As we look back upon the circumstances attending the construction of the San Francisco and San Joaquin Valley Railway, it is evident that after January, 1895, its managers played their cards with considerable shrewdness. Regarded as a direct profit-making enterprise, the ability of the new company to earn dividends was questionable. It was all very well to dwell upon the fertility of the San Joaquin Valley, and to point out the large proportion of the revenues of the Southern Pacific derived from this source.[465] Doubtless these conditions would count in the long run. Yet the fact remained that the new road was entering a not too highly developed territory already served by a through line of large capacity. It was expected to reduce rates, and was likely to be compelled to reduce them; and it was to do this while it was in the course of developing its own organization and establishing business relations with a new clientèle. Huntington said that he thought there was room in California for both the Southern Pacific and the new line. It required, he said, only a space of thirteen feet from the center of one track to the center of another, and there was lots of room in California. The projectors of the new road would have no trouble in finding room.[466] But this remark was not meant to convey comfort to subscribers to the stock of the San Francisco and San Joaquin Valley Railway, and probably did not do so.
What, then, were the conditions of success for the new road? They were: first, such a popular support as would minimize the cost of construction and maximize its business; and second, such an alliance with some other large railroad system as would give stability and permanency to its traffic relations. If the new company possessed these advantages it would probably be able to live and to render a useful service in distributing products brought to California and to San Francisco by sea; without them it was not likely to survive.
It was in order to increase their popular support, and not alone for the sake of the money involved, that the promoters of the San Francisco and San Joaquin Valley Railway early began a campaign for small subscriptions. Claus Spreckels took pains to say that while large subscriptions were all right and desirable, it would be the $20,000, $10,000, and $5,000 stockholders who would control the property and its policy.[467] In February, after the first arrangements had been made for reaching the larger business interests of the city, attention was paid to the offering of facilities for subscription to all classes of investors in San Francisco. Districts were mapped out and assigned to canvassers.[468] The following month the San Francisco Examiner, which had taken a prominent part in the fight from the first, began to print subscription blanks in its daily issues. Arrangements were made by which persons might subscribe for fractions of shares by joining with their neighbors in share clubs. The Examiner offered a gold watch to the first person forming such a club, and when there was doubt as to priority, compromised by giving two watches. The formation of the first colored club was given special mention, as was the decision of a colored club in San Francisco to make one paid-up share in the San Francisco and San Joaquin Valley Railway a tug-of-war prize to be competed for at its annual games. The winning team was to constitute a share club, and was to choose a trustee from among its members.[469]
Appeal to Local Patriotism
While devices such as these were perfectly ineffective as a means for raising large sums of money, they did give the new road valuable advertising, and helped to predispose the whole community in its favor. For the same reasons that actuated the promoters in their attempt to gain the support of investors of small means, the San Francisco committee also made appeals to the public which rested upon moral and patriotic as well as upon financial grounds. Without going into this aspect of the matter at length, it may be said that there has probably never been a commercial enterprise launched on the Pacific Coast so advertised, and praised, and predicted about as was the project of the San Joaquin Valley Railway. Participation in the movement became a test of local patriotism. The railroad took the aspect not merely of a business expedient, to be considered solely from the point of view of monetary gain, but it also became an expression of the hopes of expansion entertained by a generation of business men, strengthened by the accumulated antagonism of years between the Southern Pacific Railroad and the shipping public.
Nor was this feature of the campaign confined to San Francisco alone. The main interest from first to last was of course in San Francisco. Yet the valley towns also showed sympathy with the new development, rising at times to excitement as construction became imminent, and questions of route had to be determined. Here, it is true, there was more business and less sentiment. “What is the new road going to do for Oakland?” a man asked John D. Spreckels one day in the Palace Hotel. “It is too early to put that question,” replied Mr. Spreckels, “as it could only be answered by some theorist. The question is, What will Oakland do for the new road?”[470]
In spite of occasional skepticism, and here and there active opposition, the San Joaquin Valley received the new enterprise cordially. Among the Valley towns from which assurances of support were received may be mentioned Stockton, San José, Fresno, Madera, Modesto, Hanford, Merced, Visalia, Selma, and Bakersfield. Oakland also, though not properly in the Valley, manifested considerable interest in the work. Generally speaking, the directors of the San Francisco and San Joaquin Valley Railway asked local committees to select what in their judgment was the best route over which the railroad could pass. They then asked them to give rights-of-way, depot grounds, and terminal facilities, and to subscribe to all the stock that they could afford. It was announced that the railroad was being built on a business basis, and that it would go through the best country and where the greatest inducements were offered.[471]
This did not seem unreasonable to the local communities, and the company’s requests were generally complied with. The principal reason for raising money under such an arrangement was to pay local property owners whose lands were taken for railroad purposes. There were no money subsidies, and no land grants except to the extent sufficient for the company’s actual needs. Yet, of course, even so relatively moderate a provision of local aid materially reduced the cost of construction which the railroad company had to meet.
Purchase of Road by Santa Fé