Once the western migrations were unleashed, the demand for improved transportation systems grew dramatically. Investments in steamboats, canals, and railroads were the most important internal transportation developments of the antebellum era. There can be little doubt that the host of improvements in transportation and the precipitous decline in freight rates (as shown in Figure 9.1) were truly revolutionary in impact as well as in form. Not only did they directly propel the process of westward expansion and the relocation of agriculture and mining discussed in chapter 8, but also they greatly altered various regions’ comparative advantages in production. For example, they set the stage for New England to concentrate increasingly in manufacturing and to further the advance and application of new technologies and organizational forms of production in a factory setting (chapter 10). In turn, these changes set the stage for urbanization and heightening urban problems and labor unrest (chapter 11). The falling costs of transport—and communication—boosted market size and efficiency and forged a national market for many goods and services. Whereas the pattern of general price declines in the western markets of Cincinnati and St. Louis had followed those in New York and Philadelphia by 12 months near the turn of the century, the lag was reduced to only
FIGURE 9.1
Inland Freight Rates, 1784-1900
Freight rates declined dramatically during the nineteenth century.
Sources: North 1965; 1973, 108.
Three or four months by the 1830s. By the 1850s, this lag had fallen even further to a mere week or so. Lastly, the transportation linkage by water and rail between the East and West would prove significant in binding these two regions—politically as well as economically—as interregional tensions mounted in the years preceding the Civil War. The term transportation revolution consequently implies far more than a mere series of new technological forms rapidly introduced.
An important part of the transportation story is the role of private versus public initiative during this critical period of growing economic unification. In England, private entrepreneurs built and operated railroads and canals, and government participation was slight. In the United States, however, there was a mixture of private and public enterprise. Government investments in canals and railroads as a percentage of total investment in these modes were large. Public investments included a smaller proportion for roads and a minimal amount for the natural waterways. A strong, active role in transportation for government had been planned as early as 1807, when Treasury Secretary Albert Gallatin was asked to develop “a plan for the application of such means as are within the power of Congress, to the purpose of opening roads and making canals” (Goodrich 1960, 27). Gallatin’s ingenious plan had a projected total cost of $20 million ($400 million in today’s money), but questions of legality—and politics, as always—prevented the federal government from undertaking it. Many viewed the Constitution as an agreement among sovereignties (the sovereign states), and “strict constructionism” throughout most of the antebellum period held the federal government to only a few projects, mainly those passing through several states at a time. Nevertheless, Gallatin’s plan was carried out, not by the federal government but by private entrepreneurs and by state, local, and private enterprise mixtures. The sheer size of the capital requirements often necessitated these collaborations. Both public officials and private citizens promoted government intervention in transport investment. In some cases, private operators succeeded in obtaining public credit and special assistance just as special interest groups (such as farmers) do today. In other cases, local politicians who wanted transportation improvements for their town or region took advantage of private entrepreneurs.
World History
