The Transcontiental Railroad: Costly Chicanery

Copyright 2019 by Gary L. Pullman

Active Member of Western Writers of America

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The cost of the transcontinental railroad was enormous. It is estimated that the American people spent between $96 million and $111.5 million to built the railroad that connected San Francisco, California, to Omaha, Nebraska.

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Some of this cost was caused by chicanery and greed, rather than personnel, equipment, and supplies. Thomas C. Durant, who was in charge of the Union Pacific Railroad's westward building of the railroad, sought to profit personally from the enterprise, often through criminal undertakings.

In December 1863, the Union Pacific broke ground in Omaha, Nebraska. The company was supposed to have started to build the westward railroad in Council Bluffs, Iowa, but Durant owned land in Omaha. By starting the railroad in Omaha, he hoped to raise the value of his own property.¹

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He and his partners controlled Credit Mobilier, a construction company Durant founded. After overcharging the federal government, he deposited the “extra” funds into the company's account.² The Congressmen who participated in Durant's scam also profited greatly.³ The Union Pacific's chief engineer quit in disgust, and, by the end of 1865, Durant had laid no more than 40 miles of track.⁴ The Union Pacific's chief engineer, Peter A. Dey, was so disgusted by Durant's dishonesty that Dey quit working for the Union Pacific Railroad. Durant replaced the departed engineer with General Grenville Dodge.⁵

Although the federal government paid the railroad company well for each mile of track it laid and gave the company the land alongside the tracks, Durant found a way to increase his own fortunes. He started to buy extra land near the pathway along which surveyors had identified for the railroad's route, hoping to profit by an increase in the value of this land, an all-but-certain eventuality.

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Durant wasn't the only person to cheat the federal government. As the Union Pacific's track neared that of the company's partner and rival, the Pacific Central Railroad, both Durant and the had of the Pacific Central refused to name a meeting point. Instead, they continued to lay track, sometimes alongside one another. Finally, President Ulysses S Grant ordered the leaders to name a meeting point; if they did not, Grant told them, he would do so. Soon afterward, the railroaders named Promontory Summit, Utah, as the place at which their respective companies' tracks should join with one another.⁶

Doing business with Brigham Young, the Mormon leader with whom Durant signed a $2 million contract to build a track grade across much of Utah, also proved needlessly expensive, and, when the Central Pacific Railroad reached Utah, Young signed a similar contract with the Big Four, Leland Stanford, Mark Hopkins, Collis P. Huntington, and Mark Hopkins. Consequently, the Mormons built two paths for the tracks, one of which was never used, just as Young knew it would not be.⁷

The greed of these railroad builders might have resulted in worse than misspent funds. Cuts through hills were expensive and required a lot of time. Therefore, necessary cuts were not made. Instead, tracks were laid around hills. Years later, these large circles were removed and replaced with straight track, which added more to the already-considerable cost of the transcontinental railroad.⁸

Hardwood was supplied from back east. Waiting for it to arrive added greater expense. Instead of ordering the hardwood, the Central Pacific and the Union Pacific used pine cross ties. Pine was too soft for this purpose. As a result, they failed to support the weight of the trains. They, too, had to be removed and replaced, at an additional cost.⁹

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1The Transcontinental Railroad by Christine Zuchora-Walske

2Ibid.

3Ibid.

4Ibid.

5Ibid.

6Ibid.

7The Incredible Transcontinental Railroad by Conrad Stein.

8Ibid.

9Ibid.