Chapter 24 Industry comes of Age By Kent

Chapter 24 Industry comes of Age By: Kent Touchine and Ethan Ellison Hour: 6 th

The Iron Colt becomes an Iron Horse The Country’s railroad network expanded significantly in the 1800 s. Congress subsidized the cost of many railroad construction projects because of high costs and of the risks of building railroads. Congress also gave a lot of unused public land to the railroad companies. Spanning the Continent with Rails 1862, Congress selected Union Pacific Railroad company to build a transcontinental railroad starting in Omaha, Nebraska. The Central Pacific Railroad company was responsible to laying track on the California side of the transcontinental. Leland Stanford and Collis P. Huntington were apart of the financial backers of the Central Pacific Railroad (The Big 4). Both railroad companies received financial aid from the government. The transcontinental railroad was completed in 1869. It increased trade wit Asia and it opened up the West for expansion.

Binding the Continent with Railroad Ties There were 5 transcontinental railroad built: The Northern Pacific Railroad: Completed in 1833 and was from Lake Superior to Puget Sound. Atchison, Topeka, and Santa Fe: Completed in 1884 and was from Topeka to California. Southern Pacific: Completed in 1884 and was from New Orleans to San Francisco. The Great Northern: Completed in 1893 and was from Duluth to Seattle. Railroad Consolidation and Mechanization Cornelius Vanderbilt Made a lot of money improving the Eastern Railroads. 2 advancements helped the development of the Railroad: The steel rail A standard gauge of track width.

Revolution by Railways The railroad stimulated the industrialization of the country in the post civil war years. It created an enormous domestic market for American raw materials and manufactured goods. Railroad companies also stimulated immigration. In the 1880 s, every town in America had its own local time. To keep schedules and avoid wrecks, the major rail lines proposed, on November 18, 1883, dividing America in 4 time zone- most towns accepted the new time method. Wrongdoing in Railroading Some people selling bonds for railroad companies inflated claims about the company’s assets and profits, enabling them to sell socks and bonds in excess of the railroad’s actual value(“stock watering”). Many railroad titans felt they were above the law, and they abused the public by bribing judges and legislatures. Railroad kings manipulators of a huge natural monopoly and exercised too much direct control over peoples lives. Railroad companies colluded with each other to protect their profits. “Pools” were agreements to divide the business in a given area to share the profits. Small farmers often paid the highest railroad transportation rates while big customers paid low rates.

Government Bridles the Iron Horse During the depression of the 1870 s, famers protested against railroaders who ran the farmers into bankruptcy. Many Midwestern legislatures tried to regulate the railroad monopoly, but in 1886, the supreme court ruled in Wabash, St. Louis and Pacific Railroad Company vs. Illinois that individual states could not regulate interstate commerce. In 1887, Congress passed the Interstate Commerce Act. It prohibited rebates and pools, required the railroad to publish their rates openly, forbade unfair discrimination against shippers, and outlawed charging more for a short trip then for a long trip over the same line. It created the Interstate Commerce Commission (ICC) to administer and enforce the new legislation. The new law’s provided a forum where competing business could resolve their conflicts in peaceful ways (instead of engaging in price wars). Miracles of Mechanization Telephone was created in 1876 by Alexander Graham Bell. Revolutionized the way Americans communicated. Thomas Alva Edison Invented numerous devices; the most well-known is the electric light bulbs in 1879.

The Trust Titan Emerges Tycoons like Andrew Carnegie (Steel King), john D. Rockefeller (Oil Baron), and J. Pierpont Morgan (Banker’s Banker), circumvented their competition. Carnegie used the tactic of “Vertical integration” to combine all phases of manufacturing onto one organization. He and his business controlled every aspect of production, from mining to marketing. His goal was to improve efficiency. “Horizontal integration” meant allying with competitors to monopolize a given market. This tactic to creating trust was used by Rockefeller. Morgan used the tactic of Interlocking directorates when he put his people on the boards of directors of rival companies. The Supremacy of Steel was “king” during the industrialization era: nearly every aspect of society used it. By the 1800 s, the United States was producing 1/3 of the world’s steel supply. The Bessemer process simplified the steel productive processes and reduced the price of steel. The process involved blowing cold air in red-hot iron to ignite the carbon and eliminate impurities.

Carnegies and other sultans of steel Andrew Carnegie was not a monopolist and disliked monopolist trusts. By 1900, he was producing ¼ of the nations Bessemer steel. J. P Morgan financed the reorganization of railroads. Banks and insurance companies. Morgan bought out Carnegie for $400 million. Creating the United states Steel Corporation in 1901. Rockefeller Grows an American Beauty Rose The first major product of oil industry. The invention of the electric light bulb made kerosene obsolete. By 1900, the gasoline-burning internal combustion engine, became the primary means of automobile.

. John D. Rockefeller created the Standard Oil company of Ohio in 1870. By 1877, he controlled 95% of all oil refineries within the nation. Rockefeller expanded his company across America. the gospel of wealth “survival of the fittest”