You might believe in destiny.
But if you ask me, and I'm glad you did,
there is one powerful force that drives human behavior
and changes the world.
Money.
(intense music)
Abraham Lincoln had lots of problems.
One of them, of course, was keeping the union together,
north and south.
But he also had to work on keeping east and west together.
The California Gold Rush brought a lot of people
to California, including southerners
who brought their slaves.
I mean, somebody had to do the digging, right?
So when the Civil War broke out, there was actually a lot
of Confederate sympathy in California.
There was even talk of creating
a pro-slavery Pacific Republic.
So in order to keep them in the union,
Lincoln made them this amazing offer.
How about a transcontinental railroad?
And all the wealth that would come with it.
(upbeat fiddle music)
In his classic work, Democracy in America,
Alexis de Tocqueville, cast a shrewd eye
on the American character.
Americans, he wrote, were destined to annihilate
time and space.
He was talking about the amazing new invention,
the railroad, that would follow the money
from sea to shining sea.
Railroads were the original high-speed network.
They were as expansive, disruptive, and lucrative
as the internet is today.
Railroads are the largest corporations in the world.
The American railroads are.
And they're unprecedented.
It's one thing to have a large powerful company,
but this is a company that spans many states.
In fact, spans the entire nation.
It's getting its financing from something called Wall Street
and stocks and bonds.
In fact, the idea of a corporation,
this kind of corporation, and trusts,
these are all new financial instruments.
The how-to-do big industry is being written
by the railroads.
These old trains taught 21st Century monopolists
how to get rich.
Today, if you buy something, almost anything,
Amazon dictates the terms of the transaction and gets a cut.
Why?
Because they control the infrastructure.
The buyer and seller have to go through them.
Guess where Amazon got its business model from?
The railroads control all this, the lifelines of commerce
throughout the country, but particularly in the west.
And so you can have this fantastic crop in Iowa,
and do everything right, and raise this amazing boomer
crop of corn, and you are stuck.
You've got one way to get that to market,
and that's through the railroad.
There's no competition.
The railroad's can charge you whatever they want.
You might think it was lunacy for Lincoln
to launch a transcontinental railroad during the Civil War.
It would be kind of like FDR saying, let's beat Hitler
and put a man on the moon.
But Lincoln knew keeping the 49'ers in California happy,
would keep gold flowing back east to fund the war.
And a railroad would go far towards persuading that
big blank space in the middle to eventually join the union.
(old west music)
Movies have made us believe that the wild West was tamed
by rugged individuals with a gun on one hip and a gal
on the other.
Don't believe it.
Achieving manifest destiny took thousands of grunt workers,
millions of dollars, massive corporate interests,
and stupendous government funding.
Many of those dollars went into the pockets of a few
Sacramento speculators, known as the Associates.
Their homes were monuments to their wealth
and their chutzpah.
Collis Huntington once told French reporters,
your Eiffel Tower is all very well,
but where's the money in it?
In 1865, Huntington exploited the chaos and grief
after Lincoln's murder
to push through a bill extending his railroad line.
His partner, Leland Stanford, was governor of California
at the same time he headed the Central Pacific Railroad.
And he somehow got the state to kick in $15 million
to start track construction.
Okay, this was olden times and they had different ideas
about morality, but still, how could such astounding
corruption ever be possible?
And because it's a massive government program,
all that money gets spent, and it's all accounted for,
and everything's honest, and nothing bad happens.
Right? Absolutely.
Everything squares up at the end.
Well, not exactly.
At the end of the day, they know that they wanna
keep Congress out of the picture as much as possible.
They don't want any oversight.
So one way to do that is to give a lot of this stock
to Congressmen, and that tends to keep them quiet.
(upbeat music)
Free from interference, the rail tycoons wrote
the book on defrauding Washington.
They were paid by the mile of track laid.
So they created winding circuitous routes
to maximize mileage.
Builders received a premium for track laid over mountains,
but the term mountain was not defined.
Stanford hired geologists to survey the route,
and wouldn't ya know it, they discovered that
the Sierra Nevada range starts way back here in Sacramento.
The best scandals are always the railroad scandals.
They tend to be very large, somewhat complicated,
very colorful, and really expensive.
And of the railroad scandals, one of the greatest was
the Credit Mobilier Scandal of the 19th Century.
It started when the Union Pacific Railroad charged the
US government twice what it actually cost
to build the railroad.
The rest of the money went into the pockets of the owners
and also was paid out in bribes to practically the entire
US government, including multiple members of the House,
including the Speaker of the House, four senators,
one Secretary of the Treasury, and the Vice-President
of the United States.
And by the way, these were guys from both parties.
It was really, in a weird way, encouraging to see
such bipartisan corruption.
Here's a cartoon of the day, depicting the
Credit de Mobilier ward in the Union Pacific Hospital.
The scandal threatened to bring down the whole pyramid
of greed, debt, and double dealing.
But it turns out, the transcontinental railroad
was just too big to fail.
(jazzy music)
So the robber barons lived to steal another day.
The iron monster was a technological marvel
that embodied America's march of progress.
(whistle blows)
Walt Whitman sang its praises: "Type of the modern emblem
"of motion and power, pulse of the continent."
The view was different and a tad less romantic
on the ground.
On the theory that the people who had built the Great Wall
could surely handle the railroad, thousands of Chinese
laborers were hired.
So they're willing to come and do this kind of work,
but they're gonna be incredibly cheap.
You can pay a Chinese laborer, I mean it's explicit racism,
but you can pay a Chinese laborer much lower wages
and work them much longer hours, and also send them
to do the most dangerous jobs, to set the dynamite charges
and that kind of thing.
Because you can, you have that kind of power over them.
The Chinese worked really hard
and didn't complain, which was a mistake.
Other immigrants hated the competition,
and the Chinese Exclusion Act soon banned Chinese
from entering the country and denied citizenship to those
already in the US.
(upbeat music)
On May 10th, 1869, the nation waited breathlessly for word
that the continent was united.
(cheers)
People were like paying attention to the telegraph
and their newspapers.
Everybody knew it was going to happen.
They brought photographers, and they set up that very
dramatic picture that many people have seen,
which is the two locomotives nose to nose.
Hundreds of workers, champaign bottles in hand,
and all the key figures of the railroad are there,
and it's a great moment.
They've set it up very dramatically.
They have a golden spike that's specially forged,
and a silver hammer and Leland Stanford gets the honor
of driving that last spike.
They had telegraph wire connected to it, so that when he
hammers in Oh really?
Hammers in the spike, it sends out a signal to the world.
(hillbilly music)
They knew that people were gathering in big open squares.
Most big cities had newspaper row,
all the collections of newspapers.
So thousands of people gathering for this ceremony,
and when the lights go on, or somebody fires off a gun
to say, the continent is spanned, is literally as dramatic
a moment in people's minds as when Neil Armstrong walks
on the moon.
It's just got that can you believe what we
have just pulled off.
The triumphant headlines missed another story,
the line had been built so quickly and so shottily,
that it would take five more years to repair
and reposition large sections of the poorly laid track.
Huntington and Stanford pioneered the practice of spending
other people's money.
Each invested a paltry few thousand dollars and ended up
with $20 billion in today's money.
(train whistles)
It's nice work if you can get it.
In those days, it was customary for the ultra rich
to endow great centers of higher learning.
For example, Leland Stanford and his Stanford University.
In 1975, the Stanford administrators decided to retire
their somewhat problematic Indian mascot, and they asked
the student body to pick a new symbol to represent Stanford
to the world, and the students overwhelmingly voted
for the Stanford Robber Barons.
The administration did not go for that, and to this day,
Stanford does not have an official mascot.
But those students, they knew their history.
They just looked around and followed the money.
(dramatic music)
The railroad had conquered space and time.
When you have these intersecting networks of railroads,
it's really important that 12 o'clock in New York
is 12 o'clock in Baltimore is 12 o'clock anywhere else,
because when you're setting up schedules where trains
crisscross tracks. Yeah.
If the train is leaving here at noon
and getting there at 2:00, then their clock better be
the same clock as you have.
Otherwise, the train is gonna run into another one.
Right, and it's gonna be disastrous and expensive
and everything else.
So in 1883, the big railroads got together without Congress,
without any government oversight, and just divided up
the American continent into four time zones,
and worked it out so that there was standard time
and also the time zones.
(peaceful music)
Back when this railroad thing was but a dream,
it seemed so risky that private investors
needed a sweetener,
land.
Lots and lots of land.
Over 12,000 acres for every mile of track built.
In the end, land grants from state and federal governments
transferred 180 million acres into private hands,
an area bigger than Texas.
The rail barons became empire builders.
Making further fortunes from coal, iron, silver,
lumber and livestock.
And what about those rugged Americans who settled the West?
Those legendary icons of freedom and independence.
They lived at the mercy of their landlords.
(train whistle blows)
The railroad tycoons.
(upbeat music)