The Age of Gold

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The Age of Gold Page 49

by H. W. Brands


  The delay pushed the celebration back two days. (California couldn’t wait, and went ahead with the party that had been scheduled for May 8.) As luck would have it, a wagon train hove into view of the Promontory crowd as the final tie was eased into place; the juxtaposition of old and new struck the celebrants as fittingly dramatic. Stanford swung a silver-plated sledge to drive a spike of California gold into a tie of laurel cut from the slope of Mount Tamalpais. Durant did likewise, and the process was repeated with two other spikes: of Nevada silver, and Arizona iron, silver, and gold. Later tales that the two men had missed their marks weren’t borne out by contemporary evidence, and anyway were rendered implausible by the fact Stanford and Durant didn’t actually have to drive the spikes, which were too soft and precious to be roughly handled, and so were merely tapped into predrilled holes. (The confusion apparently arose from the fact that after the ceremonial spikes and tie were removed, ordinary substitutes were put in their place. Stanford took a full swing at an iron spike and did miss.)

  Telegraphers of the two companies had rigged wires to the spikes, so that the hammer taps closed a circuit and sent the welcome news of completion east and west. California exulted (a second time); Chicago cheered; New York and Philadelphia rang the bells, respectively, of Trinity Church and Independence Hall. In Washington, Ulysses Grant, now president, heard the news at the White House.

  William Sherman, who had assumed Grant’s old position as commanding general of the army, got the signal at the War Department. “I sat yesterday and heard the mythic taps of the telegraphic battery announce the nailing of the last spike in the great Pacific road,” he wired Grenville Dodge, in congratulation. Promising to try the railroad soon, Sherman said his next trip west would be rather faster than his first, “when the only way to California was by sail around Cape Horn, taking our ships 196 days.”

  The people who come to California are bold adventurers naturally. We were dissatisfied with life in Europe and the Eastern states, because it was too slow. We came here to enjoy an exciting life and make money rapidly….It is no uncommon thing to see men who have been wealthy on three or four different occasions and then poor again. “A fire,” “an unfortunate speculation in merchandise,” “a revulsion in real estate,” “a crash among the banks,” “an unlucky investment in a flume,” these are the phrases used every day to explain the fact that this or that man of your familiar acquaintance, though once rich, is now poor. When men fail they do not despair … they hope to be rich again.

  —John S. Hittell, Forty-Niner and author

  One man works hard all his life and ends up a pauper. Another man, no smarter, makes twenty million dollars. Luck has a hell of a lot to do with it.

  —Charles Crocker

  If the modern era in American history—call it the age of gold—was born at Coloma in 1848, it reached maturity at Promontory in 1869. By then the youthful effervescence of the Gold Rush years—the race from all over the world to California, the frantic assault on the goldfields, the wild times in San Francisco and the mining camps—was fading into memory. The Forty-Niners were growing arthritic; the placermen had long since been muscled aside by the hydraulickers and quartz borers; many of the camps had closed and fallen into ruin; San Francisco was dully proper compared to the days of the vigilantes and the nights of the wall-to-wall gambling hells. Mining remained the leading industry in California, but ever more it was an industry rather than a vehicle for personal hopes and ambitions. Immigrants still flocked to the state, but they did so for the same reasons they flocked to America generally. California, in short, was becoming more like the rest of America.

  Yet something else was happening, something of deeper significance: America was becoming more like California. The change commenced the moment the golden news from Coloma reached the East and the visions of the yellow metal littering the ground set imaginations aflame. In that moment a new American dream began to take shape. The old American dream, the dream inherited from ten generations of ancestors, was the dream of the Puritans, of Benjamin Franklin’s Poor Richard, of Thomas Jefferson’s yeoman farmers: of men and women content to accumulate their modest fortunes a little at a time, year by year by year. The new dream was the dream of instant wealth, won in a twinkling by audacity and good luck. This new dream—the dream of El Dorado— wasn’t without precedent in American history. The gentleman- adventurers of the Virginia Company had hoped to strike gold on the James River in the seventeenth century, just as the conquistadors of Spain had struck gold in Mexico and Peru in the sixteenth century. But when no gold appeared in the rivers that ran to the Atlantic, the Virginians and other American colonists adopted a different pattern, more pedestrian and better suited to the virtues of sobriety, thrift, and steady toil that facilitated success in an agricultural society and formed the archetype of the original American character.

  The golden dream resurfaced and became a prominent part of the American psyche only after Coloma. James Marshall’s discovery electrified the country (and the world), holding forth the promise that wealth could be obtained overnight, that boldness and luck were at least as important as steadiness and frugality—that El Dorado, not some Puritan city on a hill, was the proper abode of the American people. Under the Puritan aegis of the old American dream, material success required unflagging effort and constant virtue, while failure connoted weakness of will or defect of soul. The California experience provided a persuasive riposte to this received version. Success in the goldfields could come overnight, and signified not virtue but luck. John Frémont was no more virtuous than a thousand other argonauts, but he became a thousand times richer.

  Where life was a gamble and success a matter of stumbling on the right stretch of streambed, old standards of risk and reward didn’t apply. In the goldfields a person was expected to gamble, and to fail, and to gamble again and again, till success finally came—success likely followed by additional failure, and additional gambling—or energy ran out. Where failure was so common, it lost its stigma. No one in California counted the failures, only the rich strikes that rewarded the tenth or hundredth try. The entrepreneurial spirit had never been absent in American history; every immigrant to America was an entrepreneur of sorts. But in the goldfields the entrepreneurial spirit took flight, freed from the inherited fetters of guilt and blame. And once a-wing in the West—the region to which America had always looked for its future—the spirit soared over all the country.

  The no-fault ethos of the new era was hardly an unmitigated blessing. The age of gold was also the age of speculation, corruption, and consolidation on a scale unimaginable before Coloma. Traders in mining shares, in rail stocks, in gold itself colluded to drive prices up or down, and frequently purchased the cooperation of journalists and government officials to abet their schemes. Industrial magnates forged monopolies to extend their power, creating corporate behemoths that intimidated the public and acted as a law unto themselves.

  Yet for all its sordid side, the new American dream was an enormously creative force. It unleashed the energies of the American people, and of the many millions of foreigners who, drawn by this compelling dream, chose to become Americans. (It also unleashed the energies of those who stayed in other countries—or in some important cases, returned to other countries from America—and emulated the argonauts of California.) It raised the American standard of living beyond anything ever achieved so broadly. It afforded the most basic freedom—freedom from want—to more people than had ever enjoyed such release. And it gave unprecedented meaning to that really revolutionary idea of Thomas Jefferson: that humans have a right to the pursuit of happiness.

  17

  Prometheus Unbound

  As the construction crews of the transcontinental railroad raced toward their Utah meeting, Jessie and John Frémont traveled to St. Louis for the unveiling of a statue of Thomas Benton. Jessie’s father had died some years earlier, still at odds with many Missourians regarding slavery, but now that the Civil War was over his former
constituents recalled the unifying aspects of his legacy. “There were more than forty thousand people in the park, hundreds of public school children, both boys and girls, dressed in white and carrying bunches of red roses, father’s favorite flower,” Jessie told a friend after the ceremony. Speaker after speaker recounted the accomplishments of the distinguished senator. Yet one accomplishment stood out, in Jessie’s mind and in the minds of those who commissioned the monument. “Though the sun shone bright, I looked through a mist of tears at the bronze image of my father facing westward with the words carved below: ‘There is the East. There lies the road to India.’”

  At the golden-spike ceremony, one of the speakers recited Benton’s prophecy that California was the way to India. Listening, Leland Stanford certainly hoped it was true. Stanford and his associates intended for their railroad to corner the traffic between the American East and the Asian East, which heretofore had traveled around Cape Horn or the Cape of Good Hope. But they were disappointed, for as important as the Pacific railroad was in the history of transportation, it shared top billing that year with the Suez Canal. The French-sponsored Egyptian canal shortened the water route to the Far East by thousands of miles, undercutting the railroad men. “We were very much disappointed with regard to the business with Asia,” Stanford said. “We were very busy building our road, and we had not taken much account of what was going on in the matter of the construction of the Suez Canal. I think the whole country anticipated that when this road was built there would be a great business with Asia, but the opening of the Suez Canal during the very season that we completed our road disappointed us in that anticipated business.”

  Yet if the Pacific railroad failed to capture the wealth of Asia, it accomplished something far more wonderful. It afforded continental scope to the productive powers of the American people. At once, of course, the railroad linked the mines of the American West to the markets of the American East. No more would the nation’s finances be at the mercy of storms like that which sank the Central America; the rail line to California became an artery coursing with financial liquidity, the lifeblood of commerce. And the line to California was merely the start of a larger, more elaborate continental network that carried America into the modern age of industry, an age and an arena in which the United States soon outstripped all other nations. The secret of America’s ascent to economic primacy was neither the cleverness of its inventors (England’s were as smart) nor the richness of its resources (Russia’s were richer). Rather, the secret of America’s success was its vast domestic market, the largest single market in the world. The Constitution of 1787, by forbidding interstate tariffs, established the legal framework for the American market; the railroad of 1869, and the lines that followed it, by speeding traffic across the length and breadth of the continent, laid the physical framework. Now manufacturers in any part of the country could build plants big enough to serve every part of the country, confident that their wares could be shipped to the farthest districts swiftly and cheaply. The railroads were equally adept at transporting agricultural produce, allowing the different farming districts to specialize and thereby exploit their comparative advantages—the South for cotton and tobacco, the Midwest for corn and wheat, Texas for cattle, California for fruits and vegetables—and further freeing the industrial regions to concentrate on manufacturing.

  The results were little short of miraculous. Between 1869 and the end of the nineteenth century, the American economy grew as no economy had ever done before and very few did after. From a laggard in the race to industrialize, trailing Britain, Germany, and France, the United States became the leader of the pack, with a manufacturing output that, by 1900, surpassed the three European powers combined. Iron and steel production multiplied ten times between the commencement of construction of the Pacific railroad and the beginning of the twentieth century. The production of oil—whose discovery in western Pennsylvania in 1859 sparked a rush remarkably akin to the rush for California gold—multiplied more than twenty times during the same period. Agricultural output boomed as well. Cotton and wheat doubled in the two decades after Promontory, and continued to climb through the end of the century. So bountiful was the harvest, and so tremendous the production of America’s shops and factories, that although the country’s population doubled between 1870 and 1900—which fact itself attested to the power of the American economy, in providing the jobs that attracted the tens of millions of immigrants— American producers fed, clothed, and housed all the new people (fed, housed, and clothed them better, on average, than Americans had ever been supplied before) and dramatically increased American exports besides. The growth wasn’t uniform over time: wrenching recessions in the 1870s and 1890s briefly set the economy back. But in each case the hiccup gave way to renewed growth, and the engine of national prosperity roared again to life, hurling the nation ahead faster than before.

  WITH THE UNPRECEDENTED economic growth came an unprecedented concentration of economic power. Leland Stanford was hardly the master monopolist of the age—John D. Rockefeller held that dubious distinction—but Stanford’s Central Pacific was sufficiently powerful to inspire fear in its competitors and loathing in many of its customers.

  After its rocky start—that is, after Congress amended the original railroad law—the Central Pacific became a money machine. The federal, state, and county subsidies of lands and loans, besides underwriting construction, encouraged investors regarding the future of the Central and made the share holdings of Stanford and his partners almost as good as gold. Stanford and the others also benefited directly from the construction of the railroad, having formed a second, closely held corporation, Crocker & Company—subsequently called the Contract and Finance Company— to serve as general contractor. The Central Pacific paid the Contract and Finance Company to build the railroad, funneling profits to Stanford and his associates long before the Central itself began to pay. (In sending Jane some stock certificates of the Contract and Finance Company, Stanford confided, “These shares of stock are very valuable.”)

  The cozy relationship between the Central and the Contract and Finance Company raised questions among Stanford’s critics, a group that grew as the power of the Central Pacific increased. The questions were nowhere near as pointed as those directed at the Union Pacific and its counterpart to the Contract and Finance Company, an entity called the Crédit Mobilier, which became the subject of journalistic exposés, the focus of congressional inquiries, and a watchword for collusion between private corporations and public officials; but the questions did require Stanford to respond. His answers were characteristically unemotional and, for that reason, often effective. During one difficult election in California, a hostile Sacramento paper accused the Central Pacific of interfering in politics; more in sorrow than in anger Stanford denied the accusation. “It is the well settled policy of the company to keep the railroad out of politics,” he explained. He went on to say that the railroad had friends enough among fair-minded persons to guarantee fair treatment by government; any effort to ask more would rightly risk a backlash. “The Pacific Railroad [that is, the Central Pacific] seeks to be on good terms with every one. There is no interest in the State whose prosperity can by any possibility be prejudicial to the Pacific Railroad.”

  On another occasion a reporter queried Stanford regarding his political role, a role that was commonly judged to be uncommonly large. “You have been accredited with controlling state politics and with being deeply interested in political affairs,” the reporter said. Did the governor—the title by which Stanford still enjoyed being addressed—care to respond?

  Stanford disavowed not only the influence ascribed to him but also any compelling interest in politics. “I suppose you will scarcely credit me when I answer you that I know but little of political matters and that I care less. I am so absorbed in railroad concerns and so entirely employed in business affairs that the details of politics do not interest me, and if they did I have no time to devote to them.” Questioned
further, Stanford explained that popular perceptions lagged present reality. “When our enterprise was a new one, we had many things to ask and many favors to solicit. We had to demand necessary legislation in order to protect ourselves and carry out our undertaking; we felt the necessity of at least not having our enemies in power to obstruct us by unfriendly laws. This necessity no longer exists, and we now only desire just legislation; we only demand our legal rights, and we do not doubt that they will be accorded to us by any party that shall succeed to power in this state.”

  This interview took place on California Street in San Francisco, just down the hill from where builders were constructing a magnificent new mansion for the Stanford family. Gesturing toward the unfinished structure, Stanford told the reporter:

  You may assure the readers of the Chronicle that I have more important matters on my mind than politics. I have an ambition in altogether a different direction. I know the distrust there is abroad in the community against myself and the management of this great railroad enterprise; but I shall outlive it and all the jealousy such misunderstanding has inspired. I shall hope to live to sit upon yonder balcony and look down upon a city embracing in itself and its suburbs a million of people. I shall see trains of cars laden with merchandise and passengers coming from the East along the present Transcontinental Railroad. I shall see long trains from the line of the 32nd parallel. I shall see cars from the city of Mexico, and trains laden with the gold and silver bullion and grain that comes from Sonora and Chihuahua on the south, and from Washington Territory and Oregon on the north. I shall see railroads bearing to and fro the produce and merchandise of each extreme. I shall look out through the Golden Gate and I shall see there fleets of ocean steamers bearing the trade of India, the commerce of Asia, the traffic of the islands of the ocean—steamers from Australia and the southern Pacific. I shall see our thronged and busy streets, our wharves laden with the commerce of the Orient, and I shall say to myself, “I have aided to bring this prosperity and this wealth to the state of my adoption and to the city in which I have chosen my home.”

 

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