Chapters on the History of the Southern Pacific

by Stuart Daggett

[477] Laws of California, 1878, Ch. 219.

[478] San Francisco Examiner, March 9, 1895.

[479] Ibid., March 11. 1895.

[480] This was the proposal of Mr. Powers, of San Francisco. See Journal of the Assembly, 31st Session, March 8, 1895, p. 904.

[481] Reid amendment, Journal of the Assembly, 31st Session, March 11, pp. 961-62.

[482] Laws of California, 1895, Ch. 171.

[483] Indenture dated July 8, 1895. The lease was to expire May 1, 1945. Five years after the lease was signed, however, the State Harbor Commission declared it terminated because of the failure of the railway company to make agreed improvements. A new indenture was then signed by the parties under date of November 21, 1900. By this document the state slightly increased the area leased to the railway company, and extended the term to December 1, 1950. For its part, the railway agreed to construct a definite length of sea-wall along the front of the leased property, and to spend $50,000 annually for six years on improvements. It is interesting to observe that while the new lease, like the old, was non-assignable, the restriction in the indenture of 1900 did not apply to any assignment or transfer that might occur at the expiration of the Valley company’s corporate life through foreclosure of its bonded indebtedness, nor to any sale, transfer, or assignment to the Atchison, Topeka and Santa Fé Railway Company. The Santa Fé road, successor to the San Francisco and San Joaquin Valley Railway, purchased additional property adjacent to and south of China Basin, but its terminals are still on the land leased from the state. This includes the company’s freight ferry lands, its freight houses, and most of its yard tracks in San Francisco. See on this matter the annual reports of the Atchison, Topeka and Santa Fé Railroad, and also the San Francisco Examiner, November 15, 1898.

[484] San Francisco Examiner, October 27, 1898. Another point of view with respect to the consolidation of the San Francisco and San Joaquin Valley Railway with the Santa Fé is presented by W. B. Storey, chief engineer and general superintendent of the Valley line from 1895 to 1900 and now president of the Santa Fé. Mr. Storey writes:

“My views do not coincide with yours in regard to the reasons actuating the promoters of the railroad. Popular opinion in California believed that the domination of one railroad greatly retarded the progress of the state and it was the feeling that the prosperity of the state would be very greatly increased if competition could be provided. As a possible means of obtaining such competition resort was made to water competition and a steamship line was organized to handle freight via the Isthmus. This line was maintained until the money raised had been absorbed and it had been practically demonstrated that such a line could not pay. The public was, therefore, eager for any other competition that might present itself. It was the thought of the projectors that a local line should be built which might ultimately, if opportunity offered, become part of a transcontinental line. The Santa Fé, however, was not in a position to do anything, as it was at that time in a Receiver’s hands. It was, however, the nearest railroad and it, therefore, seemed wise in projecting a new road branching from San Francisco to so locate it that it could later become part of the Santa Fé if that road desired an entrance to San Francisco. Most of the people who subscribed did so with the idea of providing competition and not with the idea of making money out of the investment.... By the time the road reached Bakersfield it became evident to the Directors that the road could not successfully compete with the Southern Pacific, because while for the time the people in the valley were giving the road all the freight that came from San Francisco, they were not able to turn the freight coming from the east over the Valley Road, the Southern Pacific refusing to make joint rates. The consequence was that the Valley Road had to depend exclusively on local business, and it was felt that in time even this would drop off materially by reason of the competitive methods of the Southern Pacific. Mr. Spreckels expressed the case in the following manner: It was not possible for the Valley Road to exist unless it became a transcontinental road and California could not raise money enough to make it such. The Santa Fé, by an extension to Bakersfield, could make it a transcontinental road and offered to buy a controlling interest.”

[485] See especially a letter written by John T. Doyle under date of September 29, 1898, and published in the San Francisco Bulletin, October 5, 1898. The whole matter was extensively discussed in the columns of the San Francisco press in October, 1898.