The Big Four and the ‘Dutch Flat swindle’ | SierraSun.com

The Big Four and the ‘Dutch Flat swindle’

Mark McLaughlin

Ambitious men like Leland Stanford, Collis P. Huntington, Mark Hopkins, and Charles Crocker – the financial backbone of California’s Central Pacific Railroad and known to history as the Big Four – are rarely satisfied with any one business deal, no matter how grand or complex. As the principle directors of Central Pacific, the Big Four knew that once the transcontinental railroad was completed, they would control virtually all transportation and shipping into Northern California and Nevada. But they also realized that in the meantime, they were missing out on the lucrative stage and wagon-hauled freight between Sacramento and the Comstock mining boom.Central Pacific had already constructed a rough road to carry men and track materials eastbound from Sacramento into the Sierra, but Huntington envisioned a well-surfaced toll road from the west slope town of Dutch Flat to Donner Lake, and then onward to the Carson Valley. Huntington believed that this direct, high-quality route would monopolize the mining traffic and take business from the primary commercial road via Carson Pass, between Placerville and Virginia City, Nev. Huntington had an opponent in the railroad’s chief engineer, Theodore D. Judah, who argued vociferously against such a road, fearing that its construction would siphon money from Central Pacific’s trans-Sierra railroad effort, which he considered paramount. Judah also worried that the Big Four might decide to build the railroad only as far as Dutch Flat, where it would meet the heavy toll road traffic coming from the Nevada mines.

The Big Four would make huge profits from fees levied against all trade and commerce using their new wagon road, and their railroad company would earn additional money by carrying passengers and freight between Sacramento and Dutch Flat. Judah was concerned that satisfied with their earnings from the toll road, the Big Four might become reluctant to push the track east of Dutch Flat and into the more challenging and difficult terrain of the High Sierra. This plan would make the businessmen very rich without the risk and expense of constructing a railroad over the rugged mountains. Despite Judah’s strong objection, in August 1863, Huntington, Stanford, Hopkins and Crocker incorporated the Dutch Flat and Donner Lake Wagon Road Company. Less than two months later, Judah and his wife Anna boarded a steamer bound for Panama, on the first leg of a journey to New York to drum up investors. The frustrated engineer intended to buy out the Big Four and build his railroad. Judah’s determination to wrest control of the Central Pacific is evident in a letter he wrote to his good friend, Dutch Flat druggist Doc Strong, the man who had shown the engineer the best route through the Sierra. He wrote, “I have a feeling of relief in being away from the scenes of contention and strife which has been my lot to experience for the past year. If the parties who now manage hold the same opinion about it [building the Dutch Flat and Donner Lake Road] in three months hence as they do now, there will be a radical change in the management of the Pacific Railroad, and it will pass into the hands of men with experience and capital. If they do not, they may hold the reins for a while, but they will rue the day that they ever embarked on the Pacific Railroad.”These were the last words Judah ever wrote to Doc Strong. When Anna and her husband arrived on Panama’s eastern coast, torrential rains were lashing the region. Judah braved the deluge and dashed into a nearby store to buy a large umbrella, which he used to escort women and children from the train to the ship that would carry them north. The helpful engineer also assisted other women waiting at nearby hotels. Anna warned that he would catch a chill from his soaking wet clothes, but Judah replied, “Why, I must do this, even as I would have someone do it for you. It’s only humanity.”

That night, Judah came down with Yellow Fever. He died in New York two weeks later on Nov. 2, just four months shy of his 38th birthday.Theodore Judah may have been the most vocal critic of the Dutch Flat-Donner Pass Wagon Road, but he wasn’t the only opponent. San Francisco investors, Sierra miners, and even the general public believed that the Central Pacific Railroad was focused only on getting their line built to Dutch Flat. Other Californians believed the whole railroad construction project a scam and that no one, not even “Crazy Judah,” had ever really figured out a practicable route through the Sierra range. No one could know for certain the intentions of Crocker, Huntington, Stanford and Hopkins, but the perception of greed and avarice raised the ire of many. San Francisco newspapers boldly accused the Central Pacific of planning only to lay track up to Dutch Flat and no further. Numerous articles and pamphlets arguing against the “Great Dutch Flat Swindle!” flooded the press. San Francisco’s Alta California editorialized, “The Sacramentans [Big Four] are determined to have no railroad but Dutch Flat. The Capital City has aided in the raid upon this county for $80,000, upon Placer County for $25,000, and upon the state for millions. There will never be a railroad via Dutch Flat to Nevada Territory. There are obstacles which cannot be overcome. The Pacific Railroad will follow another route, not through Sacramento or anywhere else in the vicinity.”Despite the intense backlash, there was never any foundation to the stories spread by detractors of the Central Pacific Railroad. Judah’s successor as chief engineer, Samuel S. Montague, was immediately ordered to continue surveying the future route as far as the “Big Bend of the Truckee River” (where it turns north toward Pyramid Lake), more than 40 miles east of the California border. Obviously, there was no doubt among the Big Four that the Central Pacific line would eventually connect with the Union Pacific somewhere in Utah or the Nevada territory.

By June 1864, the controversial wagon road linking Sacramento to the Comstock mining district was finished, and Crocker proudly proclaimed “Teamsters can save three days in the round trip to Virginia City, and carry fully one-quarter more freight on account of light grades.” The road was an immediate success and it lured throngs of teamsters from the Carson Pass route. In time, the Dutch Flat-Donner Lake Wagon Road was replaced by U.S. Highway 40. Today, interested travelers driving old Highway 40 can look carefully and still see the remains of the old Dutch Flat road, a tangible legacy to our region’s exciting past.Mark McLaughlin’s award-winning books, “Western Train Adventures: The Good, the Bad & the Ugly” and “Sierra Stories: True Tales of Tahoe, Vol. 1 & 2” are available at local bookstores. Mark, a Carnelian Bay resident, can be reached at mark@thestormking.com.