2-3, Winners and Losers in races

2-3, Winners and Losers in races - Lessons from the Canal...

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Lessons from the Canal Boom in the U.S., 1820-40 9. Kinds of winners, and their characteristics. Basically, investment winners are "revolving funds" that actually do revolve, by getting early payoff. a. Trunklines with best routes. Erie Canal; Delaware and Raritan (linking Phila and N.Y. Harbor, like the Jersey Turnpike today). b. Trunklines that also serve as their own feeder lines. This was the Erie, tapping its own route, the Mohawk Valley. As the Erie progressed incrementally, each stage generated its own traffic. Payout didn't wait until completion. The pot o' gold was not just at the end of the rainbow, but along each segment. Promoters and historians have obscured this by writing of "tapping the far-flung western trade," but that analysis is too temptingly dramatic, too easy, and misleading. It was mainly local Mohawk Valley trade that paid off the Erie. It is also true, and greatly important, that it tied the mid- Atlantic with the growing northwest, but it was its local success and strength that made that possible. Ohio's several n-s canals enjoyed the same advantage, because parts of Ohio were closely settled before the canals came. (Cf. Trudy Wischemann's study of how SP R.R. in California's San Joaquin Valley chose routes to serve areas already closely settled, to generate traffic.) c. Short coal lines. d. Key short passages. The Soo, linking Lakes Huron and Superior, 1855; Louisville's by-pass of rapids on the Ohio R.; the Illinois & Michigan Canal (but not until next cycle - it was premature in 1836); Welland Canal (Canadian), 1829. e. Short lines focusing on a hub. Boston r.r.s. Network of roads around Nashville. PA's system of turnpikes and bridges preceding its canal fiasco: it had 56 turnpike corps. by 1825. Pittsburgh's short radials.
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Atlanta, "resisting seduction by the siren magic of distant trade" (love that purple rhetoric of the Old South!) was the hub of a coherent state road and rail system that made good returns. 1 The brains, judgment, and leadership that created the compact radial systems around Atlanta, Nashville, Richmond, Mobile, and other places, would have made the south invincible in peace and war, had it not been for slavery and the plantation system of agriculture. These aborted the natural economic interchange between city and country that nursed along northern industry so well. They also forced southern leaders into their posture of continental imperialism, spreading the whole population thin over more territory than it could defend. Many of their people moved to growing towns and cities north of the Ohio, where they bred future Union soldiers and leaders like Abe Lincoln. f. Technical innovation, timely and appropriate. 1817, the Pittsburgh Pike, a road replacing mere
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This note was uploaded on 02/16/2012 for the course ECON 123 taught by Professor Smith during the Winter '11 term at UC Riverside.

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2-3, Winners and Losers in races - Lessons from the Canal...

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