Industry Comes of Age

1. Industry Comes of Age Chapter 24

2. The Iron Colt Becomes the Iron Horse

3. Railroad boom after the war • 1865- 30,000 miles of track • 1900- 192,556 miles of track

4. Railroad building costly and risky • Needs government help or subsidies • Thin population unprofitable for RR • Congress begins to act and gives money and land to RR

5. Land Grants to RR • Tied up land until RR chose its plots • Choicest sections • Cleveland opens unclaimed land in 1887

6. Benefits of land grants • Preferential rates for postal and military • Subsidize transportation system by avoiding new taxes • Land used as collateral for loans • RR gave land value

7. Communities fought over RR locations • Those without withered

8. Spanning the Continent With Railroads

9. War stalls proposed Continental RR • 1862 North proceeds to tie Union to the Pacific

10. Union Pacific • West from Nebraska • 20 square miles of land for every 1 mile of track • Alternating 640 acres on each side • Generous loans at $16,000 to $48,000 flat to mountains • Begins in 1865 • Credit Mobiler pockets $75 million

11. Irish Paddies laid the track • Protect against Indians • “Hell on Wheels” tented towns

12. Central Pacific • From Sacramento through Sierra Nevada • Big 4 chief financial backers • Leland Stanford- political connections • Colis P. Huntington- lobbyist • Made huge profits- honestly

13. Used Chinese labor • Cheap and expendable • Sierra Nevada a formidable barrier

14. “Wedding of Rails” • Promontory Point near Ogden, Utah 1869

15. Successful peacetime undertakings • Brought coast more into Union • Helped trade with Asia • Helped settle Great West

16. Binding The Country With Railroad Ties

17. Four other transcontinental RR • No government loans • Generous land grants

18. Northern Pacific RR • Lake Superior to Puget Sound 1883

19. Atkinson, Topeka, Santa Fe • SW desert to California

20. Southern Pacific • New Orleans to San Francisco 1884 • (Last Continental RR in 1893)

21. Great Northern • Duluth to Seattle • James J. Hill- greatest RR builder • Well organized • Helped areas it served to prosper

22. Down side of RR • Overoptimism- areas with little potential for success • Bankruptcy- mergers- reorganizations

23. Railroad Consolidation and Mechanization

24. Cornelius Vanderbilt • Million in steamboating and turns to RR • Welded together the eastern RR • Superior Rail service at lower rates • Gave $1 million to start University

25. Improvements • Steel Rail • Replaced iron tracks • Bear heavier load • Standard gauge and width • Saves money and time

26. Improvements Cont. • Air Brakes by Westinghouse • Safety and efficiency • Pullman Cars • Luxury riding cars • (Still wrecks were common)

27. Revolution By Railway

28. Touched countless phases of American life • Nation united physically • New domestic markets • Drew foreign investors • Spurred industrialization after the Civil War • New markets for manufactured goods • Brought necessities • Farms parallel railways

29. Phases Cont. • Growth of cities • Carry food to feed huge amounts of people • Livelihood for many people • Immigration • Transport newcomers to areas needing settlers

30. Phases Cont. • Land felt impact of RR • Settlers plow up prairies • Cattle replace the wiped out buffalo • Lumber cut • Time • Divide country into time zones for RR schedules • Made new Millionaires • “Lords of rail” replace “Lords of the lash”

31. Wrongdoing in Railroading

32. Corruption near to any fortune • Credit Mobilier • Jay Gould booms and bust RRs

33. “Stock Watering” • Promoters inflate claims of RR value • Sell inflated stocks • Owners have to raise rates to meet financial obligations

34. Vanderbilt- “The Public be damned” • Disregards law • Nothing stands in his way

35. Bought and sold people • Bribed judges, legislatures • Employed lobbyists • Free passes to wealthy

36. Industrial Monarchs • More direct control over people’s lives • Began to cooperate to rule RR dominion

37. Pool • An agreement to divide the business in a given area and share profits • Secret rebates and kickbacks for steady traffic • More money for a short haul

38. Government Bridles the Iron Horse

39. Slow to combat the injustice • Dedicated to free enterprise • Jefferson’s ideals hostile to government interference • Might become millionaires themselves

40. Farmers protest against rates leading to bankruptcy • Legislatures begin trying to regulate RR

41. Wabash Case • States could not regulate interstate commerce • Federal Government would have to do it

42. Interstate Commerce Act of 1887 • Prohibits rebates and pools • RR must publish rates openly • Forbade unfair discrimination against shippers • Outlawed charging more for short haul • Set up ICC (Interstate Commerce Commission) to regulate and enforce

43. Corporate wealth can use ICC • Satisfies popular clamor for government supervision but it was nominal • Provided a way for competing business interests could resolve their conflicts in a peaceable way • TENDED TO STABILIZE, NOT REVOLUTIONIZE, EXISTING BUSINESS SYSTEMS

44. 1st Attempt by Washington to regulate business for society • Brought in new regulatory commissions that will be developed • Moved government into regulating economy • Begin of the end of free wheeling buisness practices

45. Miracles of Mechanization

46. Industrialization begins to assume mammoth proportions • By 1894 America is 1st in industrialization

47. Gave rise to many new millionaires • Civil War created immense fortunes

48. America’s natural resources are going to be exploited • Mesabi Range of iron ore becomes cornerstone of steel empire

49. Immigration makes labor cheap and plentiful • Steel used this labor in two 12 hour shifts 7 days a week

50. American ingenuity helps create industrial growth • Mass production • Between 186 and 1890 over 440,000 new patents • New machines help business (cash register, stock ticker, typewriter) • Refrigerated car, electric dynamo, electric railway