act of congress by authorizing and empowering the company to extend its road and telegraph not only in the state but in the territories lying east of the state and between it and the Missouri river, and on, over or along any street, road, river or stream, and to condemn private property-at the same time, in as far as possible, confirming to and vesting in the company all rights, privileges, franchises, power and authority conferred by the act of congress.1

All the foregoing mentioned acts of the legislature of 1863 authorizing railroad subscriptions by counties, that required a vote of such counties to give them effect, received such vote. Among them, it will have been noticed, there was one in favor, to the extent of four hundred thousand dollars, of the Western Pacific railroad. This road, which was a continuation of the Central Pacific and was constructed under an assignment executed in December, 1862, of its rights and franchises from Sacramento westward, was to run from San José, by way of Alameda creek, Livermore Pass and Stockton, to Sacramento and was intended as a link connecting, in conjunction with the San Francisco and San José railroad, the city of San Francisco with Sacramento and the transcontinental line. The San José railroad, which had been talked about from the time of the first legislature and for the construction of which several companies were vainly formed, was finally started under a new company organized in 1860. The contract of construction was let to Charles McLaughlin and Alexander H. Houston, who were to complete the road in three years for two millions of dollars, of which one-fourth was to be in cash, one-fourth in county bonds, one-fourth in mortgage bonds of the company payable in ten years with eight per cent interest, and one-fourth in capital stock of the company. It had already in 1861, principally on the plea of its being a link in the transcontinental road, received a subscription of three hundred thousand dollars from the city and county of San Francisco, another of one hundred thousand dollars from San Mateo county, and another of two hundred thousand dollars from Santa Clara county. There were few 1 Stats. 1863-4, 344, 388, 471.

*Stats. 1861, 128, 134, 198; 1862, 494.

difficulties in its construction, most of the line being substantially on a level; and it was completed and successfully opened from San Francisco to San José in January, 1864. On the other hand the Western Pacific railroad, which was as before stated to share in the grant of bonds and public lands under the act of congress of July 1, 1862, and to receive four hundred thousand dollars of the one million dollars to be paid by San Francisco under the state act of April 22, 1863, was also to receive by acts of the same year two hundred and fifty thousand dollars from San Joaquin county and one hundred and fifty thousand dollars from Santa Clara county.' And all these large amounts of money thus provided for were actually or virtually paid the respective companies named, except that, on account of the active opposition of the city and county of San Francisco represented by its mayor and other officials and its most influential newspapers, its subscriptions of six hundred thousand dollars for the Central Pacific railroad and four hundred thousand for the Western Pacific were reduced by compromise, after considerable litigation, to four hundred thousand dollars to the first-named company and two hundred and fifty thousand to the second; but at the same time, on the other hand, the city and county relinquished its stock in the companies, which in the sequel proved to be a mistake as the stock subsequently, on the enterprise becoming an assured success, rose to much greater value.'

While the Californian end of the Pacific railroad business was thus kept up by Stanford and his helpers on the Pacific coast, Huntington, who after Judah's death was left substantially to his own resources, managed its affairs in the east and at Washington. It was claimed by him and his friends that the subsidies granted by the law of 1862 were entirely inadequate to build the railway, while the need of securing speedy communication between the Atlantic and Pacific became daily more and more apparent. All sorts of arguments were used to strengthen this claim, among which was the danger of losing California to the Union if the road were not speedily constructed, and various others equally as

'Stats. 1863, 80, 276.

2 Hittell's San Francisco, 348; Orders of Board of San Francisco supervisors, No. 582, June 21, 1864, and No. 640, May 29, 1865.

strained. But there were many more weighty reasons, among which were the really great advantage in almost every point of view of the road, the incalculable effect it would have in developing the country and increasing its wealth, the great fall in the value of currency and securities and rise in the price of labor and materials caused by the war, and the fact that the Union Pacific had not started and seemed unwilling to start the construction of its part of the road unless the subsidies were enlarged.

Huntington himself proved to be a man of great strength; and he was helped by the whole force of the Union Pacific company and its friends. The result was the passage by congress and approval by President Lincoln on July 2, 1864, of a new act, amending the former one of July 1, 1862, in various important particulars. Many of these related exclusively to the Union Pacific company; but some affected also the Central Pacific and the Western Pacific, which were in fact a part of the same general line. One and a most important of these was increasing the number of alternate sections of the public land to be given from five to ten per mile on each side of the road and within twenty miles of it, and reserving from sale lands within twenty-five miles, instead of fifteen, on each side, and in addition providing that the mineral land to be reserved was not to be construed to include coal or iron land. Another was an extension for an additional year of the time for the Central Pacific to build the first fifty miles of its road and requiring only twenty-five miles to be completed each year thereafter, provided the whole distance to the state boundary should be finished in four years. Again, it is to be noted that, under the provisions of the previous act, all compensation for services rendered to the government, which were to be charged at fair and reasonable rates, and at least five per cent of the net earnings of the road were to be applied to the payment of the bonds loaned to the company and interest thereon: under the new act only one-half of the compensation for such services was to be applied to such payment. Another provision of the previous law was for the reservation by the government, until the whole road should be completed, of from fifteen to twenty-five per cent, according to location on the line, of the bonds to be delivered over to the company: this by the

new law was repealed. Among the other provisions of the new act was one that a failure of one company to comply with the law in any respect should not affect any other company that might comply.

But the most important change made by the law of 1864, and the one by which Huntington and his coadjutors accomplished most good, at the time at least, for their roads, was a new provision allowing each company, on the completion of each section of twenty miles, to issue first mortgage bonds on its road and telegraph to an amount not exceeding that of the United States bonds issued or to be issued thereafter and of even date, tenor and character; and subordinating the mortgage lien of the United States bonds to those thus to be issued by the company. This in effect took away or very much weakened the security of the government for its bonds; while, by securing the bonds to be issued by the company by a first mortgage lien, it enabled them to be negotiated at once at the highest market rates and without difficulty. From that moment, if not before, there was no longer any lack of money; and from this provision and the increase in the land grants, in addition to the state and county subsidies and the great profits after the road commenced running, it can readily be understood where, notwithstanding the great cost of construction, a large part of the subsequent immense wealth of the railroad, or rather the so-called railroad magnates, came from.'

The progress of the Central Pacific road, and particularly after the passage of the amendatory act of July 2, 1864, was comparatively rapid. In May, 1864, about fifteen months after starting work, it had twenty-two miles constructed and, in June, thirty-one miles to Newcastle-attaining in that distance an elevation of one thousand feet above tide water. From Newcastle to Clipper Gap, twelve miles, with an ascent of nearly eight hundred feet and very difficult work, the road was completed on June 10, 1865; and to Colfax, formerly known as Illinoistown, a further distance of twelve miles, it was done by September 1, 1865– making fifty-five miles from Sacramento and attaining an elevation of twenty-four hundred and forty-eight feet. Under the act U. S. Stats. 1863-4, 356.

of 1862, the first fifty miles were to be completed within two years after the filing of written acceptance by the company of the terms of the act, which took place in December, 1862; but that period was extended one year by the act of 1864; and the road to Colfax was completed and not less than three daily trains each way were run over it more than three months before the expiration of the time. Under the act of 1862, it was provided that the company was to receive United States bonds to the extent of fortyeight thousand dollars per mile for one hundred and fifty miles eastwardly from the western base of the Sierra Nevada mountains, which base was to be fixed by the president of the United States. As can easily be understood, the fixing of this point was very important to the interests of the company in its early struggles for money; and it was doubtless not without considerable management that President Lincoln, who of course had no personal knowledge of the fact, was induced to fix that western base at an almost imperceptible rise, in the middle of what was always and is still considered the valley or plain, and only seven miles northeast of Sacramento."

Meanwhile very considerable opposition to the road was made by its enemies. Besides the litigation with San Francisco before mentioned, there was more or less in reference to subsidies of other counties. In addition to or perhaps rather as a part of the trouble were the reiterated statements of various newspapers that the road would not and could not ever be finished across the mountains. Among the most influential adversaries and opponents were the Pacific Mail Steamship Company, the California Steam Navigation Company, Wells, Fargo & Co. and the California Stage Company, with the business of each of which it would necessarily interfere. But the most bitter, and as it proved the most ill-founded, opposition was that of Lester L. Robinson and others, who were more or less interested in the Sacramento valley railroad running from Sacramento to Folsom and its possible extension by way of Placerville and the south end of Lake Tahoe to the Washoe mines. As soon as the Central Pacific Company had determined upon its route north of the North Fork of the 1Stanford's Statement of Progress of Work, October 10, 1865.

2 Statement of the Central Pacific Company of January 12, 1865.