Here's a quick history of rail-line development in the United States:
http://railroad.lindahall.org/essays/rails-guage.html
This link is a dry read PDF file but has more raw data:
https://campus.fsu.edu/bbcswebdav/xid-3430397_1
The bottom line is that the industry evolved, both north and south, starting with serving local interests and eventually recognizing the desirability of standardization for economic reasons, and all apparently done without federal interference.
Perhaps more specific to the decision point in the south, here is a quote from wackypedia:
In 1886, the southern railroads agreed to coordinate changing gauge on all their tracks. After considerable debate and planning, most of the southern rail network was converted from 5 ft (1,524 mm) gauge to 4 ft 9 in (1,448 mm) gauge, then the standard of the Pennsylvania Railroad, over two remarkable days beginning on Monday, May 31, 1886. Over a period of 36 hours, tens of thousands of workers pulled the spikes from the west rail of all the broad gauge lines in the South, moved them 3 in (76 mm) east and spiked them back in place. The new gauge was close enough that standard gauge equipment could run on it without problem. By June 1886, all major railroads in North America were using approximately the same gauge. The final conversion to true standard gauge took place gradually as track was maintained.[1] Now, the only broad-gauge rail systems in the United States are some city transit systems.
Thanks so much for that awesome information. It’s not being taught to schoolchildren because the teachers love big gov.
I am a fan of Mr. Hill: https://en.wikipedia.org/wiki/James_J._Hill
He built his RR without the federal funding that turned into a boondoggle and cost the nation preciously.