Long Live the Octopus

When Frank Norris wrote about the Octopus at the dawn of the century, he was referring to the Southern Pacific Railroad. These days, of course, we don’t think of railroads as devouring beasts anymore. They seem to have slipped away in our brains to the same place reserved for steamship travel and wristwatches that tick.

And so, when the Southern Pacific announced last week that it would soon pass from the scene, having been absorbed by the Union Pacific, the news accounts leaned heavily toward the new corporate creature. The evaporative demise of the Southern Pacific itself created hardly a ripple.

A pity, really, because the Octopus deserves more. You could argue that California, even in this modern day, is but a reflection of the Southern Pacific’s design. No single company ever held, in any other large state, the power and influence that the SP held in California. It created some cities and destroyed others. It determined which industries would rise and which would fall. It owned governors, entire legislatures and political parties. No one had seen anything like it before, or have they since.

“In no other region of the United States did a railroad enjoy such a degree of freedom from competition,” writes historian Walton Bean.

Another historian, Oscar Lewis, once complained that he could not find unbiased views of the Southern Pacific from its own heyday because, he said, the company affected--for good or ill--virtually every enterprise in the state.

The railroad began as the dream child of Theodore Dehone Judah, otherwise known as “Crazy Judah,” who soon attracted four merchants from Sacramento to his scheme of linking the continent via railroad. Dozens of other investors and banks had declined to take part in the project because they believed it would fail.

The partners did not fail, completing the first route across the country at Promontory Point, Utah, on May 10, 1869. But by the time the golden spike was driven, Judah had departed the company, disgusted by the business ethics of his partners.

Those partners were Mark Hopkins, Leland Stanford, Charles Crocker and Collis P. Huntington. Their last names alone suggest the legacy they left California, from Stanford University to the Crocker Bank to the Huntington Library. Let’s coin an old phrase and say they were the men who matched our mountains.

And a more dastardly bunch the state has never seen. With their monopoly over cross-continental shipping, they set rates according to what the traffic would bear. “Often its agents would demand to examine the shipper’s books, and then set the rate according to what they thought he could afford to pay,” writes Bean.

The company also told cities where to locate in order to receive its business, and then how much the cities would pay for that business. When San Bernardino declined this extortion, the SP made an example of it by moving its switching yards a few miles down the road to the new town of Colton.

Colton, incidentally, was named after the deceased David D. Colton, an early partner to the Big Four whose widow had been cheated of her share of the company and who refused to attend the city-naming ceremony.

Eventually the SP also tried to tell Los Angeles where to locate its port, maneuvering the city away from its own site in San Pedro and toward the SP site at Santa Monica. Since the SP owned virtually the entire Santa Monica coastline at the time, it would have controlled all port activity there. An act of Congress was required to give Los Angeles the right to determine its own port.

In some ways, you can think of SP as the Microsoft of its day, controlling the new technology that controlled the economy. Except the SP had no competitors. Picture the world of computers where Microsoft reigns without bothersome interference from Intel or Compaq or Netscape. That’s the kind of world that SP enjoyed for three decades.

For what it’s worth, the SP also put Los Angeles on the map. The first great land boom in Southern California took place in the 1880s because the SP, and later the Santa Fe Railroad, had completed new cross-country routes into Southern California and needed passengers to fill the trains.

A fare war ensued with passenger rates from Missouri to Southern California falling from $125 to $1 in a matter of months. In 1887 alone the SP brought 120,000 people to Southern California, almost doubling the region’s population. “The result of this war,” a newspaper commentator wrote at the time, “was to precipitate such a flow into Southern California as to have no parallel.”

And, in the end, it was Southern California that broke the SP. A reform group blossomed here, naming itself the Lincoln Republicans and taking its goal as “the emancipation of the Republican Party in California from the Southern Pacific Railroad Company.”

The Lincoln Republicans eventually championed for governor a young prosecutor in San Francisco named Hiram Johnson and the rest, as they say, is history. Johnson and the reformists ended the SP’s reign forever.

But by then the essential backbone of the state had been formed. The era of gold mining had passed and agriculture had taken its place. The state’s timber industry dominated the West. And Los Angeles was growing into the great, dominant city of the Pacific region. All because the SP wanted it so.

Now, within a few months, the Southern Pacific will slip away, and we will find little to remark on. Just the SP, just another beat-up old railroad.

The Octopus is dead. Long live the Octopus.