Santa Fe down to $8 per ticket, Southern Pacific responded with $6. By that afternoon reports of rates as low as $1 to California

Early in January 1887, Crank went east to New York in search of expansion capital. Scarcely had he arrived in New York City when Crank received an urgent invitation to visit Washington, DC, from Leland Stanford, who was then representing both the state of California and the greater Southern Pacific interests as a United States senator. Almost simultaneously, Crank received a similar invitation from William Barstow Strong to come to Boston and meet with the Santa Fe’s board of directors. Crank was too prescient a businessman to doubt the topic both men wanted to discuss. The little Los Angeles and San Gabriel Valley Railroad was suddenly a pawn in a contest between two giants.

Having felt the heavy hand of the Southern Pacific in California firsthand, Crank eagerly accepted Strong’s invitation and took the next train for Boston. His railroad’s decision to build to standard gauge was about to pay huge dividends. Within an hour of meeting, Crank and Strong agreed to a “bargain” price for the short line. The exact dollars involved have not been documented, but whatever the amount, Strong was never afraid to spend money for strategic purposes. Crank’s little road was a thriving business in its own right—an 1886 net profit of $46,381 on gross income of $95,318—but most important to Strong, its railhead at Duarte was just 40 miles west of San Bernardino, where the Santa Fe tracks emerged from Cajon Pass.

Strong immediately put construction crews to work to close the gap between San Bernardino and Duarte. Clearly showing that it had been planning ahead, the Santa Fe already owned the right-of-way for a telegraph line between the two towns that helped to speed construction. Less than five months later, on May 31, 1887, Los Angeles welcomed the first Santa Fe train to arrive in town over its own independent tracks. The result was a rate war with the Southern Pacific, the intensity of which even Huntington could not have predicted.8

The Southern Pacific’s arrival in Los Angeles in 1876 had been welcome, but it did not unleash a huge Southern California boom. The population of Los Angeles took the decade from 1870 to 1880 merely to double to 11,183. During the same period, Denver mushroomed from 4,759 to 35,500, and San Francisco grew from 149,473 to 233,950.

Certainly there was no shortage of prospective settlers. Between 1860 and 1890, the population of the United States doubled from 31.5 million to 63 million people. One-third of the increase was fueled by immigration—mostly from European countries. The lack of immigrants to Southern California and its slow population growth stemmed in part from the cost of getting there. For starters, Huntington’s Southern Pacific was not offering any cut-rate deals. Chicago to Los Angeles fares averaged about $130 in the early years—equivalent to about $3,000 in 2008.

Immigrants were lured first to the farm belt of the Midwest and later to the Pacific Northwest and even northern California. In some cases, the Los Angeles Herald was probably correct when it bemoaned that would-be newcomers “say they can purchase homes [elsewhere] for what it would cost them to get here.”

There was also the issue of familiarity. European immigrants and East Coast transplants accustomed to winter weather, forested hills, and abundant water had to be sold on the potential of a different landscape. “It seems almost impossible, by the exercise of any human powers of description,” one Southern Pacific agent observed in 1884, “to bring them [potential immigrants] to a realization of the greater personal comfort, afforded by your equable and salubrious climate, and the additional productiveness and value that climate imparts to the soil on which it rests.”9

But promoters kept singing the praises of warm weather and sunny skies, and after the Santa Fe arrived on the scene to give some rate competition, a new wave of visitors began to ride the rails into Southern California. Most weren’t coming to stay, but they were the advance guard of a growing group of winter visitors. “Like birds of passage,” one resident observed, “the whole flock took wing as soon as the almanac announced that spring had come, leaving only a few to conclude to settle.”

Then in the spring of 1886, with the Santa Fe line complete over Cajon Pass, this seasonal exodus was balanced by a steady flow of incoming settlers throughout the summer. Once the Southern Pacific and the Santa Fe went to war over rates the following winter, the dam burst wide open.

At least one version of the “California for a dollar” story tells of a wild seesaw battle raging back and forth between the rate departments of the two railroads. First the Southern Pacific lowered its first-class ticket to $100. The Santa Fe announced fares for less than $100. As the price for fares between Chicago and California plummeted, each road shaved a few more dollars. Supposedly, on the morning of March 6, 1887, a furious exchange of telegrams found the Santa Fe down to $8 per ticket, to which the Southern Pacific responded with $6. By that afternoon, there were reports of rates as low as $1 per head.

Railroad accountants quickly brought their respective marketing departments to their economic senses. Fares promptly rebounded to $50 for first-class and $40 for second-class tickets, but the publicity accompanying the cry of $1 tickets to California had been heard. No more would the Midwest farmer, the newly arrived European immigrant, or the vacationer looking for a warmer climate think that they could not afford a passage westward.10

The result was that by the summer of 1887, the Southern Pacific and Santa Fe lines were both awash with huge numbers of passengers heading to California—many of whom put down roots and stayed. The flood of newcomers hurrying across the continent was reminiscent of the rush of the forty-niners. Only this time, instead of plodding along behind covered wagons pulled by oxen, these argonauts tossed their belongings into a freight car and rode across the country at twenty-five miles an hour in the comparative splendor of an immigrant-class coach.

Real estate prices in Southern California skyrocketed. Within a year, property transfers “increased from 6,000 to 14,000 and from $10 million to $28 million” in 1886 and then in 1887 reached 33,000 and $95 million. This boom would suffer a temporary bust two years later, but that would not stem the long-term trend. By 1890, the population of Los Angeles had quadrupled to more than 50,000 and a Santa Fe vice president predicted, “people will continue to come here until the whole country becomes one of the most densely populated sections of the United States.”11

Seizing upon this boom, the Santa Fe was not content merely to terminate in downtown Los Angeles. Strong undertook just the sort of local network expansion that Huntington had feared. Separate companies built these lines, but they had one thing in common: They all answered to the dictates of the Santa Fe.

Under the moniker of the San Bernardino and San Diego Railroad, the Santa Fe built a second independent line from San Bernardino into Los Angeles via the town of Riverside and Orange County. Running through the gap between the Chino Hills and the Santa Ana Mountains, this 70-mile leg opened in August 1888.

Inaugurated in 1892, the California Limited became the first of the Santa Fe’s crack passenger trains between Chicago and Los Angeles; here engine no. 53, a 4-6-0 ten-wheeler, waits with its consist at La Grande Station in Los Angeles. (Colorado Historical Society, scan 20104180, W. H. Jackson Collection)

That same year, what came to be called “the Surf Line” was extended south along the coast to Oceanside and Del Mar and on into San Diego. This was part of the Santa Fe’s plan to mollify San Diegans, but more important to the railroad’s operations, this leg bypassed the original California Southern route through flood-prone Temecula Canyon. The town of Temecula withered as a result, and when another flood swept down the Santa Margarita in 1891, the original California Southern tracks were not rebuilt.

The Santa Fe also reached out from downtown Los Angeles to the coast. Branch lines were built south to Redondo Beach to gain access to a harbor and west to Santa Monica to compete with the Southern Pacific’s ownership of Senator Jones’s original Los Angeles and Independence. Both of these lines quickly became popular tourist routes to serve the developing ocean-side resorts, and their success was a portent of what the overall tourist trade would soon become to the Santa Fe.

Having reached Los Angeles and broken down the Southern Pacific’s fence around California, the Atchison, Topeka and Santa Fe was poised for the next chapter of its expansion. To be sure, there would be some rough spots in the tracks up ahead, but the proven leadership of Thomas Nickerson and William Barstow Strong had laid a solid financial and geographic foundation that would serve it well come what may.

In the last annual report he authored for the company, that of 1888, Strong wrote: “The history of Western railroad construction for the past quarter of a century has demonstrated that successful results can only be attained by occupying territory promptly, and often in advance of actual business necessity. This was the policy of the Atchison Company from the first,” Strong insisted. “It led the way. It built, not upon assured returns of profit, but upon a faith which time has abundantly vindicated—that the great Western and South-western regions of the country were rich in possibilities and that the company which first occupied the territory would reap the first and greatest rewards.”12

At the end of 1888, the Atchison, Topeka and Santa Fe owned, operated, or controlled 7,706 miles of railroad—much of it in first-class condition. The little railroad that first steamed out of Topeka had become a corporate powerhouse in America’s transcontinental sweepstakes. About the only thing that hadn’t changed since it laid its first rails in 1869 was that Cyrus K. Holliday was still on its board of directors. “Santa Fe,” Holliday had once rhapsodized, dreaming of a destination. Soon that dream would become the reality of “Santa Fe all the way.”

“Rival Rails: The Race to Build America’s Greatest Transcontinental Railroad” by Walter R. Borneman.