The Connection between Farming, Manufacturing, and railroads in Postbellum United States

 

Hey everyone, today we are going to take a look at the agricultural industry in postbellum United States and the affect that railroads and manufacturing had on it.  Within this we will also be looking at the broader implications on how it affected the future of agriculture in the United States, including my chosen topic, which was subsidies in for small farms.

The decades following the Civil War marked a period of reinvention for American agriculture, a sector fundamentally transformed by two powerful allies: railroads and manufacturing. Farming, particularly in the Midwest and Plains, shifted from small-scale, subsistence operations to more commercialized, specialized enterprises due to the economic pressures and opportunities created by transportation and industrialization. Railroads brought connectivity, while manufacturing provided the tools that allowed farms to scale up operations to meet an expanding urban demand. Together, these industries not only reshaped farming practices but also set the stage for the federal subsidies and structured support that define modern agriculture.

One of the most notable transformations in this era was how railroads integrated agriculture into the broader market economy, a shift with profound economic impacts. Between 1865 and 1900, more than 170,000 miles of new rail lines were laid, opening access to markets in major cities across the East Coast and facilitating the shipment of goods across the country¹. Illinois farmers, for instance, benefited greatly from this expansion. With rail lines allowing them to transport wheat and corn to distant cities, they could sell on a much larger scale than previously possible². This newfound reach didn’t just provide opportunities, but it created a dependency on the rail network for many farmers. According to Robert Fogel’s estimates, railroads reduced transportation costs for grain by up to 30%, a critical reduction that made these long-distance sales feasible³. Without this cost savings, farms in the Midwest would have faced significant limitations in both scale and profitability, rendering much of the large-scale farming unsustainable⁴.

Manufacturing, though less immediately visible in agriculture, was equally transformative. With the growth of American industry, mechanized farming equipment became increasingly affordable and accessible. Tools like the McCormick reaper, steam-powered threshers, and the steel plow allowed farms to dramatically increase productivity, with some estimates suggesting a productivity rise of over 50% for mechanized farms by the 1880s⁵. Robert McGuire was a historian who noted that by 1890, over 60% of American farms had incorporated some level of mechanization. He said that this mechanization was crucial for meeting the rising demands of a rapidly urbanizing country and provide adequate goods⁶. The direct impact of this was significant. These new machines reduced the reliance on manual labor which sped up the planting and harvesting processes. These changes allowed farmers to cultivate more land than ever before. This seems great until we start to look at the smaller farms who struggled to afford new machinery without going into debt. These challenges, McGuire argues, foreshadowed today’s subsidy system, as the vulnerabilities exposed by these shifts ultimately led to calls for federal support to stabilize the agricultural market⁷.

As railroads expanded, a new pattern of agricultural specialization emerged. The Midwest and Plains became the nation’s breadbasket, while areas like the South, still reliant on cotton as a cash crop, diversified more slowly. This specialization was driven largely by the transport efficiencies that railroads introduced, as farmers could now afford to sell bulky crops like wheat and corn that would otherwise have been too expensive to ship⁸. Railways allowed certain crops to become regionally dominant, with wheat production becoming centered in states like Kansas and Nebraska, while Iowa and Illinois turned to corn⁹. This regional specialization had cascading effects on local economies, as it led to the rise of grain storage facilities, mills, and other supporting infrastructure near key rail hubs. The interdependencies between farming and railroads were becoming increasingly clear, with agricultural output now directly linked to the viability of transportation infrastructure¹⁰.

The growth of commercial farming and these new interdependencies revealed underlying vulnerabilities in the agricultural economy, particularly around pricing volatility and high transport fees. These challenges helped inspire the agrarian protest movements of the late 19th century, as farmers called for policies to protect them against exploitative railroad rates and unfair market practices. McGuire’s research highlights how the Grange movement and the subsequent Populist push for policy reform were partly reactions to the monopolistic control that railroads and large agricultural suppliers had gained over the sector¹¹. The financial strain farmers faced, combined with fluctuating crop prices, underscored the need for a safety net, laying the groundwork for government intervention in the form of subsidies and price controls.

This early dependence on external support and federal intervention would become a cornerstone of modern agricultural policy, as the volatility of a now-commercialized agricultural market demanded stability measures. The federal government’s involvement increased in the early 20th century, leading eventually to the structured subsidy programs that still exist today. This foundation was laid during the postbellum period, when farmers were among the first groups to realize the economic risks inherent in relying on infrastructure and industrial support beyond their control¹².

This shows us that the postbellum period illustrates how American farming evolved through its reliance on railroads for connectivity and manufacturing for efficiency. The expansion of rail networks allowed farmers to reach larger markets, creating dependencies that both boosted profits and increased risks, while manufacturing innovations helped farms scale up to meet rising demand. Together, these sectors catalyzed commercial agriculture’s growth, leaving an enduring legacy in the modern, subsidy-supported agricultural system. The period underscores the importance of infrastructure and industry in sustaining the farming sector and highlights how these partnerships, though productive, can also lead to dependencies that shape policy and economic frameworks for generations.

1.     1.  Leland H. Jenks, "Railroads as an Economic Force in American Development," The Journal of Economic History, May 1944, 5.

2.    2.   Robert William Fogel, "A Quantitative Approach to the Study of Railroads in American Economic Growth," The Journal of Economic History, Jun. 1962, 170.

3.  3.     Fogel, "A Quantitative Approach," 173.

4.      4. Fogel, "A Quantitative Approach," 175.

5.    5.   Robert A. McGuire, "Economic Causes of Late-Nineteenth Century Agrarian Unrest: New Evidence," The Journal of Economic History, Dec. 1981, 838.

6.    6.  McGuire, "Economic Causes," 836.

7.      7. McGuire, "Economic Causes," 840.

8.     8.  Jenks, "Railroads as an Economic Force," 8.

9.      9. Fogel, "A Quantitative Approach," 178.

1010. Jenks, "Railroads as an Economic Force," 12.

1111.    McGuire, "Economic Causes," 841.

1212.    Fogel, "A Quantitative Approach," 180.

 

Bibliography

Fogel, Robert William. "A Quantitative Approach to the Study of Railroads in American Economic Growth." The Journal of Economic History. Vol. 22, No. 2 (Jun. 1962): 163-197.

Jenks, Leland H. "Railroads as an Economic Force in American Development." The Journal of Economic History. Vol. 4, No. 1 (May 1944): 1-20.

McGuire, Robert A. "Economic Causes of Late-Nineteenth Century Agrarian Unrest: New Evidence." The Journal of Economic History. Vol. 41, No. 4 (Dec. 1981): 835-852.