The Gilded Age: A Preview

IN THE SPRING of 1853 Thomas Butler King had reached an obvious turning point in his life. His quest for elective office in California had proved unsuccessful, and his long absence from Georgia seemed to preclude a resumption of his political career there. Now that the Whigs had lost power, he had no prospect of receiving further administrative appointments in the national government. His wife was anxious for him to return to Retreat and relieve her of the cares of the plantation, but such a course would have to await, at least for the present, the settlement of some of his business interests, acquired during his last year as Collector of San Francisco.

King’s most ambitious speculative project was connected with gold mining—not the individualistic placer mining of the Forty-niners, but large-scale, corporate exploitation of quartz-bearing ore. Together with eight associates in the Old Dominion Gold Mining Company, he took an option on the adjacent lands of the South Carolina Gold Mining Company. His colleagues then appointed him their attorney to dispose of the property in London. The pursuit of this commission took King to England in the spring and summer of 1853. The basic scheme called for the formation of a joint Anglo-American stock company. The American entrepreneurs were to supply the gold-bearing lands, while the English backers would ship mining machinery from England to California and furnish working capital. Additional capital would be raised through stock subscriptions on both sides of the Atlantic. By August 1853 King had succeeded in carrying out his basic objectives. A group of English investors agreed to buy and ship the machinery to be used in working the mine and to supply £140,000 for working capital. Another joint stock company, the Carson’s Creek Mining Company, was planned to manage these assets, and the stock was divided equally between the British and American backers.¹

Some of the English capitalists whom King met in the course of his gold mine promotion approached him about another possible American investment, a railroad from Savannah to Mobile. They were attracted by the possibilities of the project, but distrusted the company representative who was seeking funds in London. Drawn into the scheme by his English friends, King wrote a glowing prospectus for the Atlantic and Gulf of Mexico Railway which he thought would materially assist in promoting the idea in London financial circles. He immediately wrote, also, to some of the Savannah backers of the railroad, men whom he had known in his earlier career, explaining how he had become involved, warning them against relying on their London promoter, and emphasizing the demands that English investors would make before committing themselves to such a scheme. As his own enthusiasm for the Savannah-Mobile railroad mounted, he delayed his return to the United States even after he had completed his gold mine deal. His sanguine imagination looked beyond the Savannah-Mobile line, seeing in it merely the eastern end of an “Iron Mississippi” connecting Savannah with San Diego, a possibility that he pointed out to his English friends. When he returned to the United States, he made contact with the holder of the Savannah-Mobile charter, Nelson Tift, and wrote his London acquaintances to smooth the way for Tift’s attempt to attract foreign capital. He even contemplated a trip back to London to assist in making the financial arrangements, but his energies soon were directed at another, larger project, the building of a transcontinental railroad.²

In 1853 the idea of a transcontinental railroad held no novelty for either King or the general public. The dream of a rail line to the West Coast existed even before the United States had an undisputed claim to a Pacific outlet. Foremost among the publicists who built the dream into a possibility was Asa Whitney, and it was Thomas Butler King who as a congressman reported the endorsement by the Georgia legislature of such a scheme. The acquisition of Texas and the northern portion of Mexico opened new routes overland to the Pacific. After 1849 the question was no longer whether a Pacific railroad could or ought to be built; political leaders were exploring the question of which route it should follow. Different sectional champions presented the claims of cities in their area to become the eastern terminus of the road: Stephen Arnold Douglas favored Chicago, Thomas Hart Benton, St. Louis, and Southerners proposed Memphis, Vicksburg, or New Orleans.³

Besides the problem of the selection of a route, there was the major question of how to finance a work of such magnitude. It was clearly beyond the means of any single man or small group of men. Benton, in his proposal for a national road from St. Louis, came out squarely for governmental construction of the line. Most plans suggested outright or virtual gifts of the public lands along the right of way to the companies or individuals, such as Whitney, who might accomplish the work. Some plans carried the suggestion that the United States should issue bonds in instalments as sections of the road were completed by some private company.⁴

Although many leaders advocated the building of a road with federal aid of some kind, the majority of congressmen always found some grounds for disagreement on specific proposals, either because they favored some section or group of individuals, or because of the philosophy of state rights. Increasingly, the twin problems of the preference of routes and the amount and kind of federal aid engaged the attention of the nation’s lawmakers.⁵

The building of a transcontinental rail line held the promise of rich profits for those men who might be chosen to receive the benefits of governmental grants. Among those who hoped to create the favored company were a group of men who in July 1853 received from the State of New York a charter for the Atlantic and Pacific Railroad Company. The incorporators included a long list of public figures from nearly every state in the Union, but the moving spirits were Robert J. Walker, former Secretary of the Treasury, and Levi S. Chatfield, a New York politician. Their corporation was capitalized at $100,000,000 and was granted the privilege of operating in other states besides New York. On paper, the Atlantic and Pacific company had broad powers, large capitalization, and influential men associated with it. Concurrently, a move favorable to the company was being made in Congress. Senator Walker Brooke of Mississippi introduced a Pacific railroad bill providing for the grant of public lands and the lending of government bonds up to $30,000,000 for the building of the road. The provisions of Brooke’s bill showed that it was clearly designed for the benefit of the Atlantic and Pacific Company, or one remarkably like it. Unfortunately for the promoters of the Atlantic and Pacific, Brooke’s proposal failed to pass in Congress.⁶

Thomas Butler King, although not one of the original incorporators of the Atlantic and Pacific Railroad Company, was soon associated with it and became one of its guiding spirits. He had hardly returned from London before he plunged into the schemes of Walker, Chatfield, and their companions. This activity, together with other business affairs, prevented his returning to Saint Simons, from which he had now been absent for nearly three years. Instead of going there, he brought his family to Philadelphia, where they enjoyed a long-delayed reunion. His wife and children had little more than a visit with him, for in November 1853 he left for Texas, making the first of a long series of journeys on company business.⁷

The situation in Texas was unique. One of the best known and most highly favored transcontinental routes lay along the Thirty-second Parallel through Texas, and negotiations were currently being concluded with Mexico for the Gadsden Purchase, which would open up the best railroad route west of Texas. Secondly, Texas, which had kept its public lands at the time of annexation, could provide state land grants for a large portion of a transcontinental line. A third favoring element, surplus capital, had been added by the passage of the Compromise of 1850. As an indemnity for renouncing her claims to New Mexican territory, Texas received from Congress $10,000,000 in United States bonds. Of this amount, $2,000,000 was set aside as a permanent education fund.⁸

It was at this juncture, when Texas legislators had it in their power to grant charters, lands, and state credit, that Thomas Butler King, together with Levi Chatfield and ex-President Anson Jones of Texas, arrived in Austin during the session of the legislature in December 1853. In a public address shortly after his arrival, King urged the Texans to adopt a policy of liberal aid to railroads. He argued that aid to a transcontinental line would bring to Texas the current of migration and trade between the oceans, increasing the state’s wealth and population. By adopting a generous policy, Texans had it in their power to gain the advantages that would accrue to the first transcontinental route. Descending to the practical in his peroration, he advised his hearers to pass a general land grant law, applicable alike to local roads and to a transcontinental trunk. He also spoke for the passage of loan legislation based on the investment of the school fund as an additional inducement to railroad builders. If both measures passed, the financing of Texas railroads could be managed without resort to the uncertainties of the foreign bond market, or even the New York market.⁹

After debating several alternative methods of aid to railroads, the legislature of 1853 adopted the general grant system recommended by King, to which it added a special law to provide for the grand design of reaching the Pacific. Under the general law any railroad company which completed twenty-five miles of road should receive title to sixteen sections of land per mile along the right of way. The transcontinental trunk measure was called the Mississippi and Pacific Reserve Act. It reserved from settlement a strip of the public lands two degrees wide along the Thirty-second Parallel. The governor was empowered to advertise for bids from individuals and companies to build a railroad within these bounds. After the successful bidder had surveyed a route, the original two-degree reserve was to be reduced to a width of sixty miles, and the builders of the road were to receive twenty sections of land for every mile of finished road. The contractors were required to post a guaranty of $300,000 to complete fifty miles of the line within eighteen months. At the expiration of ninety-nine years the ownership of the road was to revert to the state.¹⁰

On January 18, 1854, Governor Elisha Maxwell Pease issued a proclamation calling for bids on the construction of the Mississippi and Pacific Railroad. Within a month President Chatfield of the Atlantic and Pacific Railroad Company submitted a bid. However, this bid was replaced in July by another, submitted by Robert J. Walker and Thomas Butler King. Governor Pease accepted the second bid, and the prospects of the company looked bright. The contract was signed August 11, and put in escrow until August 31, 1854, pending the submission of the $300,000 bond. As security for their bond, King and Walker offered stock in private corporations. These securities were rejected by Governor Pease, who demanded United States bonds or state bonds. The promoters countered with an offer to increase the amount of stock in private companies, but this too was rejected by the governor. However, State Treasurer James H. Raymond accepted the stock as a valid fulfillment of the guaranty. In a letter of explanation to the stockholders of the Atlantic and Pacific company, Walker and King presented their side of the controversy. Their argument was cold comfort to their associates; an appeal to the courts could not remove Governor Pease’s opposition in time for them to complete the first fifty miles within eighteen months, as contracted. The bright prospects of the company vanished, and King and Walker were left with a contract of doubtful value and legality.¹¹

Neither Walker nor King was the type to abandon such a promising enterprise. In December 1854, at Montgomery, Alabama, they reorganized the corporation as the Texas Western Railroad Company, under a charter that had been purchased by the Atlantic and Pacific company during the preceding winter. They framed a report to the stockholders of the old company explaining their disagreement with Governor Pease. Under the circumstances, they declared, the Atlantic and Pacific organization would have to be abandoned. On the other hand, the Texas Western charter had advantages which might outweigh the opportunities that were lost with the Mississippi and Pacific contract. The new company would become eligible for only sixteen sections of land per mile instead of the twenty to be awarded under the other contract, but the time for the completion of the first section of the road was greater. The capital of the new company was set at the same $100,000,000 figure, and former Atlantic and Pacific stockholders were given the opportunity to exchange their stock for shares in the new company on a one-for-one basis. The liabilities of the old company were assumed, and future plans projected.¹²

Although the Atlantic and Pacific Railroad Company had been essentially a paper corporation, it had taken some of the preliminary steps toward building a railroad. During 1854 Andrew B. Gray, the former commissioner on the Mexican boundary, had surveyed the route of the railroad from central Texas to San Diego, California. He estimated the total cost of the 1,621 miles of road from the eastern border of Texas to San Diego at $44,470,657. The 783 miles from Marshall to El Paso, Texas, he estimated would cost approximately $20,000,000. The location survey for the first fifty miles of road was begun by Chief Engineer E. A. Blanch in May 1854, and by January of the following year he had surveyed the 125 miles from the Louisiana border to Dallas. Several contracts for grading were let in the spring of 1854, and the first ground was broken at Marshall, Texas, July 4, 1854. At one time as many as 230 men were engaged in grading, but the organizational difficulties through which the company was going forced a reduction in the number of laborers.¹³

The promoters of the new Texas Western Company proposed to raise the $20,000,000 for the eastern (Texas) division of the road by the sale of both stocks and bonds. One million shares of $100 were to be offered to the public, with individual holdings limited to $500,000. For each share the subscriber was to pay only $5, and this payment was spread over a period of four years. Such sales would provide $5,000,000 over the four-year span. The remaining $15,000,000 was to be obtained through the sale of bonds secured by four-fifths of the land grants which the company would receive as it completed twenty-five-mile sections of the road. The lands of the company were to be pledged four-fifths to the redemption of the bonds and one-fifth to the payment of interest to stockholders. Once the initial funds were secured and the first sections of road completed, the land grants would supply all subsequent capital requirements. Upon the completion of the road, the stockholders would have a debt-free road, and a surplus of 1,638,400 acres of unencumbered land. This scheme was favorably compared with the financing of the Illinois Central, whose bonds had been sold abroad by Robert J. Walker.¹⁴

In 1855, as in the preceding year, King spent much of his time travelling between Georgia, New York, and Texas on company business. From the organizational meeting at Montgomery he went home to Retreat for a brief stay before continuing on to New York, where the railroad scheme was at a standstill awaiting his arrival. With the abandonment of the New York charter, many tasks faced the promoters. They had to arrange for the exchange of Texas Western for Atlantic and Pacific stock, sound the market for sales of the new shares, create favorable publicity for the reorganized corporation, and continue construction work in Texas. Robert J. Walker was given full authority to settle the affairs of the two companies, including the transfer of stock. In September 1855 he resigned the presidency, under fire for his settling of the debts of the old company and the transferring of stock. Francis M. Dimond, former vice-president of the Atlantic and Pacific Railroad Company, succeeded to the presidency of the Texas Western. The payments of assessments on old stock and the sales of new stock were so slow that the proceeds did not meet the rent and current expenses of the New York office. However, stock sales in Ohio and Kentucky and the reports from friends and agents in that area encouraged the promoters to open an agency in Cincinnati to sell shares.¹⁵

The field work in Texas went forward uncertainly. The Boston firm which originally had contracted with the Atlantic and Pacific Railroad Company ceased operations. Jeptha Fowlkes, a director from Memphis, proposed to take a large force of Negro slaves to Texas to grade part of the road, but abandoned his plans after waiting nearly three months for his associates to approve his plans. Just before his resignation as president Robert J. Walker concluded a contract with James E. and Jonathan S. Brown to build one hundred miles of railroad, the first twenty-five miles to be completed by August 1856. After Dimond became president, these contractors sent an agent to Marshall, Texas, who hired local labor to begin the grading, pending the arrival of the initial contractor’s party of twenty men, with carts and horses. Chief Engineer Blanch returned to Marshall from his surveying expedition to superintend the work of the new contractors.¹⁶

Despite their failure to attract much new capital, and the slowness and uncertainty of the field work, the promoters achieved some success in their attempts to publicize the route and the company. In the course of 1855 they issued three prospectuses, the longest and most important of which contained the report of the route survey by Andrew B. Gray. The engineers enthusiastic endorsement of the route and his estimate of costs and receipts were excellent propaganda for the company. The Texas Western also benefited from the report of Secretary of War Jefferson Davis, who submitted to President Franklin Pierce the comparative surveys undertaken by his Department at the direction of Congress. In their publicity the promoters of the Texas Western made much of Davis’ endorsement of the recommendation of Captain A. H. Humphreys that the Thirty-second Parallel route was to be preferred over all others. King contributed to the program of publicity by publishing in the New York Herald a letter on the route and its advantages.¹⁷

In November 1855 King once more journeyed to Texas to devote his talents to the accomplishment of two objectives. At Austin he worked to persuade the assembled legislators to pass further bills to aid railroads. He was also empowered by his associates to conclude a working agreement with the Vicksburg, Shreveport and Texas Railroad Company, whose completed track would supply the link between Texas and the Mississippi River. Late in the session of the legislature an act amending the charter of the Texas Western Railroad Company was approved, only to meet a veto by Governor Pease, who assailed the company as a creation of the Atlantic and Pacific speculators and denied their plea for an extension of the time for completing the first section of their road. King was not dismayed by this rebuff. He considered the general loan act to aid railroad construction far more important. By the terms of this act, loans of $6,000 per mile of finished railroad were to be granted to railroad companies from the $2,000,000 school fund. This measure passed the Senate, but in the House action was deferred until the supplementary session of the legislature scheduled for the summer of 1856.¹⁸ King was confident that the measure would be enacted into law at that time, and he wrote triumphantly to his son: “I have placed the Rail Road Company on so firm a foundation that success is certain.”¹⁹

King hastened back to New York to report his accomplishments to the board of directors. During March and April 1856 the eastern directors took a long step forward toward actual construction. By June one thousand tons of sixty-pound rails were en route from the Montour Works of Pittsburgh, Pennsylvania, to New Orleans. King returned almost immediately from New York to Marshall, Texas, to attend a session of the board of directors on Texas soil. At this meeting, called at the instance of Louis Trezevant Wigfall, the Texas stockholders aired their resentment of foreign control of the railroad, but King expressed himself as pleased with the outcome of the week-long meetings: “…our Company is assuming the form and substance of a real live bona fide Railroad Company with power and means of progress.”²⁰

The directors’ meeting at Marshall illustrated some of the difficulties of the company in charting a course politically. Texas was undergoing rapid expansion, and most legislators looked kindly upon railroads as an aid to the growth of the state. At the same time they resented outsiders, and the Texas Western had been organized in Alabama and maintained its principal offices in New York. Numerous projected lines were seeking charters and special concessions, and each company had its advocates in the legislature. The Memphis, El Paso and Pacific, for instance, had powerful political connections, and its charter made it a formidable rival of the Texas Western for the transcontinental route. In addition, although Governor Pease had recommended and approved measures to aid railroads, he was an avowed enemy of the Texas Western; fortunately, his second term as governor was drawing to a close. It was obviously desirable for King and his associates to encourage the growth of a favorable climate for private companies, to placate or combine with rivals, and to work for a favorable legislature which might offset the governor’s animosity. July 1856 would be a crucial time, for the state capital would then be the site of both a railroad convention to declare public opinion on state participation in railroad building and also of an adjourned session of the legislature.²¹

Looking toward these important meetings, King early in 1856 dispatched an agent to the interior of Texas to cultivate public opinion for the Texas Western and to exchange stock in the company for lands along the proposed right of way. His agent, C. A. Harper, reported great success in stimulating support for the corporation and in securing instructions to both convention delegates and legislators to vote for the loan provision passed by the Senate during the preceding session. Since it was important for the Texas Western to exert every ounce of influence upon the forthcoming convention and legislature, King prepared to join Harper at Austin in July. In the meantime, he visited Mississippi to propose a working agreement to the directors of the Vicksburg, Shreveport and Texas Railroad, which would give his company connections to the Mississippi River. After holding talks with the directors of the connecting line, he returned to New York, where he received instructions to conclude a merger agreement with the Memphis, El Paso and Pacific Railroad, but only after the session of the legislature had ended.²²

The management of all this lobbying and jockeying with rival companies was left in King’s hands, and the Texas Western Railroad Company achieved its main objectives at Austin in July. The railroad convention approved the general policies of aid to private companies, while the legislature passed a law calling for the grant of loans from the school fund of $6,000 for every mile of track completed. Several important changes in the charter of the Texas Western were passed over Governor Pease’s veto. The name of the corporation was changed to the Southern Pacific Railroad Company, and it was given until February 1858 to complete its first twenty-mile section. These changes were not won without concessions, however, for the company was forced to fix its domicile in the state, have a majority of Texans on its board of directors, construct ten miles of track annually, and comply strictly with certain general regulations regarding land surveys.²³ While he was in Austin, King also worked out an agreement with the rival Memphis, El Paso and Pacific Railroad Company, whereby each corporation would build a separate line to a junction point and then build a common trunk line to El Paso.²⁴

Until the fall of 1856 King had acted merely as a director of a speculative company; he travelled and worked in the hope that his exertions would increase the value of the stock which he held. In October his services were rewarded by an appointment as “General Superintendent and Land Commissioner” of the Southern Pacific Railroad Company. Subject to the approval of the board of directors, he had broad powers over the survey, location, and sale of company lands and over the actual construction of the road. His salary was set at $15,000 a year plus expenses, and he was to have the services of a clerk of his own appointment. Heretofore, matters of organization and politics had occupied his attention. To these aspects were now added the problems of actual construction and, above all, the need to secure working capital. Contracts for laying the rails which were on their way to Texas would require actual cash in the till of the company, to the acquisition of which King now directed his efforts.²⁵

Even by the most liberal estimates, the financial status of the Southern Pacific Railroad Company was precarious. The corporation was saddled with the stock issues of two previous companies, and large blocks of stock had been retained by the original speculators, other stock had been sold to the public at a discount, while some had been used to pay for publicity or to buy lands along the right of way. Except for some negligible assets the resources of the company consisted of its charter rights and the enthusiasm of some of its promoters. The charter rights depended on the successful completion of sections of the road; for each twenty miles of road, the State of Texas would grant some 200,000 acres of public lands and a loan from the school fund of $120,000. Completion of successive sections of the road would bring similar loans and grants, but the first section would have to be completed by February 16, 1858. It was imperative to move quickly, in order that the company might acquire the assets that would support further operations.

To secure working capital King launched a promotional campaign in New Orleans, He enlisted the aid of the Daily Picayune, which during March and April 1857 extolled the virtues of the route of the Southern Pacific and kept its readers informed of the progress that the company was making. A strong bid was made for regional support, with the naming of George Shall Yerger, a prominent Mississippi lawyer and planter, as president, with an understanding that Southerners were to have a larger voice in the direction of the affairs of the corporation. King, Jeptha Fowlkes, and Edwin Post were named as agents to transfer the books and offices of the company from New York to New Orleans.²⁶ King was overjoyed at the response when the subscription books for stock were opened in New Orleans.

Thanks be to God!! [King wrote his wife] … I have laboured night and day. Have written and talked a whole city into such a state of enthusiasm as never animated it before—More than three hundred thousand dollars of hard cash have been paid down on subscriptions to stock within the last ten days.²⁷

He failed to mention that the $300,000 represented subscriptions to only half of the $12,000,000 in shares that had been thrown on the market. The books were declared closed on April 11, 1857, but were reopened again some ten days later.²⁸

Both before and after the promotional campaign in New Orleans, King’s duties as general superintendent took him to Texas. Accompanied by his son Mallery, he travelled over the line of the survey to Dallas, entered into negotiations with agents of rival lines, and contracted for the laying of twenty-eight miles of track, before returning to New York.²⁹ While he was in Texas young Butler King, who had visited New York on business, warned his father against some unnamed associates there, adding: “I think you will find the ‘rats’ have been at play in New York, & that you have not gone there too soon.”³⁰ The New Yorkers, King found on his return, did not take kindly to the idea of removing the offices to New Orleans. Even his fellow agents appointed to superintend the removal, Fowlkes and Post, showed little desire to act. Not until September 26, 1857, was the New York office declared closed, and then it was accomplished by order of the board of directors in New Orleans.

While King and some of his colleagues remained in the East, the work of construction went forward in Texas. Aside from minor complaints about labor, supplies, and sub-contractors, the chief engineer expressed satisfaction with the grading and laying of ties. If rail deliveries were accomplished as planned, he anticipated no trouble in completing the first twenty miles of road by January 1, 1858. Jeptha Fowlkes contracted to build the next two hundred miles of road at an average price of $30,500 a mile, and he took an option on the building of the entire mileage to El Paso. The real estate operations of the company proceeded under the direction of C. A. Harper, who continued to secure deeds to lands along the right of way and reported that the demand for stock in exchange for land was strong in central Texas.³¹

The most serious threats to the progress of the plans of the company were to be found in the rivalry of the Memphis, El Paso and Pacific and in the resentment of some of the Texas stockholders toward outsiders. Politics entered into both matters. The rival road had long been considered a threat by the directors of the Southern Pacific, and King’s merger agreement, which might have quieted the conflict, was rejected by the directors of the Memphis, El Paso and Pacific. Although the latter corporation was on the point of forfeiting its charter rights for failure to complete a specified mileage of road, the governor-elect endorsed an extension of the charter. King, who was still trying to push through a merger agreement, received encouragement from colleagues in Texas, but found his negotiations undermined by George S. Yerger, the new president of the Southern Pacific.³²

Some of the Texas stockholders were restive because outsiders controlled the company. The answer to this problem, as well as the rivalry of the Memphis, El Paso and Pacific Company, appeared to several observers to be essentially a political one. Most of them agreed that State Senator Louis T. Wigfall held the key to the control of opinion in Texas. Chief Engineer Blanch, writing from Wigfall’s home county, urged President Yerger and King to consult with the Texas senator and “let him know what the Company wants at the next legislature. … In fact Wigfall will be ‘de facto’ Governor.”³³ Blanch felt sure that Wigfall could quiet the fears of Texans regarding outside control. As for the extension of time for the completion of the first section of the Memphis, El Paso and Pacific, Blanch assured Yerger that “Wigfall can kill this if he tries.”³⁴ On the other hand, R. W. Loughery, a Texas director of the Southern Pacific, inclined to the opinion that some sort of merger with the other road was preferable to the existing rivalry, and here again Wigfall “could bring it about.”³⁵ Wigfall’s strong political influence was needed also to counteract the enmity of Thomas Jefferson Rusk, senior Senator from Texas in the United States Congress, who “will do any thing he can to cripple the Co[.] if thereby he can get his friends (who were backed out by Walkers action in the first move) into the M.E. & P. Co.…”³⁶ Robert J. Walker’s name, invaluable in securing support in Texas in earlier days, now was accounted a liability to the venture because of his actions as Governor of Kansas.³⁷

Despite rival roads and dissension within the company, the affairs of the Southern Pacific Railroad never looked brighter than in September 1857. Almost overnight the Panic of 1857 changed the prospects of the company, and of King. The contraction of credit put an end to land transactions and interfered with the construction. Even the forces of nature seemed to conspire to defeat the completion of the first twenty miles of track when heavy rains washed out embankments and, by delaying the cotton-picking season, brought about a shortage of Negro labor at a crucial time. The construction engineer urged King to send cash and a force of Irish laborers in order to repair the washouts and complete the laying of the track. Urging that the money be in the form of specie, not drafts, the engineer pointed to the approaching deadline for the completion of the section with the words: “Let me repeat, send at once money & send hands, or we are gone.”³⁸

In order to save the charter, President George S. Yerger took a step that was to involve the company in complex litigation for three years. On October 17, 1857, he executed a deed of trust providing for the sale of the railroad, primarily for the benefit of the contractors. According to King’s correspondents, the condemnation of Yerger’s action was almost universal:

Did any one ever hear of a President taking care of himself in preference to the stockholders whose interests he ought to guard? … This deed of trust has killed Yerger in Texas, or at least this portion of it. His unheralded and unexpected appearance here, the privacy of his counsels, the limited number of his councillors, his sudden exit, and the extraordinary document he left behind, are matters of notoriety and common conversation.³⁹

The state of public opinion was particularly important because of the imminent meeting of the Texas legislature in December 1857. Advocates of the company kept anxious watch over the prospects for action by authorities in Austin.

King was urged to take the lead in opposing Yerger’s actions and to carry the fight to the meeting of the legislature. Jeptha Fowlkes, a director who opposed Yerger, harped on a familiar theme:

My opinion, is, you should enlist Col. Wigfall heartily in our interest—he has talents & boldness with powerful Texas associations. Let Col. Wigfall make 50 000$-what of it? There is enough for all! Without Col. Wigfall I fear yr. defeat.⁴⁰

In January 1858 King took up residence in Austin to lobby for the interests of the company. To reinforce his arguments, he depended heavily on an appeal to Southern sectionalism, an aspect of the project that he had never emphasized so strongly before. In a memorandum supplied to Representative R. M. Powell, it was argued that the people of the North regarded the location of the transcontinental route as a sectional issue. The hope of the South lay with Texas, which by aiding the Southern Pacific to cross the continent “will become a vast counterpoise to the free states of the north west and fulfill the destiny which was claimed for her by the friends of annexation.”⁴¹ A vote for the bill uniting the interests of the Southern Pacific and the Memphis, El Paso and Pacific “appears to me like voting against the admission of Kansas as a free state.…”⁴² The merger agreement was approved by the legislature. On other matters, success was not so certain. Wigfall, on whom so much depended, had gone over to Yerger’s side, and he secured the passage of a law under which any railroad sold under a deed of trust should retain its franchise.⁴³ Good news for all friends of the Southern Pacific was the completion of the first twenty miles of road, making the company eligible for both land grants and loans from the school fund. The years of work had finally begun to show some fruit, but much depended on the legality of the deed of trust, which called for the sale of the company in June. If the creditors’ claims against the company could be satisfied before that date, it might be possible to stave off defeat.

During the spring of 1858 King travelled from Marshall to New Orleans, Washington, and New York in a desperate attempt to keep the Southern Pacific from foundering in the depths of the financial crisis. Not enough cash was forthcoming to settle the outstanding debts, and the stockholders were divided into groups vying for the control of the newly-won assets. Jeptha Fowlkes led the forces of the stockholders and directors outside of Texas, while Yerger and Wigfall acted respectively for the contractors and Texans. King was caught in the middle. Common sense and political reality called for him to throw in his lot with Yerger and Wigfall; but all his hopes of a fortune depended on the stock which had been issued by the earlier companies, and a deed of trust sale would void most of these claims. On June 1, 1858, the Southern Pacific Railroad Company was sold at public auction to Jefferson M. Saunders for $40,000. He immediately sold the road to the creditors of the company for the same price. The following day a new directorate was elected; all the directors were Texans except L. P. Grant, one of the principal contractors. When the sale of the road was confirmed, King abandoned his efforts in behalf of the company. He returned to Retreat, broken in health and spirits.⁴⁴

The state of King’s health gave his family grave concern. In the interest of the railroad he had neglected to submit to medical treatment that had been recommended the previous spring. Throughout the early summer he was under the care of a physician in New York, but by the middle of August he was able to go to Saratoga Springs to convalesce. As his health improved, his interest in the Southern Pacific Railroad Company revived. During his illness and convalescence he was kept informed of the affairs of the corporation, and its signs of vitality in the face of overwhelming difficulties gave hope that all was not yet lost. After the sale of June 1, Jeptha Fowlkes, who had formerly occupied a subordinate place in the directorate, took up the fight for the stockholders outside of Texas. Regarding the whole deed of trust sale as fraudulent, he set about rallying the stockholders in a fight to regain control of the company. He issued a broadside calling on all supporters of the project to avoid personal issues and unite in the fight against the “new company” formed after the sale of the road. In the hope of raising $200,000 to meet the debts of the old company, he pledged $50,000 himself and called a meeting of stockholders in Louisville for August 24, 1858. Here he appealed for a subscription of fifty cents a share to make up a trust fund to pay off the creditors and regain control. After the meeting Fowlkes wrote King that he felt confident of defeating the new company; he also promised that although the feeling against King and all other former leaders in the company was strong he would recognize King’s services of the past. Other reports on Fowlkes’ activities ranged from the deepest pessimism to limited hope.⁴⁵

With small expectations, King attended another stockholders’ meeting in Louisville in November 1858. Seeing the enthusiasm aroused by Fowlkes’ campaign to recover control, he regained some of his optimism. Since he lacked the cash to subscribe on his block of stock, he surrendered one half his holdings. Confidence in the company was restored to the point that the stockholders reportedly refused to entertain bids for $2 on stock that had been surrendered. King expressed the hope that the stock might sell at par value in another month. So entirely was his faith renewed that he reentered the employ of the company on the understanding that the stock he had surrendered should be returned to him in payment for his future services as a lobbyist. Immediately, he went to Washington, where he “made such arrangements as I think will prevent, for some weeks, the passage of any RailRoad project.”⁴⁶ Thenceforward, it was in the role of national lobbyist that King was to play his part in the affairs of the Southern Pacific Railroad Company.⁴⁷

For King the Pacific railroad adventure had been another characteristic hazard of fortunes. Like his political gambles in California, the stakes were high and the potential rewards great. Both the successes and the failures of the railroad reflected King’s own nature and his services to the company. A member of the executive committee of three successive corporations, for five years he acted as the principal link between the financial headquarters in New York and New Orleans and the field of operations in Texas. He attended the sessions of every Texas legislature from 1853 to 1858, and, to judge by the concessions granted to his companies, he achieved success as a lobbyist. He successfully met the threat of competition from the Memphis, El Paso and Pacific Railroad by a merger agreement approved by the legislature of Texas. As a promoter he engendered the enthusiasm in New Orleans that supplied the Southern Pacific with funds to continue construction in 1857. While he was general superintendent, the major portion of the twenty-five miles of actual construction was accomplished and traffic operations were begun. He could claim a large share in whatever success the railroad achieved.

At the same time, King shared equally in the failures of the companies. He was a full partner of Robert J. Walker in the Mississippi and Pacific fiasco of 1853–1854. He presided over the formation of the Texas Western Railroad and helped guide its paper destinies. The successor Southern Pacific, with its large promises and small accomplishments, rested as much on his shoulders as on those of any single man. He condoned, if he did not originate, the dubious finance that from the beginning characterized the three corporations. The debts of each failure passed to the successor company and added to the difficulties to be surmounted. King therefore contributed to the weaknesses that made the Southern Pacific an early casualty in the financial panic of 1857. The wonder is not that the Southern Pacific Railroad achieved little, but that in spite of its precarious financing it came so near to success.

Even if failure seems to the modern observer to have been almost inevitable, King’s contributions to the development of a transcontinental railroad were undeniable. He envisioned the idea of a railroad to the Pacific along the Thirty-second Parallel, he communicated his enthusiasms to others, and he managed to convert enthusiasm into action. He was a genuine pioneer of the transcontinental railroad movement, and when the continent was spanned the promoters used the same elements and techniques that King had employed. His promotion, finance, and lobbying for the Southern Pacific Railroad gave a preview of the gilded age that was to follow.