Discussion
One of the best ways to make sense of any current problem is to understand its historical antecedents. Analyzing the conflicts, resolutions, catastrophes, trends, and ideas from a bygone era can help us to comprehend our present condition, and through that knowledge, we can, perhaps, reshape the path to our future.
Purpose:
For this assignment, you must select one theme, event, or concept from this lesson’s lectures or articles (NOT the textbook readings and NOT the Crash Course history videos). You will then compare your selection to an ongoing social, political, cultural, or economic issue in the United States today, explaining how events and phenomena from the past influence or shape the present. Whereas the quizzes are designed to test your empirical knowledge of U.S. history, this discussion post is designed to evaluate your ability to make broader, analytical connections from the past to contemporary events. Your discussion post should reflect your critical analysis of the past and present.
Directions:
1. Watch the lecture and read the scholarly article in their entirety. Select one of the materials which interests you the most.
2. From one of those materials, determine what the main argument is. In other words, all academic lectures and articles have a key point that is being supported by evidence, which is what we call the argument. Figure out what that key point is.
3. In your discussion post, explain the argument by analyzing the evidence. As you are explaining the argument, you should discuss how that argument is significant for U.S. history. In other words, tell me why this topic is important for U.S. history.
4. Next, make a connection between the topic and any political, social, or cultural issue that we face today in the United States. You should explain how and in what ways the past informs or have shaped the present.
5. Your discussion post should reflect how you interpret the past and connect it to present events.
6. Please, be creative; be bold! There is no right or wrong answer! I will evaluate you based upon the quality of your analysis.
Guidelines and Requirements:
1. A minimum of 350 words. By all means, feel free to write more.
2. Use formal, well-written English. You will be penalized points if your discussion post is sloppy and incomprehensible.
The Continuing Evolution of Reconstruction History
Author(s): Eric Foner
Source: OAH Magazine of History, Vol. 4, No. 1, The Reconstruction Era (Winter, 1989), pp.
11-13
Published by: Oxford University Press on behalf of Organization of American Historians
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A SPECIAL SECTION
The Continuing Evolution
of Reconstruction History
Eric Foner
In the past thirty years, no period of American history
has seen a broadly accepted point of
view so completely overturned as
Reconstruction–the dramatic and
controversial era that followed the
Civil War. Since the early 1960s, a
profound alteration of the place of
blacks within American society,
newly uncovered evidence, and
changing definitions of history it
self, have combined to transform
our understanding of race relations,
politics, and economic change dur
ing Reconstruction.
Anyone who attended high
school before 1960 learned that
Reconstruction was as era of
unrelieved sordidness in Ameri
can political and social life.
Drawing on scholarly studies
that originated in the work of
William Dunning, John W. Bur
gess, and their students soon
after the turn of the century,
the “traditional” interpretation
argued that when the Civil War
ended, the white South ac
cepted the reality of military defeat,
stood ready to do justice to the
emancipated slaves, and desired above
all a quick r?int?gration into the
fabric of national life. Before his
death, Abraham Lincoln had em
barked on a course of sectional
reconciliation, and during Presiden
tial Reconstruction (1865-1867) his
successor, Andrew Johnson, at
tempted to carry out Lincoln’s
magnanimous policies. Johnson’s
efforts were opposed and eventually
thwarted by the Radical Republi
cans in Congress. Motivated by an
irrational hatred of Southern “reb
els” and the desire to consolidate
their party’s national ascendancy,
the Radicals in 1867 swept aside the
Southern governments Johnson had
established and fastened black suf
frage upon the defeated South. There
followed the period of Congres
sional or Radical Reconstruction
(1867-77), an era of corruption
presided over by unscrupulous
“carpetbaggers” from the North,
unprincipled Southern white “scala
Anyone who attended high
school before 1960 learned that
Reconstruction was an era of
unrelieved sordidness in Ameri
can political and social life.
wags,” and ignorant blacks, unpre
pared for freedom and incapable of
properly exercising the political right
Northerners had thrust upon them.
After much needless suffering, the
South’s white community banded
together to overthrow these govern
ments and restore “home rule” (a
euphemism for white supremacy).
All told, Reconstruction was the
darkest page in the American saga.
During the 1920s and 1930s,
new studies of Johnson’s career and
new investigations of the economic
wellsprings of Republican policy
reinforced the prevailing disdain
for Reconstruction. Johnson’s new
biographers portrayed him as a
courageous defender of constitu
tional liberty; his actions stood above
reproach. Simultaneously, histori
ans of the Progressive School, who
viewed political ideologies as little
more than masks for crass economic
ends, further undermined the Radi
cals’ reputation by portraying them
as agents of Northern capitalism,
who cynically used the issue of
black rights to fasten economic
Subordination upon the de
feated South.
From the first appearance of
the Dunning school, dissenting
voices had been raised, ini
tially by a handful of survivors
of the Reconstruction era and
the small fraternity of black
historians. In 1935, the black
activist and scholar, W. E. B.
Du Bois, published Black Re
construction in America, a
monumental study that por
trayed Reconstruction as an idealis
tic effort to construct a democratic,
interracial political order from the
ashes of slavery, as well as a phase
in a prolonged struggle between
capital and labor for control of the
South’s economic resources. His
book closed with an indictment of a
profession whose writings had ig
nored the testimony of the principle
actor in the drama of Reconstruc
tion–the emancipated slave–and
sacrificed scholarly objectivity on
the altar of racial bias. “One fact
Winter 1989 ti
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and one alone,” Du Bois wrote,
“explains the attitude of most recent
writers toward Reconstruction; they
cannot conceive of Negroes as men.”
Black Reconstruction anticipated the
findings of modern scholarship, but
at the time of its publication, it
failed to influence prevailing views
among academic historians, or the
account of the era in school texts.
Despite its remarkable longevity
and powerful hold on the imagina
tion, the demise of the traditional
interpretation was inevitable. Its
fundamental underpinning was the
conviction, to quote one member of
the Dunning School, of “negro inca
pacity.” Once objective scholarship
and modern experience rendered its
racist assumptions untenable, fa
miliar evidence read very differ
ently, new questions suddenly came
into prominence, and the entire
edifice had to fall.
It required, however, not simply
the evolution of scholarship but a
profound change in the nation’s
politics and racial attitudes to deal
the final blow to the Dunning School.
If the traditional interpretation re
flected, and helped to legitimize, the
racial order of a society in which
blacks were disenfranchised and sub
jected to discrimination in every
aspect of their lives, Reconstruction
revisionism bore the mark of the
modern civil rights movement. In
the 1960s the revisionist wave broke
over the field, destroying, in rapid
succession, every assumption of the
traditional viewpoint. First, schol
ars presented a drastically revised
account of national politics. New
works portrayed Andrew Johnson as
a stubborn, racist politician inca
pable of responding to the unprece
dented situation that confronted him
as president, and acquitted the
Radicals–reborn as idealistic re
formers genuinely committed to black
rights?of vindictive motives and
the charge of being the stalking
horses of Northern capitalism.
Moreover, Reconstruction legisla
tion was shown to be not simply the
product of a Radical cabal, but a
program that enjoyed broad support
both in Congress and the North at
large.
Even more startling was the
revised portrait of Republican rule
Persistent racism, these post-revi
sionist scholars argued, had negated
efforts to extend justice to blacks,
and the failure to distribute land
prevented the freedmen from achiev
ing true autonomy and made their
civil and political rights all but
meaningless. In the 1970s and 1980s,
a new generation of scholars, black
Reconstruction was not merely a specific time
period, but the beginning of an extended his
torical process: the adjustment of American
society to the end of slavery.
in the South. So ingrained was the
old racist version of Reconstruction
that it took an entire decade of
scholarship to prove the essentially
negative contentions that “Negro
rule” was a myth and that Recon
struction represented more than “the
blackout of honest government.”
The establishment of public school
systems, the granting of equal citi
zenship to blacks, and the effort to
revitalize the devastated Southern
economy refuted the traditional
description of the period as a “tragic
era” of rampant misgovernment.
Revisionists pointed out as well that
corruption in the Reconstruction
South paled before that of the Tweed
Ring, Credit Mobilier scandal, and
Whiskey Rings in the post-Civil War
North. By the end of the 1960s,
Reconstruction was seen as a time of
extraordinary social and political
progress for blacks. If the era was
“tragic,” it was because change did
not go far enough, especially in the
area of Southern land reform.
Even when Revisionism was at
its height, however, its more opti
mistic findings were challenged, as
influential historians portrayed
change in the post-Civil War years
as fundamentally “superficial.”
and white, extended this skeptical
view to virtually every aspect of the
period. Recent studies of Recon
struction politics and ideology have
stressed the “conservatism” of
Republican policymakers, even at
the height of Radical influence, and
the continued hold of racism and
federalism despite the extension of
citizenship rights to blacks and the
advanced scope of national author
ity. Studies of federal policy in the
South portrayed the army and Freed
men’s Bureau as working hand in
glove with former slaveowners to
thwart the freedmen’s aspirations
and force them to return to planta
tion labor. At the same time,
investigations of Southern social
history emphasized the survival of
the old planter class and the conti
nuities between the old South and
the new. The post-revisionist inter
pretation represented a striking
departure from nearly all previous
accounts of the period, for whatever
their differences, traditional and
revisionist historians at least agreed
that Reconstruction was a time of
radical change. Summing up a
decade of writing, C. Vann Woodward
observed in 1979 that historians now
understood “how essentially non
12 Magazine of History
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revolutionary and conservative
Reconstruction really was.”
In emphasizing that Reconstruc
tion was part of the ongoing evolu
tion of Southern society rather than
a passing phenomenon, the post
revisionists made a salutary contri
bution to the study of the period.
The description of the Reconstruc
tion as “conservative,” however,
did not seem altogether persuasive
when one reflected that it took the
nation fully a century to implement
its most basic demands, while others
are yet to be fulfilled. Nor did the
theme of continuity yield a fully
convincing portrait of an era that
contemporaries all agreed was both
turbulent and wrenching in its social
and political change. Over a half
century ago, Charles and Mary Beard
coined the term “The Second Ameri
can Revolution” to describe a trans
fer in power, wrought by the Civil
War, from the South’s “planting ar
istocracy” to “Northern capitalists
and free farmers.” And in the latest
shift in interpretive premises, atten
tion to changes in the relative power
of social classes has again become a
central concern of historical writ
ing. Unlike the Beards, however,
who all but ignored the black expe
rience, modern scholars tend to view
emancipation itself as among the
most revolutionary aspects of the
period.
The most recent effort to pro
vide a coherent account of the
Reconstruction era is my own Re
construction: America’s Unfinished
Revolution, published in 1988, and
with an abridged version, A Short
History of Reconstruction, set to
appear in 1990. Drawing upon the
voluminous secondary literature that
has appeared in the last thirty years,
the book seems to provide a coher
ent, comprehensive modern account
of the period. Necessarily, it touches
on a multitude of issues, but certain
broad themes unified the narrative.
The first is the centrality of the
black experience. Rather than the
passive victims of the actions of
others or simply a “problem” con
fronting white society, blacks were
active agents in the making of Re
construction, whose quest for indi
vidual and community autonomy
did much to establish Reconstruc
tion’s political and economic agenda.
Black participation in Southern public
life after 1867 was the most radical
development of the Reconstruction
years. Other themes include transi
tion from slave to free labor and the
evolution of racial attitudes and
patterns of race relations.
The book also seeks to place the
Southern story within a national
context, especially by stressing the
emergence during the Civil War and
Reconstruction of a national state
possessing vastly expanded author
ity and a new set of purposes,
including an unprecedented com
mitment to the ideal of a national
citizenship whose equal rights be
longed to all Americans regardless
of race. Originating in wartime
exigencies, the activist state came to
embody the reforming impulse deeply
rooted in postwar politics. And
Reconstruction produced enduring
changes in the laws and Constitution
that fundamentally altered federal
state relations and redefined the
meaning of American citizenship.
Yet because it threatened traditions
of local autonomy, produced politi
cal corruption, and was so closely
associated with the new rights of
blacks, the rise of the state inspired
powerful opposition, which, in turn,
weakened support for Reconstruc
tion. Finally, the study examines
how changes in the North’s economy
and class structure affected Recon
struction, and especially the retreat
from the commitment to equality
that accelerated during the 1870s.
My account of Reconstruction
begins not in 1865, but with the
Emancipation Proclamation in 1863,
to emphasize that Reconstruction
was not merely a specific time pe
riod, but the beginning of an ex
tended historical process: the ad
justment of American society to the
end of slavery. The destruction of
the central institution of antebellum
Southern life permanently trans
formed the war’s character, and
produced far-reaching conflicts and
debates over the role former slaves
and their descendants would play in
American life and the meaning of
the freedom they had acquired. These
were the questions on which Recon
struction persistently turned.
They were also questions that
confronted every society that abol
ished slavery in the Western hemi
sphere, from Cuba and Jamaica to
Brazil. Indeed, it may well be that
the future of Reconstruction studies
lies in comparative analysis of the
differences and similarities between
various aftermaths of slavery. I
made a brief beginning in this di
rection in my Nothing But Freedom,
published in 1983. But comparative
study of the economic, political, and
social consequences of emancipa
tion remains in its infancy. As was
true for the study of slavery, a
compai ative approach to emancipa
tion can broaden our perspective,
introduce new questions and con
cepts, and illuminate what was and
was not unique in the American ex
perience of Reconstruction.
Eric F oner is Professor of History at
Columbia University in New York.
He has written extensively on Recon
struction and his latest book, Recon
struction: America’s Unfinished
Revolution, 1863-1877 received man
awards, among them the 1988 Los
Angeles Times Book Prize and the
1989 O AH Avery O. Craven Award
as the most original book on the Era
of Reconstruction.
Winter 1988 13
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Contents
11
12
13
Issue Table of Contents
Magazine of History, Vol. 4, No. 1, The Reconstruction Era (Winter, 1989), pp. 1-80
Front Matter
From the Editor: Teaching Comparative Reconstruction [pp. 3-4]
Dialogue
Reforming History Curricula: Some Thoughts on Democracy and Western Civilization [pp. 5-8]
On Teaching
Using Local History, Primary Source Material, and Comparative History to Teach Reconstruction [pp. 9-10]
Historiography
The Continuing Evolution of Reconstruction History [pp. 11-13]
Reconstruction in the Southern United States: A Comparative Perspective [pp. 14-33]
What Did Freedom Mean? The Aftermath of Slavery as Seen by Former Slaves and Former Masters in Three Societies [pp. 35-46]
Ulysses S. Grant and Reconstruction [pp. 47-50]
What Students Need to Know about the New South [pp. 51-55]
Lesson Plans
Comparing the Emancipation Proclamation and the Russian Emancipation Manifesto [pp. 56-59]
Reconstruction, the Fourteenth Amendment, and Personal Liberties [pp. 60-66]
Relating the Fourteenth and Fifteenth Amendments to the Civil Rights Movement [pp. 67-70]
Reconstruction through Role Playing [pp. 71-73]
Reconstruction: From the Students’ Perspective [pp. 74-77]
Educational Resources
Reconstruction Era: Resources for a Balanced Approach [pp. 78-79]
History Headlines [p. 80-80]
Back Matter Information, Markets, and Corruption:
Transcontinental Railroads in the
Gilded Age
Richard White
The corrupt, like the poor, are supposedly alM ays w ith us. Corruption is a species of
fraud that involves violation of public or private trust. A covenant of some sort,
either implied or explicit, is violated. Corruption involves betrayal, often of a third
party. The corrupt buy or sell v^hat was not supposed to be for salea vote, for
example, or public property. They turn to personal advantage their legal status as
trustees of persons or property. Or they grant only to a privileged fevv w hat is pur-
portedly available to all or available only through open and fair competition, such as
public information or access to political officeholders or charters or contracts. Or, for
a price or for personal advantage, they make public what was pledged to be private,
such as state secrets or confidential business information. In the Gilded Age, the cor-
rupt explored new frontiers: they corrupted information, particularly financial infor-
mation, on a scale never before possible.
The Founders feared the corruption of the American republic, as did the Jackso-
nians. Gilded Age reformers decried corruption. Today, plagued by financial scan-
dals, we seem both fearful of corruption and resigned to it. We seem uncertain about
whom it hurts and what difference it ultimately makes. The Republic seems perpetu-
ally corrupted, but instead of being outraged, we are not sure it matters.^
Corruption, however, is not always the same; it has a history. The Gilded Age was
a key moment in that history not just because the issue of corruption dominated pol-
itics but also because, as republicans from Thomas Jefferson through Andrew Jackson
had feared, the rich, who now controlled corporations, used them to infiltrate the
state and to turn parts of it to their own purposes. They also did something equally
important: they moved to take control of the mass circulation of financial informa-
tion in order to manipulate financial markets. Those markets, which were supposed
to ensure the competition that would prevent the rise of economic units large enough
Richard White teaches American history at Stanford University.
‘ Gordon Wood, The Creation of the American Republic, 1776-1787 {^ew York, 1969), 32-36, 107-17, 414-
25; Harry Watson, Liberty and Power: The Politics ofJacksonian America (Nevir York, 1990), 46, 6 2 , 6 5 – 6 6 , 8 2 – 8 5 ,
101; Mark Summers, The Era of Good Stealings (New York, 1993); John J. Wallis, “Constitutions, Corporations,
and Internal Improvements: American States, 1842-1852,” paper delivered at Stanford University, April 2002 (in
Richard White’s possession), 21-22.
The Journal of American History June 2003 19
20 The Journal oF American History June 2003
to corrupt the Republic, proved to be themselves open to corruption. Even today, as
the political scientist Susan Rose-Ackerman has written, the models of modern econ-
omists are “deeply embedded in a set of often unstated assumptions about human
values, and many of the normative claims for the market are fundamentally depen-
dent upon the assumption that economic actors will not break the law.” But, as the
misdeeds of Enron and other current financial scandals demonstrate, economic
actors do break the law.
Financial corruption provoked outrage and concern. “Our w^hole system rests
upon the sanctity of fiduciary relations,” Henry Adams and Charles Francis Adams
Jr. wrote in Chapters of Erie. “Whoever betrays them, a director of a railroad no less
than a member of Congress . . . , is the common enemy of every man, woman, and
child who lives under representative government. The unscrupulous director is far
less entitled to mercy than the ordinary gambler, combining as he does the character
of a traitor with the acts of the thief.”^
But corruption was not simply a breakdown in morality. The laissez-faire enthusi-
asms of the Cilded Age did not eliminate nineteenth-century moral constraints. It
was funny when Henry Adams described corrupt characters in his novel Democracy as
“moral lunatics” who “talked about virtue and vice as a man who is colorblind talks
about red and green.” But outside of novels, most of the corporate corrupt were less
amoral than immoral. J. Gregory Smith, a president of the Northern Pacific Railroad
who was eased out because of, among other things, suspicions concerning his recti-
tude, claimed that he would “never retain or countenance an immoral man if I know
it.” Smith and other corporate leaders employed the same moral vocabulary as their
critics. Nineteenth-century American thinking about economics, as the historian
Herbert Hovenkamp has argued, joined economic rights with “moral and religious
rights.””*
It is easy to see only hypocrisy in the combination of dubious business practices
and Protestant religiosity of the financier Jay Cooke or Harvey Fisk, the Central
Pacific Railroad’s banker. But it was the cultivation of public character that led both
men into personal corruption. Not deeply reflective to begin with, they, like Collis P.
Huntington of the Central Pacific or Thomas Scott of the Pennsylvania Railroad, rec-
onciled morality and actions by embracing a morality of consequences. Like business,
morality reduced to a bottom line that reflected an increase in wealth. Bad men were
bears. Good men were bulls. Bad men lied and manipulated information to drive
down values. They hurt investors ro help themselves. Good men lied and manipulated
information to maintain or increase values. In helping themselves, they helped inves-
tors. Men of character considered themselves the final judges of their own rectitude.^
^ Summers, Era of Good Stealings, 28-29, 300-306; Susan Rose-Ackerman, Corruption: A Study in Political
Economy (New York, 1978), 189-90.
‘ Charles Francis Adams Jr. and Henry Adams, Chapters of Erie (1871; Ithaca, 1956), 8.
^ Henry Adams, Z)i-?ocrac)'( 1880; New York, 1961), 182; J. Gregory Smith to Jay Cooke, March 8, 1872, Jay
Cooke Papers, HSP 148 (Historical Society of Pennsylvania, Philadelphia, Pa.); Herbert Hovenkamp, Enterprise
and American Law, 7S36-/i?37 (Cambridge, Mass., 1991), 7A.
‘ Thomas C. Cochran, Railroad Leaders, 1845-1890: The Business Mind in Aaion (Cambridge, Mass., 1953),
122-25.
Information, Markets, and Corruption in the Gilded Age 21
Gilded Age fmancial corruption consisted of quotidian faultslying, deception,
and dishonestyplayed out largely on paper and along telegraph lines, but on a
national and international scale. People did not have to grow more corrupt; old faults
yielded new results. Altering a few words or numbers on a page could bring great
wealth. When relatively venial sins in a virtual world of financial information could
accomplish more than mortal sins in a local world, why bother to be truly evil?
Asymmetries in information allowed financial corruption to flourish. The fmancial
markets magnified the results of relatively small actions and yielded disproportionate
results. When Alfred A. Cohen, a San Francisco lawyer and businessman, ridiculed
Charles Crocker of the Central Pacific as “a living, breathing, waddling monument of
the triumph of vulgarity, viciousness, and dishonesty,” his ridicule also conveyed a
sense that the increased scale and movementthe girth and waddleof the old arts
of lying and deceit had made Crocker a figure to reckon with.*”
The possibilities for corruption were supposed to have dwindled when Jacksonian
reformers sought to diminish the central state and to center development efforts on
states and localities. The shift from special incorporation laws toward general incor-
poration law was supposed to make the corporation a tool of reform by increasing
competition and eliminating favoritism, thus diminishing corruption. If a national
government or national market was not strong enough to be worth corrupting and if
no economic unit was big enough to corrupt either one, then corruption could be
contained.”
The historical consensus from Robert H. Wiebe through Stephen Skowronek was
that antebellum reformers had succeeded in denationalizing the state and society, but
more recently Richard Franklin Bensel has persuasively argued that state authority
increased dramatically during the Civil War to create a Yankee Leviathan. Sven Beck-
ert has found the emergence of a national bourgeoisie based in New York that
replaced regional elites. Central authority may have shrunk in other regions in the
1870s, but it remained disproportionately strong in the West. Elsewhere, that
authority left behind new overlapping centers of information, new financial markets,
a national bourgeoisie, the Associated Press (AP), and powerful new corporations sub-
sidized and regulated by the central state. All were critical to the corruption that was
a part of Gilded Age life, and all are still critical to corporate corruption today.^
At the center of national corruption, both financial and political, were particular cor-
porations: the railroads. They were the major corporate consumers of capital and the
* Central Pacific Railroad Company vs. Alfred A. Cohen. Argument of Mr. Cohen, the defendant, in person. . . .
(San Francisco, 1876), 49, pamphlet, 67742 (Huntington Library, San Marino, Calif.)-
^ Richard L. McCormick, “The Party Period and Public Policy: An Exploratory Hypothesis,” Joumal of Ameri-
can History, 66 (Sept. 1979), 286.
^ Robert H. Wiebe, The Search fir Order, 1877-1920 (New York, 1967), 32-33; Stephen Skowronek, Building
a New American State: The Expansion of National Administrative Capacity (New York, 1982), 8, 23-31; Richard
Franklin Bensel, Yankee Leviathan: The Origins of Central State Authority in America, 1859-1877 (New York,
1990), 1-17; Sven Beckert, The Monied Metropolis: New York City and the Consolidation of the American Bourgeoi-
sie, 1850-1896O:^ew York, 2001), 3-13.
22 The Journal oF American History June 2003
leading corporare objecrs of both regulation and aid. An important subgroup of the
railroadsthe transcontinentals chartered to cross the western United States^were
particularly open to corruption. They operated on the national stage, and they were
political from birth. The federal government provided indirect subsidies to many
railroads, but the transcontinentals received direct ones. Most such subsidies came as
land grants, but outside of providing collateral for bonds, they contributed little ini-
tial capital. The key subsidy, granted only to the Pacific road (primarily the Union
Pacific Railroad and the Central Pacific Railroad) but sought by other roads, was the
loan of government credit in the form of bonds. The Union Pacific and the Central
Pacific sold the bonds, and the government paid the interest. The roads would repay
both interest and principal to the government when the bonds came due in thirty
years. Until then, the government had a second mortgage on the road.^
Federal aid was, however, never sufficient to build the transcontinentals, nor could
they be financed in the same way as most antebellum roads. Before the Civil War,
local investors built local roads, and capitalists combined local roads into systems;
but asking local investors to build a transcontinental was like bringing an elephant to
a horse fair. It was a different beast, and no one was buying. That was the argument
for federal subsidies in the first place. ^
Federal subsidies allowed transcontinentals to join other railroads in raising money
on national and international financial markets, which, like the transcontinentals
themselves, were products of federal actions. The federal government created the
modern bond market in order to finance the Civil War, and it used key elements of
the existing systemurban banking housesto do so. With the refinancing and
retirement of the government’s Civil War debt in the 1870s, railroad bonds took over
a larger and larger space in financial markets. The bonded debt of American railroads
rose from $ 4 l 6 million in 1867 to $2,230 billion in 1874 and $5,055 billion in
1890. The majority of the funds came from investors within the United States, but
there was significant investment from parties in Great Britain, the Netherlands, and
Germany.’^
The early transcontinentals were speculative endeavors run by men who were
essentially financiers. Early owners usually hoped for a quick gain. Even the longest
lasting of themthe “Associates” of the Central Pacific: CoUis P. Huntington,
‘ Maury Klein, The Union Pacific: Birth of a Railroad, 1862-1893 (Garden City, 1987), 14-15, 31, 514-15;
David Maldwyn Ellis, “The Forfeiture of Railroad Land Grants, 1867-1894,” Mississippi Valley Historical Review,
33 (June 1946), 27-60. For land grants as of 1873, see Henry V. Poor, Manual of the Railroads of the United States
for 1875-76 (New York, 1876), 818-22. Henry V. Poor, Manual of the Railroads of the United States for 1878-79
(New York, 1878),
