How did the railroad system affect the U. S. economy in the 1860s?

Um it totally revolutionized it. Before the railroads, farmers could only produce what they needed and enough to sell to the * nearby * people. With railroads, transportation was super duper cheap and maximum fast.

It also changed communications, although the telegraph did that more, and it made the country a country that could be crossed in a matter of days, not months, so much smaller in a way.