RAILROADS

To those who witnessed its construction the railroad was a symbol of the progress of human civilization. Historians too traditionally assumed that the new mode of transport had a revolutionary impact. According to W. W. Rostow the railway was undoubtedly "the most powerful single initiator of [economic] takeoff" (p. 302). Doubts were provoked, however, by the counterfactual approach adopted by Robert Fogel in Railroads and American Economic Growth: Essays in Econometric History (1964). On the basis of some very questionable assumptions, the Nobel prize–winning economist attempted to calculate the cost to the economy if the railways had not existed. His conclusion was that "no single innovation was vital for economic growth in the nineteenth century." This really quite unexceptional insight was subsequently applied to most European countries. In accordance with Fogel's approach, the calculations in table 1 subsequently emerged, purporting to show the relatively small amount of "social saving" that resulted from the transport of freight by rail, rather than the alternatives, in Europe.

However, the theoretical and statistical model-building engaged in by the econometricians abstracts out of existence variables that cannot be quantified and tends to make simplistic and static assumptions concerning quantifiable elements. Furthermore the statistical information available is itself fragmentary and the subsequent calculations impossible to verify. Thus, and in spite of the claims made concerning

greater intellectual rigor, the results are no more nor less than suggestive pointers to questions that ought to be asked by more empirically minded social and economic historians interested in the perceptions and behavior of the historical actors themselves rather than in assumptions concerning the "rational" actions of the homo economicus beloved of classical economic theory. Furthermore, the assertion that much of the capital invested in railways might have been more profitably employed elsewhere, while valid for underused portions of the rail networks, ignores the intense pressure on governments to ensure construction coming from localities that otherwise would have been excluded from the benefits of "modern civilization." The calculations also tend to underestimate the impact of forward (to markets) and backward (to industry) linkages, as well as the complex interactions between technical systems. In comparison with previous transport technologies, in terms of the resources necessary for its construction as well as the linkages that developed, it still makes sense to claim that the railways promoted a "transport revolution" even if it has become unfashionable to use the term. Nevertheless Fogel's revisionism has had a significant outcome in promoting an important change of emphasis in the assessment of the characteristics of technological innovation and its social impact. It has become more clearly evident that the evolution of the railway as a technical system becomes explicable only in relation to specific economic, technological, and additionally sociocultural and political contexts.

construction

Transport facilities developed in response to perceptions of the need to reduce the cost and increase the efficiency of movement of people, goods, and information. Throughout the eighteenth century political economists such as Adam Smith (1723–1790) in Britain and administrators like Anne-Robert-Jacques Turgot (1727–1781) in France insisted with growing force on the close association between improved transport and greater prosperity. Merchants and manufacturers were only too aware of the practical impact of bottlenecks within existing communications networks. From around the 1740s, substantial investment followed in roads, canals, and port facilities. Success in achieving efficiency gains stimulated further innovation. In all of this, Britain, the first to experience the pressures of industrialization, took the lead. The application of steam power to haulage on the wagon-ways linking coal mines to waterways, on which rails had already been laid in order to reduce friction between wagon and surface and increase the pulling power of horses, represented the injection of a complex new technology into the existing road and water transport system, initially piecemeal and as a means of over-coming the shortcomings of existing modes of transport. It was followed by the construction of the first major-purpose-built railway from Liverpool to Manchester, opened on 15 September 1830. Although much of Britain already possessed efficient waterborne transport, there was substantial demand for railway construction. Moreover, throughout northwestern Europe, in relatively advanced societies the capital and skills necessary to build and operate the new networks already existed, while an increasingly widely shared culture of consumption encouraged international technology transfer and the adaptation of best practice to local circumstances. Enthusiasm for the new railway spread relatively rapidly within the more economically dynamic and densely populated areas of western Europe and then more gradually into regions likely to generate less traffic and toward the European periphery where capital and technical expertise were less plentiful.

Investment in rail had come to be seen as a technological imperative, an economic necessity, and additionally a means of promoting political integration. Space-time perceptions were fundamentally

altered. Indeed space appeared to have shrunk. Although in Britain rail construction was essentially left to private companies, on the Continent mixed regimes were the norm, reflecting particular legal and administrative traditions, concerns about public safety, and military-strategic interests. Decisions were the outcome of negotiations between ministers, senior civil servants, politicians representing the socioeconomic elites, and bankers. In France, the provisions of an 1842 law represented a compromise following a highly politicized debate between liberals like Louis-Adolphe Thiers (1797–1877) convinced of the superiority of the market in the allocation of resources and proponents of state intervention concerned to prevent the development of monopoly and protect the public service functions of the new mode of transport. It was agreed that the engineers of the state's Corps des Ponts et Chaussées should plan the layout of the primary network with its tracks, reflecting a political/administrative conception of space, radiating out from Paris and largely following the existing major lines of communication and of economic activity. While the state would finance construction of the roadbed, concessionary companies would accept responsibility for providing the superstructure and rolling stock. The unprecedented financial burden was thus shared.

Typically, in the case of a new technology construction costs would generally prove to be much higher than suggested by overoptimistic estimates. The construction process had a substantial impact on financial markets. In France rail investment amounted to 10 to 15 percent of gross domestic capital formation between 1845 and 1884. Fluctuations in investment by the railway companies inevitably had a significant influence on the business cycle. The provision of capital through the auspices of private banks, with the Rothschilds to the fore, and the subsequent sale of bonds and shares spread the habit of purchasing financial assets. A speculative boom was followed by the collapse of concessionary companies during the lengthy midcentury crisis, and briefly, following the Revolution of 1848, complete nationalization was considered. Instead the establishment of authoritarian government following Louis-Napoleon Bonaparte's coup d'état in December 1851 was followed by efforts to restore business confidence by extending the length of concessions and encouraging amalgamations to create financially stronger regional companies. Public pressure to be linked to the only means of cheap and rapid transport ensured that further construction remained a political imperative, and from 1859 a series of conventions that provided for state guarantees of dividends stimulated further extension of the network. This culminated in the laying of narrow-gauge lines and local tramways at the beginning of the twentieth century.

Elsewhere the situation varied, ranging from a mixture of state and private companies to complete state control in Belgium as a means of reinforcing the independence of the recently created state while at the same time integrating its economy into that of Western Europe. In the various German states, Italy, and Austria-Hungary the balance between state and private companies was increasingly altered by the nationalization of failing companies. External investment of capital and construction skills, initially by Britain and subsequently France, was substantial. For the Austrian Empire the railways appeared to offer an opportunity to secure the political and financial dominance of Vienna and to promote an economic modernization based upon the more intense industrialization of the Czech lands and the commercialization of Hungarian agriculture. In the case of Russia, where the state itself prioritized defense expenditure, there were two major periods of rail construction, in the 1870s and 1890s. In addition to the stimulus afforded to agriculture, the railways also provided efficient links between coal and iron deposits promoting heavy industry in the Donets Basin in Ukraine and engineering in St. Petersburg and stimulating the further development of the established industrial regions around Moscow and the Baltic, and in Warsaw and ?odz in tsarist Poland. While the impact of rail construction varied considerably within countries, in general it was the major urban centers, the lowlands, and major river valleys in which population and economic activity were already concentrated and which had been well placed within the pre-rail water/road networks that especially benefited. Unfavorable topography, particularly in the uplands, could add considerably to both construction costs and, as a result of high fuel costs and low speed, to subsequent operating expenses, while limited utilization in economically less dynamic regions inevitably meant that fixed costs were distributed over a low level of traffic. Along the Scandinavian coasts sea-borne transport continued to be preferred.

Progress would be slowest where low levels of economic activity and governmental instability discouraged outside investors. As a result, in Italy the existing disparities between the north (Turin, Milan, Genoa) and the south became even more pronounced. Outside the Po valley, where the major lines had been constructed even before the establishment of national unity in 1861, the trunk routes were primarily of political and strategic importance. A rugged terrain ensured high operating costs. In more "peripheral" areas of the Iberian Peninsula and the Balkans, rail construction would in particular facilitate the development of agriculture and mineral extraction. Designed to support the export of raw materials, the configuration of the Spanish network typically took on a quasi-colonial shape.

Various forms of state subsidy sought to reduce the uncertainties in order to accelerate the process of "modernization." Nevertheless, even where private companies predominated, the establishment of freight and passenger tariffs involved constant negotiation. While the companies were anxious to

maximize their returns and adapt charges to the diversity of demand, government officials were concerned about the quasi-monopoly powers enjoyed by railway companies on most of their routes. The commercial flexibility of the companies was thus restricted. Direct state ownership, on the other hand, tended to result in higher charges designed to supplement the public revenue. Even so, substantial and repeated reductions in transport costs undoubtedly stimulated economic growth and increased traffic. In Germany freight rates by 1900 were one-quarter of their 1845 level; in Belgium they fell from 10.8 centimes per metric ton-kilometer in 1845 to 3.6 by 1913.

Historians have generally focused on the "big" innovations and neglected the incremental impact of smaller changes. Technologies tend to be improved as part of the process of diffusion. The reduction in freight rates and passenger fares achieved by the railways was thus not a once-and-for-all achievement. Over time, as traffic built up and the shortcomings of the earlier lines became evident, considerable improvements were made in their operating efficiency. This was achieved as a result of improved mechanical and civil engineering that involved most notably the replacement of iron with steel in the construction of more durable steel engine boilers and production of rails capable of carrying heavier trains. The development of more powerful and fuel-efficient compound engines ensured that in France, whereas the typical Crampton goods engine had weighed 125 kilograms for every horsepower generated in the 1870s, by 1913 this had been reduced to 50 kilograms. The introduction of continuous brakes (from 1869) and electric signals (from 1885) represented responses to safety concerns and to the congestion evident on most major lines from the 1870s. With traffic generally exceeding expectations, passenger stations, goods yards, and engineering workshops were all rapidly in need of enlargement. In Britain rail freight amounted to some 38 million tons in 1850 and 1.996 billion (expressed in U.S. figures) by 1875. In France traffic increased by around 4 percent per annum between 1851 and 1913, with 70 percent of all freight being moved by rail. More bureaucratic and systematic business procedures and accounting practices also contributed to the efficient utilization of equipment and labor. Major stations like Frankfurt, with a staff of over one thousand in 1904, were vital hubs of activity. Military-style regulations were imposed on the labor force in the interests of both safety and efficiency. Efforts were also made through complex bonus systems and pensions to instill a sense of pride and loyalty within a labor force that in Britain had grown to 600,000 and in France to 355,000 on the eve of World War I.

linkages

The broader impact of rail construction has generally been discussed in terms of "backward" and "forward" linkages. The most profound effect of improved communications was to reduce market fragmentation. As markets were widened many enterprises experienced a crisis of adaptation as new opportunities for profit were created but within more competitive markets—a situation

that promoted technical and organizational innovation. The reduction in transport costs and, in effect, of the cost of the final product for consumers, as well as the more rapid diffusion of marketplace information, was especially significant for products of low value in relation to weight such as coal, iron ore, building materials, and agricultural produce and for the finished products of the metallurgical, engineering, chemicals, and textiles industries. Falling prices stimulated the growth in demand for a wide range of products, further stimulating the creation of a mass market. This was particularly evident in regions lacking efficient waterborne communication, as in Germany, where fragmentation of economic space due to the lack of east-west river links had been particularly evident.

In the case of backward linkages, a massive stimulus was afforded to metallurgy and engineering. Demand for rails and rolling stock accounted for 13 to 18 percent of iron and steel orders in France during the height of the railway boom between 1845 and 1884 as well as for 12 to 18 percent of building materials, although subsequently demand was increasingly restricted to extensions to the network and replacement. The needs of the railway, together with competitive pressure, provided a vital stimulus to innovation designed to increase both the volume and quality of production. In metallurgy this involved the transition from small charcoal-based to large coke-using furnaces and the development of the refining, puddling, and rolling processes. Initial dependence on imports and on technological borrowing from Britain and Belgium was short-lived. Thus by the mid-1850s Germany had already achieved self-sufficiency in locomotive production, and companies like Borsig in Berlin were already looking for export markets. The supply of coal was also substantially increased as falling transport costs for domestically produced coal and rising demand from industry and the railways themselves encouraged increased production and in areas like the Ruhr or northern France led to the emergence of coal-based technical systems. Coal producers in an area like the Loire basin, which had previously dominated regional markets due to its position within the waterway network, now however faced competition from more efficient mines in the north, the owners of which themselves complained about the competitive threat from Belgian and from seaborne British coal, penetrating inland as a result of rail company efforts to generate traffic from the ports serving their networks. Improved transport not only increased the elasticity of supply of coal and other raw materials and reduced their cost, but by providing for the greater regularity of supply also ensured that industry was less susceptible to price fluctuations, as well as allowing the reduction of stocks, which had previously tied up substantial capital.

The railways thus served as a "leading sector" stimulating the modernization of key sectors of the industrial and commercial economy and also the development of agriculture. Thus the equalization of regional and then of international grain prices substantially reduced the age-old association between climatic conditions and food prices and considerably increased food security. By the 1880s half the Russian wheat harvest was being transported to western Europe from rapidly developing ports like Odessa. Cereals from the Hungarian plains increasingly met Austrian needs. The bulk transport of wine and livestock, as well as of perishables like meat, fruit, vegetables, and dairy products, encouraged agricultural specialization and modified dietary practices. The more intensive commercialization of farming sustained a growing demand for inputs including chemical fertilizers as well as for manufactured goods at the same time, however, that the concentration and increased scale of industrial production effected a rapid decline in dispersed rural manufacture and the deindustrialization of many regions. Furthermore, competition from large industrial flour mills at the ports sounded the death knell for numerous rural mills, while the construction of railways outside Europe and particularly in North America, together with falling maritime freight rates, promoted a process of globalization and heralded the onset of the "great depression" in European agriculture. It was hardly surprising, as import penetration increased, that both rail freight rates and tariff protection would become major political issues.

As well as promoting the concentration of industrial and commercial activity and thus the increased concentration of population, the railways made possible the massive transportation of the building materials needed for urbanization. The construction and then reconstruction of passenger stations with train sheds made of iron and glass behind more traditional facades, and of extensive goods yards, was in itself a central feature of the redevelopment of city centers. By the end of the century Paris had eight rail termini and Berlin seven. Their construction fundamentally affected land use and the flows of traffic and people. City centers were increasingly clogged by vast numbers of horse-drawn carriages, buses, trams, and carts. While the areas inhabited by the better-off classes were largely spared, large numbers of poorer people were displaced by the construction of lines, bridges, viaducts, and stations, and even if the relatively impoverished were increasingly likely to travel by train or tram it was the middle classes who were best placed to enjoy the suburban living that cheap mass transport made possible. In countless small towns and rural areas too the station offered a new hub for economic activity, ever more closely focused on provisioning the growing urban centers. Road traffic, which had been displaced from routes parallel to the railways, grew substantially for relatively short-distance movement to the nearest railway station. Migration too was made easier, whether to the city or to the ports and on, across the Atlantic. Construction of the Trans-Siberian Railroad from 1905 eased the movement of around 250,000 people each year from western Russia in search of a better life.

In addition to facilitating the movement of goods and people the railways, together with the electric telegraph (introduced by the Great Western Railway in Britain in 1839 and in France from 1845), combined to considerably increase the

speed and volume of information diffusion. The latter had initially served as an "enabling technology," constructed alongside the railway as a means of controlling traffic and then spreading outward. The number of telegrams dispatched rose in France from 500,000 in 1858 to 51 million in 1913. The first transatlantic cable entered service in 1866, heralding a growing globalization reinforced by the development of more efficient rail-borne postal services and of mass-circulation newspapers. In France the number of items sent through the post rose from 254 million in 1850 to 3.724 billion in 1913;in Germany the rate of increase was even more rapid, from 85.9 million to 7.024 billion during the same period. As well as reinforcing trends toward market integration, rail and telegraph also brought political centralization closer by increasing the efficiency of administrative reporting systems and the potential for central control over the provinces. The telephone represented further technical innovation to provide a more flexible means of communication in the office and home and became increasingly attractive as more extensive networks developed. There were 12,000 telephones in use in France in 1889 and 310,000 by 1913. In that year 430 million calls were made. In Germany the corresponding figures were 37,000 rising to 1,428,000, with the number of calls reaching 2,518 million. As well as stimulating business and personal contacts, improved communications also had substantial military implications, both for internal security and the waging of war. In 1846 Prussian troops were transported to Kraków to suppress a Polish revolt; in order to achieve concentration for the 1859 campaign against Austria fought in northern Italy, the French moved substantial numbers of men and horses by rail. The experience of the Franco-Prussian war in 1870 and of mobilization in 1914, however, revealed that, on the one hand, incompetent planning could result in chaos, and on the other, that sustained efforts to remedy deficiencies might result in the rigidities associated with the Schlieffen Plan (Germany's early-twentieth-century military deployment plan). Moreover, movement away from railheads continued to be on foot or dependent on horse transport.

conclusion

The railway might be viewed as a means of easing transport bottlenecks in an advanced economy (Britain, Belgium) or else as a leading sector promoting broader economic development (France, Germany, Russia). Nevertheless, even if the impact of railway construction, and that of the improvements in information diffusion it stimulated, varied between regions, there can be little doubt that it was everywhere considerable. The economic and social geography of Europe was modified substantially. In spite of continuities, the construction of national rail networks, followed by the development of international links, contributed to rising levels of productivity in both agriculture and industry. Even if the benefits were shared unequally, widespread and substantial improvements in living standards were evident. The development of coal-based technological systems also, however, substantially increased the capacity of states to wage destructive military campaigns and to sustain the war effort over long periods. In the last analysis, the impact of the railway, and of any technology, thus has to be assessed to a considerable degree in relation to the perceived interests of those who controlled its development and subsequent use.

See alsoCoal Mining; Industrial Revolution, First; Industrial Revolution, Second; Science and Technology; Transportation and Communications.

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Roger Price