Transcontinental railroad - Business in United States of America

Identification: Railroad spanning the United States from its eastern to western coasts, consisting of the Union Pacific and Central Pacific lines
Date: Completed on May 10, 1869
Significance: The transcontinental railroad facilitated U.S. trade with Asia and allowed for the development of the resources of the West and movement of settlers to its land.
Although interest in a transcontinental railroad existed before the U.S. Civil War, the choice of a route was complicated by the sectional debate, as the North and the South each wanted the first line to be in their own region. However, during the U.S. Civil War, Congress did not have to consult with southern wishes, and the Pacific Railroad Bill was passed in the summer of 1862. The law created a new federally chartered corporation, the Union Pacific Railroad, to build a railroad west from Nebraska. It also granted a charter to an existing California railroad, the Central Pacific, to build eastward from Sacramento, California.
The government gave massive quantities of aid to these two corporations. The railroads were given not only the right-of-way on the land where the track would be laid but also millions of acres of public land, which the railroads could sell to help pay construction costs. The initial legislation gave the two railroads 10 square miles (later increased to 20) of public land for each mile of track built. Altogether, the Union Pacific and Central Pacific received about 45 million acres. The government also loaned the companies $16,000 per mile for tracks laid across level land and up to $48,000 per mile for tracks laid across mountainous terrain. When the two lines met at Promontory Summit in the Utah Territory on May 10, 1869, the Union Pacific had built about 1,080 miles of track and the Central Pacific approximately 690 miles.

Railroad officials and employees celebrate the completion of the first transcontinental railroad in Promontory Summit, Utah Territory, on May 10, 1869. (AP/ Wide World Photos)
Economists have noted that the western railroads were built ahead of demand, meaning that there was no customer base to serve in much of the area the railroads crossed. However, the railroads promoted the creation of towns and cities as well as the development of land along the route for agriculture, mining, and logging. The railroads, along with improvements in communications such as the telegraph and the telephone, made it possible for American businesses to operate efficiently on a nationwide scale for the first time.

Further Reading
Ambrose, Stephen E. Nothing Like It in the World: The Men Who Built the Transcontinental Railroad, 1863- 1869. New York: Simon & Schuster, 2000.
Bain, David Hayward. Empire Express: Building the First Transcontinental Railroad. New York: Penguin Books, 1999.
Renehan, Edward J., Jr. The Transcontinental Railroad: The Gateway to the West. New York: Chelsea House, 2007.
See also: Amtrak; Forestry industry; Gadsden Purchase; Mexican War; Panama Canal; Leland Stanford; time zones; Cornelius Vanderbilt.

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