The first steam locomotive was built by Richard Trevithick after much experimentation. George Stephenson acquired glory for his locomotive named Rocket, which sped down the track of the just-completed Liverpool and Manchester Railway at a maximum speed of 24 miles per hour in 1829. The line from Liverpool to Manchester was a financial as well as a technical success, and many private companies quickly emerged to build more rail lines. Within twenty years they had completed the main trunk lines of Great Britain (Map 20.1). Other countries were quick to follow, with the first steam-powered trains operating in the United States in the 1830s and in Brazil, Chile, Argentina, and the British colonies of Canada, Australia, and India in the 1850s.

The significance of the railroad was tremendous. It dramatically reduced the cost and uncertainty of shipping freight over land. This advance had many economic consequences. Previously, markets had tended to be small and local; as the barrier of high transportation costs was lowered, markets became larger and even nationwide. Larger markets encouraged larger factories with more sophisticated machinery in a growing number of industries. Such factories could make goods more cheaply and gradually subjected most cottage workers and many urban artisans to severe competitive pressures. In all countries, the construction of railroads created a strong demand for unskilled labor and contributed to the growth of a class of urban workers.

Water travel was also transformed by the steam engine. French engineers completed the first steamships in the 1770s, and the first commercial steamships came into use in North America several decades later.