Silver Tailings: Railroad Monopoly

It cost Nevadans five cents a mile to travel on the Central Pacific Railroad in 1885, while it cost Californians only three cents a mile. This disparity also applied to freight being shipped. It cost more to ship most goods from Reno to San Francisco than it did to ship the same goods from San Francisco to New York.

This chicanery began when the transcontinental railroad was completed in 1869, although it was modified slightly in 1881. The problem was that the CPR bought successive Nevada State legislatures through bribery and kept them in a pocket.

The problem happened in other states, so Congressional action on regulating the railroads began in 1877. This resulted in the Interstate Commerce Act of 1887. However, the US Supreme Court didn’t rule against the railroads in any lawsuit until 1896 and didn’t allow the Interstate Commerce Commission to establish uniform rates until 1917.

Until then, a railroad monopoly built through government subsidy charged whatever the market in Nevada would bear.