In the United States, as in England, the first railroads, employing horse-drawn wagons, were used to haul minerals. The earliest such railroad, built from Quincy, Mass. to the Neponset River dates from 1826, and in the next year another was built in Pennsylvania from the coal mines in Carbon County to the Lehigh River. In 1829 two locomotives were imported from England, but they were found to be too heavy for the existing tracks. Thereafter, locomotives suited to the American railway were produced domestically, and Matthias Baldwin of Philadelphia soon took the lead in building them. The Baltimore & Ohio RR began operation in 1828 with horse-drawn cars, but after the successful run (1830) of the Tom Thumb, a locomotive built by Peter Cooper, steam power was used.
In the United States a turnpike era and then a canal era had immediately preceded the coming of the railroads, which proved to be fast, direct, and reliable in all weather. After 1830 the railroads grew so quickly that within a decade their mileage surpassed that of the canals. While the stagecoach type of railroad car was giving way to the square type in the 1830s, many short-run railroads began to appear throughout the United States. The big cities on the Atlantic Coast became the nerve centers, while inland points were readily connected with one another. Only the Erie RR was projected on a grand scale.
Because of the long distances involved, the United States and Russia had sleeping cars earlier than other countries. A type of sleeping car containing three tiers of berths on one side of the coach appeared in 1836 on the Cumberland Railway's run between Philadelphia and Harrisburg. Sleeping cars of a more modern type were patented (1856) by George M. Pullman and soon put in operation. The first all-steel car appeared in 1859.
The Atlantic Coast was connected with the Great Lakes in 1850, with Chicago in 1853, and with the western side of the Mississippi in 1856. Cast iron proved too brittle in railway construction and was gradually replaced by wrought iron, which in turn, by 1863, was generally replaced by steel. At the same time, two acts of Congress (1862 and 1864) initiated the building of the first transcontinental railroad: the Union Pacific RR built westward from Nebraska and the Central Pacific RR built eastward from California; the two met at Promontory Summit, Utah, and were joined with a golden spike on May 10, 1869. For many years railroad tracks had varied in width, so that cars could not pass from one line to another. However, in the mid-1880s a standard gauge of 4 ft 8 1/2 in. (1.44 m) was adopted, mainly because the transcontinental railroad had, on federal orders, used such a width for its tracks.
In addition to tracks, cars had also differed in design; in 1867 the car builders organized to plan standardized cars. Separate compartments in cars first appeared in Europe in 1873 and in the United States in 1883. George Westinghouse patented his air brake in 1872, but not until 1884 were all passenger cars provided with such equipment, and not until 1887 were air brakes being added to freight cars. Electric light, from power provided by storage batteries, was first used by a railroad in 1881 in England on the London, Brighton, and South Coast Railway. Automatic couplers were first added to cars in 1887; such equipment was in use on nearly all railroads in the country within little more than a decade. Subsequent developments included the introduction of steam heat (water was heated in the locomotive and conducted to the passenger cars through pipes) and the construction of refrigerator freight cars; large-scale use of such cars, originally cooled by salted ice, began in 1887.
Starting with the Panic of 1837, which was precipitated by the collapse of the railroad boom in England, overexpansion and unsound financing of the railroads had affected the national economy. During the turnpike- and canal-building booms the federal and state governments had done much of the financing; consequently, during the panic many states found it necessary to repudiate the debts thus incurred. That experience discouraged government participation in the railroad boom that was just beginning and accounted in large part for private instead of public ownership of railroads in the United States.
Growing sectionalism and the conflict between the North and the South before the Civil War had tended to block large-scale projects (e.g., that of Asa Whitney), but the war itself gave tremendous impetus to railroads (e.g., the Pennsylvania RR), which aided in the transportation of troops and supplies. After the Civil War the great battles of the railway financiers began. Cornelius Vanderbilt consolidated the New York Central RR system, but he, like others—e.g., Jay Gould, Daniel Drew, and James Fisk—was accused of acting with complete disregard for the American public. The 1880s saw the revival of Southern railway construction and the last period of feverish expansion, attributable in part to such financiers as James J. Hill and Henry Villard. One of the greatest financial battles over American railways was fought by Hill and Edward H. Harriman.
In 1887 the Interstate Commerce Commission (ICC) was established to cope with the abuses that had resulted in part from the rapid expansion of the railroads, whose steadily increasing political power, excessive rates, and rebate policy had caused much popular discontent. For years the ICC sought to establish adequate controls over the railroads but lacked the necessary power. Its authority was accordingly increased by additional legislation until, in 1906 the Hepburn Act gave it, among other powers, that of fixing rates. Subsequent acts further expanded federal regulatory powers.
In 1917 the federal government took over the railroads for the duration of World War I. Although the Transportation Act of 1920 returned the railroads to their private owners, it also granted the ICC general control over the lines, including the right to mediate labor disputes, which had become an important factor. Organization of railway labor began with the unionization (1864) of locomotive engineers; by 1900 railroad personnel were organized on an almost nationwide basis. The many unions were headed by the Big Four—the brotherhoods of the engineers, the firemen and enginemen, the conductors, and the trainmen.
After 1920 the railroads failed to recapture their former prosperity largely because of added competition from the automobile, the bus, long-distance trucking, and the airplane. The widespread introduction of diesel power on long-distance passenger train routes and the electrification of heavily traveled urban lines in the 1930s still failed to revive the industry. During World War II, however, when gasoline rationing forced many travelers to abandon their cars, railroads increased their passenger traffic. After the war, railroads tried to maintain their gains through the introduction of air-conditioning and lighter, faster, more streamlined cars, built of steel and aluminum.
In spite of the changes, however, business, especially passenger travel, continued to decline. The industry's financial difficulties peaked with the bankruptcy of the Penn Central RR in 1970, but since then railroads have staged a modest revival. The Railroads Revitalization and Regulatory Reform Act (1976) and the Staggers Act (1980) deregulated the industry by making it easier for railroads to set their own rates, abandon unprofitable lines, and buy other railroads, thus creating economies of scale. Under deregulation, railroads could offer rate discounts to get more customers. Moreover, variable gasoline prices and technological change made the industry more competitive with trucking. Containers that adapt to truck, ship, or train travel, multilevel automobile-rack train cars, computerized tracking systems, and piggyback carriers that allow trains to carry fully loaded trucks also aided the modernization of freight service.
The amount of freight moved by railroads increased by 34% between 1970 and 1992, and rail's share of the freight industry, relative to trucking and other forms of transport, remained stable through the 1990s, reversing decades of decline. In 1996 the 10 major railroad companies had operating revenue of nearly $33 billion. The 1980s and 90s saw the consolidation of the U.S. freight industry, which resulted in four major railroad companies: Burlington Northern Santa Fe, CSX, Union Pacific, and Norfolk Southern, as well as the expansion of the Canadian National into the United States with its purchase of the Illinois Central. As a result, the Surface Transportation Board blocked the proposed merger of the Burlington Northern Santa Fe and Canadian National systems in 2000 and issued (2001) new regulations designed to assure that future mergers would increase competition.
In the 1960s growing concerns over air pollution caused by automobile use, overcrowding of highways and airports, and the inconvenient out-of-town location of many large airports caused many people to call for government support of large-scale railroad passenger service. Finally, by the terms of the Rail Passenger Service Act (1970), a National Railroad Passenger Corporation was created to operate virtually every intercity passenger rail line in the United States.
Known as Amtrak, the quasipublic agency reduced the number of intercity passenger trains by one half in its first year of operation, retaining service only in areas of high-density travel. Amtrak, which now operates up to 300 intercity passenger trains per day on 21,000 miles of track in 46 states, carried nearly 26 million intercity passengers in 2007.