Thomas J. Misa
A Nation of Steel: 
The Making of Modern America, 1865-1925

Baltimore: Johns Hopkins University Press, 1995

Chapter 1: THE DOMINANCE OF RAILS (1865-1885)
  1. Introduction
  2. Inventing the Process
  3. Developing the Technology
  4. Shaping Technological Knowledge
  5. Building Transcontinental Railroads
[A Nation of Steel]

 Lo, soul, seest thou not God's purpose from the first?
 The earth to be spann'd, connected by network,
 The races, neighbors, to marry and be given in marriage,
 The oceans to be cross'd, the distant brought near,
 The lands to be welded together.76

 Through the 1880s, if not beyond, the mass production of steel in the United States was predicated on the mass consumption of steel rails.  In turn mass consumption required a sustained building campaign by the railroads.  By the 1860s, the northern and eastern states already had a primary rail network in place, a factor often cited in the North's success in prosecuting an industrialized War against the South.  The defining demand for rails arose only with the impressive mileage that was laid down in the trans-Mississippi West after 1880 (see Figure I.13).  In this respect the peculiar character of Bessemer steelmaking in America was ultimately a product of the nation's western expansion, "the lands to be welded together,".

 INSERT Figure I.13 Railroad Building by Region (1860-1900)

 Given their substantial investment -- and considering the outlay for rails was exceeded only by the staggering outlay for cutting, filling, and grading the route -- the major railroads had to ensure they had sufficient traffic and revenues.  Demand could not be left to chance.  For the major eastern trunk lines like the Pennsylvania, the New York Central, and the Baltimore & Ohio the problem was controlling competition (see chapter 4).  For the transcontinental railroads pushing beyond the Mississippi River, or even more boldly beyond the Missouri, the problem was creating traffic.  Railroads like the Chicago, Burlington & Quincy, pushing across Iowa in the 1860s, Nebraska in the 1870s, and Wyoming and Montana in the 1880s, had a comparatively easy time, for along its route the Burlington planted communities that provided eastbound freight in Chicago-bound commodities as well as westbound freight in farm machines and consumer goods.  The more difficult task was for roads like the Santa Fe, which passed through arid lands in Arizona and New Mexico that were impossible to farm without irrigation.  As encouragers of settlers, and thus providers of traffic, the land departments of the transcontinental railroads were ultimately the final link in the technological system that began with the Bessemer steel rail mills.

 Indeed, railroad "colonization" schemes imprinted some durable characteristics on the West.  The towns west of Lincoln, Nebraska, line up in alphabetical order -- Crete, Dorchester, Exeter, Fairmont, Grafton, Harvard, Inland, Juniata, Kenesaw, Lowell -- each one of them planned and plotted and sold by the Burlington railroad to ensure traffic.  Another railroad official became so proficient at organizing towns that he claimed the task took only 20 minutes.  Nebraska filled up with certain European immigrants, and not with others, as the Burlington railroad saw fit.  "I have so poor an opinion of the French & Italian immigrants for agriculturists that I shall not issue any circulars in their languages," wrote the Burlington's land officer.  "My efforts will be most confined to Germans, Scandinavians, English, Welsh, and Scotch, as they make good farmers."*  Russians, Canadians, and Bohemians also numbered among the favored peoples.  The classic crop of Kansas -- hard red winter wheat -- arrived with a large colony of Russian Mennonites that settled lands of the Atchison, Topeka & Santa Fe, whose land officer became known as "the Moses of the Mennonites."  Finally, in most contests with native Americans the railroads proved irresistible.  "The construction of the road," stated the Central Pacific's general solicitor, "virtually solved the Indian problem."*77

 The force of railroads and steel did not transform the Reconstruction South, however.  The region's leading ironworks, Tredegar Iron (Richmond, Virginia), attempted to establish a Bessemer plant in 1866, when (wrote one of its officers) "demand continues brisk -- particularly from our railroads, which though torn up again & again during the war, are still, for the most part, financially sound and can look forward to a promising future."*  The Bessemer effort failed, nevertheless, when Tredegar was unable to attract Northern capital.  Worse, Tredegar became shackled by worthless (Northern) railroad bonds after the 1873 depression.  Lacking the capital to convert to steel, it passed into receivership and decline within the decade.  Regional leadership in metal manufacturing passed to Birmingham, Alabama, which flourished as a center for iron and steel making beginning in the 1880s after the Alabama & Chattanooga and the Louisville & Nashville railroads linked it to the region's rich mineral lands.78

 Difficulties raising the large amounts of capital needed for comprehensive regional systems hampered railroad construction and system building across the South, in large measure because the region's own investors had insufficient funds.  Inexorably, despite pockets of regionally-oriented capital in Richmond as well as entrepreneurs, promoters, and visionaries active across the region, Northerners stepped into the breech.  In the early 1870s the Pennsylvania Railroad made a concerted if short-lived effort to build a regional system from Richmond and Charleston in the east through to Memphis in the west, while later in the decade the Illinois Central began a durable presence in the South by purchasing a defaulted Southern railroad that ran from Cairo, Illinois, to New Orleans, thus connecting the Great Lakes with the Gulf of Mexico.  Nevertheless, according to Mark Summers, "it was parochialism, not sectionalism or nationalism, that left the most serious marks on railroad policy"* in the South.  Before the war, parochialism took form in the patchwork of different railroad gauges that preserved local control and prevented the efficient through-shipment of goods.  In 1861 eight changes of cars due to gauge were necessary to complete a trip from Philadelphia to Charleston.  After the war, parochialism was scarcely dampened by the Northerners' imposition of Reconstruction.  While communities in both the North and South initially competed enthusiastically for railroads, in time Southerners became increasingly alarmed with railroads whose corporate form seemed to embody foreign dominance and whose ownership in fact passed increasingly into Northern hands.  Concerning the major southern railroads (100 miles or more in length), Northerners controlled 21 percent of the region's mileage in 1870, 48 percent in 1880, 88 percent in 1890, and 96 percent in 1900.79

 And not only in the South did railroads pass into corporate hands.  The second most famous railroad event of 1869, after the Golden Spike at Promontory Point, pointed to the corporate structure that the transcontinental rail boom would take.  Previously most railroad companies North and South had been local corporations, owning perhaps a few hundred miles of track that connected at its terminals with other lines.  In 1869 Cornelius Vanderbilt gained control of the Lake Shore & Michigan Southern, united it with his New York Central, and secured a through line from Manhattan to Chicago.  The advantages of having a long trunk line under one ownership were soon noted by Vanderbilt's rivals; those with sufficient resources followed his precedent.  The chief rival, the Pennsylvania Railroad, grew into a national concern by purchasing smaller roads.  In 1880 its system comprised 44 smaller companies and operated 3,773 miles; by 1890 it added 29 more companies and operated a total of 5,000 miles.  In 1890 only 609 of the total 1705 railway organizations remained as independents; most were subsidiaries or feeders to one big line or another.  In effect nearly two-thirds of the country's railroad companies had been absorbed by the other one-third.  The process of consolidation under Northern corporate control culminated with the Morgan-led reorganization of the industry in the 1890s (see chapter IV).80

 To a striking extent, steelmaking in the United States was created for a single product: Bessemer steel rails.  Because railroad officials promoted, funded, and even founded early Bessemer steel works, as well as consumed almost all the new steel, their influence was immense.  Railroads helped train the first generation of steel executives in modern managerial models and accounting practices.  Their influence can further be traced to the scientific knowledge developed and deployed by the industry, for railroads decisively influenced the fusion-chemical controversy that established the science of steelmaking.  Subsequent developments would reflect this legacy, most notably as Bessemer steel rail producers struggled fitfully to stabilize their prices.

 Railroads of Bessemer steel rails furthermore shaped the pattern and pace of national development.  With the primary rail network in place, manufacturers east of the Mississippi River were connected in all seasons and in all weather to expanding markets in the West; the frozen canals, spring freshets, and late summer droughts that had imposed seasonal schedules on manufacturing and shipping were reduced to local annoyances.  Machines running year-round would increasingly constitute the dominant mode of industry.  In turn, cheap food stuffs flowed from the West into manufacturing and exporting cities, fueling a powerful dynamic of growth.  Indeed the flow of grain, hogs, lumber and other commodities was so vast as to erect an immense commercial superstructure for shipping, trading, storing and financing this trade.  Needed for these new activities were an unprecedented number of white collar professionals, creating demand for office space in the commercial core of cities.  In no American city was the dynamic of growth stronger than in Chicago -- the terminus for east and westbound routes that by 1893 totalled one-twenty-fifth of the world's rail mileage.81  It would be there, in a complex partnership with the Pittsburgh mills, that the next fundamental development in steel would be found.

76. Walt Whitman, "Passage to India," in Mark W. Summers, Railroads, Reconstruction, and the Gospel of Prosperity: Aid under the Radical Republicans, 1865-1877 (Princeton: Princeton University Press, 1984), quote 163.
77. Creed Haymond, The Central Pacific Railroad Co.: Its Relations to the Government (San Francisco: H. S. Crocker, 1888), quote 43, 155; Richard C. Overton, Burlington West: A Colonization History of the Burlington Railroad (Cambridge: Harvard University Press, 1941), 283, 287, 291, quote 303, 347, quote 366, 381; later, the Burlington issued circulars in French, but aimed them primarily at families of Alsace-Lorraine (in Iowa and Nebraska, the railroad promised, they could "escape from the crushing heels of the German Empire's militarism").  For the activities of railroad land offices, see also William S. Greever, Arid Domain: The Santa Fe Railway and its Western Land Grant (Stanford: Stanford University Press, 1954), 43-52, 103-12; L. L. Waters, Steel Trails to Santa Fe (Lawrence: University of Kansas Press, 1950), 218-60; Duane P. Swanson, "The Northern Pacific Railroad and the Sisseton-Wahpeton Sioux: A Case Study in Land Acquisition," (M.A. thesis, University of Delaware, 1972).
78. A. L. Holley to John A. Griswold, 24 May 1866, 2: 4, JAG; Charles B. Dew, Ironmaker to the Confederacy: Joseph R. Anderson and the Tredegar Iron Works (New Haven: Yale University Press, 1966), quote 318-19 ("The depression of 1873, not the Civil War, stunted the growth of the South's largest industrial plant"); W. David Lewis, "Joseph Bryan and the Virginia Connection in the Industrial Development of Northern Alabama," Virginia Magazine of History and Biography 98 (1990): 613-40; Mark W. Summers, Railroads, Reconstruction, and the Gospel of Prosperity: Aid under the Radical Republicans, 1865-1877 (Princeton: Princeton University Press, 1984), 213-36; Maury Klein, History of the Louisville & Nashville Railroad (New York: Macmillan, 1972), 264-77.
79. Summers, Railroads, Reconstruction, and the Gospel of Prosperity, quote 97, 123, 213-36, 278-79; John F. Stover, The Railroads of the South, 1865-1900: A Study in Finance and Control (Chapel Hill: University of North Carolina Press, 1955), 11-12, 99-121, 155-85, 282.
80. E. G. Campbell, The Reorganization of the American Railroad System, 1893-1900 (New York: Columbia University Press, 1938), 10-13.
81. See William Cronon, Nature's Metropolis: Chicago and the Great West (New York/London: W. W. Norton, 1991), 55-259, esp. 92.