Railroads, the Free Enterprise Alternative

By Daniel L. Overbey | Go to book overview
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2 A PRODUCT OF NECESSITY

During the 1830's a tremendous change took place within the railroad industry. Much like the caterpillar changing into a butterfly, the scattered tramroads of an earlier decade quickly evolved into an industry of national prominence. Steam replaced horse power; rails of iron replaced stone and wood. Railroads left behind their old competitors, canals and turnpikes, to take on a new role in transportation.

It was at this point that the development of American railroads ceased to parallel that of their British counterparts. In Britain, railways competed with and complemented existing canals and highways. In the United States they "provided means of communication where there were none before save Indian trails."1 When Parliament considered a proposed railway charter, existing competitors forced close examination of its benefits. The only force acting on the American legislators was the people's cry for more transportation improvements--meaning railroads. As concluded by Haines, "Practically the only preliminary restriction in the early charters was in the provision for expropriating private property for railroad purposes."2


CONGRESS AND THE RAILROADS

Aside from granting charters, Congress was little involved in early railway development. This was due in part to the philosophy that internal improvements were a jurisdiction of the states, but it was also due to the fact that the federal government was involved in few things at all. America's early railroads were local affairs, with residents furnishing capital directly or through local governments. Both business judgment and civic pride were factors, sometimes with more of the latter than the former. State governments granted charters and, occasionally, provided financial aid to local railroads. The philosophies of laissez faire democracy and states' rights were justification for the lack of federal involvement, though not for long.

The framers of the Constitution recognized commerce as the tangible bond uniting the states. Commerce grew with the nation, as did demands

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