The Railroads and the West

The federal government was not the only group attempting to bring settlers west.  Railroad companies campaigned tirelessly to attract newcomers to the many small towns that sprang up along the rail routes—mostly to provide business for the freight trains. 

To encourage development of rail lines westward, the government offered railroad companies massive land grants and bonds. Railroads received millions of acres of public lands and sold that land to generate money for the construction of the railroads. The government's decisions to use public lands, including mineral rights, as an incentive to build railroads not only contributed to the development of the West, but it also constituted a massive transfer of public lands to private corporations, with repercussions for the history of the West that are still felt today. In the end, the federal government gave 134 million acres of land as incentives to the railroads. To further assist the railroad companies, the federal government offered the companies bonds. Essentially long-term low-interest loans from the government, the bonds provided railroads with capital for the construction of rail lines westward.

Americans had long dreamed of a transcontinental railroad to connect one side of the country with the other. Congress passed the Pacific Railroad Act in 1862, committing the nation to building a rail link between the East and West coasts.  The measure authorized the Union Pacific Railroad—controlled by Sidney Dillon and Thomas Durant—to build westward from Omaha, Nebraska. Leland Stanford, Collis P. Huntington, Mark Hopkins, and Charles Crocker (the “Big Four”) received authorization to build their Central Pacific Railroad eastward from California. The facilitate construction of the lines, the act issued government bonds and provided land grants to both companies. The two companies started building the rail line from opposite points in the country and came together at Promontory Point, Utah, in May 1869. To meet labor needs, the Union Pacific relied heavily on hiring Irish immigrants, while the Central Pacific employed many Chinese immigrants.

Once these two companies completed the first continuous track, a transcontinental railroad began regular service, connecting Omaha, Nebraska and Sacramento, California.  An overland trip that had once taken six to eight weeks to complete now took a week. Eventually five transcontinental lines provided rail transportation across North America.

Railroad companies heavily promoted the lands that ran alongside their tracks, encouraging Americans to settle and build towns, mainly because these communities provided the train’s freight cars with needed businesses and consumers. Railroad land departments functioned much like modern public relations offices, providing free tickets to newspapermen in exchange for upbeat stories about the territories, sending representatives to Europe to attract immigrants, and handing out handbills that described the fertility of the land available.  Railroads even went so far as to offer special passenger rates and credit terms to Americans who settled on railroad lands.  The promotions worked.  The population of Kansas, for example, increased more than five times in less than 20 years.