V

THE ACCEPTANCE OF THE RAILWAY

Duration of second period of growth. Important factors influencing railway development. Extent of railway expansion. Causes of rapid mileage growth. Public aid an important cause. Reasons for public aid. Land grants in aid of railway construction. Usual provisions of land-grant acts. Development of our land-grant policy. A reversal of judgment. Appearance of large railway systems. Public interest and consolidation. Early proposals to establish transcontinental service. The Union Pacific-Central Pacific project. Other Pacific railways. Appearance of competition. Financial aspects of railway construction and operation. Movement toward regulation. Appearance of positive control. Progress toward plant efficiency. Decline in railway charges and its consequence. Extent of the railway net.

WITH the close of the fifth decade of the nineteenth century terminated the experimental period in American railway history. In 1850 the railway, tried and found adequate, entered the second stage of its development which continued through 1873. Various facts mark the opening of the sixth decade as the beginning of a new era. The discovery of gold in California in 1849 compelled a new interest in the West and gave a tremendous stimulus to business activity. Then, too, the vast territory which the victorious conclusion of the Mexican War added to the United States opened a great area for development. Finally, the initiation in 1850 of the federal land-grant policy, the significance of which will be indicated later in the chapter, further served to separate this from the preceding period.

As 1850 marks the beginning of the second period in the growth of the American railway net, so do the early seventies mark its close. The year 1871 witnessed the enactment of the last of a series of land-grant acts designed to stimulate the building of mileage throughout the undeveloped West and Southwest. Immediately following the Civil War, too, there came a change in public attitude to

ward the railway, a change partly attributable to resentment against abuses, but more largely, perhaps, to failure to understand the essential nature of the railway business. This reaction found expression in various regulative acts some of which were not passed until 1874, but all of which resulted, nevertheless, from the agitation of an earlier date. But perhaps the fact which marks 1873 in particular as the close of this period is the sharp drop in railway construction immediately following that disastrous year.

IMPORTANT FACTORS IN RAILWAY DEVELOPMENT

Before entering upon a discussion of the outstanding features of this period in railway history, it is desirable to mention certain important factors which modified the course of railway activity. Prior to the panic of 1837, the railway was an unproved agency of which much was hoped but as to the future of which there was no assurance. During the years which followed recovery from the results of financial excesses until the close of this first period such rapid progress was made in the solution of the engineering difficulties that doubt no longer existed as to the ability of the railway to meet the most exacting demands of shippers. During this period, also, increased reliance upon the railway by the shipping public resulted in a tremendously greater volume of traffic, and this, in turn, inspired confidence in the enterprise and justified financial support. Second, the discovery of gold in California, with its resultant effect upon business, quickened railway expansion. This stimulus was both direct and indirect. The addition of large amounts of gold to the circulating medium tended to increase prices which, in turn, augmented business activity. Indirectly it exerted a psychological influence, both at home and abroad, upon the imagination and mind of those interested in business enterprise comparable to that of a powerful stimulant upon the physical organism. Though the upward trend of business was sharply interrupted by the panic of 1857, only

the outbreak of the Civil War prevented rapid recovery and further expansion. During and after the war, however, inflation of such magnitude again appeared that the panic of 1873 seemed necessary to restore normal conditions.

The Civil War also exerted a deep influence upon enterprise and its importance was no less to the railway than to industry and commerce. For a decade preceding its outbreak, the jealousies and antagonisms of North and South limited railway expansion. Furthermore, the four-year war period and the few years immediately following influenced greatly the rapidity of railway development; the energies of both North and South were largely absorbed in the conflict and little capital was available for any but war purposes. Indeed, in the active war zone a considerable destruction of railway property accompanied each change in control. Though the war resulted temporarily in restricted building, the railway ultimately profited. The hostility between the two sections which finally culminated in war had long blocked all efforts to transform the Pacific railway projects into reality. Withdrawal of the representatives of the seceding states from Congress and the consequent protracted control of the machinery of government by the North offered the desired opportunity. Also, the restlessness of the men who returned from the front and their desire to seek fortune in the undeveloped West did much to furnish an economic basis for railway expansion there. Then, too, the active part played by the railway in military campaigns gave clear proof, if such were needed, of its great utility. And, finally, the inadequacy of waterways in meeting war needs, together with the increased use of the railways in certain sections due to war interruptions of water traffic, strengthened the railway greatly.

EXTENT OF RAILWAY EXPANSION

One of the most important as well as most striking characteristics of the development of the American railway net

from 1850 to 1873 was the sharp increase in mileage. The number of miles of railway constructed in the United States at the close of 1873 was 68,485, an increase, in less than a quarter of a century and in the face of heavy obstacles, of more than 60,000 miles. The distribution of mileage at the close of this period as among the various sections of the country, an index of the varying force of expansionist tendencies, is indicated in Table 3.

TABLE 3

SECTIONAL DISTRIBUTION OF MILEAGE IN THE
UNITED STATES, 1873

As interesting as the distribution of mileage by sections, is its distribution among the various years of the period. By the close of 1859 mileage had grown from 7,310 to 27,420 but during the following decade total mileage added fell below that of the one preceding with an increase of but 16,091. Construction dropped to 574 miles in 1863 and stood at less than 1,000 miles per year during the years 1862 to 1865 inclusive, while more than half of the total contribution was added during the last few years of the decade. The striking rally from subnormal construction during the war years is indicated by the tremendous expansion in 1869-1873 inclusive, during which about 25,000 miles of line were laid. In 1872 alone almost 7,500 miles were built.