The Race Is On
With the discovery of gold in California shortly after its annexation, the untapped wealth of the American West spurred interest in westward expansion at home and abroad. By the time President Lincoln signed the Pacific Railway Act in 1862 to establish federal support for the construction of the Transcontinental Railroad, there was no question that a railway would help people and goods traveling west do so more quickly and safely, with the added benefit of nationwide geographic and economic growth as new towns sprang up near the train’s route.
The onset of the Civil War helped decide that route, since after secession, northern lawmakers faced little opposition to a route based in the north. The federal government then contracted the Central Pacific Railroad in Sacramento and the Union Pacific Railroad in Omaha to start laying tracks, supported by government land grants and bonds.
In addition to this support, each railroad company received a bounty for each mile of track laid. The Central Pacific and Union Pacific would each be compensated with $16,000 for each mile of track in the Sierra Nevadas and east of the Rockies. Once the railroads entered the mountains, they would rake in $32,000 for every mile of track they put down. The quicker each company put down track, the more money they would make. This structure of compensation started a seven-year race between the companies to see who could lay the most track.