A Good Corporate Citizen: The Southern Pacific Railroad

Richard J. Orsi. Sunset Limited: The Southern Pacific Railroad and the Development of the American West, 1850–1930. Berkeley: University of California Press, 2005. xxii + 615 pp. Illustrations and index. $29.95.

The historical literature on railroads in America is massive, ranging from individual corporate histories to studies on state and federal regulation. Yet surprisingly, the nation's first big business has not been studied exhaustively. A topic that has been largely overlooked involves the impact of a carrier (or carriers) on a particular region or locality. Fortunately, Richard J. Orsi, professor emeritus of history at California State University, Hayward, has helped to fill this scholarly void, producing this ambitious work on the role played by the Southern Pacific Railroad (SP) on the American West, especially California. In the process of examining such matters as land settlement, water, agriculture and conservation, he effectively challenges the age-old notion that the SP was the evil "octopus" of Frank Norris literary fame, namely that the railroad repeatedly committed acts of corporate arrogance and abuse. Although the company did not always perform in the public interest, the firm was much more a builder than a destroyer of California and the West. The overall philosophy of SP executives was straightforward: management that sought to unlock the region's enormous potential, creating bountiful harvests of agricultural, mineral, and timber products and profits for individuals and society alike.

The story of the SP and its relationship to its far-flung service territory is complex. From the 1850s until the 1930s, the company expanded considerably, evolving from several shortline railroads into a mighty system, the result of takeovers ("system building") and construction. The SP benefited directly from an amazingly successful initial core of investors-promoters-managers, the long-remembered "Big Four:" Charles Crocker, Mark Hopkins, Collis Potter Huntington and Leland Stanford. These California visionaries made possible the Central Pacific, the western link of the nation's first transcontinental railroad, and they also built more trackage, bought additional lines and turned the Central Pacific into a vital part of a much larger concern, the SP. Their legacy continued. By the time of the Great Depression of the 1930s, the SP operated more than nine thousand route miles, making the railroad one of America's largest and most powerful. At times growth was uneven and troublesome, especially during the early part of the twentieth century when the property fell under the control of investment-banker E. H. Harriman and the Union Pacific Railroad, leading to a messy corporate divorce, the "unmerger" that resulted from the threatened break-up of the SP-Union Pacific combine by the federal government.

Although offering a solid overview of the corporate history of the SP that complements the best modern history of the company, Orsi has not produced a traditional volume of railroad business history. The focus is fresh. He is intrigued with the SP's influence on general development and sensitive to matters of environmental policy, seeking to examine the intersections between railroad and public interest and the often-creative role that the railroad played.¹

An intregal part of the SP story centers not on top management but rather on middle-level managers. This approach differs from that in most business studies; authors commonly move from one corporate presidency to another and closely consider the activities of the board of directors and executive committees. Fortunately, Orsi recognizes the frequently overlooked role played by middle managers. As he writes, "[they] attained great longevity with the company, moved up in responsibility, and lent remarkable effectiveness and continuity to corporate policy into the early twentieth century" (p. 25). Take the case of William Mahl. This German immigrant joined the company in the early 1880s and served in various capacities, including comptroller and special assistant to the president, and he did much to organize and streamline the finances of the company. Significantly, he made a subsidiary firm, the Pacific Investment Company, a...