ollowed the panic of
1857. After 1873 the varied applications of electricity to industry and
communication gave a new direction to investment. After 1893, with every
preceding activity stimulated and extended, there came the first
successful construction of a trackless engine--the motor-car--and the
rebuilding of the physical plants of cities, railways, and suburban
residences. The recovery of confidence came after 1896, and before the
end of the century speculation was at full blast.

The drift toward monopoly was marked. The trusts had already shown their
profitable character. Concentration had been made possible by the
development of communication in the eighties, and grew now on a larger
scale than the eighties had imagined. Within the field of transportation
the promoters reorganized the railroads after the panic, reduced their
number, and gathered their control into the hands of a few men.

The railway system by 1900, with 198,000 miles of track, was directed by
a few powerful groups of roads. In the East the New York Central and
Pennsylvania systems were dominant. In the West the continental railways
formed the basis of new organizations. The keenest interest gathered
round the reconstruction of the Union Pacific by Edward H. Harriman, who
reorganized its finances after 1897. The Union Pacific had been forced
into combination by its location and its neighbors. Running from Omaha
to Ogden it was dependent for through traffic upon the Central Pacific
that ran from Ogden to San Francisco. When the latter came under the
control of the California capitalists who owned the Southern Pacific
lines, the Union Pacific was driven to build or buy outlets of its own,
and extended into Oregon and Texas as the result. Jay Gould had begun
the consolidation in the eighties and Harriman continued it after the
panic of 1893. He rebuilt the main line and improved the value and
credit of his property. In 1901 his road borrowed money with which to
buy a controlling interest in the Central Pacific and Southern
Pacific--the Huntington lines,--and thereafter the Harriman system, with
two complete railroads from the Mississippi to the Pacific, was beyond
the reach of hostile competition.

The Interstate Commerce Law of 1887 stimulated combination among the
railroads, since it made pools and rate agreements illegal. The
alternative to such agreements was destructive competition, since no two
lines were of exactly equal strength. To avoid