16 Industrialization and Technological Innovation
Republican dominance over national policy and subsidization of business development during the Civil War and Reconstruction accelerated American industrialization. It was the railroads that signaled the new American order.
The railroads created the first great concentrations of capital, spawned the first massive corporations, made the first of the vast fortunes that would define the “Gilded Age,” unleashed labor demands that united thousands of farmers and immigrants, and linked many towns and cities. National railroad mileage tripled in the twenty years after the outbreak of the Civil War, and tripled again over the four decades that followed. Railroads impelled the creation of uniform time zones across the country, gave industrialists access to remote markets, and opened the American west. Railroad companies were the nation’s largest businesses. Their vast national operations demanded the creation of innovative new corporate organization, advanced management techniques, and vast sums of capital. Their huge expenditures spurred countless industries and attracted droves of laborers. And as they crisscrossed the nation, they created a national market, a truly national economy, and, seemingly, a new national culture.
The railroads were not natural creations. Their vast capital requirements required the use of incorporation, a legal innovation that protected shareholders from losses. Enormous amounts of government support followed. Federal, state, and local governments offered unrivaled handouts to create the national rail networks. Lincoln’s Republican Party passed legislation granting vast subsidies. Hundreds of millions of acres of land and millions of dollars’ worth of government bonds were freely given to build the great transcontinental railroads and the innumerable trunk lines that quickly annihilated the vast geographic barriers that had sheltered American cities from one another.
As railroad construction drove growth, new means of production spawned new systems of labor. Many wage earners had traditionally seen factory work as a temporary stepping-stone to their own small businesses or farms. After the war, however, new technology and greater mechanization meant fewer and fewer workers could legitimately aspire to economic independence and stronger and more organized labor unions formed to defend the rights of a growing permanent working class. At the same time, the growing scale of business operations meant owners became increasingly disconnected from employees and day-to-day operations. To handle vast new operations, they hired managers. Educated employees swelled the ranks of an emerging commercial middle class.
Industrialization remade much of American life. Rapidly growing industrialized cities knit together urban consumers and rural producers into a single, integrated national market. Food production and consumption, for instance, was utterly nationalized. Between 1866 and 1886 ranche