Day 95: Industry Comes of AgeBaltimore Polytechnic Institute

January 31, 2013A/A.P. U.S. History

Mr. Green

The students will be able to describe to what extent the railroad contributed to the growth and expansion of the United States after the Civil War

Objective

Objectives: Explain how the transcontinental railroad network provided the basis for an integrated national market and the great post–Civil War industrial transformation.Identify the abuses in the railroad industry and discuss how these led to the first efforts at industrial regulation by the federal government.Describe how the economy came to be dominated by giant trusts, such as those headed by Carnegie and Rockefeller in the steel and oil industries, and the growing class conflict it precipitated.Describe how new technological inventions fueled new industries and why American manufacturers increasingly turned toward the mass production of standardized goods.

AP FocusEnormous immigration, mass production, and the presence of low-skill jobs drive down workers’ wages.A catalyst for postwar industrial and economic expansion is the railroad industry, which not only facilitates trade, commerce, and transportation, but also makes locomotive production a major industry. The government plays a major role in the industry’s development and importance by providing the companies with millions of acres of free land—a giveaway, some say.

Industry Comes of Age

CHAPTER THEMESAmerica accomplished heavy

industrialization in the post–Civil War era. Spurred by the transcontinental rail network, business grew and consolidated into giant corporate trusts, as epitomized by the oil and steel industries.

Industrialization radically transformed the practices of labor and the condition of the American working people. But despite frequent industrial strife and the efforts of various reformers and unions, workers failed to develop effective labor organizations to match the corporate forms of business.

Chapter Focus

5QQ on Friday1884, 1888, 1892, 1896 Election charts due

Friday1880s Decade Chart due Monday

Announcements

As the 19th century drew to a close, observers were asking, “Why are the best men not in politics?”

To what extent do you believe the above observation?

Can you answer that question then and today?

Drill/Warm-up

1892Populist Party formsPlatform:

1. inflation-unlimited coinage of silver2. graduated income tax3. state ownership of railroads, telegraph, and

telephone4. direct election of U.S. senators5. 1 term limit on President6. initiative and referendum7. Shorter work day8. immigration restriction

Nominated James B. Weaver for president in 1892

The Drumbeat of Discontent-some classes missed this

Homestead Strike-1892Carnegies plant near PittsburghSteelworkers angry over pay cutsTroops broke the strike and the union

Populist party in 1892 gained 22 electoral votes and 1,029,846 popular votes

Blacks denied the vote in the South, and coupled with racial tones, the Populist Party did not fare well in the South.

Grandfather clauses used to exempt whites from taxes/literacy tests

Cleveland wins in 1892Depression of 1893-4 long years

soft money hurt the U.S. credit rating when European banks called in loans from the U.S.

William Jennings Bryan emerged as the soft money leader

Gold was flying out of the Treasury as people cashed in legal tender for silver it bought

Notes had to be reissuedCleveland turned to J.P. Morgan to lend the

government $65 million in gold

Cleveland and Depression

Wilson-Gorman Tariff in 1894loaded with special interest, it did not dent the McKinley Tariff rates

Cleveland pocket vetoed the bill with a 2% income tax on $4,000

Cleveland Breeds a Backlash

Foreign investmentLaborTradeTechnologyHow did these factors contribute to America’s

economic transformation by 1900?1865-35,000 miles of track in U.S., most east

of Mississippi1900-192,556 miles of track in U.S. most

west of Mississippi

The Iron Colt Becomes an Iron Horse

Transcontinental railroad building costly and riskyCorporations asked for government subsidies

military/postal road argument aided the corporations

Congress gave 155,504,994 acres awayWestern states gave an additional 49 million acres

awayCleveland stopped practice of withholding all land

from other users as the RR withheld land Government gained cheap postal rates and cheap

rates for transporting military trafficLand Grants avoided new taxes Increased property values to land that was arguably

worthless

Transcontinental railroad debate moved forward after secession

Initiated in 1862 to bolster the union and connect the west

Union Pacific Railroad-West from Omaha, NEMany Irishmen laid track, fought with Native

AmericansCentral Pacific Railroad-East from California

fought with the Sierra Nevada mountains.Completed in 1869 near Ogden Utah

Spanning the Continent with Rails

4 more transcontinental railroads completed before 1900 without federal government loansAll received generous land grants except the Great Northern

Many laid track “from nowhere to nothing”Many bankruptcies, mergers, or reorganizations

Similar to the airline industries of today

Binding the Country with Railroad Ties

Cornelius VanderbiltNew York Central

Steel RailStandard track gaugeWestinghouse Air brakePullman Palace Cars

Many tragedies despite safety devices

Railroad Consolidation and Mechanization

1. United the United States2. Biggest business3. Employed the most people4. Took 20% of total investment dollars from domestic

and foreign investors5. Spurred economic growth post Civil War6. Largest source of orders for young steel industry7. Stimulated mining/farming in the West8. City growth/immigration9. Ecological impact 10. Standard time-Nov. 18, 188311. Maker of millionaires

Revolution by Railways

Stock watering-Inflating the value of a corporation to sell its

stocks and bondsHeads of the railroads began to work

together and “pool” resourcesSome long hauls were less expensive than

short haulsSmall farmers paid the price

Wrongdoing in Railroading

Depression of the 1870’s “railroaded” farmers into bankruptcy

Wabash v. Illinois-states cannot regulate interstate commerce, only the federal government can regulate

Congress passed the Interstate Commerce Act of 1887

Not effective in revolutionizing, only keeping stability

Government Bridles the Iron Horse

Foreign investors put the money into the hands of the private borrower

Innovations in transportation-coal, iron, oilMesabi Range-Chicago-ClevelandMass-production methods440,000 patents issued between 1860 and

1890Bell and Edison

Miracles of Mechanization

Vertical integration-combining into 1 organization all phases of manufacturing

Justified on the grounds of efficiency and quality

Horizontal integration-Trust developed by Rockefeller to control competitors

Interlocking directorates-J.P. Morgan placed his people in the businesses he bailed out

The Trust Titan Emerges

Describe to what extent the railroad contributed to the growth and expansion of the United States. Be sure to use outside information from the text, notes, and discussion.

Wrap-Up

Continue Reading Chapter 24 Prepare for 5QQ on Friday

Homework