He found in the Union Pacific a completely broken-down property…. There was absolutely but one thing he could do … and to do it required the courage that all of us that are not Harrimans lack. That was, not to wait for things to happen … but to do something that none of our railway speculators had ever done before him; namely, to borrow huge sums of money and build up his property physically; to cut down granite grades, fill mountain valleys, provide the heaviest rails, the best engines—in a word, to buy for his new line, even at enormous cost, high efficiency.
—Frank Spearman, “Building Up a Great Railway System”
Harriman understood earlier than most men the basic formula for success in the new era: to make money, a road had to haul greater loads at lower rates as cheaply as possible. This prime directive was simple but costly, especially in the vast, lightly populated West, where roads had been built as cheaply as possible to handle a modest traffic at high rates. To capitalize on the economic revival, they had to be made into modern lines like those in the East, where traffic density had always been much heavier. Since western roads were much longer, the cost of reconstruction would be greater.
There was a domino effect that made modernizing hard to tackle piecemeal. Bigger payloads required longer trains with larger cars and heavier engines, which in turn needed a straighter line, lower grades, heavier rails, better ballast, sturdier bridges, updated signals, more sidings, and newer facilities. The Illinois Central had taught Harriman that these improvements formed a seamless web where any gain in one area would always be limited by a lack of progress in the others. To undertake the whole package at once meant a huge investment from which most rail managers shrank.
But Harriman was not intimidated. During the winter of 1898, while still only a director, he had asked chief engineer J. B. Berry for data on what costs and savings would flow from reducing grades, straightening curves, and shortening the line. Berry scratched his head in dismay. Since few railroads had bothered to examine these matters, he would have to generate the figures from scratch. This task occupied him through most of 1898. To display the data's meaning clearly, Berry created a special map showing the present line and proposed