Selections From The Splinters - Volume 14

THE TEXAS AND PACIFIC

The Texas and Pacific was the last of the three roads to get in line for
congressional favor. The first project for a Pacific railway over the southern fork of the southern route was by a New York corporation styled the Atlantic and Pacific. This was in 1853. The name was changed to Texas Western; then in 1856, to Southern Pacific. In 1869 a bill to incorporate and aid in the construction of the Texas Pacific was introduced in the Senate, and during 1870-71 session a similar bill became law. By this act of March 3, 1871, the Texas Pacific was chartered to construct a railway from Marshall on the eastern boundary of Texas, via El Paso, to San Diego, following as nearly as might be expected the route of the thirty-second parallel.

A donation of lands similar to the Atlantic and pacific grant was made, i.e.,
twenty, alternate, odd-numbered sections on each side in the territories, and ten in the states. Patents were to be issued as twenty-mile sections of the road were completed. In this charter there was a provision that if any lands were not disposed of within three years they should be subject to entry and settlement.

It is significant of the time that directors were forbidden to contract for
construction work, the idea being , of course, to prevent construction rings. Construction bonds and land bonds were authorized, the former not to exceed $30,000 per mile of line.

The capital stock was limited to $50,000,000, and the corporation was authorized
to begin when 20,000 shares were subscribed and ten per cent. Of their par value paid in. Construction was to begin at both ends; fifty consecutive miles

Portion of page 9 volume 14 Splinters transcribed for the web in altered format by Russell Crump

-8- 10

of road were to be completed from each end within two years; the whole must be completed in ten.

The Texas Pacific was authorized to purchase the stock, properties, and franchises
of and consolidate with any existing railways along its route, but not with any competing through line to the Pacific. All intersecting railways were given the right to connect and discrimination among them was prohibited. Moreover, ãthe rates charged for carrying passengers and freight, per mile, shall not exceed the prices which may be fixed by Congress for carrying passengers and freight on the Union Pacific and Central Pacific railroads.ä Clearly, here, and in the provision concerning construction by directors, there is evidence that Congress was attempting to profit by experience with the Union and Central Pacific lines.

In addition to the section providing for a San Francisco branch to be built by the
Southern Pacific, section 22 empowered the New Orleans, Baton Rouge and Vicksburg Railroad Company to connect at Marshall for the purpose of joining New Orleans. This meant a donation of the same amount of lands as the Texas Pacific received for construction within states.

The discussion of the Texas Pacific bill is of great interest. It originated in the
Senate, and when it came to the House all after the enacting clause was struck out and an amendment-virtually a substitute-by Mr. Wheeler (N.Y.) was inserted. The name of the line was to be the Southern Pacific Railway Company. Six branches provided for in the Senate bill were lopped off and the land grant thus reduced from some 26,000,000 acres to 13,000,000 acres. Also the provision for a five foot gauge was altered to merly require a uniform gauge.

The two chief grounds of opposition seem to have been the object of the South,
where there were some 1,200 miles of track having a gauge of five feet, to the non- requirement of a similar gauge for the Texas Pacific, and the scruples of many whose principles had come to be opposed to land grants to railways. The section authorizing consolidations, even through competing lines were excluded, was also the object of heated criticism.

Mr. Garfield voted for the bill on three conditions; it must include no branch or
local road; no subsidy of money or credit could be involved; and the company must be prohibited from selling out its franchises and not constructing the road. These conditions Mr. Wheeler affirmed were all met to the best of his ability.

Mr. Wheelerâs summary of arguments for the bill is significant:

Page 10 Volume 23 Splinters transcribed in altered form for the web by Russell Crump
-9- 11

1. Common justice demands that the South be placed in equality, as to commercial facilities, with the North.

2. Public economy through retrenchment in military expenditures would be gained, fewer solders would be needed and their supplies could be more cheaply transported.

3. The railway would develop the natural resources of the country increasing its power, wealth and revenues.

4. Public lands would be enhanced in value

5. Trade with Mexico would be enhanced in value.

6. Finally, southern reconstruction would be furthered,- the road would form ãanother link to the chain which shall make our union indissoluble.ä

With some minor amendment the bill passed the House, 135 to 70.

Upon returning to the Senate, the House bill - for that was what it amounted to -
met considerable opposition, especially from those interested in the various proposed branches. A conference was agreed upon as the solution. As a result the name of the company was made ãTexas Pacific;ä a New Orleans branch, the New Orleans, Baton Rouge, and Vicksburg, was re-incorporated; and the provision concerning the Southern Pacific of California inserted.

There was a strenuous effort made to include a branch to Arkansas, but to no
avail.

Like the Atlantic and Pacific - and the Union Pacific before that - the Texas
Pacific charter did not prove entirely satisfactory and was soon amended to give greater privileges. The Texas Pacific constructed only 23 miles in 1871 and none the following year. Then, in 1872, a bill supplementary to the act of March 3, 1871, was passed. And issues of ãconstruction bondsä up to $40,000 per mile were authorized, any lands granted in aid of the road being made eligible as additional security for such bonds. Thus the power of the company to raise funds by bond issue was greatly increased. All lands acquired through lawful consolidation might be included in the basis for ãland bonds.ä

Furthermore the time for construction was extended by allowing ten years from
the date of the supplementary act, instead of the act of 1871.

The act concluded by providing that ãupon failure to so complete it, Congress may
adopt such measures as it may deem necessary and proper to secure its speedy completion.ä

Page 11 Volume 23 Splinters transcribed in altered form for the web by Russell Crump

-10- 12

Even this was not enough. In 1873 an act was passed to make it lawful that the
face value of the bonds thereafter issued by the Texas and Pacific might be either in gold ãor in lawful money,ä at the option of the company; and previous issues specifying payment in any lawful money were declared legal - while in 1874 the company was specifically authorized to secure its construction bonds by one or more mortgages upon all or any part of its line, including the Southern Pacific (Texas) and Southern Transcontinental with which lines it had consolidated.

In 1874 began a long continued and determined effort to secure a loan of the
governmentâs credit in the nature of a guarantee of bond interest. The hard times beginning about 1873 made it impossible to construct the road as rapidly as required by law, and between 1876 and 1882 little progress was made. In 1878 the company had partly acquired and partly constructed some 444 miles, extending from Shreveport to Fort Worth and from Marshall to Texarkana, thence to Sherman. Between Fort Worth and San Diego stretched some 1,400 miles, to build a railway over which required new capital. Hence the effort to bolster the companyâs credit by a government guarantee. One typical bill will illustrate the nature of all. In 1878 the committee on Pacific railroads reported a bill as a substitute for five others which had been introduced and referred to it. After stipulating certain rights and regulations, the bill proceeded to guarantee the interest on the 50 year 5 per cent construction bonds of the Texas and Pacific to the amount of $20,000 per mile for 1,150 miles and $35,000 for 250 miles through the mountains. As surety, the government was to have a first lien, and might retain its payment for transportation and the entire net earnings of the railway if necessary. Other bills also provided that the companyâs land grant would be relinquished to the United States in trust, to be opened to settlement and the proceeds to be applied to interest payments and the accumulation of a sinking fund.

Justice to the South, the superiority of the southern route, military economy, and
the Mexican market were argued with out avail. Congress had learned its lesson, and, there being no national exigency, these bills uniformly failed.

Meanwhile it must be remembered that the Southern Pacific is occupying the
western end of the route and it is being said that that company is ready to extend eastward to El Paso without assistance from the government. Some of the bills proposed that the Southern Pacific should be recognized as the company to construct the road west of El Paso, and to receive a proportionate share of the lands granted to the Texas and Pacific.

Such a transfer of lands, however, found little favor. SO when the Southern
Pacific reached the Colorado and found the Texas and Pacific not only far behind but even struggling with

Page 12 Volume 23 Splinters transcribed in altered form for the web by Russell Crump

-11- 13

financial difficulties, it built to El Paso without government aid, near which point, in 1882, it was finally joined by the Texas and Pacific.

Thus was opened the second route between the Pacific and the eastern states. In
1882 it became possible to journey from San Francisco, via the Southern Pacific, Texas and Pacific, and St. Louis and San Francisco lines, to St. Louis by rail.

And on October 15, of the same year (1882) the New Orleans branch of the Texas
Pacific was opened, making through rail connection between New Orleans and San Francisco. The history of this New Orleans branch is extremely interesting, and is taken up at some length below.

The Texas and Pacific agreed to release its western lands to the Southern Pacific
and the latter railway set up a claim to them; but in 1885 an act was passed declaring all lands granted to the Texas and Pacific under the act of March 3, 1871, and acts amendatory thereto forfeited, and restored to the public domain. The companyâs time for completing a railway from Marshall to San Diego had expired on May 2, 1882.

Site maintained by Russell Crump all rights reserved© 913-962-4556 73077.2356@compuserve.com, 10808 W 76th St., Shawnee, KS 66214