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I believe it was the growth of the iron industry mixed with the expansion of America to the West. After the canal boom, waterways were getting too expensive to build and maintain, so the internal improvement initiative shifted its focus to the new idea of coal-driven trains as a better way of moving bulk product and as a direct link from the national hub of the East to the newly settled West, out near the land gained from the Mexican-American War.

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Q: Which industry likely encouraged the expansion of railroads in the southwestern and pacific region back in the 1800's?
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