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Correspondence

 August 1, 2008

 Michael Fay, Branch Chief

 U.S. Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Washington, DC 20549

 Union Pacific Corporation

 Form 10-K for the Year Ended December 31, 2007

 File No. 001-06075

 Dear Mr. Fay:

 Union Pacific Corporation (the “Company”) respectfully submits the following information and comments in response to your comment letter dated
June 30, 2008, regarding the Company’s letter dated May 19, 2008, and information provided as part of our discussion during the week of June 20, 2008.

 Industry Overview

 There are seven Class I railroads in North America: The BNSF Railway
(BNSF); CSX Transportation (CSX); Canadian National (CN); Canadian Pacific (CP); Kansas City Southern (KCS); Norfolk Southern (NS); and Union Pacific (UP).

 The railroad industry switched from betterment accounting to depreciation accounting in 1983. At that time the Interstate Commerce Commission (ICC), predecessor to the Surface Transportation Board (STB), dictated
units of property for most asset classes. The primary exception was track assets (rail, ties, and ballast). The ICC required the replacement of track assets to be accounted for as capital assets when these items were replaced as part of a
replacement program. Consequently, the costs of annual rail, tie, and ballast replacement programs were to be capitalized. Each railroad developed its own units of property for track assets, which essentially established a materiality threshold for
capitalization and established an accounting convention to expense de minimus amounts that should otherwise be accounted for as assets. These units of property were then approved by the ICC. Any changes to a railroad’s

 Michael Fay, Branch Chief

 U.S. Securities and Exchange Commission

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units of property must be reviewed and approved by the STB. The various railroads’ units of property for track assets are different, which is acceptable
under STB rules. We surmise that the ICC approved these differences because replacement practices of the railroads varied widely due to geography, climate, freight commodity mix, train operations, and average length of haul. In conjunction with the
units of property, the STB requires that railroads meet the “minimum rule” for additions to property. This rule specifies that additions to road property costing less than $5,000 should be expensed rather than capitalized. Based on our
understanding of the Class I railroads, the treatment of expenditures as capital or expense focuses first on whether the expenditures are made in conjunction with an annual replacement program, second on whether the expenditures satisfy units of
property definitions, and third on whether the minimum rule has been met.

 We have addressed each of your comments below. For the
convenience of the Commission Staff, we reproduce the text of each numbered paragraph in the comment letter and follow with our responses.

 Allocation of Payroll Costs (Prior Comments 2 and 3)

1.
You refer to project supervisors in response to our prior comment number 2. Please clarify whether these project supervisors are on-site, or remote from the projects that they
supervise.

 Response:

 The project supervisors discussed in our prior comment 2 represent approximately 675 Engineering Department management personnel. Of these 675 individuals, approximately 560 (83%) are on site (this number includes 105 individuals who
are based in Omaha but spend more than 80% of their time at project sites). The other 115 employees, located in Omaha, includes approximately 58 individuals who are dedicated to capital projects (e.g., design engineers, project planners, structural
designers) and 57 who spend a small amount of their time on capital projects. The 675 managers are all salaried employees. Time worked by salaried personnel is not reported at a detailed level, unlike the time worked by our hourly employees.
Consequently, we allocate the time of these individuals between capital and operating expense based on daily time reporting of their subordinates. We believe time reported by subordinates represents our best estimate of managers’ time spent on
capital or expense projects.

2.
Please further explain to us the reason it is appropriate to capitalize the payroll costs that relate to employees who provide materials management, crew dispatching, timekeeping,
etc. It is not clear why you do not consider these costs to be general and administrative costs, which you expense as incurred.

 Michael Fay, Branch Chief

 U.S. Securities and Exchange Commission

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 Response:

 We capitalize the payroll costs that relate to employees who provide materials management, crew dispatching, timekeeping, and other services because these costs are clearly related to, and are incurred solely as a
result of, our self-constructed capital projects. Capitalization of these types of costs has been ordered by the STB and is consistent with GAAP. The 2007 PricewaterhouseCoopers accounting guide for the rail industry states that, “For
self-constructed assets (e.g., track, remanufactured locomotives) meeting the unit of property test, railroads generally capitalize only direct and certain indirect overheads such as payroll additive costs, stores expense, facilities costs and
work-train costs. Railroads that have adopted depreciation accounting for track structure [i.e., all of the Class I railroads including Union Pacific] are required by the STB to use ‘full absorption’ overhead capitalization (which would
further include general and administrative overhead costs) for capital track projects.” It is our understanding that the other Class I railroads use capital overheads to capture the same or similar types of indirect costs with respect to their
self-constructed assets.

 We believe that capitalizing the payroll costs of employees who provide materials management, crew dispatching,
timekeeping and other services is appropriate because it is consistent with GAAP, required by the STB, consistent with industry practice, and clearly represents a portion of the cost of self-constructing these assets.

3.
In addition, please clarify whether these employees devote any time to routine track maintenance activities, like the ones identified in your response to prior comment number one.
If so, describe for us your allocation methodology and explain to us why this method is appropriate. Under paragraph 7 of SFAS 67, which you have referenced by analogy, “indirect costs that relate to several projects shall be capitalized and
allocated to the projects to which they relate. Indirect costs that do not clearly relate to projects under development or construction, including general and administrative expenses, shall be charged to expense.” The paragraph 7 definition of
indirect costs appears to only contemplate capitalizable projects and, consequently, it may only be appropriate to allocate payroll costs between capitalizable projects. When an employee’s time is divided between capitalizable projects and
operating expense activities, it is not clear how this cost is “clearly related” to the capitalizable activities as required by paragraph 7 and the related definition in appendix A, unless the employee keeps track of his or her time. We
believe employee payroll costs are unlike the other indirect costs you allocate (e.g., leased vehicles, diesel fuel, etc.), where an allocation method may more accurately represent the costs related to a project.

 Michael Fay, Branch Chief

 U.S. Securities and Exchange Commission

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 Response:

 Employees who provide materials management, crew dispatching, timekeeping, and other services devote time to both capital projects and routine track maintenance, which is expensed as incurred. We allocate the payroll
costs of these employees using two primary methodologies. For materials management, we allocate labor dollars based on the cost of materials used for capital projects versus the cost of materials charged to operating expense. For the other indirect
costs, we allocate labor dollars based on percentages of total labor devoted to capital projects versus operating expense. The employees who provide materials management, crew dispatching, timekeeping, and other services do not track their time by
project; however, as we noted in our response to your comment 2 above, it is appropriate to capitalize these costs under GAAP, and capitalization is required by the STB. We believe our allocation methodology provides the best estimate for
determining costs incurred with respect to capital projects.

 Replacement of Rail (Prior Comments 5 and 7)

 4.

 We note that your tangent rail projects vary in length, with five miles and longer being typical and shorter lengths
being atypical. We believe this five mile and longer length to be the case, in part, because of the cost involved in deploying crews and equipment. Consequently, we would not expect there to be a significant amount of isolated  1/4 mile replacements of rail. In addition, the significant disparity between your typical capital program length and your  1/4 mile unit of property for rail may be an indication that the  1/4 mile replacements of rail should not be accounted for as part of your capital program. With that, please quantify for us the number of quarter mile replacements of rail made during 2007, and
provide any other information that you believe would enhance our understanding of your accounting.

 Response:

 The scope of our scheduled tangent rail replacement projects is quite large
because of the cost of deploying crews and equipment and of halting normal freight operations while work is performed. Our typical tangent rail gang employs approximately 120 individuals along with multiple pieces of heavy equipment spread over a
large area. The scheduled tangent rail replacement projects completed during 2007 all involved one mile of rail or more. These projects were planned during November of 2006 as part of our tangent rail replacement program for 2007. We also completed
22 unscheduled tangent rail replacement projects ranging from  1/4 mile to one mile as a result of safety and special
circumstances during 2007.

 Michael Fay, Branch Chief

 U.S. Securities and Exchange Commission

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 In determining our accounting policy for fixed assets, we considered FASB Concept Statement 6,
Elements of Financial Statements, which defines assets as probable future economic benefits obtained or controlled by a company as a result of past events. In addition, the 2008 CCH GAAP Guide states that fixed assets have two primary
characteristics:

1.
They are acquired for use in operations and enter into the revenue-generating stream indirectly. They are held primarily for use, not for sale.

2.
They have relatively long lives.

 In our judgment,  1/4 mile of rail meets both of these characteristics because it is critical in
our revenue-generating stream (train operations would not be possible without rail) and because it has a long life (composite life of approximately 24 years). The cost of replacing  1/4 mile of rail should not be the major consideration in determining whether the rail is a capitalizable asset. In our judgment, our unit of property is acceptable and appropriate because it meets
the requirements of GAAP, it has been approved by the STB, and the cost of replacing  1/4 mile of tangent rail exceeds the
STB’s $5,000 minimum rule (our cost for  1/4 mile is approximately $120,000).

 We understand that our unit of property is in the middle of other Class I railroads’ units of property, which range from 39 feet (one stick of rail)
to one mile.

 Track Surfacing (Prior Comment 10)

 (a) Undercutting

5.
You have indicated that your unit of property for undercutting is one net ton of ballast. In regard to this unit of property, please tell us (i) the approximate dollar amount
that is capitalized in connection with one net ton of ballast; (ii) the approximate length of track that corresponds to one net ton of ballast; and (iii) the average length, and range of lengths, of continuous track that is part of an
individual undercutting project.

 Response:

 Track undercutting involves the removal and replacement of ballast and sub-grade that has become contaminated with silt, mud, and other matter that inhibit proper drainage of the track. During undercutting, a crew of
approximately 36 individuals employs specialty equipment to remove the contaminated ballast and sub-grade, replace any bad ties, replace the ballast with new or reclaimed ballast, and then surface and line the track to meet the U.S. Department of

 Michael Fay, Branch Chief

 U.S. Securities and Exchange Commission

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Transportation’s Federal Railroad Administration (FRA) standards for the applicable class of track. We manage our undercutting program in the same
manner as our rail and tie replacement programs; the program is planned in November and executed in the following year. Undercutting is also similar to the rail and tie replacement programs because an existing asset is retired and replaced with a
new asset. The scope of undercutting projects can have a wide range, from  1/4 mile to as many as 20 miles; however, projects are
generally more than one mile but less than five miles in length.

 The standard price paid in 2007 for one net ton of ballast was
$7.02; however, the average cost capitalized in connection with replacement projects was approximately $42 per net ton because most of the cost associated with ballast is not the cost of the rock, but rather the cost of the labor, machinery, and
fuel used in its installation. In addition, the amount capitalized for one net ton can have a wide range depending on the nature of the work performed. For undercutting projects, the cost per net ton is higher than for surfacing and lining projects
because of the amount of work being done, which requires more labor and more costly equipment. The length of track that corresponds to one net ton of ballast depends on the amount of ballast and sub-grade that must be removed below the bottom of the
ties (the amount of undercutting can range from six to twelve inches depending on the degree of contamination that exists), the type of ballast being used, the terrain around the track, the amount of ballast that can be reclaimed and reused, and the
amount of ballast required to meet FRA standards for the applicable class of track. Consequently, the number of railroad carloads of ballast required per mile can range from 30 to 60 (represents 2,850 to 5,700 net tons per mile).

6.
Please explain to us why the replacement of one net ton ballast is not considered the repair and maintenance of track structure. Since ballast is a component of track structure, it
appears that it should be evaluated against it. In addition, explain to us why you believe one net ton of ballast is substantial, and not more akin to the routine replacement of a minor part, which you expense as incurred. Based on the information
provided to us, we note that the cost to replace ballast is approximately $29 per foot ($48,000,000 / (311 miles * 5,280 feet per mile)). Accordingly, it appears that the replacement of less than a substantial length of ballast might be considered
similar to the replacement of a minor part.

 Response:

 The replacement of ballast is not considered repair and maintenance of track structure because ballast is a separate asset class and meets the GAAP
definition of an asset. When ballast is installed as part of an undercutting or surfacing and lining project, it represents a new asset and not the improvement of an existing asset. Consequently, significant cost is not the basis for capitalization.

 Michael Fay, Branch Chief

 U.S. Securities and Exchange Commission

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 FASB Concept Statement 6, Elements of