Railroads -- United States; Railroads -- United States -- Finance
For the direct route President Strong sought the help of the St. Louis
& San Francisco, and the use of the charter of the Atlantic & Pacific
which it owned. The Atlantic & Pacific was a road incorporated in 1886,
with a charter to build from St. Louis to California. In spite both of
its charter and of its name it had never gone further west than Vinita,
in the northeast corner of Indian Territory.[405] President Strong and
the Frisco now agreed to continue construction under the name of the
Atlantic & Pacific, both from Vinita and from Albuquerque. The Atchison
was to be given a half-interest in the charter, directors were to be
chosen equally from the two companies, and the cost was to be met by a
$25,000,000 loan, which the Atchison and the Frisco were to guarantee
jointly but not severally.[406] Before the new construction neared
completion, however, the St. Louis & San Francisco fell under the
control of Messrs. Gould and Huntington, who, as owners of the Texas &
Pacific and the Southern Pacific respectively, naturally disapproved of
the plan to extend the Atlantic & Pacific to the coast. The Atchison,
therefore, agreed to build no further west than the Colorado River. At
that point the Southern Pacific was to meet it with a line from Mojave.
The Southern Pacific gave to the Atlantic & Pacific an interest
guarantee on its bonds to the extent of 25 per cent of the gross
earnings derived from Atlantic & Pacific through business, and the
latter road retained all its rights for a line in California.[407] This
proved unprofitable, for the Southern Pacific persistently diverted
traffic to Ogden and El Paso, and in 1884 still another arrangement was
made. By this—
(_a_) The Atlantic & Pacific bought the Southern Pacific division
between the Needles (the Colorado River) and Mojave, 242 miles, for
$30,000 per mile, and, until such time as title could be given by the
discharge of the mortgage upon it, took a lease at an annual rental of
6 per cent on the purchase price.
(_b_) The Atlantic & Pacific secured trackage and traffic rights and
facilities between Mojave and Oakland and San Francisco, as well as the
use of terminals at the latter point.
(_c_) The Atchison (and the St. Louis & San Francisco likewise) agreed
to buy from the Pacific Improvement Company first mortgage bonds
and other securities of the Atlantic & Pacific of the par value of
$3,096,768, at the actual cost to the Improvement Company, to wit,
$1,524,356.
To complete the connection to the coast the Atchison built from
Waterman, some seventy miles east of Mojave on the Atlantic & Pacific,
to Colton on the Southern Pacific, and secured control of the
California Southern from Colton to San Diego.[408] In 1885 entrance was
obtained to Los Angeles by lease of the Southern Pacific track between
Colton and that city.[409]
Public-domain text, read in full here on John Shaqi.
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