Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-03-21
CENTRAL PACIFIC.
Senator StanfOrd'S Address to the
Senate Committee.
DEVELOPMENT OF A VAST EMPIRE.
Difficulties Overcome by the Road
Constructors-Benefits Reaped
and Money Saved BY Govern
ment Through Early Com
pletion OF the Road.

the Presidents message relating to the same
subject. In his speech last Saturday he was fol-
lowed by Creed Raymond, who also made a
| strong speech. The following is the full text of
Senator stanford Is address on behalf of the Pa
cifc Railroad Company:
Mr. Chairman and Members of the Committee: l
hardly feel justified in asking the attention of
the committee to the little l have to say Mr
Raymond, the counsel for the company, will en-
deayor to give you more fully the reports of the
Pacific Railway Commissioners but at the same
time can aid the committee by plain state
ment OF the facts giving The early history of the
Central Pacific Road. In the year 1860 q few
gentlemen living in California met together and
| as result OF this meeting concluded to have a
preliminary survey made over the Sierra Ne
vada Mountains to see if ii was possible to bui d
railroad across them. Civil engineers had de-
clared that IL was practicable to build a road
over these mountains.
DE IDED TO BUILD IT.
The result of the exploration was that we de-
termlned that road could be built, and we
| formally organized a company in 1861 having
| that purpose in view. knowing there was no
way to reach the great interior country except
| by wagon teams. We came to the CONCLUSION,
| so we said in talking 1t over that If a vessel
could start from San Francisco, sail around Cane
Horn and reach that great basin we would not
be justified in building road over the Sierra
Nevada Mountains. Or, if vessel could start
| from any port on the Atlantic side and sail
! around Cape Horn and reach it we could not
afford to build road; bnt we knew that could
| not be done, and the only competitors of the
| railroad would be the mule and OK teams then
used, and then, therefore, we should be able to
| ask price fUr transportation which would Just
| iiy the construction of the road if it could be
| built at all. At tnat time the explorations had
shown that in all probability Nevada Idaho
Montana and Utah we're rich mineral countries
and we thought it itself would give us a good
| deal of business for the road
FINE PIECE OF PROPERTY.
Is rnS1lf tf,rDad ont ;,,e,;Go5 4i,~..s -
| pectations, and the road over the Sierra Nevada
| mountains without any competing line of rail
| road would to-day be a grand piece of property
We commenced to build the road unde rthe laws
of the State of California and prior to the mas.
sage of the Act of 1864 we had constructed
| thlrty-one miles OF railroad and had material
enough on hand to complete fifty miles of road,
| but we had great trouble and litigation. We
were not then able to go beyond that thirty one
| miles within our means. In 1864 the Act of Com
| gress was passed, the Act under which the road
was constructed. That Immediately gave credit
10 the company, and we were able 10 dispose of
/ our own trstmortgage bonds before the time
| when we could receive the Government bonds
| Inc Government loaned to the COMPANY its
| credit. II did not give it money 1t gave il
| credit, and that credit is ours today The en-
| tire amount given by the Government or loaned
by the Government was s27 $50; that was
| the loan: that is all that the company received
! from the Government eScep the lands the most
! OF which it has been unable to dispose of 10 to
| the present time. The company was authorized
1
amount equal to the Government bonds. These
bonds OF the Government were sold for lold.
| They were currency bonds to be so redeemable
ana were sold at about ~ cents on the dollar or
in gross we received for that ST S65 $50 the sum
| of S2O, ,44s 466 70. All this money and all the
| money that the company received from its first
mortgage bonds went into the construction of
the ROAD between sacramento and Ogden.
PROCEEDS OF THE BONDS
Senator Butler-What amount did you receive
| for the first mortgage bonds?
! Senator Stanford-Our frst-mortgage bonds
brought US little less than the Government
| currency bonds.
Senator Butler-What was the actual sum that
you received?
Senator Stanford-we sold the bonds for So
| AS, ,466 75.
Senator Dayis-Was that for bonds YOU issued
| under the Land Grant Act?
Senator Stanford-No: it was for the Govern
ment bonds; The Government loaned us the
bonds and that was The amount of money we
realized on them. We were authorized by law
to issue cur tirst-mortgage bonds equal to the
amount which the Government loaned on
which we realized just about the same amount
| OF money that we did from the Government
bonds.
Senator Davis-And that money all went into
the construction of the railroad?
Senator Stanford-GeS.
The Chairman-The whole forty million dol
lars?
DEVELOPMENT OF THE COUNTRY
Senator Stanford-Yes, every cent of il and
Wild stories which have been circulated that we
made one hundred mil ions or more and that
II was made at the expense OF The Government
never have been able myself to understand
! now you could make much more out of a thing
than there is III it. The road was built and the
government only parted with twenty-seven
millions and some odd dollars of its bonds and
we realized much less on them By the CON
rstruction of that road i'll connection with the
Union Pacific Railway the possibilities of that
country were demonstrated. Ii opened I'D To
DEVELOPMENT q in ayta tto,,
that conquered by Cesar in Europe and all at q
very small expense, so small that from the time
OF the completion OF the road in 1869 up to 1876
at winch time the contract required that the
road should be completed. the Government
saved during that time more money than it had
loaned the COMPANY, the road being completed
seven years ahead OF the contract time
The Chairman- That is, the Government
saved it by reason OF the fact that the road was
bull that length of time before the date re-
Quired under the contract?
Senator Stanford-Yes; the Government re-
ports show from 1850 10 1869, when that road was
completed there was an annual expenditure of
over s., 10000
AIR Chalrman-That was for doing what?
SAVING IN TRANSPORTATION.
Senator Stanford-For the carrying of Govern
mem mails, troops. etc. do not take into con-
sideration at al what the Government saved by
the building of the road as regards the stopping
OF Indian wars. ] do not say anything about
that. | am speaking sim ply of the transporta-
ton of the Government and the amount saved
according to the Governments own reports.
Senator Dayis-And this was caused by your
expediting the building of the road seven Years
in advance of the time required
Senator Stnnford-Yes.
Senator Davis-That is the difference between
your actual charge aud the average cost of
carrying the same things before the road was
built.
TIE COUNTRY DEVELOPED.
Senator stanford-That is it: all this is in the
testimony proven clearly and indisputably. The
Pacific Railroad Commission has published all
that testimony and have submitted it to YOU
Not only has the Government made this i'm
portant saving, but practically the whole coun-
try was developed by the building of the road
and the Advantage in that way to the Gov rn-
ment cannot be fully estimated. The construc-
tlon of the road also demonstrated the possi-
blilty OF construct ng other railroads across the
continent. Before the road was built il was
generally supposed there was no coal along its
lire. Biologists had stated that the country
was one where coal could not be expected to be
found. and that was supposed to be one of the
difhcuitles IN op rating the road. / don't know
that to-day, except for the discovery of coal
along the line, the read cou be maintained for
commercial purposes, but the discovery of these
coal-Deds helped lhe road at once. Large beds
of coal were developed upon the line of the
mon Pacific which made the operation of the
road practicable and permitted great profits.
and the road was q success. It was earning
money largely, and could have paid off tho
government loan without difficulty had not iss
business been diverted. but soon as there was
a competins line of railroad, it not only divided
the business but the rates were reduced The
value of the rosd through this barren country
without competition was such tn at the company
could fix substantially its own rates. according
TO its own Judgment of what it should charge to
transact its business
COMPETING LINES.
Senator Davis-What competing line do you
refer to?
Senator stanford-Thefrstc competing line was
the Atchison. Topeka and Santa Fe which con-
nected with the Southern Pacific road at Dem
Ing As soon as t1Aat was done, there was
competing line which divided the business and
cut down the rates. Then the Northern Pacific
read was built, 6nd the short line of the Union
Paelhc Company up into Idaho and Montana.
toward Oregon. That took from the Central
Pacific Railway very large portion OF its best
business, because that road runs from the East
and most of the supplies Of that country came
from the East, when. before that time, they
were bought at san Francisco and then had to
be carried back ON our line into Idaho Mon
tana- Washington Territory and Oregon There
are now perhaps, seven hundred thousand
people, ali o. whom when we commenced
building we expected 10 supply and did supply
for time, bat the construction by the Union
Pacific Railroad Of that liue brought supplies
for ST that section OF the country from the East
and the Central Pacific road was cut off from
thnt source of reveEae. Our whole population
- california and yfss of the Rocky monltsins