Contributions to Rapid Growth in California

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Hoping for a Railroad

Many people supported the idea of a transcontinental railroad (a railroad that would cross the continent from the Atlantic to the Pacific.) In addition to improving travel, many thought a transcontinental railroad would increase trade. Goods from California and goods brought to California from Asia could be carried by train to the East Coast. A young man named Theodore Judah took a special interest in the idea of a transcontinental railroad. Judah was an engineer, someone who plans and builds railroads and other structures. He knew the hardest part of the building a railroad to California would be crossing the Sierra Nevada.

Building the Railroad

Building a transcontinental railroad would cost millions of dollars. Judah began to look for people willing to invest in the railroad. Judah found four men who wanted to invest—Leland Stanford, Collis P. Huntington, Mark Hopkins, and Charles Crocker. They
became known as the Big Four.

In 1861, Judah and the Big Four formed the Central Pacific Railroad Company . . .
In 1862, Congress passed the Pacific Railroad Act. The United States would provide money and land for the Central Pacific Railroad Company to build a railroad east from Sacramento. Another railroad company, the Union Pacific, would lay tracks west from Council Bluffs, Iowa. The two railroad lines would meet in between.


Rails Across California: Effects of the Railroad

When the transcontinental railroad was completed, Californians were thrilled. People in Sacramento hoped that the railroad would help the city grow. In San Francisco, business owners were eager to send goods from Asia by rail to the East coast. The railroad did lead to growth. However, it also caused problems for some businesses. It brought new products into the state that sometimes cost less that goods made and sold in California. Many businesses in the state suffered and closed.

More Railroads

Before the transcontinental railroad was finished, the Big Four had begun building other railroads in California. One of these was the Southern Pacific Railroad. Part of this railroad ran through the Central Valley from Stockton to Los Angeles. Towns along the railroad’s route –such as Bakersfield, Modesto, Fresno, and Merced—grew quickly.
In return for building tracks, the Southern Pacific Railroad had gained more than 11million acres of land. This was a result of the Pacific Railroad Act of 1862. The act granted large areas of land surrounding railroad tracks to the railroad company that laid the tracks. The Big Four gained more and more land with every new railroad track that they laid in California. As they grew wealthier, they bought or started other railroads,
including the Western Pacific and the California Southern. The railroads owned by the Big Four stretched in so many directions that they were nicknamed “the Octopus.” For almost 20 years, the Big Four’s railroads had little competition in California. In business, competition is a contest among companies to get the most customers or to sell the most products. Because the railroads owned by the Big Four had little competition,
they could charge high prices for train tickets. At one time, a round-trip ticket from the East to California cost more than $200. This is equal to about $3578 in today’s money.

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