RAILROADS

In the optimistic years following the Treaty of Ghent (1814) major eastern cities sought to capture the trade of the expanding West. Taverns across the country heard the arguments of merchants, politicians, and farmers as they voiced the rival claims of turnpikes and canals, of steamboats and railroads. Businesspeople in New York City and Philadelphia favored canals and river steamboats, but the merchants of Baltimore, Charleston, and Boston sought to reach expanded western markets with railroads, which first appeared in America in the 1820s. The Baltimore & Ohio Railroad by 1831 had completed a line to Frederick, Maryland, and replaced horses with steam locomotives.

The acceptance of railroads came quickly in the 1830s, although there was some opposition: divines preached against the "iron horse," doctors warned of the excessive speed, and canal, turnpike, and coaching companies, of course, were hostile. But most Americans agreed with the French economist Michel Chevalier, who wrote, "The Americans have a perfect passion for railroads." By 1840 the New England and Mid-Atlantic states had 2,083 miles of track, seven southern states had a total of 636 miles, and the Old Northwest had 89 miles. The nation had almost 3,000 miles of railway, whereas all of Europe had only 1,800 miles. In 1847, Daniel Webster claimed the railroad "towers above all other inventions of this or the preceding age."

The iron network expanded quickly during the 1840s. Trackage increased over 150 percent in the Northeast, more than tripled in the South, and grew a dozenfold in the Old Northwest. In the 1830s many lines had more passenger revenue than freight, but the next decade saw freight traffic dominate. By 1850 the typical freight train consisted of a dozen cars, each of about ten-ton capacity. The double truck eight-wheel passenger coach had long since replaced the original stagecoach design. The typical locomotive was a wood-burning American type (a swiveled four-wheeled truck ahead of four drivers), bright with brass and paint, with a functional cowcatcher, large headlight, and balloon stack.

American railroads, a broken skein of 9,000 miles in 1850, became a national network of 30,000 miles in 1860. Iowa, Missouri, Arkansas, Texas, and California built their first lines during the 1850s, and by the end of the decade the network had reached the frontier. Northern and western lines were usually built in the English 4-foot-8 1/2-inch track gauge, and most southern roads in the 5-foot gauge.

Four important Mid-Atlantic lines reached Lake Erie or the Ohio River early: predecessor lines of the New York Central, the Erie, the Pennsylvania, and the Baltimore & Ohio. Chicago saw its first locomotive in 1848, had rail service to the East in 1853, and was served by eleven railroads with a hundred daily trains in 1860. Shippers welcomed year-round rail service—it was faster than the competition, cheap- er than turnpikes, and more direct than canal packets and steamboats.

Railroads were big business in mid-century. Few other concerns employed so many men so varied in skill, did business on so vast a scale, had operations so intricate, or financed themselves in such a variety of ways. The total investment in American railroads grew from $300 million in 1850 to $2.5 billion in 1870. Most of the investment was private, but many state and city governments also helped finance early railroads. The thousands of miles of east-west lines built across Illinois, Indiana, and Ohio during the 1850s had strengthened commercial and political ties between the industrial East and the agricultural West by the eve of the Civil War.

That war was the first American conflict in which railroads played a major role. In mileage, equipment, employees, and the ability to build and repair rails and equipment, the South was much weaker than the North. Moreover, since most of the fighting was in the South, Confederate railways were in a shambles by 1865, while Yankee railroads had grown stronger.

During the war and after, Cornelius Vanderbilt of the New York Central, John Edgar Thomson of the Pennsylvania, and John W. Garrett of the Baltimore & Ohio continued to push their lines to the major cities of the Old Northwest. The most dramatic construction, however, was west of the Mississippi; European railroads usually served established communities, but American railroads often created new centers of population. As the Union Pacific and Central Pacific track crews raced each other to their 1869 "golden spike" ceremony in Utah marking the meeting of the east-west rails, they were building through territories still years away from statehood.

Many western lines received federal land grants to aid their construction. Between 1850 (when the Illinois Central-Mobile & Ohio route obtained the first grant) and 1871 the railroads received more than 131 million acres of land for nearly 19,000 miles of line. All land-grant roads were required to give reduced rates for federal traffic, and these savings to the government were roughly equal to the value of the land grants.

The national rail network grew from 35,000 miles in 1865 to 93,000 miles in 1880, and the railroads enjoyed a golden age of rapid growth and development between then and World War I. During the 1880s more than 70,000 miles of line were built, with 164,000 miles in operation by 1890. Most of the construction was in the trans-Mississippi West, and four Granger lines continued to expand in the northern central plains region. Several Pacific roads were completed in the early eighties and James Hill's Great Northern a decade later.

Railroad construction declined in the 1890s after the panic of 1893, just as it had during the panic of 1873. Labor trouble accompanied each depression—the railroad strike in 1877 and the Pullman strike in 1894. Labor lost both times since it was not well organized except for the big four brotherhoods (engineers organized in 1863, conductors in 1868, firemen in 1873, and trainmen in 1883). Because of the depressions, a quarter of the lines were in receivership by 1894, although many later reorganized under J. P. Morgan & Co. or Kuhn, Loeb, & Co. Mergers and consolidations followed, and by 1906 about two-thirds of the nation's mileage was controlled by seven rail groupings under the leadership of such magnates as James J. Hill, Edward H. Harriman, and J. P. Morgan. Mileage continued to expand and by 1916 the national network was at a record high of 254,000 miles.

In the late nineteenth century railroads achieved many technical advances that greatly improved the efficiency and uniformity of operation. The use of heavier rails, bridges built across the Ohio, Mississippi, and Missouri rivers, and the introduction of block and interlocking signals all led to improved service. Standard time zones were adopted in 1883, and three years later the last of the five-foot gauge lines in the South were changed to standard gauge. Automatic couplers and air-brakes had appeared by 1870. After the Civil War most locomotives burned coal instead of wood, and fuel oil was first tried in 1887. As engines became heavier and more powerful with extra drivers and a wider firebox, average train loads grew from one hundred tons in 1870 to five hundred or more tons by 1915. Labor productivity in freight services more than doubled between 1880 and 1916. Passenger travel became safer and more comfortable with the introduction of dining cars in 1868, steam heat in 1881, solid vestibule trains and electric lights in 1887, and all-steel coaches in 1904.

These many innovations permitted a decline in average freight rates from about two cents a ton-mile in 1865 to .75 cents a ton-mile by 1900. With such low rates Texas cattle, Chicago packed meat, New England shoes, Pittsburgh steel, Moline plows, and Twin City flour could all be moved economically greater and greater distances. American industry boomed and local or regional markets became national. The nation's rail freight grew from 10 billion ton-miles in 1865 to 366 billion ton-miles in 1916, and the per capita rail freight from 285 ton-miles per year to 3,588 ton-miles. In 1916 the nation's railways were carrying 77 percent of the intercity freight traffic and 98 percent of the intercity passenger business.

But these years were also years of corruption, discrimination, and increased regulation. In the South railroad carpetbaggers were milking many a railroad exchequer, and western builders were making extra profits from "false front" construction companies like the Crédit Mobilier of America. In the East, Jim Fisk, Jay Gould, Tom Scott, and Commodore Vanderbilt were rigging the stock market, issuing watered stock, engaging in rate wars, or building nuisance lines in a competitor's territory. Western farmers protested freight rate discrimination, railroad pooling, rebates, and free passes, and through Grange-sponsored legislation created state regulatory commissions. In 1887 the federal government established the Interstate Commerce Commission (icc) to ensure "reasonable and just" freight rates, although early rate cases were usually decided in favor of the railroads. During the Progressive Era the Elkins Act (1903), the Hepburn Act (1906), and the Mann-Elkins Act (1910) prohibited free passes and rebates, and gave the icc greater control over freight rates. Tougher regulation came at the very time that new competition was appearing by highway, air, and pipeline.

In April 1917, when the United States entered World War I, the railroads were not well prepared for the rush of traffic. Many lines were short of locomotives, cars, and proper maintenance since the icc had denied rate hikes to meet higher operating costs. Severe winter weather increased record car shortages, and in December 1917, President Woodrow Wilson placed the railroads under federal operation, a control that continued for twenty-six months. The federal operation was both necessary and inevitable, but rail managers believed that director-general of railways William G. McAdoo had excessively increased wages and created work rules that would imperil operating efficiency. The Transportation Act of 1920, which returned the lines to their owners, was intended to ensure the railways a fair rate of return of about 6 percent on the investment. The actual return from 1921 to 1930 averaged under 4.5 percent. In the 1920s the railroads faced new competition from interurbans, buses, trucks, private cars, airlines, and pipelines. This competition would grow worse, but already by 1930 the rail share of commercial traffic had dropped to 75 percent for freight and 68 percent for passenger traffic.

Traffic, wages, and profits dropped sharply during the depression. The average rate of return was only 2.25 percent for the decade, and in 1938 about 31 percent of the nation's mileage was bankrupt or in receivership. But World War II revived the railroads and they outdid themselves in a cooperative effort to avoid federal operation. Using nearly a third fewer locomotives, cars, and workers than in World War I, they provided freight and passenger services from 1942 to 1945 that were 50 percent above the peak World War I year of 1918. The wartime prosperity enabled the railroads to retire $2 billion of bonds, or nearly a fifth of their funded debt.

Of the many technical advances appearing in the postwar years the diesel locomotive was the most important. Diesel units were not cheap, but their low consumption of fuel and water, modest maintenance costs, and long hours of service made them popular. First used in freight service in 1941, diesel units were providing more than 92 percent of all switching, passenger, and freight service by 1957. New types of freight equipment, heavier rail, longer trains, and the use of radio and improved traffic control all helped upgrade freight service.

After the war some lines improved their passenger service with new streamliners, including vistadome cars and slumber coaches, but this did not slow the sharp decline in passenger traffic. Between 1940 and 1965 the rail share of intercity commercial passenger traffic had fallen from 64 percent to 17 percent, and that of freight from 61 percent to 44 percent. In the sixties, seventies, and eighties the use of welded rail, microwave communication, computers, mechanized track maintenance equipment, unit trains, and greater piggyback and container service slowed the decline somewhat, but by 1987 railroads provided only 36 percent of intercity freight traffic and 3 percent of passenger service.

In 1971 Congress created Amtrak passenger service over a 24,000-mile network, ending nearly all other rail passenger service, and five years later, it created Conrail to provide freight service for six northeastern bankrupt railroads. Both Amtrak and Conrail were government subsidized, but Amtrak was paying 69 percent of its way by 1988, and Conrail, in the black by 1981, was sold to private interests in 1987. The Staggers Rail Act of 1980 liberalized much of the federal railroad regulation and helped provide a rate of return of 5.5 percent in the mid-1980s, well above the 2 to 3 percent of earlier years. Even with the major reduction both in work force and total mileage American rail freight ton-mileage in the late 1980s was a third larger than that of World War II. Railroad managers still complained of featherbedding by labor but had to admit that labor's efficiency in handling freight was doubling every fifteen years. In the late 1980s the nation's railways could look back proudly on a century and a half of service to the American Republic. The inherent economy of the flanged wheel running on a steel rail is so great that American railroads remain a viable form of transport.

Alfred D. Chandler, Jr., The Railroads: The Nation's First Big Business (1965); Oliver Jensen, Railroads in America (1975); John F. Stover, The Life and Decline of the American Railroad (1970).

John F. Stover

See also Brotherhood of Sleeping Car Porters; Crédit Mobilier of America; Gould, Jay; Interstate Commerce Commission; Morgan, J. Pierpont Railroad Strike of 1877; Transportation Revolution; Vanderbilt, Cornelius.