The Profiteers

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by Sally Denton


  Earning $2.75 per day—a good living for a man with his own mule team—Warren found the work plentiful, as rail companies were expanding westward with boomtown gusto. His nascent construction company consisted mostly of muscle and ambition. As the railways forged west, so too did the little Bechtel family, with Warren grading track beds in Indiana, Iowa, Minnesota, and Wyoming. Though a rugged and itinerant existence, the couple was optimistic, and welcomed the birth of their second son, Stephen Davison, while visiting Clara’s parents in Aurora, Indiana.

  When he was offered a job as gang foreman with the Southern Pacific Railroad in Reno, Nevada, during the winter of 1902–03, Warren was grateful for the opportunity. Eager for a more secure financial position, he had set his sights on the West Coast and the post–Gold Rush promise that existed in California. Warren embraced newspaperman Horace Greeley’s famous 1871 career advice to a young correspondent: “Having mastered these, gather up your family and Go West!”

  “I landed in Reno with a wife and two babies, a slide trombone, and a ten-dollar bill,” Warren later recalled. The railroad supervisor who had promised him the job had gone bust. Twenty-seven years old, Warren lived with his wife and small sons in a converted railroad boxcar. Discouraged, he hitched a ride on a buckboard to Wadsworth, Nevada—a remote railroad site on the banks of the Truckee River known for its wild mustang herd and native Paiute population. He found a job there as an estimator for the Southern Pacific, earning $59 a month. “He was learning all the time, but he seemed to me a natural engineer,” his supervisor later recalled. An engineer who worked with him during those early days described him as “a horse-drawn fresno-scraper type of contractor”—meaning an old-fashioned laborer who had come up the hard way on the railroad construction gangs.

  A series of jobs ensued from which Warren acquired technical experience in lieu of a formal education. From Wadsworth, he moved to Lovelock, Nevada, where he became a gravel pit superintendent at a quarry. He, his wife, and two young sons were a familiar sight at the primitive migrant job sites. He soon acquired the nickname “Dad,” as his ubiquitous brood called him. He bounced around various posts, gaining a reputation for efficiency and, especially, for mastering the newfangled modern transportation and construction equipment—most conspicuously the giant excavating machine called the steam shovel. “Many of the old-timers were reluctant to have anything to do with the big, belching mechanized monsters,” according to one account, “but Bechtel put them to immediate—and profitable—use.” That specialty brought him to the attention of an inspector for a construction firm, based in Oakland, California, that had a contract to build the Richmond Belt Railroad and to extend the Santa Fe line into Oakland.

  In 1904 Dad moved his family to Oakland, where a third son, Kenneth, was born. The city, named for the massive oak forest that dominated the landscape, was surrounded by redwoods, farmland, and rural settlements. Even then a sad relative to booming, raucous San Francisco, located six miles west across the San Francisco Bay, the city’s future as Northern California’s busiest seaport was not yet apparent. Still, its sunny and mild Mediterranean climate lured an increasing number of immigrants from throughout the country, and its population (eighty-two thousand upon the Bechtels’ arrival) would double in just six years. A few blocks away from their Linden Street home, tracks of the interurban electric line to San Francisco were being laid. Dad had the contract to fill the swamp at the head of Lake Merritt for Oakland’s Lakeshore Park.

  By 1906, Dad was ready to strike out on his own. At thirty-four years old, he obtained his first subcontract with the Western Pacific Railroad, building a line between Pleasanton and Sunol. This independent undertaking marked the birth of the modern Bechtel company. Dad began assembling the team of colleagues that would help him make construction history. For an extortionate fee, he rented the impressive Model 20 Marion steam shovel that had been memorably developed for the Panama Canal construction. When he purchased the imposing machine, thanks to a loan from his well-to-do father-in-law, his company was officially launched. His steam shovel was in great demand, and he undertook ever-larger railroad projects while expanding into building roads, tunnels, bridges, and dams. In large white block script, he stenciled “W. A. BECHTEL CO.” onto the red cab door. It would be another sixteen years before he would formally incorporate his business. Home now to a family of five, their residential boxcar was called WaaTeeKaa for the combination of their three toddlers’ baby names: “Waa-Waa” for Warren, “Tee-Tee” for Steve, and “Kaa-Kaa” for Kenneth.

  “Still largely undeveloped, California was booming . . . and, with the recent addition of the steam engine, railroads couldn’t lay track fast enough to link the new west to the rest of the country,” a newspaper described the moment. A man of unlimited ambition, Dad expanded his vision to the western slope of the Rocky Mountains, where he came into contact with the imposing and pugnacious sheep-ranching Wattis brothers of Ogden, Utah. W. H. and E. O. Wattis were the founders and chief executives of the Utah Construction Company—one of the great railroad construction firms of the West—who were devout members of the Church of Jesus Christ of Latter-day Saints. The sons of a forty-niner “whose trek to California ended six hundred miles short in . . . northern Utah . . . they were reared in the dynamic, enterprising environment of Brigham Young’s Mormon commonwealth,” wrote historian Joseph E. Stevens. They were notoriously reluctant to work with non-Mormon “gentiles.” But they admired Dad’s abilities and resourcefulness and, as W.H. reportedly put it to his brother: “Might as well ask him in as to have him bitin’ our feet.”

  The Wattis brothers wielded extraordinary political power in Utah. David Eccles, patriarch of the single largest Mormon fortune, leading tither to the church, and the father of Marriner Eccles, who would later become chairman of the Federal Reserve Board, supplied most of their capital. (The Eccleses’ formidable Utah Corporation was an international conglomerate of mining, shipping, and construction involved in the production of iron, coal, and uranium ore on three continents.) The Wattises gave Bechtel his most lucrative jobs to date: three large contracts for railroad lines in Northern California and central Utah. His work with the Northwestern Pacific Railroad required more sophisticated construction techniques, and he became the first contractor in the country to replace the horse- and mule-drawn freight teams with chain-driven, gasoline-powered dump trucks. At a yard in San Leandro, he retrofitted 1912 model Packards and Alcos with dump bodies. Referred to later as the “coming of age” period for the Bechtel organization, the completion of the last 106-mile stretch of the Northwestern Pacific line signaled the beginning of the company’s rise. “I never expected to have that much money in a lifetime,” the unlettered son of a small-town grocer confided to a friend upon receiving his nearly $500,000 payment.

  Now flush, he turned his attention to family—which included daughter Alice Elizabeth, born in 1912—purchasing a spacious Victorian home and furnishing it lavishly with rare Oriental rugs that had been exhibited at the 1915 Panama-Pacific International Exposition in San Francisco. He chose the Estudillo Avenue house in nearby San Leandro, where the children would have “more room to grow.” Evocative of his farm upbringing, the house was surrounded by acres of tomatoes and elaborate flower gardens. A tennis court on the grounds affirmed the family’s fresh wealth.

  But just as the official history of the company smooths over the “near misses, the bad judgment calls, and the numerous failures” of Dad’s early climb—as an academic critique of the corporate culture of Bechtel portrayed his dismal performance in the cattle, farming, and grading enterprises, not to mention the nomadic lifestyle to which he subjected his young family—so too are his subsequent fiascos whitewashed. “It is difficult to connect the sober-headed, hard-working straight-shooter depicted in the official history with the man whose main ambition on leaving home, for instance, was to play the slide trombone with a largely female dance band,” wrote Canadian postcolonialist professor Heather Zwicker.

>   Despite the revisionist and mythologizing company narrative of Warren A. Bechtel’s entrepreneurial individualism—the American exceptionalism that would be much ballyhooed by later generations of Bechtels—in the years following the Northwestern Pacific windfall, Dad made a string of bad calls. Smug with his newfound success, “and still fancying himself the wheeler-dealer of his youth,” according to Friends in High Places: The Bechtel Story—The Most Secret Corporation and How It Engineered the World, by Laton McCartney, he sank tens of thousands of dollars into an unsuccessful Oregon gold mine, followed by several hundred thousand more invested in a folding toothbrush company that tanked. The salvation of his fortune and future would lie not in the up-from-the-bootstraps chronicle that would become family legend, but with the US government. With government patronage, Bechtel was able to build a network of tracks and highways throughout the land at the very moment that railroad expansion and the automobile industry were exploding.

  Sales of Henry Ford’s iconic black Model Ts had passed the five hundred thousand mark by 1918—giving the Ford Motor Company a veritable monopoly, as a Ford was driven by more than half the car owners in America. Dad was not alone in recognizing that all of these cars needed roads to travel on, but he was among a handful of California builders positioned to capitalize on the new construction market. The Federal Aid Road Act had been approved in 1916 to meet the overwhelming demand, resulting in the creation of the US Bureau of Public Roads. Bechtel lobbied for a role, and in 1919 received the first federal highway contract in California. He first built the Klamath River Highway near the Oregon border; the scenic byway, considered an engineering marvel at the time, jutted through volcanic rock and granite. The following year, he built another highway for the federal government in Los Angeles County that ran through the rugged San Gabriel Canyon; this one required a bluff to be blasted down with the rarely used powerful explosive, picric powder. Next was the Generals Highway in Sequoia National Park, named after the largest, most famous giant sequoia trees—General Sherman and General Grant—and famous for its steep, often-impassable switchbacks. Then came the job of making additions and improvements to the highway system in Yosemite National Park, followed by contracts in New Mexico and Arizona to double track the Santa Fe Railroad from Gallup to Chambers.

  Dad, fleshy and always well groomed, gained a reputation for keeping his jobs orderly and his equipment in top condition. He espoused a “cleanliness is next to godliness” motto. He wore a trademark felt fedora and gold watch fob, and his dapper style set him apart from the workers on his many sites. Known for his hearty appetite, he hired the finest cooks and bakers he could find to accompany him to his worksites. Since his California labor force was composed mostly of what he called “eye-talians,” his cooks became expert at cooking spaghetti, for which Dad acquired a penchant. A stickler for verbal agreements and handshake deals with his associates—“When you can’t trust a man’s word, you can’t trust his signature,” he would declare—he also insisted on fifty-fifty partnerships. “Dad had no patience with 51-49 arrangements,” a former partner once said. “He used to say ‘No man with a sense of self-respect wants to be controlled on that kind of percentage.’ ”

  Although the business of road and railroad construction was steady and profitable, Bechtel began turning his attention to oil—the coming boom that accompanied the automobile. Predicting a surge in the development of the West’s oil and gas resources to meet the energy needs of a growing industrial economy, Bechtel envisioned a network of refineries and pipelines snaking throughout the country. The vision turned out to be prescient, heralding the establishment of an alliance between the Bechtel corporation and the largest oil and gas companies in the nation and, ultimately, in the world. Situated as he was in the heart of a flourishing American West, Dad garnered more contracts than he could manage, and in 1921 he partnered with a fellow Bay Area entrepreneur named Henry J. Kaiser. An “egomaniacal small-time construction tycoon,” Kaiser joined Bechtel in building major arteries that wound along the entire West Coast. The company took off in 1929 with the firm’s first gas line for the Pacific Gas and Electric Company (PG&E). Building more than a thousand miles of pipeline for Standard Oil and Continental Gas, he amassed a fortune of more than $30 million by the end of the 1920s, making his company one of the largest construction firms in America.

  At fifty-eight years of age, Dad was once again self-satisfied with his role as a newly minted western mogul. He gloried in the national and international influence he and his western partners exercised. He might have been content to enjoy the luxuries of his life, and the sweep of his enterprise, if not goaded into a construction challenge being called the “Eighth Wonder of the World.”

  When the Herbert Hoover administration announced in 1929 that it would accept bids to dam the Colorado River, Dad was leery. “It sounds a little ambitious,” he remarked drily to his protégé, Kaiser, about building the world’s tallest dam in a forbidding desert gorge. But when Kaiser compared the gargantuan project with the Egyptian pyramids and the Great Wall of China, promising that the Bechtel name would be etched on a bronze plaque at the dam’s crest in perpetuity, Dad was sold. That year he was the first western builder to become national president of the Associated General Contractors of America—a booster organization and powerful lobbying group—and he planned to brandish his political clout in both the state capital in Sacramento and in Washington’s inner circles. His petitioning would pay off.

  Meanwhile, Kaiser’s company followed the same path as Bechtel, by raking in government contracts for roads, dams, public works, and later the Kaiser shipyards.

  CHAPTER TWO

  Follow the Water

  For twelve million years, the nation’s wildest river snaked and slashed to its final destination in the Gulf of California. Then, one winter day in 1935, a massive wedge of concrete successfully plugged the destructive 1,450-mile Colorado River, ending its tempestuous journey in Black Canyon on the Arizona and Nevada border. The largest public-funded project up until then, Hoover Dam ushered in what author Marc Reisner has called “the most fateful transformation that has ever been visited on any landscape, anywhere.”

  The Colorado is not the longest, widest, or most abundant of American rivers. It has never been a major transportation or commercial thoroughfare, as its quarter-million-square-mile drainage basin meanders through some of the most rugged and desolate land in all of North America. Instead, what has defined it throughout history is its violent, irrepressible personality. “The Colorado has always been best known for the scars it left on the landscape, among them the greatest of all natural works, the Grand Canyon, a testament to the river’s primordial origin and its compulsive energy,” wrote Michael Hiltzik in Colossus: Hoover Dam and the Making of the American Century. “No river equaled its maniacal zeal for carving away the terrain in its path and carrying it downstream, sometimes as far as a thousand miles. No river matched its schizophrenic moods, which could swing in the course of a few hours from that of a meandering country stream to an insane torrent.”

  But thanks to a Bechtel-led consortium of little-known western construction companies, the unruly river was finally tamed, puddling up behind the six-million-ton curved concrete arch. As tall as a sixty-story skyscraper, as wide as two football fields at its bedrock base, and embodying enough concrete for a sixteen-foot-wide highway from San Francisco to New York City, Hoover Dam was an engineering epic. The greatest dam ever built in the entire world, Hoover “unequivocally announced the untapped industrial capacity of California and the West,” as California historian Kevin Starr wrote. The project made a lot of money for a lot of men, but it propelled Bechtel into a condition approaching that of a corporate nation-state.

  How the formation of the famous Six Companies joint venture came about has taken on mythological proportions. Over time Bechtel emerged as the primary builder of the dam, so that today the company website highlights it as its flagship megaproject. What is undisputed about the cons
ortium’s provenance is the fact that on a February morning in 1931, a group of twelve West Coast contractors assembled at the Engineers’ Club in San Francisco. “Two were aging Mormons who had graded the roadbed for the Western Pacific when it went through Utah,” Fortune magazine reported about the meeting. “Two others mixed railroad work with general contracting. One specialized in sewers and tunnels, one was a bridge builder, one a building contractor, and one . . . a sand, gravel, and paving man.” The dozen men had a conspicuous lack of formal engineering education, but an entourage of engineers, lawyers, and bankers were on hand to advise.

  Although they were the most powerful contractors in the West, none had the singular capacity to scrape together the $5 million bond required by the surety companies underwriting the construction of the dam—the largest bond ever written on a single job. The men, most of whom had never met one another, “came together to do collectively what they could not do individually: to set up an organization to bid on and build the huge dam on the Colorado River,” as Fortune described it.

 

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