The History and Economics of Utah's Railroads

By David F. Johnson

Chapter 5 The Economic Effect Of The Railroads

That the building of the railroads had a pronounced effect on the economy of the state is, of course, obvious. However, the attempt to measure this influence or to isolate the effect on various communities is difficult because of the great number of other economic factors acting at the same time. Still, the subject can be treated in a general manner, and in many cases, allowance made for the most important of the extraneous economic influences; and situations can be found where comparison of two communities can be made-one with and one without railway service-and the other factors relatively equal.

The growth of Utah's railway system has been tied in very closely with that of the mining industry from its beginning, and the effects on each other have been interrelated. Without the local railroads, the mining industry of Utah would not have existed-at least, not until recent years when some of the higher grade deposits would have been developed with the use of motor transportation. On the other hand, had the mining industry not developed, most of the railroad lines of the state would never have been built. The through lines, the Utah Central and the interurban roads are about the only companies in the state which were not organized to serve a definite need of the mining industry. As the mining industry prospered so did these railroads; and as some of the mines failed, the justification for the roads serving them ceased to exist, and the roads were abandoned.

As the mining industry's health has been dependent on its railroad service, the importance of these roads is reflected in the importance of the mining industry to the state.

In 1869, although precious metals had been discovered at several places in the territory, developmental work had come to a standstill awaiting better transportation facilities. In 1875, just five years after completion of the first railroad in Utah, more than five and one-half million dollars worth of gold, silver, copper, and lead were produced. The Utah Central, Utah Southern, Bingham Canyon and Camp Floyd, and the Wasatch and Jordan Valley Railroad can share the credit for making this production possible.

Annual production continued to rise as rail lines were built into new districts, and the established districts increased production until in 1890 a figure of $12,000,000 had been reached. For the next decade the value of these minerals produced averaged around $12,000,000 annually, but starting in 1900 it increased steadily with minor setbacks until 1917 when the production was valued at nearly $100,000,000.

By 1890, Utah stood third among all the states and territories of the Union as a producer of non-ferrous metals.[1] The state has held a high position since then. Based on annual average production of 1925 to 1929, it stood fifth in the United States in gold production, first in silver, second in copper, second in lead and fifth in zinc.[2] The economic importance of mining in Utah is aptly stated in Utah-Resources and Activities:

In actual figures, the output of Utah's mines is valued at about $120,000,000 annually. Of this gross value, approximately $85,000,000 is immediately expended largely within the state, for wages, freight, smelting, and supplies. Thirty million dollars of this is spent for labor at mines and smelters. The stockholders of the mining companies received, in 1929, approximately $38,167,318 in dividends, which was the largest dividend ever paid in the history of the state. The mining industry is, indeed, therefore, a very important factor in Utah's present economic structure. The mining industry provides employment directly for approximately 17,000 persons resident in the state. The economic and social welfare of these men and their families is dependent upon mining and industries directly built upon it. A survey of some of the mining towns seems to indicate that the national figure on size of family holds good for these particular towns. If it holds true that for every wage earner 4.3 persons obtain their livelihood, it means that about 70,000 persons are directly dependent upon the mining industry for a living. When we add to this number those indirectly dependent upon the industry, it brings the number considerably higher. This, of course, refers to the trades people, for almost all of the enormous annual payroll of twenty-eight and a half million dollars finds way into the channels of trade.[3]

An interesting comparison is that of the Park City and Dugway mining districts. Since 1881 the Park City mines have had rail connections and the district had produced to 1917 better than $169,000,000 worth of metals.[4] The Dugway district was organized about the same time as the Park City district, but was never closer than fifty-five miles to rail connections. Very high grade deposits were found here, some shipments said to run as high as 1,800 ounces of silver a ton. Work was done sporadically, and some shipments made.

In recent years, development has been confined largely to that necessary to hold the more promising land in the hope that the building of a railroad through the section will permit profitable sale or exploitation.[5]

This is but one of many examples. Of the fifteen districts in the state that had paid dividends up to 1917, out of forty-nine organized, only two did not have railway connections, and by far the greatest number of districts not paying dividends had never been served by a railroad.[6] Of course, a great many of these districts had never been productive enough to warrant construction of a line; but others such as the Dugway and Deep Creek areas were promising enough to attract much attention, and numerous attempts were made to obtain rail connections through to them. If these plans had not gone astray, the districts may have developed into great producers like Tintic or Park City-or they may have proved of little value but at least they would have had an equal chance for development.

In 1929 the mining industry was supplying four-fifths of all the railway freight tonnage originating in Utah.[7] The Chief Consolidated Mining Company alone was providing the railroads in 1929 with an annual average of 27,000 carloads of ore freight business, plus 150 carloads. of supplies to the mine, adding over $2,000,000 to the revenues of the carriers.[8]

One of the most striking examples of the effect of Utah railroads was that of the bituminous coal industry. The history of coal mining in Summit County has been discussed previously. During the decade of 1870 to 1880, these Summit County mines had managed to reach an average annual production of around 50,000 tons. By 1883, the year of the completion of the Rio Grande, production for the state had increased to 200,000 tons, due largely to the production of the Pleasant Valley Coal Company. By 1890, the year the Rio Grande completed standard gauging, production had increased to 300,000 tons; and ten years later, it passed the million ton mark.

During this time, Summit County was decreasing in importance as a coal producer, until just prior to 1906 the Pleasant Valley Coal Company was producing ninety per cent of all coal mined in the state. The year 1906 marked the entrance of the first "independent" producer in Carbon County. Two years later, another independent mine commenced production; and after this additional companies entered the field regularly. Production had increased to six million tons by 1920, and leveled off at about four million tons thereafter. In 1929 there were twenty-two operating mines in Carbon, Emery, and Grand counties, producing ninety-eight per cent of the state output.[9] During the period from 1890 to 1920, the population of Coalville decreased from 991[10] to 771, while the population of Price City, non-existent in 1880, had increased to 2,364.[11]

As coal mining grew, the towns of the district adjacent to the mines increased in size and importance, and the agricultural land began to be taken up and cultivated . . . Circulating in Utah as the result of this coal mining activity is $12,242,269 annually, produced and distributed directly or indirectly by the coal mines.[12]

About two-thirds of Utah's coal production was being exported out of the state in the early 1930s, a far cry from the days of the "coal famine" in Salt Lake City. For this we have to thank the coming of the Denver and Rio Grande Western Railroad to Carbon County.

The manufacturing industries of Utah, while even today still in comparative infancy, were affected beneficially by the opening of rail transportation to other areas of the United States. Although a number of industries was forced to discontinue operations by the competition of outside goods, the effect was, in general, a good one. Because of the isolation of the territory, a large number of industries was fostered by the necessity of providing certain goods for the people of the territory, regardless of inefficiencies and high costs. Many of these enterprises were "unnatural" to this area. The country, the quality of raw materials, and the culture of the population were simply not suited for certain lines of endeavor. Still, in the era of the territory's isolation these industries had to be promoted, whatever the cost, if possible to function at all. With the coming of the rails it was but natural that these industries should give way if the products could be manufactured elsewhere and delivered more cheaply than they could be manufactured locally. Thus disappeared shoe manufacturing, cotton textiles and other industries from the State of Deseret.

At the same time, a foundation was laid upon which could be built those industries for which the territory was naturally suited, but had been discouraged from developing because of lack of adequate transportation. Foremost among these was one connected closely with mining-the smelting of non-ferrous ores. Mention has already been made of the rapid growth of this industry in the decade immediately following completion of the railroad. From that point, the industry continued to expand, substituting fewer large operations for the many smaller plants that had dotted the Salt Lake Valley, until the area around Salt Lake City became the largest non-ferrous smelting center in the world. Twenty-nine per cent of the United States copper production, thirteen per cent of the lead, thirty-four per cent of the gold, and twenty-two per cent of the silver[13] are smeltered in central Utah.

The processing of Utah's agricultural produce for export is another great local industry-one for which the territory was naturally suited. After the first year or so of privation, this area has always been able to support its own population in regard to food products. Since the earliest days, the territory has had the production potential for an exportable surplus. This potential was not utilized, however, until the means became available for shipping surplus commodities; except for the period mentioned above, when local farmers did a good business in reprovisioning the California-bound gold seekers.

Prior to 1880 grain milling was the only food processing industry reported by the census to exist in the territory. In 1860 this industry consisted of ten plants, producing $264,818 worth of flour, and other milled products. By 1880 this had grown to eighty-five plants turning out $1,300,000 worth of mill products, and in 1929, fifty-five plants were making a product valued at over $9,000,000. By 1939 the value ,of the product had fallen to $6,000,000.

The census year 1880 listed salt manufacturing for the first time-ten plants, with a product valued at $60,000. In 1909 nine plants produced $139,488 worth of finished goods. Since 1909 the census has not shown value of product for this industry. The meat packing and canning and preserving of fruits and vegetables industries, neither of which was listed in the 1880 census, had both appeared by 1890.

The census of this year listed two plants in the canning industry. In 1929 there were thirty-eight plants, with an annual product valued at nearly $4,000,000.[14] Whether this industry had not come into existence earlier because the technology of the processes had not been developed is not known. At any rate, the industry could not have grown to its present proportions without a means of transporting the product to the out-of-state consuming centers. Utah-Resources and Activities states that the first commercial canning plant in Utah was established in Ogden in 1888. In 1931 the total pack for the state was 2,250,000 cases, valued at five and one-half million dollars.[15] Utah-produced canned goods are sold throughout the United States.

The meat packing industry consisted of four plants in 1890, with production worth $545,200. In 1919 eleven plants manufactured a product valued at $11,124,341, and in 1929, $8,835,640.[16]

Confectionery manufacture started in the territory in 1880 with four plants producing goods valued at $51,000. The first candy manufactured before this time used sugar hauled in by ox team, which often cost as much as $130 a bag. In 1933 the capital invested in this industry exceeded $3,000,000, employment was given to more than two thousand people, and the total value of the annual product was nearly $8,000,000.[17]

The sugar industry and iron manufacture, heroically introduced in the earliest territorial days, were not successfully established until years later. The first of the modern sugar factories commenced operations in 1891, but successful production was not achieved for several years. In 1933 there were sixteen sugar factories in the state with an average yearly product worth more than $6,000,000. This has been increased materially since then. Utah-made sugar is sold throughout the Midwestern and mountain states.

The modern iron industry had its beginning in 1922 with the construction of the Columbia Steel plant at Ironton. This industry today represents a capital investment of several hundred million dollars. The location was decided largely by the presence of railroads which made possible low-cost assembling of Utah coal, iron ore, and limestone deposits. Transportation difficulties which had contributed materially to the failure of first attempts at iron manufacture, have been so completely overcome that today the cost of assembling the raw materials and producing pig iron in Utah are among the lowest in the United States.

All of these industries owe, if not their actual existence, at least their present volume of production, to the availability of rail transportation. In each case, large percentages of the product are marketed widely throughout the West, and in some cases, throughout the nation. Without adequate transportation these industries would be limited at least to producing for a market confined to the immediate vicinity of Salt Lake Valley.

The railroads, in addition to their indirect effect on the state's economy through the growth of these industries, were also directly beneficial in the form of increased employment, use of supplies and services, and through taxes which they paid. For example, under the heading "Car and General Construction, Railroad Repair Shops," there were listed for Utah ten plants in 1900 turning out products valued at more than a million dollars. In 1929 there were nine plants producing $8,484,993 worth of parts and new construction.[18] Direct employment by steam railroads in Utah was 3,030 in 1900, 7,302 in 1910, and 6,309 in 1920.[19]

The impetus given to the agricultural economy of Utah is, of course, directly interrelated with that of the food processing industry. As the processing plants developed, the acreage and value of farms increased, until by the 1920s all of the farm land for which irrigation water was available in the state had been taken up. Between 1870 and 1880 acreage of improved farm land increased from 118,268 acres valued at $2,285,324,[20] to 416,105 acres valued at $14,072,178[21] -- nearly a four-fold increase in acreage and more than six-fold increase in value. During the same decade, population increased less than 100 per cent. In 1870 there was approximately 1.3 acres of improved farm land for each person in the state. In 1920 there were 1,715,380 acres, valued at $210,997,840,[22] and population was 449,396. Thus in that year there were better than 3.8 acres of improved land for each resident. Assuming that Utah was relatively self-sufficient agriculturally in 1870, the state should have been able to export sufficient agricultural produce for a population double that within her borders. Of course, changes in eating habits over the years would tend to reduce this somewhat. On the other hand, increases in productivity per acre would more than offset such a decrease. In 1870 the average value per acre of Utah's agricultural land was a little over $19. This had increased to $33 per acre in 1880, and was nearly $123 per acre in 1920.

Today agriculture and the food-processing industry of the state are limited by the lack of irrigation water. The productive land of Utah could be more than doubled if water were available for great areas of rich soil in the alluvial beds of prehistoric Lake Bonneville. Officials of packing plants have stated that the lack of agricultural produce-caused by lack of water is the main factor limiting the expansion of their manufacturing facilities in the state.[23]

Statistics on population, acreage, value of farm lands and assessed values of property show some interesting comparisons between various municipalities and counties in the state and, in a general manner, what effect the railroads have had on some of these places.

One of the most striking localities for purpose of comparison is Carbon County. Compare it, for example, with Uintah County. In 1900 these two counties stood about the same in population and assessed value of property. Uintah County is much larger in area, contains vast areas of the coal fields that underlie Carbon County, plus valuable deposits of some of the rare hydro-carbons, and is in a far superior position in regard to arable land and irrigation water supply. Yet by 1920 the population of Carbon County had increased to 15,489, compared to 8,470[24] for Uintah County. The assessed value of property in Carbon County in 1922 was over $27,000,000.[25] Farm land values in Carbon County averaged about $108 per acre. Yet the land in Uintah County, which is equal or superior in physical quality, had an average value of less than $85 per acre. Differences in assessed valuations, however, may be caused by different assessment practices in the various counties.

Because of its isolation, coal mining has not developed in Uintah County, and exploitation of its valuable hydrocarbon deposits has been on only a very limited scale. It is interesting to speculate as to what conditions would have existed had one of the proposed railroads been built into the Uinta Basin.

An amusing side-light is the fact that the bank at Vernal was built from brick shipped in by parcel post, this being the most feasible method of transportation. It is rumored that the holder of the mail contract was bankrupted by the shipment. Today, partly because good motor highways and other means of transporting goods have dispensed largely with the need for rail connections, the Uinta Basin is enjoying a prosperity greater than that of any other part of the state.

Yet the recent great oil discoveries in that area would have been practically valueless had it been necessary to rely on non-existing railways for shipping the "black gold" to refining and consuming areas. Because today the pipeline has superseded the railroad in the carrying of petroleum, the development of this industry will not be hampered by inadequate transportation facilities.

Carbon County can be compared in a similar manner to Emery County; especially two towns, one in each county. Price and Castle Dale had populations of 209 and 302, respectively, in 1890.[26] In 1930, Price, located on the main line of the Rio Grande, had a population of 4,084; and Castle Dale, less than forty miles away, and situated very similarly in regard to water supply, agricultural land and the coal fields, had a population of 713.[27]

In 1870 Washington County stood eighth in the state in population, with 3,064 persons, and sixth in assessed value of property. In 1922 it had fallen to seventeenth in population and twenty-third in property value. This county has never had railway connections. The area has a very long growing season, and precipitation in its mountains is comparable to that of others of the more important agricultural counties;[28] yet its farm land was valued at $119 per acre, compared with its northern neighbor, Iron County, much less favorably situated from the standpoint of climate, with an average value of $137 per acre.

Of the eleven counties which showed a decline in population on any census through 1920, six did not have adequate rail transportation. Of the remaining five, Juab, Piute and Tooele counties undoubtedly lost population because of the lessening of mining operations; Summit County lost its coal industry-consequently, parts of its population. Of the nine counties which consistently gained more than ten per cent population per decade, only one, San Juan, did not have rail service furnished by one of the state's major railway systems.

These statistics on population by counties, however, are quite misleading because of the great number of transfers of large areas from one county to another prior to 1920. Also, the population of some of the counties was so small that a change of less than one hundred persons would result in a large figure in per cent-change computation. The first objection can be eliminated by the use of statistics of population for cities, rather than counties, but this decreases still further the actual population figures, so that comparisons by percentage-change are not significant. For this reason, municipalities were selected that were comparable in all respects except for one having and one not having railroad service, as the best means of showing influences of the railroad; using absolute, rather than percentage-change in population. Many such comparisons are available. Population figures were not collected for 1930 and 1940 as it is felt that the coming of the automobile has minimized the effect of the railroads on this factor.

Ogden and Provo are very similar in every respect-water supply, agricultural land, climate, distance from the state capital, etc. In 1860 Provo had roughly five hundred more population than Ogden. By 1880, Ogden had already become a rail center and had 6,000 population. Provo had one rail connection, the Utah Southern, and a population of 3,400.[29] By 1920 the population of Ogden had become 32,000; and of Provo, 10,000.[30] Because of its superior transportation facilities, Ogden had developed more manufacturing trade, and financial and service industries than had Provo, whose only major manufacturing concern prior to 1920 was the Provo Woolen Mills.

Evidence of the importance of Ogden's railway connections was displayed during World War II, when this factor was influential in the decision of the United States Government to build no less than four great military supply and service bases in the vicinity of that city. The presence of rail links between Northern Utah and all important points on the Pacific Coast were significant factors in the location of these, and all of the other Government-financed industries that were established in this part of the Intermountain area.

Footnotes

[1] Anna Viola Lewis. "Development of Mining in Utah." Unpublished master's thesis, Department of History, University of Utah, 1941, p. 53.

[2] Utah - Resources and Activities. Department of Public Instruction. (Paragon Press, 1933), p. 309.

[3] Utah - Resources and Activities, p. 309.

[4] B.S. Butler, et al. Ore Deposits in Utah. U. S. Geological Survey, Professional Paper 111. (Government Printing Office, 1920), p. 292.

[5] Butler, Ore Deposits of Utah, p. 462.

[6] Butler, Ore Deposits of Utah, p. 130.

[7] Official Freight Shippers' Guide and Directory of the Denver and Rio Grande Western Railroad, p. 75.

[8] Shippers' Guide, p. 76.

[9] Shippers' Guide, p. 81.

[10] U. S. Bureau of the Census. Census of the United States, Population, Statistics by Cities, Volume 1 (Government Printing Office, 1890), p. 351.

[11] Census of the United States, Population, Statistics by Cities, 1890, p. 642.

[12] Shippers' Guide, p. 81.

[13] Industrial Utah. Salt Lake City Chamber of Commerce, 1947.

[14] U. S. Department of Commerce, Bureau of the Census. United States Census of Manufacturers, 1860-1937. (Government Printing Office), 1929.

[15] Utah - Resources and Activities, p. 347.

[16] United States Census of Manufacturers, 1860-1937. (Government Printing Office), entry for 1929.

[17] Utah - Resources and Activities, p. 346.

[18] United States Census of Manufacturers, 1860-1937. (Government Printing Office), entry for 1929.

[19] U. S. Bureau of the Census. Thirteenth Census of the United States, 1910, Population. (Government Printing Office), p. 147; Fourteenth Census of the United States, 1920, Population. (Government Printing Office), p. 120.

[20] U. S. Bureau of the Census, Ninth Census of the United States, 1870, Statistics of Wealth and Industry, Vol. III. (Government Printing Office), p. 262.

[21] U. S. Bureau of the Census, Tenth Census of the United States, 1880, Statistics of Agriculture, Vol. III. (Government Printing Office), p. 136.

[22] U. S. Bureau of the Census. Fourteenth Census of the United States, 1920, Agriculture, Vol. VI, Part 3. (Government Printing Office), p. 252.

[23] Replies to questionnaires submitted by the Committee of Industrial Expansion of the Utah Manufacturer's Association.

[24] Fourteenth Census of the United States, 1920, Population, Vol. I, p. 642.

[25] U. S. Bureau of the Census. Financial Statistics of the State and Local Governments, 1932.

[26] Eleventh Census of the United States, 1890, Population, Part I, p. 341.

[27] Fifteenth Census of the United States, 1930, Population, Vol. I, p. 1099.

[28] U. S. Department of Agriculture. Weather Bureau, Salt Lake City, Utah. Average Annual Precipitation in Utah. J. C. Alter, meteorologist.

[29] Tenth Census of the United States, 1880, Statistics of Population by Cities, p. 351.

[30] Fourteenth Census of the United States, 1920, Population, Vol. I, p. 642.

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