By the terms of the bill, the Central Pacific Railroad Company would start building in Sacramento and continue east across the Sierra Nevada, while a second company, the Union Pacific Railroad, would build westward from the Missouri River, near the Iowa-Nebraska border. The two lines of track would meet in the middle (the bill did not designate an exact location) and each company would receive 6,400 acres of land (later doubled to 12,800) and $48,000 in government bonds for every mile of track built. From the beginning, then, the building of the transcontinental railroad was set up in terms of a competition between the two companies.
In the West, the Central Pacific would be dominated by the “Big Four”–Charles Crocker, Leland Stanford, Collis Huntington and Mark Hopkins. All were ambitious businessmen with no prior experience with railroads, engineering or construction. They borrowed heavily to finance the project, and exploited legal loopholes to get the most possible funds from the government for their planned track construction. Disillusioned with his partners, Judah planned to recruit new investors to buy them out, but he caught yellow fever while crossing the Isthmus of Panama on his way east and died in November 1863, soon after the Central Pacific had spiked its first rails to ties in Sacramento. Meanwhile, in Omaha, Dr. Thomas Durant had illegally achieved a controlling interest in the Union Pacific Railroad Company, giving him complete authority over the project. (Durant would also illegally set up a company called Crédit Mobilier, which guaranteed him and other investors risk-free profits from the railroad’s construction.) Though the Union Pacific celebrated its own launch in early December 1863, little would be completed until the end of the Civil War in 1865.