Industry Comes of Age
By Jeanelle and May
Railways
• 1900: railroad expands from 35000 miles (1865) to
192556 miles
• railroad is costly and risky so congress split the
costs to different railroad companies
• Until companies decided precise
locations for railroad route all lands
were withheld from other users until
1887 when Grover Cleavland ended
this
• Railroad increases value of the land
and cities pop up near the railroad
but towns that the railroad didn’t
pass became ghost towns
Spanning the Continent with
Railroads
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Since the south seceded the proposed
transcontinental railroad was stopped
1862: congress commissions the Union
Pacific railroad from Omaha, Nebraska to
California
Constructing the Railroad
 increase corruption = Credit Mobilier
pockets money and bribes congress
 Construction contains many Irish
“paddies” who work 10 miles a day
 Many died from Indian attacks
Central Pacific Railroad
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Begins in Sacramento and being
promoted by the Big Four (chief
financial backers)
Collis P. Huntington (lobbyist) worked
in b/n 2 companies and profited $10
million w/out bribing congressmen
Labor is primarily Chinese (cheap,
efficient, docile and expendable) many
died from accidents
1869: completion of the railroad
Significance Railways
• Union Pacific RR = 1086 miles
• Central Pacific RR= 689 miles
• Union Pacific, mostly constructed on flat prairie land and
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could build more quickly
Marked a tremendous feat of engineering
connects West Coast to the rest of the Union
Facilitates trade with Asia
paves the way for Western growth by
penetrating the desert barrier
• Union pacific RR
Central Pacific RR
• Four other transcontinental lines
completed:
• 1. 1883 - Northern Pacific (Lake
Superior to Puget Sound)
• 2. 1884 - Atchison, Topeka, and Santa Fe
RR - (Atchison, KS to San Francisco)
• 3. 1884 - Southern Pacific (New Orleans
to San Francisco)
• 4. 1893 - Great Northern RR (Duluth to
Seattle)
• Great railroad builder James J Hill
Success and Failures
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Over investment of the land by pioneers =
bankruptcy of trusting investors
Improvements:
steel rails by Vanderbilt replace old iron
ones = safer & more economical since it
can bear a heavier load
1870: Westing house air brake increases
safety but there are still accidents
Pullman palace cars, telegraphs, doubleracking and block signals develop
Revolution by Railroads
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America connected from “sea to shining sea”
Creates enormous domestic market and many jobs
and appeals to foreign and domestic investors to
participate
Stimulates mining and increase agriculture in the west
bringing new people and supplies (immigrants)
1883: Creation of time zones preventing confusion
for RR operators
Creates millionaires “lords of the rail”
Corruption
Credit Mobilier (see slide 5)
Jay Guild: rich boomed and busted the stocks of
Erie, Kansas Pacific, Union Pacific, Texas & Pacific RR
companies
► “Stock Watering” = cheap $ making
► RR stock promoters grossly inflated claims about a
given line’s assets & profit & sold stocks and bonds
that exceed RR’s actual value
► RR companies:
► bribe judges & legislatures
► elected their own people to high offices
► & gave free passes to journalists & politicians
► RR kings: “pool” trusts- an agreement to divide the
business in a given area & share profits
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Government Bridles the Iron Horse
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RR plutocracy: people were aware of the injustice but were
slow to react
Granger: formed by farmers to fight against RR monopoly
Supreme Court: Wabash Case v. Illinois- individual states
hold no power to regulate interstate commerce
Interstate Commerce Act (1887): prohibits rebates & pools
and requires RR to publish their rates openly & forbids
unfair discrimination against shippers and outlaws charging
more for a short haul than a long one over the same time
1st attempt by congress to regulate business
Miracles of Mechanization
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1860: US is 4th manufacturing nation of the world
1894: US is 1st manufacturing nation of the world
Change due to: liquid capital (abundance) and natural resources
(ex. Coal, oil, iron)
Unskilled labor = cheap & plentiful (reliance on cheap immigrant
labor)
2nd American Industrial Revolution:
1860-1890: 440000 patents issued
Ex. Cash register, stock ticker, typewriter, refrigerator car, electric
dynamo, electric railway
Thomas Edison- “wizard of Menlo park” = electric light bulb,
electric railway, ect.
Trust Titan Emerges
• Monopolies: eliminates competition & get max profits
• Andrew Carnegie= “vertical integration” i.e. control all
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aspects of an industry
John D. Rockefeller= “horizontal integration” i.e. allied
w/ competitor to monopolize a given market
Standard oil: control oil industry & force weaker
competitors to go bankrupt
Carnegie
Rockefeller
Mr. Monopoly
Supremacy of Steel
 “Steel is king!” -1900: US was producing as
much as England and Germany combined
 1850: Bessemer Process =cheaper method of
producing steel
 Access to materials needed to produce steel,
ect. is near by
Bessemer converter
Carnegie and Other Sultans of Steel
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Andre Carnegie: poverty to wealthy
Steel business in Pittsburg: by 1900 he was
producing ¼ of the nation’s Bessemer's steel &
earning$25 million per year
J. Pierpont Morgan = wealthy from financing
the reorganization of railroads, insurance
companies, and banks & bought Carnegie
business for more than $400 million
Carnegie spent profit on public libraries,
pensions for professors, ect. (philanthropist)
Morgan expands industrial empire: $1.4 billion;
1st American billion dollar corporation
Rockefeller and the Standard
Oil Company
Oil industry (1870): kerosene is the 1st
major product of infant oil industry & one of
US’s most valuable export
Ending of whaling
1885: technology takes over ex. light bulbs
1900: gasoline- burning internal
combustion engine had clearly bested its
rival, steam & electricity
1870: Rockefeller’s Standard Oil Company
of Ohio = trust (1882) that crushed
competitors & sold superior oil at a cheaper
price
Divisions Between the Rich and the
Poor
New rich justify social position through the “Gospel of
Wealth” – “Godliness is in the league of the riches”
 “survival of the fittest” –Charles Darwin
 Views of the poor: lazy & lacking enterprise
 Rev. Russell Cornwell of Phil: rich from “Acres of
Diamonds” – “There is not a poor person in the US
who was not made poor by his own short comings.”
 Plutocracy: lawyers use the 14th Amendment
parallel in defending the trusts & judges agreed to it
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Government And Southern Industry
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1890: Sherman Anti Trust Act: forbids combinations in
restraints of trades (not enforced till 1914)
largely ineffective because no real way of enforcing the
laws
law used to curb labor unions
James Duke = huge cigarette industry (American
Tobacco Company)
Henry Grady: editor of Atlanta Constitution promotes
industrialization
Northern companies set rates that prevent the
Southerners from regaining its status
creation of jobs = blessing to Southerners
Impact of the Industrial Revolution
for the US
• Standard living improves
• Increase of immigrants
• Women: new opportunities: “Gibson Girl”
by Charles Gibon- most women worked
hard for $
• Pressures: foreign trade- industrial
machine threatened to flood domestic
market
• Increase class divisions
Labor Unions
 Workers unable to improve their conditions
because there is a large supply of unskilled
workers
 Strikes v. strikebreakers
 “ironclad oaths” –court gets involved to stop
strikes
 “yellow dog contracts”- troops get involve
 “blacklisted”
 “If workers want a better life, they can always
improve by working harder like Carnegie and
Rockefeller.”
Labor Limps Along
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National Labor Union (1886) = attracted 600000
members excluded Chinese, blacks and woman
Industrial disputes and 8 hr workday
Depression of 1873 ends disputes
Knights of Labor (1869) excluded liquor dealers, pro
gamblers, lawyers, bankers & stockbrokers: wanted
economic and social reforms led by Terence V.
Powderly
Decline:
May Day strikes (1886 Chicago) turns violent
Haymarket Square Bombing (May 1886) - bomb
thrown during a protest against police abuses
during strikes
American Federation of Labor - protects skilled
workers (who have a better bargaining position than
unskilled ones)
Demand for better wages, hours & working
conditions
1881-1900 more than 23000 strikes & loss of $450
million
1900: yield to most workers’ demands
1894: Labor Day = legal holiday