What conclusion can be drawn about the effect of the transcontinental railroad on these Western cities?

In 1887 Congress passed the Interstate Commerce Act, making the railroads the first industry subject to federal regulation. Congress passed the law largely in response to decades of public demand that railroad operations be regulated. The act also established a five-member enforcement board known as the Interstate Commerce Commission. In the years following the Civil War, railroads were privately owned and entirely unregulated. The railroad companies held a natural monopoly in the areas that only they serviced.

Monopolies are generally viewed as harmful because they obstruct the free competition that determines the price and quality of products and services offered to the public. The railroad monopolies had the power to set prices, exclude competitors, and control the market in several geographic areas. Although there was competition among railroads for long-haul routes, there was none for short-haul runs. Railroads discriminated in the prices they charged to passengers and shippers in different localities by providing rebates to large shippers or buyers. These practices were especially harmful to American farmers, who lacked the shipment volume necessary to obtain more favorable rates.

Early political action against these railroad monopolies came in the 1870s from “Granger” controlled state legislatures in the West and South. The Granger Movement had started in the 1860s providing various benefits to isolated rural communities. State controls of railroad monopolies were upheld by the Supreme Court in Munn v. Illinois (1877). State regulations and commissions, however, proved to be ineffective, incompetent, and even corrupt. In the 1886 Wabash case, the Supreme Court struck down an Illinois law outlawing long-and-short haul discrimination. Nevertheless, an important result of Wabash was that the Court clearly established the exclusive power of Congress to regulate interstate commerce. (See Gibbons v. Ogden.)

The Interstate Commerce Act addressed the problem of railroad monopolies by setting guidelines for how the railroads could do business. The act became law with the support of both major political parties and pressure groups from all regions of the country. Applying only to railroads, the law required "just and reasonable" rate changes; prohibited special rates or rebates for individual shippers; prohibited "preference" in rates for any particular localities, shippers, or products; forbade long-haul/short-haul discrimination; prohibited pooling of traffic or markets; and most important, established a five-member Interstate Commerce Commission (ICC).

The law’s terms often contradicted one another. Some provisions were designed to stimulate competition and others to penalize it. In practice, the law was not very effective. The most successful provisions of the law were the requirement that railroads submit annual reports to the ICC and the ban on special rates the railroads would arrange among themselves, although determining which rates were discriminatory was technically and politically difficult.

Years later, the ICC would become the model for many other regulatory agencies – but in 1887 it was unique. The Interstate Commerce Act challenged the philosophy of laissez-faire economics by clearly providing the right of Congress to regulate private corporations engaged in interstate commerce. The act, with its provision for the ICC, remains one of America’s most important documents serving as a model for future government regulation of private business.

There was a time when traveling from the East Coast to the West Coast meant riding for months in a horse-drawn wagon or stagecoach, or sailing southward to Panama and then crossing the Isthmus to board another ship for a journey up the other coast. But that all changed on May 10, 1869, when railroad baron Leland Stanford whacked in a ceremonial gold spike to mark the joining together of the tracks of the Central Pacific Railroad and the Union Pacific Railroad in Promontory, Utah, to form the transcontinental railroad. The new rail connection eventually made it possible to travel in a train car from New York to San Francisco in just a week’s time.

Some 21,000 workers—from Irish-American Civil War veterans, freed slaves and Mormon pioneers to Chinese laborers—had been recruited to perform the hard and often dangerous work of laying the 1,776 miles of track. By one estimate, the project cost roughly $60 million, about $1.2 billion in today’s money, though other sources put the amount even higher.

While the railroad's construction was a mammoth undertaking, its effects on the country were equally profound. Here are some of the ways that the first transcontinental railroad—and the many other transcontinental lines that followed it—changed America.

Map of the Transcontinental Railroad

Map of the transcontinental route of the Atlantic & Pacific Railroad and its connections, circa 1883. 

1. It made the Western U.S. more important. 

“What the transcontinental railroad did was bring the West into the world, and the world into the West,” explains James P. Ronda, a retired University of Tulsa history professor and co-author, with Carlos Arnaldo Schwantes, of The West the Railroads Made. In particular, it helped turn California from a once-isolated place to a major economic and political force, and helped lead to the state’s rapid growth.

2. It made commerce possible on a vast scale. 

By 1880, the transcontinental railroad was transporting $50 million worth of freight each year. In addition to transporting western food crops and raw materials to East Coast markets and manufactured goods from East Coast cities to the West Coast, the railroad also facilitated international trade.

The first freight train to travel eastward from California carried a load of Japanese tea. “The Constitution provided the legal framework for a single national market for trade goods; the transcontinental railroad provided the physical framework,” explains Henry W. Brands, a history professor at the University of Texas at Austin, and author of Dreams of El Dorado: A History of the American West. “Together they gave the United States the single largest market in the world, which provided the basis for the rapid expansion of American industry and agriculture to the point where the U.S. by the 1890s had the most powerful economy on the planet.”

Construction of the Transcontinental Railroad

Building of the Transcontinental Railroad, circa 1869. 

Fotosearch/Getty Images

3. It made travel more affordable. 

In the 1860s, a six-month stagecoach trip across the U.S. cost $1,000 (about $20,000 in today’s dollars), according to the University of Houston’s Digital History website. But once the railroad was built, the cost of a coast-to-coast trip became 85 percent less expensive. That made it possible for Americans to visit distant locales that previously they might only have heard about.

4. It changed where Americans lived. 

During the railroad’s construction, numerous temporary “hell on wheels” towns of tents and wooden shacks sprung up along the route to provide living quarters for workers. Most of them eventually disappeared, but others, such as Laramie, Wyoming, evolved into towns that provided rail terminals and repair facilities. Additionally, about 7,000 cities and towns across the country began as Union Pacific depots and water stops. And, as Ronda notes, the first transcontinental railroad and the other lines that followed made it easy for immigrants to spread across the nation. “People come across the Atlantic on ships, get on trains, and end up in places such as western Nebraska,” he says.

5. It altered Americans’ concept of reality. 

In an 1872 article, naturalist John Muir wrote that the transcontinental railroad “annihilated” time and space. As Ronda explains, it changed the way that people viewed distances. “When you’re walking or riding a horse, you experience the world one way, but when you’re sitting in a railroad car, you see it differently,” he says. “In the West, where the distances are so great, the railroad brought near and far closer together.” The railroad schedules also helped to push the United States into changing how it marked time, leading to the adoption of standard time zones in 1883.

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Construction of the Transcontinental Railroad

Construction of the Union Pacific section of the Transcontinental Railroad across Devil's Gate Bridge, Utah, circa 1869. 

PhotoQuest/Getty Images

6. It helped create the Victorian version of Amazon. 

In 1872, just a few years after the transcontinental railroad’s completion, Aaron Montgomery Ward started the first mail-order catalog business. As Ronda notes, the first transcontinental railroad—and other transcontinental lines that followed—made it possible to sell products far and wide without a physical storefront, and enabled people all over the country to furnish their homes and keep up with the latest fashion trends.

7. It took a heavy toll on the environment. 

The massive amount of wood needed to build the railroad, including railroad ties, support beams for tunnels and bridges, and sheds, necessitated cutting down thousands of trees, which devastated western forests. Towns and cities that sprung up along the railroad further encroached upon what had been wild areas. And the railroad and other rail routes that followed made it easy for large numbers of hunters to travel westward and kill millions of buffalo. That slaughter impacted Native Americans, who had hunted buffalo in moderation, and weakened their resistance to settlement of the west.

Chinese immigrants working on the Transcontinental Railroad

Chinese immigrants working on the Northwest Pacific Railway in the 1880s. 

Bettmann Archive/Getty Images

8. It increased racial conflicts. 

The completion of the transcontinental railroad led to heightened racial tensions in California, as white workers from the East Coast and Europe could more easily travel westward where immigrant laborers were prevalent, says Princeton University Assistant Professor of History Beth Lew-Williams, author of The Chinese Must Go: Violence, Exclusion, and the Making of the Alien in America. 

Upon completion of the railroad, many Chinese workers returned to California in search of employment. “The flood of goods and laborers who arrived in the West, combined with the boom and bust economy of the late-19th century, put pressure on the labor market," she says. "The presence of Chinese immigrants did not create the economic uncertainties of the 1870s, but they were often blamed nonetheless.” 

Growing prejudice against and fear of the Chinese eventually manifested itself in Congress’ passage of the Chinese Exclusion Act of 1882, the first of several laws that blocked Chinese laborers from entering the United States until 1943.

9. It pioneered government-financed capitalism. 

The Central Pacific’s “Big Four”—Stanford, Collis P. Huntington, Mark Hopkins, and Charles Crocker—figured out how to tap into government coffers to finance a business that otherwise wouldn’t have been possible. As Richard White, author of Railroaded:The Transcontinentals and the Making of Modern America, says, “They put little of their own money in it —they didn’t have much. It was built on land grants, government loans, and government guaranteed bonds. When their loans came due, they refused to pay and the government had to sue. In effect, they stumbled into a business model where the public takes the risk and those taking the subsidies reap the gain.” 

Other entrepreneurs and industries would follow the Big Four’s lead in tapping government help to build their businesses.

10. It instilled national confidence. 

The transcontinental railroad had a major effect on how Americans perceived their nation, and it became a symbol of America’s growing industrial power and a source of confidence that led them to take on even more ambitious quests. As Ronda says, “It’s one of the transformative moments in American history.”

Which of the following is a successful example of Americanization?

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What major trend occurred to the population of the US during the industrial expansion of the late nineteenth century?

Owing most of their population growth to the expansion of industry, U.S. cities grew by about 15 million people in the two decades before 1900. Many of those who helped account for the population growth of cities were immigrants arriving from around the world.

What factor helped farmers on the Great Plains overcome opposition from cattle ranchers?

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What was one reason for the expansion of machine politics in the late nineteenth century?

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