Evolution of the Railroad Industry – The 200 Year Long Journey


Railroads in the United States have a long, interesting history but very few people are aware of it. That might be because railroads were used more frequently for transportation of goods than of passengers. Did you know that the history of railroads is almost as old as the country itself? Railroads have been the silent contributors of growth and prosperity. Let’s follow the evolution of the railroad industry.


How it Began


This long journey began in 1826, when John Stevens pieced together a steam engine and the railroad to create a steam-powered horse carriage. This was the very first steam locomotive in the United States and earned its inventor the title of Father of American Railroads. Stevens had been granted the first railroad charter in the United States in 1815. His plans for the New Jersey Railroad Company never came to fruition, though he was able to use the charter later to create the Camden and Amboy Railroad and Transportation Company with his son Robert and other partners.


Four short years after the invention of the steam locomotive, America had its first intercity railroad. The railroad – the Baltimore and Ohio, or B&O – was a short 13 miles and connected Baltimore to what is now Ellicott City, Maryland. In the same year, on December 25, the Best Friend of Charleston became the first railroad to carry passengers.


Within 20 years, the industry was booming and America had over 9,000 miles of operation.


In 1862, President Lincoln signed the Railroad Act that supported the construction of transcontinental railroads in the U.S. By 1869, the Union Pacific Railroad was running at Missouri River and Central Pacific began running in California. These two lines met in Utah to make the first transcontinental railroad.


When the Industry Thrived


From 1880 to 1930, the railroad industry saw rapid growth and progress. In 1887, the Interstate Commerce Act mandated the federal economic regulation of all railroads. By this time, the railroads transported both goods and passengers and were the dominant force in the industry.


By 1917, railroads were a mammoth industry, employing close to 1.8 million people and running 254,000 miles of track.


During this time, some key developments took place to propel the industry forward. Standard track gauge was established, automatic couplers and air brakes were invented, and there was a drastic increase in safety measures and technology.


The Decline of the Industry


Railroading was too big an industry to not be affected by the Great Depression, but even before that, when automobiles become affordable in 1930, there was a decline in passenger traffic.


The Depression saw the revenue of this industry reduced by 50% from 1928 to 1933. The downward trend continued until the World War II, where it saw a brief revival. But that wasn’t enough. The traffic had fallen by 28% from 1944 to 49.


To reduce the losses, the railroads attempted to merge in 1960, reducing passenger trains and maintenance. By 1970, many larger railroad companies where quickly going out of business.


How Did the Industry Bounce Back?


By 1980, the government realized that the railroad regulations were stifling the industry and introduced the Staggers Rail Act with more balanced regulations. This act allowed railroad companies more autonomy regarding rail routes, services, and prices.


The rise in the gas prices led to an increasing demand for railroad services for transportation of goods. By 1990, passenger traffic had also increased. People realized that railroad transport is a more economical and environmentally friendly option.


The Backbone of the Country’s Economy


Today, railroads in the U.S crisscross through the length and breadth of the country, and is is the backbone of commerce and the country’s economy. It transports goods as well as people from one corner of the country to another faithfully, reducing costs as well as the environmental impact.


Here is the Evolution of the Railroad Industry sweet infographic:




Learn more about how Proportion-Air services the transportation market.


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