Industry Comes of Age 1865-1900 ... Industry Comes of Age 1865-1900 American Pageant Chapter 24 . Transportation

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  • Industry Comes of Age 1865-1900

    American Pageant Chapter 24

  • Transportation

    • 1865- 35,000 miles of Railroads (RR) • 1900-192,556 miles of RR • Government subsidized transcontinental RR by

    granting companies large tracts of land to build on – Gave away 155,504,994 acres!

    • Towns fought over who would have RR going through them – Could mean the survival of the town

  • Spanning the Continent with RR’s

    • Debate over North or South transcontinental RR ended when South seceded

    • 1862 Union Pacific RR began construction starting in Omaha, Nebraska and running West

    • RR were laid as quickly as possible after Civil War – Lots of Irishmen worked on RR – Often attacked by Indians – The Cali end began in Sacramento and ran East

  • • The “Big Four” oversaw the construction and made millions – Leland Stanford, Collis P. Huntington

    • Cali line built by Central Pacific RR and mostly used Chinese workers

    • “Wedding of the rails” took place in 1869 in Ogden, Utah • RR tied West and East together, opened trade with Asia

    and allowed more settlers to move West • Four other transcontinental RR were built by 1900

  • Railroad Consolidation and Mechanization

    • Cornelius Vanderbilt – Owner of New York Central Rail

    – Made over $100 million

    – Donated $1 million to build Vanderbilt University in Tennessee

    • RR started using steel rails instead of iron – Cheaper and could hold a heavier load

    • Started using the same gauge of track – Eliminated a lot of train changes for

    passengers and cargo

  • Revolution by Railways

    • US became a national market for goods – Brought in foreign investors

    • Sped up industrialization – Moved goods quickly – Demanded large amount of steel and iron

    • Helped agriculture – Transported crops to markets

    • Helped cause the rise of cities – Could bring in lots of supplies

    • Greatly changed the environment – Corn fields planted – Buffalo hunted almost to extinction – Forests cut down for lumber

    • Changed time – Until 1880’s every town had it’s own “local” time

    • Nightmare for RR

    – November 18, 1883 RR said continent would be split into time zones

    • Made some people enormously rich

  • Corruption and Greed

    • Lots of corruption tied to RR business

    • Jay Gould – Made millions manipulating RR


    • RR owners started working together (like a cartel) to fix prices and make huge profits – Bribed officials and the press

    • RR barons had massive control over people’s lives

  • Government Tries to Help

    • Americans did not want Govt involved in economy but by 1870’s farmers were being “railroaded” into bankruptcy

    • States began to try to regulate the RR’s • Wabash supreme court case stopped that

    – Only federal govt can regulate interstate commerce

    • Congress passed the Interstate Commerce Act of 1887 – Required RR’s to publish rate to public – Set up the Interstate Commerce Commission (ICC) to

    enforce new laws – Did some good but not a whole lot

  • Miracles of Mechanization

    • 1876 Alexander Graham Bell – Invented the


    • Thomas A. Edison – Invented the

    phonograph, moving pictures

    – 1879 perfected the electric light bulb

  • The Trust Titan Emerges

    • Big names of the time to know – Andrew Carnegie, steel

    – John D. Rockefeller, oil

    – JP Morgan, banking

    • All tried to avoid competition in their industries, used “vertical integration” – Carnegie Steel owned:

    • Mines

    • Ships

    • RR’s

    • Steel factory

    – No one touched Carnegie steel except Carnegie employees

  • • Rockefeller used “horizontal integration”, allying competitors to monopolize the market

    • Formed Standard Oil Co in 1870

    • Created a “trust”

    – Stockholders in small oil companies assigned their stocks to Standard Oil. Standard Oil then controlled all oil companies to make the most profit for all stock holders

  • Supremacy of Steel

    • Steel replaced iron as the dominate metal in the late 1800’s

    • 1870 Vanderbilt had to import steel from England

    • 1890 US produced 1/3 of the World’s steel, why?

    • Steel became cheaper to make through the Bessemer Process – Cold air blown on red-hot steel caused

    the steel to become white-hot, eliminating it’s impurities and making better steel

    • US had all of the natural resources to make steel and a large labor force

  • Carnegie and Morgan

    • Andrew Carnegie – Moved to America when he was

    12 from Scotland

    – Worked for $1.20 a week

    – Slowly saved money and invested in steel

    – Eventually became to steel maker in US

    – 1900 he was producing ¼ of US steel • $25 million a year, no income tax!

  • • J.P. Morgan – Top banker in US

    • 1900 Carnegie was looking to sell his steel company – Morgan was just getting into steel business

    • Morgan agreed to buy Carnegie out for $400 million – Carnegie spent the rest of his life as a

    philanthropist, giving away ~$350 million

    • Morgan expanded his steel company and created US Steel Corporation in 1901 – Worth $1.4 billion – 1st billion-dollar corporation

  • Rockefeller and Oil

    • Oil became big business after Civil War – Used mainly to make kerosene – 1870 kerosene was US’s 4th most valuable export

    • By 1885 people were turning to electricity – Bad for oil business

    • By 1900 gasoline-burning internal combustion engine developed and the century of the automobile dawned – Great for oil!

    • John D Rockefeller – 1870 organized Standard Oil Co

    • Turned into a trust in 1882 – By 1877 Rockefeller controlled 95% of oil refineries in US – Rockefeller was ruthless in business

    • Would ruin any competitor, survival of the fittest

    • Other trusts formed as well – Sugar, tobacco, leather, meat

  • The Gospel of Wealth

    • Some viewed themselves as chosen by God to be rich

    • Others thought it was social Darwinism

    • Many millionaires thought poor people were just lazy – “There is not a poor person in the US who was not made poor by his

    own shortcomings.” » Rev. Russell Conwell

    • Big business used the Constitution to protect themselves – Supreme Court ruled that a corporation was a “person”, thus their

    property was protected by the 14th Amendment

  • Government Tackles the Trust

    • Sherman Anti-Trust Act of 1890 – Forbade combinations in restraint of trade

    • Most corporations got around law through loopholes

    • It did end up hurting labor unions though – Restricting trade?

    • A step towards government restricting business

  • The South in the Age of Industry

    • South could not keep up with the North • Mostly sharecroppers and tenant farmers • James Buchanan Duke

    – Took advantage of the new machine that rolled cigarettes in the 1880’s – 1890 absorbed his main competitors into the American Tobacco Co – Duke University named after him

    • North actively worked to keep the South down – Example: Charging southerners more to ship on the RR’s

    • North began building textile mills in the South – Lots of cotton, cheap un-unionized labor – Very bad conditions

    • Worked dusk till dawn • Paid ½ of what Northerners were paid

    – Employed lots of women and children

  • The Impact of the New Industrial Revolution on America

    • Standard of living rose • Immigration went up • Jeffersonian ideals of a country of small farmers gone • Women entered the workforce

    – Same hours and conditions – Less money

    • By 1900 1/10 of Americans were wage earners – Dependent on employers

    • Foreign trade went up as US market became saturated with goods

  • In Unions There is Strength

    • Workers had no rights or power against the corporations – Could be easily replaced – Thousands of immigrants a year came for work

    • Kept wages low

    • Corporations had Federal Courts on their side – Could send in troops to break strikes

    • Employers could “lockout” workers and starve them into submission • Forced people to sign “yellow-dog contracts”

    – Swore not to join a labor union • You could be “blacklisted”

    – No one would hire you • Many middle-class Americans were tired of hearing workers cry

    – US had some of the highest wages in the world – More supportive of Big Business than the worker

  • Labor Limps Along • 1869 The Knights of Labor formed

    – Secret union that welcomed every workers • Women and Blacks included

    – Fought for workers sa