Old Steam engines needed to stop to take on water/coal. Given the sheer scale of the United States some of these stops would be in the middle of nowhere. Eventually people started building bars, inns and stores for the passengers and crew. Eventually these grew into turns and then into cities.
Similar things happened with the US highway system, small towns popped up around serving tourists traveling along the highways.
If you look at the development of America (and many other parts of the world had similar development) the earliest cities are built on water. Coasts and navigable rivers allow trade to develop. And water is necessary for drinking, manufacturing, and agriculture.
The next cities to develop are on roads constructed between these older cities. Usually locations that have enough water and other natural resources to support travelers on the roadways. In the US this is early 19th Century growth as the National Road and other improved roadways developed from public and private investment to open up more of the interior: in Europe good roads date back to Rome. That’s why so many place names in Pennsylvania and Ohio are from the names of inns, as they served these transportation networks and grew with trade. Next came canals, which used existing waterways that were often not navigable in their original state but by digging out a consistent depth and adding locks and towpaths could be used for transportation.
Railroads were just the next evolution in transportation. Early railroads required frequent stops for coal and water, and they were limited in how steeply they could climb so the best routes were located along passes through mountains. But railroads could be built in fairly straight lines between cities, reducing travel times.
Many cities that grew rapidly during the 19th century were at places where the different transportation lines came together. For example, Chicago became a major center of manufacturing and trade because it connected canals, railroads, and maritime shipping through the great lakes.
Cattle were driven overland to Kansas City and other points where the cattle trails intersected with railroads, then put on trains for Chicago. At Chicago, the cattle were slaughtered and processed into meat products that could be put on ships and sold to the East Coast and Europe. Other raw materials (like Cyprus lumber from Arkansas) were transported by rail to be turned into products (like sewing machine cabinets) that could be distributed by rail or ship to far flung markets.
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