Photos from the Vault

San Luis Obispo made Southern Pacific an offer it could not refuse

Tunnel 10 on the Cuesta Grade was shut down and bypassed after a cave in made it unusable it is now sealed up. Photo from 1971.
Tunnel 10 on the Cuesta Grade was shut down and bypassed after a cave in made it unusable it is now sealed up. Photo from 1971.

If the original surveyors had their way, San Luis Obispo would not have rails today.

Oil transport by rail has been in the news lately, and many of today’s discussions hinge on decisions made more than 100 years ago.

The Pacific Railroad Survey of 1857 by Lt. John G. Parke and Albert H. Campbell was completed under orders from Secretary of War Jefferson Davis to survey the best routes for western railroads.

The survey followed the Salinas River to Cuesta Pass and then — instead of turning right along a ridge and making a horseshoe turn into San Luis Obispo as it does today — followed the Santa Lucia Range down to near what is today Righetti Road along the Corral de Piedra Creek.

The report said San Luis Creek was not a suitable path: “The descent of the stream is too great to locate a line through, or near the town of San Luis Obispo; it is, therefore, necessary to project the line along the slopes of the mountain upon the left bank of the creek, through this second summit, to the small divide between Arroyo Grande and Corral de Piedras Creek; thence down the right bank of Arroyo Grande to near its debouch into the sea.”

Cuesta Grade was the highest elevation and most expensive construction along the coast route.

Fortunately for the business leaders of San Luis Obispo, the Southern Pacific was open to bribery.

In April 1889 one of the railroad owners, Collis Huntington, visited San Luis Obispo. The railroad terminated in Santa Margarita, and he arrived via stagecoach and addressed a hurried gathering of business leaders.

The Tribune of April 9, 1889, quoted him: “Now, we are 16 miles from here, and if you were to give us the right-of-way, and it was all straight and the title was perfect and the ground that we would want for the shops and depot purposes was provided, I expect we might commence work at the building of the road.”

In his book “Railroaded,” Richard White tells the story of fiscal mismanagement and chicanery by railroads of the time.

Competing railroads overbuilt — two, three and four lines crossed places where only one could be expected to profit. There were big profits in construction even if the railroad was not profitable.

The Leavenworth, Pawnee and Western railroad was renamed Union Pacific, Eastern Division to deliberately confuse investors and creditors with the Union Pacific.

Stockholders, bondholders and taxpayers usually paid the price of these shenanigans, but sometimes even big investors like John Frémont lost the ranch in bad railroad investments. It was a particularly horrid string of investments because his California ranch included a lucrative gold mine.

Collis Huntington ousted Leland Stanford from management of the Southern Pacific a year after he spoke in San Luis Obispo.

He pushed expansion of the line to compete with other overbuilding railroads, and an economic panic almost swamped the Southern Pacific.

Documented by White in his Pulitzer Prize finalist book “Railroaded,” Huntington schemed to keep the Southern Pacific from bankruptcy. “While seeking to shortchange his creditors, he stole from his partners.”

The 70-year-old Huntington sold stock that partner Charles Crocker entrusted to him. He sold stocks and mortgaged assets belonging to the Stanford estate. Since the beginning of the railroad enterprise, he had been the man who greased the wheels of Congress and finance.

Given the financial turmoil, it is not surprising that Southern Pacific was built through the rural county in fits and starts.

Cuesta Grade was the most costly 17 miles between San Francisco and Los Angeles according to the book, “Southern Pacific’s Coast Line” by John R. Signor. The Oakland Tribune estimated the cost at $3 million; other sources — including the San Luis Obispo Tribune — placed the cost at $1.5 million.

In his book “Rails Across the Ranchos,” author Loren Nicholson said the Tribune documented the first train pulling into San Luis Obispo in May 1894.

Tribune editor Benjamin Brooks, before he came to San Luis Obispo in 1885, had been a lawyer working for Southern Pacific in Texas and New Mexico. Brooks had been one of the committee of local businessmen who organized enticements for the railroad and likely had the clearest understanding of what was needed.

San Luis Obispo was now linked to the nation, northbound to San Francisco, but the route south to Los Angeles would take seven more years to connect in 1901.

Collis Huntington, the last surviving founder, would not live to see the Coast route completed. He died the year before the final spike was driven.

Railroad Festival

The Central Coast Railroad Festival will take place Oct. 1-4; find more information at its website: