Prices were falling in the last quarter of the century, so that the figures in the text, giving the value of imports and exports, do not do justice to the growth in the physical volume of trade. On the other hand prices began to rise just before 1900 and, therefore, the figures exaggerate the increase of trade in the most recent period. Prices of 1913 were, however, only about one-third higher than in the decade 1890-99 so that after allowance is made for their rise the growth of American commerce in this period remains extraordinary.

664. Internal development of the country.—During this period the natural growth of population was augmented by a steady stream of immigration, which has increased with time and has made to appear small in comparison all previous movements of people to the country. In spite, however, of this growth, the increase in the value of foreign trade has been even more rapid, and the share contributed by the average person to the commerce of the country was greater at the close of the century than at any previous period. The average inhabitant had in 1913 a share of about $18 in the imports, and of about $25 in the exports.

While the preceding period was called the period of national expansion, the period lasting from the Civil War to the close of the century may fitly be termed that of national development. The population continued, it is true, to spread out within the national frontiers. It occupied the great plains leading up to the Rocky Mountains region, and the strip of fertile land along the Pacific Coast, and penetrated the mountains and semi-arid region in all parts where mineral wealth and agricultural possibilities promised returns to the laborer. The most striking feature, however, in the progress of the last forty years has been not so much the breaking-in of new territory as the improved means adopted for making the most of all resources, in old and new territory alike. Improvements of a technical character have transformed the methods of transportation and manufacture, and new methods of cooperation have changed the aspects of business life completely.

The first subject requiring attention is the development of the transportation system.

665. Extension of railroads.—In the recent history of the transportation system of the United States the most noteworthy feature has been, of course, the development of railroads. The railroad mileage of the country in 1860 was divided almost equally between the North, the South, and the West, each section having roughly 10,000 miles. The section which felt most keenly the need of increased railroad facilities was the agricultural West, where the products of rich farm lands were wasted and where corn was not infrequently used for fuel, for lack of means to reach a market. After 1860 the railroads were rapidly extended through the upper Mississippi Valley, and in 1869 the first transcontinental route was completed (Union and Central Pacific). Railroads reaching out like feelers into new regions attracted population and stimulated traffic not only in the new country but also in the older settled districts, where the opportunities for profitable business were multiplied by the increased supply of raw materials and by the widened market for finished products. Old lines were extended and new lines were built until, in 1913, the mileage of the country had risen from about 30,000 as it was in 1860, to over 250,000, showing an average gain of about 40,000 miles in a decade, a greater amount than the total of 1860.

666. Improvements in the operation of railroads.—Equal in practical importance to the extension of the railroad system were the improvements effected during the period in the construction and operation of the lines. This was the time in which steel rails and bridges were introduced, which permitted the use of more efficient locomotives, drawing heavier trains, and so reducing the expense of carriage. Lines which had been constructed in short sections under the control of different companies were now merged in great corporations, operating thousands of miles of track. The railroads had previously been so independent of each other that there was not even a standard gage for the track; some lines set the rails 6 or even 7 feet apart, a California law fixed the gage in that State at 5 feet, while the Missouri Pacific had a gage of 5 feet 6 inches. A difference in gage necessitated, of course, the unloading and reloading of wares in passage from one line to another, and prohibited distant freight movements. Soon after 1860 a movement toward the present standard, 4 feet 81⁄2 inches, brought a uniform gage into use, and when the consolidation of railroads was under way there was no longer a thought of varying from the standard. The first consolidation of a through line from Chicago to the sea was effected in 1869 under the management of Cornelius Vanderbilt (Lake Shore and Michigan Southern and New York Central and Hudson River); and the movement soon spread to other lines (Pennsylvania, etc.). The benefits were greater than the reader may be inclined to suppose. The management of railroads was made at the same time more efficient and less expensive; uniformity of policy was established in such matters as the track gage; and, most important, a new policy of freight rates, designed to stimulate distant shipments, became practicable.

667. Reduction of railroad rates.—The charges for freight movements before 1860 rarely fell below 2 cents per ton-mile. Railroad managers believed that the lowest rates which they could profitably make were, roughly, 2 cents for heavy agricultural produce, 3 for groceries, 4 for dry goods. The improvements effected in road-bed and rolling stock after 1860 suggested the possibility of reducing rates, and the reorganization of small railroads in large systems made it possible to institute reductions to stimulate distant freight movements. The results exceeded all expectations. The railroads found that a reduction brought such an increase of traffic that the lower rates were not only an advantage to the shippers, but also a benefit to themselves; and rates have fallen almost constantly in the course of the period. In 1914 the average freight rate was only three quarters of a cent per ton-mile, and some of the lines between Chicago and the Atlantic coast had reduced their charges very close to half a cent.

668. Contribution of the railroads to recent national development.—The importance of this change in a country of great distances can scarcely be exaggerated. It has transformed the railroad from a luxury for the use of passengers and high-class freight to a necessity for the producers and consumers of the commonest articles. In 1860 even a ware like wheat could not pay the expense of transportation over a distance exceeding many hundred miles, and distant freight traffic was restricted to manufactures and the most valuable of farm products, such as live stock. The reduction in charges has opened a profitable market for the commonest agricultural products of distant western States, and has made accessible the natural resources of all kinds, which otherwise would count for nothing among the economic assets of the country. In 1913 more than half of the tonnage carried on the railways of the United States consisted of ores, coal, and other products of mines, which could scarcely have been carried at all in 1860. The railroads now carry a tonnage far exceeding that transported through other channels (rivers, lakes, canals, and coasting trade); and it may be said in sober earnest that a considerable proportion of the people in the country would starve, without the means of earning a livelihood, if the railroad improvements that have come since 1860 were suddenly swept away.

Some idea of the growth of railroad service in the United States in recent years can be gained from the accompanying brief table, which pictures the contribution of the railroads in their two important activities, the carriage of freight and the carriage of passengers.

Railroad Service in the U.S., 1890-1910
(Figures in milliards: 000,000,000 omitted)
18901895190019051910
Tons carried one mile.7785141186255
Passengers carried one mile.1112 16 23 32