Thursday, December 2, 2021

Railroads: San Lorenzo Railroad Company

In the beginning, there was a strong community desire to build a railroad from San Francisco to Santa Cruz. But how it would get there was always the issue for debate. The three most reasonable plans alternated between a route down the San Lorenzo Valley, a route through the Pajaro Valley, and a route up Los Gatos Creek and down Soquel Creek. A fourth option, a direct route eighty miles down the coast, was also mooted constantly although it was generally considered the most costly and least practical of the four options. Each had its champions: the San Lorenzo route was favored by lime sellers and lumber companies along the San Lorenzo River, the Pajaro Valley route was preferred by Watsonville ranchers and farmers, the Soquel route was closely associated with Frederick A. Hihn's optimistic plans for mid-county, and the coastal route was encouraged by coastal ranchers and resort promoters as well as wealthy East Coast visionaries.

Lithographic Birds' Eye View of the California Powder Works, slightly idealized, ca 1870, by Britton & Rey. Note the suspicious road following closely along the west bank of the San Lorenzo River that resembles a railroad grade, albeit one on the wrong side of the river. A later version of this scene, showing a thicker tree cover suggesting the passage of a few years, changed this road to be a flume. [Bancroft]

Debate between the first three routes began in earnest in January 1866 in a series of newspaper exchanges between Hihn and a mysterious author only known as "Seyante." Hihn at the time saw the most feasible route being through the Pajaro Valley, which would connect Watsonville to the San Francisco & San José Railroad via a standard-gauge line. He argued it would be the cheapest and cater to the most people, even though the route to San Francisco would be considerably longer. Seyante, in contrast, fought for a San Lorenzo (Rancho Zayante) route that would continue over the Santa Cruz Mountains and eventually reach Redwood City or Mountain View. He defended his choice by pointing out the many resources that would be tapped via this route, as well as the relatively easy grade along most of it despite the mountainous terrain.

Lithographic view of the Summit of the Santa Cruz Mountains, looking toward San José and Gilroy, 1863. Drawing by Edward Vischer. [Honnold Mudd Library, Claremont Colleges]

As an aside, while some have speculated that Seyante was none other than Hihn, his lack of support for a San Lorenzo route in 1867 suggests otherwise. Of the small circle of knowledgeable people familiar with the San Lorenzo Valley in January 1866, Thomas S. Farmer seems the most likely candidate. Farmer was an Englishman by birth, had lived in the Santa Clara Valley in the late 1850s and early 1860s, travelled briefly to Australia, and then moved to the San Lorenzo Valley around 1866, where he became heavily involved in the lumber and lime industries. As a lumber merchant, he would have had to travel throughout the valley to negotiate deals with timber felling crews and other mills. He also was a trained civil engineer and mechanic, which he put to use advocating for and helping design the the San Lorenzo River toll road between Felton and Santa Cruz. In 1869, on multiple occasions, he expressed his strong support for a railroad to Felton and beyond, and he had all of the requisite skills and experience to be the mysterious Seyante.

In any case, the debate between the two preferred routes sparked a year's worth of material for the Santa Cruz Sentinel and led to public meetings and action eventually taken in June 1867 by the incorporation of two rival but not mutually hostile companies. Hihn's first railroad venture, the California Coast Railroad Company, was incorporated on June 22, 1867 with the initial goal of continuing a standard-gauge railroad south from the southern terminus of the San Francisco & San José Railroad to Watsonville. Two days earlier, however, the San Lorenzo Railroad Company was established by a group of eager and excited railroad speculators with their own plans for linking Santa Cruz to San Francisco.

Stereograph of a footbridge across the San Lorenzo River north of Santa Cruz, 1865. [California State Library]

The champion of this route up the San Lorenzo Valley was Horace Gushee, a recent resident of Pescadero who had moved to the San Lorenzo Valley and promptly became involved in the gold trade along Gold Gulch. Other initial subscribers included three Santa Cruz residents, two San Franciscans, and three residents of Benicia. Future pledge drives attracted several more residents of these three cities. The railroad began as a bold but humble affair, with only $100,000 set for the capital stock and initial plans to only build a route to King's Ranch, about fifteen miles north of Santa Cruz. Contrary to popular belief, Hihn was in no way involved with this initial endeavor. The goal of the company's directors was to transport lumber, lime, granite and sand, and other resources out of the San Lorenzo Valley to the Powder Works Wharf (Gharkey's Wharf) in Santa Cruz. It would also serve as a public convenience—i.e., a passenger line—which was even more important at the time since Eben Bennett's toll road would not be built until the next year.

Lithographic view of Rancho Zayante and Captain Isaac Graham's mill on the San Lorenzo River, 1863. Drawing by Edward Vischer. [Honnold Mudd Library, Claremont Colleges]

A survey of the route was completed within a few months of incorporation and by December 1867, the directors were negotiating rights of way with property owners. Grading for a standard-gauge railroad began on May 11, 1868 in Felton near modern San Lorenzo Valley Elementary following a brief ceremony by the surveyor, Thomas W. Wright, and several of the directors. The town itself was brand new. It had begun life as Isaac Graham's lumber mill before it erupted into a boom town in the mid-1850s. Its population was focused initially on gold prospecting but subsequently became involved in the lime and lumber industries. Most of the downtown district was planned by Frederick Hihn, Horace Gushee, and Edward Stanley in 1867. By May 1868, Felton still had few permanent buildings and an itinerate populace, but it sat at the confluence of the river and Zayante Creek as well as served as the junction between Graham's Grade, Felton–Empire Grade, and the crude, meandering roads along the river and creek. It also hosted the valley's first post office and school.

Lithographic view of the San Lorenzo Paper mill and Mr. Sime's residence on the San Lorenzo River north of Santa Cruz, 1863. Drawing by Edward Vischer. [University of Southern California]

Rather than using cast iron rails for the line, the railroad would initially use oak rails with wrought iron caps. This was done only partially to save money. The Civil War had heavily depleted the West Coast's iron reserves and the iron trade to California had not yet resumed at sufficient levels to allow for a locally-funded, fifteen-mile-long railroad line. For most of its route south from Felton, the railroad would adhere to the western side of San Lorenzo Gorge. Two crossings were planned: the first would be below Davis & Cowell's lumber mill, where the right-of-way would cross to the east to make a broad curve around the Hogsback; the second would be south of the California Powder Works (today's Paradise Park Masonic Resort), although where precisely is currently unknown.

Stereograph of Troutdale Farm near Boulder Creek, ca 1875. Photo by Romanzo E. Wood [CSU Chico – colorized using DeOldify]

Although the stated intent of the company did not mention an extension to the Santa Clara Valley and the route was intended to be built in two sections—first between Santa Cruz and Felton and later between Felton and King's Ranch—most commentators at the time saw the likelihood for an extension beyond King's Ranch. A separate railroad project in the Santa Clara Valley, the San Jose and Santa Clara Railroad, intended to build a route between Alviso (the old deep-water port of San José) and Saratoga Springs, leaving only a short gap between the two termini. As late as February 1869, the Sentinel's editor was promoting the trans-mountain scheme, going so far to state that it was the only reasonable route to San Francisco. It was revived again in October as part of an effort by Hihn to promote several local railroad projects.

Half of a stereograph of the San Lorenzo River looking toward Santa Cruz from the east bank near Broadway, 1860s. Photo by Lawrence & Houseworth [Society of California Pioneers – colorized using DeOldify]

From mid-May 1868, grading progressed rapidly until late July, when Isaac E. Davis and Henry Cowell, owners of the largest lime company on the Central Coast, filed an injunction to stop all work on the railroad due to claims of trespassing and unlawful seizure of property. Following the amended Railroad Act of 1863, the railroad's directors submitted bonds totalling $10,000 to be used to compensate Davis & Cowell for any property seized for the purpose of building the railroad. With this, grading on the railroad continued while the court case was appealed. Unfortunately, due to the exceptionally soggy winters that the Santa Cruz Mountains experienced annually, work had to stop in mid-November.

"On the grade of the Felton, Sta Cruz Co, Calif.," ca 1865, showing San Lorenzo gorge and the San Lorenzo River toll road. [Bancroft]

On February 24, 1869, most of the Santa Cruz-based board of directors abruptly gave up their posts and sold their shares. They may have been worried about lost revenue from the recently-completed Santa Cruz to Felton toll road (Highway 9), or possibly tired of the fight with Davis & Cowell, or they feared that their railroad would never be built. Other railroad schemes, including the Santa Clara & Pajaro Valley Railroad, incorporated December 31, 1867, may have also discouraged them. Who the new board was is unclear from the available sources, but they lacked the enthusiasm of their predecessors.

Even as grading resumed in late March 1869, the railroad was given a boon: the Supreme Court ruled in favor of the railroad. The Sentinel's editor called out Davis & Cowell's attack for what it most certainly was: an attempt by the lime magnates to cut out competition from San Lorenzo Valley lime producers. The San Lorenzo Railroad fought back, as well, opening a countersuit against Davis & Cowell, presumably for delaying construction and lost profits. This was necessary since the railroad was out of money. With many of its more interested backers out and two years' delay, the railroad was struggling to finish grading the route. Frederick Hihn's electoral victory as assemblyman in September 1869 led to renewed optimism that county funds could be allocated toward the railroad. In a series of meetings held in October, Hihn promoted all three proposed lines, promising to submit a bill to the California State Assembly as soon as he arrived in Sacramento. New surveys were conducted north of Felton to verify the feasibility of the San Lorenzo route, and many agreed that the route was the shortest and most practical, even if the Pajaro Valley route was the cheapest and easiest to build.

Half of a stereograph showing Santa Cruz from the east bank of the San Lorenzo River, ca 1860s Photo by Lawrence & Houseworth [Society of California Pioneers – colorized using DeOldify]

Even as optimism grew, the San Lorenzo Railroad's hopes were dashed twice in relatively rapid succession. On January 1, 1870, it was announced that Davis & Cowell had been granted a re-hearing in the Supreme Court. And then in March, Hihn's Railroad Bill failed to win the support of Governor Henry Huntly Haight, who opposed all special subsidies. The railroad was out of funds, had no public financial support, and faced another lengthy and expensive legal challenge, this time over the very constitutionality of provisions of the Railroad Act of 1863. Nonetheless, the dream lived on and speculators continued to speculate. In March, another railroad bill, this one designed to consolidate the San Lorenzo Railroad with the Menlo Park Turnpike in order for the two firms to construct a railroad using county subsidies was passed through the state legislature. It also was likely vetoed by Haight for the same reasons as the other bill. The likelihood of a railroad being built on the San Lorenzo River was decreasing daily.

All eyes turned to the Supreme Court. The compensation suit brought by the San Lorenzo Railroad was effectively shelved from 1870 to 1874 awaiting the final results of the Davis v. San Lorenzo Railroad case. If the railroad won the case, then it could resume its attempt to recoup lost revenue. If it lost, then recouping the lost revenue was no longer an option. Most in Santa Cruz County supported the railroad and the nascent town of Felton was gambling much of its existence on it, even incorporating a post office at the planned terminus in November 1870. Speculation was rampant in December that a favorable resolution was forthcoming, yet none came.

The intersection of Front Street and Pacific Avenue, where the San Lorenzo Valley Railroad kept its corporate offices upstairs in the flat-iron building, 1866. [Santa Cruz Public Libraries – colorized using DeOldify]

On March 11, 1871, nearing the end of his lackluster two-year stint as an assemblyman, Frederick Hihn began a revived campaign of building railroads in Santa Cruz County by organising the San Lorenzo Valley Railroad Company. It had virtually the same goals and grander vision as the San Lorenzo Railroad, but Hihn likely felt he could do better. Several former board members of the failing scheme jumped ship and joined the board of the new firm. Perhaps feeling slighted, the San Lorenzo Railroad regrouped and several former members returned to support their woebegone venture. Curiously, Edmund Jones joined both boards, serving as treasurer of the San Lorenzo Railroad and secretary of the San Lorenzo Valley Railroad. An editorial in the Sentinel on April 1 suggested that the older railroad had become a subsidiary of the newer, although little other evidence supports this. Surveying for the route of the new firm began at the end of the month and it adhered closely to the route of its predecessor.

While the San Lorenzo Valley Railroad project continued with renewed vigor under Hihn, the San Lorenzo Railroad continued to languish in the courts. Some of the delay may have been due to renewed negotiations between Hihn and Davis & Cowell, which caused both parties to postpone a hearing. By December 1873, however, Davis & Cowell had had enough and finally brought the case before the bench. In a near-unanimous decision published on January 1, 1874, Justice Joseph Bryant Crockett ruled that Section 34 of the amended state Railroad Act of 1863 permitted legalized trespassing and the illegal seizure of land without due compensation, which thereby violated both the state and federal constitutions. As a result, that portion of the Railroad Act was declared unconstitutional. The San Lorenzo Railroad had lost. With its fall, it seemingly brought down the San Lorenzo Valley Railroad as well. The repercussions of the decision reverberated across the state, where aggressive eminent domain had been the primary means by which many upstart railroads acquired their right-of-way. Many railroad projects across the state seemingly collapsed overnight, the financial burden of construction deemed too difficult to overcome. All future railroad projects would have to lease or purchase land for their rights-of-way and compensate property owners for any damages or resources used from the land.

Stereograph of the terminus of the San Lorenzo Valley flume at Felton, 1876. Photo by F. A. Cook. [ – colorized using DeOldify]

By the end of January, a new group had come together with less lofty goals. They hoped to build a lumber flume from King's Creek to the Santa Cruz beach, following approximately the route of the railroad. Surveying of the San Lorenzo Flume & Transportation Company began in September. By December, it became clear that the southern eight miles of the route would not have sufficient sources of water to maintain. levels in the flume. As a result, on December 3, 1874, the board incorporated the Santa Cruz & Felton Railroad. The vision of this project was focused: a narrow-gauge route between Felton and Santa Cruz. North of Felton, the flume would continue for another eight miles to King's Creek. Felton would become the transfer point, which meant that the development of the town, encouraged by the promise of a railroad, would not go to waste.

It would be another five years before the South Pacific Coast Railroad finally crossed the Santa Cruz Mountains, while it was thirteen years before a railroad was extended to King's Creek. The vision of early entrepreneurs and investors such as T. S. Farmer, Horace Gushee, Frederick Hihn, and others knew the potential of such a route and fought hard to achieve it. While it was not they who ultimately did it, it was finally done and the southern portion of that route—between Santa Cruz and Felton—remains intact today as the main trunk of the Santa Cruz Big Trees & Pacific Railroad. The dream lives on.

Citations & Credits:

  • Clark, Donald T. Santa Cruz County Place Names: A Geographical Dictionary. Second edition. Santa Cruz, CA: Museum of Art & History, 2002.
  • Hall, John. "Santa Cruz & Felton Railroad." Pacific Narrow-Gauge, 2015.
  • Various articles. Daily Alta California.
  • Various articles. Santa Cruz Weekly Sentinel.


  1. Very interesting. Could you point me to the history of when Neary Lagoon was cut off by the railroad?

    1. I don't know the specific history of Neary Lagoon. Technically, I don't think it was cut off from the railroad, rather it was eventually culverted, possibly as early as 1873 when the Santa Cruz Railroad began its first operations under the Bay Street truss bridge (or whatever was there originally). I think they left a channel for the lagoon, though, for a long time. It was probably culverted in 1906 when the Coast Line Railroad was built, necessitating the wye at Santa Cruz Depot. That is when the lagoon became surrounded by track. The railroad also built a short spur that ran to where the lower Dream Inn lot is today, which would have blocked any remaining waterway there.


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