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Railroads (Divine, 2007)

Robert A. Divine, et al., The American Story, 3rd ed., vol. 1 (New York:  Pearson Education, Inc., 2007), 344.
During the 1840s, rails extended beyond the northern eastern and Middle Atlantic states, and mileage increased more than threefold, reaching a total of more than 9000 miles by 1850. Expansion was even greater in the following decade, and by 1860, all the states east of the Mississippi had rail service. Throughout the 1840s and 1850s, railroads cut deeply into the freight business of the canals and drove many of them out of business. The cost of hauling goods by rail decreased dramatically because of improved track construction and the introduction of powerful locomotives that could haul more cars.  

The development of railroads had an enormous effect on the economy as a whole. Although the burgeoning demand for iron rails was initially met mainly be importation from England, it eventually spurred development of the domestic iron industry. Since railroads required an enormous outlay of capital, their promoters pioneered new methods for financing business enterprise. At a time when most manufacturing and mercantile concerns were s still owned by families or partnerships, the railroad companies sold stock to the general public and helped to set the pattern for the separation of ownership and control that characterizes the modern corporation.


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