Railroads Impact on Economy
Railroads changed the economic systems in America. Before railroads, there was many small business and family businesses. Railroad companies consolidated with other companies or bought them out to expand their companies. The Pennsylvania Railroad Co. had bought, consolidated, or owned parts of other companies. This style of business was first of its kind in America. Small businesses soon died out when they could not compete with the resources or prizes that larger companies could offer. Large businesses sustained themselves with loans from outside investors. Before, businesses had to be private, family business that relied on only themselves. But with big businesses came big investments. Railroad companies went to the public to buy up stock in the company. Also, loans from banks came, this swelled up the banking system in America. Because of all the money put into the business, track length increased 6 times from the Civil War to the turn of the 19th century. Railroad companies were the first big business and they transformed how the rest of the world soon did business.
Railroads stimulated the economy in the Reconstruction Area and before. The railroad business touched many other industries and gave them more work, because of the many things railroad needed. Firstly, Lumberjacks cut down trees for the wood on rail lines. Secondly, dug out coal to fuel the train, as well as metals for the ties and spikes on the lines. Next, steel workers in cities made and shaped the iron for the rails. Lastly, the workers employed by railroad companies assembled and set the rails into the ground. By 1880, the Pennsylvania Railroad Co. alone employed 50,000 workers into its company. When the Transcontinental Railroad was constructed tens of thousands of workers were employed by the Union Pacific and the Central Pacific to complete the continuous line.
The most obvious effect railroads had on the economy was an improvement in transportation. Back then, railroads were the fastest mode of transportation, so transportation got quicker for the general public and for large corporations. Corners of America were opened up for public exploration and for business investments. On the east coast the textile industry boomed with immigration to support the workforce. Because of railroads, the cloth could be shipped cheaply west. Out West mining was the main industry and railroads offered quick transportation to east coast buyers. In the South, cotton could be shipped east and west for consumers. The cost to move these goods all around the country went down with the expansion of railroad lines. When the cost to ship goods went down, so did the overall cost of the goods. Trading inside America itself prospered and the economy in America became a model for the world.
Railroads stimulated the economy in the Reconstruction Area and before. The railroad business touched many other industries and gave them more work, because of the many things railroad needed. Firstly, Lumberjacks cut down trees for the wood on rail lines. Secondly, dug out coal to fuel the train, as well as metals for the ties and spikes on the lines. Next, steel workers in cities made and shaped the iron for the rails. Lastly, the workers employed by railroad companies assembled and set the rails into the ground. By 1880, the Pennsylvania Railroad Co. alone employed 50,000 workers into its company. When the Transcontinental Railroad was constructed tens of thousands of workers were employed by the Union Pacific and the Central Pacific to complete the continuous line.
The most obvious effect railroads had on the economy was an improvement in transportation. Back then, railroads were the fastest mode of transportation, so transportation got quicker for the general public and for large corporations. Corners of America were opened up for public exploration and for business investments. On the east coast the textile industry boomed with immigration to support the workforce. Because of railroads, the cloth could be shipped cheaply west. Out West mining was the main industry and railroads offered quick transportation to east coast buyers. In the South, cotton could be shipped east and west for consumers. The cost to move these goods all around the country went down with the expansion of railroad lines. When the cost to ship goods went down, so did the overall cost of the goods. Trading inside America itself prospered and the economy in America became a model for the world.