History Corner

The Santa Cruz Railroad, Part 3

From 1876 to 1880, the Santa Cruz Railroad did reasonably well financially, but was hindered by the competition with the Southern

Pacific Railroad at Pajaro. Being a different gauge than the Southern

Pacific meant that cars were not interchangeable, and all freight and passengers had to be transferred to different trains at Pajaro. In 1880, the overthe-mountain South Pacific Coast Railroad was completed to Santa Cruz. The Pacific

By John Hibble Coast Steamship Aptos History Museum Company was also offering better freight rates in Santa Cruz; therefore, the railroad line saw very little freight business.

The construction costs for the

Santa Cruz Railroad exceeded $591,000, over twice what

F.A. Hihn had estimated. By that time, Hihn was paying the expenses out of his own pocket.

Finally, in February 1881, the trestle over the San Lorenzo

River was brought down in a flood. Hihn, Spreckels and other stockholders were no longer willing to subsidize operations in the face of competition with the

South Pacific Coast and Southern

Pacific Railroads. The Santa Cruz

Railroad went into bankruptcy.

Consolidation

In October of 1881, the Southern Pacific bought the Santa Cruz Railroad at auction and began laying standard-gauge track which was completed by September 1883. The two years of construction severely affected access to Spreckels’ Aptos Hotel. The narrow-gauge locomotives were moved to other locations (e.g., the Jupiter was sent to Guatemala to transport bananas).

As soon as standard-gauge track reached Aptos, Southern Pacific built a spur line into Aptos Creek Canyon to harvest the timber. It was the most expensive rail line that they ever constructed. The town of Loma Prieta was built, including a sawmill, post office, express office, stores, cabins, and a hotel. The town grew to 185 residents and the mill was expanded to produce 140,000 board feet of lumber per day at full production.

In May of 1883, Frederick Hihn’s Aptos Mill opened on Trout Gulch Creek, just above its junction with Valencia Creek. It was capable of producing 30 to 40 thousand board-feet of lumber per day. The mill was moved to Valencia in 1885.

In January of 1887, Southern Pacific bought the over-themountain South Pacific Coast Railroad and controlled Santa Cruz County’s two main railroad lines promoting tourism and industries.

In 1888, Spreckels opened the largest beet sugar factory in North America in Watsonville, using the railroad to haul the raw and finished product. The factory helped Watsonville to weather the depression of the 1890s.

In 1903, President Theodore Roosevelt visited Santa Cruz County by train.

By 1918 there were 18 passenger and six freight trains a day arriving and departing Santa Cruz. Trains also provided transportation for high school students. The direction of the morning train determined which high school you went to. Most students in Aptos took the morning train to Watsonville.

In 1927, Southern Pacific began the Suntan Special, an excursion train over the mountain from San Jose to the beach in Santa Cruz. The late 1930s were the most popular years of the Suntan Special. It was not uncommon to have 5,000 riders a day. A round trip cost $1.25. At least one train also ran each operating day along the coast to Watsonville Junction to drop passengers off at Seabright, Capitola, and Aptos. The excursion train was suspended during World War II.

Regular passenger service on the Santa Cruz Branch Line was suspended in 1938, and the Aptos train station was torn down in 1940. That same year, a storm closed the over-themountain rail line, and it was eventually abandoned. In April of 1940, the Suntan Special resumed, going around-themountain through Watsonville Junction to Santa Cruz, adding 35 minutes to the trip.

From July 1947 until September 1959, the Suntan Special continued during the summer, carrying about 900 passengers per trip.

On Sunday, May 7, 1976, a 100year anniversary commemoration was held with the cooperation of Southern Pacific Railroad and the Chambers of Commerce of

BACK TRACKING A ceremony on May 7, 1976 in Aptos marked the 100-year anniversary of the railroad.

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Watsonville, Aptos, and Santa Cruz. It began at Watsonville Junction at 9 a.m., with a ribbon cutting, followed by a 9:30 stop at Aptos, and then a ceremony at the Santa Cruz Depot from 11:30 to 12:30 p.m. and a 1:30 p.m. ceremony at Felton's Roaring Camp.

In 1996, Union Pacific Railroad bought the Watsonville-Santa Cruz line.

FINANCIAL ADVICE 6

non-working spouse (who doesn’t themselves have earned income). Let’s look at a hypothetical example to help illustrate this: Bob and Sally are a married couple and are both 35 years old. Bob is a stay-athome dad, and Sally is the primary breadwinner earning $100,000 per year. Based on Sally’s salary, she could contribute up $6,000 in 2021 to her own traditional or Roth IRA and she could contribute up to $6,000 to a Roth or traditional IRA owned by Bob. Keep in mind that you can only contribute up to the annual maximum per spouse’s IRA account (in 2021, $6,000 for those under 50, $7,000 for those over 50) or up to your total earned income for the year, whichever is less. So, in the above example, if Sally only made $10,000 working this year (not $100,000) then she could only contribute up to $10,000 total between her own IRA and her husband’s spousal IRA (maybe she contributes the max $6,000 to her own account and $4,000 to Bob’s IRA as an example). Whether or not contributions to a spousal traditional IRA (not a Roth) are tax-deductible will depend on if the working spouse has a retirement plan offered through their employer and if household income is below a certain threshold. Again, a qualified tax professional can help you determine if contributions to a spousal traditional IRA would be eligible to be tax deductible or not given your individual situation.

Another consideration is the phased rollout of CalSavers to workers in California. CalSavers is a program being run by the state of California aimed at employers who don’t currently offer their employees access to a workplace retirement plan. By June 30, 2022, employers

On October 12, 2012, the Santa Cruz County Regional Transportation Commission completed acquisition of the Santa Cruz Branch line, which is now owned by the people of Santa Cruz County. The rail right of way is now planned to include a pedestrian/bicycle trail and passenger service in the future. It will be interesting to see what role the rail trail plays in our future given the lack of transportation alternatives.

with 5 or more employees who don’t offer an alternative workplace plan to employees are going to be required to opt into CalSavers. The program is essentially a Roth IRA (and has all the same contribution and income limits as mentioned above). However, the program allows for workers who want to participate the ability to establish an account easily (as it will be facilitated through their employer) and contribute via payroll deductions. Lastly, because CalSavers is simply a Roth IRA, if you have a Roth and/ or traditional IRA elsewhere, you total annual contribution to all Roth and traditional IRA accounts in your name in 2021 is $6,000 ($7,000 if you’re older than 50) maximum between all accounts.

Having a workplace retirement plan, especially if there are employer matching contributions, is a great benefit. But if you are one of the 33% who do not have access to a plan then you still have opportunities to accumulate retirement assets on your own. If you do have access to a workplace plan, it usually is a good idea to look to maximize contributions to that plan before looking to do outside independent plans on your own. Talk with a financial professional to evaluate your individual situation.

Soren Croxall, CFA, CFP® is a registered representative of LPL Financial Securities and Advisory Services offered through LPL Financial, member FINRA/SIPC, a Registered Investment Advisor. LPL Financial and Croxall Capital Planning do not provide tax or legal advice. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.