Chapter 14 – Section 2 The Railroads

1. Chapter 14 – Section 2The Railroads

2. Linking the Nation Railroad boom began in 1862 Abraham Lincoln signs the Pacific Railroad Act, made possible by secession - Union Pacific - Central Pacific Bill was set up to create competition between the two companies. Where they managed to construct their railroads, they would receive: Public lands Public money

3. Union Pacific and Grenville Dodge Grenville Dodge – engineer and former Union General Worked for the Union Pacific Union Pacific Line started from Omaha, NE in 1865 10,000 animals 8,000 – 10,000 laborers Workers included Civil War veterans, displaced farmers and workers, Irish immigrants, Chinese immigrants

5. The Big Four and the Central Pacific Theodore Dehone Judah – convinced California’s legislature to organize a state railroad convention Result was the Central Pacific Railroad Company “Big Four” were those who bought stock in the Central Pacific Railroad Company Leland Stanford Charley Crocker Mark Hopkins Collis P. Huntington Central Pacific line started in Sacramento, California

6. Railroads Spur Growth Linking the nation creates a larger market for products Investment in railroads delivers a great deal of stimulus to the economy Railroads must purchase: steel coal timber tools animals food for animals etc… First big business, first large investment opportunity for large financial markets, and first industry to develop large-scale management bureaucracy

7. Linking Other Lines Most railroads had been built piecemeal, by various companies for specific purposes Eventually, linking them becomes the next logical step From 1865 to 1900, railroads consolidate Go from many hundreds of small railroad companies to approximately seven Cornelius Vanderbilt – created first direct service between New York and Chicago, built Grand Central in NY

8. Benefits of a National System Our four time zones came from the American Railway Association Congress made them law in 1918 Why? Need standardized time to avoid railroad accidents Connecting the entire nation made everything cheaper, including travel, food, products, etc. Also began to knit the many distinct regions of America into a more unified nation

9. The Land Grant System Difficulty with building a railroad line is the difficulty of procuring capital capital – (n) wealth in the form of money or assets land grant – giving government land to another entity, in this case railroad corporations Approximately 148 million acres of public land were given to railroad companies between 1850 and 1870 In general, highly successful in getting railroads built

10. Robber Barons Derogatory term for those who made fortunes in the railroad industry Widespread belief that these people had cheated investors, taxpayers, their own customers, and bribed government officials Jay Gould – known for “insider trading”, using information to which he had access to manipulate stock prices Worth $100 million at his death Vast majority of his businesses failed Government involvement in the railroad industry made bribery pay very well

12. CréditMobilier Scandal Financial scam involving Transcontinental Railroad see p. 446 • In the simplest terms, congressmen used government money to pay themselves for building the Transcontinental Railroad • Investors made several million dollars, and included: • Vice President Schuyler Colfax • Speaker of the House James G. Blaine • Future president James Garfield • Congressman Oakes Ames was considered the mastermind

13. The Great Northern • Created by James J. Hill • Railroad from St. Paul, MN to Everett, WA • Built with no federal land grants or subsidies • Offered low fares to homesteaders who would settle next to the railroad • Most successful of the transcontinental railroads, and the only one which did not eventually go bankrupt