people. Farther south the proportion was one mile to 8018 people. In the next decade Southern entrepreneurs did much to extend their transportation system. In 1860 the respective ratios of railway mileage to population were one to 861, one to 1071, and one to 1076. Railroad construction in the West began with the building of the line from Detroit to Ann Arbor in 1838. The legislature of Michigan undertook to carry three railroads across the state from Port Huron, Detroit, and Munroe to Lake Michigan; but the routes lay through virgin forest, and traffic could not pay running expenses. The state management was inefficient, and the enterprise was finally (1850) made over to private companies. The Northwest was wholly agricultural, towns were few and far between, and traffic was light. In 1850 there was but one mile of track for each 19,039 of population in the states of Illinois, Michigan, Wisconsin, Iowa, and Missouri. In the next decade a mania for railroads seized the new West. Roads were built in advance of traffic, and the mileage was rapidly increased. By 1860 there was a mile of railroad for every 912 of the population in the upper Mississippi Valley. 534-537, 1137-1139. Sanborn, of Land in This result could hardly have been achieved without na- Cong. Globe, tional assistance. Several of the eastern roads had been built 1847-1848. Appendix, with state aid. Maryland had subscribed $3,000,000 to the stock of the Baltimore and Ohio; Massachusetts had loaned $4,000,000 to the Great Western; Pennsylvania, South Carolina, and Georgia had undertaken to finance their initial roads. The new Western states were hardly adequate to these costly enterprises, and they appealed to Congress for aid. Following the precedent of land grants to canal projects, Congress made over (1850) a tract of two million seven hundred thousand acres of public land to the state of Illinois to be used for the benefit of her Central Railway from Chicago to Cairo. Similar grants were made to Florida and Alabama and Mississippi. The Mobile and Ohio, the first through route from North to South, was likewise built with the proceeds of land grants. This line, together with the Mississippi Central, was carried through to the Aid of Rys., Meyer, Pt. II, Ch. 1, Gulf in 1858-1859, the years immediately preceding the These early railways were, with few exceptions, built by joint stock companies chartered by the state legislatures. The charter was essential to the incorporation of the stockholders and to the securing of the right of way. Land for the laying of the track was usually given, both public and private owners regarding the advantage accruing from improved transportation as full compensation for such concessions. The older states imposed certain stipulations intended to guard the interests of the communities to be served. The rate of dividend was limited (to ten per cent in New England, to twelve per cent in Pennsylvania) by the provision that excess profits must be divided with the state or charges reduced. Freight and passenger rates were to be held within a fixed maximum - six, five, four, and three cents a U.S. Census, mile for passengers, five, three, and two dollars per ton mile on freight. The term of the charter was limited, and in some cases the state reserved the right to purchase and operate the road after the lapse of from fifteen to twentyfive years. In the first decade of railway construction, there were built and equipped 2264 miles at a cost of $100,000,000; in the second decade, 5045 miles at a cost of $250,000,000; in the third decade, 20,109 miles at a cost of $1,000,000,000. 1880, 12, 289, 290. De Bow, II, 474. Lardner, 339-342. Little of this enormous expenditure could be expected to bring in an immediate return. In the densely populated and highly productive sections of the country, a railroad investment might net a handsome revenue. Here the average rate of dividend was eight and one half per cent. But in the sparsely settled districts of the West and South, investors must wait a score of years for their returns and run the risk of finding their stock valueless in the end. To the community at large the railroad was, in this initial period, an unmixed benefit. Construction created a demand for rails and structural iron that proved a boon to the forges and foundries. Track-laying, machine and car shops, gave employment to an army of laborers, skilled and unskilled. The new transportation system meant enhanced prices for crops and lands all along the line of the road. It halved the cost and quartered the time of journeying by stage, and brought opportunity for travel within reach of people of moderate means. The building of railroads meant, too, the extension of the postal service and the cheapening of postage. The government was able to reduce the charge of sending letters from ten, twenty-five, and fifty cents per letter to a uniform rate of three cents. Jones, of the Electric The Electric Telegraph. Hand in hand with the exten- Byrn, sion of railroads went the system of communication by Ch. III. telegraph. The sending of verbal messages along an electric wire had been rendered practicable by F. B. Morse, in 1835, but it was long before business men were convinced that this was a promising venture. In 1844 Congress appropriated $30,000 for the building of a line from Washington to Baltimore. The following year a line was run from New York to Philadelphia by a private company. The system was soon after extended to Wilmington and Baltimore. Connections between New York and Boston, New York and Albany, Albany and Buffalo, were made in 1846-1847. In 1848 Ezra Cornell built a telegraph line from New York to Cleveland, Toledo, Detroit, Chicago, and Milwaukee. In the same year a line was run from Washington to New Orleans, connecting the seaboard cities. The installation of a telegraph line is a far simpler and cheaper enterprise than the building of a railroad, and the electric wires overspread the eastern half of the United States with marvelous rapidity. Communication with the Pacific Coast was a much more difficult proposition. From 1852 to 1860 the overland mails were carried by the famous Pony Express, a relay system of rapid riders via the Salt Lake Trail. Encouraged by the prospect of a subsidy of $40,000 per year from the United States government, the Western Union Company carried a telegraph line across the Cordilleran Range in 1861. Telegraphic communication with the Old World was due to the enterprise and persistence of Cyrus W. Field. His R Inman, Great Salt Lake Trail, Sumner, Wright, Wages and Prices, 303-308. Dewey, 259-264. transatlantic cable was laid in 1857-1858. It was operated only a few months, but served to demonstrate the feasibility of working a submarine wire. Cable communication was not an established success till after the Civil War (1866). The Panic of 1857 Our third financial panic, like the first and the second, was caused by undue speculation. The extraordinary success of many business ventures tempted men to invest too heavily. The purchase and improvement of lands in the new West, the opening up of mineral resources notably coal and iron in Pennsylvania-the building of ships, the construction of railroads, all required large investments of capital that could bring no immediate return commensurate with expenditure. The $1,350,000,000 buried in railways between 1830 and 1860 represented an enormous drain on the resources of the country. The sinking of one fifth as much capital in canals had brought on the crisis of 1837. As then many canal ventures were abandoned, so now several Western railroad enterprises failed. The New York and Erie, the Illinois Central, the Michigan Central, etc., went into bankruptcy. Doubtless the reduction of import duties in March, 1857, prejudiced such manufacturing interests as reaped no adequate compensation from free raw materials. Some mines and factories were closed, and many curtailed production; but the general depression was slight as compared with that of twenty years previous. Comparatively few operatives were thrown out of employment, and the decline in wages was made good by reduction in the cost of living. The prosperity of farmers and planters was undisturbed. Their foreign market for corn, wheat, and cotton was furthered by free trade. The crisis of 1857 was primarily a financial panic. Bank management had been conservative and wise in the ten years, 1843-1853, notably in the Eastern cities. Few new banks were established, loans were extended with caution, and the issue of notes was kept within reasonable limits. The $100,000,000 worth of gold sent to the mints from the California mines furnished a sufficient specie basis for bank currency. Credit agencies kept pace with the normal business development of the country. But in 1853 a speculative mania took possession of the financial world. In the next four years the number of banking institutions was doubled, credit money was issued to the sum of $214,800,000, more than double the amount outstanding in 1847, and loans ran up to $684,500,000. On August 22, 1857, the obligations of the New York banks were $12,000,000 in excess of their available capital. The failure of the Ohio Life Insurance and Trust Company, on August 24th, dragged down some leading New York firms. A run on the banks followed, and all but the most conservative managements were obliged to suspend. Thousands of the more speculative business ventures went to the wall. There were Burton, 4932 failures in 1857, and 4225 in 1858. The losses Crises and reached an unprecedented figure, $387,500,000, but they 282-286, 344. Depressions, fell largely on bankers and investors. The rank and file of producers were little affected by the disaster. Agricultural Improvements U.S. Census, American agriculture was carried on in wasteful, unscientific U.S. Census, fashion until the middle of the nineteenth century. Farm 1860, implements were of the rudest. Spades, mattocks, pitchforks, xi-xxiv. Agriculture, and plows were still of home manufacture, the iron parts being clumsily wrought over a blacksmith's forge. In 1807 1900, Peacock succeeded in popularizing his iron plowshare in X, 352-353, New Jersey, and in the next decade Smith's plow came into 358–364. general use in eastern Pennsylvania. The cast-iron mold- Quaintance, board was not only cheaper than the plated wooden share, but stronger and more effective, because it offered less resist- chinery. ance to the soil. More than twelve thousand patents have since been issued for improvements in the structure of the Progress of plow. Chilled steel has taken the place of cast-iron; the Agr, in U. S traction engine has been substituted for draught animals as a propelling force. With the steam plow now used on the Influence of Holmes, |