How did we pay for the transcontinental railroad?

Authorizing the Union Pacific and the Central Pacific railroad companies to construct the lines, the legislation provided government bonds to help fund the work, in addition to vast land grants.



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By one estimate, the project cost roughly $60 million, about $1.2 billion in today's money, though other sources put the amount even higher. While the railroad's construction was a mammoth undertaking, its effects on the country were equally profound.

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Receiving millions of acres of public lands from Congress, the railroads were assured land on which to lay the tracks and land to sell, the proceeds of which helped companies finance the construction of their railroads.

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The rail line was built by three private companies over public lands provided by extensive US land grants. Building was financed by both state and US government subsidy bonds as well as by company-issued mortgage bonds.

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Many countries offer subsidies to their railways because of the social and economic benefits that it brings. The economic benefits can greatly assist in funding the rail network. Those countries usually also fund or subsidize road construction, and therefore effectively also subsidize road transport.

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The rail line, also called the Great Transcontinental Railroad and later the Overland Route, was predominantly built by the Central Pacific Railroad Company of California (CPRR) and Union Pacific (with some contribution by the Western Pacific Railroad Company) over public lands provided by extensive US land grants.

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The Railroad Act of 1862 put government support behind the transcontinental railroad and helped create the Union Pacific Railroad, which subsequently joined with the Central Pacific at Promontory, Utah, on May 10, 1869, and signaled the linking of the continent.

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Transcontinental Railroad Facts
  • It was built to connect the United States' East and West Coasts. ...
  • Approximately 1,800 miles of track. ...
  • The transcontinental railroad cost roughly $100 million. ...
  • Workers came from a wide range of backgrounds and ethnicity. ...
  • President Abraham Lincoln signed the Pacific Railway Act.


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But there was also a dark side to the historic national project. The railroad was completed by the sweat and muscle of exploited labor, it wiped out populations of buffalo, which had been essential to Indigenous communities, and it extended over land that had been unlawfully seized from tribal nations.

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Between 1850 and 1872 extensive cessions of public lands were made to states and to railroad companies to promote railroad construction. [18] Usually the companies received from the federal government, in twenty- or fifty-mile strips, alternate sections of public land for each mile of track that was built.

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U.S. railways are privately owned and operated, though the Consolidated Rail Corporation was established by the federal government and Amtrak uses public funds to subsidize privately owned intercity passenger trains.

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“The 150th anniversary is not just about completing a railroad, but the workers involved.” From 1863 and 1869, roughly 15,000 Chinese workers helped build the transcontinental railroad. They were paid less than American workers and lived in tents, while white workers were given accommodation in train cars.

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The construction of the Transcontinental Railroad was an engineering feat of human endurance, with the western leg built largely by thousands of immigrant Chinese laborers. The building of the Transcontinental Railroad relied on the labor of thousands of migrant workers, including Chinese, Irish, and Mormons workers.

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During the 19th century, more than 2.5 million Chinese citizens left their country and were hired in 1864 after a labor shortage threatened the railroad's completion. The work was tiresome, as the railroad was built entirely by manual laborers who used to shovel 20 pounds of rock over 400 times a day.

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While much of the original transcontinental railroad tracks are still in use, the complete, intact line fell out of operation in 1904, when a shorter route bypassed Promontory Summit.

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