Chapter 24

1. Chapter 24 Captains of Industry The RailRoad Labor

2. Transcontinental RailRoads -Leland Stanford is most responsible for building the very first trans. RR. -He donated the profit to Stanford University!! -They were very expensive!! -Built b/c of land grants & subsidies -Govt. gave RR’s 1 square mile in checkerboard fashion 640 acres=1 mile I CAN DESCRIBE THE CREATION OF AND THE IMPACT OF THE RAILROAD ON AMERICA

3. When RR’s first started taking construction, there were 2 Main ones: The Union Pacific -started in the middle of the country & moved west The Central Pacific & -started in the west of the country & moved towards the middle I CAN DESCRIBE THE CREATION OF AND THE IMPACT OF THE RAILROAD ON AMERICA

4. In 1869... The transcontinental Railroad met up in Ogden, Utah at a place called Promontory Point. Leland Stanford used a silver sledgehammer and drove a golden spike into the ground. When he drove the golden spike into the ground, they rang the cracked liberty bell!! (It apparently cracked when John Marshall died!) I CAN IDENTIFY THE MAJOR LEADERS OF THE RAILROAD INDUSTRY

5. The 5 Transcontinental Railroads • Union Pacific-Central Pacific • Northern Pacific • Atchison, Topeka, & Santa Fe • Southern Pacific • Great Northern-1893-bulit by James J. Hill w/o land grants or subsidies. I CAN IDENTIFY THE MAJOR LEADERS IN THE RAILROAD INDUSTRY

6. Cornelius Vanderbilt The Railroad Business -Bought little railroads & put them all together -amassed $100 million fortune -Biltmore House and Gardens -First to use Steel Rail and standardized RR tracks Used airbrake & palace cars I CAN IDENTIFY THE MAJOR LEADERS IN THE RAILROAD INDUSTRY

7. Unfair Business Practices by the RR *Pooling-agreement to divide business in a given area and share profit. ( high prices…no competition) *SecretRebates *Kickbacks *Differential Freight Rates -RR’s would charge more for the short haul than a long haul. Farmers soon organized into groups (Grange / Patrons of Husbandry) to protest the unfair practices of the RR. Stock Watering-selling something for more than its worth! I CAN LIST AND EXPLAIN THE FORMS OF CORRUPTION IN THE RAILROAD INDUSTRY

8. Results from the RR • United the country together • Stimulated the industrialization of America • Stimulated Mining • Stimulated agriculture • Stimulated Urbanization • Helped settle lands • Time zones were created! • Produced many millionaires I CAN IDENTIFY THE RESULTS OF RAILROADS ON AMERICA

9. RAILROAD IMPROVEMENTS Steel Rails Air Brake Steel rails were safer and more economical b/c they could handle heavier loads Also created standard gauge track width Created by George Westinghouse Made railroads much safer Palace Cars Allowed for better travel for passengers Dangerous b/c they often caught on fire though I CAN LIST THE MAJOR IMPROVEMENTS MADE IN RAILROADS

10. Munn v. Illinois 1876 *Upheld the Granger Laws -said a state could regulate the RR for the common good. 10 years later in the WabashCase-1886-the supreme court ruled that it could not regulate interstate trade. *Reversed Munn v. Illinois Farmers the most hurt by unfair railroad practices Pressure put on government to do something by the Grange or Patrons of Husbandry I CAN SUMMARIZE GOVERNMENT INTERVENTION AGAINST THE RAILROADS

11. INTERSTATE COMMERCE ACT OF 1887 Prohibited rebates and pools Required railroads to publish their rates Forbid unfair discrimination by charging more for short hauls versus long hauls Established the ICC (Interstate Commerce Commission) to administer and enforce law PROBLEM: NO TEETH!!!!!! I CAN SUMMARIZE GOVERNMENT INTERVENTION AGAINST THE RAILROADS

12. "Captains of Industry" • There were FOUR “Captains of Industry” They were the IT people. • Cornelius Vanderbilt- RR Consolidation • John D. Rockefeller- Oil • Andrew Carnegie- Steel Industry • J.P. Morgan- Banking I CAN IDENTIFY THE FOUR MAJOR INDUSTRIAL LEADERS/ROBBER BARRONS

13. Andrew Carnegie What he’s known for: Vertical Integration-when you control every stage of the development of a product. The Steel Business Kelley Bessemer Process-1850’s –steel process. William Kelly from KY, and Henry Bessemer from England. Mesabi Iron Ore Range-gotten in Web.-Ash.-1842-process of taking very hot iron ore, forcing cold air through to clean our impurities. By 1900, he produced 25% of the nations steel. Carnegie was an immigrant who grew up very, very poor. I CAN EXPLAIN THE LEADERS OF AND THE KELLEY-BESSEMER PROCESS

14. Andrew Carnegie wrote The Gospel of Wealth” “The man who dies rich dies thus disgraced” Stated that an individuals wealth was beneficial to all Carngie forced JP Morgan to buy him out of the steel industry for $400 million dollars. I CAN SUMMARIZE THE HISTORY OF ANDREW CARNEGIE

15. Charles Darwin Charles Darwin published the “Origin of the Species” in 1859. Darwinism-had three main parts: *Survival of the Fittest *Evolution *Natural Selection Social Darwinism was the concept of applying Darwinism to explain society. (rich & poor, low, middle, & high classes) I CAN DESCRIBE THE BELIEF KNOWN AS SOCIAL DARWINISM AND HOW IT APPLIES TO BUSINESS

16. Inventions The Typewriter Electric Dynamo Telephone Fridge By: Christopher Shoales “The Literary Piano” Clarence Birdseye Michael Faraday Alexander Graham Bell I CAN LIST MAJOR INVENTIONS AND INVENTORS OF THE INDUSTRIAL AGE

17. The Lightbulb He also invented motion pictures & the phonograph. Invented in…1879 BY: Thomas Edison He was known as…“The Wizard of Minlow Park” “Genius is 1% inspiration, and 99% perspiration” I CAN LIST MAJOR INVENTIONS AND INVENTORS OF THE INDUSTRIAL AGE

18. J.P. Morgan Forced to buy out Andrew Carnegie for $400 million dollars Banking -Used “Interlocking Directories”-placed his board of directors with directors on other banks boards. This way a decision affects all the companies and he benefits. 1901-United States Steel Corporation This was the first billion dollar company. I CAN DESCRIBE THE WORK OF JP MORGAN

19. John D. Rockefeller The Trust-perfected by Rockefeller. Stockholders of smaller oil companies gave their stock to the Standard Oil Company. The Oil Business His motto: “Let us Prey” Rockefeller practiced “Horizontal Integration” - the process of spreading or taking over to make a profit. 1st Oil Well- Titusville, PA, By Edwin Drake-1859 “Drake’s Folly” Standard Oil – 1870 -Cleveland, Ohio I CAN SUMMARIZE THE WORKS OF J.D. ROCKEFELLER

20. The Sherman Anti Trust Act 1890 flatlyforbade combinations in restraint of trade, without distinctions between good trusts and bad trusts. Big was bad! Law was weak.It had no teeth! First time govt. stepped in to regulate trusts. The 14th Amendment- Was used by businesses and trust so they could hide behind it. Some corp. lawyers got judges to say a corp. was a legal person. I CAN DESCRIBE THE SHERMAN ANTI-TRUST ACT

21. Labor Unions “Labor unions are good…Labor unions are bad” Three Big Unions National Labor Union-1866 Knights of Labor-1869 American Federation of Labor- 1886 I CAN DESCRIBE THE HISTORY OF UNIONIZATION IN AMERICA

22. National Labor Union-1866-William Slyvis Knights of Labor-1869-Terence V. Powderly American Federation of Labor-1886-Samuel Gompers I CAN DESCRIBE THE HISTORY OF UNIONIZATION IN AMERICA

23. National Labor Union-1866 Founded By: William H. Slyvis -First Nationally organized Labor Union -allowed skilled & unskilled workers -Destroyed by the 4th panic I CAN DESCRIBE THE HISTORY OF UNIONIZATION IN AMERICA

24. Knights of Labor-1869 Founded By Terence V. Powderly “The Grandmaster Workman” “An injury to one is a concern to all” –his motto Put all into big union, allowed skilled & unskilled workers (this was a weakness) Did well until Haymarket Square Riot-1886-in Chicago “The Windy City” The bomb blast in the riot tended to associate labor unions with anarchists & terrorists I CAN DESCRIBE THE HISTORY OF UNIONIZATION IN AMERICA

25. American Federation of Labor - 1886 Led By Samuel Gompers “Show me the country in which there are no strikes & ill show you the country in which there is no liberty” Samuel Gompers-39 years as president Gomper hated socialism & loved capitalism He said he just wanted a little more…better wages, short hours, benefits, better working conditions. Unskilled workers were not allowed-because they wanted strength Labor Day was established as a legal holiday in 1894-the first Monday in September. These are called the “bread & butter” issues that unions are concerned with. I CAN DESCRIBE THE HISTORY OF UNIONIZATION IN AMERICA

26. 6 Weapons Owners use against Striking Workers • Strike Breakers / scabs • Injunction • Lockout • “Iron Clad Oaths”- “Yellow Dog Contracts” • Black List- “You’ll never work again in this town” • Company Town-co. starts their own town The company town provided housing (very high rent) and easy credit (company town) -subtle way of keeping workers in debt forever I CAN LIST WEAPONS USED BY OWNERS AGAINST STRIKING WORKERS

27. Weapons used against Owners • Strike – refusal to work • Walk out • Boycott-refusal to buy • Closed shop – is a union technique that requires a worker to join the union or they will not keep the job. I CAN LIST WEAPONS USED BY STRIKING WORKERS AGAINST OWNERS