How Did The Transcontinental Railroad Affect The Economy Of The 19th Century

Travelling and transporting goods were very inconvenient before railroads were built in 19th-century. “Before railroads, shipping a ton of goods 400 miles could easily quadruple the price. But by rail, the same ton of goods could be shipped in a fraction of the time and one-twentieth of the cost.”9. These made the economies of the American West bad and difficult to improve. John Steele Gordon describes it as: “there really was no "American economy." Instead there was a myriad of local ones. Most food was consumed locally, and most goods were locally produced by artisans such as blacksmiths. The railroads changed all that in less than 30 years.”8 This implies that the development of the railroad had very important impacts on the American West

The 13,000-mile sea route via Cape Horn was dangerous and took even longer, while the overland stage from St. Louis to San Francisco, if “only” 2,800 miles and thirty days long, was full of discomfort and danger.3
The wagon trains also were slow, expensive, and not well suited to heavy goods. The transcontinental railroad seemed like the only possible solution for this problem.
The government began the discussion to start building the transcontinental railroad in the 1850. There were a lot of controversies while the discussion was going on. One of them was when the road was assigned to be constructed by private interests. As a solution, a bill had been introduced in April 1860. The bill stated that the government would support private parties with a sixty-million-dollar loan in the form of U.S. bonds plus land grants. After that, many congressmen suspected fraud, and the discussion raged for months until the matters rested there. Two years later, legislation was reintroduced and finally passed by the Senate on June 20, 1862, and by the House of Representative on June 24. One week after that, on July 1 1862, President Abraham Lincoln signed bill into law: “An Act to aid the Construction of a Railroad and The Line from the Missouri River to the Pacific Ocean, and to secure the Government the Use of the same for

“Formerly, most textiles and metalworking industries had been situated in areas where water power was available and distances were small. With the growing network of railroads, coal as fuel became a real alternative to water power, and railroads provided transportation of the finished products of the mills.”17 This happened because transporting goods have become easier with the help of railroads. The time taken to move the goods from one place to another did not take too much time anymore as it were before. The cost to transfer the goods also were lower than before. Thus, agricultural products, coal, and minerals were able to move freely from the west to the east coast. The weight of goods moved increased enormously after the railroads were completely built, “from 90 million tons in 1860 to 235 million tons in 1880 and 425 million tons in 1900.”15 Since transporting goods with railroads were convenient, it became the driving force for economic growth of the American. This is because western farmers could make more money by shipping cattle and wheat to the east. Businesses in the east also were able to ship goods to western towns and mining camps.4 As a result, most of the small-scale subsistence farming shifted toward market-oriented