Union Pacific's Historical Blunder?

[Murphy Siding]

  Nothing like bringing back a 2-1/2 year old thread!

     I'm half way through Nothing Like it in the World, and I remembered this thread.  (And yet, I can't ever remember what day of the week it is ). 

     It seems like the driving force behind building the UP (and the CP) wasn't so much adesire to build a good railroad for the long run, as it was to make a fast buck for the builders.  Their general principal was: "...Nail it down!  Get the thing built!  We can fix it later."  There seem to be a lot of instances where the surveyorslaid out a round about layout, in order to avoid expensive bridges, cuts or fills.  Also, as one poster mentioned above, the builders received a certain amount of land grants, based on miles of track built.  The was an instance, near Omaha, where the money men behind the UP had the surveyors make an 'oxbow' to the south, simply to gain more land grants in a desireable area.  Perhaps, the Wyoming coal mines mentioned fits that bill as well?

    

[Railway Man]

  Nothing like bringing back a 2-1/2 year old thread!

     I'm half way through Nothing Like it in the World, and I remembered this thread.  (And yet, I can't ever remember what day of the week it is ). 

     It seems like the driving force behind building the UP (and the CP) wasn't so much adesire to build a good railroad for the long run, as it was to make a fast buck for the builders.  Their general principal was: "...Nail it down!  Get the thing built!  We can fix it later."  There seem to be a lot of instances where the surveyorslaid out a round about layout, in order to avoid expensive bridges, cuts or fills.  Also, as one poster mentioned above, the builders received a certain amount of land grants, based on miles of track built.  The was an instance, near Omaha, where the money men behind the UP had the surveyors make an 'oxbow' to the south, simply to gain more land grants in a desireable area.  Perhaps, the Wyoming coal mines mentioned fits that bill as well?

Murphy, I think you're ascribing motives of excessive sophistication to the historical characters, a common error in historical analysis.  Put yourselves in the shoes of the people then.  How much did they know about the future?  How much personal risk were they taking?  How much of their lives were they consuming on a high-risk, all-or-nothing scheme?  The answers are very little, a lot, and a lot.  Most of us make decisions in our own lives based on hunches and hope.  The historical characters were not of superhuman pluck or intelligence. 

One thing they did know is that the wood and coal resources on the prairie were nil and that traffic demand was also nil, and if they were to fuel their railway's locomotives with any reasonable economy they needed either on-line coal or on-line timber, and if they were to have any hope of traffic that paid for the operation of the line, it had to be completed.  Whether the location chosen offered the best long-term value was so far down on the list of importance that for all practical purposes it was about as important as choosing the color of the paint on the locomotive's seatbox.  If the location resulted in the railway not being completed, or being financially inoperable, then the location was wrong. 

That said, if the locating engineers Dodge and Montague could select a route that solved the primary goals and simultaneously provide long-term economy and traffic potential, that was happy coincidence.  The fundamental inherent value of the Overland Route's geography was that it delivered both the immediate need -- very cheap to build to completion -- and the long-term need -- ability to grasp and inexpensively funnel vast amounts of rail traffic.  We tend now to focus far too much on the exceptions such as the Lane, Harriman, Carbon, Lucin, and Wadsworth Cut-offs rather than the rule; the rule is that 95% of the original alignment is still in use or within a stone's throw of the original.  There are not too many other expensive, fixed, and pioneer utilities still gushing forth billions of dollars in value every year, 50 years after construction. 

The land grants were a future potential value and of no present value whatsoever.  The grants were of so little present value that the land-grant railways procrastinated for decades in selecting all of their lands in the hope that some event would occur that would enable them to choose between this million acres of worthless desert and that million acres of worthless desert.  The cost of constructing the railways was so prohibitive, and the availability of capital so tenuous, that any notions of roundabouting the location were also about as high on the list of priorities as the color of the locomotive seatboxes.  There was however a direct cash subsidy per mile of track completed, and in the case of the first track laid west from Omaha, the location (following Papillon Creek) was at least in part chosen for its circuity.  Almost immediately the railway's management realized this was a poor strategy and subsequently the location was chosen for economy of construction and initial operation.

The North Platte-Laramie River route I think would have been in error then or now.  I view with little enthusiasm any railway alignment in a canyon as it carries the burdens of heavy curvature, slow speeds, exorbitant costs for adding capacity, and the inexorable processes of rock and earth sluffing onto the railbed or washing out from beneath it.  A siding we recently engineered on a transcontinental rail line passing through a canyon has the dishonor of being the most expensive siding ever added to this entire Class I railway, by a factor of three.  The gradients across Sherman Hill are mild, the speeds high, and the cost of maintenance almost as low as on the high plains of Nebraska.

RWM

[ndbprr]

Nobody has hit on the real reason from what I have read. The railroad in  recovering costs of construction received land in the form of land grants. Flat land got the railroad the land for seven miles on either side of the track.  Hilly got fourteen miles and mountains got twenty one miles of land.  Wyoming was mapped as mountains.  UP did the absolute minimum in the way of constuction to reach Wyoming first and benefit from the land grants.  They spaced ties as wide as possible, laid them right on the ground and basically built as cheap and fast as they could.  The Central Pacific in the meantime was mired in crossing the Sierras and  cutting tunnels out of granite.  The CP did such a fine job the same route is used today.   in addition  to the costs of operating the route you must deduct the value of the land Which is probably far more than the costs over the years.

[Railway Man]

Nobody has hit on the real reason from what I have read. The railroad in  recovering costs of construction received land in the form of land grants. Flat land got the railroad the land for seven miles on either side of the track.  Hilly got fourteen miles and mountains got twenty one miles of land.  Wyoming was mapped as mountains.  UP did the absolute minimum in the way of constuction to reach Wyoming first and benefit from the land grants.  They spaced ties as wide as possible, laid them right on the ground and basically built as cheap and fast as they could.  The Central Pacific in the meantime was mired in crossing the Sierras and  cutting tunnels out of granite.  The CP did such a fine job the same route is used today.   in addition  to the costs of operating the route you must deduct the value of the land Which is probably far more than the costs over the years.

I think I will differ with you about 100%.  The value of the land was zero at that time, and the value of the overwhelming majority of the land remained zero for decades after the transcontinental railway was completed.  Title to the land was not transferred to the railroads quickly and there was no ability to sell the land to pay for construction on a pay-as-you-go basis, or even a pay-a-few-years-later basis.  Much of the land still does have zero value.

The transcontinental railway was built cheaply because that's all the money the companies had.  They were taking an enormous risk with uncertain returns.  Investing more than the bare minimum into the alignment would I think have been something only a dreamer would consider. 

The idea that the CP built for the ages and the UP built cheap, or that the CP did a fine job and the UP a bad job, comes from who or where?  A journalist or historian making that claim in my opinion has a mind fully unencumbered by useful knowledge or experience with railway engineering.  Both railways used essentially identical standards for vertical and horizontal alignment, embankment, structures, rail, ties.  Ballast was native dirt in both cases.  The UP also built tunnels, through more difficult ground than the CP, and they are still in service too.  The CP route is just as heavily realigned as the UP; look at Myrick's Railroads of Nevada Vol. II for a map, or at the Trains May 1969 issue, and judge what you see.

What numbers do you use to assert the revenues from selling the land are more than the revenues realized from operating the railroad?  I have UP annual reports back to the 1870s and I don't see it. 

I think you're overestimating the long-term outlook of the investors in the UP and CP.  Few investors look long-term because they are humans that die in the short term.  Investors are people like you and me.  Most do not have significant cash to invest until later in our lives, and we want to get a return on the investment while we're still alive so we can enjoy it, or at least pass it onto our immediate children.  I'm not particularly interested in banking a dividend for my great-great-great-great grandchildren, which is what I'd be if we were just now inheriting the investment some ancestor might have made in the UP or CP. 

RWM

[ndbprr]

Yes you are correct at the time received but if the original poster wants to compare the historical cost through today of operating the railroad then the value today has to be considered also.

[Murphy Siding]

Murphy, I think you're ascribing motives of excessive sophistication to the historical characters, a common error in historical analysis.  Put yourselves in the shoes of the people then.  How much did they know about the future?  How much personal risk were they taking?  How much of their lives were they consuming on a high-risk, all-or-nothing scheme?  The answers are very little, a lot, and a lot.  Most of us make decisions in our own lives based on hunches and hope.  The historical characters were not of superhuman pluck or intelligence. 

RWM

I'm not sure that I'm ascribing motives of excessive sophistication to them.  It seems for the promoters of the transcon, the motives were actually pretty ancient:  "What's in it for me, and how do I get a bigger share?"   The surveyors seemed to have some higher motives in mind, that of building a road good enough to make it in the long run.  It appears to me, that the two groups clashed somewhat.  The compromise being, build it fast and cheap, on a good route, and we'll improve it as the (future) traffic requires.

     Some backers seemed to want to build a transontinental railroad.  Some backers seemd to simply want to make money off the construction of the railroad.

     I've read, in a couple places, that the backers kept yelling "faster! faster!", yet at the same time, were telling the builders to try to avoid expensive contruction; using cottonwood ties, with a 3 year life expectancy, for example.  Granted, I've come to believe that everything I read, about anything is skewed one way or the other.

     Did the other railroads built into the unkown of the western part of the country work under the same such conditions?

[Railway Man]

[

I'm not sure that I'm ascribing motives of excessive sophistication to them.  It seems for the promoters of the transcon, the motives were actually pretty ancient:  "What's in it for me, and how do I get a bigger share?"   The surveyors seemed to have some higher motives in mind, that of building a road good enough to make it in the long run.  It appears to me, that the two groups clashed somewhat.  The compromise being, build it fast and cheap, on a good route, and we'll improve it as the (future) traffic requires.

     Some backers seemed to want to build a transontinental railroad.  Some backers seemd to simply want to make money off the construction of the railroad.

     I've read, in a couple places, that the backers kept yelling "faster! faster!", yet at the same time, were telling the builders to try to avoid expensive contruction; using cottonwood ties, with a 3 year life expectancy, for example.  Granted, I've come to believe that everything I read, about anything is skewed one way or the other.

     Did the other railroads built into the unkown of the western part of the country work under the same such conditions?

Murphy, you've got at least three motives ascribed to the builders: make a fast buck, but loop around some to get more land grants, and worry about making sure there was good traffic sources for the future (Wyoming coal).  They're mutually exclusive. 

The locating engineer that had unrealistic expectations was Theodore Judah.  Montague and Dodge harbored no illusions about economic reality.  Judah was fired for cause. 

The promoters of the UP had little apparent desire to hold onto the property long-term, whereas the promoters of the CP did.  All of them wanted an immense reward commensurate to the large risks they were taking.  I think it's unreasonable of many critics to find that dishonorable. 

Cottonwood ties were the only practical choice for the UP until they reached Wyoming.  There wasn't any other wood available to them at any reasonable cost until that point.

The other pioneer railways of the West labored under similar or worse economic burdens.  The one that I find the most remarkable is the Southern Pacific, which was built with no equity financing.  Huntington paid the construction bills solely out of cash flow. 

RWM

[chicochip]

"Yes you are correct at the time received but if the original poster wants to compare the historical cost through today of operating the railroad then the value today has to be considered also."

Furthermore, you need to discount the cash flows (and future values) backwards to determine what the net present values were in, say, 1870 - and then again for 1909 - and then again forwards from 1870 to 1909 and 1870 to 2008. This can be done, but who has any IDEA what the discount factor should be?

Just my two cents worth that, with any luck, will be worth two million bucks in 150 years. Worth to whom? - I have no idea!

chicochip

[PwdOpd]

Mr. nanaimo37   I don't usually get into these discussions. Mostly I just read - laugh or just shake my head. I have one question -Have you ever been to Eastern Wyoming, specifically, the Wheatland or Medicine Bow area? Or what lies between? Enough said.    Paul

[Murphy Siding]

Mr. nanaimo37   I don't usually get into these discussions. Mostly I just read - laugh or just shake my head. I have one question -Have you ever been to Eastern Wyoming, specifically, the Wheatland or Medicine Bow area? Or what lies between? Enough said.    Paul

   I'm not nanaimo73, nor have I been to that part of Wyoming.  Can you explain what your comment means?  Thanks.

[Doublestack]

I've been to Wheatland - have you seen the powerplant there?  ITS HUGE.  

 I can't believe that W.T. Sherman and the boys didn't see that power plant smokestack from western Nebraska and ride up that way just to see what the deal was.   They'd have found another route in the process.   :-)

[MichaelSol]

 All of them wanted an immense reward commensurate to the large risks they were taking.  I think it's unreasonable of many critics to find that dishonorable. 

The organizers managed, through the Credit Mobilier, to give themselves $72 million in contracts to build a rail line only worth $53 million. Who, exactly, had the "risk"? How much, actually, was the "risk"? What, precisely, constituted the "risk"?

The developed historical record shows quite clearly that the only risk to the gentlemen was that someone might hurt themselves carrying the checks to the bank.

Rather than historical illiteracy, it is the continuing effect of the "Heroic" view of Western railroad building that manages to overlook one of the largest and best known graft scandals in American history to be able to pronounce that it is "unreasonable" to find such conduct "dishonorable".

 

 

[SD60MAC9500]

nanaimo73

So, how much does it cost UP to run a train 40 miles? Probably not very much. Less than an hours wages for the crew. Perhaps 50 gallons of fuel. It can't be that much. Now lets say the train has to climb 1,000 feet and go back down the other side. I would guess the fuel usage would probably triple, and it might take two hours. If Union Pacific ran 70 trains a day over that hill, costs would start to mount. You would need three tracks instead of one, for instance.If UP has been doing it for 136 years, the costs must be enormous.Perhaps $100 million? $1 billion? The Company could figure it out, I sure can't.
Construction of the Union Pacific started in 1865 in Omaha and proceded west along the Platte river. At present day North Platte, the river forked. UP could follow the South Platte River to Denver, but then the Rockies blocked further progress. How about the North Platte? UP makes heavy use of this route today for PRB coal trains as far as Joyce. This route could have continued to Fort Laramie, over South Pass and back to the present route around Fort Bridger.The Oregon Trail and the Mormon Trail took this route. The Pony Express ran this way for a year and a half until it was killed by the telegraph. Union Pacific chose to split the two. There were no settlements at the time, so the railroad founded Cheyenne and Laramie. Cheyenne became the Capitol in 1869 and Wyoming became a State in 1890. This route topped Sherman at 8,247 feet and was later lowered to 8,013 feet.
In 1909 the Union Pacific surveyed a cut-off from Yoder (near Joyce) to Medicine Bow along the Laramie River. This would have crossed the current BNSF (C&S) route at Wheatland, Wyoming's first permanent trading post (1834). The cut-off was not built because of the crippling effect it would have had on Cheyenne and Laramie.
Why didn't they go that route in the first place, did the surveyers miss it? Not saving 40 miles in distance and 1000 feet in altitude is a blunder in my books.
A lot of you out there write a heck of a lot better than I do.Do some research and you could have an article in Trains.
.

 

 

Including what others have mentioned about the Laramie River Canyon, including other canyon features. There's considerable tabletop land the cutoff would have to rise up and over with, compared to the southern route. Also keep in mind the Harriman Cutoff which lowered the grade siginificantly through Southern Wyoming, plays a key role today. 

[timz]

nanaimo73

Why didn't they go that route in the first place, did the surveyers miss it?

Sounds unlikely. No doubt the surveyors knew the North Platte River existed, and would be a lovely route to the Continental Divide, if only they could follow its canyon. After finding that that was too hard, they probably considered next-best possibilities, like the Laramie River. No idea why they rejected it.

[mudchicken]

GLO Filing Map records indicate that UP was the sixth and last railroad through that country with actual filed surveys in 1911. Only the Cheyenne & Northern (1866) actually built anything and that evolved into the C&S line that is now BNSF after starting under UP control. Laramie & Sweetwater Valley (1901), Eastern Wyoming RR (1887), Nebraska Wyoming & Western (1900) along with Wyoming Central (1886)were just so many broken dreams.

The surveyors and location engineers did their thing - somebody else got cold feet. As for Uncle Pete's failure to follow through, the answer probably resides in the Salt Caves of Omaha if it survived the UP headquarters hotel fire of 1885( Herndon House/date?)...The surveys that resulted in the GLO filing maps that show-up in the Washington card indexes and tract books were not cheap and took considerable $$$ to do.

[nanaimo73]

Anonymous

You can get most of your answers from Stephen E. Ambrose's "Nothing Like It in the World". Regarding the surveys west of Nebraska, he has this to say regarding the Laramie River route:

"To go north on the North Platte to the Laramie River was also impossible. Evans 'pushed through, taking three weeks to run 25 miles - a narrow, wild, precipitous gorge, and never before passed by man,' according to Dodge. It was therefore 'impracticable.' " (p 188)

Thanks for all the replies, now I need to read these books.

If I had taken more time back then I should have noticed that the Denver Pacific Railway opened in 1870, and the Sherman Hill line connected Denver with points west. I also should have thought about the time period, I am guessing most of UP's traffic during the 1860s was hauled by passinger trains, so the 40 mile and 1000 foot of grade savings were less important.

As for building that a route along the Laramie river around 1909, bypassing Cheyenne would of probably required the extra cost of a roundhouse and engine facilities somewhere? 

There was a need for more capacity by the early 1950s, judging by the 40+ mile low gradient 3rd mainline built around Sherman summit in 1952-53. Building a 95 mile new line and upgrading 183 more miles to North Platte would have been costly, and there was no way to know that 164 miles of the line in Nebraska would become a double track mainline for PRB coal 30 years later.

 

SD60MAC9500

 

 

 

 

 

 

 

Including what others have mentioned about the Laramie River Canyon, including other canyon features. There's considerable tabletop land the cutoff would have to rise up and over with, compared to the southern route. Also keep in mind the Harriman Cutoff which lowered the grade siginificantly through Southern Wyoming, plays a key role today. 

 

After another look at the map in the May 1969 Trains, I noticed the planned 1909 route leaves the river before the narrow part of the canyon, and rises over tabletop land just as you say. The original suryers were right, the river could not be followed.

[BaltACD]

From today's view of GPS and satellite views of locations and the application of 21st Century construction capabilities - we have to remember most of the railroads in the USA and Canada were surveyed and laid out by men on horseback that only had line of sight as their benchmarks for understanding everything as well as the understanding man power and horse power for constructing cuts and fills and black powder for what ever blasting needed to be done.

Castigating what was accomplished in the 19th Century from the 21st Century viewpoint is a laughable undertaking.

[tree68]

BaltACD

as well as the understanding man power and horse power for constructing cuts and fills and black powder for what ever blasting needed to be done.

I'm reading "Nothing Like It in the World" right now.  Thousands of men and hundreds of barrels of black powder, especially on the CP.

Today, one guy on a GPS guided dozer could do in one day what it took weeks to do in the 1860's.

I'll second the suggestion of that book - plenty of explanations on why certain decisions were made.

[JC UPTON]

"Nothing Like It in the World"

Stephen Ambrose had the nack of turning excellent historical reserach into quite readable books!!

 

[CSSHEGEWISCH]

Ambrose's books may have been readable but his research wasn't always top-notch.  My father was disappointed by "D-Day" since he all but ignored the contributions of the AAF and RAF in his writing.