How did the expansion of railroads affect the economy?

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.



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Efficient rail transportation demanded a more uniform time-keeping system. Rather than turning to the federal governments of the United States and Canada to create a North American system of time zones, the powerful railroad companies took it upon themselves to create a new time code system.

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The railroad became a way for companies to ship to each other from across the country, transport raw materials to factories, and send final products to consumers. Not only did the railway system grow due to the flourishing businesses, but corporations expanded as well due to the growth of the railway system.

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First, the increase in roads, canals, and railroads allowed Americans to move goods and people much faster and farther than ever before. Farmers in the western states could now sell their goods to people in eastern cities.

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One negative effect were building and running the railroads was difficult and dangerous work. More than 2,000 workers had died. Another 20,000 workers had been injured. A positive is railroads made long-distance travel a possibility for many Americans.

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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.

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BUT, our results also imply that the railroad was the cause of midwestern urbanization, accounting for more than half of the increase in the fraction of population living in urban areas during the 1850s.

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The railroads accelerated the pace of the Industrial Revolution. New technologies, such as machine building and iron and steel production, advanced to meet the demands of railroad growth. By providing cheaper and faster freight delivery, the railroads helped create a new national market.

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Many attributed their problems to discriminatory railroad rates, monopoly prices charged for farm machinery and fertilizer, an oppressively high tariff, an unfair tax structure, an inflexible banking system, political corruption, corporations that bought up huge tracks of land.

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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.

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The developing railroads rapidly became huge businesses, imperative to the success of American enterprise. The material needs of the railroads helped create several other big industries, such as iron, steel, copper, glass, machine tools, and oil.

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The increase in railroad mileage made it possible to transport goods and people over long distances quickly and efficiently. This led to the creation of a national market for goods, which in turn encouraged mass production and mass consumption.

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The railroad monopolies had the power to set prices, exclude competitors, and control the market in several geographic areas. Although there was competition among railroads for long-haul routes, there was none for short-haul runs.

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