Cornelius Vanderbilt. Though he had spent his early life and had
laid the basis of his fortune in steamboats, he was the first man to
appreciate the fact that these two methods of transportation were about
to change places--that water transportation was to decline and that
rail transportation was to gain the ascendancy. It was about 1865 that
Vanderbilt acted on this farsighted conviction, promptly sold out his
steamboats for what they would bring, and began buying railroads despite
the fact that his friends warned him that, in his old age, he was
wrecking the fruits of a hard and thrifty life. But Vanderbilt perceived
what most American business men of the time failed to see, that a change
had come over the railroad situation as a result of the Civil War.

The time extending from 1860 to about 1875 marks the second stage in
the railroad activity of the United States. The characteristic of this
period is the development of the great trunk lines and the construction
of a transcontinental route to the Pacific. The Civil War ended the
supremacy of the Mississippi River as the great transportation route
of the West. The fact that this river ran through hostile
territory--Vicksburg did not fall until July 4, 1863--forced the farmers
of the West to find another outlet for their products. By this time the
country from Chicago and St. Louis eastward to the Atlantic ports was
fairly completely connected by railroads. The necessities of war led
to great improvements in construction and equipment. Business which had
hitherto gone South now began to go East; New Orleans ceased to be the
great industrial entrepot of this region and gave place to St. Louis and
Chicago.

Yet, though this great change in traffic routes took place in the course
of the war, the actual consolidations of the various small railroads
into great trunk lines did not begin until after peace had been assured.
The establishment of five great railroads extending continuously from
the Atlantic seaboard to Chicago and the West was perhaps the most
remarkable economic development of the ten or fifteen years succeeding
the war. By 1875 these five great trunk lines, the New York Central, the
Pennsylvania, the Erie, the Baltimore and Ohio, and the Grand Trunk,
had connected their scattered units and established complete through
systems.

All the vexations that had necessarily accompanied railroad traffic in
the days when each one these systems had been a series of di