The Great Railroad Revolution

by Christian Wolmar

  Durant, who was not named as a commissioner under the act but had quickly set out to gain control of the transcontinental project, had previous experience in manipulating stock and cheating investors in the Mississippi & Missouri. It was, therefore, with practiced ease that he managed to scheme his way into obtaining a controlling interest in the Union Pacific, despite the legislation specifically designed to prevent such control. He spent considerable time in 1863 arranging the purchase of stock through nominees whom he controlled and in October that year, thanks to his control of the votes, ensured that an old colleague, a corrupt politician by the name of John Dix, was elected as president of the company, while Durant became vice president. As Dee Brown puts it, “Durant knew that Dix would never bother him.”12

  With the Union Pacific safely under his control, Durant was keen to demonstrate progress on the scheme, but it was not easy with war waging close by and a shortage of materials, as the company was further hamstrung by a clause in the legislation that required all iron to be American rather than British. However, the need to demonstrate at least some activity was made more urgent because a rival railroad, the Atchison, Topeka & Santa Fe, had just been awarded a large land grant by Lincoln, and there were fears it might win support for a transcontinental route from a Congress easily persuaded with the right inducements. A meaningless ground breaking ceremony was held at Omaha, Nebraska, in December 1863, but after the flag waving and earth turning, everyone had simply gone home, though Durant did use the opportunity to pick up some cheap real estate, which soon became worth millions because of its proximity to the new railroad.

  Durant then turned his attention to ensuring that the already supportive legislation was made even more generous to the companies building the line and that he would be able to reap much of the benefit. As Dee Brown explains, “During 1864, Durant successfully accomplished two major maneuvers that made it possible for him and his close associates to enter upon a colossal looting of the people’s treasure and plundering of national land resources.” First, he established the equivalent of the Central’s contracting company, an organization called Crédit Mobilier that would achieve notoriety and forever be remembered for a scandal that became the nineteenth century’s equivalent of Enron. The way to set up this structure was explained to Durant by the much-traveled George Train, another of the Union Pacific’s early promoters. Train was a “character”: a true eccentric and impassioned orator, a supporter of women’s rights and builder of tramways, and apparently the man who inspired the portrayal of Phileas Fogg, the hero of Jules Verne’s Around the World in 80 Days. Train advised Durant of a company in France called the Société Générale de Crédit Mobilier, which was involved in several major infrastructure projects and was, in modern parlance, a way of outsourcing construction to protect the parent company from risk and, incidentally, creating a mech anism through which profits, largely obtained from government subsidies and shareholders, could be purloined without scrutiny. To establish the company, a moribund little corporation, the Pennsylvania Fiscal Agency, was acquired by Train and, as a kind of ironic tribute to the original French concept, given the pretentious name of Crédit Mobilier of America. By controlling Crédit Mobilier, Durant was effectively able to make contracts with himself at any price per mile he chose. The government subsidies were paid to Union Pacific, but since Crédit Mobilier overcharged for everything it did, the beneficiaries were its shareholders, a small coterie of Durant’s friends rather than the far bigger group of Union Pacific investors. There was nothing subtle about the fraud, least of all the size of the dividends that Crédit Mobilier would soon be paying.

  Having established Crédit Mobilier, Durant sped to Washington to buy politicians in order to ensure that even more money could be made through the construction of the railroad. He went there with a staggering $437,000 of Union Pacific funds in his bag, equivalent at today’s prices to around $13 million, and doled out largesse to congressmen and senators to persuade them to pass another Pacific Railroad Act that offered better terms to the Union Pacific. According to Dee Brown, Durant “also spent a great deal more than that distributing Union Pacific stock to congressmen in exchange for their votes” and, it is thought, pocketed much of the original cash he took with him.13 With the help of $18,000 (around $540,000 in today’s money) spent entertaining congressmen at the sumptuous Willard’s Hotel on Pennsylvania Avenue, Durant’s little trip was highly successful.

  The 1864 Pacific Railroad Act doubled the land grants available to twenty square miles for each mile of completed railroad, guaranteeing the railroads land equivalent to the states of Massachusetts, Rhode Island, and Vermont combined. Durant also invited Congressman Oakes Ames and his brother Oliver, who together owned a shovel-manufacturing business in Massachusetts, into his tight coterie of shareholders of Crédit Mobilier, which effectively became a license to print money.

  With the new legislation safely passed, and the Civil War beginning to wind down, in late 1864 the Union Pacific needed to start laying tracks, as the company could begin claiming government subsidies only once forty miles had been completed. A few miles of track had started to be graded before Durant’s trip to Washington, but setbacks for the Unionists in the war and Durant’s departure resulted in the work being stopped. However, Durant had by now made the crucial appointment of a chief engineer, Peter Dey. He soon realized he had made a mistake, for Dey, like Judah, was guilty of the cardinal sin of honesty. The two men clashed over the contract for the first section of line, the hapless Dey having failed to realize that for Durant the whole enterprise was to enrich himself and his associates, irrespective of whether the railroad was built. Dey had obtained a quote from contractors for the first section of twenty-three miles out of Omaha at a cost of between $20,000 and $30,000 per mile, but was surprised to find that Durant had invited in another contractor, an Iowa politician of dubious integrity named Herbert Hoxie, who said that the work would cost $50,000 per mile, which, of course, would be paid by Union Pacific to Crédit Mobilier. Moreover, rather than using Dey’s alignment of twenty-three miles, Durant opted for a new route—devised by a “consulting engineer,” the dandyish Colonel Silas Seymour, who had been appointed over Dey’s head—that was nine miles longer than Dey’s, thanks to extra curves that had been designed solely to obtain more government subsidy. Dey, who was clearly not party to the Crédit Mobilier scam, could not accept either the route or the contract and in December 1864 tendered his resignation. Durant did not even grace his letter with a reply.

  Durant, utterly unabashed, simply continued with the circuitous route (which would eventually be shortened to Dey’s original alignment forty years later) at the higher estimate. Following tortuous progress in the first half of 1865, however, he realized that Seymour was not the man to drive the railroad forward and sought to replace him. Durant now made two key appointments that were to save the entire project. As chief engineer, he chose an old crony, a former Unionist general, Grenville Dodge, with whom he had made a fortune smuggling contraband cotton during the Civil War. Dodge might have obtained his position thanks to his lack of scruples and Durant’s criminality, but that did not mean he was a bad engineer. On the contrary, Dodge not only was a successful soldier, but also had considerable prewar railroad experience as a surveyor and engineer on several midwestern railroads, including a spell on the Chicago & Rock Island, where, ironically, he had worked with Dey. Dodge had been Durant’s first choice as chief engineer, but he had turned down the post to work on rebuilding railroads in the South, where there was more money to be made. He was well connected, having met Lincoln several times, and persuaded the president that Council Bluffs would be the right starting point for a railroad heading toward the Pacific. He was, however, “wild, nervous, and aggressive in temperament, constitutionally able to play the bully upon occasion,” and therefore not an easy fellow to work with, but certainly the right man for the job.14 Under Seymour, the line had inched forward at barely a mile a week, but with Dodge’s arr
ival the construction of the railroad took on all the aspects of a military operation. At its peak it employed an army of ten thousand men supported by nearly as many draft animals, since there was little mechanization.

  Durant’s other appointment, the choice of the Casement brothers as main contractors, proved equally important. John Casement had been a colonel (and later a general) in the Union army, with a record of protecting his men in difficult situations, and had been recommended to Durant by General Sherman, who had invested money in the railroad and visited Omaha at Train’s invitation to check on progress. Casement and his brother Daniel did not look like the sort of imposing characters that would be needed to control the huge army of men needed for such a project. They were just five feet four and five feet tall, respectively, but they were, in fact, an inspired choice. They adopted an almost Fordian approach of allocating tasks to specific gangs, which brought discipline to the ragbag of thousands of men on the work site.

  The Casements were helped by the fact that during the Civil War, the entire country had been militarized. As the war was ending in 1865, thousands of uprooted men, both former soldiers and freed slaves, were wandering around America in search of work and headed west more in hope than expectation. By chance, therefore, the right type of workforce was available, men who were used to discipline, led by officers who understood engineering. As soldiers, they had absorbed strategy, tactics, and logistics. Given that factories were still few and far between in this preindustrialized America, the skills they had learned in war proved invaluable. The Irish, many of whom had worked on railroads back in the East, predominated, but there were large groups of Germans and Swedes also, many of whom were veterans of the separate brigades that had fought in the war.

  The system devised by the Casements was ingenious and effective. To provide for the workers as they laid the track westward into lands where existing settlements became more and more sparse, the brothers devised a work train based on the model of the hospital cars used in the Civil War. The train initially had a dozen cars but grew longer as the project progressed, each with a specific purpose: one carried tools, another was a mobile blacksmith shop, a third had rough tables and a kitchen, and then there were various flatcars loaded with rails, spikes, bolts, and all the other paraphernalia needed to lay track. It was a self-sufficient small town on wheels that was, invariably, the first train to travel over each newly completed section. Behind the work train, there was a long line of boxcars with bunks in which the men took their meals and slept. The work train, of course, could not accommodate all the men on the job, and many stayed in temporary camps.

  The workers themselves were organized by the Casements in a much more structured way than in any previous railroad construction. First, the surveyors would be sent ahead, leaving wooden markers to show the route, followed by the graders cutting through the hills and leveling the ground, making everything ready for the tracklayers, including building bridges and embankments (there were, incidentally, no tunnels on the Union Pacific until it reached the Rockies, thanks to the policy of avoiding expensive features by running the track along the contour lines wherever possible). The work was carried out entirely by hand with pickaxes and shovels— provided by Ames, of course—and the occasional stone obstacle was blown up with gunpowder. Then, according to Dee Brown, after the graders came “the main body of the army, placing the ties, laying the track, spiking down the rails, perfecting the alignment, ballasting, and dressing up and completing the road for immediate use.” Next came the most skillful aspect of the work. The rails were brought up on a flatcar as far as the railhead and carried to the site, where they were dropped onto the ties and, according to a contemporary newspaper reporter, quickly laid: “Close behind the tracklayers come the gaugers, the spikers and bolters. Three strokes to the spike, ten spikes to the rail, four hundred rails to the mile.”15 The newspaperman admired the way in which the monotonous work was carried out with such meticulousness and precision. Indeed, it had all the discipline of a factory that kept pace with the railhead.

  Military discipline was not enough to spur on the work. Money was the real incentive that oiled the wheels of this massive operation. The Casements set a goal of one mile of track per day—compared with the mile per week previously achieved by the incompetent Seymour—and offered each tracklayer a pound of tobacco if the target was completed between dawn and sundown. Then, as the men’s skills improved, the Casements offered three dollars, rather than the usual two, per day if the men could lay a mile and a half, and then, later, four dollars for two miles.

  As a result of these cleverly calibrated incentives, and helped by the relatively easy terrain—this was, after all, sixteen-thousand-dollar-per-mile country—in October 1866 the railroad reached the crucial milestone of the 100th meridian, nearly 250 miles from Omaha. This was a critical landmark for the Union Pacific, as the original legislation had stipulated that the first railroad company to reach that point would be given the right to continue westward, and there were rivals, such as the Santa Fe, ready to pounce on any failings by either of the two railroads. Moreover, Congress had recently lifted the restriction previously imposed on the Union Pacific, which prevented the company from building beyond a point 150 miles east of the California border. With the lucrative land and subsidies available to the competing railroads, this effectively fired the starting pistol for a race across the great desert beyond the Rockies that, for the most part, was easy railroad-building territory.

  The Union Pacific threw a big party to celebrate its achievement on the 100th meridian in the middle of the featureless Nebraska plain, with boiled trout à la Normande, quails on toast, and “escalloped oysters Louisiana style” on the menu. The only disappointment was that President Andrew Johnson failed to turn up. One thousand miles to the west, Charles Crocker and his Associates had rather more to worry about than absent presidents, as the Central was struggling with numerous difficulties, including the mountains, a shortage of labor, and a lack of cash. The 50-mile start that the Central Pacific had enjoyed when the first rails were laid out of Omaha by the Union Pacific was long gone, as progress through the Sierra Nevada was proving painfully slow.

  First, the Central Pacific had to solve the problem of a chronic labor shortage. When work started, the war had not ended, but even when it did, few veterans wanted to travel all the way to the Pacific coast to work on a railroad, as it was much easier for them to reach the Union Pacific’s work sites. Those men who did reach the West were more likely to be attracted by the mines, which paid more than the railroads. Crocker hit on the idea of importing labor from the endless supply available in China, but he had difficulty persuading his superintendent, James Harvey Strobridge, to take on Chinese workers. Strobridge was an old-fashioned contractor who wanted giant beef-eating Irish laborers, not, as he put it, “tiny rice-eaters” who looked too frail to wield a shovel. Crocker pointed out that they had built the world’s biggest structure, the Great Wall of China, and that he could get away with paying them just over a dollar a day, half the rate earned by the rest of the labor force. Eventually, Strobridge was persuaded to take on a batch of fifty as a trial, and the experiment transformed the fortunes of the project. The Chinese proved to be the best workers Strobridge had ever employed, and he immediately sought to recruit more. Soon, virtually every able-bodied Chinese male in California had been hired by the railroad, and Stanford was organizing the recruitment of thousands more in Asia.

  Crocker and Stanford were desperate to ensure that the Union Pacific would not be able to claim the whole of the easy territory in the deserts of Utah and Nevada; every mile of railroad completed by Dodge represented money that would be lost to the Central. The speed of construction now picked up, and by November 1866 the Central Pacific line had reached Cisco, almost a hundred miles from its starting point and nearly six thousand feet up in the mountains. Further tracklaying progress was prevented by heavy snowfalls, which had begun in October and continued for the next six months, cr
eating drifts up to thirty feet deep that required locomotives with a snowplow to clear the tracks. It was decided, however, that work on the twelve major tunnels required for the line to cross the Sierra Nevada would continue through the winter, the workers being protected from the elements once they were inside the tunnels. In one of the most remarkable episodes of the construction process, an army of eight thousand men was brought up the mountains to spend the winter in the tunnels, working eight-hour shifts through the day and night in conditions that tested the whole enterprise to the extreme. A railhead was established at Cisco—where the weather conditions can be judged by the fact that today the town is a ski resort—and equipment to excavate the tunnels was hauled up the slopes of the crude wagon road on sledges. One can only guess what the atmosphere was like in the tunnels where the men worked and lived in air made fetid from their own sweat and filled with dust from the constant explosions and drilling needed to break through the rock. More snow falls in this area of mountains than in any part of the main landmass of the United States. Keeping the men supplied was a constant logistical nightmare.