Building the Transcontinental Railroad
Before Construction
There were many routes discussed for the Transcontinental Railroad,
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Congress finally selected the Central Route at the beginning of the Civil War when southern states seceded from the U.S. and therefore left Congress.
In the Pacific Railroad Bill of 1862, Congress selected the Central Pacific Railroad Company and the Union Pacific Railroad company to build the railroad.
- The UP would begin at Omaha and the CP would begin at Sacramento. Both companies would build towards each other until they met.
Challenges
The companies building the Transcontinental Railroad faced challenges such as Native Americans, weather, and mountains.
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Workers
Workers on the Transcontinental Railroad came from many backgrounds.
An 1865 labor shortage caused the Central Pacific Railroad Company to begin hiring workers from China.
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Corruption
Many of the leaders of the Transcontinental Railroad used their power to conduct schemes and make fortunes.
- The government payed the railroad companies money for each mile of track that was constructed. The Union Pacific Railroad Company took advantage of this policy by building unnecessary miles of track and collecting more money from the government.
The largest corruption scheme associated with the Transcontinental Railroad was the Credit Mobilier Company, which was devised and executed by Thomas Durant.
Similar schemes took place in the CP but remained unnoticed because of the talent of Collis P. Huntington, who was one of the company's directors.
- Using his power as the vice-president of the UP, Durant gave the UP's construction contract to the Credit Mobilier Company. The Credit Mobilier Company was a company that Durant had created for the purpose of making money from the Transcontinental Railroad.
- The Credit Mobilier charged the UP much more money than would have been considered reasonable, and this went unnoticed because of Durant's senior position in the UP. With this money, the Credit Mobilier hired smaller companies to build the railroad and gave the extra money to Durant and other private investors.
- Durant’s scheme bankrupted the Union Pacific and became a national scandal after he had left the railroad with a fortune.
Similar schemes took place in the CP but remained unnoticed because of the talent of Collis P. Huntington, who was one of the company's directors.