WHY UNITED STATES?
Although America was not the first country in the world to roll carts on rail tracks, the United States did open a new era of transportation. When the Golden Spike connected the transcontinental railroad, what had once been an arduous journey of months now took just 10 days. People flocked to ride into the future. Commerce, communication and culture expanded. And, not unimportantly, the newly emerging union was at last truly linked. In many ways, the railroad “united” the United States. It would not be long before other nations would follow, including Canada and Russia.
UNION OF A DIVIDED NATION
It was Abraham Lincoln who signed the bill authorizing the transcontinental railroad, in no small part from a need to create greater communication and union with the new states of California (1850), Oregon (1859) and Nevada (soon to come in 1864). California was of urgent concern because it was threatening to secede. When Lincoln signed the authorization allowing the Central Pacific Railroad to build east from Sacramento, California (and the Union Pacific to build west from the Missouri River), the errant state was very involved in the idea of a united country.
CONNECT THE DOTS
Connecting the country was challenging. The first American railroad to carry passengers and freight was the Baltimore and Ohio, chartered in Maryland in 1827. At midcentury, the federal government began granting land to certain railroads in exchange for reduced carriage charges for government use. By 1853, one could ride by rail from New York to Chicago. One year later, Chicago was connected to the Mississippi River at Rock Island, Illinois. The west coast followed suit: in 1856, the Sacramento Valley Railroad (running between Sacramento and Folsom) was operational. But there were vast stretches of territory that could only be traversed by stagecoach, wagon, horseback or – worst of all – walking.
President Abraham Lincoln structured the railroad’s contract with both generosity and constraint. Railroad builders were given 6,400 acres of land for every mile of track laid, and $48,000 in government bonds for every mile completed. But there were strictures: the government withheld 20% of the bonds until the entire railroad was in working order, and would not release any money to either company until 40 miles of operative railroad was complete. And further, if the railroad between Missouri and Sacramento were not completed within 12 years, all the assets would be forfeited.
If Abraham Lincoln authorized the railroad, it was Theodore Judah who persuaded Congress. Judah was fascinated with railroads and had gone out to map the route, working on the western rails in 1854, to the displeasure of his wife it is rumored. When he’d completed the land survey in October of 1861, Judah set up an office at the end of the long corridor in the Capital Office Building in Washington, DC. As Congress members passed by, he’d lure them into his office to show close-ups of important areas of the route, including a certain point he’d recently found that might make the whole thing possible.
In October 1860, in Dutch Flat, California, Theodore Judah had his “aha” moment. That was when he met Daniel Strong. While a shopkeeper by trade, Strong was known around the area as an expert on the terrain of the Sierra Nevada mountains. Judah needed someone who could function on land like a harbor pilot might on the water because the Sierra Nevada loomed as the greatest obstacle to building the transcontinental railroad. Judah knew that most crossing points would be “doubles”—that is, the train would go up a mountain, down across a valley, up another mountain, and down once more before the road was again flat. That was a lot of work for a train and blasting through not one but two mountains would be a challenge.
But Judah heard that Strong knew a place, called Donner, where it might be possible to cross just one ridge. And so it was that Judah walked with Strong for two days to reach the top of the Donner point. Judah was exhausted, but when he saw the vista, he knew the transcontinental railroad could actually be built. Right then and there, on top of the mountain, Judah and Strong drew up the Articles of Incorporation for the Central Pacific Railroad Company.
TWO ROADS (UN)DIVIDED
The Central Pacific Railroad was one of two companies building the American railroad. The other was Union Pacific. It was Union Pacific that made financial history.
Two railroads were in play. The Central Pacific would cross the Sierra Nevada Mountains and began building in Sacramento, California in 1863. The Union Pacific, on the other side, which would cross the Great Plains and the Rocky Mountains, started out from the 100th meridian of longitude (in Nebraska). Both wanted the profitable Salt Lake City business, but found themselves unable to agree upon a meeting point. Congress had to intervene with a compromise solution, and the two lines became linked. On the morning of May 10, 1869, the United States was, for the first time, united geographically with the driving of the last spike, the iconic “golden spike.” The event was heralded and celebrated by live telegraph coverage courtesy of Western Union.
FIRST LIMITED LIABILITY CONTRACT PROVED TO BE A LIABILITY
Another aspect of financing was the creation of what may be the first limited liability contract in America. Thomas Clark Durant, vice president of the Union Pacific, obtained control over 2.2 million shares of company stock and then set up, on the side, a financial structure called “Crédit Mobilier.” He made the shares available to a select circle of friends and Congress members who were “influential.” In 18 months, shares increased in value by 341%.
It was too good to be true.
The U.S. House of Representatives initiated an inquiry into the Union Pacific Railroad Company and Crédit Mobilier, which led to a notorious scandal. But Crédit Mobilier had two remarkable features: it banked on a railroad being able to eventually obtain land it did not yet own but would, if it finished the job, and it allowed investors, even if the operation failed, to lose only monies they had put in and nothing more. Each investor’s personal holdings, such as his home or bank accounts, were out of reach of any liability.
Despite its innovative investment structure, Crédit Mobilier’s scandal distracted the parent company so much that when the Civil War ended in 1865, Union Pacific had not completed a single length of track.
ASA WHITNEY AND BECKET, MASSACHUSETTS
Already a successful New York merchant, Asa Whitney began to promote the idea of a transcontinental railroad. A mercantile trader who was accustomed to travelling long distances while active in the China trade, Whitney saw the implications of fast coast-to-coast transport. He approached U.S. Congress in 1845 and again in 1848. In July 1862, on behalf of Whitney, Zadock Pratt introduced a proposal to Congress to charter a 65-mile section for a railroad, paying the wages in land (which was at the time in abundant supply) and inviting immigrants to work on the project as part of a new start in a new land. The venture proved successful, for Whitney and for the country.
When he retired, Asa Whitney bought his own kingdom. It is said that his lawyers in New York received a directive: buy as much contiguous land as is available in the town of Becket, Massachusetts. The Manhattan attorneys didn’t know much about this Berkshires outpost, but Whitney did. He bought himself a mountain and installed there a zoo of exotic animals. It is rumored there were tigers, perhaps still. In his estate the railroad baron donated a large portion of the land as a nature preserve of Commonwealth of Massachusetts where it became known as October Mountain, homage to fall foliage. It is said by some residents of Becket, including the famed Jacob’s Pillow Dance Festival, that strange beasts still roam the woods.
The Transcontinental Railroad was the biggest government construction project in U.S. history at the time. But it was not easy to get workers to do such arduous labor. In California, most people wanted to work near home and go back to their family’s dinner table at night. Who wanted to work in the middle of the prairie and live in a camp? Some others worked for a time then quit to mine gold.
Navvies – On the east coast, workers who’d done just that – lived in the field and ate around a camp fire – on the Erie canal showed up to get jobs on the railroad. “Navvies” as they were called on the canal now became a nickname for rail workers. In fact, even today in Australia, rail workers are still called “navvies.”
Veterans – Another source of workers were Civil War veterans. Accustomed to moving military supplies with logistical efficiency, and used to taking orders and carrying out missions, veterans who came to work on the transcontinental railroad helped to transform the management systems of American industry. Both Navvies and Vets were a form of pre-trained workers who were already experienced in small group teamwork as a part of large design hierarchy and project management.
“They Can Do It!” – But on the West Coast, nary a navvy answered Central Pacific’s recruitment call. Recruiters for the Central Pacific distributed handbills to attract workers. They needed 5,000; only 200 showed up. So the company looked around and saw a whole new workforce. Chinese people were arriving in California in large numbers to escape a famine in the Kwangtung region of China. When labor boss James Harvey Strobridge was reluctant, his boss, Charlie Crocker, replied: “They can do it. They built the Great Wall.” Crocker convinced Strobridge to try 50 Chinese workers. They were superb. The next week, another 100 were hired. Finally, the company recruited only Chinese workers. By 1866, the height of the building process, Central Pacific had 6,000 Chinese workers, 80% of the total workforce.
SUCCESS (FOR SOME)
By 1880 (the railroad was completed in 1869), cargo carried amounted to US $50 million per year. Instead of months, it took just 10 days to cross the country. The transcontinental railroad, like the Erie Canal of a previous era, exponentially increased commerce and communication.
On the other hand, expansion from east to west had a terrible effect on Native Americans. Red Cloud, chief of the largest tribe of the Teton Sioux Nation, made war on the United States to protest the railroad and its destruction of the Sioux habitat and its sacred buffalo and the imbalance being created between humans and the environment. Red Cloud’s actions resulted in a settlement by treaty, which awarded the Sioux Nation a land reservation in perpetuity. It may be the only war Native Americans ever won against the U.S. government.
Document of Authorization
An Act to aid in the Construction of a Railroad and Telegraph Line from the Missouri River to the Pacific Ocean, and to secure the Government the Use of the same for Postal, Military, and Other Purposes…and be it enacted that several railroad companies herein named are authorized to enter into an arrangement with the Pacific Telegraph Company, the Overland Telegraph Company, and the California States Telegraph Company, so that the present line of telegraph between the Missouri River and San Francisco may be moved upon or along the line of said railroad and branches as fast as said road and branches are built.
-U.S. Statutes at Large 12 (1862). See Davidson and Lusk Brooke, p. 238.
VOICES OF THE FUTURE: Discussion and Implications
Rail and Telegraph: Building a telegraph network at the same time as a railroad was a great idea. How did both innovations change the country’s communication? Commerce? Culture? What other combinations of systems might the future suggest?
Trains of the future — what happened to America’s rails?: The United States once had more train track than any other country on earth. Not so today. Japan’s Shinkansen far surpass American rail achievements, not to mention the trains of Europe, especially the Channel Tunnel link of France and England. China is building maglev tube trains, a technology that will transform train transportation. What should our world be doing now to promote energy-efficient transport? What should United States priorities be?
To read the complete chapter, members of the University of Massachusetts Boston may access the e-book through Healey Library Catalog and ABC-CLIO here. Alternatively the volumes can be accessed at WorldCat, or at Amazon for purchase. Further resources are available onsite at the University of Massachusetts Boston, Healey Library, including some of following:
(* indicates printed in Notebook series)
Achenbach, Joel. The Grand Idea: George Washington’s Potomac and the Race to the West. New York: Simon and Schuster, 2004.
Ambrose, Stephen E. Nothing Like it in the World: The Men Who Built the Transcontinental Railroad 1863-1869. New York: Simon and Schuster, Touchstone Books, 2000.
Boorstin, Daniel J. The Americans: The Democratic Experience. New York: Random House, 1965.
Haney, Louis H. A Congressional History of Railways. 2 vols. 1908-10. Reprint, New York: Augustus M. Kelley, 1968.
McDonnell, Greg. Canadian Pacific: Stand Fast, Craigellachie! Erin, Canada: Boston Mills Press, 1954.
Poor, Henry Varnum. Manual of the Railroads of the United States for 1870-71. New York: H.V. and J.W. Poor, 1870.
Reader’s Companion to American History. Houghton Mifflin Online Study Center. http://college.hmco.com/history/readerscomp/rcah/html/rc_021900_crditmobilir.hym.
Thompson, Slason. A Short History of the American Railways. Chicago: Bureau of Railway News and Statistics, 1925.
Twain, Mark. Roughing It. 1892. Reprint, New York: Penguin Classics, 1985.For a free digital download, please visit: http://www.gutenberg.org/files/3177/3177-h/3177-h.htm
Whitney, Asa. A Project for a Railroad to the Pacific. New York: George Ward, 1849.
For history and a select bibliography of mapmaking and the railroads, see http://lcweb2.loc.gov/ Select “Railroad Maps.”
For a complete transcript of the Public Broadcasting System’s American Experience: Transcontinental Railroad, see
For the complete text of the Report of the Select Committee of the House of Representatives Appointed under the Resolution of January 6, 1873, to Make Inquiry in Relation to the Affairs of the Union Pacific Railroad Company, the Credit Mobilier of America, and Other Matters Specified in Said Resolution and in Other Resolutions Referred to Said Committee, see http://cprr.org/Museum/Credit_Mobilier.html.
For a summary time line from 1769 to 1889, see
For western railroad songs with historical narration, including “Hell on Wheels,” see http://mcneilmusic.com/railroad.html.
For Greg Schindel, official singer on California Western Railroad’s “Skunk Train,” including a list of songs and CD, see http://www.trainsinger.com/.
Building the World Blog by Kathleen Lusk Brooke and Zoe G Quinn is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.