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During the Industrial Revolution goods were being mass produced and they needed to be transported across the country but transporation methods at the time were really crappy
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Canals were built so that we were able to send big and heavy objects. Canals are man made rivers deep enough to transport tons of weight.
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Canals were very popular for about 30 Years but they couldn keep up with the times. Americans, with their need for more, started building bigger and heavier things and that meant larger canals. Building bigger canals caused problems with the land aroung. Another issue was how limiting canals could be during the times of tough weather.
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With the downfall of one transportation came the ride of another. Railroads are better than canals because they can literally be put anywhere. Weather doesnt effect the performance either. They can carry the largest things without any strain
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The decline of trains came with the new ways that people wanted to travel. Blimps and air travel was being invented so people wanted the next best thing.