inct the Eastern manufacturer reached out for the markets
of the Northwest territory where free farmers were producing annually
staggering crops of corn, wheat, bacon, and wool. The two great canal
systems--the Erie connecting New York City with the waterways of the
Great Lakes and the Pennsylvania chain linking Philadelphia with the
headwaters of the Ohio--gradually turned the tide of trade from New
Orleans to the Eastern seaboard. The railways followed the same paths.
By 1860, New York had rail connections with Chicago and St. Louis, one
of the routes running through the Hudson and Mohawk valleys and along
the Great Lakes, the other through Philadelphia and Pennsylvania and
across the rich wheat fields of Ohio, Indiana, and Illinois. Baltimore,
not to be outdone by her two rivals, reached out over the mountains for
the Western trade and in 1857 had trains running into St. Louis.

In railway enterprise the South took more interest than in canals, and
the friends of that section came to its aid. To offset the magnet
drawing trade away from the Mississippi Valley, lines were built from
the Gulf to Chicago, the Illinois Central part of the project being a
monument to the zeal and industry of a Democrat, better known in
politics than in business, Stephen A. Douglas. The swift movement of
cotton and tobacco to the North or to seaports was of common concern to
planters and manufacturers. Accordingly lines were flung down along the
Southern coast, linking Richmond, Charleston, and Savannah with the
Northern markets. Other lines struck inland from the coast, giving a
rail outlet to the sea for Raleigh, Columbia, Atlanta, Chattanooga,
Nashville, and Montgomery. Nevertheless, in spite of this enterprise,
the mileage of all the Southern states in 1860 did not equal that of
Ohio, Indiana, and Illinois combined.

=Banking and Finance.=--Out of commerce and manufactures and the
construction and operation of railways came such an accumulation of
capital in the Northern states as merchants of old never imagined. The
banks of the four industrial states of Massachusetts, Connecticut, New
York, and Pennsylvania in 1860 had funds greater than the banks in all
the other states combined. New York City had become the money market of
America, the center to which industrial companies, railway promoters,
farmers, and planters turned for capital to initiate and carry on their
operations. The banks of Louisiana, South Carolina, Georgia, and
Virg