Railway Expansion and U.S. Economic Growth

Paper Summary:

This paper discusses the economic development of the United States during the early 1800s. In particular, the paper looks at the influence that the development of the railroad as the predominant method of inland transportation during the 19th century and thereafter had on the country's economic growth. The paper also look briefly at the sources of investment into the railways.

From the Paper:

"In any event, much of the early investment dollars that led to this initial explosion in rail transportation that ended during the late 1840s was funded by foreign investors in US securities. It is estimated that stocks and bonds issued to both expand the rail lines and purchase land rights to build on were, to some degree, financed by individuals in Great Britain who lost some $200k in 1839-1840 when the transportation and land booms in the US collapsed following the 1840s (Thies 34). This was simply a market readjustment or a market correction because the rail industry quickly re-established itself as a growth industry and went on to fuel further economic growth in the much the same way it did during this early expansion period when it was founded."

Sample of Sources Used:

• Grabowski, Richard, and Seyed Mehdian. "Efficiency of the Railroad Industry: A Frontier Production Function Approach." Quarterly Journal of Business and Economics 29.2 (1990): 26+.
• Hinshaw, David, and W. Espey Albig. Stop, Look and Listen: Railroad Transportation in the United States. Garden City, NY: Doubleday, Doran, 1932.
• Marshall, James. Santa Fe: The Railroad That Built an Empire. New York: Random House, 1945.
• Samson, William D., Dale L. Flesher, and Gary John Previts. "Corporate Governance and External and Internal Controls: The Case of the Baltimore and Ohio Railroad, Circa 1831." Issues in Accounting Education 21.1 (2006): 45+.
• Samson, William D., Dale L. Flesher, and Gary John Previts. "Quality of Earnings: The Case of the Mobile and Ohio Railroad in the 19th Century." Issues in Accounting Education 18.4 (2003): 335+.

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