The Role Of Railroads In The Late 19th Century

Another disruption in the lives of many Americans was the centralization of various railroads. A perfect example of this is Cornelius Vanderbilt, who ruthlessly expanded his railroad empire in New York by combining the New York Central and Hudson River into the New York Central & Hudson River Railroad (“Inventing the Big Businessman”). He also pursued the Erie Railroad, which he did not capture. Vanderbilt’s attempts to capture the entire railway system reflected his desires to become a master of all railways (“A Chapter of Erie”). In this way, he could charge higher fares and rates and cut wages. These unified systems, however, destabilized the lives of Americans because the railroad magnates were becoming too large for the state control,

meaning they could use their money to influence legislators and exploit the corruption of public officials to advance their own cause and earn a higher profit.
Despite the unimaginable success of railroad owners, there were two main issues that continued to haunt them throughout the middle-to-late 19th century.

The first was the conflict between “railroad kings” and workers. Railroads were the first industry to have workers operating in “an impersonal, bureaucratically controlled environment, and they were among the first to achieve collective bargaining and grievance channels through their national unions, the railway brotherhoods” (Porter 37). However, with the centralization of large railway lines, wage cuts often occurred, leading to worker strikes and violence when companies called in the military to break up the demonstrations; once again revealing the political influence that railroad owners had. Examples of violent labor conflicts include the Great Railroad Strike of 1877, the Gould Southwestern Strike of 1886, and the Pullman Strike of 1894 (“The Public Be Damned”). As a result of the labor unrest, the public pushed for governmental intervention in limiting these massive corporations. Politicians eventually listened to the public, leading to legislation, such as the 1890 Sherman Antitrust Act (and eventually, other legislation), that attempted to protect consumer and worker interests by breaking up these massive companies (Micklethwait and Wooldridge 73). Thus, labor unrest was one cause of the repeated issues faced by owners throughout the late 19th and early 20th centuries because it caused the public to pressure

legislators into enacting legislation against the railroads.
Not only was labor strife a cause of continual problems for owners during this time, but competition with other railroads was as well.

Due to the profits being reaped by the great railroad companies, railroad companies frequently entered into the market. Thus, there were too many railroads and too little business for all of them to survive. As a result, companies would engage in “orgies of rate cutting—lowering prices for passengers and freight” (“The Public Be Damned”). This would destabilize the stock market because the railroads were losing money and the majority of stock in the New York Stock Exchange was tied up in various railroad companies. To protect their profits, companies attempted to cooperate in order to set reasonable prices. These efforts invariably failed, however, as most owners failed to resist the temptation to cut their prices for rapid profits, or got into trouble with the law for collusion (“The Public Be Damned”). Competition remained a great issue for railway owners until 1901, when William K. Vanderbilt established a “Community of Interest,” that circumnavigated Supreme Court restrictions on cooperation among railroads (“America’s Railroad Kings and Their Vast Combinations”). Thus, railroads continued to have numerous issues throughout this period of history because of the competition with other

railways.
As the first corporations, railroads provided future businesses with a blue print for success, acting as a base on which future industries could grow while also changing the lives of Americans, for better and for worse; however, despite these unique innovations railroad companies were dogged with issues regarding labor and competition throughout much of the middle-to-late 19th century. Railroads provided other businesses with the financial means (a developed stock market) and the nationalized markets needed for manufacturers and distributors to incorporate. They also established a managerial system, a new working position in American society, to help organize the United States and its workers. Railroads are also responsible for the negative consequences that came with a newly rich Anglomaniac class of people that formed large, overpowering systems of railroads that the public came to resent. Yet despite the railroad industry’s general success, they could not escape problems with labor-industry relations and competition with other railways. Regardless, with both its benefits and consequences, America’s railroad industry was vital in the formation of the United States’ modern economic structure, without which the United States would never developed into a world power.