Although the loose language of national lawmakers made possible the great railroad race, it was motivated by practical considerations far removed from the halls of Congress. Every mile of track, of course, brought its reward in subsidy bonds and land grants. But there were other compelling reasons for speed. Above all, both companies aimed for Ogden and Salt Lake City, for the railroad that captured these Mormon cities would control the traffic of the Great Basin. If the Central Pacific won, it would carry the trade of the Great Basin over its tracks to San Francisco; if the Union Pacific won, this commerce would flow east to the Mississippi. Each contender, therefore, strained to reach Ogden and shut the other out of the Great Basin.
Each company, moreover, bore a constantly mounting interest on the Government loan and on its own securities. Although the 1864 Act gave them until 1875 to finish the road, every day that tied up capital in construction without the offsetting returns of operation made the burden of interest heavier. The Central Pacific faced the hard reality that the line over the Sierra Nevada had been expensive to build and would be expensive to maintain and operate. Without a compensating mileage on the level country of Nevada and Utah, the railroad would be unprofitable. Finally, the surge of public interest that focused on the Pacific Railroad provided a less tangible but no less powerful incentive. Both companies were convinced that the one that built the greatest length of railroad would enjoy the greatest prestige in the eyes of the Nation.
The Railroad Act of 1866, produced largely by the lobbying of Collis P. Huntington, cleared the way for the race. It restored the provisions of the 1862 Act by authorizing the Central Pacific to "locate, construct, and continue their road eastward, in a continuous completed line, until they shall meet and connect with the Union Pacific Railroad." This act did not specify where the point of junction would be, and from president down to spikers and gaugers, the men of the U.P. and the C.P. set out to advance that point as far into the territory of their competitor as possible.
Two provisions in the acts of 1864 and 1866 helped. One permitted the companies to grade 300 miles ahead of end-of-track. The other permitted them, upon completion of acceptable grade, to draw two-thirds of the Government subsidy bonds before the track had been laid.
As soon as Congress passed the 1866 Act, Chief Engineer Montague sent C.P. surveyors to run lines north of Great Salt Lake and east of Ogden in the Wasatch Mountains. By the spring of 1868 they were working next to the flags of the U.P. survey near Fort Bridger, Wyo. Union Pacific surveyors, meanwhile, had staked out a line across Utah and Nevada to the California border.
During 1868 and 1869, the decisive years of rivalry, both companies put grading crews far ahead of track; the Union Pacific even leap-frogged some graders as far west as Humboldt Wells, Nev. in June 1868 Leland Stanford took the stage to Salt Lake City. During the next 6 months he contracted with Brigham Young and other prominent Mormons to grade the line of the C.P. from the vicinity of Humboldt Wells to Ogden, Utah, a distance of about 200 miles. The U.P. had already let a $2 million grading contract to Young for work between Echo Summit and Promontory Summit.
Thus Mormon crews worked on parallel grades, deriving considerable profit from the rivalry and perhaps a measure of satisfaction at the discomfiture of the companies that had bypassed Salt Lake City. In the final reckoning, the Union Pacific and Central Pacific spent about $1 million on grade that was never used. Also, since the U.P. in the end could meet only half of its financial obligation to the Mormons, Brigham Young obtained $600,000 in U.P. rolling stock to equip his own Utah Central Railroad.
By the end of 1868 the Union Pacific had finished grading to the mouth of Weber Canyon and was laying rails down Echo Canyon. The Central Pacific, its track still in eastern Nevada, had made good progress on grading between Monument Point and Ogden. Both companies forged ahead. Expense was a secondary consideration. The important thing was to reach Ogden first.
In October the Central Pacific had worked a clever stratagem which came very near succeeding. It had filed with the Interior Department maps and profiles of its proposed line from Monument Point to Echo Summit. Secretary of the Interior Orville H. Browning, who had been hostile to the Union Pacific throughout, accepted the documents. Stanford then proceeded on the theory that the Central Pacific line was the true line of the Pacific Railroad, and the only one on which subsidy bonds could be issued. In Washington, Huntington filed application for an advance of $2.4 million in subsidy bonds, two-thirds of the amount due for this portion of the line.
The Union Pacific, of course, protested mightily. Dodge and the Ames brothers hurried to Washington and used all their influence to block the move of the Central Pacific. Browning retreated and in January 1869 appointed a special commission, headed by Maj. Gen. Gouverneur K. Warren, to go west and determine the best route through the disputed territory. Congressmen friendly to the Union Pacific exacted a pledge from Secretary of the Treasury Hugh McCulloch that he would not issue the bonds until the commission had reported the results of its investigation.
They failed, however, to take account of Huntington's powers of persuasion. As the administration of President Andrew Johnson drew to a close, the Treasury Department prepared the bonds for issue. By March 4, 1869, when Ulysses S. Grant took office as President, it had turned over $1.4 million to Huntington. When the Warren Commission reached Utah, it found that the Union Pacific was almost to Ogden and had obviously won the race. The commissioners therefore confined their investigation to the line between the two railheads. But the issue was to be resolved in Washington, where the new President and the officials of both railroads had been brought by events to appreciate the necessity of working out a compromise.
Dodge and several others interested in the Union Pacific met with Huntington in Washington on April 9, 1869. They drew up an agreement "for the purpose of settling all existing controversies between the Central Pacific and Union Pacific Railroad Companies." The agreement gave both railroads access to the Great Basin, with the terminus to be located west of Ogden at a point to be agreed upon by both companies. The U.P., however, was to build west from Ogden to Promontory Summit and there unite with the C.P. Then it was to sell this segment of the line to Central Pacific. Subsidy bonds were to be issued to the Union Pacific as far as the terminus near Ogden, and to the Central Pacific from the terminus west. The following day, April 10, Congress by joint resolution put its stamp of approval on the agreement.