What had happened was this: the Post Office Department cut off mail service to California via steamer from New York with the expectation that the bill to forward it overland would pass Congress. Russell had already offered to take a contract for three times a week from St. Joseph to Folsom, California, on a twenty-five day schedule, for $900,000 the first year and thereafter six times a week for the same amount.
Congress failed to pass the bill, and Russell with the aid of Senator Gwinn of California urged President Buchanan to order the service as a public necessity. In a cabinet meeting on June 10 this question was debated, and the decision was to do nothing.
Russell was now doomed. Not even desperate measures, which he unwisely took a bit later, could save him. Three factors combined to make his problem insoluble—expenses incident to putting the C.O.C.& P.P. into operation, failure to secure the big mail contract, and delay in forwarding supplies to the southwest. . . .
He was not to blame for losses incurred on account of the Mormon incident, the failure of the government to reimburse his firm for them, or for the failure of the War Department to order supplies out on the New Mexico Route at the anticipated, proper time.