Railroad Industry

RAILROAD INDUSTRY

The U.S. railroad industry began with the founding of the Baltimore and Ohio Railroad Company in 1827. The Baltimore and Ohio was the first U.S. railroad chartered as a common carrier of freight and passengers. It was only two years earlier that John Stephens from Hoboken, New Jersey built the first steam locomotive in the United States. The railroad itself had originated some years before in Great Britain. Railroads achieved great significance later on when the western part of the North American continent was being settled. They enabled transport and expanded the possibilities of the agricultural industry. They also played an important role during the American Civil War (1861–1865).

The first operating line on the Baltimore and Ohio Railroad carried passengers from Baltimore to Ellicott's Mills (later renamed Ellicott City). The line was only 13 miles long. In the 1830s railroad companies began to spring up in other parts of the country. By 1834 the tracks of the Baltimore and Ohio Railroad reached West Virginia.

Several other railroads came into being at around the same time as the Baltimore and Ohio. The South Carolina Canal and Rail Road Company completed construction of its gauge line from Charleston to Hamburg in 1833. It was the first railroad line in the United States that used a steam locomotive to run scheduled passenger operations. It was also the longest then operating in the United States. Eventually it became part of the 10,000 mile Southern Railway System.

The Galena and Chicago Union Railroad began operation in 1848 with the first locomotive in Chicago. The first line to run from Chicago to points along the Mississippi River started in 1854. As the railway industry expanded westward, many towns and cities came into being as railroad "division points." There eventually were nine major routes going from the Midwest or South to the West Coast. Cities and manufacturing centers were no longer dependent on water transportation after the onslaught of railroads. They could therefore be located away from rivers and canals.

In the early years of the railroad industry, state governments significantly aided railroad construction in the United States. The federal government gave land grants for building railroads after the American Civil War. The country had 30,000 miles of track on the eve of the war.

U.S. railroad companies were mainly based in the north of the country. This gave the Union (Federal) effort in the American Civil War an important advantage. The railway was used to transport troops and supplies. Construction of railroads was slowed down during the war, but resumed on a high level immediately following the war. The American Civil War was the first war in which railroads played a major role.

The railroads became an essential means of transport during the era of industrialization in the United States. In the 1880s railroad construction reached a peak with 70,000 miles of track being built during that decade. The first transcontinental railway route had been completed shortly after the war. In 1969 the Union Pacific tracks met the tracks of the Central Pacific Railroad at Promontory Point, Utah.

The evolution of the railroad industry was strongly linked to other industries. In the late nineteenth century a decrease in the price of coal was brought about by an increase in anthracite coal mining. That lowered the price of coal-fueled steam engines as well. Innovations in the steel-making process introduced by Scottish-born U.S. industrialist Andrew Carnegie (1835–1919) made possible the production of more durable rails. Steel rails were first introduced in 1857 in England. Captain James B. Eads built the first steel bridge was built between 1867 and 1873, over the Mississippi River at St. Louis. Another type of bridge called the timber-truss was adapted to support trains shipping heavy loads. It had originally been developed by a number of U.S. inventors in the early nineteenth century.

The railroads were the first truly big business in the United States. As such, they were at the center of many protests and conflicts. During the 1870s a farmers' group called the Grange protested the high rates that the railroad charged for shipping. The Supreme Court eventually ruled that states would have the power to regulate businesses with a strong public aspect. However, no regulation was imposed on the national level. In 1877 railroad workers organized the first nationwide strike. Between 1881 and 1905 there were 36,757 strikes throughout the country. As an outcome, the emergence of railroads resulted in the forming of the most prominent labor unions in the United States. The railroads were regulated by the Interstate Commerce Act of 1887. Yet rival companies in many industries, including the railroads, formed huge trusts despite the legal obstacles. This knocked out competition coming from smaller companies. In 1902 a suit was filed against the railroad monopoly founded by James J. Hill (1838–1916) and J.P. Morgan (1813–1890). The suit was directed by President Theodore Roosevelt (1901–1909).

The railroad industry continued to grow in the decades that followed despite all the setbacks. But by the 1950s and 1960s it started to decline as air travel and air shipping became less costly. By that time, railroads were used mostly for transporting materials such as coal, grain, and lumber. In the 1980s an increasing reliance on the trucking industry for transport represented another setback to the U.S. railroads. But by the end of the decade the industry had for the most part recovered due to technological innovations and industry deregulation. It was at its highest since it began to decline in the 1950s.

There were 535 registered railway companies in the United States in 1992. The 13 companies dominating the freight railroad industry employed around 200,000 workers. The largest of these was Union Pacific Railroad, with sales exceeding $7 billion, with Amtrak (the National Railroad Passenger Corporation) dominating the passenger railroad industry. In the 1990s rail employees were overall the best paid segment of the working population.

The railroads continued to be linked to the development of other industries. The technological innovations that helped the resurgence of railroads in the 1980s mostly had to with the telecommunications and computer industries. They also involved the development of high-speed trains using magnetic levitation systems along with the traditional wheel-on-rail trains. The railroad industry thus continued to play a significant role in economic development and on the transport service market.

See also: Baltimore and Ohio Railroad, Central Pacific Railroad, Great Railroad Strike of 1877, New York Central Railroad, Pennsylvania Railroad, Pullman Palace Car Company, Pullman Strike, Railroad Gauges (Standardization of), Railroad War Board, Railroads (Federal Land Grants to), Santa Clara County v. Southern Pacific Railroad, Transcontinental Railroad, Union Pacific Railroad Company

FURTHER READING

Encyclopedia of American Industries. Detroit: The Gale Group, 1997.

"Forbes Annual Report on American Industry." Forbes, January, 4, 1993.

Holbrook, Stewart. The Story of American Railroads. New York: American Legacy Press, 1981.

Nash, Gary B., et. al., eds. The American People: Creating A Nation and a Society. New York: Harper and Row, 1986.

Welty, Gus. "Rebuilding America's Railroads: The Information Evolution." Railway Age, February 1993.

the railroads were the first truly big business in the united states.