The building of the railroads spurred western settlement. In 1862 Congress authorized construction of two railroads to link the Midwest and the West Coast. The Union Pacific Railroad extended westward from Nebraska; the Central Pacific Railroad went eastward from the Pacific Ocean. The meeting of the two railroads at Promontory Summit, Utah, in 1869 signified a new era in Western history.
Federal and state governments had long encouraged the growth of railroads. When Congress authorized building the transcontinental railroad in 1862, it agreed to loan hundreds of millions of dollars to the two corporations to construct it. Congress also gave the railroad companies millions of acres of Western land, which the railroads sold to repay their loans. In effect, major railroad companies, with federal support, became colonizers of the West.
To attract settlers who would establish farms and become paying customers, the railroads advertised in the East and in Europe. They provided free trips west and offered long-term loans to settlers. Once the settlers had set up farms, they depended on the railroads to ship their produce. Farmers often became deeply in debt to the railroads, and to repay these debts they frequently relied on a single cash crop—typically wheat. Reliance on a single crop made their incomes dependent on fluctuating world markets and thus precarious. The railroads became very powerful. They established monopolies in specific locales, cut off service, fixed prices, and discriminated among customers. A railroad might offer rebates to favored customers or charge more for a short haul than a long one. Aggrieved by such practices, farmers soon tried to curb the power of railroad corporations. "USA" © Emmanuel BUCHOT, Encarta, Wikipedia.
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