Texas was a latecomer to the railroad game. When the first Texas railway was built in 1853, there were already 10,000 miles of tracks in the United States. Suspicious of corporations backed by British and northern capital, the state Legislature had placed extremely restrictive conditions on railroad charters. The Civil War, followed by the financial Panic of 1873, slowed development even more.
With its large distances, mostly flat land and small rivers, Texas was still a railroader’s dream.
In Episode 6 of The Engines of Texanity, we will talk about how the railroad changed the landscape of the Texas economy.
After the Civil War, things changed drastically. Mirroring the U.S. government’s generous land grant policies, Texas offered railroad developers 8 square miles of land for each mile of track laid. The deal was eventually increased to 16 square miles of land per mile of track. Texas saw over 4,500 miles of railroad built between 1875 and 1885, about one-third of the mileage constructed in all the other Southern states during that time. By 1904, Texas had more tracks laid than any state, a distinction it has held ever since.
The economic payoff was enormous. Before railroads, transporting goods relied on ox-drawn wagons, a laborious and costly endeavor. Over time, the railroad cut freight rates down by 95%.
The railroad infrastructure encouraged the growth of industries like cotton, cattle and lumber, and allowed labor-saving implements like plows, mechanical harvesters, tractors and barbed wire to be transported across the state. In terms of tonnage, lumber made up a quarter of all railroad shipments. However, cotton remained the cash crop and was the largest revenue generator until 1928. Railroads made enormous swaths of land viable for cotton-raising, which in turn created more volume of product that railroads could move.
Between 1860 and 1890, the total assessed value of property in Texas grew from $111 million to $886 million. The population more than tripled, from 600,000 to 2.2 million, with major cities like Austin, Waco and Dallas seeing their populations more than double in the first few years after the railroad arrived. Counties with new railroads saw an average population growth of 200%.
Texans became wealthier than they had ever been, and the standard of living lifted far beyond anything they could have imagined. Nonetheless, many were not completely satisfied.
Farmers — the vast majority of Texan heads of household — had little appreciation for the nuances of supply and demand that drove up freight prices during harvest time. They also weren’t sympathetic to the fact that these railroads required coordination and capital on scales that had never been seen before. As new people flooded into Texas, indirectly boosting the economy, most farmers just noticed the increasing land prices and property taxes.
As early as the 1870s, organizations like the Grange Movement and the Farmers’ Alliance formed. These organizations idealized small, family-owned farms in contrast to big, foreign corporations. Among other changes, they pushed for state-owned farmer’s banks, graduated income tax rates and the state ownership of all railroads. Despite banks and railroads’ attempts to halt some of these initiatives, the movement still resulted in the passage of a string of anti-banking, anti-corporation and especially heavy-handed railroad legislation.
Anti-railroad sentiment would culminate in 1891 in the formation of the Texas Railroad Commission. It was the state’s only functioning regulatory agency, which meant that a decade later it would become the de facto regulator of a brand new industry that would be the first to concentrate capital in Texas: oil.
Click below to listen to Episode 6 of The Engines of Texanity.
