Day 96: Industry Comes of Age

1. Day 96: Industry Comes of Age Baltimore Polytechnic Institute January 30, 2014 A/A.P. U.S. History Mr. Green

2. Objective The students will be able to describe to what extent the railroad contributed to the growth and expansion of the United States after the Civil War

3. Industry Comes of Age Objectives: Explain how the transcontinental railroad network provided the basis for an integrated national market and the great post–Civil War industrial transformation. Identify the abuses in the railroad industry and discuss how these led to the first efforts at industrial regulation by the federal government. Describe how the economy came to be dominated by giant trusts, such as those headed by Carnegie and Rockefeller in the steel and oil industries, and the growing class conflict it precipitated. Describe how new technological inventions fueled new industries and why American manufacturers increasingly turned toward the mass production of standardized goods. AP Focus Enormous immigration, mass production, and the presence of low-skill jobs drive down workers’ wages. A catalyst for postwar industrial and economic expansion is the railroad industry, which not only facilitates trade, commerce, and transportation, but also makes locomotive production a major industry. The government plays a major role in the industry’s development and importance by providing the companies with millions of acres of free land—a giveaway, some say.

4. Chapter Focus Chapter Themes America accomplished heavy industrialization in the post–Civil War era. Spurred by the transcontinental rail network, business grew and consolidated into giant corporate trusts, as epitomized by the oil and steel industries. Industrialization radically transformed the practices of labor and the condition of the American working people. But despite frequent industrial strife and the efforts of various reformers and unions, workers failed to develop effective labor organizations to match the corporate forms of business.

5. Announcements 1870s Decade chart due today 1868, 1872, 1876, 1880 Election Chart due Monday Read Chapter 24

6. Drill/Warm-up As the 19th century drew to a close, observers were asking, “Why are the best men not in politics?” To what extent do you believe the above observation? Can you answer that question then and today?

7. Cleveland and Depression Cleveland wins in 1892 Depression of 1893-4 long years soft money hurt the U.S. credit rating when European banks called in loans from the U.S. William Jennings Bryan emerged as the soft money leader Gold was flying out of the Treasury as people cashed in legal tender for silver it bought Notes had to be reissued Cleveland turned to J.P. Morgan to lend the government $65 million in gold

8. Cleveland Breeds a Backlash Wilson-Gorman Tariff in 1894 loaded with special interest, it did not dent the McKinley Tariff rates Cleveland pocket vetoed the bill with a 2% income tax on $4,000

9. The Iron Colt Becomes an Iron Horse Foreign investment Labor Trade Technology How did these factors contribute to America’s economic transformation by 1900? 1865-35,000 miles of track in U.S., most east of Mississippi 1900-192,556 miles of track in U.S. most west of Mississippi

10. Transcontinental railroad building costly and risky Corporations asked for government subsidies military/postal road argument aided the corporations Congress gave 155,504,994 acres away Western states gave an additional 49 million acres away Cleveland stopped practice of withholding all land from other users as the RR withheld land Government gained cheap postal rates and cheap rates for transporting military traffic Land Grants avoided new taxes Increased property values to land that was arguably worthless

11. Spanning the Continent with Rails Transcontinental railroad debate moved forward after secession Initiated in 1862 to bolster the union and connect the west Union Pacific Railroad-West from Omaha, NE Many Irishmen laid track, fought with Native Americans Central Pacific Railroad-East from California fought with the Sierra Nevada mountains. Completed in 1869 near Ogden Utah

12. Binding the Country with Railroad Ties 4 more transcontinental railroads completed before 1900 without federal government loans All received generous land grants except the Great Northern Many laid track “from nowhere to nothing” Many bankruptcies, mergers, or reorganizations Similar to the airline industries of today

13. Railroad Consolidation and Mechanization Cornelius Vanderbilt New York Central Steel Rail Standard track gauge Westinghouse Air brake Pullman Palace Cars Many tragedies despite safety devices

14. Revolution by Railways 1. United the United States 2. Biggest business 3. Employed the most people 4. Took 20% of total investment dollars from domestic and foreign investors 5. Spurred economic growth post Civil War 6. Largest source of orders for young steel industry 7. Stimulated mining/farming in the West 8. City growth/immigration 9. Ecological impact 10. Standard time-Nov. 18, 1883 11. Maker of millionaires

15. Wrongdoing in Railroading Stock watering- Inflating the value of a corporation to sell its stocks and bonds Heads of the railroads began to work together and “pool” resources Some long hauls were less expensive than short hauls Small farmers paid the price

16. Government Bridles the Iron Horse Depression of the 1870’s “railroaded” farmers into bankruptcy Wabash v. Illinois-states cannot regulate interstate commerce, only the federal government can regulate Congress passed the Interstate Commerce Act of 1887 Not effective in revolutionizing, only keeping stability

17. Miracles of Mechanization Foreign investors put the money into the hands of the private borrower Innovations in transportation-coal, iron, oil Mesabi Range-Chicago-Cleveland Mass-production methods 440,000 patents issued between 1860 and 1890 Bell and Edison

18. The Trust Titan Emerges Vertical integration-combining into 1 organization all phases of manufacturing Justified on the grounds of efficiency and quality Horizontal integration-Trust developed by Rockefeller to control competitors Interlocking directorates-J.P. Morgan placed his people in the businesses he bailed out

19. Wrap-Up Describe to what extent the railroad contributed to the growth and expansion of the United States. Be sure to use outside information from the text, notes, and discussion.

20. Homework • Continue Reading Chapter 24 • Prepare for 5QQ on Friday