The Transcontinental Travesty

[DET63]

By Donald WorsterUpdated Monday, June 6, 2011, at 6:56 AM ET

The corporate raider Gordon Gekko, in the 1987 film Wall Street, distilled the essential philosophy of the Reagan era, when we were supposed to get back to basic principles: "Greed, for lack of a better word, is good. Greed is right. Greed works." Although almost every ethical philosopher or religious leader of the past came out against greed as an emotion that distorts judgment and corrupts society, the Gekko-Reagan creed has usually been an easy sell in America. Running against that tradition, Richard White, in his new book Railroaded: The Transcontinentals and the Making of Modern America, doggedly persists in challenging the notion of greed as either rational or virtuous. He has a big job on his hands. No matter how many dot-com crashes or overleveraged credit debacles we go through, the core faith in greed as the engine of American greatness seems all but unshakable.

 

One legendary moment of greatness was the completion of the first transcontinental. There is a legend-making photo taken at Promontory Summit, Utah, May 1869, when the Union Pacific and Central Pacific joined tracks and reunited a war-divided people. After that came the Northern Pacific, the Great Northern, the Atlantic [sic], Topeka, and Santa Fe, and other lines that brought a transportation revolution to the West. White debunks the legend, arguing that the achievement was shoddy and chaotic and benefited the nation very little. The money that built those lines did not come from the railroad men themselves—Leland Stanford, Collis Huntington, Henry Villard, James J. Hill, and Thomas Scott. Instead, they persuaded Congress to lay out enormous subsidies.

More at Slate.com

 

[stntylr]

I've read this guy before. He believes that the U.S. would havve been better off as a farming society and skipped the industrial revolution. The fact is that while the pursuit of profit has led to problems it is also what drives inovation.

 

[Zephyr Stowaway]

Seeking to make a profit is not the same thing as greed. It's what motivates people to invest and jobs are created in the process.

 

[JAChooChoo]

Seeking to make a profit is not the same thing as greed. It's what motivates people to invest and jobs are created in the process.

Actually most of us seek to make a profit in our daily labors. Its called "take home pay."

 

[Anderson]

I think there's a difference between seeking a reasonable return on investment (compared to the risk involved) and trying to milk something for all it's worth. The former is entirely reasonable; the latter is what gets folks into trouble every time, be it the dot com boom or making bad mortgage investments. We can probably throw more than a few mismanaged railroads into the mix, too.

With that said, I think that government investment was necessary...the railroads in the 19th century were going across sparsely-populated land that still had a hostile native population in some areas (discussions about the source of this hostility belong to another thread). The risks of running out of capital in a market crash before completing a line were not negligible (and in a lot of areas, such lines would be more or less worthless if they couldn't reach a given destination), especially if one could make respectable returns with lines that stayed either in California or in the East (say, extending no further than Omaha or Topeka). After all, given two propositions with equal projected rates of return, one will choose the less risky one. Absent government intervention, it is quite possible to see the building of transcontinental rail lines taking another 20 years or so (though I'd place the likely timeframe as around 1880 instead of 1869), and with the bridge lines across Montana and Idaho or Colorado, Utah, and Nevada (or Arizona, New Mexico, and southern California) only coming once settlement expanded far enough in and as the Indian threat was resolved.

Let me put it in plain terms: You have a sum of money to invest in a railroad. Are you going to put that money in a line running several hundred miles across the (very sparsely populated) frontier, where there is little freight (particularly out of season) and even fewer passengers to carry? Or would you be better off investing in parts of the South, where you at least have developed (if damaged) cotton, tobacco, etc. industries to tap into, or perhaps putting that money into some sort of connection between Texas and the Midwest to carry cattle? Absent the government picking up part of the risk and/or fattening the rewards (via land grants which could be used to secure capital), that money would have gone somewhere else. Let's not forget that the Canadian government also had to fork over money for the CP to build its line...and that even then, it wasn't a given that the CP would finish its line even with a very large government loan and land grant.

 

[jis]

Notwithstanding attempts to write history by some to try to show how horrible the investments in the transcons were, I believe that some of the best investment made by this country was in funding the expansion of the railroads to connect the two coasts and unify the country as a whole. This country would not be what it is today had that investment not been made back then.

 

[The Davy Crockett]

They have a correction now, but the railroad cluelessness of American journalism reared its ugly head again when they called the ATSF the "Atlantic, Topeka and Santa Fe." :blink: :unsure: hboy:

 

[jis]

They have a correction now, but the railroad cluelessness of American journalism reared its ugly head again when they called the ATSF the "Atlantic, Topeka and Santa Fe." :blink: :unsure: hboy:

Fortunately no famous Oceans or Rivers with names that start with T and S came to the mind of the writer at the critical moment. It is good that at least AT&SF did not become Atlantic, Tennessee and San Francisco :lol:

 

[Anderson]

They have a correction now, but the railroad cluelessness of American journalism reared its ugly head again when they called the ATSF the "Atlantic, Topeka and Santa Fe." :blink: :unsure: hboy:

Fortunately no famous Oceans or Rivers with names that start with T and S came to the mind of the writer at the critical moment. It is good that at least AT&SF did not become Atlantic, Tennessee and San Francisco :lol:

No...that would've been the result of SP, MoPac, and Southern merging.

 

[jis]

They have a correction now, but the railroad cluelessness of American journalism reared its ugly head again when they called the ATSF the "Atlantic, Topeka and Santa Fe." :blink: :unsure: hboy:

Fortunately no famous Oceans or Rivers with names that start with T and S came to the mind of the writer at the critical moment. It is good that at least AT&SF did not become Atlantic, Tennessee and San Francisco :lol:

No...that would've been the result of SP, MoPac, and Southern merging.

I see that you are optimistic that the journalist know that much geography