_History of the Line since its completion._
Government Indebtedness--Absorption Other Lines--Receivership--Train
Robbers--Settlement With Government.
Upon the completion of the Union Pacific the rates for both freight
and passengers were fixed at what now seems a very high figure. Thus
passenger fares locally were ten cents per mile. Complaints arising,
the matter was taken up in Congress and steps taken towards the
appointment of a Board of Commissioners who should have authority to
fix rates, both freight and passengers.
The whole question of earnings and expenses of the line was an unknown
quantity and as soon as experience demonstrated what was reasonable
and just, the Company voluntarily adjusted their schedules,--until
today the rates over the line are about on a parity with those charged
by eastern lines through much more thickly settled states.
In 1869 the agitation looking to a bridge across the Missouri River in
place of the slow and often unreliable ferry culminated, and on March
11th of that year the structure was commenced. Three years were
required for the work and the first train crossed on March 11th, 1872.
By an agreement made with the city of Omaha that city was to be made
the eastern terminus regardless of the bridge. This, however, was
upset by the decision of the Supreme Court of the United States
declaring the bridge an integral part of the line and that it
commenced in Iowa not Nebraska.
In 1870 the question of repayment of the Government Loans made in the
shape of Bonds arose,--more particularly that of the interests
accruing thereon,--the bonds themselves not falling due until
1895-1899. It was a question whether the lines were to pay this
interest in cash or through services rendered in transporting men,
materials, and mails for the Government. The matter soon got into the
Courts and their decision as rendered by Justice Davis of the Supreme
Court of the United States so fully and explicitly covers the ground
as to warrant the somewhat lengthy extracts given below:
In his opinion, Judge Davis said, "This enterprise (the building of
the Pacific Railroads) was viewed as a national undertaking for
national purposes and the public mind was directed to the end rather
than the particular means to be employed for the purpose. Although the
road was a military necessity, there were other reasons active at the
time in producing an opinion as to its necessity besides the
protection of our exposed frontiers. There was a vast unpeopled
territory between the Missouri River and Sacramento which was
practically worthless without the facilities afforded by a railroad
for the transportation of persons and property. With its construction
the agricultural and mineral resources could be developed, settlements
made, and the wealth and power of the United States essentially
increased. And then there was also the pressing want in times of peace
even of an improved and cheaper method for the transportation of the
mails and supplies for the army and the Indians."
The policy of the country, to say nothing of the supposed want of
power, stood in the way of the United States taking the work into its
own hands. Even if this were not so, reasons of economy suggested it
were better to enlist private capital and individual enterprise in the
project. This Congress undertook to do, and the inducements held out
were such as it was believed would procure the requisite capital and
enterprise. But the purpose in presenting these inducements was to
promote the construction and operation of a work deemed essential to
the security of great public interests. Besides it is fair to infer
that Congress supposed that the services to be rendered by the road to
the Government would equal the interest to be paid. Congress well knew
that the Government bound itself to pay interest every six months and
the principal at the time the bond matured, resting satisfied with
the entire property of the Company as security for the ultimate
payment of the principal and interest.
This settled the interest question and the next one to arise was the
question as to the payment of five per cent, of the net earnings
towards the extinguishment of the Government indebtedness, as provided
for in the act of 1862, viz., "And after said road is completed, until
said bonds and interest are paid, at least five per centum of the net
earnings shall be annually applied to the payment thereof." By act of
Congress, June 22nd, 1874, the Secretary of the Treasury was directed
to require this payment, failing which, to bring suit. The Supreme
Court decided this in 1878 that the Company must pay this five per
cent and defined net earnings as what was left out of the gross
earnings after deducting all the expense of organization, operation,
or for betterments paid out of earnings.
In 1878 the so called "Thurman Act" became law, by which a sinking
fund was established looking to the extinguishing of the Company's
indebtedness to the Government. This sinking fund was to be made up of
one half the amount accruing on Government Transportation, the five
per cent of net earnings, plus enough more of the earnings to make up
in all twenty-five per cent of the total net earnings, but not to
exceed eighty-five thousand dollars per annum,--this sinking fund to
be invested by the Secretary of the Treasury in Government Bonds.
Up to 1879 the policy of the Company was to transfer all through
freight at its eastern termini, none of its equipment being allowed to
leave its own rails.
Soon after the absorption of the Kansas Pacific Railroad and through
it the Denver Pacific Railroad, the Union Pacific entered upon a
policy of extension by the absorption of other roads and building of
branch lines.
Under this arrangement the Texas lines--Fort Worth, Texas, to Denver,
Colo., eight hundred and one miles--were completed and added to the
system. This line was built under the name of the Denver, Texas and
Gulf (formerly Denver and New Orleans), the Fort Worth and Denver City
and the Denver City and Fort Worth Railroads.
In 1880 the Railroad from Atchison west--originally the line that was
to have connected with the Union Pacific Railroad at the hundredth
Meridian, known as the Central Branch Union Pacific--became part of
the system by purchase and was leased to the Missouri Pacific Railway
Company who have since that time operated it.
Another line added to the system was the narrow (three foot) gauge
line from Denver to Leadville and Gunnison. This line was commenced in
1873 under a Charter from the Colorado Legislature, reaching Buena
Vista, February 22nd, 1880 and Gunnison, the summer of 1881. It was
absorbed by the Union Pacific on January 1st, 1881.
The Utah and Northern was commenced in 1871 by the citizens of Utah
and reached Logan in 1873 and Franklin, Idaho, in 1874. The means for
building this road was raised by the people of Northern Utah with
great difficulty, much of it being donated in labor,--in grading,
track work, right of way, etc. After an attempt to operate as a local
line more or less successful, it was sold to the Union Pacific
Railroad in February 1877 and by them extended to Silver Bow,
Mont.--Huntington. Ore., with a branch connecting the main line of the
Union Pacific at Granger, Wyo., with Pocatello, Idaho, on the old Utah
and Northern.
On May 17th, 1869, one week after the ceremonies at Promontory, the
Utah Central was commenced by the Mormons, Brigham Young being
President of the Company. It was completed Ogden to Salt Lake City,
January 10th, 1870. The work on the line was done very largely by the
Mormons in exchange for stock, its equipment being turned over to them
by the Union Pacific as part payment (to the Mormons) for work done on
the grading of the line.
The Utah Southern--Salt Lake City to Frisco, Utah, was commenced in
May. 1871, and completed in June 1880, and absorbed by the Utah
Central in 1881.
In 1873 the line from Julesburg to Denver was located and most of the
grading done in that year and the two following. Financial stringency
together with complications arising over their relations with the
Kansas Pacific Railway forced the abandonment of the project. After
the consolidation in 1880 the line was recommenced, practically new
grades being necessary. It was completed in 1882, the work being done
under the Colorado Central Railroad Charter.
All of the above lines were absorbed by the Union Pacific Railway and
were a part of that system up to 1893 when the total mileage reached
eight thousand one hundred and sixty-seven, made up of one thousand
eight hundred and twenty-three miles Union Pacific and six thousand
three hundred and forty-four miles, owned, leased and controlled. On
the 13th of October, 1893, the United States Court at Omaha appointed
S. H. H. Clark, Oliver W. Mink, and E. Ellery Anderson, Receivers, and
in the following month Frederick R. Coudert and J. W. Doane were added
to represent the interests of the United States, this receivership
being forced on the Company by the very general business depression of
1893 and the consequent decrease in traffic and earnings. At the time
of appointing receivers for the main line, the Texas Line and the
Denver, Leadville and Gunnison (South Park) were segregated and placed
under the control of separate receivers. The Oregon Short Line and the
Oregon Railway and Navigation Company reverted to the hands of the
original Companies, and have ever since been operated independently,
although the controlling interest in both lines is owned by the Union
Pacific Railway Company. In all, three thousand one hundred and
thirteen miles of affiliated lines were segregated from the parent
Company. In February, 1899, the "Julesburg Cut Off"--Julesburg to
Denver--reverted to the Company, having been operated by the Receiver
of the Union Pacific Denver and Gulf Railway in the interim.
Among other troubles which the line has encountered during its
thirty-eight years existence has been that of train-robbers. These
were a class of men the outgrowth of Western desperadoism, now happily
passed into history. Without the fear of God, Man, or the Law, they
would singly or in bands attack trains, rob the mail, express and
sometimes the passengers.
Among the most noted cases of this kind were the Big Springs Robbery,
occurring September 18th, 1877, when a gang of twelve masked men took
possession of the station at that point, bound and gagged the
employees, cutting the telegraph wires, and upon the arrival of the
western train took possession of it, securing sixty-five thousand
dollars from the express car, and thirteen thousand dollars and four
gold watches from the passengers,--then mounting their horses they
rode off. A reward of ten thousand dollars for their arrest
immediately followed and three of the robbers were caught and hung.
About one half of the money was recovered when they were captured. It
is said the balance of the gang were apprehended and dealt with by a
frontier Court, 'Judge Lynch' officiating, this however is tradition,
its truth not being known.
Another robbery was that committed by Sam. Bass and associates who
held up the west bound Pacific Express train securing from the express
car some sixty thousand dollars in gold. This money was all recovered
and most of the band either killed or arrested.
Another great event of this kind occurred in the hills of Wyoming,
west of Cheyenne during 1898. The first section of the Overland West
Bound carrying the mail and express was flagged and brought to a stop.
A culvert behind it blown up with dynamite to prevent the second
section interfering, and the express cars were then looted and the
robbers rode off. Persistent pursuit lasting for years, however,
brought them one by one to justice, one being killed near Kansas City
while resisting arrest, another killed at Cripple Creek under similar
circumstances.
In 1897 (January 1st) the present Company, Union Pacific Railroad
Company, was organized under the laws of Utah as successor to the
Union Pacific Railway Company.
During the construction days, Wells, Fargo and Company operated the
Express service over the line. On completion the Company organized its
own express "The Union Pacific Railroad Express" which continued to
handle the express until re-organized as the Pacific Express Company.
Congress was appealed to in 1893 to pass a refunding bill, but failed
to act.
Numerous unsuccessful attempts were made to reorganize the property,
but this was impossible with the debt to the Government in an
unsettled condition. Finally in 1899 an agreement (see foot note) as
reached between the re-organization Committee and the Attorney General
by which the line was to be foreclosed and the debt adjusted. This was
accordingly done in 1899. The account standing:
Amount due Government. From Union Pacific. From Kansas Pacific.
Principal $27,236,512.00
Interest 31,211,691.75
-------------
Total $58,448,203.75 $12,891,900.19
Less Sinking Fund 18,194,618.26 6,303,000.00
------------- -------------
Balance due $40,253,585.49 $6,588,900.19
and these amounts were accordingly turned over to the United States
Government closing the account.
[Footnote: The agreement In question was signed by Sidney
Dillon, President of the Union Pacific Railroad Company;
Robert B. Carr, President of the Kansas Pacific Railway
Company; W. A. H. Loveland, President of the Colorado Central
Railroad Company, and concurred with by Henry Villard and
Carlos S. Greeley, Receivers of the Kansas Pacific Railway.
It provided that the three lines should be operated as one
property, under the general direction of the Union Pacific
Railroad Company. The gross earnings to be pooled and
apportioned between them on certain specified agreed per
cents, based on the earnings of the respective roads during
the preceding year, the arrangement to be binding for fifty
years and to be subject to the approval of the Court in whose
hands the Kansas Pacific Railway then was.]