James Gadsden, the U.S. minister to Mexico, and General Antonio Lopez de Santa Anna, the president of Mexico, sign the Gadsden Purchase in Mexico City. The treaty settled the dispute over the location of the Mexican border west of El Paso, Texas, and established the final boundaries of the southern United States. For the price of $15 million, later reduced to $10 million, the United States acquired approximately 30,000 square miles of land in what is now southern New Mexico and Arizona.
Jefferson Davis, the U.S. secretary of war under President Franklin Pierce, had sent Gadsden to negotiate with Santa Anna for the land, which was deemed by a group of political and industrial leaders to be a highly strategic location for the construction of the southern transcontinental railroad. In 1861, the "big four" leaders of western railroad construction--Collis P. Huntington, Leland Stanford, Mark Hopkins, and Charles Crocker--established the Southern Pacific branch of the Central Pacific Railroad.