Download Railroads, Westward Expansion, and Population Growth

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In 1865 the U.S. had about 35,000 miles of railroad track,
almost all of it east of the Mississippi River.
After the Civil War, railroad construction expanded
dramatically.
By 1900, the U.S. had more than 200,000 miles of track.
Railroads required major capital investment and
government land grants.
The potential profits led to some corruption as well.
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Railroad boom began in 1862 with the Pacific Railway Act.
o Gave two corporations – the Union Pacific and the Central Pacific –
permission to build a transcontinental railroad.
o Offered each company land along its right-of-way
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1865 – The Union Pacific Railroad began pushing westward from
Omaha, Nebraska under the direction of engineer Grenville
Dodge (a former Union General)
o The railroad workers included Civil War veterans, Irish immigrants,
miners and farmers, cooks, adventurers, and ex-convicts.
o At the height they employed about 10,000 workers.
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The Central Pacific Railroad began in California.
o Because of the labor shortage in California, they hired about 10,000
workers from China and paid them $1 per day.
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The railroad was completed in 4 years.
On May 10, 1869 at Promontory Summit, Utah the last spikes
were driven into the now completed Transcontinental Railroad.
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By linking the nation, railroads increased the markets for
many products, spurring industrial growth,
Also stimulated the economy by spending huge amounts of
money on steel, coal, timber, and other materials.
Large rail companies consolidated hundreds of small,
unconnected railroads to create large, integrated railroad
systems.
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To encourage railroad construction, railroad companies
were given land grants from the U.S. government
The railroads then sold the land to settlers, real estate
companies, and other businesses to raise money to build
the railroad.
To convince people to move west, railroads and real estate
companies offered the land at low prices and provided
credit to settlers.
Settlers who bought the land could then take a train close
to the location of the land they bought.
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Jay Gould was the most notoriously corrupt railroad owner
o Practiced “insider trading”
o Manipulated stock prices
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Bribery occurred frequently, partly because the government
was so deeply entangled in funding the railroads.
o Railroad investors discovered they could make more money by
selling free government land grants than by operating a railroad and
some bribed political representatives to vote for more grants.
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Credit Mobilier was a construction company set up by
several stockholders of the Union Pacific Railroad
o Included Oak Ames, a member of Congress
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Ames sold other members of Congress shares at a price
well below their market value in order to convince Congress
to give the railroad more grants.
In 1872, a letter appeared in the New York Sun listing
members of Congress who had bought shares.
o People were angry and it led to the impression that railroad
entrepreneurs were “robber barons”
• People who loot an industry and become rich unethically.
Jay Gould bowls on Wall Street
with balls labeled “Trickery”
and “False Reports.”
The pins are labeled “Banker”,
“Inexperienced Investor”,
“Small Operator”, and “Stock
Broker”.