The Great Railroad Revolution (23 page)

The asymmetry of the two sides meant that the result of the war should never have been in doubt. The North had two-thirds of the guns, a far more developed economy, most of the industrial capacity, better railroads, and far greater financial resources. Its territory included all the cities above one hundred thousand people with the exception of New Orleans. Given the North's overall strength and all its other advantages, the fact that the conflict lasted for four years was a remarkable testimony to the South's ability to fight. The South, though, had the better generals, especially in the early stages, and was fighting for what its citizens perceived as their very survival, which was a strong motivating force. Moreover, the South's generals seemed to have an instinctive understanding of how to use the railroads in the early part of the war, but the failure of Davis's government to assume control over the railroads greatly hampered the war effort. As John F. Stover suggests, “Had the government of Jefferson Davis earlier faced up to its transportation problem and established as vigorous a policy of railroad control as it did in the field of ordnance, Southern railroads might well have provided a more adequate support for the Confederate military effort.”
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The scale of use of the railroads by the military demonstrates the vital role they played throughout the war. Not all railroad companies kept records, but the Pennsylvania alone carried nearly a million military personnel during the conflict and the Illinois Central more than half a million. However, for the most part the railroads maintained their normal business, and, overall, military carryings represented a small proportion of their total wartime traffic. Even more remarkably, the railroads in the North continued to grow during the Civil War, and a start was even made on the first transcontinental.

It was because of the railroads that the conflict was carried out over such a large area and continued for so long. A report by McCallum after the war demonstrates the scale of the railroad operations during the Civil War. He
found that the United States Military Railroads, a government agency, was bigger than any private company of the age, operating 2,105 miles of line with 419 locomotives and 6,330 cars. The railroads afforded the armies unprecedented mobility, which, as the war progressed, they learned to exploit to the fullest. The scale of destruction and carnage can be directly attributed to the railroads. The official history of the war lists ten thousand military encounters, of which more than four hundred were deemed serious enough to be called battles, about one every four days. Not surprisingly, therefore, the war was far bloodier than its predecessors. The death toll of American soldiers, some 620,000,
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remains greater than in any conflict involving the United States and, remarkably, more than the total lost in all the nation's other wars before or since, including the two world wars and Vietnam. The railroads greatly increased the fighting power of the armies, allowed them to operate much farther from their supply depots than previously, and gave the side with the best railroad supply line a clear strategic advantage. The impact of the war was devastating to a vast swath of the country, and the railroads could be held responsible: “A war strategy that relied on railroads spread the effects of war over a vast area and left hundreds of thousands of uprooted wanderers looking for a place to settle or earn a living.”
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Perhaps the most fascinating question concerning the relationship between the railroads and the war, however, is whether the conflict would have happened at all had it not been for the iron horse. Many historians suggest that had the Southern states seceded earlier, when there were no long-distance railroads, the Unionists would not have been able to reclaim the South. According to Franklin Garrett, a historian of the South, “If the Southern states had seceded in 1832, when South Carolina was threatening to do so, nothing could have stopped them.” He also points out that Atlanta was created by the railroads, and that had it not enjoyed such efficient connections with the rest of the country, Sherman's long march through the hostile territory of the South would have been impossible. It was thanks to the railroad that “Union forces were able to strike deep into the South without suffering Napoleon's fate in Russia.” Indeed, even as late as 1850, it would have been impossible to envisage that the war could have been conducted on such a wide front, as there was no quick way of traveling across the country. Secession “might have succeeded in 1850 when over 40 per cent of the nation's inhabitants formed a truly ‘solid South'
and the opposition 60 per cent was scattered from Skowhegan, Maine, to Mississippi with no completed means of transportation at either end.”
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Whereas the railroads determined the conduct and course of the war, the long-term impact of the conflict on the railroads was less obvious. By 1861, the railroads were already changing, becoming more of a mass enterprise and beginning their long process of consolidation. The American public's suspicion of the big companies, which was to become an increasingly significant aspect of its relationship with the railroads as the century drew to a close, had begun to emerge even before the first fateful shots of the war were fired at Fort Sumter. For all the momentous physical impact of the conflict on the railroads, especially in the South, the trends that would define their postwar history were already visible when war broke out. The railroads were about to embark on the period of their greatest domination, and, in reality, the war was merely a blip in an inevitable process. First, however, there was a continent to cross.

The war was a transforming experience for railroads on both sides of the Mason-Dixon line, but in contrasting ways. In the North, it was mainly good news. Apart from a few unlucky railroads with lines on the border that suffered war damage, the Northern railroads had not only escaped any direct consequences of the war but prospered, thanks to the increase in traffic that always results from conflict. At first, the Northern companies rued the outbreak of the war, fearing it was going to wreck their recovery from the poor economic conditions of the late 1850s. However, they soon realized that war was beneficial for railroads. Use of the railroads in the North soared, boosting income and profits: “Railroads which had suffered a decline in freight and passenger revenues in the three years immediately preceding the outbreak of war, soon found themselves swamped with business, and vied with each other in placing orders for more locomotives and more cars.” According to the
American Railroad Journal
, 1863 had been “the most prosperous ever known to the American Railways,” and traffic continued to grow throughout the war.
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The four major east-west railroads—the Pennsylvania, the Baltimore & Ohio, the Erie, and the New York Central—did especially well during the conflict. With the Mississippi closed to through traffic during the war, and poor harvests in Europe increasing the demand for American grain, all four railroads enjoyed a spectacular rise in traffic and in profits during the war. For example, whereas in 1861 the New York Central carried 2.1 million passengers, this figure had all but doubled to 3.7 million four years
later. For the Michigan Central, the increase was even more phenomenal: a growth of 260 percent during the war. But it was not only passengers who used the trains. War generates a variety of demands for freight transportation, from raw materials to ammunition. Not surprisingly, since the railroads were essentially a monopoly, goods traffic rose dramatically during the conflict. As a result, there were healthy increases in dividends paid to shareholders, even on railroads that had rarely prospered. The Erie, for example, after not paying any dividends for many years, suddenly distributed 8 percent to its grateful investors in 1864. Some minor but heavily used lines such as the Cleveland, Painesville & Ashtabula, which paid a remarkable 26 percent that year, made a fortune for their owners.

As ever with the railroads, rapid growth was not entirely beneficial, because at times of such intensive use maintenance tends to be skimped and assets get overused. The war saw unprecedented increases in demand for equipment such as rails, new cars, and locomotives, which pushed up operating costs. Labor costs rose, too, as many skilled men joined the Union army, partly because Lincoln, showing a rare absence of foresight, failed to take action to stop railroad workers from enlisting. On some railroads, the situation was so bad that in the later stages of the war, they had to turn away business for want of rolling stock or personnel to run the trains.

Those Northern railroads that were safely ensconced away from the front were quick to use some of this extra revenue to expand. A total of five thousand miles was added to the US rail network in the first half of the 1860s, mostly in the North, a remarkable pace of growth given that so many resources were devoted to the war effort and an illustration of the burgeoning industrial strength of the North. Apart from a few hundred miles of the lines built by the United States Military Railroads, these tracks were intended to be permanent additions to the nation's network. Indeed, this period can be seen as the beginning of the greatest period of growth in the US railroads' history—or indeed that of any other country—as will be outlined in the next chapter.

The contrast with the railroads in the South could not have been greater. The war exacerbated the differences between the railroads in the two regions in every conceivable way. As in the North, the Southern railroads also saw increased carrying, but because of the chaotic organization
of the military effort, the railroad companies rarely received any of the money this should have generated. Moreover, the lack of maintenance facilities—as most of the latter had been based in the North—together with the damage wrought first by overuse and then by military action, meant that the Southern railroad network was in a terrible state at the end of the war. Indeed, much of the system was not functioning at all, owing to a combination of war damage and the parlous financial state of many railroad companies. Several railroads had gone bankrupt during the war, as the secessionist government had run out of money to pay for the men and munitions they had carried, and there was no one to compensate them for the war damage. The bonds issued by states and railroads during the Confederacy were officially deemed void by the federal government, leaving the railroad companies holding worthless paper.

Without factories or even materials, the South had completely depleted its rolling stock by 1865, and the process of reconstruction would prove slow. The Southern railroads were further hampered in their efforts to recover from the war by a shortage of labor. As Theodore Kornweibel Jr. notes, “Slave labour was essential to antebellum southern railroading,” and during the war this dependency increased, as large numbers of slaves were drafted onto the railroad to replace men who had signed up to fight.
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Losing that free labor at the conclusion of hostilities made it even more difficult for the Southern railroads to become financially viable.

The war had a very powerful direct impact on the railroads in both North and South. However, the trends that saw the railroad expand and develop almost exponentially for the rest of the century—the consolidation of small companies into bigger railroads, the growth of financial capitalism that made it easier for the railroads to obtain funds for expansion, and the shift in agriculture away from subsistence farming toward cash crops that required transport by rail to the Eastern Seaboard—had already been in evidence before the war and simply intensified afterward. In other words, those factors that would transform the US railroads from being mostly a series of short and disconnected lines into a network were already in place. For example, whereas in 1849 no railroad company operated more than 250 miles, by 1855 at least sixteen railroads controlled more than 200 miles, and the large companies were already on their way to becoming the nation's
biggest businesses. By the outbreak of the war in 1861, there were at least ten railroad companies with a capital of $10 million or more, far bigger than any other enterprise of the time.

Britain played a key role here in supplying capital. Right from the outset of American railroad development, financing had been sought in Europe and especially in the United Kingdom. Those US states that provided so much support to the railroad pioneers raised much of their capital, in the form of bonds, from the other side of the Atlantic. Indeed, when several defaulted on them in the 1840s, it was the London market that suffered most. Not surprisingly, it became reluctant to lend again, boycotting the American railroad companies. But the lure of the American railroad market was too attractive, and within a few years British investors started sending money over again, a boom-bust cycle that would repeat itself several times by the end of the nineteenth century. British investment ceased during the Civil War, but resumed by the end of the 1860s. And then it all went sour again with the panic of 1873. The author of the standard work on British investment in American railroads, Dorothy Adler, suggests that British capital helped to fuel this succession of American railroad manias: “It is not stretching the facts to draw a parallel between the late 1840s, the late 1860s and the years 1879–81. Each of these periods was characterized by a speculative movement of British capital into American railway shares.”
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She calculates that by the end of the century, British investment in US railroads totaled around £400 million (perhaps worth one hundred times that amount today, £40 billion), around 10 percent of all American railroad capitalization.