Though the Sacramento Valley Railroad had reached Folsom on January 1, 1856, it was not yet completed. The original plan was to continue to Marysville, but like always, money was the problem.
Even with the four engines pulling trains loaded with all the passengers and freight they could handle, meeting its construction costs were still proving difficult. The cost of laying the track had been nearly fifty percent more than their surveyor, Theodore Judah, had estimated and there was thirty percent interest to be paid on the floating debt under the trusteeship, along with some ten percent bonds. They were generating income, but if they were to expand, the fully privately financed railroad would need government help.
The railroad’s Vice-President William T. Sherman contacted his brother John, who had recently been elected to Congress. He ask John to try and obtain Federal land grants for the Railroad and a wagon road to Council Bluffs, Iowa. He was not at all successful.
Theodore Judah was not daunted. He had earlier surveyed the line to Marysville and knew it was possible, even though Lester Robinson, the Sacramento Valley Railroad’s engineer believed it was too expensive to construct. Judah was so positive that he leaked the results of his survey to others, which upset Robinson. Judah felt that if the Sacramento Valley Railroad was not interested in building to Marysville, he would form another railroad, the California Central. He did so, incorporating the company on April 21, 1857.
Ground was broken for the California Central on June 1, 1858, and between then and October 13, 1861, 18.5 miles connecting Lincoln, to the north, with the Sacramento Valley Railroad at Folsom Junction was built. In the meantime Judah had proceeded to Auburn to survey his route over the Sierra. The citizens of Auburn, irritated with his action, as they wished to be connected to the Sacramento Valley Railroad, formed their own railroad, the Sacramento, Placer and Nevada Railroad, which they built and by 1862 connected Auburn with Folsom.
The City of Sacramento, meanwhile, was experiencing a drastic loss of revenue. Folsom had become the new center for freight heading into El Dorado and Placer Counties, and to retaliate, Sacramento placed a tax on all passengers and freight goods that crossed the levee from river boats to the trains at its docks.
Upset, but again not defeated, the ingenious Lester Robinson surveyed a new route to a place called Newport, on the river just south of Sacramento, and named the townsite Freeport. In 1859, he extended a Sacramento Valley Railroad branch from its Perkin’s Station southwesterly 12 miles to the new townsite (This was known as the Freeport Railroad and was abandoned by the Central Pacific in 1865, possibly the earliest railroad abandonment in the Southern Pacific records). The City of Sacramento countered by tearing up the original tracks of the Sacramento Valley Railroad along Front Street.
During the same period, the people of Placerville were demanding that rail service be extended beyond Folsom to their town to carry the heavy freight that was now heading over the Sierra to the gold and silver mines in the Comstock Lode of Nevada. They approached the Sacramento Valley Railroad’s new President, George F. Bragg, and Lester Robinson, now the company’s major stockholder, to see what could be worked out. Garrison and Sherman had by this time left California.
The Placerville citizens had heard that Judah had discussed his ideas with two Sacramento hardware men, Collis P. Huntington and Mark Hopkins, a grocer named Leland Stanford and a drygoods dealer named Charles Crocker. They also knew that President Lincoln, on July 1, 1862, had signed the new Pacific Railway Act, authorizing construction of the Central Pacific and specifically showing the route of the California Central and the Sacramento, Placer and Nevada as the Western terminus. They were concerned that a railroad would not pass through Placerville and extend on along the wagon road through “Johnson’s Pass” to Nevada as they desired. The delegation from Placerville asked that the railroad be extended to Placerville and, from there, over the Sierra Nevada.
The owners of the Sacramento Valley Railroad informed the delegation from Placerville that, if El Dorado County would grade the route from Folsom and furnish ties, they would supply the rails for ten percent County Bonds. For this, a new company, the Placerville and Sacramento Valley Railroad was incorporated June 12, 1862.
At the general election on Sept. 2, 1863, the people of El Dorado County approved the issuance of $200,000 in ten percent bonds which would be used to purchase stock in the new railroad. The City of Placerville also pledged $300,000 in bonds towards this end.
The Placerville and Sacramento Valley Railroad promptly asked for the money, and construction began in late 1863, from Folsom Junction towards Placerville.
TO BE CONTINUED