Railroaded: The Transcontinentals and the Making of Modern America
New York: W. W. Norton, 2011.
660 pages, 17 black-and-white illustrations, 6 maps, 13 charts.
ISBN 978-0-393-06126-4, $35.00 HB
ISBN 978-0-393-34237-6, $18.95 PB
In 1862 Abraham Lincoln signed the law that provided extensive land grants and bonds to the Union Pacific and Central Pacific Railroads for the construction of a transcontinental line to secure the American West for the Union. Seven years later, Leland Stanford, the Central Pacific’s president, drove the golden spike at Promontory Point, Utah. Andrew J. Russell’s East and West Shaking Hands at Laying of the Last Rail, known as the “champagne photo,” is the most famous reminder of the event. “More than any other image of that day . . . the champagne photo seems to capture a defining moment in our nation’s history.”1 The transcontinental railroads became celebrated symbols of industrial might, long viewed by historians and Americans as triumphs for transforming arid plains into farms, bringing western commodities to market, producing new cities, and modernizing America.
Balderdash! Confident of his evidence and storytelling ability, Richard White challenges these popular myths and scholarly interpretations. “Transcontinental railroads,” White informs us, were one of the great boondoggles of history, “a Gilded Age extravagance that rent holes in the political, social, and environmental fabric of the nation, creating railroads as mismanaged and corrupt as they were long” (490). White contends that the transcontinentals did not need to be built when and where they were: “The issue is not whether transcontinentals eventually proved to be a good idea; it is whether they were a good idea in the mid- and late nineteenth century” (xxiv). Given the relatively small population of the West, too many railroads crisscrossed the nation. Moreover, emphasizes White, the state played a central role in promoting the railroads and the haphazard, often destructive economic development that followed.
Railroaded deals with “the entrepreneurs who created [the railroads], the men who worked for them, and the large numbers of citizens who came to oppose them as dangerous, corrupt, and threatening” (xviii). The entrepreneurs—men such as Stanford, Collis Huntington, Mark Hopkins, and Charles Crocker of the Central Pacific and Thomas Durant of the Union Pacific—used their railroads to secure vast sums of personal wealth and extraordinary political influence. There was a reason these men won the nickname “railroad barons.” Using nineteenth-century versions of congressional lobbying and insider trading, they secured funds so as to avoid risking their own money. Just two years after its first aid package, following a long campaign of bribery, Congress passed the Pacific Railway Act of 1864 doubling loans and land grants for the Union Pacific and Central Pacific during the Civil War. By the mid-1880s six other transcontinental lines stretched across the country. Each benefited from government largesse, but there were many other sources of investment: entrepreneurs and their bankers hawked financial instruments that ranged from government bonds to second mortgages in their effort to lure investors from the United States, Great Britain, and Germany who sought high returns with little regulation.
Ignoring the fiduciary duties they owed to these investors, Huntington, Durant, and the others subcontracted railroad construction to companies that they secretly owned; these companies then grossly overcharged for their services, redirecting federal subsidies and private investments from the railroads to their owners’ coffers. In 1872 a scandal erupted over Crédit Mobilier, the front company for the Union Pacific, but no significant prosecutions followed. “The essence of the Crédit Mobilier, however, was clear,” White informs us. “In order to curry congressional favor, the men running the Union Pacific Railroad had sold stock in the Crédit Mobilier to leading representatives, senators, and the vice-president of the United States below market prices” (64).
These acts of malfeasance were then compounded by incompetence and stupidity, as poorly constructed, badly routed railroads traversed scarcely populated regions and garnered only paltry profits by actually moving goods and people—indeed, their managers did not even know how to calculate transportation costs or freight rates. Railroad men turned to government and...