Effects of Transportation on the Economy

Effects of Transportation on the Economy

The construction of roads, canals, and railways in the 19th century accelerated the rise of the massive United States economy.


3 - 12


Geography, Social Studies, U.S. History


Train Governor Stanford

The locomotive revolutionized commercial transportation with a durable, faster, cheaper way to move goods. The Governor Stanford was the first train on the Central Pacific, the first transcontinental line in 1869 when joined with the Union Pacific.

Photograph courtesy of CSU Archives/Everett Collection
The locomotive revolutionized commercial transportation with a durable, faster, cheaper way to move goods. The Governor Stanford was the first train on the Central Pacific, the first transcontinental line in 1869 when joined with the Union Pacific.
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The ability to transport goods and people efficiently makes modern societies possible. A brief look at the early United States illustrates this principle. In the first half of the 1800s, Americans built a strong transportation network. Improving technology made new engineering possible. Soon feats of engineering transformed the North American continent. New roads, canals, and railways greatly expanded economic opportunities.

During the colonial and revolutionary periods, most of the nonindigenous population of North America lived near the Atlantic coast. America in the 1700s depended mainly on water transportation to link small farms with transatlantic trade. Farmers living near the Hudson River or other river systems could float their crops downstream to the port cities. Artisans transported their handmade products the same way. Travel itself was slow and difficult. Post roads between the colonies had been built by the mid-1700s. These roads, though, were unsuitable for commercial transport. Transporting farm crops and other goods was costly and slow.

Goods Hit the Road

In 1794, a new road opened between Philadelphia, Pennsylvania, and Lancaster, Pennsylvania. It was the country's first toll road, built by a group of businessmen. Soon other groups of merchants were having more toll roads paved. By the early 1820s, thousands of kilometers of graded routes crisscrossed the region. These toll roads provided a major boost to regional commerce. The federal government paid for one major highway during this era: the Cumberland Road. Began in 1811, it extended westward from Cumberland, Maryland. By 1818, it had crossed the Appalachian Mountains and reached Wheeling, Virginia. It permitted overland travel between the Potomac and Ohio rivers.

Commercial Ports Pop up

Canals gave the waterway transportation system still greater reach. The largest and most important was the Erie Canal. It was approved by New York State lawmakers in 1817. It extended from Buffalo to Albany. It was 12.1 meters (40 feet) wide on the top and 1.2 meters (four feet) deep. This engineering achievement created a human-made waterway connecting the Great Lakes to the Hudson River. The Hudson, in turn, flows into the Atlantic Ocean at New York City. The Erie Canal greatly reduced both the travel time and the cost of shipping products such as grain and lumber from the Midwest to the eastern seaboard. It led to an immediate and dramatic increase in the shipment of such goods. By the 1840s, New York City had become the nation's leading commercial port. This helped make the city the country's financial and trade capital.
Other state governments hoped to copy New York's success. They soon paid for their own canal projects. By 1840, the United States had more than 4,828 kilometers (3,000 miles) of canals. Both Ohio and Indiana built their own canal systems. They connected the Ohio River to Lake Erie. The Illinois & Michigan Canal, completed in 1848, established a water link between the Mississippi River Valley and the Great Lakes. It helped the city of Chicago, Illinois, become the great transport hub of the Midwest.

Trains Travel Year-round

The steam-powered locomotive had the most far-reaching impact. Trains were a heavy-duty, fast, year-round transport solution. In time, they became the preferred choice for commercial shipping. The earliest U.S. railroads covered only short distances. In 1827, a group of Baltimore, Maryland, businessmen formed a corporation to build the first major railway. It ran between their city and the Ohio River. Many more private railway enterprises followed in the decades before the Civil War (1861–1865). Between 1840 and 1860, the nation saw a ten-fold increase in the amount of track laid. The first transcontinental line was established in 1869. Eventually, railways lowered the cost of transporting many kinds of goods across great distances.

These advances in transport helped drive settlement in the western regions of North America. They were also essential to the nation's industrialization. The resulting growth in productivity was astonishing. Busy transport links increased the growth of cities. The transportation system helped to build an industrial economy on a national scale.

Media Credits

The audio, illustrations, photos, and videos are credited beneath the media asset, except for promotional images, which generally link to another page that contains the media credit. The Rights Holder for media is the person or group credited.

Tyson Brown, National Geographic Society
National Geographic Society
Production Managers
Gina Borgia, National Geographic Society
Jeanna Sullivan, National Geographic Society
Program Specialists
Sarah Appleton, National Geographic Society, National Geographic Society
Margot Willis, National Geographic Society
Clint Parks
Last Updated

October 19, 2023

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