The transformation of the US economy from agrarian to largely industrial took place between the late 19th century and the early 20th century , with the growth of railroads leading the way . Between the end of the Civil War and the end of the 19th century , railroad trackage grew from roughly 45,000 miles in 1870 to over 200,000 miles by 1900 . Illustrating the importance of railroads to the American economy , when the first issue of the Wall Street Journal was published on July 8 , 1889 , the news of the burgeoning railroad industry dominated that paper .
Much of the early railroad growth took place in the eastern part of the country with a host of newly constructed rail lines crisscrossing through states east of the Mississippi River . The largest two eastern roads were the New York Central ( NYC ) and the Pennsylvania Railroad , with financing coordinated by Morgan and Schiff , respectively . Morgan became associated with the NYC by virtue of his purchase of the major portion of the railroad ’ s securities from William Vanderbilt , son of Cornelius Vanderbilt . Schiff ’ s tie to the Pennsylvania Railroad developed over a longer length of time as Schiff established himself as a highly effective banker with respect to financial advising and the distribution of railroad securities .
The most challenging and widely followed rail developments involved the “ trunk lines ,” railroads whose routes were meant to extend great distances and provide shipments of goods and transport of passengers with minimal stops and transfers . The epitome of the newly constructed trunk lines of the late 19th century were those that originated in the nation ’ s midsection and extended across the vast but sparsely populated American continent . With the Pacific Ocean serving as the ultimate point of termination , the transcontinental railways bore names such as Union Pacific , Northern Pacific , Canadian Pacific and Southern Pacific .
Morgan & Co . and Kuhn , Loeb & Co . were generally the lead financiers behind those transcontinental rail enterprises . Sometimes they acted in direct competition , but more often as allies , through “ community of interest ” arrangements . ( Such arrangements would become much more carefully scrutinized under antitrust legislation passed early in the 20th century .) In the case of the Union Pacific , for instance , Morgan attempted to re-organize
that poorly managed and undercapitalized railroad , but without success . When Schiff asked Morgan if he and his financial partners could take over the reorganization efforts , Morgan was only too happy to rid himself of a seemingly hopeless situation . But Schiff was successful , and the Union Pacific remains today as a premier transcontinental carrier in the United States .
Yet not all the Morgan and Schiff interactions were friendly or benign . In the
The Morgan Library and Museum , 1913 .
Knitting class at the Henry Street Settlement on Manhattan ’ s Lower East Side , 1910 . One of Jacob Schiff ’ s major charitable acts was the funding and development of this organization .
case of the Northern Pacific Railroad , for instance , the Morgan-controlled owners held nearly half of both the common and preferred common stock of the railroad . The Northern Pacific , however , was of great strategic value to other railroad operators as well . Recognizing that importance , Schiff organized a separate and powerful group of buyers , including National City Bank and the Rockefeller interests , to make an unfriendly
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