Turnpikes, Canals, And Railroads
Overview
• What is the shortest
distance?
• The Story of Turnpikes
• The Story of Canals
• The story of Steamboats
• The Story of Railroads
• The story of Productivity
What’s the Shortest Distance?
Why Travel 3,000 Miles?
• Ohio wheat would be
ground into flour.
• Shipped to New Orleans - about 1,000 miles.
• Then shipped up the
Atlantic coast to consumers
in Philadelphia and other
cities adding another 2,000
miles.
• Why would anyone do that?
Location Matters
• Imagine cheap and
abundant apples in one
region that have little
economic value unless they
can be sold to consumers
who may not live nearby.
• A basket of apples
harvested is much less
valuable than a basket of
apples harvested and
delivered to paying
customers.
• That is why it makes sense
for people to spend time an
money on transportation.
Location Matters
• Our national transportation
system arises from public
and private decisions.
• The Constitution gave
Congress the power to “To
establish Post Offices and
Post Roads.”
• But, we sort of take it all for
granted…
The Mystery of the Alien Bananas
• Bananas are a tropical fruit.
• No one in Delaware grows
them.
• Delaware statutes provide
no plan for getting bananas
to grocery stores.
• Yet, there they are there –
everyday, even the most
rural grocery stores.
• How can that be?
John Stossel Gets a Steak
Profit Motive
• Business transportation is
guided by an interest in
profit.
• Improved transportation
systems often help
businesses generate profits
because of customers’
willingness to pay - sometimes a lot - - for
getting goods to or from the
right place at the right
time.
Profit Motive
• How does the profit motive
contribute to providing all
of us access to goods and
services requiring the
cooperation of thousands of
strangers?
• What is the metaphor of the
invisible hand meant to
convey?
• Free markets - - allowing
people to act in their own
self-interest - - promotes
positive social outcomes
even those these are not
intentional.
• The apple grower or wheat
farmer is simply trying to
earn income.
• To make this all work, we
need a system of
transportation.
The Turnpike Story
• In 1790, the poor road
system was a major
problem for Americans
looking for better
connections to markets.
• State and local governments
developed adequate local
roads but were not up to
the task of taking on large
projects.
• They turned private
enterprise to help.
The Turnpike Story
• Turnpikes are intercity toll
roads.
• They were made of stone,
gravel, and (from 1847 to
the peak in 1853) plank.
• Turnpikes offered speed and
dependability over local
roads.
• By the 1830s, turnpikes are
over taken by canals.
• 1810 = 4,600 miles
• 1830 = 27,800 miles
Turnpike Incorporation, 1792 - 1845
Year 1792- 1801- 1811- 1821- 1831- 18411800 1810 1820 1830 1840 1845
69
398 362 230 365 138
• States = NH, VT, MA, RI, CT, NY, PA, NJ, VA,
MD, OH
Turnpikes Today
• Why build a turnpike and an
Interstate?
The Canal Story
• The great canal-building era
lasted from 1815-1843.
• Combinations of private and
state and local government
money build the canals.
• 1815-1844 = $31 million
• 73% of the investment was
provided by government.
The Canal Story
• Water transportation was
important because the cost
per mile was much lower
than overland
transportation.
• This explains why Ohio
wheat would travel to New
Orleans as flour on its way
to Philadelphia
The Canal Story
• The opening of the Erie
Canal in 1825 the drove
dramatically reduced
shipping costs from Buffalo
to New York City.
The Steamboat Story
• Steamboats were
developed for use on the
internal river system - - the
Ohio, the Mississippi, and
the Missouri Rivers.
• Flatboats, Keelboats, and
steam-driven paddle
wheelers gave farmers
cheap transportation for
their crops to New Orleans
and on to other ports.
The Steamboat Story
• Abraham Lincoln made the
trip to New Orleans as a
flatboat captain.
• Flatboats were usually
broken up and sold for
timber.
• He returned home upriver
in a steamboat, the latest
and greatest mode of
transportation.
Steamboats in Operation on Western
Rivers
Years
Number
Tonnage
1811
1
371
1815
7
1,516
1820
69
14,208
1825
80
12,527
1830
151
24,574
1835
324
50,123
1840
494
82,626
1845
538
96,155
1850
638
134,566
1855
696
172,695
1860
817
195,022
The Steamboat Story
• By the end of the 1850s, a
fleet of over 800
steamboats sailed on the
internal rivers.
• Freight rates fell in real
terms by 90% upstream
from 1815 to 1860 and by
40 % downstream.
• Heavy loads (crops, iron)
tended to travel
downstream.
• Lighter loads - - consumer
goods - - tended to travel
upstream.
The Railroad Story
• The advantage shifted to
railroads beginning in 1830.
• Trains ran faster than boats.
• Trains ran when water was
frozen.
• The first trains were horse
drawn - - 10 mph.
• The first steam locomotives
were introduced in the
1830s.
• By 1900, they reached
speeds of 50 to 60 mph.
Miles of Railroad in Operation
Year
Mileage
1830
23
1835
1,098
1840
2,818
1845
4,633
1850
9,021
1855
18,374
1860
30,626
Land Grants to Railroads
Trains Roll on
The Magic Marker Mark Factory
Round
1
2
3
Wage
$5.00
Number of
Marks
Produced
Average
Cost Per
Mark
Productivity
Productively measures the
amount of output (finished
goods and services)
produced relative to the
inputs (productive
resources) used.
Productivity
Output
Input
Labor productivity is
relatively easy input to
measure since we can
measure wages and hours.
Productivity
Output
Labor Hour
Transportation and Productivity
• How may teamsters and
wagons would it take to
carry as much freight as one
train can hold?
• Turnpikes, canals,
steamboats, and trains
freed labor to pursue other
more specialized activities,
such as farming or starting
new businesses
Questions