Presentation Plus! The American Republic Since 1877
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Chapter Introduction
Section 1 Rise of Industry
Section 2 The Railroads
Chapter Summary
Chapter Assessment
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Guide to Reading
Main Idea
American industry grew rapidly after the Civil War,
bringing revolutionary changes to American society.

Key Terms and Names
• gross national
product 
• Edwin Drake 
• laissez-faire 
• entrepreneur 
• Morrill Tariff 
• Alexander
Graham Bell 
• Thomas Alva
Edison
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Guide to Reading (cont.)
Reading Strategy
Organizing As you read about the changes
brought about by industrialization, complete
a graphic organizer similar to the one on page
308 of your textbook listing the causes of
industrialization. 
Reading Objectives
• Identify the effects of expanding population
on industry. 
• Explain the effects of technological innovations
such as the telephone and telegraph on
American development.
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Guide to Reading (cont.)
Section Theme
Economic Factors The free enterprise system
nurtured the growth of American industry.
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The United States Industrializes
• With the end of the Civil War, American
industry expanded and millions of people
left their farms to work in mines and
factories. 
• By the early 1900s, the United States
had become the world’s leading
industrial nation. 
• By 1914 the gross national product
(GNP), or total value of goods and
services produced by a country, was eight
times greater than at the end
of the Civil War.
(pages 308–309)
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The United States Industrializes
(cont.)
• Water, timber, coal, iron, and copper are
natural resources found in the United
States that led to the country’s industrial
success. 
• Transcontinental railroads increased
industrialization by bringing settlers
and miners to the West and moving
resources to the factories in the East. 
• Petroleum could be turned into
kerosene for lanterns and stoves.
(pages 308–309)
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The United States Industrializes
(cont.)
• The demand for kerosene created the
American oil industry. 
• In 1859 Edwin Drake drilled the first oil
well near Titusville, Pennsylvania. 
• As oil production increased, so did
economic expansion. 
• Between 1860 and 1910, the population
of the United States almost tripled. 
• This provided a large workforce and a
greater demand for consumer goods.
(pages 308–309)
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The United States Industrializes
(cont.)
How did the construction of the
transcontinental railroad add to an increase
in industrialization?
The railroads brought settlers and miners
to the West to work and moved the
resources back to the factories in the East.
(pages 308–309)
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Free Enterprise
• Laissez-faire, a French phrase that
means “let people do as they choose,”
was a popular idea in the late 1800s. 
• Many Americans believed the
government should not interfere with
the economy. 
• Instead, they wanted supply and
demand to regulate prices and wages. 
• Entrepreneurs risked their capital to
organize and run a business.
(page 310)
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Free Enterprise (cont.)
• In the late 1800s, entrepreneurs were
attracted to manufacturing and
transportation fields. 
• As a result, hundreds of factories and
thousands of miles of railroad were
built. 
• Another important source of private
capitol was Europe. 
• Foreign investors saw more
opportunity for profit in the U.S. than
they did at home.
(page 310)
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Free Enterprise (cont.)
Why was Europe an important source of
private capital?
Foreign investors saw more opportunities
for growth and profit in the U.S. than at
home.
(page 310)
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Government’s Role in Industrialism
• In the late 1800s, state and federal
government had a laissez-faire attitude
by keeping taxes and spending low and
by not imposing regulations on industry. 
• The government did not control wages
or prices. 
• It adopted policies to help industry. 
• Since the early 1800s, the
northeastern states and southern
states debated on economic policies.
(pages 310–311)
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Government’s Role in Industrialism
(cont.)
• Northerners wanted high tariffs to protect
their industries from foreign competition. 
• Southerners opposed tariffs to keep
the cost of imported goods down. 
• The Civil War ended the economic
debate. 
• After the south seceded, the Morrill
Tariff was passed, which reversed
years of declining tariffs.
(pages 310–311)
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Government’s Role in Industrialism
(cont.)
• The high tariffs contradicted laissez-faire
policies and harmed many Americans. 
• As the United States raised tariffs on
foreign products, other countries
responded by raising tariffs against
American products. 
• American companies who sold goods
overseas, especially farmers, were hurt
by these high tariffs.
(pages 310–311)
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Government’s Role in Industrialism
(cont.)
• Many business leaders and members of
Congress felt tariffs were necessary to
protect American industry against the
already established European factories. 
• By the early 1900s, American
industries were larger and highly
competitive. 
• Many business leaders began to
encourage free trade, believing they
could compete internationally and
succeed.
(pages 310–311)
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Government’s Role in Industrialism
(cont.)
What were some problems caused by high
tariffs?
When other countries placed high tariffs
against American goods, it hurt American
companies selling products overseas. Rural
American farmers were especially hard hit
by the tariffs, causing many of them to
leave farms and take factory jobs.
(pages 310–311)
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New Inventions
• New inventions increased America’s
productivity, which in turn produced
wealth and job opportunities. 
• In 1876 Scottish-American inventor
Alexander Graham Bell invented the
telephone. 
• In 1877 Bell and his associates
organized the Bell Telephone
Company, which later became the
American Telephone and Telegraph
Company (AT&T).
(pages 311–312)
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New Inventions (cont.)
• In the late 1800s, Thomas Alva Edison
invented or perfected the phonograph,
the light bulb, the electric generator, the
dictaphone, the mimeograph, and the
motion picture. 
• In 1882 the Edison Electric Illuminating
Co. became a new industry and began
supplying electric power to customers
in New York City.
(pages 311–312)
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New Inventions (cont.)
• The clothing industry increased
productivity in the mid-1800s with the
introduction of the Northrop automatic
loom, the power driven sewing machine,
and cloth cutters. 
• Mass production in the shoe industry
allowed large factories to produce
shoes more cheaply and efficiently than
local cobblers. 
• The savings were then passed on to
the consumer.
(pages 311–312)
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New Inventions (cont.)
How did technology cause the prices of
shoes to go down?
Large factories could mass-produce shoes
more quickly and cheaply than local
cobblers could, resulting in lower prices.
(pages 311–312)
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Checking for Understanding
Define Match the terms on the right with their definitions on
the left.
__
B 1. policy that government should
interfere as little as possible in
the nation’s economy
A. gross national
product
__
A 2. the total value of goods and
services produced by a
country during a year
C. entrepreneur
__
C 3. one who organizes, manages,
and assumes the risks of a
business or enterprise
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B. laissez-faire
Checking for Understanding (cont.)
Explain how an abundance of natural
resources contributed to economic growth
in the United States in the late 1800s.
Americans did not have to import
resources from other countries, saving
resources for internal growth.
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Close
Explain the effects of technological
innovations such as the telephone
and telegraph on American industrial
development.
Guide to Reading
Main Idea
After the Civil War, the rapid construction of
railroads accelerated the nation’s industrialization
and linked the country together. 
Key Terms and Names
• Pacific Railway
Act 
• Grenville Dodge 
• Leland Stanford 
• Cornelius Vanderbilt 
• time zone 
• land grant 
• Jay Gould 
• Crédit Mobilier 
• James J. Hill
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Guide to Reading (cont.)
Reading Strategy
Organizing As you read about the development
of a nationwide rail network, complete a graphic
organizer similar to the one on page 314 of your
textbook listing the effects of this rail network on
the nation. 
Reading Objectives
• Discuss ways in which the railroads spurred
industrial growth. 
• Analyze how the railroads were financed
and how they grew.
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Guide to Reading (cont.)
Section Theme
Individual Action The railroads provided new
ways for some Americans to amass wealth.
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to listen to the audio again.
Linking the Nation
• After the Civil War, railroad construction
dramatically expanded. 
• In 1862 President Abraham Lincoln
signed the Pacific Railway Act, which
provided for the construction of a
transcontinental railroad by the Union
Pacific and Central Pacific railroad
companies. 
• To encourage rapid construction, the
government offered each company land
along its right of way.
(pages 314–316)
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Linking the Nation (cont.)
• In 1865 the Union Pacific, under engineer
Grenville Dodge, pushed westward from
Omaha, Nebraska. 
• Weather, labor, money, and engineering
problems hampered the project. 
• The workers included Civil War veterans,
Irish immigrants, farmers, miners, cooks,
and ex-convicts. 
• Camp life was dangerous.
(pages 314–316)
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Linking the Nation (cont.)
• Four merchants known as the “Big Four”
invested in the Central Pacific Railroad. 
• They each bought stock in the railroad
and eventually made a fortune. 
• One of them, Leland Stanford,
became governor of California,
founded Stanford University, and later
became a United States senator. 
• Because of a labor shortage, the
Central Pacific Railroad hired about
10,000 workers from China.
(pages 314–316)
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Linking the Nation (cont.)
How did the government encourage rapid
construction of the railroads?
The government offered each railroad
company land. Competition occurred
between the two railroad companies as
each tried to get as much land and money
as possible.
(pages 314–316)
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Railroads Spur Growth
• Railroads encouraged the growth of
American industry. 
• They linked the nation and increased
the size of markets. 
• The railroad industry stimulated the
economy by spending large amounts
of money on steel, coal, and timber. 
• In the early 1800s, most railways
served only local needs, resulting in
many unconnected rail lines.
(pages 316–317)
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Railroads Spur Growth (cont.)
• Eastern capitalists wanted to create a
single rail transit system from the many
smaller railroads. 
• Eventually seven systems controlled
most of the railroad traffic. 
• The most famous railroad consolidator,
Cornelius Vanderbilt, merged three
short New York railroads to form the New
York Central in 1869. 
• He was the first to offer direct rail service
from New York City to Chicago.
(pages 316–317)
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Railroads Spur Growth (cont.)
• In 1883 rail service became safer and
more reliable when the American Railway
Association divided the country into four
time zones, or regions, where the same
time was kept. 
• Large integrated railroad systems
provided increased efficiency, a
decrease in time spent in long distance
travel, and it united Americans from
different regions.
(pages 316–317)
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Railroads Spur Growth (cont.)
What were the benefits of integrated
railroad systems?
Integrated railroad systems were equipped
to shift cars from one section of the country
to another and made long distance
transportation quicker. It also helped unite
people from different regions.
(pages 316–317)
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The Land Grant System
• Land grants were given to railroad
companies by the federal government
to encourage railroad construction. 
• Railroad companies like the Union
Pacific and Central Pacific were able
to cover all their building costs by
selling the land to settlers, real estate
agencies, and other businesses.
(page 317)
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The Land Grant System (cont.)
Why were land grants necessary?
The building and operating of railroad lines
required more money than most private
investors could raise on their own.
(page 317)
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Robber Barons
• The wealth of railroad entrepreneurs led
to accusations that they had acquired
their wealth through illegal means. 
• One of the entrepreneurs with the worst
reputation was Jay Gould, who used
information he obtained as a railroad
owner to manipulate stock prices to his
benefit. 
• Railroad investors realized they could
make more money through land grants
than by running a railroad, so many
investors bribed members of Congress
to vote for more land grants.
(pages 317–318)
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Robber Barons (cont.)
• In 1872 corruption in the railroad system
became public with the Crédit Mobilier
scandal. 
• Several stockholders of the Union
Pacific set up the Crédit Mobilier, a
construction company. 
• The investors signed contracts with
themselves. 
• The company greatly overcharged
Union Pacific, and the railroad agreed
to pay the inflated bills.
(pages 317–318)
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Robber Barons (cont.)
• When the railroad was completed, the
investors had made a fortune, but the
railroad was almost bankrupt. 
• Congress agreed to give additional
grants to the railroad after several
members of Congress were given
shares in Union Pacific at a price well
below market value. 
• An investigation implicated several
members of Congress, including
James Garfield, who later became
president.
(pages 317–318)
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Robber Barons (cont.)
• Not all railroad entrepreneurs were
corrupt. 
• James J. Hill built the Great Northern
Railroad without any federal land
grants or subsidies. 
• It became the most successful
transcontinental railroad and the
only one not to go bankrupt.
(pages 317–318)
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Robber Barons (cont.)
What was the Crédit Mobilier scandal?
(pages 317–318)
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Robber Barons (cont.)
Several stockholders of the Union Pacific set up
the Crédit Mobilier, a construction company.
The investors signed contracts with themselves.
The company greatly overcharged Union Pacific
and the railroad agreed to pay the inflated bills.
When the railroad was completed, the investors
had made a fortune, but the railroad was almost
bankrupt. Congress agreed to give additional
grants to the railroad after several members of
Congress were given shares in Union Pacific at
a price well below market value. An investigation
implicated several members of Congress. (pages 317–318)
Checking for Understanding
Define Match the terms on the right with their definitions on
the left.
__
A 1. a geographical region in
which the same standard time
is kept
__
B 2. a grant of land by the federal
government especially for
roads, railroads, or
agricultural colleges
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A. time zone
B. land grant
The New York Stock Exchange In 1792 business-people met in
New York City to establish a stock exchange–a marketplace for
buying and selling stock in companies. At first, the new stock
exchange was located under a buttonwood tree on Wall Street.
The organization took its present name, the New York Stock
Exchange, in 1863. Huge amounts of the capital required for the
nation’s industrialization after the Civil War passed through the
New York Stock Exchange. As stock trading grew, investors from
across the nation needed financial news. In 1882 Henry Charles
Dow and Edward D. Jones founded Dow Jones & Company. This
new company sent bulletins on the day’s business to Wall Street’s
financial houses. The day’s last delivery contained a news sheet,
which became The Wall Street Journal in July 1889.
Today, The Wall Street Journal has the largest daily circulation
of any newspaper in the United States.
Carnegie Steel
OPEC
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In 1898, although Carnegie Steel’s output had
risen threefold over the previous few years, the
number of workers needed to produce the steel
had decreased by 400. The use of electricity to
drive automatic machinery was largely
responsible for the decline in the workforce.
Today the Organization of Petroleum Exporting
Countries (OPEC) tries to maintain stability in
the oil industry to ensure profits. This is called
a cartel. Since 1970 OPEC has controlled
approximately one-third to one-half of the world’s
oil supply. In 2001 member nations included
Algeria, Indonesia, Iran, Iraq, Kuwait, Libya,
Nigeria, Qatar, Saudi Arabia, the United Arab
Emirates, and Venezuela.
A century after the railroad strike of 1877,
another group of transportation workers, air
traffic controllers, went on strike demanding
higher wages and fewer working hours. In
August 1981, over 11,000 striking air traffic
controllers were fired.
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Time Tales Opponents of standard time called
local time “God’s time” because it was based
on the laws of nature–the sun’s position in the
sky. Not until 1918 was Congress able to pass
a law that standardized time zones.
Hard Work Strict rules were enforced in the
workplace in the late 1800s. Many bosses
forbade singing, drinking, joking, smoking,
or conversation on the job. They also denied
immigrant workers time to celebrate their
national holidays and holy days, and they did
not accommodate workers who did not want
to work on the Sabbath.
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