This document, part of a series of units designed to help students take and defend a position on public issues, discusses the changes that the railroads brought to the United States economy and society. As the first big businesses in this country, railroads had to grapple with a variety of challenges: raising enough money to launch companies requiring huge investments in equipment and property, and organizing and controlling a vast network of employees and equipment are just two. The unit is divided into seven sections. The first and last are an introduction and review respectively. The second section describes the development of the railroads, using dialogues or stories that make the atmosphere of the time more understandable to the student. After each episode is a list of activities and questions that cause the student to think about the information just learned. The third section is "the railroad game," in which students participate in a simulation of a real life business problem in which they attempt to meet the challenges that faced railroad managers. The fourth section is about consolidation and competition among the railroads. The fifth section is about railroads and government regulation. After presenting an overview of opposition to the railroad, the section discusses the economics of government intervention and the decline of the railroads. The sixth section compares what the student has learned about issues that shaped the history of the railroad and asks the students to apply them to an exercise on airline deregulation. The accompanying teachers' guide focuses on the following organizing questions: (1) To what extent should individuals and businesses be free to acquire and use property? What limitations, if any, should be imposed on how private property is used? (2) What is the public interest in business affairs? Is business competition the most effective way of pursuing that interest? Do the interests of the public and business sometimes require that competition be limited? Can cooperation among businesses effectively meet the interests of both business and the public? (3) What is the role of the government in protecting the interests of both business and the public? Does government have a responsibility to consider or mitigate the consequences of new technology it promotes? Fictional cases, primary source documents, and secondary sources are used to acquaint students with how these questions have manifested themselves in U.S. history. (DK)