Transportation Deployment Casebook/American Railroads
Rail was the primary mode of mass transit and commercial transportation in the United States in the mid-19th century and reached peak usage in the early 20th century. The first iteration of American railroads was the early tramways in New England in the early 19th century. This system was mostly used for industrial purposes and did not carry human passengers. Early tramways featured freight cars on inclined grades that were moved by horses as part of a cable system. The tramways were located around quarries, mines, and factories to haul minerals, lumber, coal, and other goods. Payloads were moved along tracks called gangways by horses and in later years by precursors to the locomotive. Technological innovations to the locomotive increased the load volume each car carried and the rise in speed due to improvements in steam engine technology shortened the travel time from origin to destination. Additional backing from municipal and state governments in the mid-19th century focused toward promoting the expansion of rail networks and tended to eliminate funding for canals.
Main Advantages of Rail
Rail held several improvements over canals:
- Railroads provided more options for direct routes to urban areas and markets than canals
- Railroads were available for service throughout the year compared to canals
- Winters were especially difficult on canals in the northern United States
- Railroads carried more tonnage as the technology matured
- Improvements to existing canal networks were marginal
- The widespread adoption of railroads improved existing technologies
The primary markets for rail were ports and industrial centers that gave entrepreneurs greater access to natural resources. Business owners embraced the ability of railroads to carry raw goods more quickly than canals to processing centers, refineries, and other finishing shops. As the rail network expanded the business of rail became lucrative. Cornelius Vanderbilt began buying railroad lines in 1862 after he sold his steamboat business. John I. Blair constructed network of railroads throughout the Midwest, including the Union Pacific, which served as an important section of the transcontinental railway line. These two men are among the wealthiest citizens in United States history. 
Birth of American Railroads
The rail network in the United States was expanding in the late 19th century because the innovation of streetcars and heavy rail was superior to canals. The canal system began as a means to expand the enterprise of the gentry in early colonial America. When remarking on a proposed canal from Philadelphia to the Ohio River during a legislative session in 1790 the Governor of the Commonwealth of Pennsylvania, Thomas Mifflin, noted that route was “’a natural avenue from the shores of the Atlantic to the vast regions of the western territory,’ connecting ‘the extreme members of the union,’ and offering rewards beyond imagination.” The early canals were mismanaged and routinely ran out of funding before projects were completed.
The Industrial Revolution brought the use of machinery into American commerce. Investors wanted improvements in cargo volume and lower travel time from factory to market for their goods. Modern factories of the time reduced production time for many goods and made workers more productive. With more goods available for sale due to the innovations of the Industrial Revolution businesspersons looked to expand the scope of their market segments. Improvements to the steam engine enabled capitalists to broaden the areas that they were able to sell their products. Canals were effective for simple fur traders and for small agrarian areas but did not have the capacity that the growing industrial movement required for their businesses to grow. Railroads filled this market niche and would later become the supreme transportation mode in the United States.
Railroads surpassed canals as the major transit choice for long distance travel though there was initial opposition. Towns and canal owners resisted the new locomotive technology deeming it unsafe for widespread use. Proponents of railroads included corporations that were looking to build economies of scale and towns that were in favor of the connections to order industrialized areas
Growth of the Railroad
The beginning of the second half of the 19th century marked a boom period for rail construction in the United States. Track designers and railway entrepreneurs sought capital infrastructure investments from banks and other financiers. Railroads became the first means of mass transportation. By the 1850s there were large numbers of people travelling throughout the eastern United States. The railroads may be considered the first instruments that produced a recognizable American character and society.
During the growth phase of the American railroad network there is a clear delineation before and after the Civil War in terms of the total amount of track. The antebellum period from 1830-1859 was a time when the build out phase of railroads began to spread across the country. The average volume of track in a given year in the United States was 13,015 kilometers. The Civil War years may have affected railroad expansion considering the total volume of track was roughly the same from 1861-1865 with an average of 53,311 kilometers. From 1866-1877 the average volume of track rose to 96,388 kilometers.
Figure 2 shows the annual increase in track volume. There is a low amount of annual construction from 1830 to 1848. From 1849-1856 there is a surge of railroad construction peaking in 1856 with an increase of 5,896 kilometers over the previous year. There is a drop in rail construction through the end of the Civil War in 1864. From 1865 through 1871 there is a large spike in rail construction each year with the zenith in 1871 when 12,243 kilometers of new rail was built. Annual rail construction fell 75% overall from 1872 through 1877.
Before the Civil War there was an average of 1551 kilometers per year of railroad construction. The post-Civil War average was 5917 kilometers per year. This figure represents a 281% increase. Figure 3 is instructive of the growth period for the American railroad network. From 1880-1890 the US Census reports an increase of 73% in the number of locomotives in operation. Freight locomotives increased by 69% and passenger locomotives rose by 80%. White discovered that the bonded debt of American railroads rose from $416 million in 1867 to $2.23 billion in 1874 and $5.055 billion in 1890. Most of the funds were delivered through domestic investors but there was increasing investment from entities in Great Britain, Germany, and the Netherlands.
Near the end of the 19th century arguments were made for the nationalization of railroads due to economic reasons. The rationale was that a fully developed railroad system was essential to the future success of the United States. Improvements in the East would lead to control the food supply of the world as a result of the reduction of carriage on wheat and corn from Chicago to New York. That reduction would enable domestic producers of grains and various goods to undersell Russia in Europe while wheat farmers in the Dakotas and Minnesota would see a rebirth in demand for their exports. Figure 4 shows the continued expansion of the American railroad network though nationalization of passenger rail would not occur until well into the 20th century. The expansion peaked in 1916 with a total of 409,177 kilometers of railroad track in the United States. After 1916 the volume of rail slowly declines during the Great Depression era and the decline picks up steam as the United States approaches World War 2.
Figure 5 shows the annual change in track volume from 1890 through 1945. There is a sharp drop in annual track construction beginning in 1906. Railroads were becoming phased out in favor of automobiles as there is hardly any new rail construction after 1917. The period between the two world wars shows the outright elimination of rail or the addition of only several hundred kilometers per year. Each year after 1930 confirms a negative change in track volume.
Evidence for the decline of railroads in the United States can be found by studying the number of railways in operation. The number of railways grows from 1890-1907 reaching a maximum of 1,564. The total number of railways in operation in 1945 fell to 517; a 67% decline.
The railroad network in the United States is not as prominent in the early 21st century as it was in the same period of the 20th century. Changes in American lifestyle such as the dominance of the automobile and the adoption of the Interstate Highway Act of 1956 continued to linger over the railroad industry. High-speed rail (HSR) may be a mode that will emerge into national prominence. Federal spending must increase for this to occur because state and municipal governments do not have funding capabilities for HSR projects on their own.
- The New York Times. "The Wealthiest Americans Ever." 15 July 2007. New York Times. 1 October 2011 <http://www.nytimes.com/ref/business/20070715_GILDED_GRAPHIC.html>
- Shaw, Ronald E. Canals For A Nation: The Canal Era in the United States 1790-1860. Lexington: The University Press of Kentucky, 1990.
- Daniels, Rudolph. Trains Across The Continent: North American Railroad History. 2nd edition. Bloomington: Indiana University Press, 2000.
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- White, Richard. "Information, Markets, and Corruption: Transcontinental Railroads in the Guilded Age." The Journal of American History 90.1 (2003): 19-43.
- United States Department of the Interior. Report on Transportation Business in The United States at the Eleventh Census: 1890, Part I.-Transportation by Land. Part I. United States Department of the Interior. Washington: Government Printing Office, 1895.
- Latcha, J. A. "Railroads versus Canals." The North American Review 1 February 1898: 207-225.
- The Bureau of the Census. Historical Statistics of the United States 1789-1945. Washington: United States Department of Commerce, 1949.