Ch. 24 PPTCh. 24 PPTIndustry Comes of Age, 1865-Industry Comes of Age, 1865-

19001900

Railroads Come of AgeRailroads Come of Age

Tmwk Ch 241. Pg 531 Map What do the pink squares

represent? And the tan squares?2. Pg 532 picture Why was it difficult to

build a transcontinental railroad?3. Pg 534 picture Describe railroad

construction in the Northwest area.

Railroad BuildingRailroad Building Very Very 1st big business1st big business – became a – became a monopolymonopoly. . Govt wanted to build Govt wanted to build transcontinental railroadtranscontinental railroad

becausebecause::1.1. For For securitysecurity of U.S. - transport military quickly in of U.S. - transport military quickly in

war time.war time.2.2. Tie nation Tie nation together economicallytogether economically – wealthy – wealthy

manufacturing east with gold-rich CAmanufacturing east with gold-rich CA3.3. Move products Move products from east to westfrom east to west4.4. Traded Traded goods with Asiagoods with Asia could make it to the east could make it to the east5.5. Postal mailPostal mail transportation transportation6.6. Move Move natural resourcesnatural resources – iron, ore, coal, produce – iron, ore, coal, produce7.7. Move peopleMove people to populate the west – spurring to populate the west – spurring

growth of towns/cities along the railroadgrowth of towns/cities along the railroad

Costly and Risky Govt SubsidiesCostly and Risky Govt Subsidies To spur railroad building, Federal govt passed To spur railroad building, Federal govt passed Pacific Pacific

Railroad ActRailroad Act - to - to subsidizesubsidize the transportation system the transportation system without raising taxes, and a way to use land as without raising taxes, and a way to use land as enticement to get businessmen to profit from building enticement to get businessmen to profit from building the railroadthe railroad Issued large tracts of land to Issued large tracts of land to 2 railroad companies2 railroad companies

– – Union PacificUnion Pacific and and Central PacificCentral Pacific.. For each mile of track built companies granted: For each mile of track built companies granted:

1).1). builders receive builders receive 20 square miles of land20 square miles of land 2).2). a a federal federal loanloan – – $16,000 for flat land$16,000 for flat land & up to & up to $48,000 $48,000 for mountainous landfor mountainous land – 155 million acres in total – 155 million acres in total

Union Pacific Railroad Union Pacific Railroad Began in Omaha, Nebraska and moved westBegan in Omaha, Nebraska and moved west Credit Mobilier pocketed 73 million: bribed pocketed 73 million: bribed

congressmen to continue supporting the congressmen to continue supporting the Pacific Pacific Railroad ActRailroad Act..

Irish PaddiesIrish Paddies were the workers (Irish who had were the workers (Irish who had fought in the Union Army)fought in the Union Army)

““Hell on wheels”: Hell on wheels”: tented townstented towns sprang up at rail’s sprang up at rail’s end – drinking and debauchery.end – drinking and debauchery.

Central Pacific Railroad Central Pacific Railroad Began in Began in SacramentoSacramento, CA and moved east, CA and moved east ChineseChinese built the railroad – built the railroad – high death ratehigh death rate due to due to

explosions on mts.explosions on mts. Transcontinental Railroad Transcontinental Railroad completed 1869completed 1869 Met at Met at Promontory Point, UTPromontory Point, UT No other railroads received loans, but they did No other railroads received loans, but they did

receive large land grants.receive large land grants.

EffectsEffects of Transcontinental of Transcontinental Railroad Railroad Linked entire continentLinked entire continent via railroad and by telegraph, via railroad and by telegraph,

paved way for paved way for westward movementwestward movement Created Created huge domestic markethuge domestic market for U.S. raw materials for U.S. raw materials

and manufactured goods. and manufactured goods. Stimulated Stimulated creation of new industriescreation of new industries of of miningmining, ,

agricultureagriculture and and ranchingranching Facilitated Facilitated large influx of immigrantslarge influx of immigrants.. Led to Led to great exodus to urban areasgreat exodus to urban areas.. Spurred Spurred investment from abroad.investment from abroad. Creation of Creation of distinct distinct time zones.time zones. Native Americans Native Americans displaceddisplaced and and herded onto herded onto

reservationsreservations

Tmwk4. Pg 537 Political Cartoon Who is

William Vanderbilt? What is the cartoon depicting? Is it for or against someone or something?

Railroad Consolidation & MechanizationRailroad Consolidation & Mechanization Cornelius Vanderbilt:Cornelius Vanderbilt: owned owned NY Central RailroadNY Central Railroad; ;

popularized popularized steel railsteel rail - - strongerstronger and could carry and could carry heavier loads than iron tracks. heavier loads than iron tracks.

Jay Gould And Russell Sage:Jay Gould And Russell Sage: controlled most of controlled most of Western railroadsWestern railroads - hurt other railroads by - hurt other railroads by stock stock wateringwatering and keeping profits rather than reinvesting. and keeping profits rather than reinvesting.

Pools createdPools created – agreement to – agreement to divide the businessdivide the business in in a given area and a given area and share the profitsshare the profits..

Railroads Come of AgeRailroads Come of Age

Transcontinental RRTranscontinental RR Pacific Railway Act Pacific Railway Act Union Pacific RRUnion Pacific RR Central Pacific RRCentral Pacific RR SignificanceSignificance

Robber BarronsRobber Barrons LeadersLeaders of of railroad monopoliesrailroad monopolies (Robber Barrons) (Robber Barrons)

manipulated business for their manipulated business for their own profitsown profits at the expense at the expense of the public. of the public.

Paid Paid bribesbribes to corrupt judges and politicians either to look to corrupt judges and politicians either to look the other way or to pass the other way or to pass pro-railroad legislationpro-railroad legislation. .

Often elected their own to office – funded campaigns.Often elected their own to office – funded campaigns. Many gave Many gave secret rebates or kickbackssecret rebates or kickbacks to large to large

corporationscorporations Hurt farmers because of Hurt farmers because of uneven pricinguneven pricing – farmers charged – farmers charged

more than industrialists to ship goodsmore than industrialists to ship goods Economically squashed opponents = monopolyEconomically squashed opponents = monopoly

Railroad Consolidation and Railroad Consolidation and MechanizationMechanization

Tmwk5. Pg 538 left paragraph What was the

purpose for Congress to pass the Interstate Commerce Act?

5a. Who has the power to regulate trade between states - the States or the federal govt?

6. Pg 539 Political Cartoon What is the cartoon depicting – what is it for or against?

Wabash Case 1886 Wabash, St. Louis & Pacific Railroad Company v.

Illinois: Supreme Court declared invalid an Illinois railroad law because it was an infringement on the exclusive powers of Congress granted by the commerce clause of the Constitution.

Result: denial of state power to regulate interstate rates for railroads- led to creation of the Interstate Commerce Commission.

1887 Interstate Commerce Act Prohibited rebates and pools. Required railroads to publish rates. Forbid unfair discrimination against shippers.

Outlawed charging more for short hauls than for a long haul.

Set up the Interstate Commerce Commission (ICC) to administer and enforce the Act.

The first large scale attempt of the federal govt. to regulate business in the interest of society.

Inventions Alexander Graham Bell: telephone – giant

communications network was built. Women took jobs as switchboard operators.

Thomas Edison: dictaphone, phonograph, moving picture, electric light bulb

Others: cash register, stock ticker, typewriter

Alexander Graham Bell

Eliminating Competition Eliminating Competition Andrew CarnegieAndrew Carnegie: integrated his steel-making : integrated his steel-making

operation – operation – his minershis miners mined the ore, mined the ore, his shipshis ships transported the ore, his railroad delivered it to transported the ore, his railroad delivered it to his steel making factory. his steel making factory.

Thus the 1st to pioneer “Thus the 1st to pioneer “vertical integrationvertical integration,” ,” which which combined all phases of manufacturingcombined all phases of manufacturing into into one organizationone organization and eliminated middle and eliminated middle men’s fees.men’s fees.

John D. Rockefeller & Trusts John D. RockefellerJohn D. Rockefeller developed the “ developed the “TrustTrust” by 1882= ” by 1882=

stockholders in smaller oil companies assigned their stockholders in smaller oil companies assigned their stock to board of directors of his company (“horizontal stock to board of directors of his company (“horizontal integration”) & the integration”) & the Standard Oil CompanyStandard Oil Company, which , which controlled the controlled the oil (petroleum) industryoil (petroleum) industry: : bought out bought out competitioncompetition, underselling, differential pricing, and , underselling, differential pricing, and secret transportation rebatessecret transportation rebates

1870: organized Standard Oil Company and by 1877 he controlled 95% of all oil refineries in U.S. & dominated the oil industry

The Emergence of TrustsThe Emergence of Trusts

Steel is Supreme By 1900 – U.S. produced as much steel as Britain and

Germany combined. Due to abundance of natural resources of coal for fuel,

iron ore, good labor supply, and other ingredients for making steel.

Bessemer Process – method of making cheap steel (use cold air to eliminate impurities)

Andrew Carnegie – by 1900, he was producing ¼ of the nation’s bessemer steel.

Tmwk7. Pg 540 Quote What did Andrew

Carnegie believe about leaving heirs an inheritance of great wealth?

J P Morgan: Banker and Financier Financed the reorganization of railroads, insurance

companies, and banks. Morgan bought out Carnegie for over $400 million.

(Philanthropist: Carnegie donated millions) 1901 launched the larger U.S. Steel Corporation =

America’s 1st billion dollar corporation.

Reason for Wealth Gospel of Wealth: Essay written by Andrew

Carnegie - described responsibility of philanthropy by the self-made rich. Wealthy, entrusted with society’s riches, had to prove themselves morally responsible. (God had given them wealth)

Social Darwinism: Survival of the fittest – Wealthy were “naturally selected” since they are intelligent and more fit.

Book, Wealth of Nations by economist Adam Smith: argues that free market economies are more productive and beneficial to their societies.

Tmwk8. Pg 543 Cartoon What is the cartoon

depicting – what is it for or against?

The Wealthy Ones

J P MorganBanker and Financier Andrew Carnegie:

steel John D. Rockefeller: Oil

1890 Sherman Anti-Trust Act Federal govt to investigate and pursue trusts:

companies/organizations suspected of violating the Act.

Forbid and opposed the combination of entities that could potentially harm competition, like monopolies.

Used to curb labor unions. “Against conduct which unfairly tends to destroy

competition itself” Proved ineffective as corporations would find ways to

get around the law.

Labor Unions 1866 National Labor Union: skilled and unskilled

workers and farmers - Wanted 8 hr work day (won 8 hr work day for federal employees)

1869 Knights of Labor: Skilled/unskilled workers - campaigned for economic and social reform: codes for safety and health, 8 hr workday. Chinese prohibited from joining. (May Day strikes)

1886 Haymarket Square Riot: A rally to support striking workers at Haymarket Square in Chicago. Dynamite bomb thrown at police. Bomb blast/gunfire caused deaths of 8 police officers and civilians. 8 anarchists tried for murder; 5 convicted, 4 executed and 1 committed suicide in prison. (none of the defendants had thrown the bomb)

AFL: American Federation of Labor Began 1886 - Samuel Gompers served as Pres from

1886-1924 (except for 1 year) Broke away from Knights of Labor - An association of

self-governing national unions, each with its independence, but with AF of L unifying the strategy.

Major goal: “trade agreement” authorizing the “closed shop” = employer agrees to hire union members only, so have only all-union labor.

Sought better wages, hrs, working conditions. Used walkouts, boycotts, and “we don’t patronize” signs.

Dominated and composed of skilled craftsman (carpenters, bricklayers, etc.)

Rise of UnionsRise of Unions

Industrial Workers: Child Industrial Workers: Child LaborLabor

Tmwk9. Pg 546 Chart What is happening to

cotton manufacturing?10. Pg 547 Map Name two states that had

chief manufacturing cities. What natural resource is found in Western states?

The South During Industrial The South During Industrial EraEra Efforts to Industrialize South failsEfforts to Industrialize South fails

South becomes “colonized” economicallySouth becomes “colonized” economically Exceptions: Tobacco & Cotton IndustryExceptions: Tobacco & Cotton Industry

Government Response to Government Response to RailroadRailroad Laissez-faire, corporate welfare, or regulation?Laissez-faire, corporate welfare, or regulation?

Adam Smith, Adam Smith, The Wealth of NationsThe Wealth of Nations Slaughterhouse Cases, 1873Slaughterhouse Cases, 1873 Munn v. Illinois, 1877Munn v. Illinois, 1877 Wabash Case, 1886Wabash Case, 1886 Interstate Commerce Act, 1887-ICCInterstate Commerce Act, 1887-ICC