History 383 - Dr. Gayle Olson-Raymer

Entrepreneurial Politics and Economics: The Transcontinental Railroad and Its Consequences for California

Introduction: Throughout this unit, we have examined many of the cultural, political, and economic issues that confronted California during its first decade as a state. In particular, we examined various issues related to California statehood that had a huge influence on national politics as the U.S. moved towards and eventually erupted into the Civil War.

• One of our conclusions was that the national debate about building a transcontinental railroad was tied to desire to link what seemed like two different countries - the new state of California and the east coast of the United States.
• Today, we are going to examine the consequences of that debate by learning about the entrepreneurial politics of the men who faced the geographical, political and economic realities of building this railroad, and in so doing, made California a modern state.
• To get a good understanding of building the Transcontinental Railroad, go to http://www.youtube.com/watch?v=M3OM_UnnCNM.

Cold Call: 9th Cold Call on required viewing and reading - Introduction (including the video), Goals 1, 2, and 3 in the discussion guide

1. To follow "the uphill struggle" the U.S. Congress faced trying to get a transcontinental railroad with a western terminus in California.
2. To understand how the U.S. Congress funded and built the Transcontinental Railroad.
3. To understand the particular funding and building obstacles faced by the Central Pacific Railroad and its backers, "The Big Four."
4. To discuss the growth of the railroads in California, the entrepreneurs who backed them, and the empire they created.
5. To analyze the consequences of creating a railroad empire in California.
6. To examine a case study of anti-Chinese policies and actions through a case study of Chinese explusion from Eureka in 1884.

Goal #1: To follow "the uphill struggle" the U.S. Congress faced trying to get a transcontinental railroad with a western terminus in California

This part of our story begins with the desire of many southerners who still hoped to expand slavery into the west by establishing a slaveholding colony in southern California that would produce rice, cotton, and sugar. To accomplish this, some southerners began to support the idea for a transcontinental railroad running through the southern states and into southern California. What followed was a major battle in the U.S. Congress over the route - a northern or southern route.

• The southern routewas supported by the Strict Constructionist/Democratic viewpoint - Southerners argued that there was no constitutional clause giving Congress the power to build a transcontinental railroad. Jefferson Davis, Secretary of War, got around this by saying that the Constitution gave the federal government responsibility for national defense, and the railroad was being constructed for military purposes - getting troops to the Pacific and food and supplies to the troops in case of foreign invasion. The logical route for such a railroad, he argued, was through the south and into southern California.
  • This route was reinforced by President Pierce's desire to purchase a large portion of northern Mexico.
  • Thus in 1853, he instructed James Gadsden, the new American minister to Mexico, to purchase land from Mexico for a prospective railroad route that would cross southern New Mexico and Arizona.
  • Gadsden purchased about 30,000 square miles for $10 million - but the railroad was not built along this route.
• The northern route was supported by the Loose Constructionist/Republican viewpoint - Northerners argued that Congress had the power to build a transcontinental railroad - a railroad with its terminus going through the north. The main proponent of this route was Stephen Douglas who crafted the Kansas-Nebraska Act of 1854 in part, as an argument for a northern route. Douglas wanted the eastern terminus at Chicago, going through Council Bluffs, and ending in San Francisco. Building such a railroad would attract settlers; but it also required Congress to organize the Nebraska territory. Thus, the Act called for reorganizing the territory by:
  • Repealing the Missouri Compromise's ban on slavery in the northern half of the Louisiana Purchase.
  • Allowing for popular sovereignty in the territories so that the settlers could decide the issue of slavery.
  • This is just the introduction to the enormous battle that would soon take place over the building of the transcontinental railroad.

Goal #2: To understand how the U.S. Congress funded and built the Transcontinental Railroad

We have already talked about the "uphill struggle" the U.S Congress faced trying to agree on a route for the Transcontinental Railroad. Northerners and Southerners wanted different routes for different economic reasons, both of which were related to the extension or lack thereof of slavery. But in 1862, the uphill struggle was solved. The nation was divided by war, the south had seceded from the union, and the Democratic opposition was gone. The Republicans had no trouble passing the 1862 Pacific Railroad Act. So, just how was it funded and built?

Funding: In 1862, the U.S. Congress passed and President Lincoln signed into law, the Pacific Railway Act, the first of 10 acts that would guide the building of the Transcontinental Railroad between 1862 and 1874. The 1862 Act was based largely on a bill originally proposed in 1856, but that was unable to get passed by a divided Congress.

The law created the Union Pacific Railroad Corporation - the first federally chartered corporation since the Bank of the U.S. It’s role would be to build a railroad west from Omaha, Nebraska that would meet the Central Pacific Railroad which was a California Corporation created in June 1861 with private monies from the "Big Four" (see Goal #3 below). The 1862 Act instructed the Central Pacific to begin construction at Sacramento at the same time that the Union Pacific began its construction in the east.

The Pacific Railroad Act providing two ways to fund the Union Pacific and the Central Pacific: land grants and loans.

• Land grants. Both railroads received 400-foot right-of-ways plus ten square miles of land for every mile of track built. However, the land was NOT ten contiguous square miles of land but rather was given away in a "checkerboard" pattern leaving Federal land in between. In a 20-mile wide land grant, the companies ended up with 10 square miles of land on each side of the track. The federal government's plan was that the railroads would sell their land to pay for the construction of the rail lines. But there were some tremendous flaws with this plan:
  • Few people wanted to buy any of that land until after the rail lines were constructed.
  • On all of the land, severe problems existed with the Indian inhabitants who were upset at having their land stolen.
  • Most of the land was located in barren and "worthless" parts of western states where it was nearly impossible to grow or ranch anything.
  • Despite such flaws, from 1850-1871, the railroads received more than 75,000 million acres of public land - an area more than one tenth of the whole United States and larger in area than Texas.
• Government loans. The government loaned 30-year bonds to the companies which they were required to repay with interest (6 percent). Companies would be loaned $16,000 per mile for construction across flat land, $32,000 per mile for hilly terrain, and $48,000 per mile for mountain construction. Certain conditions were placed on the loans:
  • Railroad companies could not build curves sharper than 10 degrees, nor steeper than 116 feet per mile.
  • Rail lines had to be built with American steel which created a serious hardship for the Central Pacific.
  • The whole line between Omaha and Sacramento had to be completed within fourteen years or the land, and all the track, tunneling, and labor would be forfeited!
  • The government only gave the companies the rights to use the surface of the land, not the minerals underneath.

So, how did this federal funding assistance - land grants and loans - work out in reality?

• Both the Central Pacific and the Union Pacific were controlled by only a handful of stockholders - in particular, the Big Four who became wealthy by building the Central Pacific.
• It was virtually impossible for the UP or CP officers to sell any stock except to themselves because typical investors considered the project too risky and additionally believed that the geographical construction problems were insurmountable, that hostile Indians would never allow settlement, and the federally donated land was worthless.
• Through its funding, Congress created a competitive race between two railroad companies.
• Thus, it became clear that parts of the 1862 law needed reworking.

The Railroad Act of 1864 revised the 1862 act in the following ways:

• Enlarged land grants from ten to twenty miles of alternating sections on either side of the tracks.
• Granted full rights to all the minerals underneath that land.
• Allowed the companies to collect government loans more quickly. Previously, the companies could only collect government bonds after each 40-mile section of road was fully completed and inspected. The new law said they could collect twice as fast, allowing them to collect two-thirds of their loans after the grading had been finished.

In short, as Stephen Ambrose concludes in Nothing Like It In the World, the Transcontinental Railroad was not a federal give-away. He argues:

• The federal goverment had to be the primary investor in the railroad because it crosses through too many states and territories and there was not enough private wealth available to purchase land and supplies.(pp. 55ff, 64, 68, 100)
• The 1862 Act created "unprecedented government aid to business" and in so doing, contributed to the rise of "a new class of capitalists." (p. 100)
• Government bonds were loans and they were paid back in full with sizable interest. "It was a good investment for the government."
• Ambrose insists that the land was not a give away because without the railroad, the land would have been useless

Building: But funding was not the only obstacle. Both companies faced the following obstacles as they raced to meet one another:

1. Mileage and geography. The railroad was to stretch 1,700 miles over 2/3 of the North American continent. The size was unprecedented in the world. Throughout most of the route, there were giant stretches of desert and no water, and it had to go over two formiddable mountain ranges - the Rockies and Sierra Nevada - and it had to cross unnavigable streams and rivers running through deep gorges and granite summits. Further, through much of the route, there were no trees for building bridges and railroad ties.
2. "Civilization." There was only one single settlement along the route.
3. Resources. Vast areas of the route had no trees for bridges or RR ties, no game for food, no stones for footing. Over much of the route there were no cities, no settlements, no farms, no roundhouses, no water pumps, and no way to carry supplies in and out.
4. Native American hostility. The Plains Indians who lived in the territory through which the railroad was being built were not happy with what they called the "Iron Horse." It crossed through their territory, interrupting the natural flora and fauna of the land and the migratory patterns of the many mammals in the Midwest. Furthermore, it brought more and more white people across and into their lands.
5. "Hell on Wheels" towns. According to the PBS Website, Hell on Wheels towns consisted of "gambling houses, dance halls, saloons, and brothels, flimsily assembled from wood or canvas ... Miners and traders, scattered across the countryside, converged upon the relative comforts of the new outpost. Regular train service on constructed track brought carloads of migrants looking to settle down, make a buck, or simply experience the zeitgeist of a town perched on the wild's edge. North Platte and towns that followed were the new boomtowns, and like those Pacific coast convergence points of earlier decades, they grew without law. Which, of course, encouraged a spirit of anarchy, not to mention a proliferation of scoundrels ... The most striking feature of these insurgent colonies was their portability. As winter thawed, and the railroaders built toward new towns, agents of vice or enterprise could simply pack up their wares, dismantle their shacks, and follow along on the newly-laid track. If a town dried up once the railroad left - and many did, for the railroad was where profit resided - then so be it."
6. Labor. Labor was plentiful for the UP - after the Civil War, thousands of unemployed veterans desperately needed jobs. But the opposite was the case with the CP.
7. Time. Almost everyone wanted to build the RR fast at the greatest possible profit to the investors. The engineers in both railroads wanted to build it well, while the investors wanted to build it quickly. This become a heated race to see which of the two railroads could most quickly finish their lines and meet the other railroad company.

Goal #3: To understand the particular funding and building obstacles faced by the Central Pacific Railroad and its backers, "The Big Four"

Four entrepreneuers who were new to California - collectively known as the Big Four - put up all the private money to build the Central Pacific that would begin in California and proceed eastward. From the beginning of their enterprise, they faced six major obstacles: financing the railroad, navigating the geography of the Sierra Nevada, coping with the absence of modern technology, dealing with extreme cold and harsh working conditions, handling the absence of building materials at the building site, and finding and hiring labor.

1. Financing the Central Pacific. Once the 1862 Act was passed, Governor Stanford supported millions of dollars in state bonds issued at $10,000 per mile after the required federal portions of the track were built. In return, the CP agreed to transport without charge the state militia, prison convicts, and inmates from insane asylums. The Big Four becane millionaires as a result of their investment. And who were these men? (In order of appearance)
   • Leland Stanford (came to California in 1852). He and his brother supplied minors with various goods and services.
     • He was Governor of California from 1861-1863
     • He was President of the Southern Pacific and Central Pacific
     • He founded Stanford University with a $20 million endowment on his 9,000 acre ranch
   • Collis Huntington (came to Calfiornia in 1848). He had a successful business partnership with Mark Hopkins that began in 1854.
     • When the Central Pacific was started, Huntington, after becoming vice president of the company, went to Washington with Theodore Judah to lobby for the Act of 1862. Thereafter most of his time was spent in the East, where he was active in Washington until the Act of 1864 was passed, which made financing of the railroads possible.
     • After the completion of the Central Pacific, Huntington carried on the work of building branch railroads and of extending the Southern Pacific Railroad through California, Arizona, and New Mexico to a junction with the Texas Pacific at El Paso, Texas, in 1883.
     • In 1890, Huntington ousted Stanford from the presidency of the Southern Pacific and assumed the position himself.
   • Charles Crocker (came to California in 1849). He worked in the mines but had a store by 1852 in Sacramento.
     • Crocker headed the construction part of the Central Pacific.
     • Worn out by his activity in building the railroad, in 1870, Crocker proposed to his associates that they buy him out. After a good deal of discussion, an agreement was reached whereupon Crocker retained his stock interest in the railroad and his Associates would buy him out.
     • By 1873 when the economic panic hit the nation, payment could not be made, so Crocker came back into the organization.
     • From that time on, Crocker was active in construction work on the lines that later became the Southern Pacific.
   • Mark Hopkins (came to California in 1849). He formed and managed a new company, the New England Trading and Mining Company, that shipped goods to California. When the Central Pacific Company was formed in 1861, Hopkins became treasurer, continuing in that position until his death.
2. Navigating the geography of the Sierra Nevada. The Central Pacific RR was to begin in Sacramento which lies at the north end of the Central Valley. The city is located on high ground above the river, at an elevation of twenty feet or more above sea level.
   • From Sacramento to Auburn, the railroad line was fairly even. However, beyond Auburn the next 40 miles included some of most forbidding terrain in the entire United States.
   • At Auburn, the railroad line began a fairly uniform rise of 105 feet per mile to the 7,018-foot summit of the Sierra at Donner Pass.
   • Additionally, the RR would have to run through deep canyons. At Emigrant Gap, Bear Valley is nearly 600 feet below the track, while several miles away the North Fork of the American is more than 2,500 feet below the railroad.
   • To facilitate the steep grade, the hard granite, and the roaring rivers, tunnels, bridges, and snow sheds had to be built. The Central Pacific built a total of 6,213 feet of tunnels. (Compare this to only 1,792 feet of tunnels in the Union Pacific). Most of the tunnels were built near the summit of the Sierra Nevada mountains.
   • Summit Tunnel, begun in early 1867, was the greatest construction feat of the Central Pacific. It measured 1,659 feet in length, and reached, at its deepest, 124 feet into the rock, and it sat more than 7,000 feet above sea level. It took a year to break through the tunnel and in so doing, the Central Pacific finally broke out of the Sierra Nevada Mountains.
   • It took 6 years to build 131 miles of track through the Sierra Nevada. (or 21 miles each year)
3. Coping with the absence of modern technology. It took 6 years and 20,000 men to build the Central Pacific and with very few exceptions, the RR was built by hand. The only modern technological help was the use of black powder and one steam engine that was used to haul out hand-hewn rock from the tunnels. An average of two to three miles was laid per day and the men worked six days per week. Base camps were built about 70 miles apart.
   • To further illustrate how the railroad was built by hand, consider that building the summit tunnel required the use of 500 kegs of black powder each day. In order to blast, holes had to be drilled for the explosives.
   • It took three eight-hour shifts to drill twelve inches and steel drills had to be given new edges by blacksmiths every two hours
4. Dealing with extreme cold weather and harsh working conditions. During the construction of the railroad the workers had to survive extreme conditions which included unbearable snowstorms
   • During the winter of 1866-1867, there were 44 blizzards while they were attempting to build the Summit Tunnel. The storms were anywhere from a short squall to a two week long blizzard, with between one-quarter of an inch and ten feet of accumulation of snow.
   • The heaviest storm started on February 1867 and lasted until February 22, during which time six feet of snow fell. The storm started again five days later and lasted until March 2, with ten feet of total accumulation. The storms often blocked tunnel entrances and slowed work considerably.
   • It took a crew of 4,500 men to keep the track shoveled so work could continue. Avalanches often buried laborers. 4) Throughout the snowy conditions, the workers averaged only eight inches of track per day, blasting through solid rock.
   • In the summer, the workers were hassled by insects and swarms of rattlesnakes whose dens were disrupted during construction.
   • Cave-ins, avalanches, and misfired explosions killed and maimed an unknown number of workers. (Estimates vary between 150-200 total killed.)
5. Handling the absence of building materials at the building site. The only building materials available in California were men and wood. The rails, engines, cars, wheels, and other equipment had to be made in the industrial East and brought to California.
   • Since there was no practical overland route, the materials had to be shipped 18,000 miles around the tip of South America, a process that took many months and was very expensive and dangerous.
   • Arriving in San Francisco, the materials were then loaded onto steamers or barges and shipped 130 miles through San Francisco Bay and the Sacramento River to Sacramento.
   • Once the materials reached Sacramento, the rails, spikes, and rods were loaded into the flat cars of a supply train that was sent to a worksite of awaiting laborers.
   • Each rail was approximately 700 pounds and took five men to lift. The rails were manufactured in mills in the East.
   • The ties and wood for bridges were cut from the Redwood forests of California. There were generally between 2,260 and 2,640 ties per mile. It is estimated that one average sized old-growth redwood would be needed for every 2-3 miles of track - given a standard of each old-growth tree at around 50,000 board-feet.
6. Finding and hiring labor. Because very few white men were willing to engage in the grueling work of the railroad and instead, preferred working in the hills mining for gold, at least 50 percent of the labor was performed by Chinese immigrants. By 1865, the Big Four realized they had a major labor problem. When it called for 5,000 construction workers, few Californians answered the call. Most white men were unwilling to work in the snows at $35 per month and preferred mining.
   • Charles Crocker tried an experiment and used Chinese workers on the heaviest of the RR work, finding that they worked quickly, tirelessly, accepted less money (between 60 to 90 percent what the whites were offered), and were willing to accept a lower standard of living in terms of housing and food.
   • By the end of the year, the Chinese composed two-thirds of the Central Pacific's labor force. Somewhere between 10,000-12,000 were eventually employed to build the RR - many of whom were recruited directly from China.
   • When the RR was completed, many moved to San Francisco and established a Chinatown within the city limits. There, they clustered in relative safety from the anti-Chinese sentiment that was growing across the nation and the state.

Goal #4: To discuss the growth of the railroads in California, the entrepreneurs who backed them, and the empire they created

Capitalizing on the Transcontinental RR's potential for stimulating development, promoters organized dozens of railways in the late 1860s and 1870s. Indeed, by the end of the 1870s:

• Railroads extended north of Marysville and the San Joaquin River south of Stockton and entered the distant and lightly populated southern counties.
• The first operating southern line - the Los Angeles and San Pedro Railroad -connected Los Angeles to its new harbor at Wilmington in 1869.
• By 1871, small railroads extended lines into Los Angeles's fertile surroundings.
• As the map indicates, only the Sierra foothills and the San Diego area lacked direct railroad service. Plans already existed for such lines.

These new railroads usually fell quickly to the control of the Big Four. The new railroads were quickly and shoddily built, suffered from light traffic, and put their independent financiers into ruinous debt. Thus, the Big Four eventually acquired most of these independent lines.

However, through the 1870s, all these lines failed to make the Big Four terrifically wealthy. In fact, they remained in debt and thus they reasoned that the only way to make the Central Pacific turn a profit was to absorb potential competitors - which they steadily accomplished by 1887.

• By the end of the 1870s, they had purchased all the major railroads within the state.
• In 1879, they took the Southern Pacific - which they had acquired in 1868 - across Arizona and into New Mexico.
• In 1881, the Southern Pacific reached El Paso, Texas.
• By early 1883, the Southern Pacific ran to Houston and New Orleans, thus completing the first coast-to-coast railway under one management.
• In 1887, the Southern Pacific acquired the Oregon and California Railroad between Sacramento and Portland.
• By 1878, the Big Four had created a monopoly of California's transportation system - an unrivaled railroad empire. Only 10 years later, they were the most powerful railroad entrepreneurs and among the wealthiest businessmen in the nation.
  • At the same time, the Big Four planned to reduce competition from shipping transportation.
  • In 1874, they formed the Occidental and Oriental Steamship Company that gave them great control over San Francisco's oceangoing commerce.
  • They also purchased inland riverboat enterprises and San Francisco Bay ferries.

End of 9/29 discussion

Goal #5: To analyze the consequences of creating a railroad empire in California

Railroads propelled the state of California into the modern industrial age. The following consequences illustrate that modernity.

1. Railroads increased profits for those who already had some property and influence - especially the Big Four.
2. Railroads brought the continent together, challenged the role of Europe in the world, allowed people to move west for opportunities, connected the new state to the rest of the nation, and it could help move supplies and men in time of war.
3. Railroad encouraged economic growth through the creation of urbanized boomtowns for those on the railroad route.
   • Oakland - In 1868, the founder of Oakland deeded his monopoly over the city's shoreline to the Oakland Waterfront Company which he co-owned with Leland Stanford. In return, the Big Four located the Central Pacific's terminal at Oakland rather than continuing the railroad around the bay to San Francisco. This had an immediate and spectacular effect on Oakland as travelers jammed downtown hotels, restaurants, and shops.
     • Commerce increased, land values rose, downtown building booms began, and new subdivisions arose.
     • New industries rushed into the city - especially at sites near the railroad terminal and wharves and warehouses.
     • Employment rose as did the population. In 1868, about 2,000 people lived in Oakland; only two years later, the population was 10,500 and by 1880, Oakland boasted 35,000 people making it the second largest city in the state.
   • Railroads transformed other towns in similar although less spectacular ways - the size and diversity of communities increased, while its wealth and tax base expanded which in turn, brought new schools, churches, municipal agencies, as well as social, cultural, and professional organizations.
   • Beginning in 1870s, the Big Four became major town promoters. Through their construction and real estate branch - the Pacific Improvement Company - they founded several market towns.
     • The RR laid out the streets in a gridiron pattern and built shops, stations, yards, warehouses, loading docks, stock pens, and housing for its workers.
     • The Company then added a hotel and restaurant to lure travelers, and often added trees to beautify the new community and donated cash to build parks, schools, churches, and major businesses.
     • It then advertised the townsite and brought in prospective buyers on law-fare excursion trains for picnics and lot auctions.
     • Among the towns that began in this manner were Modesto, Merced, Fresno, Tulare, Hanford, and Livermore - all of which developed into prosperous regional trade centers.
4. Railroad expanded agricultural markets for farmers. In the 1870s, California farmers began cultivating special crops like citrus and other fruits, winter vegetables, melons, cotton and rice. The Southern Pacific was key in promoting this type of agriculture since the Big Four believed that the future of the state, as well as the future of their business, depended on farm progress. Thus, the RR - especially the Southern Pacific:
   • Advanced capital to finance many new small farms and encouraged public irrigation projects.
   • Compiled most climate, crop production, and water statistics used by those experimenting with agriculture.
   • Provided monetary grants and free transportation to the University of California's new agricultural program that was reorganized in 1874 (began in 1869) to use more scientific methods related to soil chemistry, fertilizers, climate, irrigation, and pest control.
   • Linked California farmers to local market by building shorter railroad lines that connected farmers with local market towns and coastal ports
   • Linked farmers to national markets by instituting faster direct service to the east, running special fruit trains, pioneering ice manufacturing and fruit cooling plans, and creating refrigerated boxcars.
   • Helped farmers organize marketing cooperatives and helped them with mass advertizing campaigns to cultivate a taste for oranges, prunes, raisins, and apricots.
   • Thus, between 1870 and the early 1900s, fruit and specialty crop agriculture became the state's major industry. By 1900, California had 72,500 farms that were collectively valued at $708 million. By 1925, the state's 136,400 farms were worth more than $3 billion.
   • By the early 20th Century, California had become the nation's leading producer of wine, table grapes, raisins, walnuts, winter vegetables, lemons, almonds, tomatoes, sugar beets, plums, prunes, and apricots.
5. Railroads manipulated water resources. California is semi-arid and thus towns and farms required water manipulation. No agricultural growth could occur without the railroad and without reorganizing and manipulating the state's water resources through a variety of channels.
   • Public passage of conflicting water laws:
     • Riparian rights entitled the landowner to use a share of the surface water flowing past their property. While riparian rights require no permits or licenses, they apply only to the water that would naturally flow in the stream and they do not allow the user to divert water for storage or use it on land outside its watershed. Riparian rights remain with the property when it changes hands. When California entered the Union in 1850, one of the first actions taken by its lawmakers was to adopt the law of riparian rights.
     • Appropriative rights began with the Gold Rush when the ‘49ers built extensive networks of waterways to work their claims. The water carried in these systems had to be transported far from the original river or stream. The self-governing miners applied the "finders-keepers" rule to water use allowing the first users of water the unrestrained right to divert it from the stream. In 1851, the California Legislature also recognized the appropriative right system.
   • Public management of irrigation water. By 1870, only 60,000 acres was being irrigated. Demands for irrigation grew over the next 20 years, but water rights still remained uncertain.
     • In 1886, the case of Lux v. Haggin found two giant land interests fighting over control of the flow of the Kern River. The state supreme court decided that the riparian rights of downstream landowners superseded the appropriation rights of upstream water users. Thus, irrigation and agriculture suffered a serious setback.
     • The Wright Irrigation Act of 1887 was the response from agricultural interests. The act
       • authorized the formation of local irrigation districts,
       • gave them the power of eminent domain (to condemn private water rights and irrigation facilities for public use), and
       • empowered the new districts to levy taxes and sell bonds to build reservoirs and canals.
6. Railroads assaulted the environment and stimulated the beginnings of an environmental movement. Between widespread and devastating mining techniques and the building of the railroads in California, its environment had suffered continuous assault for almost three decades
7. Railroads encouraged social and political inequality. Like the remainder of the U.S., Californians were divided by wealth, ethnicity, and family backgrounds. Thus, its people were divided into classes of sharply differing status and opportunity.
   • Such inequities were not as apparent in the first two decades as the society was largely composed of transient, unsuccessful people who skipped from one temporary community to another without notice. But by the 1870s as people began to settle down, glaring inequities became more apparent and politically explosive.
   • In cities, specialized districts arose, each devoted to commerce, industry, entertainment, and residents.
     • Wealthy citizens lived on the best sites - such as wealthy San Franciscans who lived on the tops of hills once cable cars made them accessible after 1873.
     • The working class, however, lived in densely populated pockets surrounding or within the cities and they rarely had a chance for upward mobility.
     • The Chinese, Mexican, African American, and some European immigrants were pushed into the least desirable neighborhoods. There, they were isolated from mainstream politics, culture, and economics through policies that excluded them from white collar business employment, public schools and churches, and forced them into gerrymandered voting districts that neutralized their votes.
     • Such stratification was replicated in most cities and in most rural areas as well.
8. Railroads encouraged anti-railroad politics. By the 1870s, the monopolies over land, the wheat trade, and transportation came under scrutiny. The Central/Southern Pacific Railroad - the state’s largest business, landowner, and employer of Chinese workers with an annual budget that dwarfed that of the entire state - was no exception.
   • The Big Four were not guilt free - they were using the wealth they received from public construction subsidies to absorb or destroy competitors and charge high transportation fees. To protect these efforts, they employed a huge force of lawyers, lobbyists, and political bosses.
   • Discontented farmers, workers, and urban shippers were especially angry with the monopoly’s high freight tariffs. Many favored regulating railroad costs and/or lowering rates. Many of these people united to revise the constitution accordingly.
   • The Constitution of 1879 was a compromise. The new constitution:
     • Declared RR were “subject to legislative control”
     • Called for a RR commission of three elected members with authority to fix maximum rates and prohibit RR from discriminating among shippers.
     • Made intangible corporate assets like profits and franchises subject to taxation.
     • Raised taxes on railroad and other corporate property.
     • In so doing, the constitution established important principles of state economic regulation of public utilities - i.e. railroads; distributed the tax burden more widely; and created the machinery for increasing state revenues.
     • Thus, California had a stronger legal and fiscal framework for dealing more actively with the economic, scientific, and environmental problems of modernization.
9. Railroads provided unprecedented opportunities for young men willing to work hard in pursuit of wealth and helped to perpetuate the idea of the self-made man. This was particularly the case in building the Union Pacific that utilized the labor of thousands of German and Irish immigrants, as well as between 5-10,000 white workers on the Central Pacific.
10. Railroads encouraged anti-Chinese sentiment. In the late 19th Century, federal policies discriminated against Asians, especially the Chinese with the Chinese Exclusion Act of 1882. The Act prohibited U.S. entry to all Chinese people except teachers, students, merchants, tourists, and officials. This was the first - and only - federal law that restricted immigration based upon nationality and race. The Act was repealed in 1943. The Exclusion Act was one of the first formal federal acts to restrict and discriminate against immigrants.

Cold Call: 10th cold call on required reading - Read Elinson and Yogi, Ch. 2, "In a Strange Land: The Rights of Immigrants"

Goal #5: To examine a case study of anti-Chinese policies and actions through a case study of Chinese explusion from Eureka in 1884

Due to the California Gold Rush and the recruitment of Chinese to work on the RR, California had the largest Chinese population in the nation by the 1860s. By 1880, its Chinese population was 75,000. Thus, the Chinese were pulled to America by promises of working hard, acquiring wealth, and possibly of returning home with their fortunes. But they were also pushed to the U.S. due to natural disasters largely in China's southeastern Kwantung provinces where persistent drought and floods made it hard to maintain a satisfactory quality of life.

Most Chinese immigrant were men who couldn’t afford their passage, so they entered California on the credit-ticket system. Upon arrival in California, they worked to pay off the cost of their ticket.

Successful Chinese merchants already settled in California began to recruit young men from their villages in China, pay their passage, and introduce them to the Chinese Six Companies once they landed in San Francisco. Each of the six companies represented one of six districts and clans that existed in the Kwangtung province of China. Each company provided new arrivals from their clans with a place to stay, food, employment, protection, companionship, and language and legal services. Thus, each became an acceptable intermediary between California's Chinese immigrants and California's white society.

By the 1870s, the Chinese had organized themselves into sub-units within each of the Six Companies. Known as Chinese Tongs, they originally worked in association with the Six Companies, but eventually, they broke away, began competing with each other for jobs in the larger white society, and eventually functioned as small, secret societies. When they left San Francisco, their tong affiliations and grievances went with them and often resulted in violence between rival tongs in Chinatowns throughout the state.

Upon arrival in California, the Chinese worked in laundries, domestic service in white households, fishing, heavy construction work - and other jobs that white laborers will unwilling to do. Gradually, a small percentage of Chinese began to work inindustries already occupied by white labor,especially clothing manufacturing, shoemaking, and cigar-making. Thus, they encountered resistance from white workers who could not compete with the Chinese because they were not willing to live as cheaply. In addition to the poor reputation the Chinese had gained from Tong activity and actual and perceived competition for jobs, many white California began to resent the fact that most Chinese did not appear to be assimilating into American life. They continued to live in Chinatowns, speak their language, eat their own foods, and practice their strange religion. Anti-Chinese sentiment grew and with it grew demands for the California legislature to respond

1852 California's Foreign Miner's Tax imposes $3 monthly tax for non-native-born citizens of the US (the Chinese) and those becoming citizens under the Treaty of Guadelupe Hidalgo (the Mexicans).  The tax was enforced by tax collectors who kept part of the fee for themselves, were allowed to take property of those who failed to  pay, and often used extreme violence in their collection methods.

Commutation Tax requires shipmasters to prepare a list of foreign passengers, and ship owners to post a $500 bond for each, which could be commuted by paying a tax of $5 to $50 per passenger.

1855 California legislature levies a $50 tax on every ship bringing immigrants "ineligible for citizenship."  The California Supreme Court declared the law unconstitutional in 1857.

California legislature increases the Foreign Miners' License Tax to $6 per month, with increases set for $2 each susequent year.  The State legislature repeals the law and establishes the tax at $4 per month.

1862 California legislature passes "An Act to Protect Free White Labor Against Competition with Coolie Labor and to Discourage the Immigration of Chinese to the State of California."  Requires a tax on laborers who were not working in agriculture.

The California Legislature passes a Chinese Police Tax that levied a $2.50 fee on all Chinese living in the state. The California Supreme Court declared the law unconstitutional by the end of the year.

1863 Chinese individuals are prohibited from testifying in California criminal or civil court cases. Chinese children are excluded from public schools.

1866 California legislature passes "An Act for the Suppression of Chinese Houses of Ill-Fame" which made Chinese brothels illegal.  The law makes it possible for a landlord to discriminate against potential Chinese occupants upon the suspicion that prostitution might take place in the premises.

1870s The Chinese represent 20% of California's labor force, although they constitute only .002 percent of the entire US population.

• The Workingmen's Party, comprised of white workers and white poor, focuses on the elimination of Chinese labor in California.  The new party convinces San Francisco's office of the Cigarmakers' International Union to distribute a circular across the western US that listed manufacturers who employed Chinese, "Which is a great injury to our white working men and women."  The union asked readers to boycott these firms and began to attach special labels to their products proclaiming "Made by white labor," or "Made by white men."
• California legislature imposes steep fines up to $5000 on individuals who imported Chinese into the state without a "certificate of good character."  California Supreme Court declares the law unconstitutional.
• "Mongolian" women immigrating to California must prove they are of good character.

1874 An area known as Chinatown arises in Eureka, composed primarily of men and a few prostitutes. Chinatown was a small square block between F and E Streets, bounded by 3rd and 4th Streets. It was located in the heart of what is now the business and tourist district of Old Town Eureka. The Chinese did not give up their customs or religion. They celebrated their holidays and interacted with each other within their distinct community. For the most part, they kept to themselves.

1878  California legislature bars Chinese individuals from  owning real estate.

The Federal Circuit Court in San Francisco rules that Chinese are ineligible for naturalized citizenship in Ah Yup, 1, Cas. 223.

1879 Second California Constitution passes with two new articles that discriminate against the Chinese: Chinese immigrants were denied the vote in California; and state and local public works agencies were forbidden to employ a Chinese laborer.

1880 California Chinese population reaches 75,000.

The California legislature prohibits marriage between a white person and a "negro, mulatto, or Mongolian."

1883 Chinese labor, recruited by Humboldt Country builders, helps build the Eel River and Eureka RRs.  About 200 Chinese live in Eureka in a small square block between F and E Streets and bounded by 3rd and 4th streets.

1884 Local newspapers in Eureka print articles about violence among rival Chinese tongs, as well as random acts of violence committed against the Chinese in Eureka. When the one newspaper printed an article about two white women visiting an opium den, the community was incensed.

• However, a few residents did not join in the growing vigilante attitudes. Reverend Charles A. Huntington pointed out that if the Chinese gambled, it was among themselves; no one ever saw a drunken Chinaman on the streets; and that the Chinese were less a menace to public morals than the white men who publically drank and gambled.
• Huntington saw racism as the culprit in the different treatment and attitudes toward the Chinese. However, his sympathy toward the Chinese was not widely shared by Eurekans.

1885   February 6 - City Councilman, David C. Kendall is fatally shot by a stray bullet fired by rival Chinese tong members.  20 Chinese are arrested.  Vigilante behavior becomes difficult to quell.  That evening a meeting was held at Centennial Hall during which a resolution was  proposed to massacre "every Chinaman" in the city.  When it fails to pass, another suggested destroying Chinatown and driving the 480 occupants beyond city limits.

• February 7 - All Chinese citizens in Eureka are loaded onto two steamers bound for San Francisco. A gallows is erected in the middle of Chinatown with a sign stating, "Any Chinaman seen on the street after 3:00 will be hung to this gallows."  On the ships, rival tongs are separated - 135 Chinese on The Humboldt, and 175 on the City of Chester.  High seas prohibits sailing until February 14th.
• February 14 - Eurekans adopt three proosals declaring that all "Chinamen" be expelled from the city and not allowed to return; that a committee be appointed to act for one year to warn all Chinese who attempt to come to Eureka to live, to use all reasonable means to prevent their remaining, and in the case of a disregarded warning, to call a mass meeting of citizens who will determine the appropriate action; and that a notice be issued to all property owners requesting them not to lease or rent property to Chinese.

1886   Fifty-five of the excluded Chinese filed the first lawsuit for reparations in the U.S. in Wing Hing v. the City of Eureka. The victims sued Eureka in the U.S. Circuit Court to recover $132,000 in damages ($75,000 for injuries to property and $58,000 for the loss of business, for the loss of opportunity to collect debts owed by their white customers, and for being driven out of the city by a mob). Ultimately, the Chinese lost the suit because they did not and could not own land in Eureka, could not testify against whites, and were prevented by vigilante activities from returning to the area. But in the act of bringing Wing Hing, the expelled community quickly regrouped, and the lawsuit itself became an effective warning and sounded across the state against similar treatment of the Chinese. It put other cities on guard.

• February - Arcata adopts an anti-Chinese resolution declaring, "We, the citizens of Arcata and vicinity, wish the total expulsion of the Chinese from our midst.  We endorse the efforts of Eureka to exclude all Chinese settlements in the city and environs."  Ferndale passed a similar resolution several days later.
• March - Crescent City decides to "remove all Mongolians from our midst."
• April - The last group of 20 Chinese leave Arcata.  No Chinese are allowed to live in Humboldt County for the next 60 years.

1891 The California legislature passes a law stating that "the coming of Chinese persons into the State, whether subjects of the Chinese Empire or otherwise" is prohibited. In 1894, the California Supreme Court declared the law unconstitutional in Ex Parte: Ah Cue,101, 197.

1905 Asiatic Exclusion League is organized by delegates from 67 organizations who met in San Francisco to begin plans to press for legislation to halt all Japanese immigration.  Before the end of the decade, the League began lobbying or an amendment to Constitution that would deny citizenship to American-born Asians.

San Francisco School Board issues a decree that all persons of Asian ancestry must attend segregated schools in Chinatown by stating,  "Our Children should not be placed in any position where their youthful impressions may be affected by association with pupils of the Mongolian race."

• On September 30, the Humboldt Daily Standard headline reads, "The Chinese must go." The article reads, in part: " After being free from the foot of a celestial for twenty odd years, and for so long a time being known far and wide as a place absolutely free from coolie labor, Humboldt county saw the return of Chinese within her borders yesterday noon with the arrival of the steamer Roanoke, when the Starbuck-Tallant Company, of Port Kenyon, imported twenty-seven Chinese to work in its cannery on Eel river. The Chinese were kept aboard the steamer until shortly before 4 o'clock when a Santa Fe engine backed a box car on the sidetrack alongside the warehouse and the pigtails, bag and baggage, were dumped in, the door shut, and the engine returned with the forbidden fruit, to the train, hooked onto the passenger coaches and pulled out for the valley."
• On October 4, the Humboldt Country Sheriff takes the newly-recruited Chinese to Gunther's Island and four days later, they were placed on The Roanoak, bound for Astoria. (See photo below.) The Japanese were allowed to stay until the end of the fishing season.

1910 Angel Island is opened to enforce immigration laws during the Asian exclusion years. From 1910-1940, at least 175,000 Asian immigrants - mostly Chinese - were detained and interrogated at Angel Island.  The average stay was 2 weeks; the longest was 2 years.  Thousands were deported.

1937 The Humboldt Times publishes a souvenir edition on its 85th anniversary which included an article, "No Oriental Colonies Have Thrived Since the Year 1885."

1959 Eureka officially repealed its anti-Chinese ordinance of 1885.

Question to ponder ... In no other California community were the Chinese expelled. So, why did it happen in Humboldt County?

• In her excellent paper, "In Our Midst: The Chinese Expulsion from Eureka, California," former HSU history major Sophie Huntington tackles this question. She shows that Eurekans were affected by the same prejudices, the same labor pressures, the same anti-Chinese sentiments as were other California communities. But, she argues, two factors encouraged a different reaction in Humboldt County: its remote location where it was not easy for the Six Companies to protect or control Eureka's Chinese settlers and the location of Chinatown in the middle of the city of Eureka, close to white residences and business, where the wars raged between rival tongs.
• Thus, expulsion occurred as a result of white anti-Chinese prejudices and fears, combined with the geographical isolation of Eureka and the placement of a Chinese community in the heart of town where it could not be ignored.

1. Despite the many financial, political, geographical, economic, and human obstacles, the Transcontinental Railroad became a reality and in so doing, politically and economically linked California to the rest of the nation.
2. In linking California to the U.S., the railroad became the ultimate symbol of Manifest Destiny and American progress.
3. The federal goverment was the primary investor in the railroad because it crossed through the continent and there was not enough private wealth available to purchase land and supplies.
4. The Railroad Act of 1862 created "unprecedented government aid to business" and in so doing, contributed to the rise of "a new class of capitalists."
5. The Central Pacific Railroad faced many financial, geographic, technological, weather, resource, and labor related obstacles - all of which were overcome in 6 years by over 20,000 men who largely built the railroad by hand.
6. The completion of the Transcontinental Railroad enabled a small group of railroad entrepreneurs to create an empire that monopolized California's transportation industry.
7. This empire was responsible for several key consequences that shaped California's history from 1868 to the turn of the 20th Century: increased profits for those who already had some property and influence; encouraged economic growth through the creation of urban boomtowns for those on the railroad route; expanded agricultural markets for farmers; manipulated water resources; assaulted the environment and stimulated the beginnings of an environmental movement; encouraged social and political inequality; encouraged anti-railroad politics; provided unprecedented opportunities for young men willing to work hard in pursuit of wealth and helped to perpetuate the idea of the self-made man; and increased the Chinese population and encouraged anti-Chinese sentiment.
8. Federal and California state immigration policies of the 19th Century greatly influenced the opinions of Humboldt Country residents about the Chinese immigrants living in their various communities. The intolerance sanctioned by the federal government and the California legislature, as well as the geographical isolation of Humboldt County and the central location of Eureka's Chinatown, culminated in the expulsion of Humboldt County's entire Chinese population whose culture, traditions, and standards of living were unacceptable to the larger white community.