The Overland Mail Company had the main contract for transporting mail to California, but no line over which to travel. The Russell, Majors & Waddell Company had two minor contracts and the only open, unexposed route. What to do ? Solution of the dilemma by the process of annullment and the certain ruin of one of the contractors was not considered.
And something had to be done, for the regular flow of mail to and from California had to be maintained at any cost. A movement to carry that state out of the Union, or divide it North and South, was already being promoted with some promise of success. If California seceded, her gold would be denied the hard-pressed Union. Furthermore, if that catastrophe occurred, the position of Oregon and Washington would be jeopardized.
Without a doubt the dilemma was solved by an understanding between William H. Russell, William B. Dinsmore, and Congressional leaders as to what could and should be done in the crisis. Five days after the news of the disaster to the Overland Mail Company reached Washington, the Senate Finance Committee reported the Post Office appropriation bill. This provided for the bodily removal of the Overland Mail Company from the Southern to the Central Route, letter mail on a twenty-day schedule eight months of the year and twenty-three days for the remaining time, and the continuation of the Pony Express semiweekly until the transcontinental telegraph line was completed. The pay was $1,000,000.00 per year. . . .
The bill was approved by President Buchanan on March 2,1861, and became the law of the land immediately. On March 12, E. S. Childs, acting second assistant postmaster-general, officially notified Dinsmore that the postmaster-general had ordered service discontinued on the Southern Route by the Overland Mail Company and that a like service was to be performed on the Central Route. This service was to begin July 1,1861.
Four days later, March 16, Russell and Dinsmore signed a contract in New York, under which the Central Route was divided into two sections with each assuming operation of one of them.