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The Apollo Project of the 19th Century

Alex Planes
May 10, 2013

On this day in economic and business history...

The golden spike sank into the earth at Promontory Summit in Utah on May 10, 1869. The Transcontinental Railroad was complete, joining the east and west of a sprawling 3,000-mile wide nation. Two railroad enterprises, the Union Pacific (NYSE: UNP) and the Central Pacific, had been built at a frenzied pace since shortly after President Abraham Lincoln's signature approved federal funds for construction in 1862. Both railroads were created to service this legislation, with Union Pacific building west from the Missouri River as the Central PacificĀ struck out east from Sacramento.

The 1,900-mile line, built in only six years, was, as Howard Means writes in Money and Power: the History of Business:

... the Apollo Project of the 19th century -- one of those rare moments in history when discovery and technology seems to be colliding with destiny. National pride was at stake, and national aspiration, and something bigger still: Just as the manned landing on the moon would do, the railroad conquered an unknown world, planted a first tentative foot in an unknown space. Only those present could see the final spike of iron, clad in silver and gold, being driven into the last link of rail ... but the event was broadcast by telegraph and followed by Americans as avidly -- and greeted as enthusiastically -- as Neil Armstrong's lunar 'giant leap for mankind' almost exactly 100 years later, on July 20, 1969.

The railroad had been contemplated for decades, with talk starting only shortly after the first steam-powered railroads began to shuttle across Great Britain, and then across the eastern United States. California's gold rush, and rapid attainment of statehood, further inflamed this talk, and by the time the Civil War broke out, a transcontinental railroad began to be seen as vital to national security.

The Eastern line was championed by Thomas C. Durant, officially the Union Pacific's vice president, but its true guiding force in reality. Durant's other notable contribution to American business is the Credit Mobilier construction company, created to finance Union Pacific's westward expansion while simultaneously feathering the nests of Durant and his compatriots. It is now enshrined in infamy as one of the most widespread political financial scandals in American history.

The Western line counted Leland StanfordĀ among its principal backers. Unlike Durant, Stanford attained lasting success, first as governor of California (a tenure which coincided with the beginning of construction), and later as the founder of Stanford University, the development of which he financed with what would today be worth over $1 billion. Clearly, there were incredible fortunes to be made for the champions of the railroad, which was to be expected -- according to Means, the federal go