Steel rails versus iron rails: Evidence from Canada

The results shown in Fig. 1 and in Table 2 argue that steel was a cost-minimizing choice for railroad companies in Canada by 1870, given the assumed 5:1 ratio of steel rail life to iron rail life and an average life for the latter of less than 7 years. The evidence in Table 1 shows that there was a very rapid switch from iron to steel over the decade from 1870. This evidence suggests that there is no case for the inertia argument in Canada.It is possible that there was inertia in the United States but not in Canada. Such a situation is possible if the two countries were completely separate entities. But this was not the case. First, the Canadian lines were built as through lines to carry freight from the American midwest to the Atlantic seaboard and were thus in direct competition with American lines. The vigorous competition which resulted can be seen in the freightrate situation of the 1870s. Second, there was some degree of overlapping ownership between the Canadian and American railroads. Both the Grand Trunk and the Great Western owned lines in Michigan and in New England, while the Canada Southern was organized under the presidency of Milton Courtwright of Erie, Pennsylvania. At least for those railways with overlapping ownership, it seems reasonable to assume that decisions were made in the same fashion on both sides of the border.