Who paid for the transcontinental railroad?

In 1862, Congress passed the Pacific Railway Act, which designated the 32nd parallel as the initial transcontinental route, and provided government bonds to fund the project and large grants of lands for rights-of-way.



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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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In 1862 Congress passed the Pacific Railroad Acts which designated the 32nd parallel as the initial transcontinental route and gave huge grants of lands for rights-of-way. The legislation authorized two railroad companies, the Union Pacific and the Central Pacific, to construct the lines.

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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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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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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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The building of America's railroads involved African Americans, many working as slaves. Virtually every railroad built in the Pre-emancipation Era South was built using slave labor. During the Civil War (1861–1865) the US Military Railroads (USMRR) employed thousands of freeman and contraband slaves (as seen here).

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The Central Pacific Railroad, which was tasked with constructing the western half of the Transcontinental Railroad, began hiring Chinese workers in 1864 after facing a labor shortage that jeopardized the railroad's completion.

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Yet, due to the critical shortage, Crocker suggested that reconsideration be given to hiring Chinese. He encountered strong prejudice from foreman James Harvey Strobridge. Strobridge's attitude changed when a group of Irish laborers agitated over wages. Crocker told Strobridge to recruit some Chinese in their place.

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To encourage development of rail lines westward, the government offered railroad companies massive land grants and bonds. Railroads received millions of acres of public lands and sold that land to generate money for the construction of the railroads.

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Danger Ahead: Building the Transcontinental Railroad The company suffered bloody attacks on its workers by Native Americans–including members of the Sioux, Arapaho and Cheyenne tribes–who were understandably threatened by the progress of the white man and his “iron horse” across their native lands.

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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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Initially, Chinese employees received wages of $27 and then $30 a month, minus the cost of food and board. In contrast, Irishmen were paid $35 per month, with board provided. Workers lived in canvas camps alongside the grade.

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Altogether, the Central Pacific Railroad hired an estimated 12,000 Chinese workers, some as young as 12. The Chinese workers, at that time the largest industrial workforce in American history, made up 90 percent of the Central Pacific's total labor force.

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United States. Current subsidies for Amtrak (passenger rail) are around $1.4 billion. The rail freight industry does not receive direct subsidies.

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They were paid less than white workers, and hundreds lost their lives as a result of the dangerous work, said Gordon Chang, professor of American history at Stanford's School of Humanities and Sciences. A Chinese laborer works at a tunnel heading above Donner Lake on the western summit of the Transcontinental Railroad.

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The transcontinental railroad was built in six years almost entirely by hand. Workers drove spikes into mountains, filled the holes with black powder, and blasted through the rock inch by inch. Handcarts moved the drift from cuts to fills.

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Irish immigrants often entered the workforce at the bottom of the occupational ladder and took on the menial and dangerous jobs that were often avoided by other workers. Many Irish American women became servants or domestic workers, while many Irish American men labored in coal mines and built railroads and canals.

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African Americans were employed as train porters, freight handlers, switch tenders, and engine shop workers. Following the Civil War, George Pullman established the Pullman Sleeping Car Company.

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John Stevens is considered to be the father of American railroads. In 1826 Stevens demonstrated the feasibility of steam locomotion on a circular experimental track constructed on his estate in Hoboken, New Jersey, three years before George Stephenson perfected a practical steam locomotive in England.

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Answer and Explanation: The entire United States benefited financially from the joining of two railroads to form one transcontinental railroad. However, two industries benefited the most from the Transcontinental Railroad. Those were cotton and cattle.

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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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