China suffered from numerous military conflicts throughout the first half of the twentieth century. These conflicts are thought to have slowed the pace of economic development; however, the magnitude of their negative impact remains unclear This paper studies the effect of militarism on the railway industry, one of the most important modem industries at the time. I study these alleged impacts by using a new panel data-set linking archival data for China's national railways to information on military conflicts for the period from 1916 to 1932. My results show that conflicts that occurred within 5 km of a railway reduced the railway's current profitability by about 10%. Moreover, this negative impact persisted for years but to a lesser extent. However, conflicts that occurred beyond 5 km from a railway had no significant impact on the railway's profitability. I also find that wars did not influence the net investment of national railways directly, but likely reduced investment indirectly by diminishing their profits. My findings suggest that militarism had a substantial but geographically limited impact on the profitability of railways and that the uncertainties created by warfare were not significant enough to drive national railways into disinvestment.