How did railroads cause corruption?

In the most notorious instance of corruption connected to the railroads, Union Pacific Railroad executives formed a sham construction company, Crédit Mobilier, that submitted bills for nearly double the construction cost of the eastern portion of the Transcontinental Railroad and pocketed the overcharges.



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Crédit Mobilier Scandal, in U.S. history, illegal manipulation of contracts by a construction and finance company associated with the building of the Union Pacific Railroad (1865–69); the incident established Crédit Mobilier of America as a symbol of post-Civil War corruption.

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Common knowledge has it that the transcontinental railroad was very much a product of its times – another Gilded Age monument to corruption, embezzlement, and the unjust enrichment of capitalists.

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The great wealth many railroad entrepreneurs acquired in the late 1800s led to accusations that they had built their fortunes by swindling investors and taxpayers, bribing officials, and cheating on their contracts and debts.

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There was abuse of labor and destruction of the labor movement. The transcontinentals harmed Native Americans, and hastened the destruction of the buffalo. They opened lands to farming before the production was needed leading to oversupply and economic collapse. They brought in open range cattle a poorly run industry.

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The railroad opened the way for the settlement of the West, provided new economic opportunities, stimulated the development of town and communities, and generally tied the country together.

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The railroad opened the way for the settlement of the West, provided new economic opportunities, stimulated the development of town and communities, and generally tied the country together.

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Just as it opened the markets of the west coast and Asia to the east, it brought products of eastern industry to the growing populace beyond the Mississippi. The railroad ensured a production boom, as industry mined the vast resources of the middle and western continent for use in production.

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Crédit Mobilier Scandal, in U.S. history, illegal manipulation of contracts by a construction and finance company associated with the building of the Union Pacific Railroad (1865–69); the incident established Crédit Mobilier of America as a symbol of post-Civil War corruption.

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During the post-World War II boom many railroads were driven out of business due to competition from airlines and Interstate highways. The rise of the automobile led to the end of passenger train service on most railroads.

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But freight railroad abuses grew rampant. Money lined the pockets of greedy public officials who awarded generous terms to the railroads. Railroad companies set their own shipping rates. Sometimes it was more expensive for a small farmer to ship goods to a nearby town than to a faraway city.

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Not only did the railroads transport raw materials used in industrial production, such as coal and iron ore, the railroads were also one of the largest consumers of raw materials in their own right. The growth of railroads thus led to growth in other industries, such as timber and coal.

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The first rail lines in most of western Europe were in existence by 1835, but at that time Germany was still quite rural in settlement and development patterns.

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Railroads became a major industry, stimulating other heavy industries such as iron and steel production. These advances in travel and transport helped drive settlement in the western regions of North America and were integral to the nation's industrialization.

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As a result, although rail transport has advantages such as high carrying capacity, economy, reliability and environmental impact, it also has some disadvantages such as limited flexibility, operating costs, necessity of intermodal connections and delivery time.

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As a result, although rail transport has advantages such as high carrying capacity, economy, reliability and environmental impact, it also has some disadvantages such as limited flexibility, operating costs, necessity of intermodal connections and delivery time.

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Each company faced unprecedented construction problems—mountains, severe weather, and the hostility of Native Americans. On May 10, 1869, in a ceremony at Promontory, Utah, the last rails were laid and the last spike driven.

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