COMMUNICATIONS WITH THE WEST -- A RECURRENT PATTERN

Mannel Hahn Tells How the Mails Were Carried by Sea and by Land with Subsidy Aiding Private Enterprise

Westerners held their monthly meeting at the old corral (Ireland's) April 25, 1949, with Mannel Hahn, who had once upon a time given us the story of the Pony Express, enlarging upon the question of mails to the West in pioneer days and pointing to the recurrent pattern of government aid and private enterprise. His talk follows:

Westward expansion presents an ever-repeating pattern on a changing background. So much do the backgrounds differ that the pattern printed upon them frequently loses its identity, and we forget that we are seeing the same thing over again.

The problem of organizing and perfecting air transport is now being worked out. That it is a speeded-up version of the railroad pattern -- and that there was an intermediate automobile-bus-truck pattern is so ignored that newspaper and magazine writers treat of the headaches as something entirely new. Basically, they are only streamlined versions of 1865-1890 developments.

In 1865 they neglected to apply the lessons learned from the 1858 spread of the stagecoaches through the West, and the stages forgot to look at the lessons of 1848 that the steamships had learned the hard way.

Transportation to new and sparsely-settled regions follows a definite pattern. People with capital were and are slow to enter the field until enticed by government subsidies. Even then, it was daring men who risked muchand often allto prove that large profits might be made. Immediately, they were threatened by other entrepreneurs who sought to reap benefits from the sowing of the pioneers. The slight differences that the government subsidies made usually tipped the balances in favor of the original dare-devils, or their lineal descendents. Furthermore, the subsidy seemed to favor an eventual monopoly -- sometimes the monopoly favored the subsidy -- but in either case, the end product was a trust.

The governmental Santa Claus that handed out the subsidies was usually the Post-office Department, and even when it was another branch, the excuse was usually that the mails must go through. Any one who has examined accumulations of correspondence will attest that with notable exceptions, the letters of others seem filled with mention of money, vital statistics, and the health of the family. Occasionally there is a letter of love and eternal devotion; rarely a letter of pertinent comment on contemporaneous events. Now and again one happens on a veritable treasure -- correspondence of observation, topical philosphy and real historical [ ]

But let the normal exchange of trivia be interrupted, and we learn how vital it is to the well-being of man in all climes and times. The chance comment on grandpa's palsy or junior's bruised skin becomes the one thing the non-recipient of the letter wants to hear. I learned this for myself when I was cut off from mail for two months in Bolivia. I found out about Lindbergh and Amelia Earhardt before I reached home, but I have never known exactly what happened to my son in his first days in a British school.
 

Letters from Besieged Paris
Nor is that experience peculiar. I have recently read a score or so of letters written from Paris during the siege of 1870-71. Only two of the letters were from the same pen and only three from the same family. The only common bond of the writers was this: They are human beings in various strata of society caught in the mesh of war, writing to family and friends outside of the besieged area. And every letter, with unmistakeable clarity and sincerity, sometimes with identical words, says: "We can bear privation, starvation, the dangers of warbut we suffer intensely from the lack of word from our dear ones!"

That this is not an outlet of the emotional Latin temperament is shown by letters coming through directly after the fall of Japan wherein family and friends caught in the Japanese "Greater Asia Sphere of Influence" for two years or three all declare in their first letters that it was not insult, famine nor forced labor that hurt so much as the lack of communication with the outside world: not so much events, as the dread of learning of events, that caused suffering.

Perhaps I have labored this point unduly, but I am trying to show why the Santa Claus of transportation is usually the Post-office Department: The excuse for largess is that "the mails must go through."
 

Isolation of California in '50s
The state of communications between the populated East and the handful of Americans along the Mexican coast of Upper California and in Astoria prior to 1850 is well depicted in Dana's "Two Years Before the Mast." The firms for which they worked sent out to pick up hides or furs, and the ships bringing trade goods also carried a sack or more of letters and newspapers. Astoria was not a postoffice -- the Territory of Oregon was not erected until 1848 (1) and mails for the Mexican cities came from Mexico City seldom.

It is important to draw a fine, but very real, distinction between "letters" and "mail." A "letter" does not become "mail" until it is put into the care of the Post-office. By law, the carrying of letters along a "post road" is illegal when done by private persons. At first, the post roads were only those along which the Post-office conveyed mails. Later, this was extended to cover competing routes -- and extended still further to the railroads and waterways. But where no ships under contract plowed the waters, letters might be conveyed in "private ships" until a post-office was reached. But there were no postoffices in Oregon and the Mexican officials of California were not very exigent so long as there was no attempt to avoid duties on goods brought in -- and even these could be entered on favorable terms.

But with the settling of the Oregon question (1846,) the picture changed. Oregon was no longer a vague condominium -- it was a part of the U. S. When a postoffice was opened there (1847) (2) there was a demand for mails to enter that office -- not letters through a no longer omnipotent nor omnipresent "company," but mails. And almost at the same time, the Peace of Guadalupe Hidalgo (1848) brought California within the American orbit, with a change in status of Americans living there.

The government had, however, not been napping. As early as 1835, President Jackson had sent Charles Biddle, formerly of Philadelphia but then of Tennessee, on a mission to survey, personally, the possible routes to the Pacific via Panama, Nicaragua and Tehuantepec. Biddle sailed for Santiago de Cuba, thence to Chagres. He found the Isthmus of Panama at the nadir of its commercial fortunes. There was no regular transport to the Pacific side, but he organized an expedition and covered the dangerous and difficult fifty miles. His energetic example galvanized the lethargic citizens, and they set to work to clear the old mule track from Panama to the Chagres River -- a paved road that tradition ascribes to the Pizarros.

Finding the representatives of the State of Panama about to set out for Bogota and the meeting of the Congress of Nueva Granada, Biddle accompanied them instead of going on to Nicaragua or Tehuantepec. In concert with our minister, he negotiated a treaty giving the United States the right to a transit over the Isthmus. In 1837, with this treaty in his pocket and a lot of hearsay information on the alternative routes, he hurried to Washington -- where he died before he could make his official report. (3)

A Treaty was concluded, however, almost a decade later. (4) Under it, the U. S. was given the sole right to control the transit of the Isthmus, and agreed to protect an open route there under the express sovereignty of Nueva Granada.
 

Ocean Mail Subsidies
Up to this time, the U. S. had taken no steps to encourage ocean shipment. Great Britain had, in 1839, given a subsidy of 60,000 pounds to Samuel Cunard to underwrite his mail line between Liverpool and Boston (later New York was added.) One part of this subsidy gave the Admiralty the right to take over the vessels in case of war, and the U. S. was studying this system. As part of the commercial war with Britain over the mail subsidy, the 29th Congress in 1847 passed a law to subsidize the Collins line (5) for a service paralleling the Cunard Line, and a little later the same day, provided for an ocean service to California and Oregon. (6) Although the Postmaster General was directed to make the contracts, a paragraph in the Collins subsidy act called for "an option to purchase the steamers as provided in the act of March 3, 1847."

The act set the route as starting from New York, Charleston, Savanna, Pensacola or New Orleans via Havana to Chagres, across the Isthmus, and thence from Panama to Astoria with stops at Monterey and San Francisco. The postage from Eastern ports to Havana was set at 12 1/2 c per half ounce, to Chagres 20c, and to West Coast American ports, 40c.

There were several shipping lines on the East Coast capable of taking the contract as far as Chagres. The choice finally fell to energetic, scrappy "Live Oak George" Law, by indirection. It was let to Col. A. G. Sloo, of Ohio, who had no ships, and he enlisted "Live Oak George," who had several. Law's boats, however, were Hudson River steamers. On receiving the mail contract, he brought the ocean-going Falcon, and began building the Ohio and Georgia under the specifications of the Navy Department, who had the signing of the contract.

On the Pacific side there were no ships available. But Arnold Harris, who received the original contract, likewise assigned itto William H. Aspinwall, one of the partners of Howland & Aspinwall, who had a large trade with South and Central America.

An amendment cleared the matter of who was to control the contracts. The appropriation was made to the Navy, (7) and new ten year contracts were authorized. The Navy was given power to advance $25,000 on each ship built up to the limit of the contract for one year's service. Based on a yearly total of $100,000 for one sailing every two months, the contract was scaled upwards as the proposed departures were increased to monthly at first, later to semi-monthly and thrice a month. Because of the danger inherent in the pioneer sailings on the Panama-Astoria line, payment was to begin under the contract when the first ship was ready, if not before Oct. 1, 1848.

Law's line became incorporated as "The United States Mail Steamship Co." The route agreed upon started at New York, called at Charleston, S. C., and Havana; and ended at Chagres. Aspinwall incorporated the "Pacific Mail Steamship Company" and set his route from Panama to Astoria with a stop at San Francisco. However, San Francisco became the terminus, with calls at Acapulco and Manzanillo, and a separate ship made the journey to Astoria and ports of call. Aspinwall started three ships at once: the California sailed from New York on Oct. 6, 1848; the Panama sailed Feb. 6, and the Oregon on Feb. 12, 1849. The first two were built by William H. Webb of New York; the Oregon by Smith & Dimon. (8) All reached California in due time, their steam making it possible to buck the contrary wind of Cape Horn, although the Panama had to put back into New York for engineroom repairs.
 

Gold Rush Aids the Mail
Aspinwall was severely criticized for his "flyer." His modest company of $400,000 capital was dependent upon the mail contract to break even, it was thought. The company, however, had much capital back of it -- the stockholders were, besides himself, his cousins and partners, the Howlands; Henry Chauncey; and Edwin Bartlett. This was thought to be the first speculative venture for these conservative businessmen. But the California was hardly out of sight of the mainland when the news of Marshall's discovery of gold at Sutter's Mill filtered through, and a rush for California began. When the ship put in at Panama for stores, coal and the mail brought down from New York by the Falcon, she found a deck-load of passengers straining for a foothold on her limited space, eager to get to the promising goldfields.

Instead of struggling to meet expense, the Aspinwall venture was blessed with the Midas touch from the first voyage!

The most difficult portion of the trip turned out to be the 50 mile crossing of the Isthmus. Passengers and cargo had to transship at Chagres into riverboats, called bongos, and fight the swift Chagres River for three days up to Gorgona at the mouth of the Obispo River. At times, the Obispo could be navigated -- otherwise it was mules, and at all events, it meant transshipment to mules for the descent to Panama City. It took four long, arduous days to cross.

In Panama dwelt John L. Stephens, an American who had dreams of a railroad to replace the river-mule traffic. When Aspinwall visited Panama, he stayed with Stephens and became imbued with the same dream. With Stephens and Chauncey (one of his co-directors of the Panama Mail,) he secured a favorable contract with Nueva Granada under the treaty mentioned. It granted a free port at either end of the line, free land for the use of the railroad and a bonus of 250,000 acres. The railroad was empowered to police its own line and to fix its own tariffs: Nueva Granada was to receive 3% of every dividend on capital and later, a portion of the mail receipts.

With a skeleton organization, Aspinwall and Stepehns secured the cooperation of the United States in checking the surveys and authorized G. M. Totten and John C. Trautwine, engineers who had just completed a railroad in Nueva Granada proper, to begin work (1849.) Then they completel organization by incorporating for $1,000,000.

Without going into the vicissitudes of the building of the Panama Railroad, let us simply say that it cost nearly eight times the original capital, and that it was 1855 before the first train made the complete transit -- in just four hours. But as soon as the grade and rails reached Barbacoas, on the Chagres, it began to haul passengers and freight. The first dividend, on a capital of $1,467,720 was paid in 1852, and it amounted to 10% plus 3% of that amount to Nueva Granada. (9)

George Law, who made a visit to the operations in 1852, was so impressed with the possibilities that he invested $500,000 just after it paid its first dividend. (10)

On July 1, 1851, Congress changed the rates of postage so that a "single letter" (of 1/2 ounce) paid only 6c to California if prepaid, 10c if sent collect (11.) Despite this, the subsidies of 1848 remained unchanged -- in fact, because of the increase of service, they had increased. In 1852, the three contractors, the U. S. Mail, Panama Railroad, and Pacific Mail, earned $480,000. Such a tempting plum was not ignored by other hungry businessmen.

Although Biddle and Aspinwall had preferred Panama to Nicaragua and Tehuantepec, others were not unaware of the fact that the total distance via either of these routes was shorter. James Gadsden, while Minister to Mexico in 1853-54, concluded the treaty with Santa Ana by which the international border was rectified. A little-known clause of this treaty secured for the United States the right to a transit of Tehuantepec similar to the right that protected the Panama Railroad. Even before this was signed, and a year before it was ratified, the Postmaster General entered a tentative contract with Carmich & Ramsey for a mail service from New Orleans to San Francisco via Tehuantepec. Congress never appropriated the $429,000 this service was to cost.

In 1858, Postmaster General Aaron V. Brown signed a contract with the Louisiana-Tehuantepec Co., for a semi-weekly service from New Orleans to San Francisco in 15 days. The mail went by boat to Minititlan at the mouth of the Coatzacoalcas River, up the river by boat to Suchil and by coach to Ventosa on the Pacific coast, where it was picked up by the Pacific Mail boats. The Panama transit from New York to San Francisco was then 21 days (12.) The Tehuantepec service was discontinued at the end of one year when Brown's successor, Joseph Holt, considered the $286,000 cost to produce $5,726 revenue excessive.

Although the Panama route was a post road, the government had no objection to non-contract carriers handling letters provided they bore the proper postage. Any steamer, therefore, might carry letters in either direction if they were stamped, cost the government nothing to carry, and were deposited in the postoffice for delivery or the stamps defaced and canceled.
 

Vanderbilt Enters Field
Among the many who tried for a share of the California trade was Cornelius Vanderbilt. Not only a share of California gold was his aim -- he was actuated also by a feud with George Law. Vanderbilt had challenged Law's control of the Hudson River trade, and Law retaliated by entering the long Island Sound shipping business. A race between vessels of the two fleet was won by Law's Oregon, and not even the fact that Law later had to sell out to pious Dan'l Drew had salved the hurt to Vanderbilt's pride.

Vanderbilt and his associates secured concessions from Nicaragua in 1849 and set up his "Accessory Transit" from New York to San Juan del Norte, on the mouth of the San Juan River, then by river steamer to Lake Nicaragua and across the lake where a short trip of 12 miles by coach reached the port of Realejo (later San Juan del Sur.)

in 1850, Vanderbilt began advertising that he could beat the mail route, and did so regularly by a day or two. Merchants with important mail did not mind playing an extra quarter or more to save time, and so sent their letters out of the mails via the Accessory Transit Company. Lovers who had gone to California to make the wherewithal to found a family used the extra-charge transit to carry burning promises a day or two earlier to their beloveds. Vanderbilt stamped these letters "via Nicaragua Ahead of the Mails" before dropping them into the postoffice in New York.

In an effort to wrest the mail contracts from the Law-Aspinwall contract Vanderbilt, in 1853, offered to carry the mails for only $300,000 a year (approximately 60% of the contract payments for that year) but the contracts were ironclad and the offer was refused. During a vacation in Europe in 1854, advertising his ocean service by a lavish display of his private yacht, the North Star, Vanderbilt was sold out by his associates, headed by Charles Morgan. But this did them little good, for the insurrection engineered by William Walker closed the Nicarague transit for several years. Meanwhile Vanderbilt reorganized his opposition lines and kept sniping at Law.

In 1855, the Panama Railroad was completed, and the new "regular" schedule dropped to approximately the equal of the best the opposition could offer.

By 1858, the subsidy-contract was approaching $900,000 a year. To Postmaster General Holt, who had a streak of economy a yard wide, this was anathema. The Collins Line contract had been abrogated, and Vanderbilt had secured the privilage of carrying the European mails under Act of June 14, 1858 (11 U. S. Stat. pp 364-5) for "sea and inland postage" and no fat subsidy. Perhaps he should have realized that there was no money in such a contract, but when the Panama-California contract expired in October, 1858, he took the Atlantic portion of it nevertheless.

The Pacific Mail and Panama Railroad were slightly better off. The Panama Railroad, for example, took in $1,933,672.12 with $100,000 coming from the mail contract. However, when you look at the wharfage and lighterage account, you will see that this doubled in 1859 over 1858 -- and Vanderbilt paid a good share of it! (14)

Vanderbilt's original contract ran for only nine months. When, in 1859, he tendered for a renewal (the Act of June 14, 1858, cited, limited the terms of contracts to two years.) he was faced with opposition from the Pacific Mail, which had purchased three of the defunct Collins Line's steamers for the Atlantic run. But Vanderbilt won out, and his Atlantic and Pacific Mail S. S. Co., fought the Pacific's three steamers to a standstill, although the latter were able to do well enough on freight and passenger service. The prospect of a war with the doughty Commodore was enough to scare the Pacific Mail into withdrawl.

However, their investment was not a loss. In 1866, the Pacific was able to acquire all outside interests and combine the entire operation of the mail line from New York to San Francisco into one.

To condense, a new subsidy program was begun by Congress, and the Pacific Mail was able to secure support for a line to Japan and China, which began 82 years ago and continued until a scandal in the subsidy brought about withdrawal of the support. (1878)

Thus we see that the first mail-route to the Pacific Coast -- which sets the pattern -- was (1) made possible by a subsidy; (2) grew and prospered under the joint protection of this subsidy or mail-contract and a period of commercial plenty that fortuitously sprang up at the time of its greatest danger -- the out-set of its operations; (3) because of the profits of that period and the back-bone of assured income by operation of the mail contract, it was able to withstand repeated attack by a formidable rival who, in turn, was enabled to secure favorable terms for retirement from the field by virtue of the government contract he temporarily held and; (4) ended with a monopoly of the mail-carrying (i.e., government-supported) shipping lines to the Coast. (14)

Without a government subsidy, private capital would have been slower to enter the field -- and the Argonauts of 1848 would have lacked a Pacific Ocean route to the goldfields just as the gold would have lacked a route for return. Without a strong commercial traffic, the steamship lines would have had small chance for survival on the mail income alone. And without the combination, it was touch and go for most of the competition -- even Vanderbilt was unable to make money on passenger and freight alone over a decade of struggle.
 

The Pattern on Land
And now see how the pattern repeats on land.

Although the race for the West Coast by land and by sea was as near a dead heat as possible, the transport of produce was primarily by sea. The hides of California reached the tanners of New England around the Horn. Although the mountain men sent their furs back through the South Pass and the Platte trail, the wealth of the Astorians usually went back by sea.

In 1830, the first wagon train started over the Oregon Trail. By the time the Mormons left Council Bluffs in 1847, the Trail was well known, but hardly well traveled. But with the discovery of gold in 1848, the blazing of the trails -- Mormon, California offshoots of the Oregon Trail, the "Santa Fe extension" over the old Spanish trail to Stockton and the "Southern route" along the new Mexican border -- began.

The first inland postoffice west of Fort Leavenworth, Kansas, was Santa Fe, New Mexico. It was opened July 1, 1850. That same day, the first stage line west was inaugurated, from Independence, Mo., to Santa Fe, (15) once a month, with 30 days permitted for the trip. Compared with the 25 day trip via Panama (later shortened to 21 days,) this timing seemed to rule out overland transit for the mails.

A new phenomenon had grown up "back East," where railroads had largely displaced the stage-coach. In the early days, stage drivers had been the messengers of the people. In place of an impersonal U. S. Mail, even letters had been entrusted to drivers for delivery to friends and relatives down the line. If money were sent (mail registry was not instituted until 1855, and even then it did not call for reimbursement in the event of loss,) it was greatly to the advantage of the sender to entrust it to a known stage driver -- a man of some importance in the community -- and since the mails did not concern themselves with parcels, the driver was the only safe guardian for these. Of course, small sums were offered for the service -- and by common consent were the perquisite of the driver.

When the railroads started, it became commonplace to entrust similar errands to the conductor. William F. Harnden, the first conductor on the Boston & Worcester Railway (1834,) was one of the beneficiaries of this carry-over. Indeed, so large was his package business that, according to one legend, he was given the option in 1839 of ceasing his package carrying or his railroading. According to another story, he found his health slipping under the load and determined to branch out for himself. At all events, he started "Harnden's Package Express" between Boston and New York in 1839.
Although he had a hard time for the first year, his example was soon followed. A year later, Alvin Adams started a line in competition with him, over a competing railroad. Gradually other men -- ex-stage drivers, ex-employes and others, started similar lines along other railroads. Gradually, consolidations set in, and the stronger lines became bigger and still stronger. Indeed, they parceled out territories and rail lines between them, and through interlocking directorates began the "Express Trust" that endured until the government was forced first to regulate, then to combine them under one management under regulation during the present century.
 

Early Express Companies
In 1855, after Adams had brought Harnden's from the heirs -- Harnden died in 1845 -- and other consolidations had eliminated the weaker lines, the principal companies were Adams Express Co., and the American Express Co., serving between them the East and South; the United States Co., operating along the Erie Railroad; the National Express Co., between New York and Canada and Wells, Fargo & Co., operating in California and Oregon and along the lines of the U. S. Mail S.S. Co., the Panama Railroad and the Pacific Mail S.S. Co.

To make later developments a little clearer, here are the founders and directors of these great express lines:

The American Express Co., was a combination of several earlier lines. Henry Wells had been an agent for Harnden, and in 1841 combined with George Pomeroy and Crawford Livingston to operate an express from Albany to New York. Pomeroy & Co., became later, Livingston, Wells and Pomeroy, then Livingston, Wells and Co. (16) They expanded to reach Buffalo and then Wells, with an employe named William G. Fargo and another started and express west to Chicago under the name of the Western Express. In 1846, Wells sold his interest in this latter line to William A. Livingston, and the name was changed to Livingston & Fargo.

In 1850, John Butterfield, a former stage drive, started Butterfield, Wasson & Co., over the lines of the New York Central. Butterfield had just completed a contract for the telegraph line from New York to Buffalo and had spent some time hauling freight across the Isthmus of Panama in 1849. In 1850, these three lines merged to form the American Express Company, the stock being held by two new companiesWells, Butterfield & Co., and Livingston, Fargo & Co. Wells was president, Butterfield was line superintendent. Butterfield's son-in-law, Alex, Holland was treasurer.

In 1852, Wells and Fargo started a line for West Coast transportationWells, Fargo & Co. D. N. Barney became president.

Barney was also president of the National Express Co., formed in 1855 by the combination of Pullen & Co. (Pullen was an old employe of Harnden) and Johnston & Co., founded by Robert L. Johnston and William A. Livingston.

Adams Express Co., was formed by the merger of various smaller expresses run by former Harnden employes, and the old Harnden Express itself. The officers were Alvin Adams, president; William B. Dinsmore, vice-president; Edwards S. Sanford, S. M. Shoemaker, C. Spooner, John Bingham, Johnston Livingston, George W. Cass and R. B. Kinsley, directors.

You will note that each of these contains one or more representatives of one or another of the remaining express companies. It might be well to remember that William A. and Johnston Livingston were brothers.
 

Overland Mail Proposed
By 1855, overland transportation had improved enough to encourage Senator Weller to introduce a bill for an overland mail route (17.) Two years earlier, Congress had authorized a survey for a possible railroad route to the Coast (18.) In 1855, a bill for the construction of three railroads at government expense was defeated in the Senate by a close vote (17.) In 1856, four overland mail bills were introduced -- and lost.

Proponents of the Northern route for the railroads being helplessly deadlocked with the adherents of the Southern route, Californians and Astorians were both left without overland-transport. Wagon trains supplied the intermediate forts and settlements, but there was no through transport, except for pioneer families, and that was self-made.

Though the East was still the source of much of the desired merchandise for the West Coast, and the ocean route carried that, there was a growing volume of goods available at Missouri and Mississippi River rail and boat heads. Debate in Congress grew heavier and more specific, but not until March 3, 1857, did the act establishing an overland mail route pass (19.)

This bill provided "for the conveyance of the entire letter mail from such point on the Mississippi River as the contractor may select to San Francisco in the state of California for six years at a cost not exceeding $300,000 for semi-monthly, $450,000 for weekly or $600,000 for semi-weekly." It was left to the Postmaster General to select the contractor and whether semi-monthly, weekly or semi-weekly dispatch should be used. It was further provided that the contractor should use four-horse coaches suitable for passengers "as well as safety and security" for the mails. The contractors were given the right of pre-emption to 320 acres of "any land not then disposed of or reserved at each point necessary for a station, not to be nearer to each other than ten miles; and provided that no mineral land shall be thus pre-empted..." The trip was to take not more than 25 days and service was to begin within one year of the signing of the contract.

Despite the proviso that the contractors should select the starting point -- and by inference the route -- Postmaster General Brown of Tennessee made it clear that he would consider only a Southern route, and advertised for bids on a line from St. Louis and Memphis, converging in Arkansas and following a line through Texas, New Mexico, Fort Yuma and north to San Francisco.

The two main bidders were James E. Birch, a California stage-coach operator, and a new company known as "The Butterfield Company" and composed of John Butterfield, William R. Dinsmore, William G. Fargo, Alex. Holland -- all of whom we have met beforeand three others who were also linked to the express companies by ties of gold. (20)

Both organizations bid the same amount -- $600,000 for a year's semi-weekly service. It was the Butterfield organization, well and favorably known to the Postmaster General and, especially, to President Buchanan who got the award for a six-year period. Service began simultaneously from both termini on Sept. 15, 1858, and the first step was made in less than 24 days in both directions.

The Express monopoly now had a fairly complete hold on the parcel business of the nation. Along the railroads, it was supreme. On the West Coast Wells, Fargo & Co., had the main routes in their hands, and smaller companies had to deal with them or perish. From East to West Coasts, express parcels went, if by sea, via Wells, Fargo; if by land, via Butterfield's Overland Stages -- another name for the same group.

But freight was not so well controlled. Along the canals and railroads of the East, it was in the hands of those common carriers. But from the Mississippi westward it was controlled less rigidly. The overland trails were free, and the cost of a dozen wagons and oxen or mules to drag them was not excessive.

Yet free competition meant cutthroat competition, too. Gradually, the big contracts -- those with the Army -- gravitated to the hands of two big operators: William H. Russell and Alexander Majors. When those two joined hands with another operator to form Russell, Majors & Waddell, a new monopoly was born. It had but one competitor. Ben Holladay, whose relations with Mormons were friendly, had the pick of the Mormon trade. When he found it better to concentrate on the western haul, Russell, Majors & Waddell had no competition worthy of the name between the Missouri ports and the Wasatch Valley.

It cannot be said that either the freight monopoly, the mail-carrying, nor the express combine were without competition. Postmaster General Brown let two more important contracts in 1858 -- one for a mail route via the Oregon Trail to Fort Bridger, thence by cut-off to Utah City (Salt Lake City) and the Nevada road to Placerville, Sacramento and San Francisco. Compensation on this was figured at only $320,000 per annum for a weekly trip. The other route was the Kansas City-Stockton route, that followed the established Santa Fe trail to Albuquerque and the old Spanish Trail on to California. The latter never functioned beyond Albuquerque, and the former was constantly pressed by Nature and poverty -- both bad enemies.

Had it not been for the death of Postmaster General Brown, the Central Overland route might have struggled through, for Brown was a visionary who saw the development of the West dependent upon government aid to transportation. His successor, Joseph Holt, of Kentucky, was more penny-pinching. He recoiled in horror from the figures spread before him: The Panama route costing some $750,000 and earning only $300,000 for the government: the Butterfield route costing $600,000 and earning less than $30,000; the Central route earning a paltry $5,400 and the Santa Fe route earning nothing or a reasonable facimile thereof ($600.)

The discovery of gold in Cherry and Clear Creeks brought a new gold rush. A postoffice was established at Auraria, in Kansas Territory, to handle the mails, but Holt held it to the postage collected to get these mails to Fort Leavenworth. Naturally, no freighter was interested in the six or ten cents per letter -- half that if the letter were addressed to St. Louis or St. Joseph.

Russell, the freighter, determined to go into the potentially lucrative stage-coaching business. In partnership with one of his employes, John S. Jones, he founded the "Leavenworth & Pike's Peak Express," to operate a stage line to Auraria. On a trip to the diggings, however, he acquired -- by gift -- several town lots in Denver City, across Clear Creek from Auraria, and opened his stage office on one of these, the terminus of his line. He carried the mail too -- if the miners paid him 25c a letter over and above the postage, and the postoffice collected for him.

Three weeks after the initial run to Denver City, Jones & Russell bought out the Hockaday, interests, that held the mail contract from St. Joseph to Salt Lake City along the Central route. Russell was going after express business with a vengeance. Although Holt reduced the service from weekly to semi-monthly, with a corresponding cut of $115,000 in the compensation, Russell began to envisage a chance to take the more remunerative contract from the Butterfield interests.

Meanwhile, things were not going well for him financially. To pay the notes due on his Denver coaches, he had to ask his partners -- Majors and Waddell, who had refused to join him at first -- to advance the money and take the line as security. Against further drains, he turned to Ben Holladay, who furnished him some cash to take up drafts in Salt Lake City.

The Pony Express was started as an advertising adventure in the hope of securing a million dollar contract for carrying the mail between St. Louis and San Francisco. Unfortunately it was discovered before Congress passed the act that Russell had taken bonds from the Indian bureau to cover up his dealings with Secretary Floyd. The mail contract went to Butterfield & Co., which employed the C. O. C. & P. P. to do the actual work and continue the Pony Express until the telegraph line was completed. But Holladay foreclosed and bought in the remnants of Russell, Majors and Waddell holdings March 21, 1862. Holladay became a director on Wells Fargo and in 1868 sold out to them. (21)

In 1867, the Wells, Fargo directors included Ben Holladay, John Butterfield, Johnston Livingston, William G. Fargo and seven men of the younger generation. Louis McLane was president -- and a director in the Pacific Mail Steamship Co., of which Allen McLane was president. (22) The survival of the fittest -- those with mail contracts -- produced no less strange bedfellows than politics is reputed to furnish!

Thus the pattern of operation repeats -- individual enterprise, with plenty of capital, undertakes to carry the mail for a healthy subsidy. The golden flood of government money attracts rival capital. The rival organization gives better service -- but without the backing of the mail contracts, is forced to capitulate.

Thus, the Postoffice Department becomes the fairy godmother of the transcontinental transportation -- first for the Pacific Mail Steamship Company, next for the express companies in combination.

In 1869, the railroad across the continent was completed, and the third act in the mail drama began. The express companies continued carrying the mail in sections where there was no such competition as the Pacific Railroad offered, but it was the beginning of the end for them as mail carriers. Just as it was for the Pacific Mail Steamship Company -- its service from New York to San Francisco was no longer needed, though the new service to China and Japan was valuable indeed, both to them and to American trade.

There is no space here to trace the third act -- how the mail-carrying contracts were life-savers to the new railroads. The picture is further complicated by the land-grants which, as we have seen, were not new. None the less, the roads which carried the mail survived and many of those without contracts were forced to agree to consolidation.

In 1918, the curtain raised on the fourth act. For the first time, airplanes carried the mail. A short precis of the mail-carrying activities would show that those lines blessed with mail contracts have survived, although the end is not yet written. Nevertheless, the recurrent pattern holds up, with no changes in the basic design.

Thus, from the earliest days of mail communication to our own day we see the same interesting play of drama -- a pioneer system of communication financed by private capital, subsidized by government money, rivalled by competition, able to win because of the difference -- the added margin -- of the government help.

It's going to be interesting to see the fifth act -- when rockets begin to span the Continent!

_________

(1) First Session, 30th Congress; 9 U.S Stat. p. 323
(2) 9 U.S. Stat. p. 203
(3) F. N. Otis, M.D., History of the Panama Railroad (Harper & Bros., 1867) pp vil-ix.
(4) The Bullock-Mallarino Treaty, 1846.
(5) 9 U.S. Stat. p 187
(6) idem pp 200-202
(7) 9 U.S. Stat. p 267
(8) Richard C. McKay, South Street, (Putnam's, 1934) pp 278,, 279.
(9) Otis, op. Cit.
(10) McKay, op.cit.
(11) 9 U.S. Stat. pp 537-589.
(12) Stanley B. Ashbrook, The U.S. One-Cent Stamp of 1851-57 (Lindquist, 1938.)
(14) Otis, op.cit. pp 64-66. He also gives (pp 159-160) these details on P. M. S. S. Co:

Origianl capital stock (1848). . . $400,000  . . . . . . . $400,000
Increased (1850) to. . . . . 2,000,000
Increased (1860) to. . . . . . 4,000,000
Increased (1865) to. . . . . .10,000,000
Increased (1867) to. . . . . .20,000,000

It paid 20% in 1866 and the $10,000,000 increase in 1867 was sold ($5,000,000 par for $10,000,000) and issued as a stock dividend ($5,000,000) of 50%!

(15) Missouri Republican, St. Louis, 26 July 1850.
(16) A. L. Stimson, Hist. of the Express Business, (privately publ. 1881.
(17) Ashbrook, op. Cit. P 275
(18) Sidney A. Wells in The Westerners Brand Book, V. III, pp 53 et. Seq. 1946.
(19) 11 U.S. Stat. pp 190 et seq.
(20) Mannel Hahn, in The Westerners Brand Book, v. III, pp 1 et seq. (1946.)
(21) See Mannel Hahn's "Pony Express: 1860 Equivalent of Advertising Campaign" in the Brand Book, Vol. III, Nos. 1 and 2-3. March and April-May, 1946.
(22) F. N. Otis, op. cit. pp 168, 230.