Two Rails Against the World!

Indians attack transcontinental railroad survey crew in Utah.
"On this day in 1853, Paiute Indians attacked U.S. Army Captain John W. Gunnison and his party of 37 soldiers and railroad surveyors near Sevier Lake, Utah. Gunnison and seven other men were killed, but the survey party continued with its work and eventually reported its findings to the United States Congress."
Suffering the effects of flu I resolved to watch the latest addition to my DVD collection. On speculation, or more probably subliminal advertising by Amazon, I had purchased "Hell on Wheels", which sounds like a coach journey across the Indian continent without aircon, but is in fact a TV mini-series. The plot is one of vengeance carried out with violence and slow romance wrapped around the fascinating story of the building of the inter-continental railway across America.
In the real world this is the founding of the Union Pacific Railway by Act of Congress in 1862. The Union Pacific started on the east coast and worked west while the Central Pacific started out west and worked back east. They were united in the famous golden spike incident on May 10, 1869 - who needs Sat-Nav really!
The two companies later merged to form the Union Pacific (NYSE: UP). The TV plot touches upon the greed and corruption of the founders which in reality led to the famous Credit Mobilier scandal in 1872 that involved bribing congressmen and other public officials. As a result the company twice went into bankruptcy and stock reorganisations before ending up on an even keel.
In real terms not only was the project built on the greed and corruption of countless people who were meant to protect the public interest, but there were other countless financial irregularities including massive overbilling of supplies paid from the government subsidy. Also, those with inside knowledge of the track's intended route bought the land ahead - an early form of front running as practiced illegally in some current stock markets.
In human terms there was suffering and tragedy as well. Large numbers of Chinese, Coloured and Irish workers were injured or killed as the railway pressed ahead at full steam in the race to get the greatest per mile track subsidy from the US tax payer. There were no unions or Health & Safety men with clipboards and no compensation paid to the injured or families of those who died. The Native American population was not treated very well either as the railways were indiscriminately built across their tribal lands leading to incidents similar to the one quoted at the beginning.
It raises the time honoured question - does the end justify the means?
The joining up of the Pacific and Atlantic coasts of the US was a pivotal moment in the growth of that great continent. By reducing the journey time from six months to six days it facilitated trade and led, ultimately, to the settlement of the vast interior. In a very real sense it opened up America and unlocked its land, mineral, forestry and population potential that was to catapult it to become the world's number one nation in less than sixty years.
The project was driven by a combination of human greed and vision by Dr. Thomas Clark Durant, who like many great men had flaws as large as his talents. It was a different era when "robber barons" cared little for their workforce and only for their own pocket. Thus it is difficult to weigh them in light of modern day values.
Today the Union Pacific is the largest owner of rail track in the United States and thus will be a prime recipient of the recovery in the US economy, as outlined in detail in one of our recent publications.
We all wondered what Warren Buffett was doing in March 2009 when he laid out US$34 billion on Burlington Northern Santa Fe Corp. He was making a huge bet on the future of the US economy.
The largest overhead for railway companies is fuel, primarily diesel. Well, just as oil replaced coal another seismic change is taking place in railway fuel. On a 300-mile stretch of railroad in the plains of eastern Alberta, a test train now runs on ... natural gas. This makes sense to railway leaders whose top priority is cutting costs. Over the past month, top train industry executives have been meeting in Houston and the Chicago area to make natural gas the fuel of the future and slash one of railways' top overheads.
The next few years could be another golden era for train companies in the US and investors quick off the mark.
So what happened to the great visionary and fraudster Dr. Thomas Clark Durant?
Like many others, he lost a great deal of his wealth in the panic of 1873. He spent the last twelve years of his life fighting lawsuits from disgruntled partners and investors.