David Eccles and the Origins of the Utah Construction Company a commemorative lecture presented at the 2007 Utah Construction/ Utah International Symposium The Beginning of an Era by Dr. Thomas Alexander Thursday, October 18, 2007 1 It’s a pleasure for me to be here today and let me thank a number of people for this opportunity. Thanks to Beverly Ahlstrom and to my daughter Tracy Alexander Zappala for their help with the research. Thanks to Richard Sadler and Joan Hubbard here at Weber State for inviting me to give this presentation. I thank Brooke Ann Alexander, another daughter for her help with the pictures that I put together today and thanks to John Sillito and the staff of Special Collections here at the Stewart Library for their help with the documents here. To Brad Cole and the staff of the Leonard J. Arrington Archives at Utah State University for their help and Greg Thompson and his staff at the University of Utah Marriott Library for their help. Most particularly let me thank Utah International and the Eccles, Wattis and Dee families for sponsoring this symposium. I’m grateful for the opportunity to be here today. On May 12th of 1849 Sarah Hutchison Eccles gave birth to David Eccles who joined his older brother, John, among William Eccles and Sarah’s expanding family that eventually included seven children. After working hard selling resin stick as lighters and products of his fathers lathe in Scotland and obtaining less than a year of schooling David immigrated with his family from Scotland to Utah in 1863. The family settled first here in Ogden and then successively in Liberty and Eden in Ogden Valley. Cataracts had blinded William Eccles, but he turned utensils on his lathe by feel and David peddled those products from a pack in Ogden and Brigham City and points between. The family moved to Oregon City in 1867 and William Eccles, David now age eighteen and his younger brother Stewart found work cutting cord wood. The back braking labor of felling and 2 sawing timber became David’s entree in to the business in which he grounded his fortune. In 1869 after two years in Oregon the Eccles family moved to Ogden because of the joining of the Union and Central Pacific that same year. Ogden became Utah’s transportation center and it surpassed Provo as Utah’s second largest city. David and Stewart returned to lumbering. In the winter of 1869- 70, now twenty years old David found additional work in Wyoming as a freighter and in Eden on his father’s homestead. The entrepreneurial spirit evidence in his business ventures in Scotland however impelled him to brake loose from working for others. Capitalizing on the skills he had learned in Oregon he negotiated a contract to furnish logs for the Wheeler Saw Miller which was located at the confluence of Wheeler Creek and the Ogden River just west of the present site of Pine View Dam. With his earnings he purchased two oxen. To his great regret an accident killed the oxen as they pulled logs for him. The death of his team forced him to return to work for others. He worked for the Union Pacific and the Alameda Coal Mine in Wyoming. Recognizing David’s industriousness the boss gave him a job for which he was not qualified, because of the lack of schooling in Scotland he had not learned to do arithmetic properly and he soon lost the job as a bookkeeper for the company. Soon Chinese workers willing to work for much lower wages replaced the Euro Americans in the job there at the coal mine. The boss fired him and he returned to Eden. After returning to Ogden Valley he again engaged in logging. 3 David recognized the need for better education to supplement his entrepreneurial skills and during the winter of 1872- 73 and again in a later winter he enrolled in a private school in Ogden’s old City Hall that was run by Louis F. Moench. Moench a well educated immigrant from Germany’s Rhineland later became principal of Weber Stake Academy, and now Weber State University. He’s best known today as the lyricist of a familiar Latter- day Saint hymn written first in German as “ Sehet, ihr voelker” and translated in to English as “ Hark All Ye Nations.” Many of you are familiar with that hymn. Although he attended only two terms David learned enough to develop the skill of adding a row of figures in what seemed to observers like lightening speed. The winter of 1872- 73 proved extremely busy for this ambitious young man. In addition to attending school he negotiated a freighting contract to take a load of coffins from Ogden to Pioche, Nevada. You wonder perhaps what all of this stuff that David did during his early life has to do with Utah Construction. Well his earnings in lumbering formed the basis of his fortune. The earnings in lumber provided the funds for his investment in First National Bank and investment in the sugar industry. The investment in the bank then led to his investment in Utah Construction. And the investment in Sugar led to Utah Construction’s first large contract. If you don’t learn anything else from this presentation today you ought to get those three points. To understand his success then, we need to understand these things. Now during the summer of 1872, David had a contract to furnish logs for a mill owned by Bishop David James on Monte Cristo forty- five miles east of Ogden after he finished the contract he reached an agreement with 4 two colleagues to share the cost of building a mill during the summer of 1873, the next year. He used a loan and the money he’d earned from freighting coffins for his share of the capital for that mill. Firm of Henry E. Gibson, W. T. VanNoy and David Eccles operated the mill and the following year they opened a lumber yard in Ogden. As David managed the mill on Monte Cristo he found time to come down the mountain to Huntsville to dance. There he renewed his acquaintance with a young woman Bertha Marie Jensen whom he’d previously seen in Huntsville and had met at Monech’s school. In contrast with David’s impoverished family, Bertha a native in Denmark had relatively fixed parents. Then in spite of their social differences the two feel in love and married in the Endowment House in Salt Lake City on December the 17th of 1885. The marriage produced twelve children. After his marriage David continued in the lumbering business. He logged and processed lumber on Monte Cristo with Gibson and VanNoy and then with Gibson. Then in 1881 after dispute because Gibson traded a span on his horses for some worthless oxen he broke with Gibson and formed his own company and after this time he was independent. Convinced of the need to retail his own products David opened a lumber mill on the corner of 24th Street and Lincoln Avenue in Ogden at which he always considered his primary business. Even when he became bank president and president of Utah Construction he kept his office at the lumber yard. Eccles soon moved his timber operation to Scofield a mining district in Carbon county about fifty miles northwest of Price. Concurrently he opened lumber operations in Idaho. 5 Engaging in business with John Stoddard who lived in Wellsville, he began to taking an interest in one of his fellow Scotsman’s daughters, Ellen. That interest bloomed into love between the two. Born in January 1867 and nearly eighteen years younger than David, Ellen was only a couple weeks shy of age eighteen at the time of her marriage to David in the Logan Temple on January the 2nd 1885. Although the LDS church continued to encourage plural marriages in 1884 the federal government had inaugurated an intense campaign against polygamist Mormons and David kept his marriage to Ellen secret. At various times she lived with her father’s family in Cache County at Scofield and in Oregon. The marriage produced nine children. Between 1884 and 1889 David continued to run his lumber business, but he entered in to local politics as well. He served as an alderman and mayor here in Ogden. While serving as mayor he bridged the gap between the Mormon and non- Mormon business communities by championing the organization of the Ogden Chamber of Commerce in April of 1887. He also oversaw the construction of a new city hall. At the time David also expanded his lumber operations. Between 1883 and 1889 he opened new timber stands in Oregon the opportunity to market lumber from the lush stands of the mountain west and pacific coast became part of the incentive for the construction of railroads through the west. And the available railroad transportation led to a boom in railroad logging. As entrepreneurs moved into the Rocky Mountains, California and the Pacific Northwest, to harvest evergreens Eccles got in on the ground floor of the logging business. 6 In 1883 he purchased a mill to manufacture railroad ties at North Powder from John Stoddard. Organizing the firm of Spencer, Ramsey and Hall in 1887 Eccles established sawmills at Veneta, Oregon and Chandroth, Washington. Fluming or floating logs to Veneta, the company cut the logs into ties, loaded them on railroad cars and shipped the out to fuel the ever expanding railroads throughout the west. In 1888 Eccles closed his operations at Scofield and moved the mill to Telocaset about thirty miles north of Baker, Oregon, and about eight mile from North Powder on the Union Pacific Railroad. Eccles’ loggers at Scofield had been cutting illegally on public lands and after the inauguration of the Cleveland administration in 1885 General Land Office Commissar William A. J. Sparks began a sustained attack on illegal use of public resources. In addition, the General Land Office lumber inspectors had reportedly been extorting bribes from the company. That was somewhat of an incentive to close the operations down. In 1887 Eccles began his associations with Charles W. Nibley and you see the two of them here on the advertisement for the Oregon Lumber Company. Nibley a Scottish immigrant like Eccles earned a fortune in lumbering and in the beet sugar business before he became Presiding Bishop of the LDS Church stockholders in addition to Eccles, who held a controlling interest in the company. In 1889 David moved Ellen’s family to North Powder. Eccles and Nibley induced the Union Pacific Railroad to use rails salvaged from other operations to construct in 1890 a twenty mile long narrow gauge railroad from Salisbury eight miles south of Baker northeast through the Sumpter Valley and he himself invested in that railroad as well. In addition the U. P. contracted with Eccles’ firm 7 to furnish 500,000 ties each year which they shipped on their new railroad to various destinations. In 1891 the company shipped its first timber from Sumpter Valley and in 1892 Eccles opened a mill at Baker. By 1893 the company had operations at Hood River, Meacham, North Powder, Baker and Pleasant Valley. Eccles’ company managed to weather the economic depression that followed the financial collapse in 1893 and the company was able to keep its employees, because they honestly told the workers about the dangers of working for the company under these stringent economic conditions. At the same time they promised the workers that they would treat them fairly. Into the early twentieth century the company continued its operations. In 1902 Eccles opened the mill at Anglish Oregon and about forty miles northwest of Portland. The town again lay on the Columbia River and also on the railroad line. In 1903 Eccles purchased the Lost Lake Lumber Company at Hood River also on the Railroad line and the Columbia River and he consolidated with the Oregon Lumber company. In 1905 Eccles induced the Union Pacific to construct a spur line the Hood River Railroad from Hood River twenty- five miles up to Parkdale. This allowed them to access the lush stands of fir in the region. In the mean time Eccles began to invest in other businesses. He reluctantly bought stock in the Utah Sugar Company, the parent company of Utah- Idaho Sugar. In spite of his reservations about investing in that company his connection with U& I proved a god send for him. He also began to invest in banking and it was the banking business that eventually led him to invest in Utah Construction. In 1881 a group associated with Horace S. Eldridge then president 8 of Deseret National Bank and manager of ZCMI chartered the First National Bank in Ogden. The bank located its offices at the corner of Washington Boulevard and 24th street. At the time the only Ogden stock holder was Neil C. Fliger. In 1883 the First National Bank increased its capital from a $ 100,000 to $ 150,000 and David invested in the bank and was elected to the board of directors. In 1888 the board elected David H. Parry as president of the bank and in 1889 Eccles was elected, or in 1892 Eccles elected vice president. In 1894 he purchased Parry’s stock and was elected president of the bank. In 1898 he became a director of the Deseret Savings Bank and Deseret National Banks in Salt Lake City. These banks later became the basis of the First Security Bank system, now part of the Wells Fargo Bank system. As a faithful Latter- day Saint he also responded to calls to help his church. He never served a mission himself but sent sons on missions. He made his initial investment in the Utah Sugar Company because of a request from Heber J. Grant. Later when President Lorenzo Snow decided to issue bonds to help satisfy the church’s creditors David Eccles subscribed to $ 200,000 worth of Latter- day Saint bonds. Eccles also paid off a $ 7,000 debt of the Ogden fifth ward by inducing President Lorenzo Snow to allow the ward to credit his tithing toward the debt toward that ward. Imagine trying to do something like that now. While David Eccles amassed a fortune from lumbering, the earning from which he invested in other business, two other young men, Edmund O. and William H. Wattis began to make their mark in business. E. O. and W. H. farmed together in Uintah and you’ll hear some more about them from Stan Layton later 9 on, but they also began taking grading contracts often with their uncles George L., Charles J, Amos B., and Warren W. Corey. In 1881 the Corey Brothers and Ira E. Spalding organized Corey Brother Construction Company as a private company. In 1886 the Wattis brothers joined with their uncles and Spalding and incorporating Corey Brothers. The corporation constructed railroads in various states. Sometime after this incorporation David Eccles offered to purchase a share in the company, but reportedly the opposition of Warren Corey kept him out. Already however, Corey Brothers had begun financing their operations by borrowing $ 50,000 from Eccles’ First National Bank. For the Portland to Astoria job for which the Corey Brothers contracted to grade the railroad line the contract required the company to pay the contractors at the completion of each twenty mile section of the railroad. As they moved along in the construction the company ran short of funds, in part because they had to front the cost of construction. Financial problems also arose because a company they were doing some work for in Nevada went bankrupt and because of the financial stringency. The depression of 1893 was probably the second worst depression that we had in the history of the United States. When Corey Brothers could find no financing to conclude the railroad contract local authorities auctioned their equipment to meet their obligations. In the mean time, the Corey Brothers soon reached First National Banks lending limit of ten percent of their capital. Warren Corey came to bank to borrow some more money. Well bank officials told him that David Eccles wasn’t there. He was in his office over at the lumber company where he always 10 had his office, so Corey went and sought him out. What David did was to say, “ Look, I don’t want to talk with you. I want to talk to W. H. Wattis he’s the general manager of the company.” So Wattis came in to Eccles office and Eccles asked him, “ Look what’s the matter. Why do you need more money?” Wattis replied, “ That nothing was the matter if we could get rid of the Coreys.” He told Eccles that job wasn’t good enough for seven families to live off. Unable to meet their obligations as the depression deepened the Corey Brothers filed for bankruptcy in 1895. To settle their debts the Wattis’s and Corey’s had to sell a great deal of their property in downtown Ogden and on the bench, east downtown to the First National Bank. As a bankrupt company Corey Brothers passed into receivership and the receiver sold the company assets now totaling about $ 7,000 to a new company incorporated on November the sixth of 1895 with capital of $ 10,000. Significantly with the new Corey Brothers they had a new set of senior partners all officers of the First National Bank. After the reorganization the officers of the bank, Thomas D. Dee, James Pingree, Joseph Clark, and David Eccles owned two- thirds of Corey Brothers Construction Company. Eccles held the largest block of stock with thirty- six shares. Dee, Pingree and Clark each held ten percent among the Corey Brothers only Warren Corey and his wife, Julia, with thirty- two percent and Amos Corey with one percent remained as stock holders and William H. Wattis held only one percent of the stock in this company. In what was an apparent effort to avoid calamities similar to that the company had experience in 1895 David Eccles insisted that company carry no 11 long term debt. In a bow to the Corey Wattis partnership however and because David Eccles had considerable confidence in him William H. Wattis was appointed vice president and general manager of the company. The new owners elected Dee as president of the company and Pingree as secretary and treasurer. Since the company had come under the wing of First National Bank however, David Eccles as bank president and the largest stock holder became a major power in the company. Soon however as Wattis had hoped the new owners of Corey Brothers shut the Corey brothers out of the business. On January the 8th of 1900 E. O. and W. H. Wattis together with their brother Warren L. Wattis incorporated the Utah Construction Company. They subscribed stock worth $ 8,000 from an initial offering of 24,000. Then on February the 8th of 1900, David Eccles, Thomas Dee, James Pingree and Joseph Clark, you’ll remember their names from the bank together with the Wattis brothers purchased the remainder of the stock. Utah Construction agreed to purchase Corey Brothers assets except their books, probably weren’t any good anyway, for $ 24,000. In the reorganization the Wattis brothers and W. H.’ s wife Marie held $ 8,000 in shares, the same amount as David Eccles. Dee held $ 4,000 worth and Clark and Pingree $ 2,000 worth each. The directors reappointed W. H. Wattis as vice president and general manager and Dee was appointed as president. Wattis’ reappointment came on the motion of David Eccles who had a considerable confidence in this younger mans ability. Eccles told his wife Bertha that the Utah Construction Company was one business that he did not have to concern himself about and that Mr. 12 Wattis knew the construction business and was competent to handle it. He also had similar confidence in E. O. Wattis whom he eventually place in charge of the companies San Francisco office. Under new management Utah Construction still had to finish the contracts that Corey Brothers had previously negotiated. The one Corey relative that they hired was Lester S. Corey, who served in various positions and eventually became company president. Completing the Corey Brothers contracts, Utah Construction finished a number of jobs including grading a road from Idaho Falls to St. Athenie for the Oregon Short Line, a subsidiary of railroad magnate Edward H. Harriman’s Union Pacific Railroad. They also continued negotiating contracts for other jobs. In 1901 Utah Construction took a contract with Oregon Short Line to grade a line from its terminus in Utah to Las Vegas, Nevada. This construction project put O. S. L. and Harriman’s Union Pacific system in competition with the Los Angeles and Salt Lake railroad owned by William Andrews Clark, who was a banking and mining magnate from Montana and who served for a time as Montana’s senator. The Union Pacific had surveyed a line from Utah to Los Angeles in the nineteenth century, but Clark insisted that the franchise had lapsed because Union Pacific had not constructed the line very soon. This difference in opinion led to a frantic race between the two lines to completely construction through choke points. That is Narrow Canyons where workers could construct only one line. Both the Utah Construction Company and the L. A. S. L had crews that they pushed into the breach. Beginning at choke points construction crews actually graded road beds between places where other crews had already laid tracks. 13 Lester Corey served as Utah Construction’s forwarding agent. In that capacity he had to make sure that hay, oats, and other supplies reached the camps ahead of the construction crews. From that vantage point Corey watched the progress and the confrontation between Utah Construction and Clark’s company. They sent men and teams over land to places as much as fifty or more miles ahead of the rail end, those are Corey’s words as he watched this. Laying rails at the rate of a mile a day the O. S. L people reached a choke point in Caliente Canyon, about sixty miles as the crow flies from Modena, Utah which was the last town in Utah before the tracks went into Nevada. Crows however don’t fly the circuitous route that Utah Construction had to take to get into Caliente Canyon and down to Meadow Valley Wash in southern, southwestern Nevada where the town of Caliente was located. The Utah Construction crews reached Caliente Canyon before the L. A. S. L. crews did. Although the story is a bit unclear, Utah Construction must have already graded road bed through the canyon because the O. S. L. crews pulled in laying track on the way. When they got to the canyon they found that L. A. S. L. crews had strung a wired fence across the road bed, behind the fence stood a squad of toughs with rifles aimed at the O. S. L. construction crew. O. S. L. chief engineer, William Ashton, order his men to push the construction cars up to the fence and then he dumped a load of ties across the fence. In the face of these riflemen then, Ashton jumped the fence to call their bluff. Well as it happened the shooters weren’t bluffing, at least not exactly. As soon as Ashton reached the other side of the fence the rifle men greeted him with volley of shots. 14 Fortunately the shots were all bang and no lead because the shooters had loaded their rifles with blanks. Both sides laughed at the confrontation and cooler heads prevailed. Utah Construction crews then packed up and returned to Utah and Idaho to carry several bank widening contracts. U. P. and L. A. S. L. took a year to negotiate an agreement and the line eventually became part of the Union Pacific system and Utah Construction returned to finish the road into Las Vegas. Significantly one of the stations in Caliente Canyon is named Eccles probably after David Eccles. After the organization of the company Eccles understood that Utah Construction could not really prosper if they continued to take small contacts for portions of railroad lines or for realigning various railroad lines the way the Corey Brothers had done. He wanted to undertake a very large project, but he needed help to negotiate it. His help came from Henry Havemeyer. As we’ve noted before through the good offices of Thomas Cutler, Eccles had already met Havemeyer. Cutler’s Utah- Idaho Sugar Company had sold a fifty- one percent interest to Havemeyer’s sugar trust. In June of 1902 after Cutler had introduced them, Havemeyer left Cutler twiddling his thumbs in the outer office and spent most of the day with David Eccles. The wily New Yorker apparently thought he could wear Eccles down, having cut his teeth though on the rough and tumble of western business Eccles held his own. After having his fill of Havemeyer’s tactics Eccles finally told him bluntly, “ We don’t have to sell. We don’t owe a dollar. This is what we’ll do and nothing under that.” Accepting Eccles proposal Havemeyer purchased fifty- one percent of the Ogden, Logan 15 and Oregon sugar companies that Eccles owned for more than the combined total of the three companies, and he consolidated them into the Amalgamated Sugar Company. Although he stood his ground in these negotiations, Eccles recognized that he could not battle a powerful company like the American Sugar Refining Company, so he bargained for the best deal he could. Significantly instead of detesting Eccles for his unyielding stand Havemeyer found Eccles a capable and impressive businessman and they became close friends. In Bertha Eccles’ words, “ Havemeyer didn’t lose any respect for him because he stood up for what he knew was right.” In fact he kept Eccles on as company president. Later when Havemeyer sent one of his technical experts to investigate Amalgamated Sugar Company plants the expert returned with the complaint that Eccles managers and other employees didn’t have any advanced education. Havemeyer then defended Eccles, he told him, “ Any man Mr. Eccles employs as a superintendent or to work around the mill is satisfactory and you must not interfere with Mr. Eccles.” Now Havemeyer’s friendship with Eccles proved more that propitious. Following the death of Callis B. Huntington in 1900 Edward H. Harriman gained control of the Southern Pacific Railroad. He already owned a controlling interest in Union Pacific and with the control of S. P. he effectually monopolized all of the railroad traffic from Salt Lake City to California. Previously S. P. had divided its patronage between the Denver and Rio Grande and the Union Pacific. With the 16 acquisition of Southern Pacific however, like a first rate monopolist Harriman began to squeeze the D. & R. G. In the mean time ownership of D. & R. G. had passed from Jay Gould to his eldest son George Jay. George Gould then owned a controlling interest in railroads stretching from Buffalo New York to Ogden Utah and he intended to extend that railroad from Baltimore to Oakland. To accomplish the western leg of his dream Gould turned to E. T. Jeffery who was president of Denver and Rio Grande in which Gould had a controlling interest. Gould and Jeffery tried to conduct surveys in secret over Beckworth Pass and down the Feather River Canyon to Oroville in California. But Arthur Caddy and Walter Barknet who had long planned for such a railroad learned of these efforts. Pressing Gould with claims that they’d already staked. Barknet negotiated an agreement with Gould on February the sixth of 1903 to provide for a new company to build this railroad from Salt Lake City to Oakland. On March the third then, a month after the two had signed this agreement and less than a year after Eccles had negotiated the sale of the controlling interest in his sugar plants to Havemeyer eleven men sat down at the California Safe Deposit Building on California Street in San Francisco. And you should remember that name, California Safe Deposit because it becomes important later on to the company. They signed and agreement to construct the Western Pacific Railroad from Salt Lake City to Oakland by way of Beckworth Pass, the Feather River and Oroville. Beckworth Pass lay more that 2,000 feet lower than Donner Pass which the Southern Pacific controlled. 17 Virgil Boge whom Gould sent out to conduct surveys found that they could construct a road with a grade of one percent, making it much more efficient that the Southern Pacific’s grade over Donner Pass. After word of the new railroad reached Ogden the Company Officers learned that the contract for the western leg of the rail road from Oakland to Oroville had gone to E. B. & A. L. Stone of San Francisco. No one however had won the contract for the eastern end of the road which was to cross the Sierra Nevada, span all of Nevada and then cross Utah into Salt Lake City. No one in Utah Construction except David Eccles had an association with anyone with influence who could recommend them to Gould’s representatives. He was in the word of Lester Corey, “ The only one of our group who was known in eastern circles.” Moreover “ Eccles firmly believed that the company could do the job, so he agreed to go to New York and see what could be done,” those are Lester Corey’s words. Since he had a working relationship with Henry Havemeyer Eccles went to see the sugar magnate. Because of Havemeyer’s confidence in Eccles’ ability he recommended Eccles to the W. P. officers. Eccles said that “ Havemeyer told Gould and his associates that anything that Eccles would sign his name to they could be sure he would see it through.” Significantly Eccles, personally obligated himself to the successful performance of the contract, gave his personal word for it. In the midst of these negotiations on July eleventh, 1905 Thomas D. Dee contracted phenomena and died. On August seventh vice president W. H. Wattis called a meeting of the board of directors, the directors then elected David Eccles 18 president of the company. On September thirtieth, Eccles met with the board to ratify the first of the results of his negotiations with the Gould people. The directors agreed to sign first what to have been six contracts and seven supplemental contracts that authorized Utah Construction to prepare a roadbed for laying of rails from Salt Lake City to Oroville, California. The first contract obligated Utah Construction to grade between Salt Lake City and Silver Zone Pass, a pathway through the Toano Range about a hundred and ten miles west of Salt Lake City. Readers should understand that Utah Constructions obligation on this as on many previous contract consisted on preparing road bed on which the railroad laid its tracks rather than to lay the tracks as well. It did some jobs where it laid tracks but a lot of these involved grading road bed. Eccles then tasked Andrew H. Christenson with supervising the contract from Salt Lake City end and Edmund O. Wattis to superintend the Oroville end. Each section of the line had its own problems. In crossing the Bonneville Salt Flats near Wendover the construction crews faced a vast span of water soaked salt under pinned by mud. To solve the problem by laying lumber on the salt laying tracks on the lumber and hauling train loads of earth and gravel until the train bed would hold the locomotives and railroad cars. Consulting with supervisors and engineers the company broke new technological ground. This is the old technology, horses and wagons and scrappers. Here’s an example on a construction project on the way they went ahead with their horses and wagons. Before 1905 construction company 19 workmen had prepared the road bed with horse drawn plows scrappers and dump wagons. Crews blasted through rock with dynamite but horse drawn equipment did virtually all of the earth moving. Since numatic drills available in the nineteenth century were bulky and difficult to move crews did most of the drilling by hand to place dynamite and nitroglycerin. On the Utah Construction job however, on the western construction job, Utah Construction began to move its technology into the twentieth century. Crews began to use in Lester Corey’s words, “ Air compressor, power drills, small steam locomotives, dump cars of four to eight cubic yards capacity, and steam shovels.” You can see in this picture one of the trains with dump cars and the steam shovel operating, this is at Beckworth Pass. Since much of the hardest work took place in California and Western Pacific had its office in San Francisco as construction near completion in 1908 Utah Construction opened what they anticipated would be a temporary office in San Francisco. Eccles sent E. O. Wattis to head this office which was located in the Flood Building on Market Street between Turk and O’Farrell. After completion of the Western Pacific job the company began to secure contracts for work on the west coast and instead of closing this temporary office, it remained opened. E. O. and his associates Henry J. Lawler, John G. Tyler and John Q. Barlow aggressively sought contracts on the west coast as well. With the exceptions of the difficulties encountered on Utah’s Bonneville Salt Flats Utah Construction crews had a relatively easy time constructing the road through Utah and Nevada. The seventy five mile Feather River Canyon in 20 northwestern California between Cady and Oroville however seemed like something from another world. On the surface a span of seventy five miles that dropped only one foot in a hundred seems like a walk in a park, at a glance. If you look at a topographic map of Feather River Canyon however, it reveals something quite different. The canyon is so steep that contour lines seem to lie on top of one another. And photographs from the canyon reveal a gloriously rugged landscape. And you’ll see one of those pictures here. In some places surveyors had to hang by cable to drive the center line and field space across the canyon. In some places crews had to work very hard because they had to build a railroad grade with curves of only twenty degrees. Utah Construction blazed a trail and brought supplies in by mule train to set up camps and used these as bases for blasting out wagon road to haul in provisions and equipment. Eleven men lost their lives working on a rope bridge at Cromberg. Five died in and explosion at Beckworth Pass. At the confluence of Grizzly Creek the crews had to raft around shear cliffs. Utah Construction blasted forty tunnels of between forty and 7,500 feet in addition to building bridges, trestles and doing cuts and fills. E. O. Wattis moved his family to Oroville just beyond the north fork of the Feather River and his daughter reported that they could hear blasting from their home. As the construction proceeded, Utah Construction in general and David Eccles in particular faced a new problem caused in large part by the panic and recession of 1907. On October 22nd 1907 W. H. Wattis approached J. Dalzell Brown, Western Pacific’s treasurer and asked him for payments due the 21 company. Lying to Wattis, Brown told him that the company didn’t have any money on hand when in fact Western Pacific had deposited in the California Safe Deposit and Trust Company in San Francisco. Wattis had to leave San Francisco but Brown promised to send him the checks to Salt Lake City. Later Brown who was also the treasurer and vice president of California Safe Deposit, he had both those companies together, sent Utah Construction two checks totaling $ 236,000 drawn on California Safe Deposit. John Pingree who was the cashier of First National Bank of Ogden had left the business when the checks arrived and James F. Burton who was assistance cashier received the checks and sent them to California Safe Deposit for credit instead of depositing them in the San Francisco banks at the First National generally did business. Dalzell Brown and the other bank officers however knew something that Wattis and Brown didn’t know. Through out the month of October 1907 California Safe Deposit was insolvent, in fact only deposits from Western Pacific from failing earlier and the bank apparently tried to protect itself by paying only nominal amounts from W. P. had deposited. More over California Safe Deposit had not kept the more than $ 400,000 required by the state of California for its financial institutions. Thus in an age before deposit insurance First National stood at risk. Employees at California Safe Deposit nicely credited First National’s account for the checks, this was on October the 28th 1907 but they paid out no money, they simply credited the account. Safe Deposit proved quite unsafe deposit however because it closed its doors two days later on the October 30th. 22 To compound the difficulty at the same time because of the recession Western Pacific ordered construction curtailed by forty percent. In spite of Western Pacific’s curtailment, Utah Construction had obligated its self to pay subcontractors their retained percentages, but W. P. didn’t have to pay Utah Construction. In effect Utah Construction faced involuntary bankruptcy. Now David Eccles had guaranteed the contract with Western Pacific personally so he felt personally responsible for the losses incurred by the banks failure and the obligations to the subcontractors. As a result he negotiated a personal loan of $ 100,000 from Desert Savings Bank which he deposited in First National Bank, the remaining $ 125,000 came from Utah Construction’s undivided profits. Thus Utah Construction and David Eccles absorbed this loss. Utah Construction however agreed to repay the bank losses and though the documents on this matter are not clear Eccles may have recovered some of the money that he advanced. After the completion of the contract Utah Construction tried to recover its losses from Western Pacific. Western Pacific insisted that since California Safe Deposit had credited Utah Construction with the checks that they gave him that the company had no liability. Safe Deposit was bankrupt of course and the checks were no good. Utah Construction officers believed that Western Pacific should repay the money. Officers of Utah Construction and Western Pacific then agreed to submit their disagreement to arbitration on April 29th 1910 the two companies’s turned the dispute over to Charles P. Ells. Ells ruled for Western Pacific and Utah Construction then appealed to the California Superior Court in 23 San Francisco in 1912. The California Superior Court also ruled in favor of Western Pacific and to add insult to injury ordered Utah Construction to pay court costs and attorney fees to Western Pacific. Utah Construction the appealed to the California Supreme Court and on January the 9th 1917, five years after David Eccles’ death the Supreme Court sustained the lower court decision in favor or Western Pacific. Now I discussed this case with an attorney friend that told me that a Utah company probably didn’t stand the chance of beating a California company in California court in 1912. He said that the company might have stood a better chance had they applied in federal court. In spite of this setback Utah Construction had made its mark as one of the west’s major construction companies. The company received $ 22.3 million dollars for a contract that kept its crews and subcontractors busy from 1906 through the end of 1909. The company hired more that 7,700 workers it drew many of them from Europe through an employment agency in Chicago. At about the same time the company contracted to construct this line. It agreed to build a line for the Nevada Northern Railroad in Nevada from Cobre on the Southern Pacific line southward to Ely. Eccles also purchased an interest in a livestock company, which is son and executor of estate David C. Eccles sold to Utah Construction in 1913 to obtain money to pay his fathers inheritance tax. The owners incorporated as the Vineyard, Land and Stock Company. Between 1908 and 1911 the company also undertook a number of smaller projects which kept their crews busy. All of these 24 activities proved extremely profitable. In 1900 the incorporators had purchased the assets of Corey Brothers for $ 24,000, in 1906 the company increased its capital to $ 500,000, on December the 31st of 1912 a few weeks after Eccles’ death the company had paid stock of $ 903,000, moreover it had additional resources of assets over liabilities totaling $ 1.4 million. David Eccles had invested $ 8,000 in a company in 1900 that was worth $ 24,000. At the time of his death in 1912 the value of the stock and undistributed profits of Utah Construction Company totaled $ 2.3 million. In 1971 Leonard Arrington interviewed Marriner S. Eccles, the son of David and Ellen Stoddard Eccles. Marriner had had both the Utah Construction Company and First Security Corporation. Eccles told Arrington that Utah Construction was then worth in excess of $ 60 million, this was in 1971. Now I’m quoting from Marriner Eccles, “ The Eccles family holding in First Security are chicken feet compared to Utah Construction.” David Eccles died on December the 5th of 1912 running to catch a train in Salt Lake City he had a heart attack from which he did not recover. By today’s standards where billionaires seem to abound, his estate seems relatively small. David C. Eccles administrator of that estate valued it at $ 7.3 million. In 2007 dollars however the estate would be worth about $ 154 million. Bertha got a widows share of one- third the estate and his children by both Bertha and Ellen received equal shares of the remainder. As a plural wife Ellen received none of the estate. His heirs paid inheritance tax of $ 297,000. 25 At his death Eccles’ stock in Utah Construction Company were valued at $ 235,000, that from an $ 8,000 investment. It was the fifth largest block of stocks that he owned exceeded only by Amalgamated Sugar Company, Lewiston Sugar Company, Utah- Idaho Sugar Company, and the Oregon Lumber Company. In effect his $ 8,000 investment in Utah Construction in 1900 had grown 2,938 percent in twelve years. That’s a fairly decent return on your investment. Now to what did David Eccles owe his success? The origins of his fortune lay in hard work and thrift. During 1872 while he ran the mill on Monte Cristo he seldom slept in a bed. He worked until dark, laid down where ever he could find a place to nestle himself and began to work again at dawn. He spent virtually none of the money that he earned saving it as an investment to improve his position as a capitalist. Although he accumulated some debt during the early years shortly after his marriage to Bertha he paid that off and he ordered his business affairs so that he carried no long term debt. He had excellent business acumen and extraordinary ability to recognize significant economic trends. He based his fortune on lumbering during a time of cheap or free land and a rapidly expanding market. Then instead of carrying all the all of his eggs in one basket, he diversified into eighty- three companies in a wide range of business ranging alphabetically from Adams Copper Mining and Smelting Company in Washington County to ZCMI in Salt Lake City, that’s A to Z. He was an excellent judge of the abilities of people with whom he associated and of the opportunities open to him. He recognized the particular strength of people like Thomas Dee and William H. and Edmund O. Wattis. He 26 knew how to cultivate the friendship of people that could that help him. Without his association with Henry O. Havemeyer it seems unlikely that Utah Construction would have obtained the large contract to build the eastern leg of the Western Pacific Railroad Company. Clearly Utah Construction Company owes much of the credit for the early successes which provided a foundation for its future to David Eccles. Thank you. © 2007 WSU Stewart Library, All rights reserved.