Historical Cost Considerations in Building New High-tech Infrastructure -- The U.S. Transcontinental Railroad

The new, economy-building high-tech in the mid-1800's was railroads. Connecting the continental U.S. West with East through the Rocky Mountains had been an initiative discussed starting in the early 1840's; but private investors seemed to find the venture too risky or too costly even for their situation.

The U.S. Presidents and Congressional majorities during the 1840-1850's were "small-government" proponents; so the dream of connecting the U.S. East with West through the Rocky Mountains by railway languished as but-a-dream.



In 1862, President Abraham Lincoln and the U.S. Congress passed the Pacific Railroad Act, which funded the completion of our transcontinental railroad. Specifically, it laid the final stretch of connecting Omaha, Nebraska to Sacramento, California in Utah.

The Pacific Railroad Act provided 6,400 (later doubled to 12,800) acres plus funding of $48,000 per mile of laid railroad track to each of the 2 companies building this: Union Pacific Railroad and Western Pacific Railroad. 

That $48,000 per mile awarded in 1862 dollars -- with inflation -- would equal an estimated $1,208,877 in 2012 dollars. 

Interestingly, President Lincoln likely was convinced to fund the Pacific Railroad Act by his strategy for fighting the U.S. Civil War. Lincoln passionately worked the railroads and telegraph lines (that strung with the railroads) to leverage the Union Army's troop and manufactures advantage over the Confederacy. The North had far more people (i.e. soldiers) and the only factories (i.e. munitions). 

Lincoln saw the ability to communicate where troops and supplies were needed and then move them there -- quickly -- as the missing link. Lincoln likely brought that thinking to his decision to sign the Pacific Railroad Act: Making sure to control and leverage the Western land, people, and supplies. Of course, a united nation was also already on his mind.

Well, today's key economy-building -- and security enhancing -- high-tech is communications and electric lines, which we refer to as the "smart grid". 

In 2012, China announced a massive smart grid investment to lay 200,000 km of super high-power UHV DC lines at an estimated cost of $1.05-million per mile.

What a coincidence! If the U.S. were to invest in building a new national smart grid network, the cost would be comparable to the cost we spent 150 year ago to build railroad networks.

President Lincoln and Congress were willing to spend $1.2-million per mile for the latest economy-building, security-enhancing high-tech of that era. President Obama and Congress should spend the $1.2-million per mile for our smart grid.

What's your opinion?

by Steve Reichenstein