Building the Union Pacific Railroad: a study of mid-nineteenth-century railroad construction accounting and reporting practices

Abstract

America's greatest technological achievement of the nineteenth century was the completion of the transcontinental railroad. The ensuing political scandal over the disposition of millions of dollars in government bonds led to congressional hearings that revealed accounting and reporting practices for construction contracts that obscured the relationship between the two companies involved – the Union Pacific Railroad Company and the Credit Mobilier of America. Some of the accounting practices, such as the reporting of assets, liabilities, and capital matched contemporary practices of the mid-nineteenth century. Other practices, such as accounting for stock dividends and bond discounts, may have been first employed by the two organizations, but some eventually made their way into common practice among railroads of that era.