The Ground Breaking Railroad

On July 1, 1862 the Pacific Railroad Act was signed into law by President Lincoln.  It gave authority to the Central Pacific to build a railroad and telegraph line from Sacramento to the Nevada line and created a new company, the Union Pacific to build westward from Nebraska.  Land grants of 10 square miles were awarded for each mile of track laid.  Financial aid of loan bonds payable in 30 years at 6% annual interest was also given, amounting to $16,000 for each mile of track on flatland, $32,000 for each mile of track through the high desert land, and $48,000 for each mile through the mountains.  Quite a lucrative offer!

Ground breaking ceremonies began in Sacramento on January 8, 1863.  At the time the Central Pacific had only $156,000 on hand.  Chief engineer Theodore Judah estimated that the first 50 miles of track had to be completed before the government loans or land grants would be available.

The "Big Four" pledged their own savings to obtain the rails shipped from the East.  Huntington went to New York and Boston to raise more money but no one was interested.  War bonds were a much better investment in 1863.

The "Big Four" did not give up-they managed to lay 24 miles of flatland rail east of Sacramento that was previously designated mountainous country. That gave them an additional $768,000 in loan bonds plus opened up the bankers in the East to invest money in the project.

All this time Theodore Judah clashed with the rest of the "Big Four" over their focus on profits over well-built railroads.  When he died in the fall of 1863 of yellow fever, the "Big Four" were soundly in charge with no one to clash with.  The money was again scarce and construction lagged.  Huntington again went to Washington to lobby (and buy off) Congress to pass the Pacific Railroad Act of 1864.
Something else happened in Washington...a new acquaintance. 

Next time...A New Acquaintance
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Today in Pioneer History:  "On April 12, 1961, aboard the spacecraft Vostok 1, Soviet cosmonaut Yuri Alekseyevich Gagarin becomes the first human being to travel into space. During the flight, the 27-year-old test pilot and industrial technician also became the first man to orbit the planet, a feat accomplished by his space capsule in 89 minutes.