Historical Essay

The Last Spikes Everlasting Steam Last Spike Site Reading List Essay	The Race Across Utah Example of Land Grants given to both the Union and Central Pacific Railroads.
In the summer of 1862, the United States was deeply involved with the bitter struggle of the Civil War. Few people had the foresight to look beyond the current crisis and think about construction of a transcontinental railroad. The war required great quantities of supplies, labor, and most importantly money. Nevertheless, Congress passed, and President Lincoln signed, the Pacific Railroad Act with the hope that western states such as California and Utah (territory) would remain loyal to the union. The Pacific Railroad Act provided subsidy bonds and land grants to help the railroad companies acquire the money they would need. This not only aided the Union Pacific and the Central Pacific in raising the necessary funds, it eventually resulted in a railroad construction competition that was characterized by unfettered greed, and memorialized by more than 200 miles of parallel grading. The Pacific Railroad Act of 1862 authorized each company to receive government bonds for every mile of track they laid. The bonds were not a payment to the railroad, but more like a low interest loan. They had to be repaid at maturity, which was in thirty years, at a rate of six percent interest. The bonds were to be issued as follows: $16,000 for every mile of track laid on flatlands, $32,000 for every mile of track laid in the foothills, and $48,000 for each mile of track laid in mountainous terrain. Initially, the bonds were of little help because the companies needed money to pay for the labor and supplies necessary to begin construction. Since the government had no money to pay the railroad companies, they instead gave ten square miles of land for each mile of track that was completed. The land grants were to be distributed in a checkerboard fashion. Every other section (square mile) of land for ten miles on each side of the track, for a total of ten square miles, was given to the railroad company (see diagram below). The intent of the land grants was to give the railroads an asset they could turn into cash to help them finance construction. Along with the land grants, a 400 foot right-of-way was also given. By 1864, the Central Pacific had only laid 18 miles of track and the Union Pacific had yet to spike down a rail. It was apparent that the subsidy bonds and land grants were not enough to finance such a monumental project. Congress passed the Pacific Railroad Act of 1864 with the intent of providing further means whereby the two companies might build capital. The 1864 act doubled the land grants to allow a total of twenty square miles (every other section for twenty miles on each side of the track) for each mile of track laid. The act continued the practice of subsidy bonds, and allowed each company to issue its own bonds to match those of the government, effectively doubling the amount of money that could be raised. The only drawback from the railroads’ point of view was a lessening of the right-of-way from 400 feet to 200 feet. In the original Pacific Railroad act in 1862, the Central Pacific, beginning in Sacramento, California, was authorized to build a railroad only to the California-Nevada border. It was believed that crossing the Sierra Nevada would be so difficult that they would not get any further. In the 1864 legislation this was extended to 150 miles east of the California-Nevada border, and in 1866, the Central Pacific was given permission to build until it met up with the Union Pacific which was building westward from Omaha, Nebraska. This, combined with the lucrative land grants, caused a competition between the two companies to arise. The Union Pacific, working on the great plains, was laying one and two miles of track each day while the Central Pacific, stuck in the mountains, was barely moving forward. It was a classic example of the tortoise and the hare. However, in 1867, something remarkable happened; the Central Pacific finished its line over the Sierra Nevada Mountains, and hit the flatlands of Nevada. The race was on. Each company began to lay two, three, and even four miles of track per day when weather and available supplies permitted. By October of 1868, just west of Rock Springs, Wyoming, the Union Pacific worked all day, and well into the night by firelight to set an astounding record of seven and one half miles of track in one day. It became obvious that whichever company reached Ogden, Utah first would control the rail traffic throughout the west. As a result, Ogden became the prize of the great railroad race. The Union Pacific won the race by reaching Ogden in March of 1869. The Central Pacific was still laboring in the deserts of northern Utah. In an effort to win a bet with Union Pacific’s Thomas Durant, and save face, on April 28, 1869 the Central Pacific crews set a record that still stands by laying ten miles and 56 feet of track in a single working day. The competition went beyond the track laying accomplishments of each railroad company. Because no meeting point had been determined, it was assumed that the grading crews of each company would eventually meet and link their roads together. Instead, the graders, who worked many miles ahead of the track laying crews, were ordered to continue working side by side with their opponents, but in opposite directions. The result was more than 200 miles of parallel road bed between the cities of Echo, Utah and Wells, Nevada. Each company hoped to receive land grants for their efforts. This wasteful effort continued until President Ulysses S. Grant stepped in. He had taken the oath of office in March of 1869 and by April he strongly urged the two companies to agree on a meeting place or the government would do it for them. On April 8, 1869 Grenville Dodge of the Union Pacific and Collis P. Huntington of the Central Pacific met in Washington D.C. and made an agreement. Congress quickly passed it on April 10. All parallel grading was stopped within the next few days. The Treaty of Hooper’s House, as it came to be known, called for the joining of the rails to be at Promontory, Utah which is very near the center of the parallel grading. Apparently neither company wanted to give any ground to the other in the negotiation process. Since Promontory was not suitable for a junction point, it was agreed that the Central Pacific would buy the line from Promontory to Ogden, and that Ogden, controlled by the Union Pacific, would become the permanent junction. The use of land grants and subsidy bonds was very crucial to the financing of the transcontinental railroad, it may not have been built without them. The greed and competition they inspired became one of the greatest stories of the American west.