What was the first transcontinental railroad corruption?

On September 4, 1872, the Sun broke the story. The newspaper reported that Crédit Mobilier had received $72 million in contracts for building a railroad worth only $53 million. After the revelations, the Union Pacific and other investors were left nearly bankrupt.



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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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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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Shipping and railroad tycoon Cornelius Vanderbilt (1794-1877) was a self-made multi-millionaire who became one of the wealthiest Americans of the 19th century.

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Before, during and after the transcontinental railroad's construction thousands of enslaved and then freedmen worked on the railroads grading lines, building bridges, and blasting tunnels. They working as firemen shoveling coal into the boiler riding alongside the engineer, and as brakemen and yard switchmen.

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Small businesses and farmers were protesting that the railroads charged them higher rates than larger corporations, and that the railroads were also setting higher rates for short hauls than for long-distance hauls.

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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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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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Even though railroads made life a little bit easier, it was hazardous to the environment, and the people, such as the destruction of natural resources, more pollution in the air also affected people causing even more diseases and made it much harder to breather with these conditions.

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Good and bad The railroad is credited, for instance, with helping to open the West to migration and with expanding the American economy. It is blamed for the near eradication of the Native Americans of the Great Plains, the decimation of the buffalo and the exploitation of Chinese railroad workers.

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How did government grants to build railroads result in large-scale corruption? Railroad investors realized they could profit more by selling free government land grants than by operating railroads, so some bribed political representatives to vote for more grants.

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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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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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Within ten years of its completion, the railroad shipped $50 million worth of freight coast to coast every year. 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.

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