Staring last year, and continuing for the next few years, we are commemorating the 150th anniversary of our nation’s Civil War. Times of war tend to dominate our view of history, often giving us the impression that the conflict, it origins and aftermath were the main events that occurred. In the midst of our Civil War, on July 1, 1862, Congress and President Lincoln initiated a bold move to expand the nation westward, and unite the oceans with the transcontinental railroad with the Pacific Railway Act. We may recall the “golden spike”, hammered in to unite the Union Pacific and Central Pacific Railroads at Promontory, UT in 1869. But, how many of us know how this railway project came under construction and the two congressional funding acts that started the project?
One issue that faced rail transportation prior to the Transcontinental Railroad, was that most systems were regional, possibly even temporary, such as the many timber, coal, and iron spur lines. Standards for rail width, etc. depended on who built the tracks. Thus, when a narrow gauge line met with a difference gauge line, the cargo had to be transferred, rather than the trains switching tracks. This became a major headache for military troop and supply transport during our Civil War. The Pacific Railway Act would establish the standard, henceforth. Rather than regional rail lines building different width tracks, willy-nilly, across the country, one line would become the backbone of the transportation system that would dominate until the National Highway system began almost a hundred years later. What! The federal government has the authority to impose standards? Where is that in the Constitution!
To build a railroad across the country, without creating a national railroad company, the Pacific Railroad Act authorized the formation of two companies: the Union Pacific starting in Missouri and heading west, and the Central Pacific starting in California and heading east. Numerous routes were surveyed, all passing through “empty” land (oh, except for various Native American tribes and treaties, which the Pacific Railroad Act nullified by eminent domain if the right of way would fall within the boundaries of those prior agreements). The companies would have a 200 foot right-of-way on each side of the track, and would receive ten square miles of adjoining land for every mile of track laid. The companies could then sell the land for farms and towns along the tracks to generate additional funds for the project. Imagine drawing a line across the country, then parallel lines five miles on either side, and saying “Any takers?”.
Most of the law is rather dull reading about details of incorporation, price of stock, limits of how much stock one person could own, etc. Any surprise that two years later, the companies claimed they were underfunded and Congress granted them twice the amount of land to re-sell? Any surprise that after the railroad was completed, that Congress “investigated” a number of investors for fraud in land sales. At least the project was completed about five years ahead of schedule.
Who became the company owners, board members, and stockholders? Priced at $1,000 per share, need we say that the 1% existed then too? Who built the railroads? The Union Pacific used mostly Irish laborers who were coming over after the potato famine. The Central Pacific used most Chinese laborers, whom they transported over for this purpose. Guess our immigration issues were not much different either. Was this compassion for people who suffered from high population densities of their homelands, or exploitation of those who have few better options? As with many large construction projects, which require large crews for a relative short time, did the legislators or company owners concern themselves with what the laborers would do after the project was finished? Guess there would be lots of potential for building in the ten square miles sectors along the railroad.
Well, our Civil War ended, the railroad was build, the wagon trains gave way to the iron horses, more east-west railroads would be built, the Wild-Wild West would come and go, and Fred Harvey would dot the country with railroad stop restaurants. Meanwhile, farms and ranches had access to the markets in the populated coasts, and many towns could develop to bring people from those coastal cities to live in rural America and provide the services needed to develop the middle of the country.
A concept that I recall from my junior high school civics classes is that the government provides the infrastructure for society, directly, or through contracts with companies and investors. Once the transportation, utilities, and sanitation systems are in place, then individuals and the free markets would fill in the rest. In our current contentious political debates, we seem to jump between the poles of nationalizing industry vs. leaving all services up to investors. The Pacific Railroad Act presents the compromise. Industry was not building the railroads on their own, but wanted the transfers of wealth (land resources) from the nation to their investors. Congress did not want to run a railroad, but wanted to connect the two coasts. Our Civil War would join north and south. The Pacific Railroad would joint east and west.
The Pacific Railroad Act, 1862
CHAP. CXX. An Act to aid in the Construction of a Railroad and Telegraph Line from the Missouri River to the Pacific Ocean, and to secure to the Government the Use of the same for Postal, Military, and Other Purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Walter S. Burgess [and others] … together with commissioners to be appointed by the Secretary of the Interior, and all persons who shall or may be associated with the, and their successors, are hereby created and erected into a body corporate and politic in deed and in law, by the name, style, and title of “The Union Pacific Railroad Company;” and by that name shall have perpetual succession, and shall be able to sue and to be sued, plead and be impleaded, defend and be defended, in all courts of law and equity within the United States, and may make and have a common seal; and the said corporation is hereby authorized and empowered to layout, locate, construct, furnish, maintain, and enjoy a continuous railroad and telegraph, with the appurtenances, from a point on the one hundredth meridian of the longitude west from Greenwich, [listing of boundaries]… upon the route and terms hereinafter provided, and is hereby vested with all the powers, privileges, and immunities necessary to carry into effect the purposes of this act as herein set forth. The capital stock of said company shall consist of one hundred thousand shares of one thousand dollars each, which shall be subscribed for and held in not more than two hundred shares by anyone person, and shall be transferable in such manner as the by-laws of said corporation shall provide. The persons hereinbefore named, together with those to be appointed by the Secretary of the Interior, are herby constituted and appointed commissioners, and such body shall be called the Board of Commissioners of the Union Pacific Railroad and Telegraph Company, and twenty-five shall constitute a quorum for the transaction of business. The first meeting of said board shall be held at Chicago at such time as the commissioners from Illinois herein named shall appoint, not more than three nor less than one month after the passage of this act, notice of which shall be given by them to the other commissioners by depositing a call thereof in the post office at Chicago, post paid, to their address at least forty days before the said meeting, and also by publishing said notice in one daily newspaper in each of the cities of Chicago and Saint Louis…
Sec. 2. And be it further enacted, That the right of way through the public lands be,
the same is hereby, granted to said company for the construction of said railroad and telegraph line; and the right, power, and authority is hereby given to said company to take from the public adjacent to the line of said road, earth, stone, timber, and other materials fro the construction thereof; said right of way is granted to said railroad to the extent of two hundred feet in width on each side of railroad where it may pass over the public lands, including all necessary grounds for stations, buildings, workshops, and depots, machine shops, switches, side tracks, turntables, and, water stations. The United States shall extinguish as rapidly as may be the Indian titles to all lands falling under the operation of this act and required for the said right of way and grants hereinafter made…
Sec. 7. And, be it further enacted, That said company shall file their assent to this act, under the seal of said company, in the Department of the Interior, within one year after the passage of this act, and shall complete said railroad and telegraph from the point of beginning, as herein provided, to the western boundary of Nevada Territory before the first day of July, one thousand eight hundred and seventy-four: Provided , That within two years after the passage of this act said company shall designate the general route of said road, as near as may be, and shall file a map of the same in the Department of the Interior, whereupon the Secretary of the Interior shall cause the lands within fifteen miles of said designated route or routes to be withdrawn from preemption, private entry, and sale; and when any portion of said route shall be finally located, the Secretary of the Interior shall cause the said lands herein-before granted to be surveyed and set off as fast as may be necessary for the purposes herein named: Provided, That in fixing the point of connection of the main trunk with the eastern connections, it shall be fixed at the most practicable point for the construction of the Iowa and Missouri branches, as hereinafter provided.
Sec. 20. And be it further enacted, That the corporation herby created and the roads connected therewith, under the provisions of this act, shall make to the Secretary of the Treasury and annual report wherein shall be set forth –
First. The names of the stockholders and their places of residence, so far as the same can be ascertained;
Second. The names and residences of the directors, and all other officers of the company;
Third. The amount of stock subscribed, and the amount thereof actually paid in;
Fourth. A description of the lines of road surveyed, of the lines thereof fixed upon for the construction of the road, and the cost of such surveys;
Fifth. The amount received from passengers on the road;
Sixth. The amount received from freight thereon;
Seventh. A statement of the expenses of said road and its fixtures;
Eighth. A statement of the indebtedness of said company, setting forth the various kinds thereof. Which report shall be sworn to by the president of the said company, and shall be presented to the Secretary of the Treasury on or before the first day of July in each year.