Commemorating the 150th Anniversary of the Transcontinental Railroad on May 10.
By Nancy Spannaus
May 11, 2019—When President Lincoln, in his Second Inaugural Address, spoke of the need to “bind up the nation’s wounds,” he was not specifically referring to his signature construction project, the Transcontinental Railroad. But in all likelihood, Lincoln considered that undertaking a major part of the healing process. To him, the linking of the East and West coasts of the United States by rail was a crucial step in unifying the nation, economically and politically.
Americans today would do well to study his example, both in concept and implementation. Is it just a coincidence that our nation is fracturing politically at the same time that its national grid of rail has been permitted to sink into obsolescence, or be dismantled altogether? Whole areas of the country are being cut off from rail travel, leaving them in isolation and poverty. There are fewer rail miles in the United States today than in 1900! The current Administration is even now proposing to eliminate Federal support for Amtrak’s few long, cross-country routes, claiming they are uneconomical. That bodes more disintegration to come.
As great statesmen (and economists) from the early 19th century on understood, transportation links represent more than simply moving citizens and goods from place to place. Count Sergei Witte, the Hamiltonian Russian Prime Minister in 1905-6 who organized the Trans-Siberia Railway on the model of the American Transcontinental Railroad (and with the physical aid of many American engineers), put it this way:
The railroad is like a leaven, which creates a cultural fermentation among the population. Even if it passed through an absolutely wild people along its way, it would raise them in a short time to the level requisite for its operation.
I would argue that the construction of a modern, electrified high-speed rail network linking the whole nation—including the vast midsection and extremities like Alaska–would indeed be a major step toward binding up the wounds of our nation, upgrading our productivity, and restoring a sense of unified national commitment to progress not seen since we landed a man on the Moon. But let’s first take a look at the Lincoln’s railway.
“Nothing more important before the nation…”
Proposals for linking the nation coast to coast by rail were being discussed in the United States Congress as early as the 1830s and ‘40s, when the railway boom began during the John Quincy Adams Administration. The Hamiltonian Second National Bank played a significant role in the construction of the rail network in the East; the Bank’s murder by President Andrew Jackson was a major factor in ensuring that that rail network was not expanded South and West. Surveys on prospective Western routes began in 1853, but as the battle over the expansion of slavery heated up over the next decades, Congressmen argued over which route an East-West link should take, with the North and South each demanding the railroad go through their territory.
Abraham Lincoln, who was a “railroad man” from the time he served in the Illinois state legislature, not only supported the idea of such a railroad; he saw a properly routed rail link to be a political and economic necessity. “There (is) nothing more important before the nation than the building of the railroad to the Pacific,” Lincoln is reported to have told the man who eventually became the Union Pacific’s chief engineer, Grenville Dodge, in 1859.[1] It would tie California and Oregon to the Eastern states, build trade links, and contribute to national unity. “No other improvement … can equal in utility the railroad,” he said.
Thus, despite the demands of waging the Civil War , Lincoln strongly backed the Pacific Railway Act, which was passed in June of 1862. That Act necessarily followed the passage of the Legal Tender Act in February, which established the Greenback system and stabilized the Federal government’s finances, allowing it to issue the bonds which financed the railroad. The Pacific Railway Act authorized the creation of the railroad, guaranteeing rights of way to the Union Pacific and Central Pacific companies, and provided for funding of the construction through land grants and the loans of Federal bonds. The rail companies were then able to issue their own bonds based on the government collateral.
The Federal bond grants were absolutely essential given the massive investment required to carry out this risky undertaking, which clearly would not pay back its investors for decades. Payments were performance-based, conditional on the completion of miles of track. Their amounts varied, depending upon the difficulty of the terrain being covered. In addition, an overall deadline of 1874 was set for completion, along with numerous provisions for government oversight and benefits, including subsidies for troop travel. The loans were to be repaid in 30 years, and they were.[2]
According to Stephen E. Ambrose, author of Nothing Like It in the World, The Men Who Build the Transcontinental Railroad 1863-1869, the Federal government was not only paid back in full, but even made a financial profit on the deal.
A monumental achievement
The completion of the Transcontinental Railroad—which went from Omaha, Nebraska to Sacramento, California—was a monumental accomplishment which has been compared to the Moon Shot of the 20th Century in its scope. Working at breakneck speed once the Civil War had ended, the Union Pacific (which originated in Omaha) laid over 1000 miles of track, while the Central Pacific (originating near Sacramento) laid 690 miles through some of the most daunting mountains on the continent. Huge tunnels had to be dynamited out of the mountains; they ranged from 92 to 1659 feet in length.
The major problems encountered by the Central Pacific were physical, including steep mountains and ravines, and ferocious winter weather which often would nearly obliterate the work which had been completed. The Union Pacific’s problems came primarily from hostile Indian tribes, whose attacks eventually required the mobilization of the Army to protect the work.
Recruiting a steady workforce also represented a challenge for both companies. The Union Pacific, under the leadership of General Dodge, ultimately functioned like a military detachment; indeed, many of its workmen were former soldiers in the Union and Confederate armies. The Central Pacific encountered serious problems of worker attrition, as their men often caught “gold fever,” and left the job to try to get rich quick. Ultimately, more than 10,000 industrious and skilled Chinese laborers formed the core of the workforce, carrying out daredevil operations to dynamite the tunnels and lay the track in the treacherous terrain. Many of the Chinese men had been long-term residents of California, but the Central Pacific found it necessary to import more from China in order to fill the ranks, which were constantly being thinned by deadly landslides and other accidents.
President Lincoln played a “hands-on” role with the railroad, weighing in on the route and the gauge. He shepherded through an increase in the Federal compensation in 1864, as the difficulties and costs mounted for the companies. In the wake of the war, the speed increased, and the two companies raced toward each other without yet knowing where the rail lines would hook up, Indeed, it was not until April of 1869 that the final meet-up point was decided, approximately a month before the ceremony at Promontory Point, Utah on May 10, 1869.
As with the Moon landing 100 years later, the culmination of this mammoth project captured the imagination of the country. Ambrose describes the way the newspapers chronicled the drive to the meet-up, a glorious occasion which President Lincoln had hoped he would be able to attend. Speakers at what is called the ceremony of the Golden Spike (named after a spike crafted by the Californians to be the final nail linking the two railways) included Leland Stanford (head of the Central Pacific) and William Durant (head of the Union Pacific). Upon the driving of that final spike into a railroad tie made of California laurel, a telegraph immediately went to President Grant, and spread throughout the nation. Mission accomplished!
Seize the Potential
The benefits of the new link between East and West were economically great. The cost of shipping goods or travelling across country—which previously required going through Panama or around South America’s Cape Horn–dropped by an order of magnitude. Travel to the West increased, and centers of population and industry grew up along the line. The nation as a whole experienced an increase in productivity due to the ability to send resources, as well as ideas, from one section to the other. There was an increasing sense of one nation, coast to coast, with all contributing to the whole.
Much of the potential, however, remained unrealized. Lincoln’s death was followed by the abandonment of many American System policies (like the greenbacks); oligopolies moved in to increasingly dominate economic development, often leading to violent class conflict and the failure to build up an infrastructure that would foster the basis for in-depth prosperity. Too often, the railroad’s role for bringing civilization, education, and technology to underdeveloped parts of the country, was aborted in favor of the model of the rail line which carries extracted minerals to the far-off factory, and never brings anything of value back to mining country and its population.
FDR did a yeoman’s job at taking up and working to advance Lincoln’s vision of creating national unity through economic development—especially by building a nationwide electrical network (the Rural Electrification Administration) and bringing whole regions of the country (such as the Tennessee Valley) out of misery. But over the last 50 years, that impulse too has been aborted.
We now face a problem not only of dramatic economic inequality, collapsing infrastructure, and pathetically low productivity, but also political fragmentation of alarming proportions. The situation is ripe for initiating a new National High-speed Rail Network, funded by a National Infrastructure Bank capitalized with government bonds (a variation of what Lincoln did), and constructed with the new, advanced technologies that represent a leap in productivity for the economy as a whole.
Unlike Lincoln’s railroad, this network must unite the nation by connecting “forgotten” and economically distressed and isolated regions with the urban centers throughout the country. No more division between the coasts and the “fly-over states” of the nation’s mid-section, or isolation due to lack of air travel to small cities. Indeed, short-hop plane trips should be replaced by efficient rail, at the same time that traffic congestion on major arteries (like I-95 on the East Coast) can be relieved by a faster, cheaper, safer, and more comfortable alternative. But to do that, the rail network must be upgraded and expanded.
Like Lincoln’s railroad, such a high-speed rail network would be a huge financial undertaking, and would not “pay for itself” for many years to come. Thus, the need for the $4 trillion National Infrastructure bank now under discussion in the nation’s capital. The payback will be enormous economically, but that’s not all. The construction of such a rail network, in conjunction with the dramatic upgrading of our electrical production capability with nuclear power, and a crash program for returning man to the Moon and Mars, can be a major element in bringing our nation together again.
[1] Lincoln sought out Dodge because he had heard he was the man involved in scoping out the potential for cross-country rail. Dodge had done western surveys for the Rock Island Railroad before joining the Union Army.
[2] For a brief overview of the funding, see this article published by the Gilder-Lehman Institute of American History.
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Tags: Abraham Lincoln, Federal bonds, Grenville Dodge, Nancy Spannaus, National Infrastructure Bank, Pacific Railway Act, railroads, Transcontinental Railroad