Railroads

   The railroad industry, which began in the early 19th century and grew with increasing rapidity from the 1830s onward, was central to U.S. economic growth. By 1860, there were more than 30,000 miles of railroad track in the United States. The greatest wave of railroad construction came after the Civil War in conjunction with westward expansion and settlement and massive industrialization in the East. The first transcontinental railroad was completed in 1869, and by the start of the 20th century more than 200,000 miles of track had been laid.

   The railroad industry also witnessed the development of huge corporations headed by entrepreneurs. Despite the beginning of regulation with the creation of the Interstate Commerce Commission in 1886, the ruthless profiteering and shady business practices of such men led to calls for reform. Legislation aimed at curbing railroad monopolies and controlling the rates charged by companies was passed under both Theodore Roosevelt and Woodrow Wilson. During World War I, the government took over operation of railroads and, although there were calls for the practice to continue, they were returned to private ownership under the Railroad Transportation Act of 1920.

   Postwar readjustments led to labor conflict in the industry and a major railroad strike in 1922. The development of the automobile and air transportation and the earlier overexpansion of uneconomic lines placed the industry in an increasingly unfavorable position from the 1920s onward. By 1929, interstate rail travel had fallen by 18 percent. Railroad mileage, which peaked at 254,000 miles in 1916, had fallen to 249,619 miles by 1930. Many railroad companies were heavily in debt and in 1932 were provided with loans by the Reconstruction Finance Corporation. In 1933, the Emergency Railroad Transportation Act consolidated the railroads into three regional groups and established a coordinator to prevent duplication of services and bring about greater cooperation. The development of diesel and some new lines contributed to some increase in rail travel in the late 1930s. Reforms were also introduced to benefit rail workers. Two Railroad Retirement Acts providing retirement payments to railroad workers were introduced under the New Deal, the first in 1934. When it was declared unconstitutional in 1935, a second was passed in 1937. Benefits were increased in 1951.

   Railroads faced a considerable demand during World War II, and they avoided falling under government control by pooling resources and adopting centralized traffic control. Timetabling was managed through the federal Office of Defense Transportation. The war provided railroads with a new lease on life as they were the major form of freight transportation during the war and experienced a huge increase in passenger travel. However, after the war the railway system again faced competition from road and air transport, particularly after the development of the federal highway system in the mid to late 1950s, and they declined in importance.