Thursday, April 01, 2021

List of competing contract and monies from the US Government between CPRR and UPRR

From: "Celeste Wolfe"

Can you direct me to a resource where I can find the list of government contracts and monies that the CPRR and UPRR were competing for during the years of 1867-1869?

I wanted to know what CPRR was dealing with financially in the overall picture with their U.S. government subsidies being possibly snatched up and taken by UPRR’s Credit Mobilier price gouging manipulation. Can you give me a list of what those subsidies were called that both companies were competing for during 1867-1869?

If there is a resource you can direct me to, I would be very grateful. Both government sources and CPRR books for that time on what contracts they received and then how they spent that money for those last two years.

I needed to the specifics of the economic context and pressures the Big Four were laboring under and how C.P. Huntington was dealing with competing against UPRR in DC. ...

—Celeste Wolfe


Anonymous Anonymous said...

Regarding the Role of Government in RR Construction Funding [not actually subsidies]:

"In the same way that you pay (not the bank) when you get a construction loan to build a new house, the transcontinental railroad project wasn't actually paid for by government, because government funding was in the form of bonds that had to be and were repaid by the railroads [with interest], not as grants funded by taxes. Similarly, the land grants were not subsidies because the government retained half the land (in a checkerboard pattern) and the project was to make the worthless wilderness grant lands valuable for both the railroads and the government as land owners as a result of building the railroad. Actually, the project was a billion dollar windfall for the government, just based on the discounted transportation costs for carrying the mail."

4/01/2021 11:29 AM  
Anonymous Anonymous said...

From: "Kyle Wyatt"

If you are thinking of modern government contracts as a model for government involvement in CP and UP, that financial model has virtually nothing to do with the actual relationships in the 1860s. From a financial perspective, Federal supports to CP and UP came in two forms - these established and modified by the several Pacific Railway Acts passed by Congress in the 1860s. The railroads received their support allotments based on 10-mile sections of rail line certified as complete by each railroad, and verified by government inspectors. In this context, "competition" was all about where the two railroads would meet - as ultimately recognized by the government - and thus how much of the overall support each railroad would receive.

Federal support was in two forms.

Each railroad received Federally guaranteed bonds for each completed 10 mile section - the face value of the bonds set in the legislation based on construction difficulty (in one of three categories). These bonds were "loans" which the railroads were to repay with interest - and ultimately did repay (yielding a tidy profit for the government). After receiving the bonds, the railroads then sold the bonds on the open market - at a discount - in order to get the cash they needed.

The second support was as land grants from Federally owned land - the idea being that the railroads could ultimately sell the land to raise money to help pay off the bonds. Within the area of the land grants, the government retained alternate sections, property made more valuable because of the completion of the railroad. In reality, the land grant land proved of mixed value to the railroads. For instance, large stretches of land in Nevada had very little economic or resale value - but the railroads did have to pay property taxes on the land.

As the railroads approached each other, there were miles of parallel grades constructed before the junction point was established - but these were not completed railroad lines, and the railroads received no government allotments for this duplicate construction.

On historical resources, the CP Huntington correspondence files (both outgoing and incoming) are preserved at Syracuse University.

They have also been microfilmed, with copies at a number of other institutions. It is heavy slogging, but there is a great deal of valuable information contained in those files.

The Pacific Railway Commission Hearings in the 1880s contain a great deal of valuable info. The web site includes hot links to the published volumes.

Norman Tutorow's 2-volume The Governor: The Life and Legacy of Leland Stanford is deeply footnoted with primary sources. It both provides a great deal of information, and references numerous valuable sources.
Copies are available from several book dealers, or in libraries.

[Continued below]

4/02/2021 10:55 AM  
Anonymous Anonymous said...


Salvador Ramirez' 2-volume The Inside Man: The Life and Times of Mark Hopkins of New York, Michigan, and California is similarly deeply footnoted with primary sources. Copies [are] available from book dealers and in several libraries. Mark Hopkins was the Treasurer of the Central Pacific.

Also, Ramirez' papers and files for the book are at the California State Railroad Museum, with collection guide.

Many Southern Pacific records are at several public archives:
Stanford University
California State Railroads Museum - several relevant collections

I recommend the following books:
David Bain, Empire Express: Building the First Transcontinental Railroad
David Bain, The Old Iron Road: An Epic of Rails, Roads, and the Urge to Go West
Richard White,Railroaded: The Transcontinentals and the Making of Modern America
Stuart Daggett,Chapters on the History of the Southern Pacific - published 1922, but still a valuable resource - available as a digital download.
Several books by Julius Grodinsky, including Transcontinental Railway Strategy, 1869-1893 - digital copy

Avoid Stephen,Ambrose "Nothing Like It In the World: The Men Who Built the Transcontinental Railroad 1863-1869- he is a good storyteller, but an exceptionally poor railroad historian (not his real field, which was World War 2). Full of errors - and not a few fantasies.

—Kyle Wyatt

4/02/2021 10:56 AM  

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