Over time, there have been many different modifications to facilitate transportation and the economy. The transcontinental railroad is one factor that introduced the American indusrty. This immense industry turned into an even greater business and touched from coast to coast. Because of the railroads, urbanization and industrialization grew although the corruptions with scandals came as well. The nation was in a time of spurring even higher from starting in 1865. Before the railroads, the population was more scattered around farming areas. As the railroads grew, urbanization also expanded and began gathering around the railroads.
Because the government gave a significant amount of land grants, the railroad companies, which were able to choose alternative mile-square sections, had much land that they did not use to build their railroads. President Grover Cleveland gave the unclaimed portions for land settlement in 1887. Although this was seen as the “giveaway” of land, the government ended up benefiting with long-term preferential rates for postal service and military traffic; the railroad corporations could also sell the land at an average of three dollars an acre.
With new railroads in placed, people moved beside them and brought in business for the railroads and towns which gave the railroads another source of profit. Immigration also started uprising, with the Chinese and Irish working on the railroads. As the railroads traveled across the country, it gave the nation a way to get products or people across the country. Food and materials traveled to all from farms to towns and cities. People found it easier to move across the country; urbanization grew throughout the whole country rather than being scattered among the farms.
The railroads were built because of industrialization and expanded it even further. As the railroad network snaked around the country, the economic growth did as well. The locomotives touched coast to coast offering what each side of the country had for the other. The west had many wealthy resources and the east had many workers. Raw materials traveled back and forth as so did the finished goods afterwards, such as steel for the generation of more railroads. The United States soon became the largest integrated national market in the world.
As the railroads grew there was more demand for raw supplies from different parts of the country. The steel and wood for the railroads impacted greatly the forestry and mining industry while the coal industry also grew to power the trains; new factories and industries were built and powered to load more onto the new railroads. Millionaires greatly benefited from this, such as Cornelius Vanderbilt who was one of the most profitable amongst the new aristocracy. As the railroads expanded, so did industrialization, which made the United States economy one of the best that it has had over history.
Although the effects of the railroads were mostly positive, there was the negative aspect of corruption and scandals came as well. Congress commissioned the Union Pacific Railroad, which the company received huge sums of money and land to build tracks. What the government did not know was that the corporation had frauds which were known as the Credit Mobilier; insiders from the construction company had reaped twenty-three million dollars in profits. Jay Gould was many of those who also executed many robberies. For nearly thirty years he gained money from the stocks of Erie, the Kansas Pacific, and the Texas and Pacific.
One of the many different ways these million-dollar-thieves manipulated was “stock watering”. Originally coming from the definition of bloating up a cow to sell for more, the stock promoters were doing this but with the economy and stocks. The railroad stock promoters inflated their claims about a given line’s assets and profitability and sold stocks and bonds much higher than the railroad’s actual value. Railroad managers where therefore forced to charge much higher and compete against each other in order to pay the exaggerated financial obligations. In the midst of all the scandal, the Vanderbilt’s were involved as well.
As many railroaders, they had to fight and bribe for rights. As long as there were railroads, and with their many positive effects, there was also corruption, competition, and scandal. The building of the transcontinental railroads changed the American economy immensely. It has changed the nation as a whole and spurred with a new way of supply and demand traveling all over the country. The new web of steel brought up urbanization, industrialization and corruption with scandals as well. The transcontinental railroads brought the country together with a new form of economy.
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