Ch 24 PPT Industry Comes of Age 1865

Ch. 24 PPT Industry Comes of Age, 1865 -1900

Railroads Come of Age

Tmwk Ch 24 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. 1.

Railroad Building Very 1 st big business – became a monopoly. n Govt wanted to build transcontinental railroad because: 1. For security of U. S. - transport military quickly in war time. 2. Tie nation together economically – wealthy manufacturing east with gold-rich CA 3. Move products from east to west 4. Traded goods with Asia could make it to the east 5. Postal mail transportation 6. Move natural resources – iron, ore, coal, produce 7. Move people to populate the west – spurring growth of towns/cities along the railroad n

Costly and Risky Govt Subsidies n To spur railroad building, Federal govt passed Pacific Railroad Act - to subsidize the transportation system without raising taxes, and a way to use land as enticement to get businessmen to profit from building the railroad n Issued large tracts of land to 2 railroad companies – Union Pacific and Central Pacific. n For each mile of track built companies granted: 1). builders receive 20 square miles of land 2). a federal loan – $16, 000 for flat land & up to $48, 000 for mountainous land – 155 million acres in total

Union Pacific Railroad Began in Omaha, Nebraska and moved west n Credit Mobilier pocketed 73 million: bribed congressmen to continue supporting the Pacific Railroad Act. n Irish Paddies were the workers (Irish who had fought in the Union Army) n “Hell on wheels”: tented towns sprang up at rail’s end – drinking and debauchery. n

Central Pacific Railroad Began in Sacramento, CA and moved east n Chinese built the railroad – high death rate due to explosions on mts. n Transcontinental Railroad completed 1869 n Met at Promontory Point, UT n No other railroads received loans, but they did receive large land grants. n

n n n n Effects of Transcontinental Railroad Linked entire continent via railroad and by telegraph, paved way for westward movement Created huge domestic market for U. S. raw materials and manufactured goods. Stimulated creation of new industries of mining, agriculture and ranching Facilitated large influx of immigrants. Led to great exodus to urban areas. Spurred investment from abroad. Creation of distinct time zones. Native Americans displaced and herded onto reservations

Tmwk 4. Pg 537 Political Cartoon Who is William Vanderbilt? What is the cartoon depicting? Is it for or against someone or something?

Railroad Consolidation & Mechanization Cornelius Vanderbilt: owned NY Central Railroad; popularized steel rail - stronger and could carry heavier loads than iron tracks. n Jay Gould And Russell Sage: controlled most of Western railroads - hurt other railroads by stock watering and keeping profits rather than reinvesting. n Pools created – agreement to divide the business in a given area and share the profits. n

Railroads Come of Age n Transcontinental RR n Pacific Railway Act n Union Pacific RR n Central Pacific RR n Significance

n n n Robber Barrons Leaders of railroad monopolies (Robber Barrons) manipulated business for their own profits at the expense of the public. Paid bribes to corrupt judges and politicians either to look the other way or to pass pro-railroad legislation. Often elected their own to office – funded campaigns. Many gave secret rebates or kickbacks to large corporations Hurt farmers because of uneven pricing – farmers charged more than industrialists to ship goods Economically squashed opponents = monopoly

Railroad Consolidation and Mechanization

Tmwk 5. Pg 538 left paragraph What was the purpose for Congress to pass the Interstate Commerce Act? 5 a. 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. n Result: denial of state power to regulate interstate rates for railroads- led to creation of the Interstate Commerce Commission. n

1887 Interstate Commerce Act n n n 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. n Thomas Edison: dictaphone, phonograph, moving picture, electric light bulb n Others: cash register, stock ticker, typewriter n Alexander Graham Bell

Eliminating Competition n Andrew Carnegie: integrated his steel-making operation – his miners mined the ore, his ships transported the ore, his railroad delivered it to his steel making factory. n Thus the 1 st to pioneer “vertical integration, ” which combined all phases of manufacturing into one organization and eliminated middle men’s fees.

John D. Rockefeller & Trusts John D. Rockefeller developed the “Trust” by 1882= stockholders in smaller oil companies assigned their stock to board of directors of his company (“horizontal integration”) & the Standard Oil Company, which controlled the oil (petroleum) industry: bought out competition, underselling, differential pricing, and secret transportation rebates n 1870: organized Standard Oil Company and by 1877 he controlled 95% of all oil refineries in U. S. & dominated the oil industry n

The Emergence of Trusts

Steel is Supreme By 1900 – U. S. produced as much steel as Britain and Germany combined. n Due to abundance of natural resources of coal for fuel, iron ore, good labor supply, and other ingredients for making steel. n Bessemer Process – method of making cheap steel (use cold air to eliminate impurities) n Andrew Carnegie – by 1900, he was producing ¼ of the nation’s bessemer steel. n

Tmwk 7. 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. n Morgan bought out Carnegie for over $400 million. (Philanthropist: Carnegie donated millions) n 1901 launched the larger U. S. Steel Corporation = America’s 1 st billion dollar corporation. n

Reason for Wealth n n n 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.

Tmwk 8. Pg 543 Cartoon What is the cartoon depicting – what is it for or against?

The Wealthy Ones J P Morgan Banker and Financier Andrew Carnegie: steel John D. Rockefeller: Oil

1890 Sherman Anti-Trust Act n n n 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) n 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) n 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) n

AFL: American Federation of Labor n n n 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 Unions

Industrial Workers: Child Labor

Tmwk 9. 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 Era Efforts to Industrialize South fails n South becomes “colonized” economically n Exceptions: Tobacco & Cotton Industry n

Government Response to Railroad n n n Laissez-faire, corporate welfare, or regulation? Adam Smith, The Wealth of Nations Slaughterhouse Cases, 1873 Munn v. Illinois, 1877 Wabash Case, 1886 Interstate Commerce Act, 1887 -ICC