Following the Civil War the United States government had begun a widespread effort to reconstruct the southern states and bring them more in line economically and socially with the north. This included a major effort to financially invest in the existing railroad network and to provide grants for the construction of new rail infrastructure. Although mismanagement of funds was commonplace, the southern rail network did begin to expand west into the southern frontier territories. The 1870s were a fairly turbulent time for the American rail industry as competition between railroad companies led to the construction of unprofitable lines and a series of high profile bankruptcies in 1873. Competition also led to price wars as rivals constantly undercut each other’s haulage prices until stabilization was agreed between the major companies in the middle of the decade. Low wages for railroad workers led to anger and a large-scale strike spread through the railroads of the northeast in 1877.
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