Building the Railroad to Space





As a young boy I was enthralled by the stories of building the first transcontinental railroad.  I still have the picture book from my school days which is full of black and white photos from 1868-9.  As an engineer, I am fascinated with the period locomotives, the rolling stock, the tunnels, the bridges.  As a program manager, I have an abiding interest in the logistics, the planning, and the execution of a project of such magnitude.

 Building the Transcontinental Railroad in 1868

So I was terribly surprised several years ago when I read my first “adult” history of the building of the transcontinental railroad.  Written by serious and professional historians, leaving behind the halcyon accounts which are carefully sanitized for young readers, I was surprised to find that the great achievement was not what I had been taught in my youth.  Yes, these serious histories told about surveying the route, building trestles over prairie coulees, digging tunnels through the Sierra Nevada, bridging the Green River, organizing the logistics of the work for record breaking track laying.  Yes, that was all there, but those herculean efforts were mere sidelights, incidental to the real story. 



Because the real story was about . . .  the money.




Everybody knew that railroad technology in the late 1860’s was fully capable to traverse the continent.  There was no question that rail travel from the eastern states to California was desirable.  The problem was the business case; the return on investment.


Do you see the parallels with today? 


Starting as early as 1827, railroad development in America was subsidized by government.  This followed the tradition of government subsidies to road builders and canal diggers.  Blame it on the city of Baltimore who was the first to devote public funds to the B&O Railroad (Baltimore and Ohio – yes, it’s on the monopoly board!).  In ’27 and ’28 the city invested the unimaginable sum of $1.5 million dollars.  It took more infusions of money and almost 20 years before the railroad reached Wheeling, West Virginia.  In my research it is unclear if the B&O ever really made it to Ohio. 


This sort of story happened all over the United States.  Cities and State governments poured money into the railroads.  Not always to good effect, one might note.  But it helped, in a major way, to develop the rail transportation system that is still in use today.  The Federal government lent a hand by donating almost 25 million acres, by 1850, to be used to subsidize railroad building.


So when the transcontinental railroad was proposed, the only real question was whether it would be profitable enough to pay back the capital investment which would be required for its construction.  The business establishment quickly came to a negative conclusion.


So the Federal government had to step in and offer incentives and subsidies.  For example, the government provided to the builders a subsidy of $16,000 per mile of track laid (more if the terrain were mountainous).  And when the railroad was complete, the Federal government provided many sections of land (a section is one mile square) alongside the right of way.  Actually for ten miles either side of the track the land was surveyed into a checkerboard pattern with alternating squares given to the railroad as a subsidy and alternating sections retained by the Federal government. 


The technology was ready, the need was there, and with the subsidies the project took off.  The rest, as they say, is history.


So we should learn from this, right?  If we want the nation to have a “railroad to space” we should take this lesson from history and apply it today.  Perhaps it is not so important to argue about the configuration of the rocket or the exact parameters that its design must meet as it is to understand the financing and the provision that the government has to make to get a new industry started.


Hey, I’m just a government bureaucrat; I don’t know how business really works.  But this money thing seems really important to investors.  Maybe we should pay some attention to that, too.


I don’t know how incentives may work this time.  Clearly we don’t have land to give away along the road to space.  Does it involve tax breaks for investments in commercial human space services?  I don’t know.  But we need to give that as much thought as we give to the engineering standards and requirements.


In the final analysis, the Federal government made more money from land sales (all those sections near the right of way became very valuable) than the Federal government provided in subsidies.  In fact, one of the provisions was that Federal officials and military troops would travel for free on the transcontinental railroad; the Federal government “cost avoidance” in free travel for its military more than paid for the railroad subsidy.  So from a taxpayer standpoint it was a great investment!


And even more importantly, the railroads tied the nation together.  Rapid, reliable, economical transportation fueled American’s economy in vast and profound ways.  The galvanizing affect of doing something “that could not be done” gave the young nation a sense of pride and an example of what innovation and hard work could accomplish.


But the history lesson is not complete.  (Did you expect a rosy ending?)


Both the Union Pacific and the Central Pacific were in bankruptcy within 5 years of the completion of the transcontinental railroad.  New management adopted draconian business tactics to make the railroads profitable:  this gave rise to the “Robber Barons” of the “Gilded Age”.  And the railroads, especially the Central Pacific, invented that quaint practice that we call “lobbying”.  Yes, an entire additional “industry” was added to the national economy; this one centered in the District of Columbia.  You can make your own judgment about the value that lobbying has brought to the nation.


Finally, there was the Credit Mobilier scandal.  Many of the politicians which had to approve the subsidies for the transcontinental railroad bought stock in the railroad companies – or were given stock for their votes.  Money changed hands in ways that would be illegal today.  The resulting scandals went on for 40 years.  As one historian remarked, it took until all the politicians of 1870 had died before the mess was cleaned up. 


So we need to learn from that, too.  Hopefully the law will prevent those kinds of excesses from occurring.  Hopefully.


Anyway, when you hear folks talk about building a new industry, think about the business case. 


And what incentives the government may have to provide to get that industry to take off. 




NASA's KSC railroad Engine #1

23 thoughts on “Building the Railroad to Space”

  1. interesting comparison, but couple of questions and areas where the analogy doesn’t sync up. Since there is no space land for the government to sell that would be in close proximity to the space railroad how does the government make back $ to offset the subsidies they pay to commercial to get them up and running? Also under this new direction NASA will still pay to have astronauts (and cargo) ride on the commercial rides so we lose the military rides for free analogy benefit as well. While the government didn’t operate a railroad in competition with the commercial lines, I think for space things don’t work out the same where NASA can just subsidize the commercial rockets while not developing their own spacecraft. Will the government also start subsidizing space hotels so that the commercial craft have somewhere to go beyond just the 2 crew rotations per year? I wonder if without other places to go beyond the space station how long these commercial ventures can really survive on a fixed cost contract. And if the bottom line does finally send them under like it did the railroad companies, where does that leave NASA for access to space? crawling back to the Russians in hope the price is still close $55M. per seat.

  2. It doesn’t matter what laws exist or what provisions are put in place, someone, somewhere will try to make money out of it. We’ve had the same in the UK with the ongoing expenses scandals and don’t get me started on what happend with the railways once the Government carved it into little pieces and sold it off.

    Anyway, whilst I can see the parallels between spaceflight and the US railroad I can’t see the same investment model paying off. With the railroads you have something to go there for, go west and you had the various gold mining operations, Go East and you had the (then) fledling towns so where ever the railroad stopped you’d be able to add services – profit for a lot of people.
    Space doesn’t have that and those investors aren’t keen on giving things like science results away for free. The money for space is tied up in the commerical satellite market, the very same one that NASA (quite rightly in my opinion) walked away from after Challenger.

    But what do I know? I’m just an armchair astronaut and general commenter 😉

  3. Some of historys famous and possibly not so famous Exploration Quotes. Remember its the Vision thing.

    Because its there. George Mallory

    Exploration is really the essence of the human spirit. Frank Borman

    After sleeping through a hundred million centuries we have finally opened our eyes on a sumptuous planet, sparkling with color, bountiful with life. Within decades we must close our eyes again. Isnt it a noble, an enlightened way of spending our brief time in the sun, to work at understanding the universe and how we have come to wake up in it. This is how I answer when I am asked, as I am surprisingly often, why I bother to get up in the mornings. Richard Dawkins

    Do just once what others say you cant do, and you will never pay attention to their limitations again. Captain James Cook.

    By prevailing over all obstacles and distractions, one may unfailingly arrive at his chosen goal or destination. Christopher Columbus.

    But I just have to say pretty bluntly here, We have been there before. Barack Obama.

  4. “In my research it is unclear if the B&O ever really made it to Ohio.”

    According to the map posted on Wikipedia, they did indeed make it to Ohio, as well as Indiana and Illinois. If you ever get the chance, you really should visit the museum in Baltimore.

    There is another, more ugly side to railroad history: the use of the U.S. Army to clear Native Americans out of the path of the railroads. When he was in eighth grade, my son brought a book about the railroads home that stated the main reason Custer was where he was was to clear a path for the Northern Pacific.

    You like to talk about history repeating itself, well, the use of the military to serve commercial interests would appear to be nothing new. Crooked politicians are not the sole possession of any particular historical era, either.

    Space is not its own “destination”. The railroads had the West Coast to go to, but where is commercial space going to go? The ISS is obviously going to get pretty chummy if a whole lot of tourists start showing up (“Quick, turn off the lights and pretend no one’s home!”)

    No, we needed that moon base that President Obama decided that we don’t need “because we’ve already been there”. Yes, but who remembers HOW to get there?

    Building a research station at the Moon’s south pole, along with a DC-to-daylight radio observatory on the Moon’s backside would have been an excellent way to create a destination and a reason for private industry to want to go.

    The beauty of our system is that in two years the next president will change the direction of the space program and ensure that nothing of any substance will ever be accomplished.

  5. Interesting to see this facet of American history, Mr. Wayne. Actually the government must have a special focus on service quality and to prevent market speculation that lead companies into bankruptcy rather than by lack of customers. Difficult, however, is to avoid economic downturns. Would that we could avoid, we would be all in a paradise. A market cruel, and an ambitious merchant, is a fatal combination. This is what it is.

    But it is still the way things happen. As you yourself said, the railroad brought many benefits to the country. Yesterday, today and also will bring many benefits to all Americans. This makes the American people rich and admirable. The ability of great achievements, with the participation of private enterprise, albeit with government involvement is a hallmark of American way of doing things. There were mishaps, but the greatness of the United States based on these initiatives-free, a people will, and strong government. To learn from past mistakes yes, and be alert to the dangers, but more, learn from their successes. Come on!

  6. Great article that hits at the heart of the current problems. I’ve always loved space and firmly believe that our long term future exists as much out there as it does on earth. But my friends are less certain. People forget all the tangible gains we already enjoy because of space exploration. NASA needs a good spin-doctor to sell the program and invest Americans in why the program pays out long term rewards. Not many believe there is any economic plus to going to the moon or Mars.
    I know it probably offends purist but I’ve always wondered why NASA doesn’t reach out to corporate sponsors. To be honest a Nike endorsement with astronauts featured in commercials showing them as the heroes they are would inspire and connect the whole program to the current generation (just like twitter, NASA channel and Hubble pics). Why not involve folks like Bill Gates in even a small part of the program? The name recognition and press alone would help sell the program.

  7. I also offer the example of how early air transport was stimulated by the US mail contracts that provided steady revenue to early air operations.The LEO contracts will do the same thing for spaceflight.

    But there is still so much for NASA to learn to make deep space human operations possible. Developing closed loop life support systems for a long duration hab module, engineering rotating the hab module for gravity, Some form of aero braking when returning from deep space orbit to rendezvous with ISS or a decent module( why drag it across the solar system if you only need it at the end), Refurbishing and refueling the hab module for subsequent missions, On orbit fuel storage and transfer, etc etc etc.
    Lots to do just need lots of smart people to figure it out.

  8. If Falcon 1 is really doing what can’t be done & “giving the young nation a sense of pride and an example of what innovation and hard work could accomplish” then what giant leap for mankind is the Kia minivan?

  9. Railroad trains are something I can understand. Before the railroads could be built, Thomas Savery invented the steam engine. James Watt had to develop the modern condensing steam engine. George Stephenson had to invent the first locomotive. A host of others improved these things.

    To me, it does not appear that space flight technology is sufficiently mature for commercialization. No one can know for sure when it will be ready. My SWAG is that this point will be reached when orbiters are advanced enough to operate like commercial aircraft from runways and when interplanetary spacecraft can go anywhere in the solar system. This does not seem possible without the use of nuclear reactors for power and propulsion of these vehicles.

  10. Thanks Wayne, I really enjoyed the varied takes on what it took, and what happened along the way. You really are a great story teller and your last photo of NASA #1 Engine is fantastic!

    To the comments about abandoning the Moon, please at Bigelo Aerospace's plans. With subsidized Commercial Space, this will happen decades sooner than under the “old way of doing things”.

    I'm sorry, but the days of spending 50 billion dollars to build a rocket that barely makes it to LEO are over. Commercial Space can do better than that, and we need NASA to focus on the big picture for a change.

    My Favorite Quote?

    “I'll fully fund what I'm asking you to build.” President Barack Obama

    Space is not its own “destination”. The railroads had the West Coast to go to, but where is commercial space going to go? The ISS is obviously going to get pretty chummy if a whole lot of tourists start showing up (“Quick, turn off the lights and pretend no one's home!”)

    Again, Bigelow, Big Time.

  11. We can have alternative energy powered by windmills and.rainbows if we ignore return on investment. The goverment also subsidized canals. In South Carolina they were failures.

  12. Hi Wayne,

    Nice post. Informative. But like you mention, there is no “tracks of land” to sell this time. No need to send hundreds, if not thousands, of troops into space (ok, so maybe I’m just hoping for that). So I am looking for the government payback.

    My concern is that, like most industries, making a large profit (keyword “large”) will be the motivating factor. I imagine my great granddaughter on a 2 day flight to moon-base Victor stuck in a seat just wide enough, handed a bag of bad peanuts, treated like a cow to slaughter. And when the rocket has to sit on the runway (yes, runway..please!!) for 2 days due to weather, with no way to get off. All the time the space transportation industry crying poor profits and wanting more money from the government (like the railroads?).

    Can industry do it. Yes. Of course. But will they make it in anyway customer friendly? Can the government do better? Well, ya see, just bring up that point shows I have no better idea 🙂

  13. On the subject of land grants — why not MAKE the land? Orbital hotels is only one of the possibilities. Let’s assume for a second that Harbles’ research objectives are accomplished: “Developing closed loop life support systems for a long duration hab module, engineering rotating the hab module for gravity, Some form of aero braking when returning from deep space orbit to rendezvous with ISS or a decent module, Refurbishing and refueling the hab module for subsequent missions, On orbit fuel storage and transfer” Add to that an in-orbit acquaponics system — crops are grown, harvested, waste is recycled as food for algae, fish are grown, etc. The systems devised by NASA are then industrialized and mass produced. Then NASA in partnership with the private sector can, indeed, make land. Any immigrant from anywhere in the world can emigrate to space, literally, by buying into the new space habitats. There’s economic reasons to be in space — asteroid mining, space solar power, microgravity biotech. And virtually endless space with no indigenous population. Why not?

  14. Could you pass along the book title for that good history of the railroads? I’m always looking for more good books to read on how industries like the railroads came to exist.

  15. I fully agree with the theory that NASA is trying to employee here. My only problem, and borrowing from your analogy, is that the federal government didn’t first retire all their wagons and horses before starting on the railroads.

    The first true lesson my father taught me was to get a new job before you quit your old one…

  16. Wayne adds excellent synopses of additional elements to the story of the railroad expansion west. The comment on the business-case failure goes to the business motivation side. What about the government’s motivations? Was it only graft for politicians and their supporters? Or was it related to “manifest destiny” theme (circa 1812-1860’s) and the desired need to bind east to west and occupy all that semi-empty territory acquired with the treaties following the war with Mexico, with Great Britain over the Oregon Territory and the Gadsden Purchase. Furthermore, there were displaced people from the recently ended Civil War to help occupy that land. The first part of the work was authorized by Congress during the Civil War, incidentally.

    The Federal government “owned” pretty much all the relevant land from the Louisiana Purchase and the above mentioned treaties, hence they had it to either grant or sell or lease. As Wayne points out, they gave some and kept some. Another question was who were the investors? The US government sold 30 year bonds to provide the money they paid the railroad companies and those companies sold additional bonds based on the perceived value of the lands granted to them and sold some of the land outright to settlers. I don’t know but would imagine that there were some international investors (i.e., Great Britain) as well. In those days, the US Government did not have authority for an income tax so I guess it expected to pay off the 30 year bonds with its other taxing powers and land sales of its remaining holdings. It also had incurred few social welfare obligations.

    So how does all this apply to today’s world?
    – On the issue of needing government subsidies, it would seem to fit.
    – The lands the US owned in the 1800’s were intrinsically exploitable and the farmers, ranchers, miners and others understood how to use the resources that might be found. The US Government owns nothing in space (other than what it has put there); in fact, it has signed a space treaty to deal with space resources “for the benefit of all mankind” or some such high-sounding words (I don’t think this applies to Space Hotels, rather to discoveries on the moon or asteroids or other planets). What is the law going to be on these things? Who has jurisdiction for disputes? How are “benefits” split up?
    – What is the government’s motivation? In the 1800’s, see above. Today? Human exploration for its own sake? Or is there some hope for colonization? Or resource exploitation? Or national security? A reasonable case, I think, can be made on these grounds (so to speak). American power today rests to a large degree on the territory under its control and the location of that territory. Possession being “nine-tenths” of the law, whoever actually possesses and controls a spacial volume and/or any body of material external to the earth will further expand their territory and potentially their power. This, I would argue, was Jefferson’s motivation for the Louisiana Purchase and Polk’s efforts regarding treaties with Mexico and Great Britain (regarding Oregon Territory) in the 1840’s. It is probably the most legitimate of any of the rationales for spending the taxpayer’s money.
    – What about regulation? There was a lot less in the 1800’s to hinder and tie up the railroads. Today, everywhere you turn, regulatory and legal obstacles to pretty much anything significant, including space exploitation, drive up the costs and lower the prospect of profit. This rarely comes up when doing paper studies, but once these kinds of things begin to become real, all these resistive forces rise up. Some may be legitimate, but some are simply employed to maintain the status quo or stifle competition.
    – What about funding? The US Government has increased its taxing authority since the 1800’s, but has taken on virtual cradle-grave-responsibilities for its own citizens as well as the international military role for almost all of what used to be known as the “free world”. It is currently spending almost twice as much as it is taking in and has a current debt of nearly $13 Trillion. There are no projections anywhere that suggests the US government deficits turn positive for decades. Is there something in space that will turn a negative into a positive for the feds in a 30 year bond time frame?

    In my opinion, the railroad expansion, Interstate Highway system, Panama Canal and similar things had much better economic rationale, at the time, for subsidies than anyone can now make for human space exploration. Human space exploration, sadly, at this time cannot yet stand on much beyond exploration for its own sake (inspirational efforts as well as possible discoveries) and national security. There are also possible byproducts of highly focused technology development, but I see that as a bonus, not an end in itself. That is enough for me for the amount of money we are putting into it and even some more. I would also encourage, as we are already doing via subsidies, commercial exploitation when/if the entrepreneurs can do it, and would pay them to haul exploration astronauts and cargo up and down as the capability existed and the need arose. But I would not wait for them, as this administration is proposing.

    Jack Knight

  17. The US is currently in a new debate over funding high speed passenger rail. Your history of the first railways is very opportune.

    There should also be more debate about funding efficiency and local environmental improvements to the now ancient US freight rail network as its now largely accepted rail will have an increasing share our freight future. Many a freight railroad runs down local streets because either the street was built next to the railway long ago, or the railway company found it cheaper to build it along the street. We need competition between railroad companies but we don’t need the spagetti that present railroad networks amount to.

    Plan A (Constellation) had funding issues. President Obama has proposed Plan B. With no substantial Plan C on the horizon with funding commitments, I guess we gotta get behind Plan B. Earth has the largest terrestrial gravity well in our solar system, there is thus much merit in opening up this well to competition. Innovation in this market will help develop systems for negotiating other terrestrial gravity wells. While Orion was designed to take astronauts up and down Earth’s gravity well and well beyond Earth’s gravity, specialist vehicles for the ride up and down will probably prove most economic and less risky. Thus big rockets don’t need to human rateable – they just need to carry human rateable cargos. Despite the cost of large cargos, the different nature of the risks will drive different standards for vehicles not carrying humans.

    The ISS circulates at 75 degrees to the solar plane. This is great for Earth observation and perhaps testing Earth observation equipment, but its a largely useless orbit for destinations beyond LEO. Therefore Plan B should include a space station in the solar plane – a non research station for crew transfers, in-space checkout of vehicles heading beyond LEO, and crew base for in-space refuelling depots. The solar plane is obviously a boring orbit for earth observation and poor for utilizing solar panels and thus has limited hotel prospects. Polar orbits by contrast offer good prospects for earth observation hotels.

    The President continues to stress the need for NASA to be a technology leader for Earth based industry. I still maintain a significant technology area NASA should pioneer is low cost jet engines in the range from 20KW to 200KW that can use a variety of fuels, including renewable fuels, to power hybrid vehicles, small co-gen and tri-gen local power stations, light aircraft, ‘jet pack’ personal aircraft, safer boats, and many other uses.

    NASA’s Aqua satellite shows the full extent of oil spill in gulf. NASA spacecraft are being used by energy companies to exploit and protect the environment. These same companies could learn more from NASA. A CAIB style investigation should be carried out into off shore oil drilling to find the many procedural weaknesses that have led to fail-safe systems failing on many oil rigs. Its not a problem technological capability – the oil industry is endowed with that. It is a problem of corporate and government weakness that the social capital and associated social infrastructure has not been built such that oil leaks into the environment are rare than common place at present. A robust social infrastructure would ensure equipment could be brought rapidly into play to deal with failure of fail-safe systems. The oil industry could learn lessons from the nuclear power industry and NASA.

  18. I agree with posts 17 & 18. Don’t retire what you have before you have a replacement, and space exploration, at this point in time, is to satisfy our curiousity about what is “out there”, and is the end into itself. The inventions and technology spinoffs are nice benefits, but again are not the prime reason to have human space flight. We don’t have the technology at this time to do what we would like to do. We don’t have a star trek Enterprize, with warp drive and all the other things required for interstellar space travel. And I don’t think we will for a very long time. So, we need to use what we have until we have something better. We still ride horses. And to pay russia for what we could do is appaling. I believe we are making a huge mistake. Commercial space travel will probably happen, just not as soon as we would like to think. and if we can spend hundreds of billions on bailing out crooks, liars, theifs, ect on wall street, and inept managed companies like General Motors, and on and on, then we can spend 1/2 cent on the dollar on a space program that is provide some benefit for America.

  19. While there’s no “land” to offer the issue of private property rights does need to be broached. If a company acquires assets from the moon or an asteroid, do they own them? What if another company refuels from a rival’s fuel depot? Or if a base is established on the moon – do they own that land? Private property rights are a direct tie-in to the return on investment that investors are looking for. Something to think about…

    Great post, Wayne. Enjoyed reading it.

  20. Although there have been several great books on the 1800s development of the railroad infrastructure, most notably Nothing Like It In The World: The Men Who Built the Transcontinental Railroad, 1863-1869 by Stephen Ambrose, and the best comparison to spaceflight is The Railroad and the Space Program: An Exploration in Historical Analogy by MIT’s Bruce Mazlish.

    But some historians have noted that the more likely comparison, because of the fact that there are not land parcels to be given away, and because of the harshness of the environments, is a comparison between space flight and the construction of the Panama Canal. But this analogy is not quite accurate, since there was already significant water traffic between the two oceans when the canal reduced times and cost. Air travel was similar; there was ocean travel between the continents, and in order to reduce time, airlines, most notably Juan Terry Trippe’s Pan Am, emplaced mainly prefabricated outposts on a series of islands so that the transoceanic carriers built by Martin, Sikorsky and Boeing could carry people; the outposts became important during WWII when they were used as the initial points of embarkation for the US Marines.

    In the case of space, there is no destination in space for a large number of people today. A closer analogy might be either Antarctic exploration or undersea exploration. In the case of the Antarctic, the first sightings of the continent occurred during the time of the great explorers, like Ferdinand Magellan and Francis Drake in the 1500s. The first crossing of the Antarctic Circle occurred in the 1770s by James Cook. There were expeditions that reached the continent in the 1800s but the pole was not reached until the 1900s and it was only in the last 75 years that permanent outposts and tourist travel was established. Most of this occurred because the new transportation technology, aviation, made it relatively easy and inexpensive. Maybe a 400 year timetable is not unreasonable.

  21. What do you think of the railroad that SpaceX is building?Are three flights with no cargo up or down needed?This is the way it was done 50 years ago.Generally the first flight is an operational flight today.Orbital is going to ISS on the first flight.They have a lot of experience and a MPLM is hard to waste though.

Comments are closed.