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  • Writer's pictureCheryl Anne Stapp

First Transcontinental Railroad

Dropped into a pre-drilled hole and gently tapped into place, a 17.6-karat golden spike ceremoniously joined the Central Pacific Railroad laying tracks eastward from Sacramento, and the Union Pacific Railroad headed west from Omaha, on May 10, 1869, at Promontory, Utah. For some, the completion of America’s first transcontinental railroad meant— at long last—a physically united nation. Others wondered what this new era would mean for California, now that it was less than a week’s journey from the East Coast.


It meant that the tumultuous mining frontier of the 1850s, as well as the self-governing mentality of the 1860s, were passing. California was losing its resplendent isolation, a factor that had helped the Golden State develop a unique social and economic culture. As the 1870s opened, it had but one truly large city, San Francisco, whose population of 149,473 made it the 10th largest city in the United States. Now it would unite with the several East Coast metropolises, a less-fluid eastern society, and the national economy with its industrial culture, which had been expanded and intensified by the recent Civil War. Also, hundreds of thousands of new immigrants were expected to pour in, and how would they assimilate?


As it turned out, however, the decade of the 1870s was in general not a good time for California, or the nation. Moreover, the railroad had clearly not banished the violence of the frontier era.


The known fact that Chinese crews had built the western leg of the transcontinental railroad through daunting and dangerous terrain notwithstanding, anti-Chinese sentiment ran high, leading to brutality in a number of places during the decade. The Los Angeles Chinese Massacre of October 24, 1871, was a 500-strong mob composed of Anglos and Hispanics who harassed, robbed, and murdered nineteen Chinese immigrants, fifteen of whom they hanged during the course of the riot, mutilating at least one victim when a member of the mob cut off a finger to obtain the victim's diamond ring. Prior to the massacre, the Chinese population in Los Angeles had only numbered 172. Ten men of the mob were prosecuted and eight were convicted of manslaughter; convictions later overturned due to technicalities


In September, 1873, panic gripped Wall Street when the premier banking house of Jay Cooke went under. Currency in the nineteenth century was based on specie (coin), although banks issued paper banknotes backed by the supply of gold and silver. Railroads were the nation’s largest non-agricultural employer, and banks, especially Jay Cooke and Company, raised millions selling bonds to finance railroad construction, while speculators simultaneously gambled that profit-making opportunities would arise with completed railways. Unfortunately, construction costs ballooned, outpacing financing. Jay Cooke and other banking houses folded; the New York Stock Exchange closed for ten days—the first time ever—and the worst depression thus far in US history ensued, lasting until 1878-1879. Thousands of businesses, including many major railroads, fell into bankruptcy.


The Far West’s premier financial institution, the Bank of California—backed by Comstock silver— failed on August 26, 1875, when major investors learned just how extensively the bank’s founder, silver baron William Ralston, had depleted its resources to finance his many silver mining schemes. Bank of California’s failure took down a number of other local banks as well, purportedly draining the city of San Francisco of capital for the rest of the 1870s.


In turn, this financial crisis compounded the effects of the national depression, which by then had brought some 154,000 impoverished migrants into California, many of them Irishmen formerly employed in building the Union Pacific Railroad, the transcontinental eastern leg. It got uglier on July 23, 1877—six days after the national Great Railway Strike had commenced—when some 8,000 unemployed, restless men came to a nighttime rally of the Workingmen’s Party, where speakers denounced the capitalist system in general, the railroads in particular, and once again blamed the Chinese for all troubles. Hostilities and counter-measures escalated, but finally, Workingmen’s Party leaders decided to transform their movement into a political party, the better to promote new legislation with a re-write of the original, still-in-force 1849 state constitution.  


Consequently, a constitutional-reform convention, with delegates elected from all over the state, was held in Sacramento beginning in June 1878. The results: a new 1879 state constitution, providing for a Railroad Commission to govern what most saw as overcontrolling railroads, plus the regulation of previously unregulated banks and corporations, as well as the newly emergent public utilities cooperatives. As a side issue, Spanish was dropped as the second legal language. A strong anti-Chinese immigration policy was adopted, but a proposal to entirely ban the Chinese from all forms of employment and trade failed to pass.


It all looked good on paper, and meantime certain hot-blooded passions had indeed faded. Nonetheless, California entered the 1880s pretty much the same as it had been in the 1870s, with railroads still in control.

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