Nor was it unimportant that the organization was asking for a sum which on the face of it was insufficient to accomplish the purposes which were in mind. Nobody pretended that $350,000 would do more than permit of the organization of the San Francisco and San Joaquin Valley Railway. To build the line would cost ten times that sum or more. Indeed, the company was actually capitalized at $6,000,000, a not unreasonable figure under the circumstances. Thus a subscription to a fund of $350,000 merely committed the subscriber to an enterprise which might involve him, if it was to be successful, in an additional large and undetermined expense, on the penalty of losing his original subscription if the additional sums were not forthcoming.
Final Success
We have now seen that two attempts to secure support for a new independent railroad in the San Joaquin Valley failed between June, 1893, and the end of 1894. The third stage in the progress of the Valley road began with a meeting called by the Traffic Association on January 22, 1895, for the purpose of interesting the realty owners of San Francisco in the construction of a railroad. By this time the Traffic Association’s second campaign for subscriptions had failed as definitely as had its first. Only about one-half of the desired sum of $350,000 was on hand. No more could be secured from the merchants of the city. There was little enthusiasm in San Francisco, and in the interior, cities like Fresno were becoming impatient and were turning to the south instead of to San Francisco for relief from the burden of high rates.[462]
It was at this point and under these conditions that the management of the enterprise passed to new men and that a complete reorganization of its affairs occurred. In the main this change in control and in the policies of the projected Valley railroad was due to the energy of one man. Claus Spreckels, of San Francisco, the leading sugar refiner of the Pacific Coast, was not a member of the Traffic Association, and was not pledged to the support of the San Francisco and San Joaquin Valley Railway. He was, however, one of the speakers at the January meeting, and when the formal proceedings were over he came forward with an offer to subscribe $50,000 provided that the minimum amount to be raised were increased from $350,000 to $3,000,000 or to $5,000,000. On Spreckel’s motion, moreover, the chairman was authorized to appoint a committee of twelve from among the property owners of the city to solicit subscriptions from holders of real estate. After the adoption of this motion the meeting adjourned.
Map showing the line of the San Francisco and San Joaquin Valley Railway, together with portions of the systems of the Southern Pacific and of the Atchison, Topeka and Santa Fé, 1898.
The subscriptions in definite amounts received on Tuesday, January 22, 1895, did not much exceed $20,000. The committee of twelve met, however, on January 24 and Claus Spreckels was elected chairman. Soon after this, larger pledges began to appear. Spreckels himself now subscribed $500,000, or ten times his initial offer, and at his instance, John D. and Adolph Spreckels, his sons, subscribed $100,000 apiece. From this one family, therefore, came twice the sum which the Traffic Association had tried in vain to raise from all of San Francisco. The whole complexion of the business changed as a result of this beginning. By January 30 over $1,200,000 was pledged. Subscriptions through February 2 amounted to $1,536,500, and on February 8 the $2,000,000 mark was reached. This so encouraged the committee that it immediately resolved that the sum of $4,000,000 should and must be obtained from the city of San Francisco, and that with the aid of the interior the competing line could be constructed on a cash basis. To this end every effort was to be turned.[463]
It is very evident that the substantial wealth of the Spreckels group and the reputation for success which Claus Spreckels enjoyed, made a powerful impression both in San Francisco and in the San Joaquin Valley. The proposed railroad enterprise was the same as before, but the leadership was different. At the same time the amount of money necessary to be raised in the first instance was increased from $350,000 to $2,000,000.[464] Large sums are sometimes easier to secure than small, for reasons both sentimental and practical, and it proved so in this case. Claus Spreckels said himself that he had never made a failure in his life, while with $2,000,000 in hand it seemed so unnecessary for anyone to fail that people hastened to share in the anticipated success.
Campaign for Stock Subscriptions