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You might believe in destiny.

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But if you ask me, and I'm glad you did,

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there is one powerful force that drives human behavior

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and changes the world.

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Money.

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(intense music)

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Abraham Lincoln had lots of problems.

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One of them, of course, was keeping the union together,

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north and south.

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But he also had to work on keeping east and west together.

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The California Gold Rush brought a lot of people

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to California, including southerners

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who brought their slaves.

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I mean, somebody had to do the digging, right?

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So when the Civil War broke out, there was actually a lot

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of Confederate sympathy in California.

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There was even talk of creating

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a pro-slavery Pacific Republic.

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So in order to keep them in the union,

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Lincoln made them this amazing offer.

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How about a transcontinental railroad?

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And all the wealth that would come with it.

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(upbeat fiddle music)

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In his classic work, Democracy in America,

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Alexis de Tocqueville, cast a shrewd eye

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on the American character.

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Americans, he wrote, were destined to annihilate

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time and space.

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He was talking about the amazing new invention,

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the railroad, that would follow the money

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from sea to shining sea.

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Railroads were the original high-speed network.

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They were as expansive, disruptive, and lucrative

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as the internet is today.

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Railroads are the largest corporations in the world.

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The American railroads are.

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And they're unprecedented.

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It's one thing to have a large powerful company,

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but this is a company that spans many states.

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In fact, spans the entire nation.

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It's getting its financing from something called Wall Street

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and stocks and bonds.

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In fact, the idea of a corporation,

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this kind of corporation, and trusts,

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these are all new financial instruments.

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The how-to-do big industry is being written

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by the railroads.

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These old trains taught 21st Century monopolists

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how to get rich.

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Today, if you buy something, almost anything,

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Amazon dictates the terms of the transaction and gets a cut.

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Why?

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Because they control the infrastructure.

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The buyer and seller have to go through them.

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Guess where Amazon got its business model from?

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The railroads control all this, the lifelines of commerce

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throughout the country, but particularly in the west.

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And so you can have this fantastic crop in Iowa,

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and do everything right, and raise this amazing boomer

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crop of corn, and you are stuck.

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You've got one way to get that to market,

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and that's through the railroad.

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There's no competition.

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The railroad's can charge you whatever they want.

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You might think it was lunacy for Lincoln

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to launch a transcontinental railroad during the Civil War.

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It would be kind of like FDR saying, let's beat Hitler

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and put a man on the moon.

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But Lincoln knew keeping the 49'ers in California happy,

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would keep gold flowing back east to fund the war.

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And a railroad would go far towards persuading that

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big blank space in the middle to eventually join the union.

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(old west music)

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Movies have made us believe that the wild West was tamed

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by rugged individuals with a gun on one hip and a gal

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on the other.

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Don't believe it.

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Achieving manifest destiny took thousands of grunt workers,

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millions of dollars, massive corporate interests,

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and stupendous government funding.

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Many of those dollars went into the pockets of a few

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Sacramento speculators, known as the Associates.

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Their homes were monuments to their wealth

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and their chutzpah.

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Collis Huntington once told French reporters,

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your Eiffel Tower is all very well,

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but where's the money in it?

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In 1865, Huntington exploited the chaos and grief

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after Lincoln's murder

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to push through a bill extending his railroad line.

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His partner, Leland Stanford, was governor of California

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at the same time he headed the Central Pacific Railroad.

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And he somehow got the state to kick in $15 million

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to start track construction.

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Okay, this was olden times and they had different ideas

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about morality, but still, how could such astounding

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corruption ever be possible?

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And because it's a massive government program,

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all that money gets spent, and it's all accounted for,

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and everything's honest, and nothing bad happens.

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Right?
Absolutely.

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Everything squares up at the end.

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Well, not exactly.

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At the end of the day, they know that they wanna

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keep Congress out of the picture as much as possible.

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They don't want any oversight.

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So one way to do that is to give a lot of this stock

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to Congressmen, and that tends to keep them quiet.

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(upbeat music)

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Free from interference, the rail tycoons wrote

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the book on defrauding Washington.

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They were paid by the mile of track laid.

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So they created winding circuitous routes

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to maximize mileage.

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Builders received a premium for track laid over mountains,

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but the term mountain was not defined.

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Stanford hired geologists to survey the route,

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and wouldn't ya know it, they discovered that

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the Sierra Nevada range starts way back here in Sacramento.

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The best scandals are always the railroad scandals.

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They tend to be very large, somewhat complicated,

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very colorful, and really expensive.

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And of the railroad scandals, one of the greatest was

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the Credit Mobilier Scandal of the 19th Century.

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It started when the Union Pacific Railroad charged the

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US government twice what it actually cost

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to build the railroad.

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The rest of the money went into the pockets of the owners

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and also was paid out in bribes to practically the entire

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US government, including multiple members of the House,

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including the Speaker of the House, four senators,

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one Secretary of the Treasury, and the Vice-President

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of the United States.

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And by the way, these were guys from both parties.

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It was really, in a weird way, encouraging to see

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such bipartisan corruption.

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Here's a cartoon of the day, depicting the

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Credit de Mobilier ward in the Union Pacific Hospital.

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The scandal threatened to bring down the whole pyramid

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of greed, debt, and double dealing.

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But it turns out, the transcontinental railroad

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was just too big to fail.

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(jazzy music)

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So the robber barons lived to steal another day.

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The iron monster was a technological marvel

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that embodied America's march of progress.

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(whistle blows)

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Walt Whitman sang its praises: "Type of the modern emblem

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"of motion and power, pulse of the continent."

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The view was different and a tad less romantic

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on the ground.

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On the theory that the people who had built the Great Wall

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could surely handle the railroad, thousands of Chinese

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laborers were hired.

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So they're willing to come and do this kind of work,

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but they're gonna be incredibly cheap.

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You can pay a Chinese laborer, I mean it's explicit racism,

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but you can pay a Chinese laborer much lower wages

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and work them much longer hours, and also send them

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to do the most dangerous jobs, to set the dynamite charges

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and that kind of thing.

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Because you can, you have that kind of power over them.

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The Chinese worked really hard

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and didn't complain, which was a mistake.

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Other immigrants hated the competition,

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and the Chinese Exclusion Act soon banned Chinese

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from entering the country and denied citizenship to those

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already in the US.

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(upbeat music)

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On May 10th, 1869, the nation waited breathlessly for word

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that the continent was united.

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(cheers)

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People were like paying attention to the telegraph

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and their newspapers.

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Everybody knew it was going to happen.

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They brought photographers, and they set up that very

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dramatic picture that many people have seen,

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which is the two locomotives nose to nose.

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Hundreds of workers, champaign bottles in hand,

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and all the key figures of the railroad are there,

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and it's a great moment.

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They've set it up very dramatically.

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They have a golden spike that's specially forged,

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and a silver hammer and Leland Stanford gets the honor

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of driving that last spike.

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They had telegraph wire connected to it, so that when he

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hammers in
Oh really?

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Hammers in the spike, it sends out a signal to the world.

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(hillbilly music)

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They knew that people were gathering in big open squares.

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Most big cities had newspaper row,

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all the collections of newspapers.

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So thousands of people gathering for this ceremony,

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and when the lights go on, or somebody fires off a gun

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to say, the continent is spanned, is literally as dramatic

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a moment in people's minds as when Neil Armstrong walks

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on the moon.

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It's just got that can you believe what we

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have just pulled off.

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The triumphant headlines missed another story,

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the line had been built so quickly and so shottily,

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that it would take five more years to repair

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and reposition large sections of the poorly laid track.

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Huntington and Stanford pioneered the practice of spending

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other people's money.

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Each invested a paltry few thousand dollars and ended up

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with $20 billion in today's money.

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(train whistles)

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It's nice work if you can get it.

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In those days, it was customary for the ultra rich

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to endow great centers of higher learning.

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For example, Leland Stanford and his Stanford University.

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In 1975, the Stanford administrators decided to retire

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their somewhat problematic Indian mascot, and they asked

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the student body to pick a new symbol to represent Stanford

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to the world, and the students overwhelmingly voted

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for the Stanford Robber Barons.

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The administration did not go for that, and to this day,

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Stanford does not have an official mascot.

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But those students, they knew their history.

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They just looked around and followed the money.

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(dramatic music)

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The railroad had conquered space and time.

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When you have these intersecting networks of railroads,

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it's really important that 12 o'clock in New York

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is 12 o'clock in Baltimore is 12 o'clock anywhere else,

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because when you're setting up schedules where trains

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crisscross tracks.
Yeah.

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If the train is leaving here at noon

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and getting there at 2:00, then their clock better be

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the same clock as you have.

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Otherwise, the train is gonna run into another one.

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Right, and it's gonna be disastrous and expensive

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and everything else.

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So in 1883, the big railroads got together without Congress,

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without any government oversight, and just divided up

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the American continent into four time zones,

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and worked it out so that there was standard time

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and also the time zones.

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(peaceful music)

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Back when this railroad thing was but a dream,

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it seemed so risky that private investors

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needed a sweetener,

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land.

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Lots and lots of land.

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Over 12,000 acres for every mile of track built.

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In the end, land grants from state and federal governments

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transferred 180 million acres into private hands,

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an area bigger than Texas.

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The rail barons became empire builders.

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Making further fortunes from coal, iron, silver,

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lumber and livestock.

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And what about those rugged Americans who settled the West?

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Those legendary icons of freedom and independence.

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They lived at the mercy of their landlords.

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(train whistle blows)

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The railroad tycoons.

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(upbeat music)