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US economic historian here. The idea that the US government funded the construction of the first Transcontinental Railroad and Panama Canal to trade with China

US economic historian here. The idea that the US government funded the construction of the first Transcontinental Railroad and Panama Canal to trade with China is very, very weird. - 1850-1890 was a period of high protectionism, highest tariffs on imports in the US history. - A good approximation of share of traded goods in the railroads would be the share of imports+exports in the GDP. Together, exports and imports were not more than 15% of GDP. Source: https://www.nber.org/system/files/working_papers/w4710/w4710.pdf https://www.nber.org/system/files/working_papers/w4710/w4710..., Table 3. - railroads transported a lot of agricultural products and also passengers, and were hugely profitable from that. I doubt they would recover any cost by transporting porcelain and whatever other goods China exported at the time. - "But that answer is wrong, as can be shown by examining historical records of the time." - citation needed.

MkNape 5y ago
I’ve always wondered if one of the reasons was to protect the Union. Would be a lot easier to prevent states from seceding, and defend US borders when you can quickly transport soldiers (plus equipment, food, etc.) to where they’re needed.
- myohmy 5y ago
  I would imagine so. The CN railroad was specifically built to transport soldiers from eastern Canada to BC to defend against American machinations. (Not for expansion, nope, no way, we didn't want Alaska anyways!)
  - deleted 5y ago
    [deleted]
- roussanoff 5y ago
  I don't think there is a single answer to "why the US built railroads", but both the railroads and the Eisenhower's Interstate Highway System certainly had something to do with the military needs.
lisper 5y ago
For the record, the idea that the transcontinental railway was built to link the east coast with China was not mine, it was Donald Gibbs's.
- practicallytru 5y ago
  That's more or less how the railroad has since served the {Chinese-American, } people who worked so hard to build it. https://en.wikipedia.org/wiki/First_transcontinental_railroad https://en.wikipedia.org/wiki/First_transcontinental_railroa...
- ravitation 5y ago
  That seems mostly irrelevant, aside from maybe providing credit. The way in which you "co-opt" it in this piece is not as some questionable hypothesis, whose veracity is unimportant - which seems to be your intent based on this comment and the rest of the actual piece. It's hard to see how you are not explicitly endorsing this hypothesis when you have unquoted lines like "but that answer is wrong, as can be shown by examining historical records of the time." You are not saying that Donald Gibbs thinks this is wrong, you are saying you think it's wrong.
  - lisper 5y ago
    Yes, that's a fair criticism. If I were to rewrite this article today I would try to make this clearer. I think at the time, having recently seen Gibbs speak, I found his argument compelling. But I clearly could (and should) have done a much better job communicating it. Mea culpa.
    - ravitation 5y ago
      Also, for the record, I really enjoy/get a lot of value from your writing (if I didn't I probably wouldn't have criticized this tiny part of it).
      - lisper 5y ago
        Thanks for the kind words. And I always appreciate constructive criticism. It's the only way to improve.
asdff 5y ago
If trading opportunities were the answer it would have been reported as much at the time imo. Here is the justification from the U.S. house of representatives about the project at the time, in 1856: "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" (1) The reason seemed to be just geopolitics rather than trading opportunities. I'm curious if you know what route they were referring to in this quote that routed through a foreign power? An oversea route maybe? In 1856 we had territory coast to coast already so the caravan routes were within our possessions. 1. https://en.wikipedia.org/wiki/First_transcontinental_railroad#Origins https://en.wikipedia.org/wiki/First_transcontinental_railroa...
- _dain_ 5y ago
  They had to sail around the bottom of South America.
- roussanoff 5y ago
  I am not that familiar with the history of railroads, but I will speculate: - take the railroad as far west as possible, then a stagecoach (expensive, slow, uncomfortable). The land route was created after the Gold Rush: https://en.wikipedia.org/wiki/California_Trail https://en.wikipedia.org/wiki/California_Trail - ship to Panama, cross by land in Panama, ship from Panama to California (cheaper, slower, risk of disease like malaria) - ship around South America. Yep, all the way to Antarctica, through Magellan Strait. (even cheaper, even slower, risks from travelling by the sea). This route seems crazy if you look at the map. However, for goods, it was very much in use before Panama Channel was built. Sea is so much easier than land. I am not sure what "foreign power" this quote refers to though. Panama? Chile? Maybe you could also go through Mexico?
  - _dain_ 5y ago
    Magellan strait
hinkley 5y ago
1853 is when Admiral Perry showed up in Japan with gun boats and said "You will trade with us." Whatever the confusing economics were of trade with East Asia, we were not only active over there, we were being rudely pushy about it.
Synaesthesia 5y ago
Well that's the government intervening in the economy (protectionism) to support local corporations. BTW you should check the work of economist Michael Hudson, I think he's the foremost expert in this realm.
somedudetbh 5y ago
Not a historian but possible other weird thing: "(Bonus question: what did the U.S. give to China in exchange for its china?)" "(the answer to the question I posed above about what the U.S. traded to China in the 19th century is "fur")" My understanding is that in this period, the most valuable China->US exports were tea, silk, and porcelain. The USA didn't produce anything the Chinese were interested in buying (unlike the Spanish, who had had torrents of silver coming from South American silver mines), and so British and American traders in the Canton System and Thirteen Factories period traded opium from British India to China, which of course led to the Opium Wars, British control of Hong Kong, etc. I've never read anything about fur exports from USA to China being a big part of 19th century USA trade, but I have read a about mid-19th century booming East Coast and European demand for beaver pelts.
- thedogeye 5y ago
  The answer to the bonus question is opium. In particular the Forbes family (not related to the magazine folks) traded about 20% of all the opium sold in China during this period with the other 80% coming from the British East India Company and other UK-based trading houses. Fun fact, the Forbes family is still one of the wealthiest families in America, they own their own massive private island called Naushon Island right next to Martha's Vineyard. They also have their own family museum in Boston where you can learn about their trading history in Asia which I'm super eager to visit And the patriarch of the Forbes Family today is... wait for it... John Kerry. When Obama made Kerry his secretary of state the Chinese weren't super thrilled, they have a long memory.
  - jazzyjackson 5y ago
    FDR's grandpa also got rich trading opium. Great article here: "How Profits From Opium Shaped 19th-Century Boston" https://www.wbur.org/news/2017/07/31/opium-boston-history https://www.wbur.org/news/2017/07/31/opium-boston-history
  - thedogeye 5y ago
    Source for this is a book called Barons of the Sea: https://www.amazon.com/Barons-Sea-Worlds-Fastest-Clipper/dp/1476745978 https://www.amazon.com/Barons-Sea-Worlds-Fastest-Clipper/dp/... Great book if you're interested in America's history in large scale drug dealing.

MkNape 5y ago

I’ve always wondered if one of the reasons was to protect the Union. Would be a lot easier to prevent states from seceding, and defend US borders when you can quickly transport soldiers (plus equipment, food, etc.) to where they’re needed.

myohmy 5y ago
I would imagine so. The CN railroad was specifically built to transport soldiers from eastern Canada to BC to defend against American machinations. (Not for expansion, nope, no way, we didn't want Alaska anyways!)
- deleted 5y ago
  [deleted]
roussanoff 5y ago
I don't think there is a single answer to "why the US built railroads", but both the railroads and the Eisenhower's Interstate Highway System certainly had something to do with the military needs.

lisper 5y ago

For the record, the idea that the transcontinental railway was built to link the east coast with China was not mine, it was Donald Gibbs's.

practicallytru 5y ago
That's more or less how the railroad has since served the {Chinese-American, } people who worked so hard to build it. https://en.wikipedia.org/wiki/First_transcontinental_railroad https://en.wikipedia.org/wiki/First_transcontinental_railroa...
ravitation 5y ago
That seems mostly irrelevant, aside from maybe providing credit. The way in which you "co-opt" it in this piece is not as some questionable hypothesis, whose veracity is unimportant - which seems to be your intent based on this comment and the rest of the actual piece. It's hard to see how you are not explicitly endorsing this hypothesis when you have unquoted lines like "but that answer is wrong, as can be shown by examining historical records of the time." You are not saying that Donald Gibbs thinks this is wrong, you are saying you think it's wrong.
- lisper 5y ago
  Yes, that's a fair criticism. If I were to rewrite this article today I would try to make this clearer. I think at the time, having recently seen Gibbs speak, I found his argument compelling. But I clearly could (and should) have done a much better job communicating it. Mea culpa.
  - ravitation 5y ago
    Also, for the record, I really enjoy/get a lot of value from your writing (if I didn't I probably wouldn't have criticized this tiny part of it).
    - lisper 5y ago
      Thanks for the kind words. And I always appreciate constructive criticism. It's the only way to improve.

asdff 5y ago

If trading opportunities were the answer it would have been reported as much at the time imo. Here is the justification from the U.S. house of representatives about the project at the time, in 1856: "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" (1) The reason seemed to be just geopolitics rather than trading opportunities. I'm curious if you know what route they were referring to in this quote that routed through a foreign power? An oversea route maybe? In 1856 we had territory coast to coast already so the caravan routes were within our possessions. 1. https://en.wikipedia.org/wiki/First_transcontinental_railroad#Origins https://en.wikipedia.org/wiki/First_transcontinental_railroa...

_dain_ 5y ago
They had to sail around the bottom of South America.
roussanoff 5y ago
I am not that familiar with the history of railroads, but I will speculate: - take the railroad as far west as possible, then a stagecoach (expensive, slow, uncomfortable). The land route was created after the Gold Rush: https://en.wikipedia.org/wiki/California_Trail https://en.wikipedia.org/wiki/California_Trail - ship to Panama, cross by land in Panama, ship from Panama to California (cheaper, slower, risk of disease like malaria) - ship around South America. Yep, all the way to Antarctica, through Magellan Strait. (even cheaper, even slower, risks from travelling by the sea). This route seems crazy if you look at the map. However, for goods, it was very much in use before Panama Channel was built. Sea is so much easier than land. I am not sure what "foreign power" this quote refers to though. Panama? Chile? Maybe you could also go through Mexico?
- _dain_ 5y ago
  Magellan strait

hinkley 5y ago

1853 is when Admiral Perry showed up in Japan with gun boats and said "You will trade with us." Whatever the confusing economics were of trade with East Asia, we were not only active over there, we were being rudely pushy about it.

Synaesthesia 5y ago

Well that's the government intervening in the economy (protectionism) to support local corporations. BTW you should check the work of economist Michael Hudson, I think he's the foremost expert in this realm.

somedudetbh 5y ago

Not a historian but possible other weird thing: "(Bonus question: what did the U.S. give to China in exchange for its china?)" "(the answer to the question I posed above about what the U.S. traded to China in the 19th century is "fur")" My understanding is that in this period, the most valuable China->US exports were tea, silk, and porcelain. The USA didn't produce anything the Chinese were interested in buying (unlike the Spanish, who had had torrents of silver coming from South American silver mines), and so British and American traders in the Canton System and Thirteen Factories period traded opium from British India to China, which of course led to the Opium Wars, British control of Hong Kong, etc. I've never read anything about fur exports from USA to China being a big part of 19th century USA trade, but I have read a about mid-19th century booming East Coast and European demand for beaver pelts.

thedogeye 5y ago
The answer to the bonus question is opium. In particular the Forbes family (not related to the magazine folks) traded about 20% of all the opium sold in China during this period with the other 80% coming from the British East India Company and other UK-based trading houses. Fun fact, the Forbes family is still one of the wealthiest families in America, they own their own massive private island called Naushon Island right next to Martha's Vineyard. They also have their own family museum in Boston where you can learn about their trading history in Asia which I'm super eager to visit And the patriarch of the Forbes Family today is... wait for it... John Kerry. When Obama made Kerry his secretary of state the Chinese weren't super thrilled, they have a long memory.
- jazzyjackson 5y ago
  FDR's grandpa also got rich trading opium. Great article here: "How Profits From Opium Shaped 19th-Century Boston" https://www.wbur.org/news/2017/07/31/opium-boston-history https://www.wbur.org/news/2017/07/31/opium-boston-history
- thedogeye 5y ago
  Source for this is a book called Barons of the Sea: https://www.amazon.com/Barons-Sea-Worlds-Fastest-Clipper/dp/1476745978 https://www.amazon.com/Barons-Sea-Worlds-Fastest-Clipper/dp/... Great book if you're interested in America's history in large scale drug dealing.