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Reading Essentials
and Study Guide netw rks
Industrialization, 1865-1901

Lesson 2 The Railroads

ESSENTIAL QUESTION
How did the United States become an
industrialized society after the Civil War?

Reading HELPDESK
Content Vocabulary
time zone a geographic region in which the same standard time is kept
land grant a grant of land by the federal government, especially for
roads, railroads, or agricultural colleges

Academic Vocabulary
integrate to combine two previously separate things
investor one who puts money into a company in order to gain a future
financial reward
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Reading Essentials
and Study Guide Cont. netw rks
Industrialization, 1865-1901

TAKING NOTES: Organizing

ACTIVITY As you read about the development of a nationwide rail network,
complete a graphic organizer similar to the one below to list the effects of the rail
network on the nation.

IT MATTERS BECAUSE…
Railroads, like the transcontinental railroad, were constructed quickly after the
Civil War ended. Railroads needed a lot of capital investment and government land
grants. The possible profits also led to some dishonesty.

Linking the Nation

GUIDING QUESTION How did the transcontinental railroad transform the West?
In 1865 the United States had about 35,000 miles of railroad track. Almost all of it

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was east of the Mississippi River. Railroad construction increased a lot after the
Civil War. By 1900 the United States had more than 200,000 miles of track.

The Transcontinental Railroad

The Pacific Railway Act was passed in 1862. It caused the railroad boom to begin.
This act allowed two corporations, the Union Pacific and the Central Pacific, to build
a transcontinental railroad. It also gave each company land along its right-of-way.
Grenville Dodge, a past Union general, was the engineer in charge for the Union
Pacific. In 1865 the Union Pacific Railroad began building a railroad that went west
from Omaha, Nebraska. The laborers faced blizzards in the mountains and great
heat in the desert. They also faced angry Native Americans. Labor, money, and
engineering problems troubled the supervisors of the project.
The railroad workers of the Union Pacific included Civil War veterans and newly
employed Irish immigrants. They also included frustrated miners and farmers,
cooks, adventurers, and ex-convicts. The Union Pacific employed about 10,000
workers at the busiest time of the project.
Engineer Theodore Judah started the Central Pacific Railroad. He sold stock in
his new Central Pacific Railroad Company to four Sacramento merchants: Leland
Stanford, Charley Crocker, Mark Hopkins, and Collis P. Huntington. These “Big
Four” made huge fortunes. Stanford became governor of California, served as a
U.S. senator, and founded Stanford University.
The Central Pacific Railroad hired about 10,000 workers from China because of a
shortage of labor in California. It paid them about $1 a day. All the equipment was
shipped from the eastern United States. Some of the equipment was rails, cars,
locomotives, and machinery. The equipment suppliers traveled either around Cape
Horn at the tip of South America or over the Isthmus of Panama in Central America.

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Reading Essentials
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Industrialization, 1865-1901

Workers finished the transcontinental railroad in only four years. Four years was
quick because there were physical challenges. Each mile of track used 400 rails,
and each rail took 10 spikes. The Central Pacific started in the West. It laid a total
of 688 miles of track. The Union Pacific laid 1,086 miles of track. On May 10,
1869, hundreds of spectators gathered at Promontory Summit, Utah. They
watched as dignitaries hammered five gold and silver spikes into the final rails.
This joined the Union Pacific and Central Pacific railroads.
Telegraph operators sent the news across the nation after Leland Stanford
hammered in the last spike. Cannons blasted in New York City, Chicago held a
parade, and Philadelphia citizens rang the Liberty Bell.

Railroads Spur Growth

The transcontinental railroad was the first of many lines that began crossing the
nation after the Civil War. Railroads linked the nation. This action increased the
markets for many products and drove industrial growth. Railroad companies
improved the economy by spending huge amounts of money on steel, coal, timber,
and other materials.
Large rail companies combined hundreds of small, unconnected railroads to create
an integrated railroad system. These integrated railroad systems were very large.
Southern states benefited from improved transportation. Railroads spurred the
growth of new industries such as the Florida tourist trade. Increased railroad
organization helped freight prices drop by over half between 1860 and 1900.
The railroads even unified the nation’s clocks. Each community set its own
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clocks before the 1880s. This created multiple local time zones. This interfered
with train scheduling and passenger safety. These issues caused the American
Railway Association to divide the country into four time zones in 1883.
PROGRESS CHECK
Explaining How did the transcontinental railroad help unite the nation?
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Robber Barons
GUIDING QUESTION How did government grants to build railroads result in
large-scale corruption?
Most private investors could not raise the money needed to build railroads. A
private investor is an individual or company who puts money into a project. So the
federal government gave land grants to many railroad companies. Companies
sold the land to raise money for construction. Railroad entrepreneurs such as
Cornelius Vanderbilt and Jay Gould became very wealthy. This led people to think
that they were cheating investors and taxpayers and bribing officials to become so
wealthy. Bribery did occur because government helped fund railroads. Some
investors began bribing members of Congress to get more grants.

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Reading Essentials
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Industrialization, 1865-1901

The Crédit Mobilier Scandal

People learned about corruption in the railroad industry when the Crédit Mobilier
scandal happened in 1872. Many stockholders of the Union Pacific Railroad had set
up Crédit Mobilier, which was a construction company. Oakes Ames was a member
of Congress and one of the stockholders. The investors acted for both the Union
Pacific and Crédit Mobilier. In that way, they signed expensive contracts with
themselves. Union Pacific paid the large bills because the same investors
controlled both companies. By the time the railroad was completed, it was almost
bankrupt. Ames sold shares in the Union Pacific at a very low price to members of
Congress. He did this to convince Congress to give the railroad more grants.
During the 1872 election campaign, a letter appeared in the New York Sun
listing members of Congress who bought shares in the Union Pacific. The scandal
led to an investigation that suggested several politicians were involved. Two of
these politicians were Representative James Garfield and Vice President Schuyler
Colfax. Garfield later became president. No charges were filed against anyone
involved with Crédit Mobilier, and the scandal did not affect the outcome of the
elections.

The Great Northern Railroad

Not all railroad men were robber barons, or industrialists who grew wealthy from
unethical means. James J. Hill built and ran the Great Northern Railroad. It ran
from Wisconsin and Minnesota in the east to Washington in the west. He did this
without any federal land grants or funding. Hill identified goods that were in

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demand in China and shipped those goods to Washington. From there, they were
sent to Asia. The railroad thus made money by moving goods both east and west.
Most railroads of the time sent goods east and came back empty. The Great
Northern became the most successful transcontinental railroad and the only one
that was not eventually forced into bankruptcy.
PROGRESS CHECK
Explaining Why did robber barons bribe people in Congress?
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