ABSTRACT
Introduction One of the greatest transfers of capital worldwide before 1914 was the flow of gold across the Atlantic to America, more specifically to railways in the United States of America. Billions of dollars in the shape of English pounds, Dutch guilders, German thalers and reichsmarks, French francs and lesser European currencies were invested in the construction and running of the railways of America. Railways were one of the most influential agencies in the development of the unlimited possibilities of that vast country, where distances were enormous and other ways of communication strictly limited in number and importance.1 European investors were important agents in this process.2 The first railways in the USA The very first railway lines in the United States were mostly regional affairs, funded with local money. New England traders had built up sizeable savings in the China trade or in whaling, and this capital was available for investment. These early railways were promoted by local men, often supported by local governments, and investment in them was therefore deemed safe. In some states, such as South Carolina, to name but one, the state government was the chief actor and the main source of capital. Other states, such as Maryland, Michigan, Indiana and Illinois, came up with ambitious internal improvement programs, consisting of canals, plank roads
1 Robert Fogel’s thesis minimising the role played by the railways in the
development of the American economy, as put forward in his ground-breaking Railroads and American Economic Growth (Baltimore 1964), has been largely superseded by more positive estimations. See for instance A. D. Chandler, The Railroads: The Nation’s First Big Business (New York 1965).
