On December 11, 1865, a bill granting lands to aid in the construction of a railway and telegraph line from Missouri and Arkansas to the Pacific coast by the southern route was introduced in the Senate; it was referred to the committee on
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Pacific railroads favorable reported, and became a law on July 27, 1866, by the signature of President Johnson. The Atlantic and Pacific was the result.
This was the first company chartered and aided by Congress to construct a Pacific railway over the southern route, and by its agency the fourth through route between the East and the Pacific coast was opened.
Beginning at or near Springfield, Mo., the road was to proceed to the Canadian river and to Albuquerque, thence along the thirty-fifth parallel to the Colorado-and to the Pacific. From its intersection with the Canadian river a branch was to be extended eastwardly to the border of the Arkansas.
In addition to a two-hundred-foot right of way and the usual right to take materials from adjacent public lands, a land grant of twenty odd-numbered sections per mile on each side of its line was made. This applied only to the territories; within the bounds of a state the donation was but half as large. The railway company was to receive the lands by twenty-five mile sections as such sections were reported satisfactorily completed by an examining commission.
The road was to be of uniform gauge, equal in all respects to railways of the first class, and its rails of the best quality of American iron.
It is notable that in this charter Congress provided that, if the route taken should coincide with another road which had received government aid, the previous grant would be deducted; and especially this, -ãthat no money shall be drawn from the treasury of the United States to aid in the construction of the said Atlantic and Pacific Railroad. By 1866 Congress had become more wary than in 1862.
Then, too, the act required that $1,000,000 be subscribed and 10 per cent be paid in within two years, that construction be begun in two years, that not less than fifty miles a year be built after the second year from beginning and that the whole should be completed by July 4, 1878, finally that if any violation of the act was continued through one year, the government might complete the road.
Other provisions made the railway a post route and military road; provided that government rates should be no higher than to individuals for similar transportation, required sworn annual reports to the secretary of the interior, and reserved the right to alter, amend or repeal.
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Two further provisions remain for special attention. One of the chief grounds of discussion over the bill arose from the fact that the line of the road crossed Indian lands. The Cherokees and Chickasaws objected to the section which made it the duty of the United States to extinguish Indian titles as rapidly as might be consistent with public policy and the welfare of the Indians, and , as finally passed, the bill provided that extinguishment should be only by the voluntary cession of the Indians.
The other provision authorized the Southern Pacific Railroad of California to connect with the Atlantic and Pacific at any point neat the eastern boundary of California for the purpose of forming a line to San Francisco. The Southern Pacific, if such connection were made, was to make its gauge and rates uniform with those of the Atlantic and Pacific and was to receive the same grants - subject to the same obligations - as the latter road. Thus Congress met the Southern Pacific for the first time and largely aided the road which was soon to monopolize transcontinental traffic over the southern route; but of that, more will be said further on.
In 1867 and 1868 bills were introduced to amend the above act and to further facilitate the construction of the road, but made little of no headway. And in 1869 a joint resolution to extend the time for construction came to nothing. These measures are to be taken in connection with the fact that the Atlantic and Pacific project almost immediately fell into financial difficulties and constructed no mileage until 1871, in which year the census of 1880 credits the company with 33.87 miles of line, all lying in Indian Territory. Accordingly, in 1870, in connection with another bill to amend the charter, we find citizens of New Mexico objecting to aiding a company which could not build the road. It was simply holding the line of the thirty-fifth parallel and keeping others out. The railway company maintained that as the right of way had not been obtained from the Indians it should be relieved of the requirements to construct fifty miles per year beyond the western line of Missouri.
The final outcome of the companyâs efforts for further government relief came in 1871 when an ace to enable the Atlantic and Pacific Railroad Company to mortgage its road was passed. By this act the company was authorized to mortgage its road, franchises, lands etc., the mortgage to be filed and recorded with the secretary of the interior. This included no government guaranty. Later - immediately following the crisis of 1873 - vain attempts were made to get the United States to guarantee the companyâs bonds.
In 1872 the company leased the Pacific railroad of Missouri, later the Missouri Pacific, whcih it operated until 1875; and in November of that year it went into the hands of the receiver.
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Then in September, 1872, the entire property of the Atlantic and Pacific was sold to Wm. F. Buckley and by him conveyed to the St. Louis and San Francisco Railway Company.
Here one might hope that this much tried company might rest and prosper. Not so. In 1880 there cam a reorganization and Tripartite Agreement between the Atlantic and Pacific, St. Louis and San Francisco, and Atchison, Topeka and Santa Fe companies. The Atlantic and Pacific was divided so as to form a ãcentral division - from the western boundary of Missouri to Albuquerque, - and a ãwestern divisionä extending from Albuquerque westward. At this time there was but 24 miles constructed on the central division, the road reaching to Vinita in Indian Territory. The western division had been located, but no construction begun.
The Tripartite Agreement provided for immediate construction. TO finance the plan first-mortgage bonds up to $25,000 per mile secured by the companyâs whole property, and income bonds up to $18,750 per mile were to be issued. These the Santa Fe and Frisco companies guaranteed up to 25 per cent. Of their gross earnings on traffic interchanged with the Atlantic and Pacific. And if that road were unable to pay interest during its period of construction the same companies agreed to make the necessary advances.
The two owned practically all the stock of the Atlantic and Pacific - a joint control being the scheme.
Between 1872 and 1881 construction had ceased. Between 1881 and 1883 some 450 miles were built and the Atlantic and Pacific pushed to the Colorado river at The Needles.
Here westward construction stopped. Perhaps the crisis of 1883 was partly responsible, but the chief reason was the opposing interest of the road which Congress had mentioned in one section of the act of 1866, authorizing it to build a branch to San Francisco, the Southern Pacific Railroad Company. Mr. Huntington - who, with Senator Stanford dominated the Southern Pacific - was a controlling factor in the St. Louis and San Francisco; and when the latter road acquired the Atlantic and Pacific its fate was sealed. Practically the4 Southern Pacific secured an agreement that the Atlantic and Pacific should not be extended beyond The Needles and thus nipped a prospective rival and invader.
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The financial standing of the Atlantic and Pacific as reported to the commissioner of railroads in 1883 was as follows:
Assets: 1. Construction Old....................................$21,746,834 New................................... 59,704,261 $81,451,095 2. Cash........................................... 243,191 3. Land Department............................... 24,220 4. Accounts receivable........................... 29,445 Total................................. $81,747,953 Liabilities: 1. Funded debt...................................... 26,098,822 2. Unclaimed interest........................... 2,100 3. Unpaid pay-rolls.............................. 23,612 4. Bills and accounts payable...................... 4,417,579 Total debt............................ $30,542,113 5. Capital stock.................................... 51,510,300 $82,052,413 Deficit........................................... 204,460On December 31, 1886, the companyâs balance sheet showed a deficit of over $3,000,000.
Here a pause must be made in tracing the occupation of the southern route in order to sketch the rise of the Southern Pacific.
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