The Iron Colt Becomes An Iron Horse
RR building exploded after the Civil War.
US government subsidized the first two
How land-grants worked
Why subsidies were necessary.
In all RR got over 200 Mill acres from
Feds and states—area larger than the
state of Texas.
Benefits of Subsidies
US benefited from giving land to
RRs promoted immigration
promoted of westward migration.
RR gave the government a break
on mail and military transport.
Free land a cheap way to
Spanning The Continent With Rails
After secession, Congress Commissioned
a transcontinental RR.
Union Pacific and Central Pacific.
20 square miles of land for each mile of
Building began in earnest in 1865 after the
Credit Mobiler scandal
Completion of transcontinental Railroad
CP was led by "The Associates," familiarly known as the "Big Four," who pushed the project to
completion with its share of rancor and scandal.
Leland Stanford became president and later served as California governor and U.S. senator. He
Stanford University in honor of his son, who died at 16.
Collis Huntington , vice president, secured suppliers for the railroad and attracted investors to fund it.
Charles Crocker was head of construction and got the railroad built through torturous terrain.
Mark Hopkins handled the railroad's accounts and maintained harmony among the three younger men
Building the Railroads
On both lines mostly poor
immigrants did the work.
Irish were predominant on
the UP line
Chinese on the Central
Pacific line. Often beset
Moving tent cities
Hundreds of labors died.
Binding The Country With Railroads
Four other Transcontinental lines were
built. None received cash grants, but
three received land grants.
Many other RR went bankrupt and fleeced
Towns competed with bribes to RR
promoters to get the RR to come to their
town. Many of these RR took the money
Cornelius Vanderbilt Railroad
Cornelius Vanderbilt welded
together and expanding older
Had made a huge fortune in
steamboats and used this wealth
to fund RRs.
He was coarse, ill educated,
ungrammatical and ruthless, but
knew how to make money.
Railroad Consolidation and
Significant Improvements to RR facilitated
growth of railroads:
Standard gauge track:
Pullman sleeping cars: made travel more
comfortable for passengers—1860s.
Trains still dangerous.
Revolution By Railways
Transcontinental RR caused many changes:
Stimulated American economy
Stimulated manufacturing and industrialization
Westward expansion of agriculture
Settlement of the unsettled areas
Changed Western ecology
Wrongdoing in Railroading
The railroads were
rife with corruption
Trusts and Pooling
Government Bridles The Iron Horse
Farmers resented the RR
Generally, the country was slow to respond to
abuses of RR.
Depression of 1870 spurred the government into
Grange put pressure on many Midwestern
legislatures to regulate the RR monopoly.
State laws held unconstitutional in the famous
Wabash case. Why?
Interstate commerce could not be regulated by states
Interstate Commerce Act
Interstate Commerce Act in 1887.
Prohibited rebates and pools
Required RR to publish their rates openly
Outlawed discrimination against shippers
outlawed charging more for short hauls than for long
Set up the Interstate Commerce Commission to
administer and enforce
Was not a revolutionary victory; simply modest
Did provide an orderly forum.
water-shed in establishing the power of
government to regulate business
Miracles of Mechanization
1865-1895 saw a huge industrial boom.
Much more liquid capital
natural resources started to be exploited
Massive immigration provided cheap unskilled labor
American inventions made businesses and factories
telegraph, mass production, cash register, stock ticker .
Telephone (1876) and expanded telegraph;
communications revolution. “Telephoniacs”
Edison and Electric Light
The Trust Titan Emerges
Businesses, left alone, hate competition.
Ways to avoid competition.
Vertical Integration--Andrew Carnegie’s Steel
operations. More effeciant
Horizontal Integration, wipe out competiation
—Rockefeller and Standard Oil
Trusts—Rockefeller “ Let us Prey”
Interlocking Directorates—J.P. Morgan put
bank managers on all board of directors
The Supremacy Of Steel
Steel became King after the Civil War.
Foundation for much of the industrial
America biggest Steel producer by 1900.
Produced 1/3 of the world’s steel.
Why America dominant.
Carnegie And Other Sultans Of Steel
King of American Steel
Carnegie cleared 25 Mil.
a year. Huge fortune
Sold out to J.P. Morgan
for 400 Million.
Spent the rest of his life
giving money away
Rockefeller and Standard Oil
Oil industry emerges after the
Rockefeller and Standard Oil.
Big believer in commercial
By 1877 controlled 95% of all
the old refineries in the
The Gospel of Wealth
Social obligations of new
Charles Graham Sumner
Get richer; none to poor
Rich deserve to be rich;
poor deserve to be poor
Contempt for poor who had
“earned” their own poverty
Carnegie’s Gospel of Wealth
Inequality is inevitable and
Wealthy should act as
“trustees” for their “poorer
Wealthy had to prove they
deserved their wealth.
Give back to the community
as a whole, not to individuals
Carnegie gave away millions
Government Tackles The Trust Evil
Sherman Anti Trust Act of 1890.
Forbids combinations in restraint of trade.
Did not prove very effective because went after
bigness and not badness.
Not very effective because penalties weak and
Biggest effect was unintended--Was used against
Importance of the law was not its immediate
effect but the shift in thinking that it represented.
The South In The Age Of Industry
South did not benefit much
Produced smaller % of Manufacturing
goods than pre-Civil War
Barriers to Southern development
Railroad rate discrimination
Pros and Cons
The Impact Of Industrialization
Increased wealth of nation
Standard of living rose sharply
Workers enjoyed many more physical comforts
Urban centers mushroomed
Jeffersonian Ideal of nation of small farmers died
Concept of time changed.
Many more women in the workforce
Delayed marriages and smaller families
New class system
Workers becoming more dependent and more
In Unions There is Strength
Surplus of unskilled labor.
Individual workers were powerless to bargain
Early Unions had little power, as well.
strike-breakers, lawyers and thugs (“Oh my!”)
Courts issued injunctions against strikes based
on Anti-Trust laws.
Middle-class was largely unsympathetic.
Labor Limps Along
Unions strengthened after the Civil War.
National Labor Union organized in 1866
and did well,
600,000 members, both skilled and unskilled
Did not recruit women or blacks
Goals: arbitration of industrial disputes, 8-hour
damaged by the depression in the 1870s.
Knights of Labor
Knights of Labor took over
where the National Labor Union
had left off.
Sought to include all labor in one
They stayed out of politics, but
campaigned hard for economic and
Their biggest issue was the 8-hour
Won that fight from a number of
industries and their ranks swelled.
An injury to one is the concern of all!
Unhorsing The Knights Of Labor
Knights of Labor riding for a fall
The Haymarket Square incident in Chicago in
Fusion of both skilled and unskilled labor.
Skilled workers abandoned the Knights for
the American Federation of Labor.
This dealt the Knights a death blow, and
the union slowly withered.
The AF Of L To The Fore
AF of L --1886
Brain child of Samuel Gompers.
President of the union every year
for 38 years but one.
Confederation of self-governing
independent unions for skilled
Gompers political strategy.
Major goal was closed shop.
Weapons were walk-outs and
The AF Of L To The Fore
Let unskilled workers,
blacks and woman fend
500,000 members by
1881-1900 over 23,000
By 1900, increased but
1894—Labor Day holiday.
Most employers still
fought labor aggressively.
Management vs. Labor
P. R. campaign