The Collapse of a Railroad Empire

The acquisition of the Navigation Company by the Union Pacific—a jumble of lawsuits and injunctions—had resumed a settled aspect in January 1890, but everything depended on the business being conducted profitably. Why was it not? The failure was not due solely to the snow blockades and landslides in early 1890, though that was a powerful cause. The real trouble emerged when the enormous wheat crop of Eastern Oregon came in; the railroad's equipment broke down, and for weeks the Oregon newspapers were filled with complaints of incompetent management that neglected to provide for a traffic they knew was coming. As expenses increased at all points, the Union Pacific turned to the London banking house of Baring Brothers for a loan of $4,000,000. However, Mr. Thomas Baring hesitated, remarking that in the existing financial situation, conservatism required restricting loans. This note of warning left the Union Pacific stranded. At this juncture, Jay Gould permitted himself to be interviewed. That made an end to any possibility of borrowing money on the credit of a management whose existence was a question of only a few days.