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-i89o] Railroad expansion and speculation. 705 materials, but of such unexpected resources as the supplies of natural oil and gas. Within this area there existed no artificial barriers to the growth of commerce. Free trade between the States had been established by the Constitution ; and the extension of a territorial division of labour was possible on a larger scale than had ever before been known. The next step was to overcome the natural barriers of mountain and wilder- ness. At the end of the war the railroad mileage of the country was 35,000 miles; and an era of great expansion at once began. It had become apparent early in the war that a transcontinental line, uniting California with the East, had become a necessity; and an Act incor- porating the Union Pacific Company was passed in 1862. The tremendous difficulties of constructing a line across the desert and the Rockies called for government aid; and it was given in generous measure a bond subsidy of $27,000,000 in all and 12,000,000 acres of land. The Central Pacific received over $27,000,000 and 11,000,000 acres. The bonds were secured by a first mortgage on the road, changed later to a second lien to enable the road to raise further loans. Finally, in 1869, the last spike was driven, the two roads were united at Ogden, and the first line to join the Atlantic and Pacific was complete. In the meantime rapid building continued in all sections of the country, especially in the Middle Atlantic States, and in the Middle West. The progress, or its effects on particular sections, cannot be traced in detail. By 1870 the mileage had increased to 52,000 miles, by 1880 to 93,000, and by 1890 to 166,000. This continuous expansion of transport facilities brought new areas into cultivation, opened up new supplies of raw materials, and built up a market in the West for the products of the East. This rapid growth was attended, however, with considerable evils. In the first place, there occurred serious instances of corruption. Though the charges of political bribery in the matter of the aid given to the transcontinental lines were not substantiated, there is no doubt that fortunes were made by the manipulation of construction companies for the benefit of railroad directors rather than stockholders. In the next place, the rate of building was not only rapid, but excessive. An era of speculation began which led to the construction of parallel lines, fierce competition, destructive rate wars, and bankruptcy. The new enter- prises were on so gigantic a scale, and the demoralisation due to excessive competition was so destructive of values, that the openings for stock speculation were greatly increased; and, as vultures flock un- erringly to carrion, a new group of financiers appeared who made fortunes by wrecking enterprises instead of by making them prosper. The scandals of that period will always remain a blot on the commercial history of the country, and they sowed evil seed in the mind of the public, who were frequently unable to distinguish between the beneficial c. M. H. vii. CH. xxii. 45