8 Your Initials Pg. 530-532 Building the Transcontinental Railroad.
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Transcript of 8 Your Initials Pg. 530-532 Building the Transcontinental Railroad.
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8 Your InitialsPg. 530-532
Building the Transcontinental Railroad
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ID: In 1865 only 35,000 miles of track, by 1900 up to 192,556 which is more than all of Europe; Government needed to help subsidize the building process
Significance:• Reasons government subsidies were needed for the transcontinental
railroad– It was costly and risky– Unprofitable until areas around it could be built up– Caused advance for military and postal reasons
• Beneficial returns of government grants– Preferential rates for postal service & military traffic– Land grants avoided new taxes– Railroads can profit from selling land– Villages on rail lines become flourishing cities
• Reasons for transcontinental railroad– Binds west coast with rest of the country
• Frontier villages touched by the railroad become flourishing cities• Welded the West Coast more firmly to the Union• Facilitated a flourishing trade with Asia• Penetrated arid barrier of the deserts• Paved way for growth of the West
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8 Your InitialsPg. 531-532
Union Pacific and Central Pacific Railroad
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ID: The two companies chosen to build the first transcontinental railroad. Union Pacific starting in Omaha, NE moving west, Central Pacific moved east starting from Sacramento, CA
Significance:• For each mile of track company gets 20 square
miles of land• Received $16,000 loan for flat land, $48,000
for mountains• Life of railroad builders
– Worked at frantic pace– Fought hostile Native Americans– Lived in tented towns – “hells on wheels”
• “Wedding of the rails” took place on May 10, 1869 – Promontory, Utah just near Ogden
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8 Your InitialsPg. 534-535
Cornelius Vanderbilt
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ID: Made millions in steamboating, turned genius to railroads, controls most of track and amassed $100 Million fortune
Significance:• Expands the older eastern tracks to improve
ability to trade in the west• Offered superior service at lower prices• One of the most powerful of the time
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8 Your InitialsPg. 535
Railroad improvements
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ID: Spearheaded by Vanderbilt, railroad industry standardizes to the benefit of companies and make other improvements
Significance:• Steel rail
– Safer and more economical than iron• Standard gauge track
– Eliminated expense and inconvenience of numerous changes between lines
• Air breaks• Pullman Palace Cars
– Travel in deadly style• Still fatal accidents occur near-daily
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8 Your InitialsPg. 535-536
How Railroads spurred industrialization
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ID: stitching the country together by rail creates enormous domestic market for American raw materials and manufactured good;
Significance:• Perhaps largest integrated national market area in the
world• Huge empire of commerce beckoned to foreign and
domestic investors alike and businesspeople who could dream on continental scale
• ways the railroads spurred industrialization– Opened up new markets– Generated most orders for new steel industry– Stimulated mining and agriculture
• Farm settlements paralleled railroads– Boon for cities– Stimulates immigration
• Time itself is bent with railroad time– Cities and towns had “local” time– Railroads standardized times for scheduling– Break country into four time zones
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8 Your Initials Pg. 536; digitalhistory.com
Jay Gould
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ID: master of stock watering, regarded as a master of bribery and insider stock manipulation
Significance:• Boomed and busted stocks of four railroads• Prototype of “robber barons”• Reckless speculator • He paid off President Grant's brother-in-law to learn
the president's intentions about government gold sales;
• he bribed members of New York's legislature; and he tried to corner the gold market.
• he was one of the architects of a consolidated national railroad and communication system.
• One of his major achievements was to lead Western Union to a place of dominance in the telegraph industry.
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8 Your InitialsPg. 536-537
Stock Watering
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ID: Inflating claims of rail’s profitability to lure investors and drive up prices;
Significance:• Favorite device of railroad moguls to
manipulate investors and make money• After driving up prices, they sold stocks
and bonds in excess of the actual value• Public interests was frequented
trampled underfoot as railroad titans waged the brutal wars
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8 Your InitialsPg. 537-538
Wasbash case
(1886)
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ID: Supreme Court rules that individual states had no power to regulate railroads and interstate commerce
Significance:• Farmers and other groups feared the growing
power of the railroad companies and owners at expense of the “little guys”
• Under pressure many Midwestern states begin to try to regulate the railroad monopoly
• The federal government would have to step in and regulate
• Passes Interstate Commerce Act in 1887
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8 Your InitialsPg. 538
Interstate Commerce Act
(1887)
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ID: Passed to regulate railroads; prohibited rebates and pools and required that railroads to publish their rates openly; forbade unfair discrimination against shippers; outlaws charging more for a short haul than a long on along the same line; sets up Interstate Commerce Commission (ICC)
Significance:• Provided orderly forum where competiting business interests could
resolve their conflicts in peaceable ways• Country could now avoid ruinous rate wars among the lines• Tended to stabilized, not revolutionize the existing business system• Red – Letter law
– First attempt by Washington to regulate business in the interest of society at large
– Heralded the arrival of a series of independent regulatory commissions in the next century
– Government would commit of monitoring and guiding the private economy
– Foreshadowed the doom of freewheeling business practices and served notice that there was a public interest in private enterprise that the government was bound to protect
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8 Your InitialsPg. 538-539
Upsurge in Manufacturing
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ID: Postwar industrial expansion, partly a result of the railroad network, rapidly began to assume mammoth proportions
Significance:• Four main causes in the upsurge
– Liquid Capital– Natural resources– Massive immigration– American ingenuity
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8 Your InitialsPg. 539
Alexander Graham Bell
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ID: Inventor of the Telephone
Significance:• Thought he could make telegraph lines “talk”• America speedily turned into a nation of
“telephoniacs”• Revolutionizes communications
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8 Your InitialsPg. 539
Telephone
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ID: new means of communication invented by Alexander Graham Bell, allows for people speak directly to each other at great distances
Significance:• Gigantic communications network built as a
result• Women flood into work place as “number
please” operators on the switchboardsOperators at work
Source: www.americaslibrary.com: 2/3/07;
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8 Your InitialsPg. 539
Thomas Alva Edison
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ID: Prolific inventor and director of an “invention factory” New Jersey
Significance:• Responsible for
– Phonograph – mimeograph – Dictaphone – Movies – Light bulb– Electric distribution
• Make electricity safer and cheaper• People used to sleep an average of 9 hours a
day, with light bulbs slept just over 7• Turns night into day
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8 Your InitialsPg. 539-540
Vertical Integration
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ID: Method of developing a monopoly pioneered by Andrew Carnegie
Significance:• Combining all phases of manufacturing
from mining to marketing into one company
• Goal to improve efficiency by making suppliers more reliable, controlling the quality of products at all stages of production and eliminating middlemen’s fees
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8 Your InitialsPg. 539-540
Horizontal Integration
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ID: Method of developing a monopoly pioneered by J.D. Rockefeller
Significance:• Allying with competitors to monopolize a
given market• Used trusts to gain control
– Smaller companies would give stock to larger company’s board of directors
– Board would then be able to control all competition
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8 Your InitialsPg. 540
Bessemer Process
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ID: Method of making cheap steel
Significance:• Process to eliminate impurities in steel• Makes steel industry possible• America one of few places in the world
where one could find relatively close together abundant coal for fuel, rich iron ore and other essential ingredients
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8 Your InitialsPg. 539-541
Andrew Carnegie
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ID: The steel king
Significance:• Brought to America by his impoverished parents in
1848 and quickly worked up way up the ladder of success
• Acquired some capital and entered the steel business in Pittsburgh
• Gifted organizer and administrator• Succeeded by picking high class-associates and by
eliminating and middle-men• Was not a monopolist and disliked monopolistic trusts• By 1900 was producing ¼ of Bessemer steel• After being bought out, dedicated the remaining yers
of his life to giving away money for public libraries, pensions for professors and other such philanthropic purposes
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8 Your InitialsPg. 541
J.P. Morgan
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ID: the Bankers’ banker, financed the reorganization of railroads, insurance companies and banks
Significance:• Established an enviable reputation for
integrity• Did not believe that “money power” was
dangerous, except when in dangerous hands• Organizes bailout of government under
Cleveland• Symbolized to many people the power and
arrogance of “finance capitalism”
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8 Your InitialsPg. 541
U.S. Steel Corporation
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ID: Morgan buys out Carnegie Steel, adds other holdings and launches U.S. Steel
Significance:• Capitalized at $1.4 Billion • America’s first ever billion dollar corporation
– Larger sum that total estimated wealth of the nation in 1800
• Will come to dominate steel industry
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8 Your InitialsPg. 541-542
Drake’s Folly
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ID: The first well in Pennsylvania to pour out oil
Significance:• Almost overnight an industry was born• More wealth to take out of the Earth
– More useful wealth from earth than all of the gold extracted by the 49ers
• Kerosene first major product of the infant oil industry
• Oil business booms in 1870s• Internal combustion engine expands industry
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8 Your InitialsPg. 542-543
John D. Rockefeller
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ID: Dominates the oil industry and organized Standard Oil Company
Significance:• Sought to eliminate the middlemen and
squeeze out competitors• Flourished in era of completely free enterprise• Pursued policy of rule or ruin• Controlled 95% of all the oil refineries in the
country• Showed little mercy• Employed spies and extorting secret rebates
from the railroads, even forced lines to pay him rebates on the freight bills of his competitors
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8 Your InitialsPg. 542-543
Standard Oil Company
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ID: Oil company founded by J.D. Rockefeller, controlled 95% of oil industry
Significance:• Sought to eliminate the middlemen and
squeeze competitors• Turned out a superior product at a relatively
cheap price• Achieved important economies by it’s large-
scale methods of production and distrubtion• Efficient use of expensive machinery called
for bigness and consolidation proved more profitable
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8 Your InitialsPg. 543-544
“Gospel of Wealth”
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ID: wealthy, entrusted with society’s riches had to prove themselves morally responsible
Significance:• Theory of Andrew Carnegie to justify growing
size of the uber-wealthy
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8 Your InitialsPg. 543
Social Darwinism
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ID: survival of the fittest theory used by defenders of wide-open capitalism to justify of wealthy, created by Herbert Spencer and William Graham Sumner
Significance:• Millionaires are a product of natural selection• Self-justification by the wealthy involved contempt for
the poor• Many rich, especially newly rich, were self-made men• Concluded poor must be lazy and lacking enterprise• “Acres of Diamonds” lecture by Reverend Russell
Conwell charges “there is not a poor person n the United States who was not made poor by his own shortcomings”
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8 Your InitialsPg. 544-545
Sherman Anti-Trust Act
(1890)
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ID: Law passed by Congress which forbade combinations in restraint of trade, without any distinction between “good trusts” and “bad trusts”
Significance:• Bigness, not badness, was the sin• Law proved ineffective, largely because it had only
baby teeth or no teeth at all• Contains legal loopholes through which clever
corporate lawyers could wriggle through• Unexpectedly effect in one respect: used to curb
labor unions or labor combinations that were deemed to be restraining trade, contrary to original intent
• Threatened iron grip of monopolistic corporations• Revolutionary new principle takes hold: private greed
must be subordinated to public need
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8 Your InitialsPg. 545-546
Obstacles in the path of southern industrialization
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ID: South remains mostly rural despite industrialists attempt to into factories but with only modest success; Railroad rates limit chances
Significance:• Regional rate setting by railroad• Better rates for manufactured goods going south and
raw materials coming north• Pittsburgh plus pricing system in the steel industry
– Steel made in Birmingham AL was charged as if it was sent from Pittsburgh, driving up prices
• Some success in textile mills– Low taxes– Cheap labor
• Rural southerners come to work in mill towns• Paid half as much as northerners• Paid in credits to company stores• Kept in debt to company
– Employment seen by most as salvation
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8 Your InitialsPg. 548-549
Gibson Girls
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ID: a magazine image of an independent and athletic “new women” created in the 1890s by the artist Charles Dana Gibson
Significance:• Romantic ideal of the age• Represented new economic and social
opportunities– Telephone switchboard– Stenographers
• Women delay marriage• Smaller families• Lower pay
Source: www.content.cdlib.org: 2/4/07
Gibson Girl
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8 Your InitialsPg. 552
National Labor Union
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ID: Organized in 1866; included 600,000 members of skilled, unskilled and farm workers
Significance:• First large scale union• Lasted 6 years• Excluded Chinese• Minimal effort to include women and blacks
– Blacks organize Colored National Labor Union
• Agitated form the arbitration of industrial disputes and eight-hour workday
• Dealt a knock out blow by panic of 1873
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8 Your InitialsPg. 552
Knights of Labor
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ID: New large scale union that seized the torch from the National Labor Union
Significance:• Tried to unite workers into one big union• Barred non producers
– Liquor dealers, lawyers, bankers and stock brokers
• Campaigned for economic and social reforms– 8 Hour work day
• Hurt by including skilled and unskilled workers– Skilled workers in better bargaining
positions• Lose support after failed strike movements
and Haymarket square riot– Seen as anarcists
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8 Your InitialsPg. 552
Haymarket Square Riot
(May 4, 1866)
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ID: Strikes break out in Chicago and Chicago police advanced on a meeting called to protest alleged brutalities by the authorities, foreign anarchists throw a dynamite bomb into the crowd which injured and killed several dozen people
Significance:• Undermines the Knight of Labor, which called
for initial strikes– Now seen as anarchists
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8 Your InitialsPg. 553-554
Samuel Gompers
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ID: founder and creator of the American Federation of Labor;
Significance:• Adopted a down-to-earth approach to
engineer social reform• Had no quarrel with capitalism, but demanded
a fairer share for labor• Promoted “pure and simple” unionism
– Better wages, hours and working conditions• Major goal was a trade agreement authorizing
a “closed shop”– All union labor
• Chiefly used walk-outs and boycotts
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8 Your InitialsPg. 553, 555
American Federation of Labor
(AF of L)
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ID: Labor union founded by Samuel Gompers; composed of skilled craftsman
Significance:• True federation
– It was a organization of existing labor groups
• Demanded fairer share of business for labor– Sought better wages, working conditions
and hours• Used walkout and boycotts
– Established war chests for walkouts• Willing to let unskilled labor, women and
blacks to fend for themselves