History
The outbreak of war had a depressing effect on the economic fortunes of the Confederate railroad industry. With the cotton crop being hoarded in an attempt to entice European intervention, railroads were bereft of their main source of income. Many were forced to lay off employees, and in particular, let go skilled technicians and engineers. Due to a general sentiment that the war would not last long, initially Confederate rail operators did not seek, nor build, alternative sources of iron for rail construction and repair.
Although railroad contracts to port-towns had ceased, due to the combined effects of the Cotton export policy and the Union naval blockade, lucrative government contracts were doled out to rail operators with lines supplying men and arms to the front line of Tennessee and Virginia. A consortium of rail operators had decided upon a universal rate for government contracts; "a uniform rate of two cents a mile for men and half the regular local rate for munitions, provisions, and material, and also agreed to accept Confederate bonds at par in payment of government transportation."
In addition, the Confederacy suffered from two key railroad deficiencies. The first was the lack of a true rail network; instead, rail lines usually connected ports and river terminals to points inland. This lack of inter-railway connections caused many railroads to become useless once the Union blockade was in place. A second concern was a break of gauge; much of the Confederate rail network was in the broad gauge format, but much of North Carolina and Virginia had standard gauge lines. Southern railroads west of the Mississippi were isolated, disconnected, and differed widely in gauge.
Read more about this topic: Confederate Railroads In The American Civil War
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