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Breaking the Myth About America’s ‘Great’ Railroad Expansion

Historian Richard White talks about the greed, ineptitude and economic cost behind the transcontinental railroads of the 19th century, and what that says about the development of infrastructure today.

The,Last,Spike,1881,A,Painting,By,Thomas,Hill,Depicts
The Last Spike 1881, a painting by Thomas Hill, depicts the ceremony held at Promontory Point, Utah, on May 10, 1869, marking the completion of the first transcontinental railroad.
(Shutterstock)
Politicians love a good historical analogy. That’s why Joe Biden has compared his infrastructure law to the construction of the interstate highway system and the transcontinental railroad. The president, of course, means such comparisons in a flattering light. For those who have studied these revolutionary policy choices, however, the consequences are not so unblemished.

Ten years ago, historian Richard White catalogued the greed and ineptitude of railroad executives and the policymakers who blindly enabled their schemes. In Railroaded: The Transcontinentals and the Making of Modern America, he explored the history of corporations that have gone down in American myth as corrupt but ultimately productive and necessary.

White argues that the transcontinental railroad companies were not necessary for stitching the young country together; they were simply an example of “dumb growth” that hurt more than it helped. Sped along by state subsidy and paid-for politicians, these corporations built in places where there were no markets. They never made money. The entire enterprise was a vast Ponzi scheme, and its periodic turmoil threw the nation into repeated economic crisis. Their selfish flailing scourged wildlife, oppressed Native Americans, and spread new settlements to areas where they could not be sustained (and after long suffering were not).

Instead of an all-powerful “octopus” engulfing the country, he saw the railroad men as a collection of myopic and unintelligent executives who could not have survived year to year without government subsidy. Instead of a monstrous kraken, he suggested a better analogy would be “a group of fat men in an Octopus suit fighting over the controls” of a train going off the rails.

Governing talked to White on the 10th anniversary of Railroaded about the common mistakes we make in debating infrastructure, the dangers of historical analogy, and backlash to myth-busting the preferred national narrative.

Governing: In Railroaded you argue that the great transcontinental railroads were not the embodiments of rough-and-tumble frontier capitalism we learn about, but wasteful, heedless entities that survived only by corruptly securing financial backing from the public. Why does the myth of the railroad generation as a time of corrupt, but fruitful, corporate growth persist?

Richard White: It’s such a useful myth. Barack Obama used to cite it around high-speed rail. I admire Obama for a great many things, but his knowledge of American history in the 19th century took a blow with that one. But I think for his purposes, he couldn’t care less about what the railroads were actually like. What he wants to do is say, “look, we did this once and we can do it again.”

You hear this over and over again. David Brooks says it all the time. Once we were a nation of builders, but now we can’t get anything done. The story of the railroads is a very useful, encapsulated myth for that kind of statement. That’s why they use it. It’s not about what actually happened in American history. It’s a justification for policies they want to pursue.

Governing: The alternative to the transcontinental railroads as they existed was not a lack of progress, or a West without trains. The question instead was whether they should have been subsidized to grow in the way that they did. How might railroad networks and America’s westward development have unfolded if they did not enjoy such government largesse? 

White: What would have happened is what, in fact, happened in California. Even though the transcontinentals [reach the West Coast] in 1869, there’s hardly any traffic going across the country. Instead, there is a market on the West Coast so what you get is railroads built in California that feed into San Francisco Bay. Things are put on railroad trains that go into San Francisco Bay. Then they are put on ships and shipped west across the Pacific, or more likely down to Panama. What you have is a hybrid system where the railroads feed the ports. That’s how things operate really until the 1880s, 1890s.

Meanwhile, they build not only those first transcontinentals but all these others and they inevitably go bankrupt. They’re subsidized railroads which do not have traffic and with their attempts to develop traffic, they’re disastrous for Native American people and disasters for the environment. They largely fail.
An advertisement created by the Burlington and Missouri River Railroad Co. in 1872 to increase land sales in Iowa and Nebraska.
This was an advertisement created by the Burlington and Missouri River Railroad Co. in 1872 to increase land sales in Iowa and Nebraska. This flyer promoted “millions of acres” of land being sold on 10 years credit with 6 percent interest.
(Library of Congress)

Governing: You compare development in North Dakota, where subsidized transcontinentals expanded, and South Dakota where no major railroad enjoyed a land grant. What were the effects of this accidental experiment in different forms of development?

White: These are very similar areas, one where you don’t subsidize these railroads and another one where you do. And it turns out in the unsubsidized area the railroads are built more densely in the areas that actually need them. You tend to get smaller farms, you tend to get more equitable land distribution. Settlement ends up being denser, the land ends up being more productive.

In the other areas where there are the land grants [to the railroads], you get the opposite. There’s more scattered settlement and the farms tend to be larger. Because they’re going to be building out into areas that can’t support railroads, you’re going to find railroads like the Northern Pacific going bankrupt.

Governing: You write about the anti-monopolist movement, both its successes and its failures. What do you make of the anti-monopoly movement of today, which seems to be a much more upper middle class concern. Why haven’t working class voters been motivated in the ways that their late 19th century predecessors were?

White: That may be changing. The reason anti-monopoly concerns have tended to be middle class and upper middle class is that so many of them are focused on the internet. Amazon, Apple, these are the monopolies that they want to break up. Most of these consumers are going to be middle class, and many of the employees of those companies are going to be middle class.

It’s hard to say what’s going to happen, but the anti-monopoly movement might be spreading. Even though they’ve been defeated so far, Amazon workers, Lyft drivers are beginning to act in ways that seem very resonant with the 19th century anti-monopoly movement. I could be totally wrong. We could have this conversation again in a year and it turns out all of this went nowhere in the same way the Wall Street demonstrations went nowhere. But for right now, I wouldn’t write off the fact that there might be a labor reaction against monopoly too.
An old image of the Union Pacific Railroad crossing the Great Salt Lake, in Utah.
An image of the Union Pacific Railroad crossing the Great Salt Lake, in Utah.
(Marzolino/Shutterstock)
Governing: There are other parallels that could be drawn to today, specifically in terms of large corporations focused on dumb growth that are largely able to survive and thrive — despite free market rhetoric — because of support from the government. 

White: Elon Musk would be a good example.

Governing: Exactly. So let’s talk about the uses and misuses of history. Our contemporary era is often compared to the 1930s or a second Gilded Age. What are the uses of history when it comes to drawing lessons for the present day? How useful are such analogies or are they mostly facile?

White: Take the Gilded Age: there are a lot of easy comparisons. The inequality of wealth, the rise of powerful corporations, corruption. All those things jump out at you. But if you stop with the easy part, you’re not going to get much.

I’d argue there were really two Gilded Ages. One is the easy, facile Gilded Age, the one that’s come across as a great age of selfishness, corruption and inequality. But what’s forgotten in this is the other part, which I put in Railroaded. It’s also a period where anti-monopoly comes up, there’s a drive for democracy, there’s Reconstruction, an attempt to extend Black suffrage and extend equality. That part tends to be forgotten, because by and large those people lost.

The great virtue of history, if it’s written well, is it brings back the losers too. The losers sometimes may have more to teach us than the winners. That’s one of the ways you can use history profitably, it’s one of the ways you can use the Gilded Age.

Governing: You talked about Amazon workers rebelling and unionizing, and so far they have been losing too. What can they learn from those movements that lost in the 19 century?

White: First, you have to find allies. Anti-monopolists recognized this, but never could achieve it. You had the anti-monopolists, the Knights of Labor, the Farmers Alliance, all these different groups. But they came up at different times and they never really made alliances with each other. You also had a society much like ours, which is really very, very fragmented. It’s Catholics, Protestants, immigrant workers, native-born workers. All these groups, if they fight separately, if they cannot find some common ground on which they can stand, they’re probably going to be picked off piecemeal.

The second thing is that politics really does matter. Controlling the federal government, having the federal government on your side and having local government on your side makes a great deal of difference. When you go back to the strikes, by and large, workers won when they had local and state governments on their side. If not, workers lost. The intervention to suppress strikes mattered a great deal. These are the kinds of lessons you should bring home. You can’t depend on government unless you control it. If you disavow politics, the other side will take the politics and you’re going to lose.

Governing: You’ve argued that the costs and real possibilities of infrastructure projects are often obscured by excitement over new jobs, new spending. How do you see this dynamic playing out in the contemporary debate?

White: This first physical infrastructure bill strikes me as incredibly conservative and backward looking. It’s about rebuilding current infrastructure. We’re in a predicament, particularly around climate change, in part because our current infrastructure imposes on us certain ways of doing things. Simply fixing that infrastructure, while it gives us jobs, is really not going to change much. I don’t want bridges to fall down. Fixing potholes is going to be good. But having done that, we’re not going to be any further towards stopping climate change or confronting the crises we face.

The second infrastructure bill goes towards [social welfare] and infrastructure built toward climate change. Like everybody else, I don’t have the details about what that will be. But it will face the great challenge that all infrastructure faces. Infrastructure is about the future, but there’s all kinds of unknowns. We are building for something which won’t be realized for 10, 15, 20 years. We’re anticipating that it will be adequate for the world that exists at that time. But the world is changing so quickly that we’re taking a chance. We have to take that chance, but I would certainly like a clearer idea of the world they are building for.

A lot of this seems to be about how to bring all the interests on board. By the time you bring all the interests on board, any clear vision of what this infrastructure legislation is supposed to achieve is going to be lost. The recent climate change conference did not give me much clarity about how we’re preparing to meet this future. This is a huge challenge. Terrible things are happening. We have to do something about it. But we seem to put a lot of faith on muddling through here. But you can’t muddle through with infrastructure because you’re stuck with it for a very, very long time.
Illustration of workers setting rails of the transcontinental Union Pacific Railroad.
Illustration of workers setting rails of the transcontinental Union Pacific Railroad.
(Shutterstock)
Governing: Do you think contemporary actors have evolved when it comes to looking at the real downsides of infrastructure projects like the highway system or fossil fuel projects?

White: We’re not as bad as we were five or 10 years ago, but we’re certainly not very good. We now accept that climate change is a reality. We accept that things are going to get worse unless we do something dramatic. In the states, particularly in a state like California, we’ve shown that you can correct some of these problems.

Everybody says California is a mess. But it’s not the mess that people make it into. California has managed its clean air problem. California knows how to manage its water problem. California has gotten a lot better on clean energy. These kinds of tasks are not impossible.

When we look towards the states, when we look towards local examples, things seem much more optimistic than they do if we look nationally or internationally. But the problem, of course, is that while the local places can be laboratories, they’re not going to fix it by themselves. We need some national effort. I’m mildly optimistic because we’ve recognized the problem and on a local level, on a state level, we’ve shown remarkable aptitude in solving some of these problems. But nationally, it’s pretty discouraging.

Governing: Your work is often described by reviewers as refuting national myths about the Wild West and other stories we tell ourselves about our history. What do you make of the contemporary battles over the non-mythologized version of American history?

White: I used to teach an American survey class and my final lecture would end with me acknowledging that I’d spent a lot of time telling the students things that they probably would rather not hear. I told them there were two reasons for this.

Very often the course would stop with the end of Vietnam. You go to the Vietnam [Veterans] Memorial and you have there all those names listed. Because I’m of that generation, I knew some of those names and I knew what they believed about their country. They went and fought in the name of something which was not true. They didn’t understand what was happening to them because they didn’t know the history. And because they didn’t know the history, they were manipulated, and they were dead.

But that’s not all. The major thing is that I can stand up in this country, and I can tell you this stuff, and nothing is going to happen to me. That’s one of the things that sets the United States apart. In China, I could not teach this kind of history. In the Soviet Union, I could not teach this kind of history. In modern Russia, I could not teach this kind of history.

This kind of history is one of the marks of a democratic government. If you take away this kind of history, you’re taking away one of the basic standards of democracy: that sometimes you have to hear things you don’t want to hear. Those are the two reasons I give for why I do this kind of work and why I teach it.
Jake Blumgart is a senior writer for Governing and covers transportation and infrastructure. He lives in Philadelphia. Follow him on Twitter at @jblumgart.
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