America's first transcontinental railroad (known originally as the "Pacific Railroad" and later as the "Overland Route") was a 1,911-mile (3,075 km) continuous railroad line built between 1863 and 1869 that connected the existing eastern U.S. rail network at Council Bluffs, Iowa, with the Pacific coast at the Oakland Long Wharf on San Francisco Bay. The rail line was built by three private companies over public lands provided by extensive U.S. land grants. Building was financed by both state and U.S. government subsidy bonds as well as by company-issued mortgage bonds. The Western Pacific Railroad Company built 132 miles (212 km) of track from the road's western terminus at Alameda/Oakland to Sacramento, California. The Central Pacific Railroad Company of California (CPRR) constructed 690 miles (1,110 km) east from Sacramento to Promontory Summit, Utah Territory. The Union Pacific Railroad (UPRR) built 1,085 miles (1,746 km) from the road's eastern terminus at the Missouri River settlements of Council Bluffs and Omaha, Nebraska, westward to Promontory Summit.
The railroad opened for through traffic between Sacramento and Omaha on May 10, 1869, when CPRR President Leland Stanford ceremonially tapped the gold "Last Spike" (later often referred to as the "Golden Spike") with a silver hammer at Promontory Summit. In the following six months, the last leg from Sacramento to San Francisco Bay was completed. The resulting coast-to-coast railroad connection revolutionized the settlement and economy of the American West. It brought the western states and territories into alignment with the northern Union states and made transporting passengers and goods coast-to-coast considerably quicker, safer and less expensive.
The first transcontinental rail passengers arrived at the Pacific Railroad's original western terminus at Alameda Terminal on September 6, 1869, where they transferred to the steamer Alameda for transport across the Bay to San Francisco. The road's rail terminus was moved two months later to the Oakland Long Wharf, about a mile to the north, when its expansion was completed and opened for passengers on November 8, 1869. Service between San Francisco and Oakland Pier continued to be provided by ferry.
The CPRR eventually purchased 53 miles (85 km) of UPRR-built grade from Promontory Summit (MP 828) to Ogden, Utah Territory (MP 881), which became the interchange point between trains of the two roads. The transcontinental line became popularly known as the Overland Route after the name of the principal passenger rail service to Chicago that operated over the length of the line until 1962.
Railroads not only increased the speed of transport, but also dramatically lowered its cost. The first transcontinental railroad resulted in passengers and freight being able to cross the country in a matter of days instead of months and at one tenth the cost of stagecoach or wagon transport. With economical transportation in the West (which had been referred to as the Great American Desert) now farming, ranching and mining could be done at a profit. As a result, railroads transformed the country, particularly the West (which had few navigable rivers).
For example, before the railroads were built in the West, if a farmer were to ship a load of corn only 200 miles to Chicago, the shipping cost by wagon would exceed the price for which the corn could be sold. So, under such circumstances, farming could not be done at a profit. Mining and other economic activity in the West were similarly inhibited because of the high cost of wagon transportation. One Congressman, referring to the West, bluntly stated that, “All that land wasn’t worth ten cents until the railroads came.”
Freight rates by rail were a small fraction of what they had been with wagon transport. When the United States concluded the Louisiana Purchase in 1803, people thought that it would take 300 years to populate it. With the introduction of the railroad, it took only 30 years. The low cost of shipping by rail resulted in the Great American Desert becoming the great American breadbasket.
Among the early proponents of building a railroad line that would connect the coasts of the United States was Dr. Hartwell Carver, who in 1847 submitted to the U.S. Congress a "Proposal for a Charter to Build a Railroad from Lake Michigan to the Pacific Ocean", seeking a congressional charter to support his idea.
Congress agreed to support the idea. Under the direction of the Department of War, the Pacific Railroad Surveys were conducted from 1853 through 1855. These included an extensive series of expeditions of the American West seeking possible routes. A report on the explorations described alternative routes and included an immense amount of information about the American West, covering at least 400,000 sq mi (1,000,000 km2). It included the region's natural history and illustrations of reptiles, amphibians, birds, and mammals.
The report did not include detailed topographic maps of potential routes needed to estimate the feasibility, cost and select the best route. However, the survey was detailed enough to determine that the best southern route lay south of the Gila River boundary with Mexico in mostly vacant desert, through the future territories of Arizona and New Mexico. This in part motivated the United States to complete the Gadsden Purchase.
In 1856, the Select Committee on the Pacific Railroad and Telegraph of the US House of Representatives published a report recommending support for a proposed Pacific railroad bill:
The necessity that now exists for constructing lines of railroad and telegraphic communication between the Atlantic and Pacific coasts of this continent is no longer a question for argument; it is conceded by every one. In order to maintain our present position on the Pacific, we must have some more speedy and direct means of intercourse than is at present afforded by the route through the possessions of a foreign power.
The U.S. Congress was strongly divided on where the eastern terminus of the railroad should be—in a southern or northern city. Three routes were considered:
A northern route roughly along the Missouri River through present-day northern Montana to Oregon Territory. This was considered impractical because of the rough terrain and extensive winter snows.
A central route following the Platte River in Nebraska through to the South Pass in Wyoming, following most of the Oregon Trail. Snow on this route remained a concern.
A southern route across Texas, New Mexico Territory, the Sonora desert, connecting to Los Angeles, California. Surveyors found during an 1848 survey that the best route lay south of the border between the United States and Mexico. This was resolved by the Gadsden Purchase in 1853.
Once the central route was chosen, it was immediately obvious that the western terminus should be Sacramento. But there was considerable difference of opinion about the eastern terminus. Three locations along 250 miles (400 km) of Missouri River were considered:
St. Joseph, Missouri, accessed via the Hannibal and St. Joseph Railroad.