The Railroad Boom

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The Railroad Boom

The main reason for the transcontinental railroads to be built was to bring the east and west together. The building of these railroads caused huge economic growth throughout the United States. The railroad created opportunities for everyone across the US.

“Railroads were the first big business, the first magnet for the great financial markets, and the first industry to develop a large-scale management bureaucracy. The railroads opened the western half of the nation to economic development, connected raw materials to factories and retailers, and in so doing created an interconnected national market. At the same time the railroads were themselves gigantic consumers of iron, steel, lumber, and other capital goods”. (Tindall, Shi)

The undertaking of a project as large as building a railroad across the expanse of the United States seemed impossible and way too expensive for any railway companies to undertake; therefore, in the early/mid 1800’s, railway companies and business people began approaching legislators in an attempt to convince them to support railroad expansion. This, combined with economic necessity, helped to pass the first of several land grant bills. The bills entailed the gifting of public land to railroad companies in exchange for railroad track being laid in designated areas. The land that was not used for track was then sold. Both railroad companies and the government gained from this. The land where track was laid also became more valuable and the profit that was made from the sale of the land was used to pay for materials and labor to continue the railroad expansion. (Railroad Land Grants).

With the East and the West being brought together by the railroad, goods were able to go to market more cheaply, federal shipping costs were reduced, more jobs became available due to railroad construction and due to the new settlements that were developing along the new railroad routes. (Railroad Land Grants)

The building of...
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