4Why Travel 3,000 Miles? Ohio wheat would be ground into flour. Shipped to New Orleans - - about 1,000 miles.Then shipped up the Atlantic coast to consumers in Philadelphia and other cities adding another 2,000 miles.Why would anyone do that?
5Location MattersImagine cheap and abundant apples in one region that have little economic value unless they can be sold to consumers who may not live nearby.A basket of apples harvested is much less valuable than a basket of apples harvested and delivered to paying customers.That is why it makes sense for people to spend time an money on transportation.
6Location MattersOur national transportation system arises from public and private decisions.The Constitution gave Congress the power to “To establish Post Offices and Post Roads.”But, we sort of take it all for granted…
7The Mystery of the Alien Bananas Bananas are a tropical fruit.No one in Delaware grows them.Delaware statutes provide no plan for getting bananas to grocery stores.Yet, there they are there – everyday, even the most rural grocery stores.How can that be?
9Profit MotiveBusiness transportation is guided by an interest in profit.Improved transportation systems often help businesses generate profits because of customers’ willingness to pay - - sometimes a lot - - for getting goods to or from the right place at the right time.
10Profit MotiveHow does the profit motive contribute to providing all of us access to goods and services requiring the cooperation of thousands of strangers?What is the metaphor of the invisible hand meant to convey?Free markets - - allowing people to act in their own self-interest - - promotes positive social outcomes even those these are not intentional.The apple grower or wheat farmer is simply trying to earn income.To make this all work, we need a system of transportation.
11The Turnpike StoryIn 1790, the poor road system was a major problem for Americans looking for better connections to markets.State and local governments developed adequate local roads but were not up to the task of taking on large projects.They turned private enterprise to help.
12The Turnpike Story Turnpikes are intercity toll roads. They were made of stone, gravel, and (from 1847 to the peak in 1853) plank.Turnpikes offered speed and dependability over local roads.By the 1830s, turnpikes are over taken by canals.1810 = 4,600 miles1830 = 27,800 miles
14Turnpikes TodayWhy build a turnpike and an Interstate?
15The Canal Story The great canal-building era lasted from 1815-1843. Combinations of private and state and local government money build the canals.= $31 million73% of the investment was provided by government.
16The Canal StoryWater transportation was important because the cost per mile was much lower than overland transportation.This explains why Ohio wheat would travel to New Orleans as flour on its way to Philadelphia
17The Canal StoryThe opening of the Erie Canal in 1825 the drove dramatically reduced shipping costs from Buffalo to New York City.
18The Steamboat StorySteamboats were developed for use on the internal river system - - the Ohio, the Mississippi, and the Missouri Rivers.Flatboats, Keelboats, and steam-driven paddle wheelers gave farmers cheap transportation for their crops to New Orleans and on to other ports.
19The Steamboat StoryAbraham Lincoln made the trip to New Orleans as a flatboat captain.Flatboats were usually broken up and sold for timber.He returned home upriver in a steamboat, the latest and greatest mode of transportation.
20Steamboats in Operation on Western Rivers YearsNumberTonnage18111371181571,51618206914,20818258012,527183015124,574183532450,123184049482,626184553896,1551850638134,5661855696172,6951860817195,022
21The Steamboat StoryBy the end of the 1850s, a fleet of over 800 steamboats sailed on the internal rivers.Freight rates fell in real terms by 90% upstream from 1815 to 1860 and by 40 % downstream.Heavy loads (crops, iron) tended to travel downstream.Lighter loads - - consumer goods - - tended to travel upstream.
22The Railroad StoryThe advantage shifted to railroads beginning in 1830.Trains ran faster than boats.Trains ran when water was frozen.The first trains were horse drawn mph.The first steam locomotives were introduced in the 1830s.By 1900, they reached speeds of 50 to 60 mph.
23Miles of Railroad in Operation YearMileage18302318351,09818402,81818454,63318509,021185518,374186030,626
26The Magic Marker Mark Factory RoundWage$5.00Number of Marks ProducedAverage Cost Per Mark123
27ProductivityProductively measures the amount of output (finished goods and services) produced relative to the inputs (productive resources) used. Productivity Output InputLabor productivity is relatively easy input to measure since we can measure wages and hours. Productivity Output Labor Hour
28Transportation and Productivity How may teamsters and wagons would it take to carry as much freight as one train can hold?Turnpikes, canals, steamboats, and trains freed labor to pursue other more specialized activities, such as farming or starting new businesses