investors in California and founded the Central Pacific Railroad, but died before seeing his dream come true.

Where does Daggett declare the beginning of the Western slope of the Sierras is? why is it significant

Rocklin, CA, 22 miles East of Sacramento

According to Orsi, how did the SP make a positive impact on CA

SP diversified CA agriculture through encouraging education and crop diversity and economic prosperity for the State

David Colton

Southern Pacific lawyer, politician, and jr partner. Helped Southern Pacific establish its political power. SP took a nosedive after his death

What is the title of Orsi's cumulative work regarding the SPRR?

Sunset Limited

Stephen J. Field

Supreme Court justice due to lobbying thanks to his favoring of corporations. deemed the "Tool of the Corporations"

Why was the government technically able to take credit for the full 41.85 million in bonds for the RR according to Daggett?

The federal government essentially cosigned the RR project through government bonds, giving confidence to private investors to place trust in the project i.e. funding

Mercer's thesis

Though the land grant policy was not perfect, it did contribute to the social return relating to the RR and the betterment of society. He argues that the social rate of return for the railroads was the most beneficial when compared to the land grants and gov subsidies. Though they did make a lot of money from building these railroads, it was mutually beneficial for America and its citizens

Colton letters

a series of letters that revealed corruption in the Southern Pacific Railroad Company. Released by Colton's widow in her lawsuit against SP for cheating her out of estate of her husband. Despite SP winning the case, this was still a huge PR blow for the company

Pooling Agreement

agreement between corporations to divide the market and agree on rates to charge across the board

Robber Barons

an American capitalist who acquired a fortune in the late nineteenth century by ruthless means (taking advantage of government grants such as railroad subsidies)

Populist Movement (Farmer's Alliance + People's Party)

an agrarian-based political movement aimed at improving conditions for the country's farmers and agrarian workers. The movement was preceded by the Farmer's Alliance and the Grange.

Grange

an association formed by militant farmers and urban laborers in the late 1800s to protect workers from SP corruption and price gauging

Edwin Crocker

brother of Charles Crocker (Big 4), served on the Supreme Court

Constitution of 1879

california's second constitution retained the basic structure of the first but added institutions to regulate railroads and public utilities to ensure fair tax assessments.

Terminal Rates (long haul v. short haul)

discriminatory charges favoring long-term shipping over short-term haul. This was due to the fact that short haul shipping was more time consuming and caused more stops (more time consuming = less profit)

What election ended the Agrarian revolution and the peak of the Populist party?

election of republican William McKinney defeated populist party, thus ending the Agrarian revolt

Duopoly

fused monopoly between two corporations for the benefit of each other

What was the reason for checkerboard grants?

giving railroads a checkerboard grant allowed for the United States to spread its land ownership further than they would otherwise get if the grants were connected in one continuous line. This left public domain available for people to preempt, adding to the US population of the West

What is Orsi's new approach to the SP? Why is it significant?

he criticizes the current approach to the RR through the corruption of the Big 4 and wants to focus on it as a corporation. He wants to focus on the people who actually work the corporation, "middle management" like William Mills, Benjamin Redding, IN Hoag, and Charles Turrill, Jerome Madden, and James Horsburgh. Orsi's "Middle 6." None of the 6 are directly involved in the actual trains but contributes to the industry of CA

Charles Turill

helped spearhead crop diversity in CA through university on wheels bringing professors of Ag to farmers

I.N. Hoag

immigration commissioner for CA. Encouraged and recruit people to move to CA to help develop agriculture. Lots of advertising in Northern Europe and Eastern United States

Michael Magliari Thesis

in monopolistic zones there was more populist votes, while in competition zones there were less populist votes. The specialty crop farmers were teamed with the RR, while the wheat farmers were left with nothing, causing their rage to personify in the populist vote

Southern Pacific Company of Kentucky

in order to escape state corporation regulations, taxes, and the state court system the Big 4 moved their company to Kentucky, a state with far less regulations. Federal courts were much kinder to corps than state courts, so moving out of state made lawsuits less stressful for SPCK

Rebates

large volume shippers would receive these from Southern Pacific to keep large companies on the side of the railroad and prevent further push for regulation. Essentially an under the table discount

Checkerboard Grants

occurred as a result of railroad land grants where railroads would be granted every other section along a rail corridor. These grants, which typically extended 6 to 40 miles (10 to 64 km) from either side of the track, were a subsidy to the railroads.

George Stoneman

only member of the State Railroad Commission to not succumb to bribery from Southern Pacific

"all the traffic will bear"

phrase used by the Big 4 relating to cost of shipment. This idea essentially rationalized charging individuals as much as they "could bear" without sending them into bankruptcy. Rationalized profit maximization

Significance of 1910 to RR's

political: election of Hiram Johnson Economic: Western Pacific Railroad breaks monopoly that the big 4 held in the west

plutocracy

power is wielded by the rich ~ Antithesis of Democracy due to their power coming from wealth rather than election from the people

Pacific Mail Steamship Co.

purchased by Big 4 in 1868 and was the largest international steamship company at the time

What are the three rates of return determined by Mercer?

rates of return relating to: 1. without the land grant 2. with the land grant 3. social rate (most beneficial)

Sumner, CA

spite town for Bakersfield (named after Massachusetts Senator Charles Sumner)

Colton, CA

spite town for San Bernardino named after a junior partner of the SP

Lathrop, CA

spite town for Stockton (named after Sanfords brother in law Charles Lathrop)

Goshen, CA

spite town for Visalia (biblical term for land of comfort)

Central Pacific Railroad

started in California, and pushed eastward; eventually connected with the Union Pacific Railroad in Promentary Point, Utah. Path for the railroad planned out by Theodore Judah

State Railroad Commission

state agency from CA's new constitution of which was publicly elected. held the power to regulate RR's setting maximum passenger and freight rates, as well as the power to subpoena RR finances. Of the three members of the board, only one was above bribery

State Board of Equalization

state agency from CA's new constitution responsible for modernizing and regulating tax codes for new kinds of wealth

Daggett's Thesis

the land grant policy was a mistake because it intentionally enriched a few men by securing extravagant shares in the unearned accruement due to the development of California without aiding in the actual project the government intended them to preform. The land grants did not contribute to the success and building the railroads and served little purpose outside of giving gross and excessive profit to a few individuals. "such a policy needs only to be understood to be condemned.'

what was a major criticism of the Big 4's approach to the free market?

they were hypocrites having built their wealth off of government subsidies rather than hard work

Working mans party of California

third party formed in 1870 by the Grange. Remembered mostly for their anti-chinese and immigrant rhetoric. Was still considered progressive due to anti-corporation and monopoly stance

why does Daggett take issue with the placement of the Western slope at Arcade Creek?

this location received mountain rate funding (48k/mile) but in reality it is a flat valley leading into the sierras. The CP received unjust funding here, so it is fair to assume they may have lied in other areas to accrue more funding

William Mills

took over land management for Redding. also advocated against hydraulic mining due to its impact on climate and rivers in CA

Sunset Magazine

used to advertise California and encourage immigration. Originally a RR magazine to help sustain their workforce

California Steam Navigation Co.

water transportation purchased by the Big 4 in 1864 to eliminate competition in CA