It's a little hard to summarize the book considering how much ground it covers, butSimon_Jester wrote: Could you expand on that?
I mean, the immense fraud associated with the long-distance railroad boom of the 1860s and '70s was definitely a big stain and a waste of resources. That I agree with- although this was the beginning of the Gilded Age; it was hard to find anyone capable of bankrolling large industrial concerns who didn't have some degree of corruption or disarray in their finances. Still, the transcontinental railroad attracted worse investors than most.
But what's the argument for the decision to have transcontinental railroads being a bad one in the first place? The rapid expansion of the rail network played a major role in turning the American West from a wild and largely empty territory into a substantially contributing economic asset. Is the argument that this rail expansion should have occurred more 'organically?' Or what?
1. The transcontinental railroads were unnecessary. None of them paid for themselves without crazy financial schemes involving subsidies and land grants until very late in the 19th century*, and there was an enormous amount of corruption involved in just getting the traffic they had. For example, White points out that for decades, the owners of the Central Pacific actually bribed the primary Mail Steamer company (which had the contract for delivering US mail at the time) to not compete or solicit additional West Coast traffic. Why? Because it was not only much cheaper to send goods/mail by steamship down to Panama, across the isthmus by a railroad down there, and then up to the East Coast by another steamship - it was actually faster than sending it over land by the railroads.
* A lot of the transcontinental railroads constructed in the 1860s and 1870s were so shoddy they had to be re-built again.
2. The case for the social benefits of doing a massive transcontinental build-out on subsidies isn't there either. White specifically brings up the case example of North Dakota vs South Dakota, where North Dakota had the heavily subsidized/land grant approach to railroad building while South Dakota didn't and had a gradual build-out of existing railroads along with expanding farms/towns. South Dakota not only had better run railroad access as a result, it had better and more solid economic development.
In other words, better railroad development probably would have happened anyways, along with better economic development without the giant federal railroad subsidy. Incalculably huge amounts of investment capital would not have been sunk into the fraudulent bonds and stocks of big railroad companies and the "construction companies" created to leach money off them (like Credit Mobilier). The only reason to build a transcontinental railroad at all with federal support besides easement/right-of-way access in that time period would be if they needed one for military reasons, and they could have the Army Corps of Engineers build such a road like they did in the Civil War (and then allow some traffic across it to defer costs).
Sorry, this is taking the "Reading" thread off-course, and I'm not even slightly doing White's argument and book justice. I strongly recommend you read it.
