The Niles Western Railroad was founded before the turn of the century. With the success of the nearby South Pacific Coast, a local business man named Jebidia Niles convinced some of his friends to invest in a new railroad that would connect the East Bay to Stockton. The route they chose was to follow Alameda Creek through the east bay hills into the Livermore valley and climb over Altamont Pass to reach the Central Valley and Stockton.  

After a period of financial struggles, track laying began in 1883. Within a year, construction had reached the community of Centerville, and the construction gangs began to attack the steep canyon walls. By 1884 they had reached the Livermore valley. In the meantime, construction crews pushed from Stockton toward the Altamont Pass. 

The line connecting Oakland and Stockton was completed in 1886. The Niles Western generated a lot of business initially -- carrying goods to the Central Valley and fruit and vegetables to the Bay Area. Competition from the Central Pacific, Southern Pacific, and Western Pacific put a strain on financial returns. The only way to survive was to become a transcontinental railroad. Planning began on pushing a route eastward through the Sierras with the goal of reaching Denver. 

The route chosen through the Sierras took the line south of Lake Tahoe. It was a high rugged pass that led to steep grades and sharp curves. Several bridges were needed to cross the various rivers and streams -- putting quite a challenge to the engineering department. 

As construction pushed down the eastern side of the mountains, funds began drying up. With reports of financial difficulties and construction delays, finding more investors became increasingly difficult. It became obvious that laying a new transcontinental line from Nevada all the way across the Rockies was just not feasible. With time running out on their funding, a last ditch effort put them in possession of a narrow gauge railroad that gave them a rail connection with the main CP line east of Reno NV. They broad gauged the acquired line and completed the trans-Sierra route in 1890. With the CP (later the SP) connection, they were able to provide a competitive connection between the east and Northern California markets. 

A later alliance with the Western Pacific provided access to the Northwest and markets in Northern California. A number of smaller railroads were acquired in the Nevada and Utah areas. Growth during the early 1900s was strong with many acquisitions and operating agreements with other lines. The depression hit hard but the Niles Western survived. 

Since the war, the Niles Western has flourished. With its numerous connections and joint agreements with other rail lines, the Western Division carries a great deal of interchange traffic. It serves as one of the major gateways to eastern markets for Central Valley agriculture and Bay Area industry. ...