Railroads Come of Age Tmwk Ch 24 - Pg 531 Map What do the pink squares represent? And the tan squares?
- Pg 532 picture Why was it difficult to build a transcontinental railroad?
- Pg 534 picture Describe railroad construction in the Northwest area.
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
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
- 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 rail’s end – drinking and debauchery.
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.
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.
- 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.
Railroads Come of Age - Transcontinental RR
- Pacific Railway Act
- Union Pacific RR
- Central Pacific RR
- Significance
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?
- 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?
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.
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.
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
- 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 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
- 1870: organized Standard Oil Company and by 1877 he controlled 95% of all oil refineries in U.S. & dominated the oil industry
The Emergence of Trusts - 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 nation’s bessemer steel.
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.
- Morgan bought out Carnegie for over $400 million. (Philanthropist: Carnegie donated millions)
- 1901 launched the larger U.S. Steel Corporation = America’s 1st billion dollar corporation.
Reason for Wealth - 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.
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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
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.
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)
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 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
- South becomes “colonized” economically
- Exceptions: Tobacco & Cotton Industry
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
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