What abuses were the railroads accused of?

Railroads discriminated in the prices they charged to passengers and shippers in different localities by providing rebates to large shippers or buyers. These practices were especially harmful to American farmers, who lacked the shipment volume necessary to obtain more favorable rates.



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Steel rails linked the farms and the mills. The railroads provided the efficient, relatively cheap transportation that made both farming and milling profitable. They also carried the foodstuffs and other products that the men and women living on the single-crop bonanza farms needed to live.

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The Complaints of Farmers First, farmers claimed that farm prices were falling and, as a consequence, so were their incomes. They generally blamed low prices on over-production. Second, farmers alleged that monopolistic railroads and grain elevators charged unfair prices for their services.

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Railroads Were at the Forefront of Political Corruption “Railroads need monopoly franchises and subsidies, and to get them, they are more than willing to bribe public officials,” White says. The Central Pacific Railroad, for example, spent $500,000 annually in thinly disguised bribes between 1875 and 1885.

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Jay Gould Infamous for manipulating stock, Jay Gould was the most notoriously corrupt railroad owner. He became involved in the budding railroad industry in New York during the Civil War, and in 1867 became a director of the Erie Railroad.

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In the middle of the nineteenth century, U.S. railroad companies were expanding at a breakneck pace, straining to span the continent as quickly--and cheaply--as they could. The work was brutally difficult, the pay was low, and workers were injured and killed at a very high rate.

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Once some railroad owners consolidated, combined, they gave secret rebates, or discounts to their “better” customers in an attempt to keep them in business with the railroad. This hurt many small businesses that could not compete.

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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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The builders were inept and built shoddy products. 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.

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