Founded in late 1874, the Occidental and Oriental Steamship Company (also known as the O&O) was created for a simple purpose – to compete with the Pacific Mail Steamship Company.
Pacific Mail had signed an agreement with a number of railroads in 1869 following the completion of the Transcontinental Railroad. Under the terms of the agreements, after its ships landed at San Francisco, its passengers from Asia would be placed on the transcontinental railway lines to travel from the West Coast to the East Coast. The agreement had proven effective and profitable for all parties until 1873, when Pacific Mail’s management reneged on the agreement. It began routing its passengers via an overland trip through the Isthmus of Panama and then by ship to the East Coast. The reasons? The company had built new ships and wanted to use them more effectively – and not sending passengers by rail meant more money for Pacific Mail…
Southern Pacific and Union Pacific get even
To fight Pacific Mail on its route from Hong Kong to San Francisco, executives of the Central Pacific Railroad and the Union Pacific Railroad came together in 1874 to form the Occidental & Oriental Steamship Company (known as the O&O) and provided the company $10 million in capital (about $227 million today). The railroads’ purpose was to create a competitor to Pacific Mail and to force it to respect the passenger agreements it had signed. George Bradbury, a former president of Pacific Mail, was named the new company’s president.
Help from the British White Star Line
Bradbury travelled to London seeking charter contracts. He met with the chairman of the White Star Line in October 1874. The meeting led to a two-year charter agreement for three of White Star’s vessels – two cargo-liners (the SS Gaelic and the SS Belgic) – as well as the RMS Oceanic, the White Star’s first luxury liner, which had become redundant on the North Atlantic route.
The Oceanic gave the O&O immediate credibility as well as a prestigious vessel to entice travelers. The Oceanic steamed from Liverpool to Hong Kong, and then began its new route from Hong Kong to Yokohama, Japan, and then on to San Francisco. On its first voyage the Oceanic set a record, crossing the Pacific Ocean in 16 days and 10 hours, which was eight days less than Pacific Mail’s ships. The Oceanic beat its own record in 1876; it reduced the time across the Pacific to 14 days and 15 hours. The Oceanic’s success began a long collaboration between the two companies – White Star supplied British officers to lead the ships, while O&O provided Chinese crews.
Bradbury and his staff chartered other vessels as well. O&O ships traveled the same routes as those of Pacific Mail ships – and generally beat them at their own game.
The success of the O&O’s ships meant that its railroad backers had achieved their goal and led Pacific Mail to sign a contract with the O&O to operate a joint service on the route. However, during the ensuing years, Pacific Mail managers expressed displeasure with the contract and threatened to break it (as they had with the previous contract). Pacific Mail protested that the O&O was carrying three times more passengers and cargo than it did…
Therefore, O&O remained active much longer than the railroad managers had originally thought it would. The O&O’s agreement with the White Star Line continued; four more ships were chartered – the SS Arabic and SS Coptic in 1881 and the new SS Belgic and RMS Gaelic in 1885. The RMS Oceanic remained the O&O’s flagship and most prestigious ship until it was retired in 1896.
Leland Stanford leads O&O (and other enterprises)
Leland Stanford (March 9, 1824–June 21, 1893) was an industrialist and politician.He served as the 8th Governor of California from 1862 to 1863 and also represented California in the U.S. Senate from 1885 until his death in 1893. He and his wife Jane were also the founders of Stanford University, which they named after their late son.
Before entering politics, Stanford was a successful merchant who built a business empire after coming to California during the Gold Rush. He was president of the Central Pacific Railroad and later the Southern Pacific Railroad (1885-90).
He engaged in mercantile pursuits on a large scale in the state capital of Sacramento. He was one of “The Big Four,” who were the major investors in the plan for the Central Pacific Railroad. The railroad was incorporated on June 28, 1861; Stanford was elected as its president. His three associates were Charles Crocker, Mark Hopkins and Collis P. Huntington, all of whom are also well-known in 19th century California.
In 1859 Stanford ran unsuccessfully for governor of California. Nominated again in 1861, he won the election and served one term (then limited to two years).
In May 1868, he joined several other wealthy men and founded the Pacific Union Express Company. In 1870 the company was merged with Wells Fargo and Company. Stanford served as a director of Wells Fargo and Company from 1870 to January 1884. After a very brief retirement, he served again from February 1884 to his death in June 1893.
The same month that he helped found Pacific Union Express Company, Stanford started the Pacific Mutual Life Insurance Company (now named Pacific Life). He also served as the life insurance company’s first president (1868-76).
During the construction of the Central Pacific Railroad in 1868, Stanford and his associates acquired control of the Southern Pacific Railroad. Stanford was elected the railroad’s president, an office he held until 1890, when he was ousted by Collis Huntington.
In 1874, Stanford and his family moved from Sacramento to San Francisco. At that time he became the president of the Occidental and Oriental Steamship Company.
A decade later, the Southern Pacific Company was organized as a holding company for the Central Pacific-Southern Pacific system. Stanford was president of the Southern Pacific Company from 1885 until 1890 when he was forced out by Huntington. It is speculated that Huntington’s actions were retaliation for Stanford’s election to the U.S. Senate over a close friend of Huntington.
Despite Huntington’s actions, Stanford was elected chairman of the Southern Pacific Railroad’s executive committee in 1890. He held this post and the presidency of the Central Pacific Railroad until his death.
The 20th century
Throughout the period from 1874-1899, the O&O was the Pacific Mail’s most serious competitor (despite their agreement). Then, in 1900, the general manager of Pacific Mail was appointed president of the O&O.
The O&O was challenged by the larger and faster ships of Pacific Mail and its management began to divest the company’s charter contracts. The SS Coptic began the last O&O voyage on October 30, 1906. O&O’s remaining ships were then sold to Pacific Mail. On July 23, 1908, the last formal board meeting of the O&O took place.
Although the steamship company was begun to irritate Pacific Mail, the O&O proved to be an able competitor and advanced the capabilities of both companies.