The Civil War and the Southern Rail Network

Abstract

The early decades of railroading in the United States, in the early 19th century, featured relatively small, disconnected rail systems operated by different railroad firms. A major obstacle to interconnecting these systems was the multiplicity of track gauges and other standards used by the different firms.

However, in the latter part of the 19th century, standardization, interconnection, and expansion swept over U.S. railroading, resulting in a continent-wide rail network and the dawn of railroading as a major industry. This was no small feat, as standardization required extremely expensive reconfiguration of both fixed assets and rolling stock.

Interestingly, scholars have given little attention to why that standardization occurred, given the expense. This paper argues that one of the more important causes was the near-total destruction of Southern rail networks during the U.S. Civil War, which diminished the path-dependence of the original, disparate railroad standards.

Keywords: Railroad, track gauge, U.S. Civil War, path dependence, lock-in, network effects, network externalities

JEL Classification: L23, D23, N41, N71