Government Aid to Big Business

If the Union is to continue to be bounded as it has been extended, from the Atlantic to the Pacific … measures must be adapted to bring nearer together the extremes, by these iron highways which, in stimulating social and commercial intercourse, constitute the strongest bonds of political harmony.


The life of James Gadsden reveals that there is nothing new about powerful lobbyists winning government funds to support their special interests. Nor is there anything new about individuals leaving high-level government jobs for corporate positions from which they operate as influential lobbyists. Gadsden was an adjutant general in the U.S. Army who left government service and became a railroad president—a railroad president later appointed by President Franklin Pierce to purchase land from Mexico for the purpose of building a railroad. The Gadsden Purchase, which the United States acquired in 1853, also resolved a lingering boundary dispute between the two countries. It now forms the southern end of Arizona and southwestern New Mexico.

James Gadsden was born in 1788 to a distinguished South Carolina family. His grandfather had been a delegate to the Continental Congress and, later, a brigadier general in the war itself. After graduating from Yale and serving in the military, Gadsden became the president of the South Carolina Canal and Rail Road Company. In that capacity, he saw opportunities to connect the South via rail to gold-rich California and ports on the Pacific. A firm believer in slavery, he also saw in the newly acquired western lands the opportunity—indeed, the necessity—to secure its continued legality through additional congressional votes from new slave states. Toward that end, Gadsden joined an effort under way to divide California in two, with slavery permitted in the southern half. To encourage the legislature via the prospect of bringing development to sparsely populated (mostly by Mexican Americans) Southern California, he sent a petition in 1852 bearing 1,200 signatures of people seeking permission to establish a district that would be farmed by “African Domestics.”1 Slavery was a hotly contested issue in California. Gadsden’s plan aroused debate but went nowhere.

James Gadsden (1788-1858) (photo credit 28.1)

The Gadsden Purchase

When President Franklin Pierce decided the United States should seek to purchase land from Mexico, Gadsden was ideally situated for the appointment—just as appointments today often go to corporate executives whose resumes include previous government positions and powerful politicians as references.

The reason the southern railroads said they needed this Mexican land was that it contained mountain passes that did not exist elsewhere in the region. One such pass, in the area still under dispute, was so important that the town where it was situated had been named after it: El Paso.

Still, the purchase of land for the purpose of building a railroad triggered a three-way clash of political power, ideals, and pork. Abolitionists believed the government should not actively promote the economy of the slave-holding South. Southerners responded with outrage, though others in the South who were troubled by slavery argued that promoting industry in the region would help build an economy that need not depend on slavery to be financially viable.

Ideals and pork also came into conflict. Southerners’ commitment to states’ rights had previously led them to oppose federal expenditures for road and bridge construction. Such projects, they believed, were the responsibility of the states. Once the federal government entered in, they argued, it would open the door to ever-increasing centralization of power. Indeed, history has proven them right.

But in this instance most leaders left their ideals on the campaign trail and reached for the pork. Railroads, after all, were beginning to shift the flow of commerce through the north, rather than along the waterways leading to the Mississippi River. Moreover, even if the Southern states could have afforded the $10 million price tag for the Gadsden Purchase, they were barred by the Constitution from negotiating a treaty with another country.

Faced with these realities, the South’s two foremost advocates for states’ rights, Jefferson Davis and John C. Calhoun, found ways to justify federal involvement in the building of a southern transcontinental railroad. Davis, at the time secretary of war in the Pierce administration, maintained that federal expenditures to enable such a railroad were legitimate because it might be needed for national defense.2 And while Calhoun, in his keynote address to the 1845 Memphis Commercial Convention, asserted that building railroads was beyond the purview of Congress, he allowed as to how the government, as owner of the land on which such a railroad would be built, could grant alternate sections of the land to the railroads, since such grants would raise the value of the land the government retained.

Gadsden was also present at that convention. It was there that he proposed two possible routes for such a railroad—one terminating in San Diego and the other in Mazatlán, a port on the Mexican coast opposite the southern tip of Baja California. San Diego, at that time, was also in Mexico. Since federal investment, not an agreement with Mexico, was the issue at hand, how were the Memphis conventioneers planning to pull this off? War with Mexico?

Less than a year later, that’s exactly what happened. What they were thinking in 1845 may be suggested by what surfaced in 1853 when Gadsden received his instructions regarding the purchase. He was authorized to spend up to $65 million to acquire a region that included most of what are now the Mexican states of Baja California, Coahuila, Chihuahua, Sonora, Nuevo León, and Tamaulipas.

Gadsden’s mission, 1853

Gadsden’s mission sparked a new voice of opposition in the person of Senator Thomas Hart Benton, whose doubts began with the underlying premise that the land was necessary in order to build a southern railroad through the Rockies:

We have a fine … route on the parallels of 34 and 35, by Albuquerque, corresponding with the center of the southern states. The route gained by the [Gadsden] treaty is not even a sectional route. It is too far south to be southern. It is not only beyond the center, but beyond the limits and latitudes of the southern states; and is besides … through country so utterly desolate, desert, and God forsaken that Kit Carson says even a wolf could not make his living upon it.

Benton went on to speculate regarding a darker causes for locating a railroad so far south:

What is the reason of this strange deflection? I will tell you.… The city of New San Diego. Here it is—[holding up a map]—here it is, and with explanatory notes showing that it is a “port.” … New San Diego, then, is the governing point in the southern proposed railroad route to the Pacific Ocean. And who owns this city on the map which has suddenly become a governing point in our legislation and diplomacy? It is said to belong to the military.

To Benton, a railroad located so far south, when considered with the fact that Gadsden had been authorized to acquire far more of Mexico, suggested that proslavery interests sought to expand the South—through purchase, if possible; through military actions, if necessary—and consequently increase the number and influence of slave states.

Benton’s claim of an alternate southern rail route

Why then would Mexico be willing to sell? Not because it wanted to. The United States was its greatest threat. Even as Gadsden was in Mexico City seeking to purchase a wide swath of territory, a privately raised army of Americans under the leadership of William Walker illegally invaded sparsely populated Baja California and briefly declared it an independent republic before being chased out by local Mexicans. Fortunately for Gadsden, however, Mexico was burdened by $17 million of debt from its recent war with the United States. President Santa Anna therefore grudgingly agreed to sell only enough land to raise sufficient funds to enable his military to defend against further incursions by the United States.

The agreement was sent to Washington for approval. Gadsden then pursued the purchase of the rest of the land the United States sought by not so privately meeting with revolutionary elements in Mexico. To further unsettle Santa Anna, he told the Mexican president “the spirit of the age” was such that these northern regions of Mexico would eventually secede to join the United States, so he might as well sell them now.3 Santa Anna responded by having his ambassador in Washington demand that President Pierce recall Gadsden. Pierce expressed his understanding and respect to the ambassador and did nothing. Later, when the agreement was being finalized by the U.S. Senate, Gadsden offended virtually every Mexican by telling Americans living in the country to ignore a call to illuminate all homes in celebration of Mexico’s Independence Day.4 President Pierce then sent word to Gadsden to come home.

James Gadsden did not live to see the railroad for which he had labored so long. He died in 1858. The railroad was delayed by the approach and outbreak of the Civil War. Only after Union troops secured the Southwest in 1862 did planning and construction begin. As it turned out, Senator Benton had been right. Adequate passes did exist through the mountains north of the Gadsden Purchase, and in laying out its main line, the Southern Pacific Railroad did not pass through the Gadsden Purchase.

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