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Along with the railroads, what became known as railroad towns came into existence. The first ones appeared east of the Mississippi before 1860. The spread of new railroads was reduced sharply by the Civil War, but construction resumed shortly after it. Railroad towns were founded according to the same "boom-bust" cycles as the railroads themselves. From 1850 to 1910, these new towns appeared across the nation. In the West, where few cities had existed before, they became the fabric of the settlement system.
In the 1860's and '70's, "every temporary terminus of track laying became a city; wicked, wonderful and short-lived", wrote a former railroad agent in Harper's Magazine of one such place at the end of track in western Kansas. The town of Coyote consisted of "canvas saloons, sheet-iron hotels, and sod dwellings, surrounded by tin cans and scattered playing cards". Its main street, known as "Rat Row", was temporary home for a gang of Irish track laborers whose behavior was described in shocking detail. The writer found that "the Pacific railways have been responsible for more and worse towns than any other single cause.[49]" From the start, the railroad towns were despised for their unimaginative appearance. "Dropped at random upon the flat and featureless prairies along our western railroads", the new towns were predicted to be failures. "In the ordinary course of civilization, such characterless sites are not the ones to which populations cleave[50] ", wrote an unrelenting critic in The American Architect and Building News.
To make matters worse, these shabby towns with their matching inhabitants were the personal creations of railroad builders and their companions, everyone's favorite symbols of greed and corruption in the Gilded Age. The towns themselves were symbols of civilization's westward expansion. Along with some of the other unromantic aspects of pioneering, they shocked the educated and the refined, but they were absolutely irresistible to others. Soon a steady stream of young men and women began arriving on the muddy townsites to bargain over quality building lots in the grid of wooden stakes poking up through the prairie grass. This scene repeated itself many times in many places.
Some of the towns grew to become important cities: Tacoma, Reno, Fresno, Cheyenne, Billings and Albuquerque are successful examples. But even such a short list requires some qualification, because there is no restrictive definition of a "railroad town" that would allow counting their numbers. Every sizable town, east or west, was served by a railroad before the end of the nineteenth century. On the other hand, very few settlements were actually owned by railroads in the arrangement of company towns of that period. What distinguishes a railroad town is that it was part of a railroad's strategy to populate and control the territory along its line. Successful or not, a railroad town was a tool of corporate ambitions to manipulate people and resources, to control space and consolidate position, in order to maximize profits for the company. Hundreds of independent towns appeared along the tracks, but they were not instruments of corporate strategy. Countless other towns were already existed before railroads arrived, and sometimes they were successful in directing the rails their way, but in neither of these cases could a railroad company fully develop the potential of a townsite for its own advantage.
The railroads' clear goal was to promote and control business along the line. Every railroad that promoted agricultural settlement also wanted to bring prospective business people to their new towns. There was little disagreement over how the system should work: farmers expected that trade-center towns would be created, and merchants expected that there would be a surrounding population to support the trade. Railroads did their part by reconstructing in the West the familiar system of town-country settlement. While anyone could seek their fortune in towns along the line, the companies had an interest in controlling it by limiting the number of stations. A regular spacing, at seven- to ten-mile intervals, discouraged independent promoters from developing a business in the intervening area.
Many railroads made deals with private parties who platted and sold the townsites. Railroad survey engineers determined town locations and then handed over their information to townsite agents, who hired surveyors (sometimes from the railroad) to stake out the plat. There were many men who wanted to get into the business, especially during the boom periods of westward migration, but there was little chance for most of them. Railroad companies generally entrusted one man or a small group with the responsibility for all the townsites. These people usually were already connected financially with the road. Such an arrangement was common.
Union Pacific engineer Grenville Dodge was the greatest Western townsite creator. He was in charge of the UP towns in the late 1860s, and later with his son-in-law directed townsites for the Texas & Pacific and the Fort Worth & Denver City. Although he was in control, he does not seem to have become well acquainted with his towns. Dodge managed to command the attention of eastern railroad investors, the US government, and local officials all at the same time. Unlike other townsite agents, he directed operations he rarely saw. Cheyenne, Laramie, Midland, and Odessa were some of his creations, but most towns never accomplished more than a modest reputation.
After the completion of the transcontinental railroad, new construction consisted mostly of shorter branches or secondary lines. The lines served, rather than bridged areas. The network of rails became a great web, and companies began to compete intensely to control local trade. As a result, the number of new railroad towns increased instead of decreased once the horizon had been reached.
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