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Effects of the Railroads • Expansion and Connection At the end of the Civil War, most rail lines were located in the Midwest and Northeast. The completion of the transcontinental railroad spurred the growth of rail lines to all regions of the country. Rail lines in Southern states enabled industry there to expand. • Economic Effect Railroads created new markets for goods and spurred the growth of new industries. The construction of railways and the manufacture of trains required steel, coal, timber, and other materials, which boosted the economy. New jobs were created to build and maintain tracks, operate trains, and serve the public. • Travel Time A trip between San Francisco and New York, which once might have taken six months by wagon train, took about a week by train. • Time Zones Traditionally, each town set its clocks by the sun’s position at noon. The confusing mix of local times along the railway interfered with train scheduling and safety. To make rail service safer and more reliable, the American Railway Association divided the country into four time zones in 1883.
Railroad Growth • How did railroad growth and economic growth become so closely interrelated? Improved transportation made trade faster and easier, and opened new markets for products. They will probably also observe that railroad construction and operations generated thousands of jobs both with railroad companies and with related businesses, allowing those employees to have money to spend on consumer goods. As railroads grew, so did the power of the economy, and economic growth generated increased business for railroads. Talk with your group about a list of jobs that would be associated with railroad work.
Robber Baron-Squashing competition by acquiring competitors by charging prices so low their smaller competitors can’t compete in order to create monopolies. Then, eventually raising prices.
Robber Barons • The great wealth many railroad entrepreneurs acquired in the late 1800s led to accusations that they had built their fortunes by swindling investors and taxpayers, bribing officials, and cheating on their contracts and debts. This led to their being termed “robber barons.”
Robber Barons What corrupt activities does the cartoonist suggest that this industrialist engages in? trickery and lying According to the cartoonist, what people were hurt by the actions of robber barons? bankers, stockbrokers, small railroad operators, and inexperienced investors
Who Were the Robber Barons? • Jay Gould Infamous for manipulating stock, Jay Gould was the most notoriously corrupt railroad owner. He became involved in the budding railroad industry in New York during the Civil War, and in 1867 became a director of the Erie Railroad. Over the next two years, he and others fraudulently manipulated the railroad’s stock prices to keep opposing railroad tycoon Cornelius Vanderbilt from gaining control of the railroad. Gould also engaged in actions in the gold market that led to a financial panic and recession. By 1874, Gould had begun buying up new railroads in the West, and he eventually owned more than 15,000 miles of railroad track around the nation. • Cornelius Vanderbilt After beginning his career in the steamship business, Vanderbilt became involved in railroads in the 1850s. He soon owned several rail lines around New York, and in 1873 became the first railroad proprietor to offer New York City–Chicago rail service. • Russell Sage A successful financier, Sage became involved in railroads after lending money to Wisconsin’s La Crosse Railroad. He served as vice president of the line, which eventually extended into Chicago, St. Paul, and Milwaukee. He later shared control of New York City’s elevated lines with Gould. • Cyrus Field A pioneer in the telegraph industry, Field also held stakes in the railroads. He served as president of the New York Elevated Railroad Company in the late 1870s and, with Gould, contributed to the development of the Wabash Railroad in the Midwest.
Robber Barons • Who are these men? What is the cartoonist’s opinion of them? This cartoon shows four major robber barons—Jay Gould, Cornelius Vanderbilt, Russell Sage, and Cyrus Field. They are scoundrels, powerful men who think they can split the country among them.
Railroad Industrialists • Honest Operator James J. Hill operated the Great Northern Railroad from Wisconsin to Washington in the West, without federal help. Many railroads hauled lumber and farm products east, but carried nothing back west. Hill filled his westbound railcars with cotton, textiles, flour, and other products, for export to Asia, which increased his profit. • Western Leaders The “Big Four” who invested in the Central Pacific railroad also became wealthy and influential. Investor Leland Stanford, who was the railroad’s president for over three decades, proved especially important in the history of California. He served as the state’s governor from 1861–1863, and later as U.S. Senator. In 1885, he and his wife founded Stanford University.
Railroad Industrialists How might you evaluate the accomplishments of railroad industrialists? The successes of the robber barons in building and expanding railroads helped connect the country and outweighed their negative aspects. Alternatively, students may note that the corrupt practices of robber barons, particularly Gould, damaged the country through financial panic and depression.
Railroad Industrialists • Do you think that the accomplishments of railroad industrialists were mostly positive or mostly negative? Were they captains of industry or robber barons? Railroad industrialists helped connect the country and encouraged positive economic growth. They may alternatively argue that railroad industrialists engaged in illegal activities and cheated taxpayers out of money, leaving a mostly negative legacy.
Discussion • How has the use of railroads changed between the past and today? Railroads still carry people and goods from place to place, but students should understand that long-distance railroad travel has been largely overtaken by automotive and air travel. Point out that in many large cities, people commute from suburbs to work in trains.
Activity • Write a group activity about a Robber Baron.
