However, with the discovery of gold at Sutter's Mill, California in late 1848 came thousands of people hoping to strike it rich in that gold country. There were no railroads in that area at the time, so people had to either take the torturous five month journey through the Great Plains via the California Trail or take the even more torturous eight month journey around South America. Both had their disadvantages and risks, but they were the only routes to California.
It was at this time that people began contemplating the benefits of building a transcontinental railroad across the United States. Onto the scene came Theodore Judah, a civil engineer who had been railroading since the age of 13. In 1854, he gained experience building railroads by building a railroad in the Sacramento Valley. Judah was obsessed with the idea of building a transcontinental railroad, and he did everything he could to convince people to invest in its construction. Some didn't believe it could be done; he was often called "Crazy Judah."
After several years of planning, Judah went to Washington DC to propose his construction plans. At this time, however, the US government was dealing with increasing pressures in the South, which would eventually lead to the American Civil War. A bit disappointed, Judah went back to California, where he continued to work on his plans.
By 1860, Judah had many plans for the railroad, but he didn't know how to get past the Sierra Nevada Mountains. In October of that year, Daniel Strong showed Judah the long-abandoned trail that the Donner Party had used to get across the Sierra Nevadas many years before. Agter gazing upon the route, Judah decided that this would be the route that the transcontinental railroad would take past the Sierra Nevadas.
Theodore Judah (public domain photo)
Immediately, Judah and Strong returned to Sacramento and wrote articles of incorporation for the Central Pacific Railroad Company, which would be instrumental in the construction of the railroad. He also found some investors for the company: Collis Huntington, Mark Hopkins, Charles Crocker and his brother E. B. Crocker, and Leland Stanford. Together, these businessmen were called The Associates; a few years later they were known as The Big Four.
The next year, Judah returned to Washington DC to propose his new plan. The American Civil War was being fought at the time of his return, so many government officials ignored Judah; however, Abraham Lincoln, who had recently been elected president, supported Judah and worked with him to put it into effect. On July 1, 1862, Lincoln signed the Pacific Railroad Act into law, which allowed the railroad to be built and was instrumental in the forming of the Union Pacific Railroad Company.