By the early 1900s, railroads had been fundamental to the American economy (I'm assuming the question is about the United States, but the railroads were important in pretty much every industrialized society in the early 1900s) for more than half a century. There are many reasons why this was the case. For one thing, the railroads were enormous consumers of capital goods. The steel, coal, copper, iron, timber, oil and other resources needed to construct and maintain locomotives and railroads themselves was tremendous, and each of these items had to be produced in factories. It was no coincidence that mining, steel, and oil industries in particular rose to the center of the American economy, fostering enormous economic growth. The railroads drove much of this growth. Another reason the railroads were so important to the growth of business in the early 1900s was that they enabled the flow of goods throughout the nation. Goods could be purchased through catalogs and delivered by rail very quickly. This created a national market for both consumer and capital goods, and was especially crucial for farmers. Finally, the railroads provided an organizational model that many other industries followed in the late nineteenth and early twentieth century. The first large-scale monopolies in the United States were railroad trusts. Thus the railroads helped shape the patterns of economic expansion that continued into the 1900s. So important were railroads that the rise of the automobile, because it led to a decline in the railroad industry, was one of the destabilizing factors that contributed to the outbreak of the Great Depression in the 1930s.