The economic changes which have accompanied the great development of
transportation that has taken place during the last fifty years have
revolutionised our industrial and social life. Among the effects of
developed transportation upon the economic organisation may be noted:
First, that relations of producers and consumers have been
fundamentally changed by placing a larger market at the service of
both. Many classes of commodities are now bought and sold in a world
market that were formerly restricted to local trade. Second, improved
transportation has made the prices of commodities more uniform for
different producers and consumers. The variations due to situation
have been lessened. In a like manner there has been a decrease in
those time variations in prices that result from changes in the supply
of commodities. Improved transportation also makes prices lower--not
only because it reduces the costs of moving the raw materials of
manufacture and the finished products of industry, but also because it
enables the merchant to turn his stock oftener and thus do business
with less expenses for capital.
As a third effect of improved transportation may be mentioned the
acceleration which it has given to the growth of cities. Cheap and
efficient transportation has led manufacturers to locate their plants
where they can command a large supply of labour and where they have
the greatest advantages for the distribution of their products. The
great manufacturing establishments are now located in Chicago, New
York, Philadelphia, Pittsburg, and the other large cities. Conditions
of transportation have become a stronger factor than even the location
of the sources of raw materials in determining where an industry shall
be established. The effect of the railroad upon the location of
agriculture has been no less potent. The railroad has brought new
agricultural regions into cultivation and destroyed the profits of
cereal agriculture in many parts of the Eastern States.
Another important consequence of improved transportation and
communication has been that of bringing the nations of the world into
closer economic and social relations. With the growing solidarity of
the economic interests of the countries of the world, with the
multiplication of the intellectual and other social ties that unite
the nations, their political relations inevitably change, and for the
better. Nothing is doing more to advance the attainments of the
cherished ideal of international amity than is the development of
transportation.