If one is assessing competitive routes, the transcon routes that mattered in the U.S. were:
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SP
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RI-SP (via Tucumcari)
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AT&SF via Brownwood to Houston
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AT&SF via Amarillo to Chicago
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UP-LA&SL (after 1906 or so)
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U
It is assigning the term “competition” to routes seperated by hundreds and even thousands of miles that bothers me. Maybe from Los Angles to Chicago the traffic was competitive, maybe from San Francisco to Chicago the traffic was competitive, maybe from Seattle to Chicago the traffic was competitive. But after leaving terminals at either end of the route, there were other markets tapped by each railroad that often made pale the coast to the Lakes for what it meant to the carrier. “Competitive” therefore means nothing unless you are talking direct traffic, say fruit from LA to Chicago via SP or SF (UP or BNSF). But that same fruit cannot go to San Francisco or Seattle and still use a competitive route like WP (UP) or NP-GN. Nor would ore from VIrginia City cause competition on routes except out of Virginia City, and oil from Texas wouldn’t go to Seattle to go to Chicago. The term here has become a political red herring to make you look away from the political rhetoric rather than explain what the railroad story is really all about.
Were GN and UP even competitors for the same traffic, when GN first completed it’s transcontinental route?
Looks like my Muddy friend is wanting my participation, and since I was Right of Way Agent and Mgr. of Real Estate & Contracts for Santa Fe perhaps I can add something here.
Fantasy vs. Fact: like Marley’s ghost the issue of land grants keeps rearing its head and once again needs explaning.
!. More than 92% of the US Railroads mileage was built by private enterprise, W/O land Grants.
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The primary purpose of the grants - limited to a few trail blazing RR’s - was not to help these RR’s, but to open up the vast area, mostly west of the Mississippi, to settlement and developement.
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Most important! The grants were not gifts but part of a business transaction which ultimately resulted in the RR’s repaying the government more than ten (10) times the value of the lands received.
The RR’s received more than 131 million acres specifically for the purpose of providing them with the security for borrowing money. Which money would not have been available on the open market since there was no foreseeable revenue potential that a reasonable lender could use to believe he would be repaid.
The government’s objective was achieved. The land grants made it possible to do what had never been done before: provide transportation ahead of settlement. Prior to 1850 the government offered land for sale at $1.25 per acre and there were very few takers. After the first legislation was passed the government immediaely doubled the price to $2.50 per acre. And where the RR’s were to be built the land was eagerly bought by settlers.
A few fringe (maybe not fringe) benefits: The vast ares which had produced no continuing revenue were converted into taxable property for the states and municipalities which sprung up. The RR’s sold most of the land outside of the operating property, usually at bargain prices, to enterprising new settlers who then pro
Murphy,
That is a big yes. GN and UP were competitors across much of the state of Washington, Portland OR, and at Butte MT.
IIRC Hill had a chance to purchase the OR&N, which connected Portland with NP at Wallula WA (Villard Jct) and with OSL at Huntington OR after the panic of 1893. Hill was more interested in the NP, the GN’s long standing rival.
Hill did not buy the OR&N, Harriman did and the UP was back into Portland and later muscled its way to Seattle as well. If Hill had bought the OR&N he would have frozen the UP out of the entire state of Washington and northern Oregon. While the OR&N had a line to Spokane from Wallula it was no prize, and Hill would have built a line very much like the “Washy” between Spokane and Wallula as Harriman later did. Hill would also not have had to build the SP&S which never made any money and was a constant drain on the GN and NP until about WWII.
Mac
Wow. I have been missing things on this thread…
Shame on me for being out on the ties I guess…
LOL.
LC
Also the majority of the GM&O was part of the Land Grant Act of 1851 as MC and I know well…
LC
Mac, Murphy’s point underscores what I was trying to say…that yes, at particular points there was some competition but that overall a GN and a UP and an SF from the Pacific Ocean to the Great Lakes were not as competitive as we are led to believe. Now from Puget Sound the the Gulf Of Mexico, it might be a different story. But from Salt Lake City to San Francisco or Chicago, niether GN, NP, nor SP were factors. From Pocatello, ID to Chicago, SF and SP were not competition. From Sante Fe to Chicago or Los Angeles NP nor GN nor UP were competitors. What I am saying is that the whole competitiveness arguement is not as strong when you consider that each road had a chance to (and did) develop its own markets where its rails were and where those rails were were often untouched by a competitive railroad. And a good example of Pacific to the East competitive traffic would be California produce…could and did go an
I liked Hilton’s several 1960s - 1970s articles on the ICC in Trains - but then, I was a high school senior / college frosh-junior taking Econ courses as my liberal arts electives that were required for my engineering major at the time. I was just starting to appreciate that side of the business, and they were a good intro to it - pretty deep and scholarly stuff for a fan magazine, too. I’m a lot older and (hopefully) wiser than that now . . .
Hilton was revolutionary for the times, too, in that he was publicly and in print essentially advocating in the LBJ “Great Society” era of 1967 the deregulation that didn’t happen until the Staggers Rail Act of 1980 at the very end of Jimmy Cater’s presidency - see:
What went wrong and what to do about it
Trains, January 1967 page 36
the ICC must go [emphasis added - PDN.]
( ECONOMICS, GOVERNMENT, “HILTON, GEORGE W.”, ICC, REGULATION, TRN )
Also:
What does the ICC cost you and me?
A couple of things…
There were three transcontinental routes looked at in the 1850’s; from north to south they were the northern pacific, central pacific and southern pacific routes. The Secretary of War was most involved in reviewing and selecting the one to build first, and he favored the southern route - largely because he was from Mississippi. That Secy of War was Jefferson Davis, so once he became president of the Confederacy his influence on the decision obviously died, so the central route was chosen to be the first built.
Virtually every railroad built in the 19th century rec’d some sort of land grant, either from the federal government or from a state. Sometimes a state legislature would pass a land grant for a proposed railroad that never got built, and years later another railroad (or a new railroad) would buy the charter expressly to get the land grants.
Generally the RR land grants gave the railroads every-other parcel of land…so a RR building west might have say a one mile square land grant on the north side of the tracks, then the next mile it would be on the south side, then the next mile back on the north…alternating kinda like a checkerboard. The government owned the alternate squares, the idea being the RR got value in the land and could sell it, and when the RR was built and people moved to the area, the gov’t could sell the gov’t land to people and make money that way (though I suppose some of it went to homesteaders?)
The early history of the Union Pacific and the Credit Mobilier is so filled with amazing levels of corruption, bribery, graft etc. in both private enterprise and government that it’s hard to tell who is most responsible. UP pretty much gave stock shares to Senators and Congressmen to influence their votes for example, and some UP officials were getting kickbacks on supplies the RR bought.
While Jefferson Davis might have favored the Southern Route to favor the South’s economic and political interests, it was also independently judged to be the technically superior route, too. Which proved to be correct.
RWM
In my haste to finish my posts late yesterday, I conflated the roles of the several transcontinental railroads as potential competitors, and as path-finders for proving that it could be done. Almost all of the subsequent posts since then - such as henry6’s - are valid as to the non-competitiveness of those lines that were far apart, for regional traffic and even for the trans-pacific trade - no further argument on those points.
But it seems that the early builders were more concerned about the nearest adjoining transcontinental line that was - or could soon be - next door, so to speak, and its ability to build branches that would then invade and poach on their “natural territory” (again, see the Vance book The North American Railroad for an detailed exposition of that). While this didn’t always occur, the fear or possibility of it did seem to drive a lot of the decisions. And it did seem to occur often enough to justify those concerns and the actions taken to preclude or minimize it - see Mac’s post above for a really good example.
What I was really meaning to say is that once a transcontinental line or two had been done, the others were just more of the same - it was no longer the 1st man on the moon kind of thing. So I don’t doubt that if the UP had not been built, that Hill would have built the GN anyway.
By the way, note that DiLorenzo claimed that the Panic of 1893 exposed the flaws of the UP - but that’s the same year that the GN was completed to the Pacific, along with the other 4 by then. RWM’s analysis of the relative competitive importances of them (above) places UP dead last - 10th of 10, IIRC - so it was probably a multiplicity of factors that led to the UP’s fall.
Also, I wrote earlier that Hill had to worry about Harriman running the UP as such a potential next door competitor when the GN was expanding
When first completed, they only competed at Butte, Montana, and end-to-end for business moving to and from the Orient. UP wasn’t extensively built into the Palouse yet, nor did it reach Seattle yet.
You can break the competition picture into eras:
- In the 1880-1900 era, there was very little freight traffic moving between Pacific Coast ports and the midwest. Heavy goods continued to move by water because it was so much cheaper. Rail business end-to-end consisted of passengers, mail, and express, which in that era was profitable. Very little freight business moved by rail more than 300-500 miles. For example, GN would move lumber from mills in Washington and Idaho eastward into Montana and the Dakotas, lumber westward from Minnesota into the Dakotas, grain from the Dakotas to the Great Lakes, and merchandise from Chicago into its territory. None of this except business getting onto or off a steamship bound for Japan was truly competitive with UP, except for merchandise and lumber to Butte, and matte copper to Chicago.
- In the 1900-1920 era, UP and GN had built extensive overlap into the Palouse, and UP reached Seattle. Now they would compete head-to-head for Chicago-Seattle traffic, and local traffic within the Palouse and moving from the Palouse to ocean for export. However, competition doesn’t have to be head-to-head between common endpoints: only one point has to be in common. For example, if UP cut its rate on mine timbers to Butte from mills in Southern Idaho, so that the delivered price FOB the team track in Butte was lower than GN moving the identical product from a mill in northern Montana, then UP would outcompete GN and get the traffic. (That particular example probably never occurred, however; UP’s costs would be way
It is sometimes said that war spurs progress…However, but for the Civil War the Southern Route would probably have been built first.
Paul, I ordered the transcons south-to-north, not in importance. Sorry I didn’t make that note earlier – I meant to but forgot!
RWM
Assembling difficult jig-saw puzzles is much easier if you wield a sledge-hammer.
That’s OK. I should have noticed that geographic progression anyway, because the one that caught my eye and surprised me the most was GN as dead last (not UP as I just said above, so my recollection of the UP’s position was flawed, too). “Haste makes waste”, as they say around here.
- PDN.
GN wasn’t dead last…wasn’t the Milwaukee Road built in 1909 or there about?..the last of the trans cons to be constructed I believe.
[quote user=“Railway Man”]
When first completed, they only competed at Butte, Montana, and end-to-end for business moving to and from the Orient. UP wasn’t extensively built into the Palouse yet, nor did it reach Seattle yet.
You can break the competition picture into eras:
- In the 1880-1900 era, there was very little freight traffic moving between Pacific Coast ports and the midwest. Heavy goods continued to move by water because it was so much cheaper. Rail business end-to-end consisted of passengers, mail, and express, which in that era was profitable. Very little freight business moved by rail more than 300-500 miles. For example, GN would move lumber from mills in Washington and Idaho eastward into Montana and the Dakotas, lumber westward from Minnesota into the Dakotas, grain from the Dakotas to the Great Lakes, and merchandise from Chicago into its territory. None of this except business getting onto or off a steamship bound for Japan was truly competitive with UP, except for merchandise and lumber to Butte, and matte copper to Chicago.
- In the 1900-1920 era, UP and GN had built extensive overlap into the Palouse, and UP reached Seattle. Now they would compete head-to-head for Chicago-Seattle traffic, and local traffic within the Palouse and moving from the Palouse to ocean for export. However, competition doesn’t have to be head-to-head between common endpoints: only one point has to be in common. For example, if UP cut its rate on mine timbers to Butte from mills in Southern Idaho, so that the delivered price FOB the team track in Butte was lower than GN moving the identical product from a mill in northern Montana, then UP would outcompete GN and get the traffic. (That particular example
GN was last only in the context of RWM’s listing of the U.S. transcontinentals from south to north, because GN was the northernmost. You’ll have to look at about the 2 previous pages of posts to see how I’ve confused it that much. [sigh]
- PDN.