The Great Railroad Revolution

by Christian Wolmar

  The scale of use of the railroads by the military demonstrates the vital role they played throughout the war. Not all railroad companies kept records, but the Pennsylvania alone carried nearly a million military personnel during the conflict and the Illinois Central more than half a million. However, for the most part the railroads maintained their normal business, and, overall, military carryings represented a small proportion of their total wartime traffic. Even more remarkably, the railroads in the North continued to grow during the Civil War, and a start was even made on the first transcontinental.

  It was because of the railroads that the conflict was carried out over such a large area and continued for so long. A report by McCallum after the war demonstrates the scale of the railroad operations during the Civil War. He found that the United States Military Railroads, a government agency, was bigger than any private company of the age, operating 2,105 miles of line with 419 locomotives and 6,330 cars. The railroads afforded the armies unprecedented mobility, which, as the war progressed, they learned to exploit to the fullest. The scale of destruction and carnage can be directly attributed to the railroads. The official history of the war lists ten thousand military encounters, of which more than four hundred were deemed serious enough to be called battles, about one every four days. Not surprisingly, therefore, the war was far bloodier than its predecessors. The death toll of American soldiers, some 620,000,35 remains greater than in any conflict involving the United States and, remarkably, more than the total lost in all the nation’s other wars before or since, including the two world wars and Vietnam. The railroads greatly increased the fighting power of the armies, allowed them to operate much farther from their supply depots than previously, and gave the side with the best railroad supply line a clear strategic advantage. The impact of the war was devastating to a vast swath of the country, and the railroads could be held responsible: “A war strategy that relied on railroads spread the effects of war over a vast area and left hundreds of thousands of uprooted wanderers looking for a place to settle or earn a living.”36

  Perhaps the most fascinating question concerning the relationship between the railroads and the war, however, is whether the conflict would have happened at all had it not been for the iron horse. Many historians suggest that had the Southern states seceded earlier, when there were no long-distance railroads, the Unionists would not have been able to reclaim the South. According to Franklin Garrett, a historian of the South, “If the Southern states had seceded in 1832, when South Carolina was threatening to do so, nothing could have stopped them.” He also points out that Atlanta was created by the railroads, and that had it not enjoyed such efficient connections with the rest of the country, Sherman’s long march through the hostile territory of the South would have been impossible. It was thanks to the railroad that “Union forces were able to strike deep into the South without suffering Napoleon’s fate in Russia.” Indeed, even as late as 1850, it would have been impossible to envisage that the war could have been conducted on such a wide front, as there was no quick way of traveling across the country. Secession “might have succeeded in 1850 when over 40 per cent of the nation’s inhabitants formed a truly ‘solid South’ and the opposition 60 per cent was scattered from Skowhegan, Maine, to Mississippi with no completed means of transportation at either end.”37

  Whereas the railroads determined the conduct and course of the war, the long-term impact of the conflict on the railroads was less obvious. By 1861, the railroads were already changing, becoming more of a mass enterprise and beginning their long process of consolidation. The American public’s suspicion of the big companies, which was to become an increasingly significant aspect of its relationship with the railroads as the century drew to a close, had begun to emerge even before the first fateful shots of the war were fired at Fort Sumter. For all the momentous physical impact of the conflict on the railroads, especially in the South, the trends that would define their postwar history were already visible when war broke out. The railroads were about to embark on the period of their greatest domination, and, in reality, the war was merely a blip in an inevitable process. First, however, there was a continent to cross.

  5

  HARNESSING THE ELEPHANT

  The war was a transforming experience for railroads on both sides of the Mason-Dixon line, but in contrasting ways. In the North, it was mainly good news. Apart from a few unlucky railroads with lines on the border that suffered war damage, the Northern railroads had not only escaped any direct consequences of the war but prospered, thanks to the increase in traffic that always results from conflict. At first, the Northern companies rued the outbreak of the war, fearing it was going to wreck their recovery from the poor economic conditions of the late 1850s. However, they soon realized that war was beneficial for railroads. Use of the railroads in the North soared, boosting income and profits: “Railroads which had suffered a decline in freight and passenger revenues in the three years immediately preceding the outbreak of war, soon found themselves swamped with business, and vied with each other in placing orders for more locomotives and more cars.” According to the American Railroad Journal, 1863 had been “the most prosperous ever known to the American Railways,” and traffic continued to grow throughout the war.1

  The four major east-west railroads—the Pennsylvania, the Baltimore & Ohio, the Erie, and the New York Central—did especially well during the conflict. With the Mississippi closed to through traffic during the war, and poor harvests in Europe increasing the demand for American grain, all four railroads enjoyed a spectacular rise in traffic and in profits during the war. For example, whereas in 1861 the New York Central carried 2.1 million passengers, this figure had all but doubled to 3.7 million four years later. For the Michigan Central, the increase was even more phenomenal: a growth of 260 percent during the war. But it was not only passengers who used the trains. War generates a variety of demands for freight transportation, from raw materials to ammunition. Not surprisingly, since the railroads were essentially a monopoly, goods traffic rose dramatically during the conflict. As a result, there were healthy increases in dividends paid to shareholders, even on railroads that had rarely prospered. The Erie, for example, after not paying any dividends for many years, suddenly distributed 8 percent to its grateful investors in 1864. Some minor but heavily used lines such as the Cleveland, Painesville & Ashtabula, which paid a remarkable 26 percent that year, made a fortune for their owners.

  As ever with the railroads, rapid growth was not entirely beneficial, because at times of such intensive use maintenance tends to be skimped and assets get overused. The war saw unprecedented increases in demand for equipment such as rails, new cars, and locomotives, which pushed up operating costs. Labor costs rose, too, as many skilled men joined the Union army, partly because Lincoln, showing a rare absence of foresight, failed to take action to stop railroad workers from enlisting. On some railroads, the situation was so bad that in the later stages of the war, they had to turn away business for want of rolling stock or personnel to run the trains.

  Those Northern railroads that were safely ensconced away from the front were quick to use some of this extra revenue to expand. A total of five thousand miles was added to the US rail network in the first half of the 1860s, mostly in the North, a remarkable pace of growth given that so many resources were devoted to the war effort and an illustration of the burgeoning industrial strength of the North. Apart from a few hundred miles of the lines built by the United States Military Railroads, these tracks were intended to be permanent additions to the nation’s network. Indeed, this period can be seen as the beginning of the greatest period of growth in the US railroads’ history—or indeed that of any other country—as will be outlined in the next chapter.

  The contrast with the railroads in the South could not have been greater. The war exacerbated the differences between the railroads in the two regions in every conceivable way. As in the North, the Southern railroads also saw increased carrying, but because of the c
haotic organization of the military effort, the railroad companies rarely received any of the money this should have generated. Moreover, the lack of maintenance facilities—as most of the latter had been based in the North—together with the damage wrought first by overuse and then by military action, meant that the Southern railroad network was in a terrible state at the end of the war. Indeed, much of the system was not functioning at all, owing to a combination of war damage and the parlous financial state of many railroad companies. Several railroads had gone bankrupt during the war, as the secessionist government had run out of money to pay for the men and munitions they had carried, and there was no one to compensate them for the war damage. The bonds issued by states and railroads during the Confederacy were officially deemed void by the federal government, leaving the railroad companies holding worthless paper.

  Without factories or even materials, the South had completely depleted its rolling stock by 1865, and the process of reconstruction would prove slow. The Southern railroads were further hampered in their efforts to recover from the war by a shortage of labor. As Theodore Kornweibel Jr. notes, “Slave labour was essential to antebellum southern railroading,” and during the war this dependency increased, as large numbers of slaves were drafted onto the railroad to replace men who had signed up to fight.2 Losing that free labor at the conclusion of hostilities made it even more difficult for the Southern railroads to become financially viable.

  The war had a very powerful direct impact on the railroads in both North and South. However, the trends that saw the railroad expand and develop almost exponentially for the rest of the century—the consolidation of small companies into bigger railroads, the growth of financial capitalism that made it easier for the railroads to obtain funds for expansion, and the shift in agriculture away from subsistence farming toward cash crops that required transport by rail to the Eastern Seaboard—had already been in evidence before the war and simply intensified afterward. In other words, those factors that would transform the US railroads from being mostly a series of short and disconnected lines into a network were already in place. For example, whereas in 1849 no railroad company operated more than 250 miles, by 1855 at least sixteen railroads controlled more than 200 miles, and the large companies were already on their way to becoming the nation’s biggest businesses. By the outbreak of the war in 1861, there were at least ten railroad companies with a capital of $10 million or more, far bigger than any other enterprise of the time.

  Britain played a key role here in supplying capital. Right from the outset of American railroad development, financing had been sought in Europe and especially in the United Kingdom. Those US states that provided so much support to the railroad pioneers raised much of their capital, in the form of bonds, from the other side of the Atlantic. Indeed, when several defaulted on them in the 1840s, it was the London market that suffered most. Not surprisingly, it became reluctant to lend again, boycotting the American railroad companies. But the lure of the American railroad market was too attractive, and within a few years British investors started sending money over again, a boom-bust cycle that would repeat itself several times by the end of the nineteenth century. British investment ceased during the Civil War, but resumed by the end of the 1860s. And then it all went sour again with the panic of 1873. The author of the standard work on British investment in American railroads, Dorothy Adler, suggests that British capital helped to fuel this succession of American railroad manias: “It is not stretching the facts to draw a parallel between the late 1840s, the late 1860s and the years 1879–81. Each of these periods was characterized by a speculative movement of British capital into American railway shares.”3 She calculates that by the end of the century, British investment in US railroads totaled around £400 million (perhaps worth one hundred times that amount today, £40 billion), around 10 percent of all American railroad capitalization.

  British capital played a role in most of the bigger American railroads, and the two companies that built the first transcontinental, the Union Pacific and Central Pacific, were no exception. One of the most immediate effects of the secession of the Southern states was the start of construction on the transcontinental, which, remarkably, began even as the conflict was still raging. The building of a line from the Atlantic to the Pacific had been mooted at the very dawn of the railroad age, and despite the physical obstacles and huge distances involved, the dream of uniting the two oceans had become part of the American psyche. The idea of a transcontinental railroad was integral to the very notion of creating a unified nation across North America. The land was there, but, for the settlers to come, transportation was needed. In the early days, they traveled in wagon—rather than steam—trains, but it was obvious that the creation of substantial communities in the West was dependent on finding a better transportation solution than the horse and cart. Without the railroad, it would be impossible to open up the huge swath of land between the Mississippi and the West Coast.

  Several fanciful and impractical ideas for a transcontinental railroad had been put forward as early as the 1810s and 1820s, but the first detailed proposal emerged just as the first locomotives were chugging along the Charleston & Hamburg and Baltimore & Ohio lines. In 1830, William Redfield, later the president of the American Association for the Advancement of Science, published a paper proposing a railroad from the East to the Mississippi with extensions right through to the Pacific. Redfield’s paper was soon forgotten, but the people of Dunkirk, on the shore of Lake Erie in upstate New York, can lay claim to being the first to lobby for the transcontinental line to pass through their town. At a public meeting in January 1832, they passed a resolution in favor of a line connecting the Hudson with Lake Erie, suggesting it would continue on to the Mississippi River and the Pacific Ocean. Their idea was picked up by Samuel Dexter, the editor of the Western Emigrant of Ann Arbor, who wrote in the following month that “it is in our power to build an immense city at the mouth of the Oregon [on the West Coast] by a railroad by which the traveller leaving the city of New York shall, at the moderate rate of ten miles an hour, place himself in a port right on the shores of the Pacific.”4 Interestingly, like Redfield, Dexter opined that the expense of such a massive scheme would be insignificant in relation to the cost of war, though his estimate of $30 million would prove rather optimistic. He also suggested—quixotically perhaps, because his knowledge of weather patterns was limited—that one reason to build the line would be to facilitate the export of furs to India. But then, to be fair, the notion of a three-thousand-mile transcontinental railroad at a time when there were barely a few dozen miles of line in the whole country could be conceived only by those with a fervent imagination.

  Various enthusiasts began to pick up on the idea. There was, for example, John Plumbe, a Welsh engineer who had moved to the United States in the 1820s and in 1836 began to examine possible routes for the line from his home in Wisconsin, then still a territory rather than a state. Rather presciently, Plumbe, best remembered as a pioneer of photographic techniques, argued that a transcontinental railroad “would hasten the formation of dense settlements throughout the whole extent of the road, advance the sales of the public lands, afford increased facilities to the agricultural, commercial and mining interests of the country . . . and enable the government to transport troops and munitions of war.” Yet when Plumbe petitioned Congress for the idea in 1938, one congressman reckoned it was as silly as asking “to build a railroad to the moon.”5 Poor Plumbe spent much of the 1840s trying unsuccessfully to convince politicians, national and local, of his idea, but returned a broken man to the Midwest in 1857, where he soon committed suicide at the age of forty-seven.

  The most serious and effective early proselytizer for the scheme was Asa Whitney, an eccentric self-made merchant whose resemblance to Napoléon Bonaparte was apparently so marked that strangers would often stare at him in amazement. He spent many years and much of his fortune trying, unsuccessfully, to convince Congress to sanction the idea of a railroad acro
ss America. More practical and thorough than Plumbe, Whitney conceived of his plan for a transcontinental on a lengthy sea voyage in 1843, as he returned to the United States from China, where he had made his fortune. It was the apparently interminable nature of his journey across the Indian and Atlantic Oceans—for this was the era before the construction of the Suez Canal—that attracted Whitney to the idea of a transcontinental. He believed the railroad would become the corridor of exchange between Europe and Asia, placing America at the center of the world’s trade routes. Whitney was also an idealist who, like many early railroad promoters, saw the project as an opportunity for human improvement. As he told Congress, it would bring the dispersed population of the United States “together as one family, with but one interest—the general good of all.” In 1845, after presenting the plan in Washington, he toured the country with a group of enthusiastic young acolytes, extolling the virtues of the project and exploring a rail route that went west from Milwaukee, Wisconsin—which would, indeed, be chosen by one of the later transcontinentals. Whitney became a popular speaker and a darling of the newspapers. He returned several times to Congress, where he put forward a plan to build the railroad himself in return for a grant of a corridor of land sixty miles wide from Lake Michigan to the Pacific. By selling off parcels of land as the railroad was built, Whitney optimistically believed that it would be self-financing.