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The Influence Of Transportation Upon American Industrial Development

( Originally Published 1918 )

Trade and industrial development. From what has been said in preceding chapters it is clear enough that the industrial progress of any country depends very largely upon the degree of perfection attained by the transportation system. For trade, on anything but the most meager scale, is impossible without transportation ; and without trade there is no opportunity for industry on the large scale, where many men must spend all their time making a single product. This last is something which they could not do unless there were other groups of men, perhaps at some considerable distance, who were ready to supply them with the various articles which they need.

Trade and civilization. In fact, we can go farther than this and say that without the development of trade on a rather large scale civilization itself would scarcely be possible. Trade has been called " the handmaid of civilization," but it is rather its forerunner and way-preparer. No other agent in human history has been so powerful in spreading civilization as has the trader. Led by the desire for profits, he has made his way to the remotest corners of the earth and has always carried with him the products of civilization : tools, inventions, foods, textiles ; and arts, letters, and other less material things as well. From him the more backward peoples have learned first the products and then the processes of a more advanced culture ; and when trade relations have been steady and frequent enough, the more backward race has usually been raised toward the higher plane of life.

Transportation and American industry. The advance of any country in material prosperity is dependent, in large degree, upon the transportation facilities available. These are so necessary that they are often overlooked, for, like the presence of the atmosphere, they are taken to be a matter of course. People get their eyes upon the stream of trade and seem to regard that as the fundamental factor in prosperity, not realizing to the full that all the articles of trade have to be carried by some agency. This is true in the history of our own country. It is not going too far to assert that there is no single influence which has played a more essential part in American industry than transportation.

How our history centers about transportation. During the colonial period, when we depended chiefly upon foreign commerce, we were compelled to use marine transportation. This continued well into the nineteenth century, when the shipping and carrying trade still ranked in importance with the growing manufactures. Later, when we had developed a great internal commerce, our chief interest was a national system of transportation. Then we devoted the greater part of our accumulations of capital and much of our keenest business ability to the development of what were called internal improvements — mostly transportation projects. In connection with these there first appeared those characteristic figures of American society, the millionaire and the captain of industry ; and here, too, there developed, more rapidly than anywhere else, the great business corporation. We have not always realized the importance of this development of internal improvements, but have given more attention to the growth of manufactures, to currency and banking systems, and to other such enterprises ; but no one of these matters has come anywhere near exerting the influence upon our economic growth that has been wielded by improvements in transportation. In fact, since 1815 our most conspicuous industrial achievements have depended directly upon this factor.

How America captured the cotton market. To illustrate, let us take that early American triumph, the almost complete monopoly of the world's cotton market. We have seen in a foregoing chap-ter that we possess a climate and soil peculiarly adapted to cotton production ; but these alone would not have secured the monopoly of the market. It required the network of navigable streams which cover the whole Southwest. But even their presence was not by itself enough ; it was the invention of the steamboat, which suddenly converted them into a first-class transportation system, that insured success. Similarly, it was not alone the possession of natural grainfields that gave us first place in the international trade in breadstuffs ; it was the ease with which railroads could be constructed in those regions, combined with our improvements in rolling stock, that enabled us to avail ourselves of our natural advantages. In general, we have in this country a remarkable territorial division of labor, which is the basis of our internal commerce. No other country shows anything like it. Through it we have been able to reach that great development of rich natural resources along all lines which has formed the basis of our prosperity. But this also is largely the result of easy and cheap transportation, which has smoothed the way for a copious internal commerce.

Transportation is vital. It is sometimes easier to realize the importance of that to which we are commonly accustomed if we try to imagine it utterly absent. Let the reader pick out any industry he likes and try to imagine it in operation in the absence of existing transportation facilities, and he will quickly realize how all modern industry rests upon modern transportation development.

Transportation increases property values. There is another way in which the transportation system affects industrial and social life, namely, through the increase of property values. Railroads in this country have exerted a powerful influence along this line — much more powerful than in some other countries. In every part of England are to be found large cities which take over the products of the surrounding country, consuming them not far from the spot where they are raised. It has been said that every British farmer lives within sight of a market. The same is true of manufactures distances are short there and the railroads have had no such effect in developing a section as in the United States. But in this country, where distances are tremendous, what the farmer needs most is not a fertile soil — for he has that—but rather a market; and that can be supplied to him only through the agency of transportation. Thus the railroads increase immensely the value of property. It was estimated, in the middle of the nineteenth century, that the increased value of a belt of land ten miles wide lying on either side of a certain railroad was equal to at least $7.50 per acre. This amounted to $96,000 for every mile of road, though the road itself cost only about $20,000 per mile. Thus the railroad created a value in real property alone equal to about five times its cost.

It allows of city growth. The railroads have likewise increased property values at a considerable distance from their lines. For the development of a transportation system is what allows of the growth of great cities and the land values in a city rise with its growth. If the transportation system were to be permanently paralyzed, population would have to disperse from the great centers, and the land values in these centers would decline, in many cases to zero. In Massachusetts the valuation rose 100 %cent between 1840 and 1850, and by far the greatest part of this was due to railroad construction.

Transportation and political unification. It is worth while to mention the fact that the transportation system has political bearings. Easy communication between different parts of our country tends to strengthen and perpetuate the Union, for nothing is more likely to create sympathy between human beings than frequency of seeing and communicating with one another. One of the reasons for putting through the first railroad to the Pacific coast was, as we have seen, that California might be linked in sympathy with the free states of the North. The railroads are also of great military advantage to a nation when it is at war with foreign powers. The excellent roads radiating from Paris are said to have saved that city from the German` invaders in the first few days of the Great War. A large army was rushed by automobile from Paris to the Marne within a few hours. It can thus be seen that modern states, if they wish to secure the highest stability, must follow the example of the ancient Romans, who always knit their empire together with the best of roads. But the stability of a government is of very great importance to the welfare of its industrial life. No industrial activity of importance can pros-per under a weak and tottering political system. If, therefore, the development of a transportation system, and particularly of rail-roads, is of advantage to the national government, it must thereby in yet another way than those mentioned in the preceding park graphs be of advantage to a national industrial life.

Cheap carriage. One of the marks of an effective transportation system is, of course, cheapness of carriage. ' An author of repute states that you could not construct a railroad twenty miles long without enabling farmers to send their products to town at from one half to one fourth of what it had cost them previously. This lowering of rates has enabled farmers to sell vast quantities of products which before that could not pay the cost of transportation. Illustrations are numerous : in Maryland freights and tolls amounting to several dollars a ton were reduced by road-building to one cent a ton ; in South Carolina a railroad to the interior transported cotton to the seaboard for a few cents a bale, where it had previously cost three or four dollars to get it down by the rough and swampy wagon roads.

Costs before railways. In 1832 the writer of an article advocating the construction of the Erie Railroad declared

It would prevent a recurrence of the state of things which now exists in the city of New York. There would not then be, as there now are, thousands of barrels of flour and other kind of produce in proportion, frozen up in canals and in sloops on the Hudson ; salt would not now be selling in Albany for $2.50 per bushel and pork at $z per hundred for want of salt to save it, while pork is worth from $5 to $7 in this city. Coal would not then sell here for $15 or $16 per ton ; nor oak wood at $9, and hickory at $13 per cord, as has been the case for two or three weeks past, if railroads were in general use; but all kinds of business would move on regularly and be more equally divided throughout the year. Produce could come to market as well in January as in July ; and the farmer would not be obliged, in order to get his crop to market in the fall, to neglect preparing for the next.

The blessings of cheap transportation. At the middle of the nineteenth century people were just beginning to experience the advantages of cheaper transportation, and it is of interest to quote what men then thought of the change. Says one of these writers :

It is well known that upon the ordinary highways the economical limit to transportation is confined within a comparatively few miles, depending, of course, upon the kind of freight and the character of the roads. Upon the average of such ways the cost of transportation is not far from 15 cents per ton per mile, which may be considered a sufficiently correct estimate for the whole country. Estimating at the same time the value of wheat at $1.50 per bushel and corn at 75 cents, and that 33 bushels of each are equivalent to a ton, the value of the former would be equal to its cost of transportation for 330 miles, and the latter 165 miles. At these respective distances from market neither of the above articles would have any commercial value, with only a common earth road to market. But we find that we can move property upon railroads at the rate of 1 1/2 cents per ton per mile [the 1917 rate is between seven and eight mills per ton mile], or for - the cost upon the earth road. These works, therefore, extend the economic limit of the cost of transportation of the above articles to 3300 and 165o miles respectively.

Twentieth-century rates. If this was the case more than half a century ago, it can be imagined that the twentieth century would show still more startling figures. A few of these may be cited as typical of the first decade of this cent: Eggs were then brought to New York from the West, over two thousand miles, for two and one half cents a dozen ; butter from the Mississippi Valley to New York City for about one cent a pound ; turkeys into New York from Texas, in the winter, for about one dollar and a half per one hundred pounds. A three-pound can of tomatoes coming to New York from Maryland paid the railroad five mills; and dressed meat was brought from Chicago to New York for about the same figure per pound. A sack of flour weighing fifty pounds was sent from the Indiana mill to almost any Eastern point for about eight or nine cents. Similarly with clothing : the transportation charge on the material used in making a pair of shoes in a St. Louis factory averaged a cent and a quarter, while the charge required to carry a pair of shoes to a buyer in any part of the United States averaged between two and three cents. The freight charge paid on the entire clothing of a fully dressed man or woman almost anywhere in the United States east of the Mississippi was somewhere between six and eighteen cents.

Big systems give low rates. On the whole, it may be said that the freight rates on raw material are now so adjusted that it is possible to manufacture almost any staple article at any logical place within the country. Freight rates in the United States have for decades been remarkably low — a condition made possible by the magnitude of the scale upon which our transportation is con-ducted. Soon after the United States was drawn into the Great War, however, there was a marked advance in freight rates as well as passenger rates throughout the whole country.

Rates of canal transportation. It would be possible to give figures illustrating the cheapness of transportation brought about by the development of turnpikes and canals. For one instance, in 1807 the cost of transportation between Buffalo and New York was $ 100 per ton, and the time required was twenty days ; this meant that the cost of transportation between these cities was three times the market value of wheat, six times that of corn, and twice that of oats. Thus most articles were entirely shut out of any extended market. The opening of the Erie Canal, eighteen years later, of course did for commerce in a smaller degree what the railroads later accomplished on a grand scale. The cost of freight between Buffalo and New York fell to between $15 and $25 a ton and the time of transit was reduced to eight days. Rates were steadily lowered by the use of the Canal until they were reduced to about one tenth of the former figures.

Communications. Transportation and communication are very closely allied, and the development of the latter allows a speeding-up of the machinery of business which adds much to industrial efficiency. Under the improvement of communications come the development of such factors as the telegraph, telephone, cable, postal service, postal money service, and wireless telegraphy. The invention of duplex telegraphy greatly reduced the cost of messages ; then, by 1880, the telephone was in rather common use, although its invention had taken place only a few years before. The recent development of wireless telegraphy has made it possible for an exporting firm to remain in constant control of its goods while in transport across the ocean, and has otherwise enlarged the possibilities of business organization.

Good transportation a condition of national well-being. It would be possible to fill a large volume with facts and figures illustrating the subject of this chapter, but perhaps we have cited enough cases to stimulate reflection. It is true, of course, that transportation is not so fundamental to industrial development as is agriculture. There must be, first of all, something to transport. But just as soon as industry has developed beyond the first and simplest stages, it calls for transportation as a necessity for further growth. Then the transportation system becomes, to a more developed industry, fully as vital as are its supplies of raw material — in fact, as we have seen, the very value of the raw materials is dependent upon the possibility of moving them from one place to another. In its most developed form modern industry could spare the transportation system about as well as it could forego its raw materials. As we conclude this chapter, therefore, we see the truth of the statement which may have seemed to us somewhat exaggerated at the outset of the chapter, that " there is no single influence which has played a more essential part in American industry than transportation."

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