In the 1850s government-sponsored surveys to chart the remaining unexplored regions of the West, and to plan possible routes for a transcontinental railroad. Much of this work was undertaken by the Corps of Engineers, Corps of Topographical Engineers, and Bureau of Explorations and Surveys, and became known as “The Great Reconnaissance”. Regionalism animated debates in Congress regarding the choice of a northern, central, or southern route. Engineering requirements for the rail route were an adequate supply of water and wood, and as nearly-level route as possible, given the weak locomotives of the era.
In the 1850s, proposals to build a transcontinental failed because of Congressional disputes over slavery. With the secession of the Confederate states in 1861, the modernizers in the Republican party took over Congress and wanted a line to link to California. Private companies were to build and operate the line. Construction would be done by unskilled labourers who would live in temporary camps along the way. Immigrants from China and Ireland did most of the construction work. Theodore Judah, the chief engineer of the Central Pacific surveyed the route from San Francisco east. Judah’s tireless lobbying efforts in Washington were largely responsible for the passage of the 1862 Pacific Railroad Act, which authorized construction of both the Central Pacific and the Union Pacific. The line was completed in May 1869. Coast-to-coast passenger travel in 8 days now replaced wagon trains or sea voyages that took 6 to 10 months and cost much more.
The road was built with mortgages from New York, Boston, and London, backed by land grants. There were no federal cash subsidies, but there was a loan to the Central Pacific that was eventually repaid at six percent interest. The federal government offered land-grants in a checkerboard pattern. The railroad sold every-other square, with the government opening its half to homesteaders. The government also loaned money—later repaid—at $16,000 per mile on level stretches, and $32,000 to $48,000 in mountainous terrain. Local and state governments also aided the financing.
Most of the manual labourers on the Central Pacific were new arrivals from China. Kraus shows how these men lived and worked, and how they managed their money. He concludes that senior officials quickly realized the high degree of cleanliness and reliability of the Chinese. The Central Pacific employed over 12,000 Chinese workers, 90% of its manual workforce. Ong explores whether or not the Chinese Railroad Workers were exploited by the railroad, with whites in better positions. He finds the railroad set different wage rates for whites and Chinese and used the latter in the more menial and dangerous jobs, such as the handling and the pouring of nitro-glycerine. However the railroad also provided camps and food the Chinese wanted and protected the Chinese workers from threats from whites.
Building the railroad required six main activities: surveying the route, blasting a right of way, building tunnels and bridges, clearing and laying the roadbed, laying the ties and rails, and maintaining and supplying the crews with food and tools. The work was highly physical, using horse-drawn ploughs, scrapers, manual picks, axes, sledgehammers and handcarts. A few steam-driven machines, such as shovels, were used. The rails were iron and weighed 700 lb, and required five men to lift. For blasting, they used black powder. The Union Pacific construction crews, mostly Irish Americans, averaged about two miles of new track per day.
Six transcontinental railroads were built in the Gilded Age (plus two in Canada); they opened up the West to farmers and ranchers. From north to south they were the Northern Pacific, Milwaukee Road, and Great Northern along the Canada–US border; the Union Pacific/Central Pacific in the middle, and to the south the Santa Fe, and the Southern Pacific. All but the Great Northern of James J. Hill relied on land grants. The financial stories were often complex. For example, the Northern Pacific received its major land grant in 1864. Financier Jay Cooke (1821–1905) was in charge until 1873 when he went bankrupt. Federal courts, however, kept bankrupt railroads in operation. In 1881 Henry Villard (1835–1900) took over and finally completed the line to Seattle. But the line went bankrupt in the Panic of 1893 and Hill took it over. He then merged several lines with financing from J.P. Morgan, but President Theodore Roosevelt broke them up in 1904.
In the first year of operation, 1869–70, 150,000 passengers made the long trip. Settlers were encouraged with promotions to come West on free scouting trips to buy railroad land on easy terms spread over several years. The railroads had “Immigration Bureaus” which advertised package low-cost deals including passage and land on easy terms for farmers in Germany and Scandinavia. The prairies, they were promised, did not mean backbreaking toil because “settling on the prairie which is ready for the plow is different from plunging into a region covered with timber”. The settlers were customers of the railroads, shipping their crops and cattle out, and bringing in manufactured products. All manufacturers benefited from the lower costs of transportation and the much larger radius of business.
White concludes with a mixed verdict. The transcontinental did open up the West to settlement, brought in many thousands of high-tech, highly paid workers and managers, created thousands of towns and cities, oriented the nation onto an east-west axis, and proved highly valuable for the nation as a whole. On the other hand, too many were built, and they were built too far ahead of actual demand. The result was a bubble that left heavy losses to investors and led to poor management practices. By contrast, as White notes, the lines in the Midwest and East supported by a very large population base, fostered farming, industry, and mining while generating steady profits and receiving few government benefits.