The Railroad Boom: Changing the Landscape
Copyright © 2005-6, Henry J. Sage

Completing the Transcontinental Railroad
Promontory, Utah, May 10, 1869

The story of the destruction of Native American cultures is intimately connected with the building of railroads across the western part of the United States. During the period of struggle between Indians and whites in the late 19th century, Indian leaders often traveled east to plead their case before sympathetic audiences. One chief was asked what could be done to help preserve the Indian cultures of the West. His answer: “Stop building the railroads.” He may as well have asked for the sun to stop shining. The building of the transcontinental railroads and all their branches was an inevitable part of the Industrial Revolution that drove America following the Civil War.

The building of the first transcontinental railroad by the Central Pacific and Union Pacific Railroad companies was a monumental feat. Whether the men were battling winds and blizzards on the open plains, or tunneling through the Sierra Mountains at the painfully slow rate of 8 inches per day, the work was grueling and dangerous. Every mile of track was laid by hand; every spike was driven by strong men with hammers; every wooden tie was lifted into place by railroad workers, sometimes called “Gandy dancers.” The workers who built the railroad came from the ranks of immigrants who flooded the country following the Civil War: They were primarily Italians, Irish, and Chinese. The Chinese especially became very adept at the skills necessary to tunnel through the California Sierra mountains, using hammers, chisels and black powder to blast through the rock.

Plans for the first railroad had begun well before the Civil War, and in fact the Central Pacific started building east from Sacramento, California, in 1863. But civil war delayed progress until 1865. Then the Union Pacific started out from Omaha, Nebraska, and the two companies worked towards each other to cover almost 2000 miles. In addition to the physical challenges of the mountains, plains, cold and heat, the workers were constantly harassed by Indians who felt that the building of the railroads across reservation lands was a violation of their treaties. They also understood that the railroads would bring even more white settlers into their territory, which could hardly bode well for their existence, which had already become tenuous in any case. Indeed, the completion of the first railroad in 1869, as well as the other transcontinental lines that followed in the ensuing decades, changed the lives of the Plains Indians forever.

In addition to labor and materials, the railroads obviously needed large amounts of capital. Since the federal and state governments saw the railroads as a boon to national and local economic prospects, they were willing to underwrite much of the cost by distributing to the railroads the one commodity which they held in abundance: land. Across the vast open spaces in the West were millions of acres of land which, however, could not be converted into profitable farming land without some means for the farmers to get their produce to market. No one would pay a substantial price for land until the prospect existed that a railroad would be constructed to move cattle, grain and other products to urban areas.

Rather than giving funds directly to the railroads in the form of grants or loans, the government divided the land along the railroad rights-of-way into square sections, and alternate sections were given to the railroads, and the rest were offered for sale directly to settlers. Because the government could command a much higher price for land that would be serviced by a railroad, settlers were willing to pay a premium for the promising sites. Conversely, the lands granted to the railroads could be similarly sold to settlers in order to raise the necessary capital for the actual building. There is no question that this great land giveaway benefited the railroads, the settlers and, indirectly, the workers who were employed in building the long lines. But to the land-grant legislation the government attached the right of federal agencies to use the railroads at discount prices once they were completed. One historian has estimated that the federal government recouped most of its investment just in the period of the First World War, when thousands of troops and tons of supplies were moved over the rails.

Any time large amounts of money change hands, the opportunity for corruption and misuse of funds is bound to exist, and the building of the railroads proved to be no exception. The owners of the railroad companies formed a construction organization called Credit Mobilier, which was owned and controlled by the same people who owned the railroads. The railroad executives then awarded lucrative contracts to Credit Mobilier, thus lining their own pockets. In order to keep the government from getting too fussy about how in this shady business was being transacted, the Corporation gave hundreds of shares of stock to congressmen, senators, and state legislators under the pretext of ensuring that the donations would allow government officials to exercise oversight over the roads themselves. In the end, millions of dollars were raised, often changing hands under the table, and huge profits were enjoyed, to the benefit of thousands. But in the long run, many miles of railroad track often failed to produce profits and ended up being written off as losses.

What about the farmers who quickly came to depend on railroads for their livelihood? Unfortunately they soon discovered that the railroads, which had a monopoly on the transportation medium that served their direct needs, could exploit them outrageously, charging any rate they chose, charging for storage of farm goods such as grain in railroad owned silos, and even manipulating railroad rates to take advantage of people in areas on short spur lines who had only one avenue to get their produce where it needed to go. Such exploitation helped to fuel the farmers' movement which eventually became the core of the Populist movement.

Like most other technological advances of that industrial era, the railroads did much good and considerable harm. But they changed the lives of Americans in ways of which we are scarcely aware. Our four time zones, for example, were created by railroads, and the white collar job market was generated largely by railroads, which needed thousand of clerks to manage schedules, billing, and myriad other jobs that were part of the operation of any large corporation.

Even today, in the 21st century, railroads move millions of tons of materials and products far more efficiently than they can be moved by any other means. Railroads no longer occupy the romantic imagination of travelers as they once did, but they remain a vital part of the American economy.

History 122 Part 1 | Updated January 18, 2007