Railroads have been vital in the history of the population and trade of rough and finished goods in the state of Michigan. While some coastal settlements had previously existed, the population, commercial, and industrial growth of the state further bloomed with the establishment of the railroad.
The state's proximity to Ontario, Canada, aided the transport of goods in a smooth east–west trajectory from the eastern shore of Lake Michigan toward Montreal and Quebec.
Major railroads in the state, prior to 20th century consolidations, had been the Michigan Central Railroad and the New York Central Railroad.
Chronology
The first roads
The history of railroading in Michigan began in 1830, seven years before the territory became a state, with the chartering of the Pontiac and Detroit Railway. This was the first such charter granted in the Northwest Territory, and occurred the same year the Baltimore and Ohio Railroad began operation. Joining the P&D in 1832 was the Detroit and St. Joseph Railroad, which aimed to cross the entire Lower Peninsula and establish a connection with Lake Michigan on the St. Joseph River. Neither of these projects had made any progress when in 1833 the Michigan Territorial Council granted a charter to yet another company, the Erie and Kalamazoo Railroad.
The Erie & Kalamazoo was to connect Port Lawrence (now Toledo, Ohio) on Lake Erie to some point on the Kalamazoo River, which flows into Lake Michigan. By November 2, 1836, the E&K had completed a line from Port Lawrence northeast to Adrian, Michigan, in Lenawee County. Horse teams drew a solitary car along the line, the first railroad trip undertaken west of the state of New York. The first steam locomotives operated in early 1837, with an average speed of .
Further north, the Detroit and Pontiac Railroad had completed a line from Detroit north to Royal Oak. Operations began in 1838 but would be horse-drawn until the following year. After financial difficulties and government entanglements the railroad reached Pontiac in 1843, for a total length of .
The state fiasco
By 1837, Michigan had the beginnings of a railroad network, but one with which both the government and the people were dissatisfied. In the first seven years of railroading in Michigan (1830–1837), the Michigan Territorial Council approved charters for 23 private railroad companies. Of these, only five completed and opened lines, and then for a total in-state (excluding Ohio) length of only . The two main lines, the Erie & Kalamazoo (Toledo–Adrian) and the Detroit & Pontiac (Detroit–Royal Oak) reflected the needs of the local business interests which built them and were inadequate from the perspective of the newly organized state government. Additionally, the settlement of the Toledo War placed Toledo in Ohio, which meant that the one railroad-connected port on Lake Erie lay in a different state. Therefore, using the state of New York's construction of the Erie Canal as a model, Michigan embarked on an ambitious project to construct three railroad lines across the state.
Michigan's project was not unusual at the time: her neighbors Illinois, Indiana and Ohio all had either government-funded building programs or generous assistance packages for private companies. Michigan lawmakers proposed to build three lines from the east side of the state to locations on Lake Michigan: The "Northern" line: St. Clair (on the St. Clair River which separates Michigan from the Canadian province of Ontario) to Grand Haven. The "Central" line: Detroit to St. Joseph. The "Southern" line: Monroe (on Lake Erie) to New Buffalo.
The Central line would connect with the D&P in Detroit, while the Southern line would connect with the E&K near Adrian. The government, under the leadership of Governor Stevens T. Mason, would finance the whole project through a US$5 million loan. A report prepared by a legislative committee predicted that construction of all three lines would take no more than five years, that revenues earned from the partially completed lines would be sufficient to satisfy interest payments during that period, and that once all three railroads were in full operation revenues earned would permit the state to pay off the loan in 20 years and turn a substantial profit. These assumptions proved to be wildly optimistic, leading to what one historian termed a "fiasco" and another an "embarrassment."