July 1^st, 1862 the U.S. Congress enacted the Pacific Railroad Act with the signature of President Abraham Lincoln’s pen.  In a move of extreme, left-wing, liberal politics the Transcontinental Railroad would be built largely at federal government expense.  Two railroad companies (i.e. Union Pacific and Central Pacific) were given by the U.S. government as much as 6,400 acres of land and $48,000 in government bonds for every mile of track they built from Omaha, NE to Sacramento, CA. 

At the time, the Civil War was generating massive government expenditures for troops and war material.  President Abraham Lincoln and the United States Congress still decided to expand government by signing immense spending proposals into law.  In an effort to build telegraph and railroad lines from the Atlantic to the Pacific, the U.S. government spent large sums of money in what might be considered an historical starting point for modern U.S. prosperity.  Congress had already been spending money on topographical surveys for the best train route as early as the 1850’s but by 1863 the money spent by the U.S. federal government increased dramatically.

The Union Pacific took more than 8,000 immigrants into its workforce from Ireland, Germany and Italy.  In contrast, the Central Pacific’s crews eventually teamed with more than 10,000 Chinese immigrants.  The last spike for the Transcontinental Railroad was driven home May 10, 1869 at Promontory, UT.  The legacy of the Pacific Railroad Act is multifaceted but it ultimately allowed for quicker transportation of goods as well as communication of ideas across the United States.  This act of Congress, and President Lincoln, also exposed how U.S. corporations embroil and entangle the nation in pertinent social issues which have not been fully addressed to this day.

Chinese laborers were used by Central Pacific Railroad for a variety of reasons, but among the most cited include the Chinese laborer's character of dependability and sobriety.  It’s also telling that Chinese immigrants would work 12-hour days, 6 days a week for $26 to $35 a month, without company provided food or shelter compared to $35 a month with food and shelter required by white American laborers.  The Central Pacific in turn picked up a dependable worker in the men from China while driving down salaries for blasting, digging and taming the Sierra Nevada Mountains for travel. 

Another part of the Pacific Railroad Act of 1862’s legacy was how it established the wealth and careers of several men in the United States.  Collis P. Huntington, with the direct assistance of then California Governor Leland Stanford, cemented his fortunes when he “saw the value in the land grants and loans given the partners by Congress.”



Although he didn’t drive railroad spikes home, he obtained massive wealth by lobbying Congress and networking with investors.  James Harvey Strobridge, who served as foremen on the railroad lines, was more actively involved in managing the day to day construction but never acquired anything near the opulent wealth put on display from 1919 until today by Collis P. Huntington’s nephew at the Huntington Library in San Marino, CA.

Central Pacific Railroad workers were lucky if they could buy a small farm when their job was finished.  Foremen James Harvey Strobridge, half blind from an accident incurred while building the 1^st Transcontinental Railroad, sought wealth building a second railroad after dedicating years of commitment to building the first.  The story of America seems to be a guy providing funds with little sweat earns millions then (and billions now) while the worker bee must be satisfied with the possibility of an opportunity to one day become filthy rich.

Much of the money made from and by the construction of the Transcontinental Railroad originated from federal handouts from Congress.  Whether we consider profits earned by owners (i.e. Huntington, Stanford, Mark Hopkins or Charles Crocker) or wages earned by immigrant workers the source of the money was largely U.S. federal investment of taxpayer dollars.  In this way, government spending inspired private citizens to create jobs in hopes of attaining massive amounts of land and money.  (The term private enterprise is used loosely since so much of the enterprise depended on government spending and incentives) 

At the other end of the tracks, the Union Pacific Railroad demonstrated other aspects of how “private” enterprise functions in American history.  Dr. Thomas Clark Durant took on the challenge of gaining federal loans in order to build the railroad from east to west meeting the Central Pacific Railroad in the middle.  In the process, Durant formed a corporation called Credit Mobilier to handle federal loan money thereby enriching the corporate shareholders.  Congressional representatives bought shares of the company’s stock to get in on the act.  Eventually, Credit Mobilier was accused of fraudulently obtaining $50 million more than needed for railroad construction.