How Trains 'Railroaded' The American Economy In his new book, Railroaded, historian Richard White examines the impact transcontinental train corporations had on business and politics at the end of the 19th century. Railroads establish "a kind of networking between politics and business that persists to this day," White says.

How Trains 'Railroaded' The American Economy

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The historian Richard White wrote a book about the late 1800s. He did so during the recent housing bubble, the financial crisis, and the Great Recession. And all those modern-day events began to seem familiar.

Mr. RICHARD WHITE (Historian): In many ways as I wrote this book with these things going on, the early 21st century seemed so late 19th century to me.

INSKEEP: Much of America as we know it evolved in the 19th century, as we'll hear in three conversations this week. We're talking with writers who seek out new ways to understand old events. Richard White explores businesses that brought you the American economy as we know it. They are the corporations that built transcontinental railroads from the East toward California. From the 1860s onward they built one strip of tracks after another across mountains and deserts. You've heard the stories, the Chinese and Irish labor, the brilliant engineering that unified America. That is not the story that Richard White tells.

What was the image at the time that people had of these transcontinental railroads and the image that has been passed down through history?

Mr. WHITE: Well, the ideal image of the transcontinental railroads is they're this tremendous technical feat that connects San Francisco with the Missouri River and onto the East Coast and makes the nation one. And it's the ultimate triumph that comes out of the Civil War.

INSKEEP: Virtually the 19th century version of the moonshot or something like that.

Mr. WHITE: Essentially, yes. I mean it'll be used it's still used that way today. And many of the presidential campaigns, both President Obama, and I think Newt Gingrich, refer back to the transcontinental railroads as this great national triumph.

INSKEEP: And you write that to an extent that was true, but you argue that there was a different reality. What was the other reality of the transcontinentals?

Mr. WHITE: The other reality of the transcontinentals is they are built way ahead of demand and it will be 30 or 40 years before many of these railroads are needed. They bring about a great deal of political controversy and corruption. They yield environmental damage. They are conceptually grand, and in practice they really amount to being disasters in many respects.

INSKEEP: What do you mean when you say corrupt?

Mr. WHITE: What I mean corrupt is that it establishes a kind of networking between politics and business that persists to this day. And essentially for me corruption is quite simple. It's the trading of public favors for private goods, and that's what happens repeatedly with the railroads and the federal government.

INSKEEP: Were businesses not entwined with the federal government in the same way before the transcontinental railroads?

Mr. WHITE: There are no businesses like the transcontinental railroads. One of the remarkable things about this is that this is the invention of the modern corporation. This is why railroads are so feared. It's the first time that Americans come face to face with a new way of organizing the economy on a scale that they had never seen before. And the results of this is not just going to be political corruption, but they think an intervention into the economic lives of ordinary Americans that frightens them.

INSKEEP: I want to draw a distinction here, because listeners to this program, some, may recall that we interviewed a biographer of Cornelius Vanderbilt, one of the great eastern railroad magnates of the 19th century, who was a major force in inventing the modern corporation. But with these western railroads you argued that something else happened because of the way that they were so closely linked on and dependent on the United States government.

Mr. WHITE: Yeah, what - the western railroads, particularly the transcontinental railroads, would not have been built without public subsidies, without the granting of land, and more important than that, loans from the federal government.

INSKEEP: Why not?

Mr. WHITE: Because there's no business there. There's absolutely no reason to build them expect for political reasons and the hope that business will come.

INSKEEP: Because it's largely empty country, at least empty of white settlers at that time.

Mr. WHITE: What we're talking about is, you know, the 1,500 or more miles between the Missouri River and California, in which there are virtually no Anglo-Americans. Most railroad men look at this, including Vanderbilt, and they want nothing to do with it. And that's why it's got to be built by largely promoters.

INSKEEP: I want to mention a name who comes up in your book. When I was a kid I loved books about railroads and I read some book that talked about Grenville Dodge. And the story that I learned from a book long ago about Grenville Dodge was he was a Civil War veteran, he was a great engineer, he was involved with the Union Pacific, part of the first transcontinental railroad, and he was the guy who brilliantly discovered a pass through the mountains that became part of the key route of the Union Pacific. It's a heroic story. He's a little different in your book.

Mr. WHITE: Yeah, he's very different in my book. He's an impressive guy and certainly he tells wonderful stories, including the story of finding that pass. And I'm not the first one to point out that that pass shows up nowhere in his actual contemporary accounts. It's not in his diaries, it's not in his letters; it's a story that he makes up later. And that's what Grenville Dodge is very good at, making up wonderful stories about Grenville Dodge, which is not to say he's not a competent engineer. I mean the problem with Grenville Dodge is that he is surprisingly competent at times and at other times he represents the worst of the Gilded Age. He is corrupt, he's a politician, he will go out and become a lobbyist for the Union Pacific and for the Texas Pacific. What he is is very adroit at finding ways in which he can get public favors for private railroads.

INSKEEP: And you see more signs of the corporate lobbying yet to come and corporate lobbying techniques. He claims credit for inventing some of these techniques.

Mr. WHITE: He really does. But what he realizes is that lobbyists themselves have limited ability to gain what they want if they operate only in Washington, D.C. They have to appear to be channeling real public desire for whatever it is that they're advocating.

And so what Dodge does is go back out and organize publicity campaigns. He will solicit editors. He will solicit his local prominent people to write their congressman. So he makes it appear that what the Union Pacific wants and the Texas Pacific wants is what local people want. But all of this uproar of popular opinion has really been engineered by Grenville Dodge.

INSKEEP: This has a name in modern parlance. It's sometimes called grassroots lobbying when it's legitimate and Astroturf when it's completely financed from afar and made up.

Mr. WHITE: And this is Astroturf. I mean, one of the things that the 19th century realizes, and it's a critical thing for the railroads and other corporations, is this has already become what we call an information society. It's controlling information, controlling financial information, seeming to produce popular initiatives. All of this are things that are mastered in the 19th century, the rise of the Associated Press, the telegraph, these are critical to what goes on.

INSKEEP: So was Grenville Dodge, in addition to whatever skills he had as a railroad engineer, the Thomas Edison of Astroturf lobbying?

Mr. WHITE: In many ways he was. I mean it's easy when you're writing about these people to despise them, but it's also tempting to admire them. They're inventing, in many ways, our modern world. This is the first time that they're seeing many of these things and they see them fresher than we do. They realize that they're making it up as they go along and I learned an awful lot from watching them do it.

INSKEEP: Richard White is the author of "Railroad It: The Transcontinentals and the Making of Modern America." Thanks very much.

Mr. WHITE: Thank you.

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INSKEEP: We're getting new views this week of old events, 19th century moments that influence the country we live in today. Tomorrow we'll talk about the very shape of this country, the series of random misunderstandings that created a border between the United States and Mexico.

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