Chapters on the History of the Southern Pacific

by Stuart Daggett

Another Project

Following the failure of the San Francisco and Great Salt Lake enterprise, plans for railroad construction in California made no progress for several months. It had now become evident, however, that the state legislature was not disposed to pass a maximum rate enactment, and that any reduction in the level of local rates in California must come either from the good-will of the Southern Pacific or from the construction of competing lines. Under these circumstances, plans for railroad construction were revived, this time under the direct leadership of the Traffic Association of California.

Exactly when the Traffic Association took up the idea of promoting a competing railroad in the San Joaquin Valley cannot be stated with confidence. Newspaper reports indicate that the project was discussed at least as early as April, 1893. Whether or not a beginning was made in this month, it appears that by June, 1893, plans had progressed sufficiently to permit the publication of a prospectus, sent out with the approval of San Francisco shippers. This prospectus invited the citizens of San Francisco and of the state of California to subscribe to the capital stock of a railroad which should run from the city of Stockton to the head of the San Joaquin Valley, in Kern County, a distance of about 230 miles. The plan was said to be to secure as much money as possible in the city of San Francisco, and then to ask the people of the valley, from Stockton up, to add thereto a fair quota. Construction was to begin at Stockton instead of at San Francisco, in order to save expense and in reliance upon the effect of water competition on San Francisco Bay—a competition which was expected to maintain a low level of rates between Stockton and its larger neighbor. The cost of a good road from Stockton to Bakersfield was estimated at something less than $20,000 per mile.

Appealing particularly to San Francisco, the promoters of the new enterprise declared that a competing railroad was essential to that city’s prosperity. San Francisco amounted to no more than any other collection of people unless it used its facilities as a seaport. Facilities unused might just as well not exist. It had been a part of the policy of all the transcontinental roads for many years to neutralize this seaport by all the means at their command, including the practice of maintaining excessively high local rates between the sea and the interior. This condition must be remedied. The prospectus also explained that the new line would benefit the producer and the consumer in the interior as well as in the city of San Francisco.[457]

Lack of Financial Support

Once the prospectus was out, the project for a local competing railroad was pushed with all the energy characteristic of Mr. Leeds and the Traffic Association. It received substantial support also from a portion of the San Francisco press. In order to test sentiment, a subcommittee of the executive committee of the Traffic Association started a canvass of the wealthy men of San Francisco, not to secure subscriptions, but to seek general assurances of co-operation. With one exception the citizens interviewed were reported to have promised to take stock in the road, and to have invited the committee to call again. Such an indication of unanimity was considered important.[458] Not only did the moneyed men of San Francisco encourage the enterprise at this time, but the newspapers printed accounts of the interest taken by men of small means. Mechanics and laborers were said to be coming to the offices of the Traffic Association, and offers to subscribe for small amounts of stock, payable in labor, were received.[459] Yet there is some question about the warmth with which the original proposal for a competing line was received. Certainly the minimum amount necessary to be raised in order to make all subscriptions binding was small—$350,000—and the slowness with which this sum was approximated did not indicate enthusiasm.[460] In the valley generally there were indications of interest, such as favorable newspaper notices, offers of rights-of-way for the new company, and resolutions of indorsement by boards of trade, and by meetings of citizens. But here, too, there were few subscriptions, and after the panic of 1893 the Traffic Association recognized that their initial attempt had failed.

Failure of Second Attempt

The second campaign for subscriptions to the stock of the Valley road began about August, 1894, when the executive committee of the Traffic Association decided to renew its search for funds. It was now decided to call the new enterprise the San Francisco, Stockton and San Joaquin Valley Railway Company, and to define its route generally as between San Francisco, or some convenient point on the Bay of San Francisco, via Stockton and Fresno by a convenient and practicable route thereafter to be determined, to some point in Kern County. The minimum subscription was again set at $350,000, and, as in the earlier project, a trust was devised to hold the stock of the company and to preserve its status as an independent carrier.[461]

In October stock subscription books were thrown open to the public and some thousands of dollars of subscriptions received. Mr. Leeds went to Stockton to see what could be done there. In San Francisco, Mr. Van Sicklen, a member of the executive committee, endeavored to reach the business men of the town in a somewhat systematic fashion. Large subscriptions and small were invited, but once more small success was obtained. The members of the executive committee of the Traffic Association were busy men and disinclined to devote much time to personal campaigning, while, even had they done so, the chances of success were not good. The primary defect in the Traffic Association’s campaign lay in the fact that no man in the group of promoters interested in the new enterprise had sufficient prestige so to impress the public imagination as to lead investors to have confidence from the beginning that the projected railroad would be built. The composition of the Traffic Association was admirable for the purpose of encouraging water competition. It was as inadequate to the financing of a large railroad to be conducted without government support as it had been shown to be to the management of a political campaign.