Reading Between the Lines From Point A to Point B With a Letter to Richard Smith of New York City From William B. King, California Southern Railroad Company, Los Angeles, 16 June 1887, Part Three

by Paul R. Spitzzeri

With the onset of 1888, during which year the great regional boom peaked and then declined, the Los Angeles Herald of 31 January noted yet another delay, even though it was posited that this “may result most excellently for the future prospects of the road.” This was because an unidentified director left for the east “and until he notifies the officials here nothing further will be done,” although nothing could be learned about specifics. I  was added that “even the work of securing the right-of-way from property owners in East Los Angeles has been suspended,” but it was assured that “officials here state most emphatically that the road will surely be built.”

On 24 February, the Herald observed that “at last something definite has been done toward building the San Pedro, Los Angeles and Utah Railroad” in that the Los Angeles County Recorder noted the filing of $1.5 million in mortgage bonds to finance fifty miles of the road. Moreover, it was reported “that almost the entire management has changed hands” as “a gentleman in this city, who is prominently identified with the present state of affairs (King?),” told the paper that he was working with eastern capitalists on a possible sale. Some 70% of the company’s stock was then held by New York City investors “who will push the road to a finish” which meant “an entirely new organization is being perfected that will command an unlimited amount of capital,” perhaps $30 million.

The source added that Jay Gould had no involvement, while noting that the mortgage involved security involving a little more than 7 miles of road of the “Altadena Railroad” and the 224 acres comprising Rattlesnake Island, while, if the bonds were not paid within six months, a shareholder majority could initiate foreclosure proceedings. The paper stated that the route was from San Pedro “through to this city, via Raymond Hill [today’s South Pasadena] to, and through the city of Pasadena; thence through the counties of San Bernardino, Kern and Inyo, passing Owen’s [sic] Lake to a point on the eastern boundary line of the State, the distance being 275 miles.” Woodbury, as president and former head of the Altadena/Pasadena Railroad,
signed the indenture for the bonds.

The piece concluded with the observation that the informant “states that the road will be built straight through to Salt Lake City, and that the floating of the bonds mentioned is only a ‘starter.'” Moreover, a contract with the Raymond Improvement Company of South Pasadena for a right-of-way stipulated that a station was to be built at Mission Street (today, the Metro
Gold Line station, on the old route of the LA&SGVRR, is just south of Mission and west of Meridian Avenue) by the end of the year. Rights-of-way were “virtually secured” to San Pedro from Los Angeles city limits and “partly secured” in East Los Angeles, while no issues were foreseen to Pasadena “and certainly none beyond the terminus of the Altadena line.”

In its issue of the 29th (1888 was a leap year), the Los Angeles Express reminded readers that, at the end of the prior year, it speculated that “the actual head and front” of the SPLA&U “was none other than Jay Gould, the great Eastern railroad king.”  It went on to observe that,

When Rattlesnake Island, in San Pedro harbor was sold by the Dominguez heirs, it was generally assumed that Richard Smith of New York, bought the property, simply acting as an agent for Mr. Gould and his associates.  Although Mr. Smith’s attorneys have ever since the transfer to him of the island held that it was simply a private speculation on his part, is the fact, however, that Mr. Gould owns the Island.  When Mr. Smith opened up negotiations for its possession, a matter of nearly half a year ago, he pushed them as far as to secure an agreement from the Dominguez heirs to convey to him.

As noted in the paper’s Real Estate Transfers listings, an agreement was filed the prior day in which the heirs of the Rancho San Pedro’s Manuel Dominguez and Engracia Cota, these being their daughters Josefa Guyer (whose first husband was William G. Dryden, a prominent and notorious county judge), Guadalupe Marcelina, Dolores Watson, Victoria Carson, Susana del Amo and María de los Reyes Francis, sold the island for $300,000 to John P. Woodbury, Lewis R. Winans and William B. King.

The Express, though, commented that “the scheme of a re-conveyance of the property means simply a recently conceived plan to put it in Mr. Gould’s hands, the agreement to convey to Mr. Smith being nullified.  It added that, when a route to Salt Lake was planned, this being by Woodbury and his Pasadena (sometimes Altadena) Railroad it was “with the object of taking care of the interests of the California division of the road,” meaning that portion of the line to the border with Nevada after it passed through Inyo County, and an engineer hired to find a practical passage through the San Gabriel Mountains.

Rights-of-way were obtained from Pasadena to Redlands and from Los Angeles to the boundary of Rancho San Pedro, as well as the acquisition of Rattlesnake Island.  As also reflected in the transfer listings, Woodbury individually as well as trustee for the Pasadena Railroad Company, sold all of the property of the firm to Clarence W. Scott for $180,000 and Scott then immediately turned around and transferred this to the SPLA&U for $200,000 (earning himself a tidy $20,000 profit for no work) and the paper stated that “he acted as agent for the Union Pacific,” so that it was now abundantly clear that the latter would build this third transcontinental railroad in the region.

The next day’s Herald, however, called its rival’s remarks “of a most highly sensational character” and sent a reporter to speak to Scott’s brother, Lester (involved in the early establishment of Monrovia—the Scotts were also from Van Wert County, Ohio, where John M.C. Marble, who was a correspondent of Smith, was a major banking and railroad figure) who informed the paper that “for a long time [my brother] has been busily engaged in working up a sale of the San Pedro, Los Angeles and Utah Railroad Company’s properties, and for this reason has been in New York for some time with a party of powerful and prominent capitalists who now own 73 per cent of the stock of that railroad.”  Moreover, the account went on, the Union Pacific was said to have no involvement whatever in the scheme, it being averred that the SPLA&U was “a distinct organization” and “not even remotely connected” to any eastern railroad companies.

Lester Scott then added “there is but little foundation in the article in the Express” with only its factual renderings of the real estate transfers being true.  He flatly stated that Gould had nothing to do with Rattlesnake Island and that Smith “went into it as a speculation” before selling it to Woodbury, Winans and King.  The latter, then, sold his interest to Winans who then did so to Woodbury, who followed with his transfer to Scott, who alienated the island to the SPLA&U.  This, moreover, “was simply to give some security for the issuance of the mortgage bonds” mentioned above.

It was again asserted that “Jay Gould is in no wise connected with the road” and that “the parties now owning the road are perfectly able” to get it built and operating, though “if any other road comes into Los Angeles over the route it will be done by a traffic agreement or some such arrangement [lease of the track].”

At the end of March, Winans came to Los Angeles from the SPLA&U’s Pasadena office and the Herald was informed that “matters are now in such shape as to guarantee the commencement of this line at an early day.”  A “mission” to New York City undertaken by Woodbury and Scott was determined to have resulted “in interesting sufficient additional capital to warrant the beginning of operations in the near future.”  Additionally, it was reported that a $1.5 million mortgage was filed with the county clerk to secure money for the first 75 miles of the road from the harbor to a point in the San Gabriels (referred to then as the Sierra Madre range.)

While the Pasadena line was a short one in that vicinity, it was mentioned that the SPLA&U had “been repeatedly urged to extend their Altadena line through to Los Angeles without delay” as it would improve transportation between the Angel and Crown cities “and would undoubtedly pay handsomely from the very start.”  The response from company officials was that it was challenging to obtain rights-of-way and material, along with vaguely stated “unavoidable delay in the development of plans.”  The latest news, though, was expected to lead to the public’s “faith in the ultimate success of the whole project.”

The 13 April edition of the Herald referred to a wire report from New York City that the American Finance Company, involved in the establishment of those mortgage bonds, “is endeavoring to form a syndicate to purchase in part” those instruments.  It added that Darius O. Mills, a San Francisco capitalist, was said to be interested in extending his Carson and Colorado Railroad, which went from the Nevada capital to Keeler, a mining town on the east shore of Owens Lake to Mojave, north of modern Lancaster and Mills was quoted as saying “I do not know that the building of the San Pedro and [sic] Los Angeles and Utah will cause us to change our plans,” which were not far enough along for imminent construction.

Three days later, the paper wrote about the SPLA&U prospectus issued by the finance firm, including the listing of officers as Woodbury as president, Sherman O. Houghton as vice-president, and Winans as treasurer, while Clarence Scott was general manager.  It was further announced that the line would run 275 miles to Keeler and the Carson and Colorado terminus, with a quarter of the road finished to date.  Capital stock was pegged at $10 million and the 40-year mortgage bonds paying 6%, with $1 million devoted to “purchase money for Rattlesnake Island, wharves and terminal facilities and construction costs deemed to be $5.5 million, or $20,000 per mile.

The Herald continued that,

The shipping facilities and advantages of San Pedro Bay, the fine lay-out to be built there by the company, and the enormous business being done in San Pedro Bay, Los Angeles and Pasadena, are specifically set forth.  The commercial prosperity of the country along the line of the road, the immense traffic already being done at Los Angeles and Pasadena, are shown . . .

After providing the financial detail, however, the paper observed that “the prospectus naively states, that it may be safely assumed and expected that the Utah Central branch of the Union Pacific road will, in the near future, be extended from Frisco, Utah [now a ghost town in the southwestern part of that state], its present southern terminus, to Keeler, and reach San Pedro Bay” via the SPLA&U.

Further, the Missouri Pacific and Denver and Rio Grande railroads were said to someday establish linkages to the line so that they had Pacific Coast access “since this company has secured the only pass through the Sierra Madre mountains in a distance of over 60 miles in either direction, east or west.”  After noting that the document contained “seductive maps,” the Herald concluded its overview by observing, “the San Pedro people believe they hold the key to the California entrance, and that no more roads can get in there except over their line.”

Not quite two weeks later, the Los Angeles Times of the 29th spoke to “a gentleman, in a position to know,” who told the paper that “within the next 30 days work will certainly be begun on the San Pedro, Los Angeles and Utah Railroad, starting most probably at San Pedro.”  Noting that a good deal of talk had been bandied about concerning the project, it was stated that “there has at last come a time when something tangible is being done, and the road is a certainty.”

Reviewing the route and some of the history of the enterprise, the Times added that, while rights-of-way were obtained along almost all of the route, “a few gaps remain here and there.  It reiterated the potential linkages to other railroads and it was suggested that

With these connections and the business of the Union Pacific, which the company expects to get in a large part, they will bring into Los Angeles nearly all the business now coming by way of San Francisco . . . To the Pasadena people the line is another sweet morsel, since if pushed through they will have the long-looked-for rapid transit.

The article ended with the unnamed “heavy stock-holder in the road” claiming that “there is every reason to believe that the road will be built to the full length” as funds were obtained “and it only needs to close up those gaps in the right of way.”

Two months or so later, in its 22 June edition, the Times commented on the two proposed railroads to Salt Lake City, including the Los Angeles and Salt Lake mentioned before in this post, and the SPLA&U.  While it was stated that “the Union Pacific people have circulated the story very extensively that they were to control” the latter, when a Times reporter saw one of those figures the day prior, the unnamed figure denied this. 

Apparently asked for an update on progress, though, the person claimed that “things are going very well with us, though there are no new developments.”  That pesky problem of the necessary rights-of-way persisted and, as for other companies building along parts of the route, the source defiantly rejoined, “that doesn’t scare us at all.”  A Los Angeles and Salt Lake official, Alexander Badlam pointedly noted that the Union Pacific, legally prohibited from building a line along the route, “can form a new syndicate which can construct the line, and it would always be under Union Pacific control.”  The paper felt that Badlam “has had some reason to fear the Union Pacific” and wondered if the UP would get possession of one or the other or find another way to get to Los Angeles.

There were no further reports on the SPLA&U until the end of September.  The Times of the 29th published a report from Pasadena that “the Altadena railroad has been taken possession of by its original owners, the Pasadena Improvement Company.”  This was because the SPLA&U, which, as noted before, acquired the line, were not only failing to run the four daily trains as required by the terms of the purchase, but “trains run regularly today for the first time during the past 40 days.”  Moreover, “C.W. Scott, general manager of the road for the late possessors, was ejected from one of the trains for refusing to pay its fare to the conductor” and the article simply ended with: “Trouble is anticipated.”

The same day’s Express elaborated somewhat on the report of its rival and stated that it was the improvement firm that got the trains to run regularly again by taking possession of the Altadena line the previous evening.  When Scott heard the news, he headed from Los Angeles, exited a different train at the Raymond Station near the well-known hotel in South Pasadena and got on the Altadena line train and it was recorded that,

When the conductor came round and demanded fare of Mr. Scott, saying that the road was now being run by the Pasadena Improvement Co., that gentleman refused to pay.  At Colorado street the alternative of paying or being put off was presented to him, and [Scott] choosing the latter, the determined conductor secured help from another train man and duly put the late general manager of the road over which he was riding off on terra firma, he protesting and resisting vigorously.  Perhaps the spectacle of the general manager of a road being put off what he claimed was his own train was never before presented in the vicinity.  Legal steps will be taken to test this question of ownership.

Not quite a month later, Scott’s brother, who was the secretary of the SPLA&U, issued a notice for the annual stockholders’ meeting, held on 5 November in a room in the Temple Block, built by the brothers Jonathan and F.P.F. Temple between 1857 and 1871, but owned, after the 1876 failure of the Temple and Workman bank, by merchant Harris Newmark.

With this, we’ll hold off and return with a fourth and final part to this post, so look for that soon.