Chapter 8

HARRIMAN VERSES GOULD

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Harriman, with his connections, had a line from Chicago to Ogden, Utah. Gould, with his connections, also had a line to Ogden. At this point, however, both the Gould and the Harriman systems ended abruptly in the desert. Neither could get to the Pacific coast except by way of a third line, Collis P. Huntington’s Southern Pacific and both the Gould and Harriman lines were treated impartially. Both systems turned over a large freight business from the East to the Southern Pacific at Ogden, and, on its part, the Southern Pacific divided its traffic from the Pacific coast equally between Gould and Harriman.

Collis P. Huntington was an old man and his death could precipitate changes in the railroad map. Clearly, the greatest calamity that might happen to either Gould or Harriman would be to have the other man get possession of the Southern Pacific. If such an event were to come about, the fortunate rival would have an unbroken line of his own from Chicago to the West coast; he would be absolute master of the Pacific, and could shut off the other. And, as Gould and Harriman were natural competitors, the chances were that either man would do just that, which was precisely what the friends of George J. Gould meant when they warned him against Harriman.

Gould was apparently little disturbed, but Harriman spent sleepless nights over the fear that someone, very likely Gould, would capture the Southern Pacific and "bottle up" the Union Pacific in the Utah desert. Certain signs seemed to indicate that Gould was trying to do this although in later years he wouls deny it declaring, "I would have regarded it as disloyal to my associates in the Union Pacific." Harriman however had no such scruples.

Although Gould had enjoyed a harmonious business relationship with Harriman that relationship began to deteriorate early in 1900. In January it was rumored that the Stanford-Hopkins holdings of Southern Pacific recently purchased by the Huntington-Speyer syndicate had been sold to Harriman and Jacob H. Schiff, representing the Union Pacific, President Huntington of the Southern Pacific said:
"There is not a word of truth in it. I know exactly where and how that is held. And I may say, in passing, that I am not selling any Southern Pacific stock. Rather I am buying it. As for the interests which you say purchased these shares, I can only say that some time ago they did purchase some Southern Pacific stock at my advice. But you can rest assured that they have not gotten hold of the Stanford-Hopkins holdings. As for our relations with the Union Pacific, they are of the best."

In May 1900 rumors also began circulating that the Denver and Rio Grande Railroad was to be extended to the Pacific Coast, with a terminal somewhere in the southern part of California. Recent railroad happenings in Colorado firmly supported this rumor. It was said that this determination on the part of the Denver and Rio Grande owners was, in part, brought about with the purchase of the Colorado Midland by the Rio Grande Western people.

Under an arrangement that existed before this purchase the Colorado Midland and the Denver and Rio Grande (who were rivals for the business of the State of Colorado and both of which terminated at Grand Junction) secured their western outlet from Grand Junction through the Rio Grande Western. They were given equal terms by the latter road and as far as Rio Grande Western business was concerned neither had an advantage.

The purchase of the Colorado Midland by the Rio Grande Western and the making of all its feeders in the state a part of its own system at once placed the Denver and Rio Grande at a disadvantage. As matters now stood, if the statement regarding the purchase was correct, the Denver and Rio Grande was absolutely at the mercy of the Rio Grande Western and not in a position to compete in the matter of Colorado's freight and passenger business with the west coast. It was this situation, so it was said, that led to the determination by the backers of the Denver and Rio Grande to build to California.

CoIIis Potter Huntington, president of the Southern Pacific railroad, died at his Pine Knot camp, on Raquette Lake in the Adirondack Mountains of New York State, shortly after midnight on August 14, 1900. Mr. Huntington, with his wife and servants, had arrived at Durant on Friday, August 10, in their private car. The steamer Oneata was awaiting their arrival at the wharf to convey them to their mountain home, Pine Knot camp.

Apparently well on retiring at 11 o'clock, he was taken suddenly with a choking spell which was quite common with him and was not thought to be serious, but he became worse and was soon unconscious. As soon as the seriousness of the attack was realized, a messenger was dispatched to the neighboring camp of Governor Lounsberry for a doctor and he was on hand in half an hour. Mr. Huntington died without regaining consciousness. Mrs. Huntington and Mr. Huntington's secretary, O. E. Miles, were at his bedside at the time of his death.

Prior to his death Huntington appeared to be enjoying the best of health, walking about his preserve, and taking a trip on his private steamer and had remarked to his friends that he was feeling unusually well. His adopted son, Archer M. Huntington, was notified shortly after his death after which he joined Mrs. Huntington. Heart disease was the direct cause of Huntington's death.

Harriman had made the last days of Collis P. Huntington miserable. He had haunted the old man's office, and chased his coat-tails all over Wall Street, imploring him to sell the Southern Pacific. Huntington, however, absolutely refused. Harriman then tried to make an agreement with Huntington guaranteeing him perpetual access to the Pacific, but Huntington refused to do even that.

Shortly after Huntington’s death Harriman went after the Huntington interests in an attempt to obtain control of the Southern Pacific system and its outlets on the Pacific coast.

Control of the Pacific Mail Steamship Company went to Harriman on October 23, 1900 as he succeeded Huntington, Harriman and his colleagues having taken over a majority of the Pacific Mail capital stock. This fight for control had been between the Atchison, Topeka and Santa Fe, Union Pacific, Missouri Pacific, and Southern Pacific companies to obtain absolute control of the steamship company. It had been said that the Southern Pacific had been a heavy buyer of Pacific Mail stock recently in an endeavor to retain the hold on the property which it had exerted through Huntington.

Identified with Harriman in this new big deal was James J. Hill and William K. Vanderbilt whose interests were relatively insignificant. Under Huntington's direction the Pacific Mail Steamship Company had been a tender to his Southern Pacific interests; its operations subordinate to his great railway system. The acquisition of the Pacific Mail Steamship Company now made possible the immediate accomplishment of Vanderbilt's cherished plan of a continuing transportation system, virtually under one management, from the Atlantic through to the Pacific Coast and thence direct to the Far East.

Purchase of the Southern Pacific stock previously held by the Huntington, Crocker, Searles and Stanford interests became known to the public on October 26, 1900. This railroad transaction, reaching much further in its ultimate results than any of the deals which had thus far marked the closing of the old and the beginning of the new century, became known when the transfer of the control of the Southern Pacific Company into the hands of a syndicate in which Union Pacific interests predominated was announced. This transaction completed the last link necessary for the establishment of a transcontinental railroad under a single control. This control was vested in E. H. Harriman.

The new route included the following lines, in all of which, except the Southern Pacific, Harriman was officially connected: Starting at San Francisco, running over the Central Pacific end of the Southern Pacific direct to Ogden, thence, first, over the Union Pacific to Kansas City, and thence over the Chicago and Alton to Chicago, or, second, over the Union Pacific to Omaha and thence over the Dubuque and Sioux City branch, of the Illinois Central direct to Chicago, where the Baltimore and Ohio connects direct to the Atlantic seaboard.

The control of the Southern Pacific included the large holdings that had been controlled by Speyer & Co., and also the Huntington holdings. James Speyer, when questioned, would make only the following concise statement:
"We have received a satisfactory offer for our holdings of Southern Pacific stock and have accepted it."

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