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4 Cultivating the Prairie

Cordery, Simon Indiana University Press ePub

In the beginning, railroads needed land and the federal government had it. For settlers, it seemed in plentiful supply. The earliest European immigrants entered an apparently empty territory rich in resources and potential. Initial colonization—despite charters from British monarchs—was haphazard and small-scale. Violence against indigenous peoples was commonplace, squatting widespread, and ownership frequently a matter of dispute. Early national land policy was, in the words of historian John Mack Faragher, a matter of “Extinguish Indian title, survey, and sell.”1 Only when the federal government turned to the orderly settlement of the frontier did systematic landownership develop, and only with the arrival of railroads could mass migration occur.

Public land sales in Illinois began in 1814. Land offices in Kaskaskia and Shawneetown did a brisk business and a third office opened in Edwardsville in 1816, all in the southern third of the state. The federal government began planning for settlement north of the Illinois River by setting aside approximately 3.5 million acres—the “military tracts” from which the Central Military Tract Railroad would get its name—between the Illinois and Mississippi Rivers for veterans of wars up to and including the War of 1812. Only after a delegation of territorial leaders, including Governor Ninian Edwards, obtained title in 1816 from the Native Americans living there did land offices make 160-acre plots available to veterans. Purchasers were not required to live on the land, and many veterans sold their allotments to speculators for as little as ten cents an acre. Soon Illinois land was trading on the open market in New York City for prices ranging from 50 cents to $1.50 an acre. As much as a quarter of the total acreage in the military tract sold that way, violating the principle of establishing small farms to settle the region.2

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2 Development Delayed

Cordery, Simon Indiana University Press ePub

The earliest attempts to build steam-powered railroads in Illinois failed miserably. Several private projects laid a few miles of track before going bankrupt; two short coal lines used animals to haul wagons; and an ambitious state-funded network fell victim to an economic depression—called a “panic” at the time—in 1837. But the seed blown across the Atlantic Ocean from Britain fell on fertile soil. Railroads offered relatively fast, all-weather transportation for people and commodities. Engineering challenges, especially safely and reliably harnessing steam power, proved surmountable, and investment capital became available, but the development of the industry was neither smooth nor simple. The demand was fueled in part by roads so poor that Illinois became a notorious “mud state” when the weather turned foul. In the winter of 1848–49, for example, the people of McLeansboro found themselves isolated. Bereft of “coffee, sugar and other necessaries of life,” they survived on what they had stored from previous harvests until the roads dried out the following spring.1 This was a common occurrence in the harsh Illinois climate, and town and country alike needed a dependable, all-weather mode of transportation to combat snow, ice, and mud.

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6 Conflagrations and Expansion

Cordery, Simon Indiana University Press ePub

The railroad-building surge of the 1850s made Chicago into an international marketplace and would help the North win the Civil War. Railroads transformed Illinois by bringing in people and capital, mechanizing and growing the grain trade, and dramatically expanding the labor force. A national financial downturn in 1857 caused an immediate drop in traffic volume, brought expansion to a halt, and tipped many railroads into bankruptcy, but local services temporarily kept them running and allowed the system to adjust to the new mileage.

The 1860s and 1870s witnessed the trauma of Civil War and the excitement of transcontinental railroading. The war caused little direct injury to Illinois railroads, though the closure to civilians of the Mississippi River and additional wartime traffic meant deferred maintenance, damaged track, and worn-out rolling stock. Illinois was the fastest-growing state in the Union during the Civil War because of its network of railroads, migrants entering from the Confederacy, and the increased importance of Chicago as a transshipment center. When the conflict began the industry seemed ready to contribute, though few could have predicted how much the railroads had to offer the war effort.

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9 Panic and Innovation

Cordery, Simon Indiana University Press ePub

Regulators could do little to help the railroad industry in the face of global economic downturns, though their strictures did not help the bottom line. The capital needed to build railroads came from the Netherlands and Great Britain, from New York and Rock Falls. Financiers and farmers proffered their savings in hopes of earning a profit, but sometimes disaster struck. Connecting with a transatlantic economy could prove painful, as events in 1873 would demonstrate. In that year another of the recurring crises of capitalism forced numerous railroads into bankruptcy, demonstrating the dangers of relying on the invisible and far-flung forces of capital accumulation.

The vulnerability of railroads to financial forces they unleashed but could not control was stunningly demonstrated in 1873. Railroad construction virtually stopped and operations were threatened when the New York office of the country’s largest private banker, Jay Cooke, suddenly closed its doors. This unexpected catastrophe was the culmination of a series of smaller failures and precipitated a downturn lasting on and off to the end of the century. The Panic of 1873—which initiated a frenzied effort to convert stocks, bonds, and savings into cash—revealed the dangers of overcapitalization and overbuilding. The cultural scale tipped against speculators again, and a new round of corporate consolidations kicked off.1

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13 Progressive Regulation

Cordery, Simon Indiana University Press ePub

The perceived excesses symbolized by the Reid-Moore syndicate’s bleeding of the Chicago, Rock Island & Pacific Railway contributed to a political and social climate conducive to further regulation. Behind this renewed regulatory fervor was a fear of dependence on enormous economic entities. Corporations appeared to be getting too big, too powerful, and too likely to control an entire industry. Democratic republics were not supposed to give rise to monopolies dominating entire sectors of the economy, but that is precisely what seemed to be happening. When Minnesota-based railroader James J. Hill and Wall Street banker J. P. Morgan merged the Chicago, Burlington & Quincy into a holding company already containing the Northern Pacific and the Great Northern Railroads, the government called foul. President Theodore Roosevelt, spurning Morgan’s gentlemanly offer to “send your man to see my man and tell him to fix it up,” instead mobilized the might of the federal government and established a precedent for future trust busting.

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