As the railroads grew in power, they exerted increasing influence on local and state governments, eventually prompting Congress and reform-minded presidents to pass laws to regulate the new industry.
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Since the new residents of the West could not survive without the use of the railroads, they were forced to pay whatever rates the raildroad companies set. With these huge stores of capital, the railroad companies were able to finance political campaigns through whatever and whomever was needed in government.
Between 1850 and 1872 extensive cessions of public lands were made to states and to railroad companies to promote railroad construction. [18] Usually the companies received from the federal government, in twenty- or fifty-mile strips, alternate sections of public land for each mile of track that was built.
The railroad opened the way for the settlement of the West, provided new economic opportunities, stimulated the development of town and communities, and generally tied the country together.
The railroad opened the way for the settlement of the West, provided new economic opportunities, stimulated the development of town and communities, and generally tied the country together.
During the Gilded Age railroads often tried to coax state governments into offering them favorable construction opportunities. In many cases, railroad companies bribed state legislators and attempted to influence them.
In the most notorious instance of corruption connected to the railroads, Union Pacific Railroad executives formed a sham construction company, Crédit Mobilier, that submitted bills for nearly double the construction cost of the eastern portion of the Transcontinental Railroad and pocketed the overcharges.
As the building of rail lines increased during the 1840s and 1850s, the direction of the nation's internal commerce shifted increasingly east-west. The growing economic ties between the East and the West promoted nationalism as well as stronger cultural and political connections between these regions.
The railroads not only set in motion the combined forces of mass production, distribution, and communication under which the American economy grew by leaps and bounds, they also shaped the foundation of modern capitalism.
Accordingly, on December 26, 1917, President Wilson took possession of the railroads by proclamation, under the authority of a provision in the Army appropriation act of 1916.
Railroads became a major industry, stimulating other heavy industries such as iron and steel production. These advances in travel and transport helped drive settlement in the western regions of North America and were integral to the nation's industrialization.
Just as it opened the markets of the west coast and Asia to the east, it brought products of eastern industry to the growing populace beyond the Mississippi. The railroad ensured a production boom, as industry mined the vast resources of the middle and western continent for use in production.
As a result, although rail transport has advantages such as high carrying capacity, economy, reliability and environmental impact, it also has some disadvantages such as limited flexibility, operating costs, necessity of intermodal connections and delivery time.