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Listening Dr. Patrick Newman on his lecture “The Nation’s First Big Business” is fascinating to learn about as it is not taught in history classrooms today. From the lecture I learned how about ways that the government was corrupt on and members of it are still following today.
The first big business of the United States was the Transcontinental Railroad. This would soon become a business that would corrupt the US Government at the taxpayers’ expense. These were large businesses that would receive money from wall street. These companies became very large and were ran off of a political influence. Politicians were being bribed, having their pockets lined by these companies. The companies were sending lawyers to Washington DC as lobbyist. One of these lobbyists was Abraham Lincoln also known as Honest Abe. Was he an Honest Abe? Lincoln was one of these lobbyists that lined their pockets and pushed for the railroads. He was paid $5,000 at one point which was more than a governor’s salary.
When the idea of building a transcontinental roadway was brought up, it was decided that they subsidize this project with free land and loans. Before it could be built the fight was where would it go. Through the northern republican are or southern democratic area. That was all changed when Honest Abe became the Nation’s President in 1860. With the south succeeding they would be able to make the railroad go through the north, but they had a small problem. With California being a democratic state, said that they would build the railroad to Sacramento to keep them from succeeding.
Crooks
The group known as the big 4 was made up of Sacramento merchants Leland Stanford, Collins P. Huntington, Mark Hopkins, and Charles Crocker. These four men were all eagerly on board for the construction of this railroad for one reason. That reason was to line their pockets even more because they were corrupt. Their plan was to overcharge the railroads on there supplies. With the plan in place to build both railroads, they had their lobbyist in place in DC, they were bribing them with $66,000 worth of stock. To this day I feel as if this could be the beginning of our corruptness within our government. To this day we still people paying off congressmen with cash, stocks, or favors to get what they want. This is only where the corruptness begins in my opinion.
After California decided to charter its own railroad, it fell into the hands of Oaks Ames, who was on the Union Pacific Committee. Ames Brother Oliver became the president of Union Pacific. While it was earlier in the countries time, I am unsure of how congressmen looked the other way from what was going on. I would assume that the only reason for that was that they were being bribed at the taxpayers’ expense.
While Central Pacific was building eastward from Sacramento Honest Abe had made the decision that the Union pacific would build westward in-between Omaha Nebraska and Council Bluffs Iowa. The problem with that was the Lincoln owned real estate in Council Bluffs. This was him lining his own pockets. This increased his property values being close to a railroad. Not only was Abe lining his pockets, but the railroad companies were being paid 16k per mile through the plains, 48k per mile over mountains, 32k per mile between the two major mountains, and 6400 acres of free land per every mile. This right here is a government screw up. This was taking away from the American taxpayers when they stood to gain nothing from a railroad that was slapped together and would not even be done correctly. The promotors of this project profited by overcharging the railroads at the taxpayers’ expense. They did this by overcharging on materials and for the services of their construction companies. With them being so heavily involved within the railroads and having their businesses they were double dipping.
As the construction companies thrived the railroads did not fair so well. They were in deeper with banks and not paying their loans that were coming due. Once completed in 1869 it was only 2/3 complete as it needed many repairs before it operated. They soon had a rude awakening when their competitors lobbied for the 1878 Thurman Act. This required them to have to pay off their government loans and put 25% of their earning into a mutual fund. This shows to prove that the governments involvement was not necessary. This project could have been done by a private company. They did not think this was possible, but they were proven wrong by 4 companies who did this on their own were successful without the governments help. Th help of congress seems great but is not always needed. While it may seem like a great idea, it will turn out that they are spending more money and being wasteful of taxpayer’s dollars. In the event that they had a private company do this as an incentive they could have offered tax cuts to help them out.