warm up how did the u.s. government help fund railroad construction? land grants and loans
TRANSCRIPT
Warm Up
How did the U.S. government help fund railroad construction?
Land grants and loans
Industry Comes To Age
1865 to 1900
The Iron Colt Becomes The Iron Horse
In 1865: 35,000 miles of railways; east of the Mississippi
1900: 192, 556 miles of railways; west of the Mississippi
Congress gave land to railroad companies. In return, the government received special rates for postal services and military traffic
Companies were allowed alternate mile-square sections in checkerboard fashion for railroad routes, but until companies determined which part of the land was the best to use for railroad building, all of it was withheld from all other users
President Grover Cleveland stopped this in 1887Railroads gave cities value; towns that were bypassed by railroads became ghost towns
Spanning The Continent With Rails
Deadlock over the proposed transcontinental railroad was given to the North after the South had seceded
The north wanted to connect the Pacific coast to the rest of the nation; esp. California
Union Pacific Railroad moved westward from Omaha, Nebraska
Central Pacific Railroad in California pushed eastward from Sacramento through Sierra Nevada (biggest problem)
Big Four: chief financial bankers of enterpriseLeland Stanford: ex-governor of California; had useful political connections
Collis P. Huntington: skilled lobbyist Railroads met near Ogden, Utah in 1869
Binding the Country with Railroad Ties
4 other transcontinental lines built before the century ended: Atchison, Topeka, Santa Fe, and Southern Pacific
James J. Hill created the Great Northern; greatest builder
People sometimes got overexcited and built railroads where there wasn’t a large enough population to support them
Caused bankruptcy with the savings of investors
Railroad Consolidation and Mechanization Older eastern railroads, like the New York Central,
were expanded and welded together with the western lines making them successful
Lead by Cornelius VanderbiltImprovements: Steel rail instead of iron. Steel was tougher, safer and more economic because it could handle a heavier load
Standard gauge of track width; eliminated the hassle and cost of changing lines
Westinghouse air brake was adopted in the 1870s; it increased safety
1860s: Pullman Palace cars; luxurious passenger cars Accidents still happened despite telegraphs, double-
tracking, and block signals
Revolution by Railways
Railroads stitched the nation together Generated a huge market and many jobs Helped America’s rapid industrialization Environment was affected by the construction of
railroads. Prairies were plowed up, forests cut down and the buffalo population challenged
Before railroads, each town had its own “local time” Railroads introduced “time zones” (November 18,
1883) to keep schedules and avoid wrecks Railroads made millionaires New aristocracy: “lords of the rail” replaced “lords of
the lash”
Wrongdoing in Railroading
Credit Mobilier scandal: Insiders of the company reaped 23 million in profits when the Union Pacific began westward construction from Omaha, Nebraska
Jay Gould: embezzled stocks from Erie, Kansas Pacific, Union Pacific, and the Texas and Union Pacific
Used “stock watering” method: railroad stock promoters inflate and sold stocks and bonds more than the railroads’ actual value
Railroad managers were forced to charge ridiculously high rates and compete to payoff the financial obligations
Railroad owners abused the public by bribing judges and legislatures, employing lobbyists, electing their own people into political office, giving rebates, and free passes to gain favor from the press
Built defensive alliances to rule the railroad industry “Pools”: group of supposed competitors who agree to work
together; usually to set prices
Government Bridles the Iron Horse
Grange: farmers protesting against being “railroaded” into bankruptcy
States stopped the railroad monopoly, but in 1806 the Supreme Court said states could not regulate interstate commerce; that was up to the federal court
Interstate Commerce Act of 1887 prohibited rebate and pools; railroads had to publish their rates openly;
Outlawed charging more for short hauls than long hauls; forbade discrimination against shippers
Interstate Commerce Commission was set up to enforce the act
The act was set up to stabilize the American business system, not revolutionize it
Showed Congress has a responsibility to interfere with private enterprise for the interest of society
Miracles of Mechanization
In 1860 the US was the 4th largest manufacture in the world; in 1894 it was the 1st because...
Liquid capital became abundant Coal, iron, and oil were fully exploited Massive immigration made unskilled labor cheap
and plentiful American ingenuity blossomed Mass production was refined and perfected Cash register, stock ticker, typewriter, refrigerator
car, electric dynamo, and electric railway were introduced
In 1876, Alexander Graham Bell invented the telephone
Thomas Edison was the most versatile inventor; invented the lightbulb
The Trust Titan Emerges
Andrew Carnegie: steel king “Vertical integration”: combining into one organization all
phases of manufacturing from mining to marketing In his case, he mined the iron, transported it, refined it, and
turned it into steel... Only his employees had touched the iron Carnegie’s goal was to improve the efficiency of the product by
controlling the quality and eliminating the middle man John D. Rockefeller: oil baron “Horizontal integration”: allied with or bought out all
competitors to monopolize the market The word “trust” came to be used to describe any large-scale
business combination He used this method to form Standard Oil and control the oil
industry by forcing weaker competitors to go bankrupt J.P. Morgan: banker’s banker
“Interlocking directories”: placed his men into the board of directors of his rival competitors to gain influence there and reduce the competition
Supremacy of Steel
By 1900 America produced as much as England and Germany put together
Because of the Bessemer-Kelly processAmerica had lots of coal for fuel, iron for smelting, and other things for steel making; that’s why it became #1
Carnegie and Other Sultans of Steel
By 1900 he was producing 1/4 of the nation’s steel and taking 25 million home every year.
J. Pierpont Morgan financed the reorganization of railroads, insurance companies, and banks.
Morgan bought Carnegie’s entire business at $400 million
Morgan took Carnegie’s business, added others and launched the United States Steel Corporation in 1901
World’s 1st billion-dollar company (worth more than the nation’s total wealth in 1800)
Warm Up
Explain Rockefeller’s rose analogy.
Warm Up
What was the message of the “Gospel of Wealth?”
If you were out Friday, see Mrs. Akins for the DBQ stuff.
Use documents A-G to analyze the principles that guided business and industrial practices/development in the U.S. from 1860-1900.
Due Thursday!
Rockefeller Grows an American Beauty Rose
Kerosene was better than whale oil and burned brighter; whale oil became obsolete
By the 1870s kerosene was America’s 4th most valuable export
By 1885 Edison’s light bulbs were in use; kerosene became obsolete
Gasoline-burning internal combustion engines depended on oil, so the oil market was still open
John D. Rockefeller organized the Standard Oil Company of Ohio in 1870; by 1877 he controlled 95% of all the oil refineries in the country; greatest trust formed in 1882
His goal was to eliminate the middleman and ruin his competitors
His company did produce better oil at a cheaper priceOther trusts started making better products at cheaper prices too (sugar, tobacco, leather and harvester trusts)
Meat industry, lead by Gustavus F. Swift and Philip Armour, arose
The Gospel of Wealth
“Social Darwinism” concept of survival-of-the-fittest was applied to business. Only the best could run an industry.
Reverend Russell Conwell of Philadelphia became rich by giving his “Acres of Diamonds” lecture: rich people made themselves rich, poor people made themselves poor
Corporate lawyers used the 14th Amendment (designed to protect slaves) to defend trusts; corporations were legally people and entitled to their property
Plutocracy ruled (government ruled by the wealthy)
Government Tackles the Trust Evil
In 1890 the Sherman Anti-Trust Act was signed into law.
Any combinations in restraints of trade was forbade (trusts, pools, interlocking directories, and holding companies)
Prosecutions for violating the act were unsuccessful
Not until 1914 was the Sherman Act given its place
The South in the Age of Industry
The South was still behind the North in manufactured goods despite all the inventions
In the 1880s machine made cigarettes were introduced; boosted tobacco consumption
In 1890, James Buchanan Duke absorbed his main competitors into the American Tobacco Company
Industrialists urged the South into factories The South had many obstacles when it came to industrialization Railroads gave preferential rates to manufactured goods moving
southward from the North, but in the opposite direction they discriminated in favor of southern raw materials
The North kept the South in servitude to it by suppling the Northeast with raw materials; unable to develop its own industries
Beginning in the 1880s, northern capitals began building cotton mills in the South because of tax benefits and the prospect of cheap non-unionized labor
Southerners had menial jobs, paid half the rate of a northernEven though working conditions were bad, southerners were happy to be employed
The Impact of the New Industrial Revolution on America
Because of the Industrial Revolution, the standard of living rose
Jeffersonian ideals about the dominance of agriculture and free enterprise without government interference changed
Telephones, typewriters, and stenographs gave women social and economical opportunities
Careers for women meant delays in marriage and smaller families
Women worked for money, not independence or glamourHad the same working conditions as men yet earned less
“Gibson Girl”: 1890s; created by Charles Dana Gibson became the “ideal woman”; she was athletic attractive, and outdoorsy
In the 1860s; 1/2 the country was self employed; by the end of the century 2/3 of people depended on wages
In Union There is Strength
With the inflow of immigrants providing cheap labor that would work in poor conditions, the workers who wanted to improve their conditions couldn’t; bosses could easily replace them
Individual workers were forced to organize and fight for basic rights
Corporations would hire strikebreakers, have courts to stop the strikes, bring in troops, lock their doors against rebellious workers and make them submit
Workers then had to sign contracts which banned them from joining unions
Workers would be “blacklisted”: put on a list and denied special privileges
Labor Limps Along
The rising cost of living was an incentive to unionize By 1872, there were 32 national unions and thousands of
organized workers National Labor Union was organized in 1866
Lasted 6 years About 600,000 members
Included skilled, unskilled workers and farmers Excluded Chinese; didn’t really try to get women and
blacks to join Blacks organized their own union; Colored National Labor
Union. Due to racism, the two unions couldn’t work together
It worked for the arbitration of industrial disputes and the eight-hour workday, and won the latter for government workers, but the depression of 1873 knocked it out.
Knights of Labor
Similar to the National Labor Union, the Knights of Labor began secretly in 1869 until 1881
Sought to include ALL workers (even women and blacks)
Excluded liquor dealers, professional gamblers, lawyers, bankers, and stockbrokers (“non-producers”)
Won strikes for 8 hr days Won strike against Jay Gould’s Wabash Railroad in
1885; membership went up to 75 million Terence V. Powderly: lead the Knights
Unhorsing the Knights of Labor
Knights became involved with May Day strikes in 1886; 1/2 of them failed
In Chicago, on May 4, 1886, Chicago police were advancing on a meeting that had been called to protest brutalities by authorities when a dynamite bomb was thrown, killing or injuring several dozen people. This was the Haymarket case.
8 anarchists were rounded by without any proof of being involved with the bombing but because they preached incendiary doctrines, they were charged with conspiracy5 were sentenced to death; the other 3 were given stiff prison terms
When John P. Altgeld, was elected governor of Illinois in 1892, he pardoned the 3 survivors
Because of the bombing, the public associated the Knights of Labor with anarchists
Popularity and effectiveness lowered, membership declined, and remaining members joined other unions as well
The AF of L to the Fore
American Federation of Labor, created in 1886 by Samuel Gompers
Consisted of an association of self-governing national unions; each kept its independence; the AF of L unified overall strategy
Sought better wages, hours, and working conditions Strategies: walkouts and boycotts It was made up of skilled workers and let unskilled
workers fend for themselves (women and esp. blacks) From 1881 to 1900, there were over 23,000 strikes
involving 6,610,000 workers with a total loss to both employers and employees of about $450 million
Public acknowledged the right of workers to organize, bargain collectively, and strike
In 1894, Labor Day became a legal holiday