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The transcontinental railroad network transformed the American economy in two major ways.
First, the network provided the demand that helped to boost the size of the steel industry in the US. The need for rails and for rolling stock dramatically increased the demand for steel, helping to drive a growing steel industry. Second, and more importantly, the network connected all parts of the US. This increased the size of the US market. By doing so, it allowed companies to grow much bigger. Firms were no longer limited because they could only sell in a certain area. Instead, firms grew as the railroads allowed them to sell to the whole country.
The Transcontinental Railroad, finished in 1869, was only part of a massive increase in railroad growth in postwar America. First, the railroads themselves created a need for new materials, such as cheap steel for rails. Andrew Carnegie made millions of dollars creating the raw material to make these rails. The railroads also improved the economies of towns as they became rail hubs. No one would have heard of Dodge City, Kansas without the railroad. The transcontinental railroad also connected the fertile Pacific Coast region with a growing urban population in the East who had no access to farms. Refrigerated railcars would ultimately give Easterners access to goods the West enjoyed, such as out-of-season produce and cheap beef.
The transcontinental railroad also united America economically, as mail-order catalogs now had a way to get goods to their customers quickly and inexpensively. People from coast to coast could now shop out of the same catalogs, thus creating a distinctly American consumer culture out of what had been only a regional one previously.
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