[3] Chicago's location, at the southwestern end of Lake Michigan with a short, easy portage to rivers flowing south and west, made it a strategic point for white settlers moving through—as it had been for Native peoples before them.

One particular market that had Chicago leaders' attention was centered in Galena, Illinois,[5] a town named for the most common form of lead sulphide.

[6] Long mined by Native peoples and French explorers, substantial lead deposits in Illinois, Wisconsin, and Iowa became known to settlers from the East in the early 1800s.

But merchants in Galena thought a railroad would provide lower costs to transport goods more directly to and from Chicago, then on to the East Coast.

[15] New railroad companies were risky ventures, because they had to spend huge amounts on construction, rolling stock, and storage and maintenance facilities before they could even begin to make money.

[16] Knowing this, the G&CU's commissioners initially sought financing from investors in the East,[17] and on August 4, 1836, they increased the amount of stock for sale to $500,000, aware that building a railroad would cost much more than $100,000.

[17] Things seemed about to change when Elijah K. Hubbard got involved, purchasing an overwhelming majority of G&CU stock—79 percent, in fact; he also provided $30,000 for construction costs, so the railroad had funds to work with until late 1838.

However, Hubbard died in May 1839 of tuberculosis, at which point it was revealed that he had been silently representing Elihu Townsend, an Eastern financier who was a director of the New York and Erie Railroad.

After two years in Chicago, Ogden was handling financial affairs for about a hundred Eastern investors,[21] working with running totals, on average, of about $1 million of their funds.

Although both ventures strained him financially, he successfully avoided bankruptcy,[26] and when the economy settled down he focused on reviving the moribund Galena and Chicago Union Railroad.

As the years had gone on with no railroad service, frustrated mine operators in Wisconsin had begun to use wagon companies to transport lead to Madison and then on to Milwaukee.

"[27] As time went on, more towns in northwestern Illinois demanded action, to the point where supporters from Chicago realized that they might also lose the Galena market to the Madison-Milwaukee wagon companies.

According to D. W. Yungmeyer, "the Chicago group was so well organized that it practically took over all the official chairs, committee heads, and about everything else, and because of its readiness with resolutions, statistics, and so on, secured the whole-hearted consent and approval of .–.

Ogden set up the outlines of a deal in which Townsend would relinquish corporate control of the G&CU in exchange for the promise of substantial amounts of stock in what would essentially be a new company governed by the same charter.

[28] A year after the first directors' meeting, on February 24, 1847, the Illinois legislature amended the railroad's charter to fit the new circumstances, setting the company's capital at $3 million.

In 1847, Richard Morgan, their civil engineer, estimated construction costs of a single-track line from Chicago to Galena at approximately $2.65 million, or $14,553 for each mile.

[36] The directors took a two-pronged approach to get this funded: they urged local farmers and townspeople to buy small amounts of stock in the railroad, and they sought other wealthy investors in the East.

Shipping magnate William F. Weld told the G&CU representatives, "When it breaks down as it surely will ... come and give it to us, and we will take hold of it and complete it.

They decided to begin construction as they gained funding, even if they didn't yet have money to build the whole route, and they intensified their efforts to sell stock in Illinois.

[38] Ogden in particular traveled the length of the planned route, trying to sell stock to farmers, businessmen, and miners in both Illinois and Wisconsin; he emphasized that downpayment on a $100 share would only cost $2.50, and that investors could make partial payments over time to complete the purchase.

Young Scammon and Walter Newberry, approached tired farmers who had just driven their harvest loads into Chicago, pointing out that a railroad would save them that work.

[42] New chief engineer John Van Nortwick planned to save money by using strap-iron rails—wooden rails topped by 3/4-inch-thick iron strips—which were commonly used among early railroads.

[43] That spring, Ogden and fellow director Raymond Turner went east to buy construction materials and rolling stock, including locomotives, cars, and iron for the tracks.

To show off the new railroad's potential, the company held a celebratory first trip from Kinzie Street to Oak Park for stockholders and journalists, which raised people's excitement.

That year the G&CU also built a freight station in Chicago, where they located the company's administrative headquarters, as well as two repair shops and an engine house.

[53] Freeport was on the planned route, so when construction to that point was completed on September 1, 1853,[54] the Galena and Chicago Union Railroad had accomplished the goal identified in its company name.

Recently the new town of Clinton had been renamed by the Iowa Land Co. from its original name of New York, a small village and ferry at a narrows on the river.

The CI&N began laying rail to Cedar Rapids in 1857 while the CR&MR was organized in 1859 to build the rest of the way to Council Bluffs.

Much of this was designed for gaining government land grants and charters and these companies had many of the same stockholders, including noted New York railroad promoters Dr. Thomas Clark Durant and John Insley Blair.

[58] Durant of the Union Pacific had recently committed to building a transcontinental railroad to the west coast from Omaha opposite Council Bluffs in Iowa.