By Noel T. Braymer
Some people like to bemoan that it only took 6 years to build the first Transcontinental Railroad between Omaha and Sacramento. Many of these same people like to criticize High Speed Rail and other rail projects about how long they take to build now in this Country. People who say this either don’t know much or care about history. The first proposal for a Transcontinental Railroad was in 1830. By the 1850’s there was a great deal of discussion and debate about building a Transcontinental Railroad. At the end of 1853 the Gadsden Purchase bought much of what is now southern Arizona and New Mexico. The reason for buying this land was it on the most logical route for a Transcontinental Railroad. It was the shortest route between ports on both coasts of the 3 proposed routes. It also had the fewest problems with elevation and snow. This is why the Central Pacific, recreated itself as the Southern Pacific and started building the Sunset Route shortly after the construction of the 1st Transcontinental Railroad. The man most responsible for the Gadsden Purchase wasn’t the American Ambassador to Mexico at the time Mr. Gadsden, but the then Secretary of War Jefferson Davis.
While the Southern route was the most economical to build, there wasn’t a consensus in the country of which route to use to build a Transcontinental Railroad. There were 3 proposed routes, a Northern, Central and Southern route. Each region of the country supported the route in their region. The Northern Route would have gone through Montana to Oregon. The Southern route was what became the Sunset route. The route that was finally chosen was the Central route. A major reason for the delay in choosing a route, were many of the same reasons which caused the Civil War.There had been many threats by the South to secede before the Civil War began. If the Southern route had been built between Texas and California before the Civil War broke out, this would have cut California off from the North and given the South easy access to California and its gold. California was still mining a great deal of gold at the time of the Civil War which had a major impact on the Nation’s economy. When one ship with a shipment of gold from California to the East Coast sank in the Atlantic in 1857, it triggered the Panic of 1857 which was one of the worse economic depressions in United States history.
Another reason for the delay was that up to the Civil War the Southern States could usually block any legislation it didn’t want. This was the result of the Missouri Compromise of 1820 which kept the number of slave states equal with free states. This gave the Southern Plantation owners the ability to block any legislation in the Senate. The South was not interested in Federal tax dollars being spent in much of anywhere outside of the South.The Plantation owners didn’t want to pay any more in taxes than they could. Many infrastructure projects for the North and Midwest were blocked by the South in the Senate before the Civil War. Before the breakout of the Civil War, most of the wealth, development and population growth of the Country was in the North and Mid-West. At the time of the start of the Civil War the total population of the County was 31 million, with roughly 9 million people in the Confederacy, of whom 4 million where slaves.
At the Republican Party National Convention in 1860, the party’s platform included planks for building a Transcontinental Railroad and a Homestead Act to give land in the West free to settlers who were willing to create farms on Federal Land. After the Southern States rebelled, these two projects and many others were passed in Congress, without the obstruction of the missing Southern Senators. Today we often hear the complaint that we can’t afford major infrastructure projects like High Speed Rail. That the National Debt is too high and so on. It is amazing then that despite the high cost of the Civil War plus labor and material shortages, construction of the Transcontinental Railroad began during the war. Much of the money for building the Transcontinental Railroad came from the Federal Government. Much of that was based on debt from government secured bonds. Today for California High Speed Rail we often hear it called the “train to nowhere”. But in 1869, Omaha, Cheyenne, and Sacramento which the UP/CP railroads ran were about a close to going to nowhere as you could get in 1869.
But that was the point of building the Transcontinental Railroad. This is why it went hand in hand with the Homestead Act. The whole point of both of these in the 1860 Republican Platform was to develop land in the West and move people there. To create business for the new railroad, it needed people to settle in the areas by the railroad to create farms and towns served the railroad. The money would be made in the new development and increased wealth of the settlers who bought or homesteaded land made accessible by the railroad. Much of the land that had been bought in the West before 1869 had been bought by plantation owners. They were always on the move to buy large plots of land needed to run new plantations. Most of the founders of the short lived Texas Republic were plantation owners. There was a battle over land by the 1850’s between farmers with small, family worked farms and plantations worked by slaves. Much of the opposition to slavery was from people who didn’t want to compete with slave labor to earn a living.
The political fights now over expanded rail service are like most political battles are over money just as they were before the Civil War. Other groups are competing with rail service for government funding for other projects. Much of the cost increases and delays in building new rail projects is from opposition by local residents concerned about impacts to their property by any new project. This is not not just a problem for rail passenger projects. It was growing opposition by impacted communities that largely brought freeway construction almost to an end by the 1970’s. There were many planned freeway projects that have never been built just in Los Angeles County. An example of this is the attempt to connect the 210 Freeway to the 710 which are heavy truck routes that has been blocked for over 30 years by residents of the city of South Pasadena.
Much of the criticism to Rail Projects in this Country is over the costs of construction. Nothing is said of the lower costs of travel by rail, when compared to the full cost of car travel both in term of energy, land use and environmental impacts. More important is the impact to the economy with transportation improvements. The expansion of the railroads with several transcontinental railroads in the 19th Century had a major impact on the economic growth of the country which still impacts us today. Much of the post World War II economic growth in this country was fueled by the construction of the Interstate Highway program. Any country’s economy is depended on its transportation infrastructure. Transportation infrastructure is almost always a government responsibility. Much of the railroad construction in this country needed government help to get built in the 19th Century. Other transportation services depend on government to own and maintain roads, harbors, water ways, airports and air traffic control. These government services might be called subsidies, but transportation services are generally able to compete and make a operational profit. In much of the world the railroad tracks and dispatching are owned and controlled by government or government controlled non-profit companies. This insures the railroad infrastructure is in good and safe condition. This makes it possible for private rail service companies to make a profit around the world. The main reason so many publicly owned rail services in this country “lose” as much money as they do, is because they own and are responsible for their expensive transportation infrastructure.
What the past shows us is economic growth depends on government to raise money, build and maintain infrastructure. Much of the profits private companies enjoy depend on taxpayer supported services including transportation. On a level playing field, rail passenger service is more economical in land use, energy consumption, environmental impacts and ability to generate economic growth. This is why rail passenger service is successful and growing around the world. It is also happening in places like California where rail service has been built and expanded.
I will close with this quote on High Speed Rail financing from the Fiscal Times for May 7, 2016
Rail lines are generally profitable once in operation, said Jim Steer, director of UK-based high-speed rail research organization Greengauge 21. But operating profits are unlikely to be enough to repay massive construction costs.
“No private party is actually going to stump up the kind of money needed to create these things,” said Steer.
Supporters of the new rail lines said investors can expect solid returns based on ticket sales and profits from high-end real estate developments near stations.
Current economic trends also make private financing for infrastructure projects easier to secure. Interest rates at historic lows have created global demand for stable, long-term investments, igniting interest in infrastructure projects from banks and major investors, such as pension funds.