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

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Ch. 24 PPTIndustry Comes of Age, 1865-1900
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Railroads Come of Age
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Tmwk Ch 24

1. 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.

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Railroad Building

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

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Costly and Risky Govt Subsidies

• 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
• Issued large tracts of land to 2 railroad
  companies Union Pacific and Central Pacific.
• 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

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Union Pacific Railroad

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

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Central Pacific Railroad

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

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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

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Tmwk

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

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Railroad Consolidation Mechanization

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

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Railroads Come of Age

• Transcontinental RR
• Pacific Railway Act
• Union Pacific RR
• Central Pacific RR
• Significance

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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

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Railroad Consolidation and Mechanization
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Tmwk

• 5. Pg 538 left paragraph What was the purpose for
  Congress to pass the Interstate Commerce Act?
• 5a. 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?

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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.
• Result denial of state power to regulate
  interstate rates for railroads- led to creation
  of the Interstate Commerce Commission.

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1887 Interstate Commerce Act

• 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.

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Inventions

• Alexander Graham Bell telephone giant
  communications network was built. Women took
  jobs as switchboard operators.
• Thomas Edison dictaphone, phonograph, moving
  picture, electric light bulb
• Others cash register, stock ticker, typewriter

Alexander Graham Bell
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Eliminating Competition

• 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.
• Thus the 1st to pioneer vertical integration,
  which combined all phases of manufacturing into
  one organization and eliminated middle mens
  fees.

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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
• 1870 organized Standard Oil Company and by 1877
  he controlled 95 of all oil refineries in U.S.
  dominated the oil industry

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The Emergence of Trusts
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Steel is Supreme

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

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Tmwk

• 7. Pg 540 Quote What did Andrew Carnegie believe
  about leaving heirs an inheritance of great
  wealth?

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J P Morgan Banker and Financier

• Financed the reorganization of railroads,
  insurance companies, and banks.
• Morgan bought out Carnegie for over 400 million.
  (Philanthropist Carnegie donated millions)
• 1901 launched the larger U.S. Steel Corporation
  Americas 1st billion dollar corporation.

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Reason for Wealth

• Gospel of Wealth Essay written by Andrew
  Carnegie - described responsibility of
  philanthropy by the self-made rich. Wealthy,
  entrusted with societys 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.

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Tmwk

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

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The Wealthy Ones
J P Morgan Banker and Financier
Andrew Carnegie steel
John D. Rockefeller Oil
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1890 Sherman Anti-Trust Act

• 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.

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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)
• 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)
• 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)

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AFL American Federation of Labor

• 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 dont patronize
  signs.
• Dominated and composed of skilled craftsman
  (carpenters, bricklayers, etc.)

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Rise of Unions
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Industrial Workers Child Labor
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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?

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The South During Industrial Era

• Efforts to Industrialize South fails
• South becomes colonized economically
• Exceptions Tobacco Cotton Industry

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Government Response to Railroad

• 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