The Gold Spike
After more than six years of construction, the tracks of the Central Pacific and Union Pacific railroads approached each other just to the north of the Great Salt Lake. It was there, at a place called Promontory, that the lines were officially joined in a famous and colorful ceremony.
Witnessing the ceremony was a crowd of five hundred laborers, mostly Chinese and Irish immigrants. Workers carefully placed a final polished laurel tie on a bed of gravel. Company officials presented several commemorative spikes, including one of silver and two of gold. Central Pacific president Leland Stanford attempted to drive home the final spike with a mighty swing of his silver-headed sledgehammer. (Unfortunately he missed on the first attempt!)
Telegraphers reported the ceremony to an awaiting nation. A. J. Russell captured the significance of the moment in his carefully staged photograph, "East Meets West." Exactly a century after the founding of the first Spanish settlements in Alta California in 1769, iron rails now linked American California to its kindred states.
Californians expected that the completion of the transcontinental railroad in 1869 would usher in a new era of prosperity. Those expectations were not immediately realized. By a cruel paradox, the completion of the railroad not only failed to bring the expected good times, it also marked the beginning of a deep and general depression that continued through the next decade.
California merchants and manufacturers found themselves suddenly exposed to intense competition from those of eastern cities. Local merchants had overstocked merchandise in anticipation of increased demand. Now, after 1869, they found the market glutted with goods shipped to California by rail. Nor did land prices rise as expected. Land values had become overinflated in anticipation of the completion of the railroad. When the road was completed, land prices in California actually fell.
The completion of the railroad released thousands of workers, most of whom drifted back to the California labor market. The oversupply of workers depressed wages and contributed to widespread unemployment.
On the positive side, the railroad did help California farmers and other producers transport their products to distant markets. Fruit growers benefited especially from the development of the refrigerated railroad car that kept fruit cool and ripe during shipment across the country.
Southern California experienced tremendous growth in the 1880s, stimulated in part by the railroad. The Southern Pacific was the largest landowner in the state and it took a leading role in the advertising of California. The railroad's publicity department flooded the nation with articles and stories extolling the charms of California's natural beauty, climate, and romantic heritage.
The Atchison, Topeka, and Santa Fe Railroad reached Los Angeles in the mid- 1880s and began a rate war with the Southern Pacific. Passenger fares from the Midwest to southern California dropped from $125 to as little as $1. More than 200,000 newcomers arrived in southern California in 1887, the peak year of "the boom of the eighties." Real estate sales in Los Angeles County exceeded $200 million during a single year. Dozens of towns sprang up. A hundred new communities with 500,000 homesites were established.
The great wealth produced by the railroad enabled the Big Four and their families to become some of California's leading philanthropic benefactors. Leland Stanford and his wife Jane founded Stanford University in 1885 as a memorial to their only son who had died the year before at age fifteen.
After her husband died in 1893, Jane Stanford played a major role in the governance and support of the university. Stanford was one of the few universities in the world to admit women, and Jane Stanford paid close attention to the conduct of the coeds on campus. She was alarmed to learn that some of them were becoming "quite lawless and free in their social relations with young men." She instructed the college president to place Stanford coeds under "strict surveillance."
Jane Stanford also was concerned about the growing number of women on campus. When the number of female undergraduates exceeded 40 percent, she feared that the university was developing a reputation as a women's school. In 1899 she issued a strongly worded edict: "Whereas the University was founded in memory of our dear son, Leland, and bears his name, I direct that the number of women attending the University as students shall at no time ever exceed 500.... I mean literally never in the future of the Leland Stanford Junior University can the number of female students at any one time exceed 500." The edict stayed in place until 1933 when university trustees found a loophole that allowed them to lift the limit.