Railroads completely transformed the United
States socially, politically, and economically during the Gilded
Age. Literally the engine of the new industrialized economy, they
facilitated the speedy transportation of raw materials and finished
goods from coast to coast. In addition to raw materials, these “iron
horses” carried people west to settle the heartland and the frontier.
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.
After the Civil War, rail tycoons such as Cornelius
Vanderbilt capitalized on the conversion of their iron tracks to
steel, which allowed them to lay more track for only a fraction
of the cost. As a result, by 1900,
the United States boasted almost a quarter of a million miles of railroad
track. In turn, steel magnates such as Andrew Carnegie benefited
from the increased demand for steel and responded by producing more.
As consolidation and innovation streamlined costs, it became cheaper
and faster to ship raw materials, manufactured goods, foodstuffs,
and oil via rail than by steamship.
Railroads transported people, too, and contributed, more
than any other single factor, to the transformation and development
of the West. Although more than a million Americans had moved westward
in the days of “manifest destiny” before the Civil War, trains brought
millions more throughout the latter half of the nineteenth century.
Railways made it physically and economically feasible for Americans
to settle Montana, Wyoming, Idaho, Arizona, New Mexico, Colorado,
North and South Dakota, Nebraska, and Oklahoma in large numbers.
At the same time, the decimated population of native grassland bison
testified to the negative consequences of this drastic transformation
of the Midwest.
As railroad companies grew in power, they exerted more
and more influence on local politics and economics. Unscrupulous
“robber barons” extorted the public by charging outrageous rates,
distributing uncompetitive rebates to preferred customers, accepting bribes
and kickbacks, and discriminating against small shippers. Public
discontent with the railways emerged in small farming communities
throughout the Midwest—a discontent that ultimately helped form
the backbone of the populist movement. Populists, like the socialists
of the early twentieth century, wanted to curb railroad corruption
by nationalizing all lines.
Even though Populism eventually faded, cries
for railroad reform did not, prompting the federal government to
take action. In 1887,
for example, Congress created the Interstate Commerce Commission (ICC),
which supervised railroad companies that operated in more than one
state by outlawing unfair rebates and ordering companies to publish
fares up front. The Elkins Act of 1903 and
the Hepburn Act of 1906 strengthened
the ICC by restraining railroad companies further. In addition,
the Supreme Court ordered the dissolution of James Hill’s and J.
P. Morgan’s Northern Securities Railway in 1904.
Railroads thus transformed American society, politics,
and economy unlike any other invention during the Gilded Age. They allowed
big business to prosper and people to settle the West and Midwest.
Ultimately, public reaction against the railroad barons’ uncompetitive
business practices formed the backbone of the reform-minded Populist
and Progressive movements around the turn of the century.