Effects of the Railroads
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Expansion and Connection At the end of the Civil War, most rail lines were
located in the Midwest and Northeast. The completion of the transcontinental
railroad spurred the growth of rail lines to all regions of the country. Rail lines in
Southern states enabled industry there to expand.
Economic Effect Railroads created new markets for goods and spurred the
growth of new industries. The construction of railways and the manufacture of
trains required steel, coal, timber, and other materials, which boosted the
economy. New jobs were created to build and maintain tracks, operate trains,
and serve the public.
Travel Time A trip between San Francisco and New York, which once might
have taken six months by wagon train, took about a week by train.
Time Zones Traditionally, each town set its clocks by the sun’s position at noon.
The confusing mix of local times along the railway interfered with train
scheduling and safety. To make rail service safer and more reliable, the
American Railway Association divided the country into four time zones in 1883.
Railroad Growth
• How did railroad growth and economic growth become so
closely interrelated?
Improved transportation made trade faster and easier, and
opened new markets for products. They will probably also
observe that railroad construction and operations generated
thousands of jobs both with railroad companies and with related
businesses, allowing those employees to have money to spend
on consumer goods. As railroads grew, so did the power of the
economy, and economic growth generated increased business
for railroads.
Talk with your group about a list of jobs that would be associated
with railroad work.
Robber Baron-Squashing competition by acquiring competitors by charging
prices so low their smaller competitors can’t compete in order to create
monopolies. Then, eventually raising prices.
Robber Barons
• The great wealth many railroad
entrepreneurs acquired in the late
1800s led to accusations that they had
built their fortunes by swindling
investors and taxpayers, bribing
officials, and cheating on their contracts
and debts. This led to their being
termed “robber barons.”
Robber Barons
What corrupt activities does the cartoonist
suggest that this industrialist engages in?
trickery and lying
According to the cartoonist, what people
were hurt by the actions of robber
barons?
bankers, stockbrokers, small railroad
operators, and inexperienced investors
Who Were the Robber
Barons?
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Jay Gould Infamous for manipulating stock, Jay Gould was the most notoriously corrupt
railroad owner. He became involved in the budding railroad industry in New York during the
Civil War, and in 1867 became a director of the Erie Railroad. Over the next two years, he
and others fraudulently manipulated the railroad’s stock prices to keep opposing railroad
tycoon Cornelius Vanderbilt from gaining control of the railroad. Gould also engaged in
actions in the gold market that led to a financial panic and recession. By 1874, Gould had
begun buying up new railroads in the West, and he eventually owned more than 15,000
miles of railroad track around the nation.
Cornelius Vanderbilt After beginning his career in the steamship business, Vanderbilt
became involved in railroads in the 1850s. He soon owned several rail lines around New
York, and in 1873 became the first railroad proprietor to offer New York City–Chicago rail
service.
Russell Sage A successful financier, Sage became involved in railroads after lending
money to Wisconsin’s La Crosse Railroad. He served as vice president of the line, which
eventually extended into Chicago, St. Paul, and Milwaukee. He later shared control of New
York City’s elevated lines with Gould.
Cyrus Field A pioneer in the telegraph industry, Field also held stakes in the railroads. He
served as president of the New York Elevated Railroad Company in the late 1870s and, with
Gould, contributed to the development of the Wabash Railroad in the Midwest.
Robber Barons
• Who are these men? What is the
cartoonist’s opinion of them?
This cartoon shows four major robber
barons—Jay Gould, Cornelius
Vanderbilt, Russell Sage, and Cyrus
Field. They are scoundrels, powerful
men who think they can split the country
among them.
Railroad Industrialists
• Honest Operator James J. Hill operated the Great Northern
Railroad from Wisconsin to Washington in the West, without
federal help. Many railroads hauled lumber and farm products
east, but carried nothing back west. Hill filled his westbound
railcars with cotton, textiles, flour, and other products, for export
to Asia, which increased his profit.
• Western Leaders The “Big Four” who invested in the Central
Pacific railroad also became wealthy and influential. Investor
Leland Stanford, who was the railroad’s president for over three
decades, proved especially important in the history of California.
He served as the state’s governor from 1861–1863, and later as
U.S. Senator. In 1885, he and his wife founded Stanford
University.
Railroad Industrialists
How might you evaluate the
accomplishments of railroad
industrialists?
The successes of the robber barons in
building and expanding railroads helped
connect the country and outweighed their
negative aspects. Alternatively, students may
note that the corrupt practices of robber
barons, particularly Gould, damaged the
country through financial panic and
depression.
Railroad Industrialists
• Do you think that the accomplishments of
railroad industrialists were mostly positive
or mostly negative? Were they captains of
industry or robber barons?
Railroad industrialists helped connect the
country and encouraged positive economic
growth. They may alternatively argue that
railroad industrialists engaged in illegal
activities and cheated taxpayers out of
money, leaving a mostly negative legacy.
Discussion
• How has the use of railroads changed
between the past and today?
Railroads still carry people and goods from
place to place, but students should
understand that long-distance railroad travel
has been largely overtaken by automotive
and air travel. Point out that in many large
cities, people commute from suburbs to work
in trains.
Activity
• Write a group activity about a Robber
Baron.