By the 1930s, motor car No. 23 performed the passenger and mail duties. When it was in the shop, a more humble car and trailer was used.
The U.S. Postmaster General Burleson was the next person to unwittingly stumble upon Sexton’s spear. For several years mail had been carried by stage to Eureka for $8,000 a year, but when the passes were snowed in, delivery was sporadic. The USPS offered the contract to the E&P for $16,000 annually if a bond was posted guaranteed regular delivery.
Sexton informed the USPS that there would be no bond, no formalities, and no fines for delays. On this basis he would haul the mail at the old rate of $8,000.
That winter it snowed heavily. Mails from the overland trains began to pile up at Palisade. The feds insisted that Sexton could not legally refuse to deliver the mail on their terms. Sexton informed them that he would carry the mail like any other commodity- no bond, no contract, no fines.
Washington sent two inspectors to Eureka to investigate. Sexton accommodated them with free tickets for the 90 mile ride from Palisades on his train. But when they were ready to return home, the ticket agent informed them that he was terribly sorry, but all trains had been canceled indefinitely.
The inspectors telegraphed Washington for advice. They were told to rent a sleigh. It took them six days to make the return trip through the snow. They were “weary, cold, & disgruntled as they came over the hill into Palisade, and they probably turned the air blue when they saw an E&P train pulling in from Eureka.”
When the story hit the national papers, the Postmaster General enlisted help from the U.S. Attorney-General. He passed a regulation that forced the E&P to carry US mail on all regular-service passenger trains.
A group of officials traveled to Palisade to enforce the regulation. When they arrived, they saw a train made up, with passenger coaches, and a locomotive waiting full of steam. Sexton pointed out prominent signs that said “All regularly scheduled trains are indefinitely annulled, only specials will be run hereafter.”
The spokesman for the federal party insisted the mail be put aboard. Sexton informed them that it was not regularly scheduled passenger service, but a ‘special’, and that they’d better look at the sign on the side. The banner on the train read, “Special Train, For Dogs And Japanese Only”.
When news of the banner hit the national headlines, it went on the overseas news wires, and caused a furor. The Japanese foreign minister formally protested to Washington. This caused the State Department to get involved- now the USPS, the Attorney-General’s office, and the State Department were all trying to get this small-town, narrow-gauge railroad operator to bend to their will.
They could find no legal reason why Sexton wasn’t legally allowed to run special trains for anybody. The State Department appealed to Senator Newlands of Nevada, an old friend of Sexton’s. Upon arrival Sexton suggested they crack open some of his prime private stock of whiskey. After a merry meeting, Senator Newlands returned to Washington and pushed a bill through Congress that gave the Postmaster General special authority to negotiate mail contracts, and the Postmaster wrote up a contract that gave the job to the E&P just the way Sexton originally wanted it- no bond, fines, or penalties.
In February 1910, unseasonal spring rains washed out the track and slid the locomotive into the mud. Repairs were affected, they washed out as well. The real floods came in March, submerging the town, washing out 11 miles of tracks, and forming a 30-mile-long lake in the desert. The locomotive remained stuck for the next 2 years. The winter of 1911 saw temperatures of minus 20. Eureka faced famine without a railroad to bring in supplies. The railroad eventually got operations going again, with storms washing it out again in 1917 and 1921. By 1927, the roads were starting to get good enough to compete with the railroad, and the Eureka boom was waning. It finally ceased operations in 1938.
Looking at this empty valley today, with only snakes and jackrabbits and the occasional mainline train thundering past at 70 mph, it’s amazing to think that it was once the site of a scandal that went all the way to Washington and thence around the globe.