In the 1800s, how did US policy encourage the growth of the transportation sector?
During the 19th century, the federal government gave essentially no support to the building of canals, but it did (particularly after the Civil War) aid greatly in the building of railroads.
In the early United States, canals were a very important form of transportation. Before the building of canals, water transportation could only occur along some rivers and lakes. This was inconvenient because it meant that some connections (such as that between the Great Lakes and the Atlantic Ocean) could not be made. For this reason, people started to want to build canals to link various bodies of water. The first of these was the famous Erie Canal that connected the Great Lakes to the Atlantic via the Hudson River. The federal government did not play any real role in the creation of canals. There were many attempts to get the federal government to help fund the canals, but many early political leaders felt that the government was not allowed to provide such funding by the Constitution. Therefore, the federal government declined to fund the Erie Canal and other canals.
The federal government did much more to help the railroads, particularly after the Civil War. The main way in which the federal government did this was by granting land to the railroad companies. The federal government gave the railroad companies the title to huge tracts of land along the railroad tracks. By giving the companies this land, the federal government was essentially giving them a way to make a lot of money. This helped fund the transcontinental railroad.
So, we can say that the federal government did a great deal to help fund the expansion of railroads, but it did very little to help build the canals.