The Irony And Tragedy Of Completing The Transcontinental Railroad
The transcontinental railroad was completed in 1869. It was a marvel of modern engineering and technological innovation, slashing the time it took to cross the United States from many months to a mere week. It literally united the nation. Not only did the railroad reduce the time and cost of making the journey, it also helped ensure that there would be no more tragedies like the Donner Party.
There's no doubt that the railroad would ultimately be a gigantic engine that powered economic growth in the West. But, as with many other new technological waves in history, excitement about locomotives was accompanied by a speculative mania. And, when the spell was broken and the economy came crashing down, life would get much worse for Chinese immigrants.
Railroad investors believed that the sky was the limit with the transcontinental and other railroads. They took on massive amounts of debt, buying railroad bonds and gobbling up real estate they believed would increase in value near train stops. This debt proved to be a ticking time bomb.
What followed was a financial crisis known as "The Panic of 1873," which led to what some historians call "the first Great Depression," or "the Long Depression." Nationally, the unemployment rate skyrocketed to 14 percent. The economy remained bad for many years.
Nancy Qian, an economist at the Northwestern University Kellogg School of Management, says this harsh recession was worse in the West — and one reason, ironically, was the transcontinental railroad.
"One of the ironies of integrating the East and West of the United States with the transcontinental railroad is that the West had to now compete with the East," Qian says. "The East was more developed than the West. This made it very difficult for manufacturing and agriculture in the West."
Like so many other times in history, economic turmoil led to scapegoating, populist foment, and racial violence. With many white people now looking for gainful employment, Qian says that Western voters and populist politicians began to blame Chinese immigrants for taking jobs. They began to gravitate to the idea that, "If we kick out the Chinese, then the rest of us will have more jobs, more opportunities."
Ground zero for this movement to kick the Chinese out of America would be none other than the home to what is now Donner Memorial State Park: Truckee, California. Many of the Chinese immigrants who built the railroad moved there after its completion. In fact, they helped make Truckee's "Chinatown" one of the largest in the nation. But soon that would dramatically change.