Who funded the first transcontinental railroad?
posted from CPRR Discussion Group at 10:43 AM
Tuesday, May 08, 2007
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4 Comments:
See the earlier discussion.
Funding initially was primarily from the personal savings of the Big Four Sacramento merchants (Stanford, Crocker, Huntington, and Hopkins) and additional investors. These men each risked their entire life savings, as limited liability companies such as modern corporations were not yet available. The U.S. government provided funding with the Pacific Railroad Acts, starting in 1862, in the form of bonds sold to the public (issued only as construction proceeded and which had to be and were repaid in full with interest) and land grants. The government kept half of the land in alternating squares, giving the other half of the squares to the railroad, and the increase in value of the land due to building the railroad meant (as the U.S. Supreme Court later concluded) that the land grants were not really subsidies because the increase in value of the government's land exceeded the value of the land granted to the railroads. The cities of San Francisco and Sacramento also provided bond funding.
From: "Kevin Bunker" mikadobear45@yahoo.com
That's a very complicated question but the answers to which are well documented in a number of recent books on the subject. Among these is one stand-out book, The Great Persuader by David Lavender (covering biographically the involvemnent of Collis P. Huntington of the Central Pacific's "Big Four" directorate).
In Lavender's book we learn, through the letters written by Huntington (sealed at his death and unsealed by his descendants for Lavender's careful researtch and writing) and his colleagues how difficult it was to gather and build funding for the construction of the Central Pacific Rail Road from Sacramento. On the opposite side of the story, the Union Pacific's directorate – under the self-serving leadership of Dr. Thomas C. Durant – sought out funding in as many devious ways that would bring maximum cash profit to Durant and very few others while often leaving the UPRR to starve for supplies and even regular pay for the UP's construction crews and contractors long before the railroad was completed in 1869.
The Central Pacific Railroad Photographic History Museum website has a very good bibliographic list of titles that will help you find other books on the subject.
—Kevin
Who were the big 4 and why were they important?
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