Going for Broke
The Union Pacific of that day was a melancholy imitation of a railroad. Of the whole system he found only about 400 miles of road that was graded at all, the rest being merely a collection of ties and rails laid down on a dirt foundation. The station buildings were tumble-down shacks. The cars, as he whizzed past them, looked old and battered, and eloquent of economy in the purchase of paint. West of Cheyenne, on the main line of traffic from the Missouri to Ogden, his train climbed hills by the hundred, hills that would compel every heavy freight train to call upon two engines for its haulage. The engines were old and light. Everything was dirty, decrepit, low-class.
—C. M. Keys, “Harriman: The Man in the Making”
Nothing has done more to shape the Harriman legend than the myth that he found the Union Pacific a dilapidated wreck. What better way to demonstrate Harriman's genius than to portray him as the Merlin whose magic touch transformed a decrepit antique into the very model of a modern railroad? Everyone from journalists to Schiff to Kennan perpetuated this story over the years. Averell Harriman, who was only six years old when his father took charge of the Union Pacific, insisted late in life that “its rusting rails were sinking into mud; its ties were rotted and broken, its rolling stock falling apart.” 1
Observers at the time took a different view. Since a bankrupt road did not have to pay interest on its bonds, it could devote most of its earnings to upkeep. The Union Pacific receivers did just that and thereby earned praise from all sides. For two years the Wall Street Journal hammered at the themes that the Union Pacific was well maintained and the stock undervalued. In October 1897, just two months before Harriman joined the board, the Journal issued its most emphatic statement on the road's condition: “Under the receivership the whole property has been put in the most extraordinary fine condition…. It is no secret that instead of buying a worn-out property, the new company will get a system in as fine condition as anything in the West. New rails, new bridges, new rolling stock, passenger and freight, in fact everything that goes to make up a first-class railroad line.” 2
Those who knew the Union Pacific from the inside, such as secretary Alex