Industry Comes of AgeIndustry Comes of Age

By Jeanelle and MayBy Jeanelle and May

RailwaysRailways

• 1900: railroad expands from 35000 miles (1865) to 192556 miles

• railroad is costly and risky so congress split the costs to different railroad companies

• Until companies decided precise locations for railroad route all lands were withheld from other users until 1887 when Grover Cleavland ended this

• Railroad increases value of the land and cities pop up near the railroad but towns that the railroad didn’t pass became ghost towns

Spanning the Continent with Spanning the Continent with RailroadsRailroads

Since the south seceded the Since the south seceded the proposed transcontinental railroad proposed transcontinental railroad was stopped was stopped

1862: congress commissions the 1862: congress commissions the Union Pacific railroad from Omaha, Union Pacific railroad from Omaha, Nebraska to CaliforniaNebraska to California

Constructing the RailroadConstructing the Railroad increase corruption = Credit Mobilier increase corruption = Credit Mobilier

pockets money and bribes congresspockets money and bribes congress Construction contains many Irish Construction contains many Irish

“paddies” who work 10 miles a day“paddies” who work 10 miles a day Many died from Indian attacksMany died from Indian attacks

Central Pacific RailroadCentral Pacific Railroad

Begins in Sacramento and being Begins in Sacramento and being promoted by the Big Four (chief promoted by the Big Four (chief financial backers)financial backers)

Collis P. Huntington (lobbyist) worked Collis P. Huntington (lobbyist) worked in b/n 2 companies and profited $10 in b/n 2 companies and profited $10 million w/out bribing congressmenmillion w/out bribing congressmen

Labor is primarily Chinese (cheap, Labor is primarily Chinese (cheap, efficient, docile and expendable) many efficient, docile and expendable) many died from accidentsdied from accidents

1869: completion of the railroad1869: completion of the railroad

Significance RailwaysSignificance Railways• Union Pacific RR = 1086 milesUnion Pacific RR = 1086 miles• Central Pacific RR= 689 milesCentral Pacific RR= 689 miles• Union Pacific, mostly constructed on flat prairie Union Pacific, mostly constructed on flat prairie

land and could build more quickly land and could build more quickly • Marked a tremendous feat of engineeringMarked a tremendous feat of engineering• connects West Coast to the rest of the connects West Coast to the rest of the

UnionUnion• Facilitates trade with AsiaFacilitates trade with Asia• paves the way for Western growth by paves the way for Western growth by

penetrating the desert barrierpenetrating the desert barrier• Union pacific RRUnion pacific RR Central Pacific RRCentral Pacific RR

• Four other transcontinental lines completed:

• 1. 1883 - Northern Pacific (Lake Superior to Puget Sound)

• 2. 1884 - Atchison, Topeka, and Santa Fe RR - (Atchison, KS to San Francisco)

• 3. 1884 - Southern Pacific (New Orleans to San Francisco)

• 4. 1893 - Great Northern RR (Duluth to Seattle)

• Great railroad builder James J Hill

Success and FailuresSuccess and Failures

Over investment of the land by pioneers = Over investment of the land by pioneers = bankruptcy of trusting investorsbankruptcy of trusting investors

Improvements: Improvements: steel rails by Vanderbilt replace old iron steel rails by Vanderbilt replace old iron

ones = safer & more economical since it ones = safer & more economical since it can bear a heavier loadcan bear a heavier load

1870: Westing house air brake increases 1870: Westing house air brake increases safety but there are still accidentssafety but there are still accidents

Pullman palace cars, telegraphs, double-Pullman palace cars, telegraphs, double-racking and block signals develop racking and block signals develop

Revolution by RailroadsRevolution by Railroads America connected from “sea to shining sea”America connected from “sea to shining sea” Creates enormous domestic market and Creates enormous domestic market and

many jobs and appeals to foreign and many jobs and appeals to foreign and domestic investors to participatedomestic investors to participate

Stimulates mining and increase agriculture Stimulates mining and increase agriculture in the west bringing new people and supplies in the west bringing new people and supplies (immigrants)(immigrants)

1883: Creation of time zones preventing 1883: Creation of time zones preventing confusion for RR operatorsconfusion for RR operators

Creates millionaires “lords of the rail”Creates millionaires “lords of the rail”

CorruptionCorruption► Credit Mobilier (see slide 5)Credit Mobilier (see slide 5)► Jay Guild: rich boomed and busted the stocks of Erie, Jay Guild: rich boomed and busted the stocks of Erie,

Kansas Pacific, Union Pacific, Texas & Pacific RR companiesKansas Pacific, Union Pacific, Texas & Pacific RR companies► ““Stock Watering” = cheap $ makingStock Watering” = cheap $ making► RR stock promoters grossly inflated claims about a given RR stock promoters grossly inflated claims about a given

line’s assets & profit & sold stocks and bonds that exceed line’s assets & profit & sold stocks and bonds that exceed RR’s actual valueRR’s actual value

► RR companies:RR companies:► bribe judges & legislatures bribe judges & legislatures ► elected their own people to high offices elected their own people to high offices ► & gave free passes to journalists & politicians& gave free passes to journalists & politicians► RR kings: “pool” trusts- an agreement to divide the RR kings: “pool” trusts- an agreement to divide the

business in a given area & share profitsbusiness in a given area & share profits

Government Bridles the Iron Horse RR plutocracy: people were aware of the injustice but were

slow to react Granger: formed by farmers to fight against RR monopoly Supreme Court: Wabash Case v. Illinois- individual states

hold no power to regulate interstate commerce Interstate Commerce Act (1887): prohibits rebates & pools

and requires RR to publish their rates openly & forbids unfair discrimination against shippers and outlaws charging more for a short haul than a long one over the same time

1st attempt by congress to regulate business

Miracles of Mechanization

1860: US is 4th manufacturing nation of the world 1894: US is 1st manufacturing nation of the world Change due to: liquid capital (abundance) and natural resources

(ex. Coal, oil, iron) Unskilled labor = cheap & plentiful (reliance on cheap immigrant

labor) 2nd American Industrial Revolution: 1860-1890: 440000 patents issued Ex. Cash register, stock ticker, typewriter, refrigerator car, electric

dynamo, electric railway Thomas Edison- “wizard of Menlo park” = electric light bulb,

electric railway, ect.

Trust Titan EmergesTrust Titan Emerges

• Monopolies: eliminates competition & get max profitsMonopolies: eliminates competition & get max profits• Andrew Carnegie= “vertical integration” i.e. control all Andrew Carnegie= “vertical integration” i.e. control all

aspects of an industryaspects of an industry• John D. Rockefeller= “horizontal integration” i.e. allied w/ John D. Rockefeller= “horizontal integration” i.e. allied w/

competitor to monopolize a given marketcompetitor to monopolize a given market• Standard oil: control oil industry & force weaker Standard oil: control oil industry & force weaker

competitors to go bankruptcompetitors to go bankrupt

CarnegieCarnegie RockefellerRockefeller Mr. MonopolyMr. Monopoly

Supremacy of SteelSupremacy of Steel ““Steel is king!” -1900: US was producing as much as Steel is king!” -1900: US was producing as much as

England and Germany combinedEngland and Germany combined 1850: Bessemer Process =cheaper method of 1850: Bessemer Process =cheaper method of

producing steelproducing steel Access to materials needed to produce steel, ect. is Access to materials needed to produce steel, ect. is

near bynear by

Bessemer converterBessemer converter

Carnegie and Other Sultans of SteelCarnegie and Other Sultans of Steel Andre Carnegie: poverty to wealthyAndre Carnegie: poverty to wealthy Steel business in Pittsburg: by 1900 he was Steel business in Pittsburg: by 1900 he was

producing ¼ of the nation’s Bessemer's steel & producing ¼ of the nation’s Bessemer's steel & earning$25 million per yearearning$25 million per year

J. Pierpont Morgan = wealthy from financing J. Pierpont Morgan = wealthy from financing the reorganization of railroads, insurance the reorganization of railroads, insurance companies, and banks & bought Carnegie companies, and banks & bought Carnegie business for more than $400 millionbusiness for more than $400 million

Carnegie spent profit on public libraries, Carnegie spent profit on public libraries, pensions for professors, ect. (philanthropist)pensions for professors, ect. (philanthropist)

Morgan expands industrial empire: $1.4 billion; Morgan expands industrial empire: $1.4 billion; 11stst American billion dollar corporation American billion dollar corporation

Rockefeller and the Standard Oil Company

Oil industry (1870): kerosene is the 1st major product of infant oil industry & one of US’s most valuable export Ending of whaling1885: technology takes over ex. light bulbs1900: gasoline- burning internal combustion engine had clearly bested its rival, steam & electricity1870: Rockefeller’s Standard Oil Company of Ohio = trust (1882) that crushed competitors & sold superior oil at a cheaper price

Divisions Between the Rich Divisions Between the Rich and the Poorand the Poor

New rich justify social position through the New rich justify social position through the “Gospel of Wealth” – “Godliness is in the league of “Gospel of Wealth” – “Godliness is in the league of the riches”the riches”

““survival of the fittest” –Charles Darwinsurvival of the fittest” –Charles Darwin Views of the poor: lazy & lacking enterpriseViews of the poor: lazy & lacking enterprise Rev. Russell Cornwell of Phil: rich from “Acres of Rev. Russell Cornwell of Phil: rich from “Acres of

Diamonds” – “There is not a poor person in the US Diamonds” – “There is not a poor person in the US who was not made poor by his own short who was not made poor by his own short comings.” comings.”

Plutocracy: lawyers use the 14Plutocracy: lawyers use the 14thth Amendment Amendment

parallel in defending the trusts & judges agreed to it parallel in defending the trusts & judges agreed to it

Government And Southern IndustryGovernment And Southern Industry

1890: Sherman Anti Trust Act: forbids combinations 1890: Sherman Anti Trust Act: forbids combinations in restraints of trades (not enforced till 1914) in restraints of trades (not enforced till 1914)

largely ineffective because no real way of enforcing largely ineffective because no real way of enforcing the laws the laws

law used to curb labor unionslaw used to curb labor unions James Duke = huge cigarette industry (American James Duke = huge cigarette industry (American

Tobacco Company)Tobacco Company) Henry Grady: editor of Atlanta Constitution Henry Grady: editor of Atlanta Constitution

promotes industrializationpromotes industrialization Northern companies set rates that prevent the Northern companies set rates that prevent the

Southerners from regaining its statusSoutherners from regaining its status creation of jobs = blessing to Southernerscreation of jobs = blessing to Southerners

Impact of the Industrial Revolution Impact of the Industrial Revolution for the USfor the US

• Standard living improves• Increase of immigrants• Women: new opportunities: “Gibson Girl”

by Charles Gibon- most women worked hard for $

• Pressures: foreign trade- industrial machine threatened to flood domestic market

• Increase class divisions

Labor Unions Workers unable to improve their conditions

because there is a large supply of unskilled workers

Strikes v. strikebreakers “ironclad oaths” –court gets involved to stop

strikes “yellow dog contracts”- troops get involve “blacklisted” “If workers want a better life, they can always

improve by working harder like Carnegie and Rockefeller.”

Labor Limps AlongLabor Limps Along National Labor Union (1886) = attracted 600000 members National Labor Union (1886) = attracted 600000 members

excluded Chinese, blacks and womanexcluded Chinese, blacks and woman Industrial disputes and 8 hr workdayIndustrial disputes and 8 hr workday Depression of 1873 ends disputesDepression of 1873 ends disputes Knights of Labor (1869) excluded liquor dealers, pro Knights of Labor (1869) excluded liquor dealers, pro

gamblers, lawyers, bankers & stockbrokers: wanted gamblers, lawyers, bankers & stockbrokers: wanted economic and social reforms led by Terence V. Powderlyeconomic and social reforms led by Terence V. Powderly

Decline: Decline: May Day strikes (1886 Chicago) turns violentMay Day strikes (1886 Chicago) turns violent Haymarket Square Bombing (May 1886) - bomb thrown Haymarket Square Bombing (May 1886) - bomb thrown

during a protest against police abuses during strikes during a protest against police abuses during strikes American Federation of Labor - protects skilled workers American Federation of Labor - protects skilled workers

(who have a better bargaining position than unskilled (who have a better bargaining position than unskilled ones) ones)

Demand for better wages, hours & working conditionsDemand for better wages, hours & working conditions 1881-1900 more than 23000 strikes & loss of $450 million1881-1900 more than 23000 strikes & loss of $450 million 1900: yield to most workers’ demands1900: yield to most workers’ demands 1894: Labor Day = legal holiday1894: Labor Day = legal holiday