The Importance of Railroads

1. The Importance of Railroads Railroads: -Carried troops and supplies to battlefields during the Civil War -Move raw materials to factories -Become central to the American economy

2. Building of the Union Pacific Railroad from Omaha, Nebraska

3. Problems with Railroads • Railroad lines are short, only running up to 50 miles long • Railroad lines are set at different gauges (different widths between the iron lines) • Cars can only run on certain tracks because of the different sizes of the gauges

4. U.S. Railroads “Standardized” • “Standardized”= All tracks are set to the same gauge (or width) • The U.S. forms a “network” of railroad lines so that all the small lines are connected into fewer longer lines

5. New Inventions To Help RR Travel • George Westinghouse: Air Brake allowed all cars to stop at once, instead of one at a time • George Pullman: Sleeping Cars allowed people to changed their seat into a bed and sleep (He also made dining cars, and bathrooms for trains) • Time Zones were created to make railroad schedules simpler

7. Cornelius Vanderbilt • Bought up Railroad lines and consolidated (or combined) them all into his own company • He used tough tactics to force other companies to sell him their railroad lines

8. The Vanderbilt’s summer home in Asheville, NC

9. James Hill • Hill finished the Great Northern transcontinental railroad • He was the only builder who did not need money from Congress • He raised money by giving farmers and ranchers seeds and equipment in exchange for settling near his lines to provide him with business

10. Fierce Competition • Soon their were too many railroads and companies began to compete with each other by slashing prices • Railroad companies would secretly offer rebates (discounts) to their biggest customers • Small farmers were still charged the full price • Railroad companies tried to save money by “pooling” (dividing up business areas and then setting high prices for customers)

11. Benefits of Railroads 1. Made possible the rapid growth of the economy 2. Building railroads created thousands of jobs 3. Pioneered new ways of managing business 4. Opened new areas of the country for settlement and growth

12. Growth of the American Steel Industry • Iron rails wore out quickly • Steel was much stronger but was very expensive and difficult to make • Henry Bessemer created the Bessemer Process which allowed steel makers to make steel at a much lower cost • As a result, steel mills sprang up around the country

14. Andrew Carnegie • Scottish immigrant • Made a fortune in the steel industry • Worked in a steel mill when he was a boy • After traveling to England, he built a steel mill in the U.S.

15. Carnegie Steel Company • With his profits, he began to buy out steel and iron mills, railroad and steamship lines, and warehouses • His control of all the steps to change raw materials into finished products is called: vertical integration • He combined all his businesses into Carnegie Steel Company

16. Carnegie’s home in Scotland

17. The Gospel of Wealth “Wealth, passing through the hands of the few, can be made a much more powerful force for the elevation of our race than if it had been distributed in small sums to the people themselves.” -Andrew Carnegie

18. Carnegie’s Charities • Carnegie gave millions to libraries and schools • He believed that it was the duty of the rich to help the poor • He argued that rich people should be able to remain rich • He still did not pay his workers very much

19. The Beginning of Corporations • Corporation: Business owned by investors NOT a single person • Stock: Shares of the business • Stockholders: People who have bought shares (parts) of a corporation • Dividends: Profits that stockholders make off of their shares *Stockholders do not have to pay all of a businesses debts if the business fails*

20. J.P. Morgan Powerful banker Gained control of most railroad businesses (including Carnegie Steel) by buying lots of their stock He united all of these businesses into the United States Steel Company

21. John D. Rockefeller • Poor man from New York • He later moved to Ohio and invested in an oil refinery • He used these profits to buy other oil refineries • He combined these refineries into Standard Oil Company • He often cut his prices to drive other oil companies out of business

22. Trusts and Monopolies • Trust: A group of corporations (or businesses) that is controlled by one group of people • Rockefeller got control of 95% of all oil refineries in the U.S. This is called a monopoly • Many Americans argued that these rich businessmen were buying favors from elected officials

23. Political cartoon showing Standard Oil Company as an octopus spreading its tentacles. *What is the octopus controlling?*

24. Free Enterprise • Many Americans argued that monopolies ruined the competition of free enterprise: Where businesses are owned by private citizens • Congress passed the Sherman Antitrust Act: Banned the formation of monopolies and trusts • The act was too weak to have any effect, and was ignored by corporations and businesses

25. Horrible Conditions for Workers • Industrial workers had horrible pay, long hours and dangerous conditions • Factory owners ignored their complaints • Workers tried to fight back by: • Slowing work • Taking days off • Organizing strikes

26. Haymarket Riot • Workers at the McCormick Harvester Company in Chicago went on strike • The company hired “strikebreakers” (replacements) for the striking workers • Workers clashed with the strikebreakers • The police opened fire, 4 workers killed • Thousands gathered in the Haymarket Square to protest the killings • A bomb went off and the police opened fire on the crowd, killing many • 8 “anarchists” were arrested for the bombing

27. Unions: The Knights of Labor • President: Terence Powderly • Goals: End child labor, equal pay for men and women, shorter workday • Held rallies and meetings, but did NOT endorse strikes • Lost support over the Haymarket Riot, even though they were supposedly not involved

28. American Federation of Labor • Organized by Samuel Gompers • Workers joined Trade Unions, that then joined the AFL (ex. Shoemakers Unions, and Typesetters Unions) • Stressed practical goals such as “Collective Bargaining” • Supported strikes, had a strike fund for families who were on strike

29. International Ladies’ Garment Workers • In 1900, more than 20,000 men and women garment workers walked off their jobs in a strike • Employers met their demands for better pay and shorter hours • Most women did not strike, and continued to work for poor pay until the Triangle Fire caught national attention

30. Western Federation of Miners • Miners in the West went on strike many times to complain about pay cuts • Between 1894 and 1904, these miners organized this union and led many strikes • Presidents and the American people usually sided with the factory owners during strikes

31. Successes and Failures of Strikes • During the late 1800s, there were thousands of strikes and riots, with thousands more killed • The federal government usually sided with the factory owners • Most Americans did not side with strikers because they feared they were foreign radicals • Some workers did gain slightly better wages and working conditions • By the mid-1900s, thousands of workers would have joined unions