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American Railroads

In the United States, railroads spearheaded the second phase of the transportation revolution by

overtaking the previous importance of canals. The mid-1800s saw a great expansion of American

railroads.

The

major

cities

east

of

the

Mississippi

River

were

linked

by

a

spiderweb

of

railroad

tracks. Chicago's growth illustrates the impact of these rail links. In 1849 Chicago was a village of

a

few

hundred

people

with

virtually

no

rail

service. By

1860

it

had

become

a

city

of

100,000,

served by eleven s to the north and west of Chicago no longer had to ship their

grain, livestock, and dairy products down the Mississippi River to New Orleans; they could now

ship

their

products

directly

east.

Chicago

supplanted

New

Orleans

as

the

interior

of

America's

main commercial hub.

The east-west rail lines stimulated the settlement and agricultural development of the Midwest.

By 1860 Illinois, Indiana, and Wisconsin had replaced Ohio, Pennsylvania, and New York as the

leading

wheat-growing

states.

Enabling

farmers

to

speed

their

products

to

the

East,

railroads

increased the value of farmland and promoted additional settlement. In turn, population growth

in agricultural areas triggered industrial development in cities such as Chicago, Davenport (Iowa),

and Minneapolis, for the new settlers needed lumber for fences and houses and mills to grind

wheat into flour.

Railroads also propelled the growth of small towns along their routes. The Illinois Central Railroad,

which had more track than any other railroad in 1855, made money not only from its traffic but

also from real estate speculation. Purchasing land for stations along its path, the Illinois Central

then laid out towns around the stations. The selection of Manteno, Illinois, as a stop of the Illinois

Central, for example, transformed the site from a crossroads without a single house in 1854 into a

bustling town of nearly a thousand in 1860, replete with hotels, lumberyards, grain elevators, and

gristmills. By the Civil War (1861-1865), few thought of the railroad-linked Midwest as a frontier

region or viewed its inhabitants as pioneers.

As the nation's first big business, the railroads transformed the conduct of business. During the

early 1830s, railroads, like canals, depended on financial aid from state governments. With the

onset

of

economic

depression

in

the

late

1830s,

however,

state

governments

scrapped

overly

ambitious railroad projects. Convinced that railroads burdened them with high taxes and blasted

hopes,

voters

turned

against

state

aid,

and

in

the

early

1840s,

several

states

amended

their

constitutions to bar state funding for railroads and canals. The federal government took up some

of the slack, but federal aid did not provide a major stimulus to railroads before 1860. Rather,

part of the burden of finance passed to city and county governments in agricultural areas that

wanted

to

attract

railroads.

Such

municipal

governments,

for

example,

often

gave

railroads

rights-of-way, grants of land for stations, and public funds.

The

dramatic

expansion

of

the

railroad

network

in

the

1850s,

however,

strained

the

financing

capacity of local governments and required a turn toward private investment, which had never

been absent from the picture. Well aware of the economic benefits of railroads, individuals living

near

them

had

long

purchased

railroad

stock

issued

by

governments

and

had

directly

bought

stock in railroads, often paying by contributing their labor to building the railroads. But the large

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railroads of the 1850s needed more capital than such small investors could generate. Gradually,

the center of railroad financing shifted to New York City, and in fact, it was the railroad boom of

the 1850s that helped make Wall Street in New York City the nation's greatest capital market. The

stocks of all the leading railroads were traded on the floor of the New York Stock Exchange during

the 1850s. In addition, the growth of railroads turned New York City into the center of modern

investment firms. The investment firms evaluated the stock of railroads in the smaller American

cities and then found purchasers for these stocks in New York City, Philadelphia, Paris, London,

Amsterdam,

and

Hamburg.

Controlling

the

flow

of

funds

to

railroads,

the

investment

bankers

began

to

exert

influence

over

the

railroads'

internal

affairs

by

supervising

administrative

reorganizations in times of trouble.

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The Achievement of Brazilian Independence

In

contrast

to

the

political

anarchy,

economic

dislocation,

and

military

destruction

in

Spanish

America,

Brazil's

drive

toward

independence

from

Portugal

proceeded

as

a relatively

bloodless

transition

between

1808

and

1822.

The

idea

of

Brazilian

independence

first

arose

in

the

late

eighteenth

century

as

a

Brazilian

reaction

to

the

Portuguese

policy

of

tightening

political

and

economic

control

over

the

colony

in

the

interests

of

the

mother

country.

The

first

significant

conspiracy

against

Portuguese

rule

was

organized

from

1788-1799

in

the

province

of

Minas

Gerais, where rigid governmental control over the production and prices of gold and diamonds,

as well as heavy taxes, caused much discontent. But this conspiracy never went beyond the stage

of discussion and was easily discovered and crushed. Other conspiracies in the late eighteenth

century as well as a brief revolt in 1817 reflected the influence of republican ideas over sections

of the elite and even the lower strata of urban society. All proved abortive or were soon crushed.

Were it not for an accident of European history, the independence of Brazil might have been long

delayed.

The French invasion of Portugal in 1807 followed by the flight of the Portuguese court (sovereign

and government officers) to Rio de Janeiro brought large benefits to Brazil. Indeed, the transfer of

the court in effect signified achievement of Brazilian independence. The Portuguese prince and

future King Joao VI opened Brazil's ports to the trade of friendly nations, permitted the rise of

local industries, and founded the Bank of Brazil. In 1815 he elevated Brazil to the legal status of a

kingdom

coequal

with

Portugal. ln

one

sense,

however,

Brazil's

new

status

signified

the

substitution of one dependence for another. Freed from Portuguese control, Brazil came under

the

economic

dominance

of

England,

which

obtained

major

tariff

concessions

and

other

privileges

by

the

Strangford

Treaty

of

1810

between

Portugal

and

Great

Britain. The

treaty

provided

for

the

importation

of

British

manufactures

into

Brazil

and

the

export

of

Brazilian

agricultural produce to Great Britain. One result was an influx of cheap machine-made goods that

swamped the handicrafts industry of the country.

Brazilian elites took satisfaction in Brazil's new role and the growth of educational, cultural, and

economic

opportunities

for their

class.

But

the

feeling was

mixed with

resentment

toward

the

thousands of Portuguese courtiers (officials) and hangers-on who came with the court and who

competed with Brazilians for jobs and favors. Thus, the change in the status of Brazil sharpened

the conflict between Portuguese elites born in Brazil and elites born in Portugal and loyal to the

Portuguese crown.

The

event

that

precipitated

the

break

with

the

mother

country

was

the

revolution

of

1820

in

Portugal. The Portuguese revolutionaries framed a liberal constitution for the kingdom, but they

were conservative or reactionary in relation to Brazil. They demanded the immediate return of

King

Joao

to

Lisbon,

an

end

to

the

system

of

dual

monarchy

that

he

had

devised,

and

the

restoration

of

the

Portuguese

commercial

monopoly.

Timid

and

vacillating,

King

Joao

did

not

know which way to turn. Under the pressure of his courtiers, who hungered to return to Portugal

and their lost estates, he finally approved the new constitution and sailed for Portugal. He left

behind him, however, his son and heir, Pedro, and in a private letter advised him that in the event

the Brazilians should demand independence, he should assume leadership of the movement and

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