Trains in Vain: On Richard White
One reason White chronicles the corrupt and chaotic business practices of the transcontinentals in great detail is to challenge the idea that the railroad corporations pioneered managerial innovation and bureaucratic rationality. This notion, argued most influentially by the business historian Alfred Chandler Jr. in The Visible Hand: The Managerial Revolution in American Business (1977), shifted attention away from the promoters and financiers—Jay Gould, Thomas Scott, Collis Huntington and the rest—toward midlevel railroad managers who invented such useful tools as cost accounting and the organizational chart. White implicitly concedes that Chandler was right about management innovation at Eastern railroads such as the Pennsylvania, which, in fairness, was his major example. In the West, however, White shows us a railroad business that was “closer to Dilbert than to Chandler.”
White has even less patience for an idea related to Chandler’s—Joseph Schumpeter’s view of capitalism as “creative destruction,” with markets rewarding entrepreneurs and companies for efficiency, competence and innovation, and punishing them for lacking these characteristics. Nobody was punished for running railroads into the ground, or at least nobody at the top. The transcontinental railroad corporations failed repeatedly, but they did not vanish. Instead they went into receivership, preserved by the law as what White calls “corporate zombies—the undead who preyed on the living.” Once in receivership, a railroad corporation could stop paying interest to its bondholding creditors, prevent organized workers from initiating labor actions (now defined as crimes against the federal receivers) and undermine solvent competitors by shipping freight at cut rates. The story of the transcontinental railroads is about dysfunction rewarded. What everyone involved kept discovering was that “market signals” had nothing to do with running a railroad.
White’s quarrel with Chandler, Schumpeter and other bullish economic historians owes much to his scholarly rigor. The sparkling portraits of heroic entrepreneurialism sketched by Chandler and others relied heavily on the annual reports of the railroad corporations. White, however, draws copiously from the correspondence of railroad insiders, which describes the brazen dishonesty of the annual reports as purposeful and systemic. “If the goal is to have great villains or powerful heroes,” he warns, “don’t read the mail of the men who ran the transcontinentals.” White read sacks of this mail. Luckily for him, and for us, he located two especially rich troves of letters. One was penned by the relatively high-minded and obsessively literate Charles Francis Adams Jr. (grandson of John Quincy Adams), who ran the Union Pacific from 1884 to 1890 and supplemented his extensive correspondence about railroading with frank and highly detailed diary entries. The other contains letters in which Collis Huntington and his partners in the Central Pacific, the Southern Pacific (a spinoff of the Central) and allied businesses had to commit many details to paper because, White explains, “the dimmer lights among them, such as Leland Stanford, had to have so much explained to them.”
White has some fun at Stanford’s expense, with Huntington providing most of the punch lines. Huntington, White writes, “despised Stanford for his stupidity and carelessness, his selfishness and greed, his laziness and his immense self-regard.” Huntington once asked Stanford to “tell me whom to correspond with in Cal. when I want anything done; for I have become thoroughly convinced that there is no use in writing to you.” Huntington was not alone in his contempt for Stanford. Mark Hopkins, a Central Pacific partner, told Huntington at one point that there was a task Stanford might have been able to perform, “but not without more mental effort than is agreeable to him.” The letters of Stanford’s business partners, White explains, are “a chronicle of amazement, dismay, and irritation at his greed, laziness, ignorance, and ineptitude.” As one politician concluded, Stanford was an “immensely stupid man.” That he was also an immensely wealthy railroad entrepreneur proves White’s case against historians who insist that success in the capitalist world must axiomatically bespeak innovation, intelligence or even moderately hard work. None of Stanford’s shortcomings prevented him from using his railroad fortune to found a university to memorialize his dead son Leland Stanford Jr., which is where White, a MacArthur-winning historian, has taught since 1998.
If naïve investors and deluded settlers were the whole story of the transcontinentals, it would be sad and criminal. What made the scam a full-scale tragedy, as White reminds us periodically, was the displacement, confinement and murder of American Indians by railroads, farmers, miners and ranchers who coveted ever more of their land. Yet Indians are not at the center of Railroaded in the way one might expect of White, whose reputation as a leading historian of the American West rests on three crucial books about encounters between Indians and colonizing Europeans: The Roots of Dependency: Subsistence, Environment, and Social Change Among the Choctaws, Pawnees, and Navajos (1983); The Middle Ground: Indians, Empires, and Republics in the Great Lakes Region, 1650–1815 (1991); and “It’s Your Misfortune and None of My Own”: A New History of the American West (1991). White reminds us that Indians were reliant on, as well as victimized by, the railroads. Among the many vignettes told in Railroaded is one about Elias Boudinot, a Cherokee railroad investor who argued in favor of the abolition of Indian Territory (now Oklahoma) and of independent tribal status for Indians generally. Another vignette focuses on twenty-eight Indians (Lakotas, Shoshones, Cheyennes, Bannocks and an Arapaho) riding the Oregon Short Line and the Central Pacific to visit a Paiute prophet who claimed that God would rid the West of whites.
Railroaded has a lot more to say about workers, especially the white male workers who organized large unions: the Knights of Labor in the car shops, the Railroad Brotherhoods (of locomotive engineers, firemen and brakemen) on the trains and, in the early 1890s, the American Railway Union (ARU), which was most powerful in the shops but also organized on the trains. Railroading was exceptionally dangerous work, with accidents caused by the lack of basic safety devices such as automatic couplers and air brakes. (The tycoons thought they were too expensive to install.) White’s discussion of the Knights—which by 1885 had organized about 10,000 of the 15,000 workers on the Union Pacific, with strong political allies in most of the Western states—also focuses on their racism. “Sinophobia,” he explains, “was an essential part of [the] worldview” of workers as well as other “antimonopoly” opponents of the railroad corporations. The heart of the problem was that many of the Chinese railroad workers had been brought to the United States by labor contractors, who exploited them as “combination employment agency, travel agency, loan shark, and merchant” and offended white workers’ racialized self-images of masculine independence. European laborers migrated to the United States under similar conditions, but the “face of the contract laborer” was the Chinese “coolie,” an ideological construct independent of facts—and linked inextricably in workers’ minds with corporate exploitation in general.
One gruesome outbreak of Sinophobia occurred in Rock Springs, Wyoming, in 1885. The Union Pacific owned coal mines in the town, which had little else in it, and for a decade the corporation continually cut wages while increasing the ratio of Chinese to white workers. A work-related dispute between white and Chinese miners escalated into a pogrom: the white population of European immigrants (“English, Scots, Welsh, Swedes, Danes, Irish, and, in smaller numbers, Poles, Bohemians, and Hungarians”) stormed the Chinese part of Rock Springs, setting homes afire and shooting Chinese immigrants attempting to flee. With about fifty Chinese dead, the white workers drove the survivors into the desert, destroying or stealing their savings and property. There were no prosecutions. Charles Francis Adams, who by then was president of the Union Pacific, likened the Western Knights of Labor to the Southern Ku Klux Klan. Leading Knights disavowed the murders, but local organizers supported the white workers’ demand that the Union Pacific stop employing Chinese, which Adams refused to do.
The epic battle between the railroads and the workers occurred in 1894 with the Pullman strike, which the railroads won decisively. Unlike most accounts of the strike, which tend to focus on Chicago, White’s focuses on Sacramento and draws heavily on detailed records of the battle kept by the Southern Pacific. He can get bogged down in details—“Frank Baldwin reported that Tony Kaiser and Charles Rowlands confronted him at the foot of Peralta Street and called him a scab”—but the California focus is refreshing, even as it sidelines ARU leader Eugene Debs. Ultimately it was in Washington, not Sacramento or Chicago, that the railroads broke the strike, and they prevailed because the US attorney general, Richard Olney, coordinated strategy for them and deployed the Army against the strikers. Olney had not only been the general counsel of the Chicago, Burlington and Quincy Railroad before becoming attorney general; he stayed on its payroll (and also that of the Atchison, Topeka and Santa Fe) while working in Washington.
White draws some comfort from the fact that a broad swath of the public mistrusted the railroad corporations. These “antimonopolists,” who appear in every chapter as defenders of the farmers, miners, settlers, shippers and railroad workers against corporate arrogance and greed, sometimes won elections, particularly in Western states, where they could deputize workers instead of Pinkertons to keep the peace during strikes. Nevertheless, the antimonopolists were rarely a strong countervailing power to the corporations, and their demands were easily co-opted when, for example, one railroad saw a particular regulatory gesture as a convenient way to cripple a rival. The antimonopolists could see that corporations were not “individuals” in the sense that the courts meant when they introduced “corporate personhood” into American law. But they could not stop the courts from creating the concept or, after the adoption of the Sherman Act in 1890, invoking it in antitrust rulings against unions, which, unlike a single corporate person, consisted of multiple “individuals” conspiring to restrain trade.
The most troubling aspect of the story White tells in Railroaded is how fully recognizable its characters and their struggles are today. Even corporate personhood is back in the headlines, with the Supreme Court’s ruling in the Citizens United case having revived the idea that corporations are people endowed with all the rights of citizenship, among them the ability to use money as free speech through unlimited campaign contributions. White’s railroad barons and their Washington lobbyists jumped through hoops to bribe politicians effectively, hoping that the norms of “friendship” would ensure that the politicians remained on the take. But these guys were pikers compared with K Street. The capitalism of the transcontinentals is back. The question is whether another “age of reform” can dent its new defenses.