USA HISTORY

Detailed explanation-1: -In most cases, a contract for construction of a given amount of mileage would be made between the railroad and some individual, who then assigned it to the construction company. Payment for completed sections of track went to the railroad, which used the funds to pay its bills to the contractors.

Detailed explanation-2: -To further assist the railroad companies, the federal government offered the companies bonds. Essentially long-term low-interest loans from the government, the bonds provided railroads with capital for the construction of rail lines westward.

Detailed explanation-3: -In 1862 Congress passed the Pacific Railroad Acts which designated the 32nd parallel as the initial transcontinental route and gave huge grants of lands for rights-of-way. The legislation authorized two railroad companies, the Union Pacific and the Central Pacific, to construct the lines.

Detailed explanation-4: -Huge consumers themselves, the railroads also stimulated the economy by spending extraordinary amounts of money on steel, coal, and timber, among other needs.