Presentation on theme: "The Rise of Industry and the Transcontinental Railroad"— Presentation transcript:
1 The Rise of Industry and the Transcontinental Railroad IndustrializationThe Rise of Industry and the Transcontinental Railroad
2 Essential QuestionIndustrialization increased the standard of living and the opportunities of most Americans, but at what cost?
3 Natural ResourcesEdwin Drake drilled the nation’s first oil well in 1859 in PennsylvaniaOil Production fueled industrial growth
4 Large WorkforceBetween 1860 and 1910, the population in the US TRIPLED!Over 20 Million immigrants arrived between and they flocked to work in our nation’s factories
5 New Inventions Alexander Graham Bell invented the telephone in 1876 Thomas Alva Edison invented the phonograph, light bulb, and electric generator
6 U. S. Patents Granted 1790s 276 patents issued.
7 Expansion of Railroads 1865 the nation had 35,000 miles track1900 boasted over 200,000 miles!Construction linked distant regions of the nation and helped create a National market for productsConstruction stimulated the economy by spending millions on steel, coal, and timber
9 Pacific Railway ActRailroad boom began in 1862 when Lincoln signed the Pacific Railway ActThe Act provided for construction for the first transcontinental railroad by two construction companiesUnion PacificCentral Pacific
10 The Union Pacific Led by Engineer Grenville Dodge, the Union Pacific moved West fromOmaha NebraskaRailroad workers included Civil War veterans, new Irish immigrants, frustrated farmers and miners, and ex-convictsEmployed over 10,000 workers
11 Central Pacific Engineered by Theodore Judah who sold stock to the “Big Four”including Leland StanfordThey pushed East from Sacramento CaliforniaA labor shortage in California led the Central Pacific to hire over 10,000 Chinese immigrants to lay the track
12 Chinese Workers in the Snow Life working on the rails was rough, dirty, dangerous, with lots of gambling, drinking, and hard fighting
13 Two Lines MeetMay 10, 1869 the two lines met in Promontory Summit, Utah (near Ogden, Utah)Two celebrate the event, they drove in a famous “golden spike”
15 Government HelpThe Transcontinental RR would never have been built without help from the federal governmentThe gov. gave large Land Grants to RR companies, who could sell that land to settlers or businesses to raise money for RR constructionBy the 1860s the federal land grant system had given over 120 million acres of land to RR
16 Consolidation of the RR By 1900 there were hundreds of small lines that needed to be consolidatedCornelius Vanderbilt purchased and merged many lines in NY and Chicago and was able to offer the first direct service between the citiesHe also built NY City’s Grand Central StationTo make rail service safer and more reliable, the American Railway Association divided the country into 4 time zones regions where time was the same throughout each region
17 Industrial World Leader -by 1880, U.S. is world’s leading producer of goods-reasons why????unlimited labor forceabundant coal supplyiron mining- Bessemer Process (steel)discovery of oil in US– Drakerailroad development
18 Laissez Faire the ideology of the Industrial Age. Public Support-laissez-faire government policies: “hands off”, no government intervention in business-unlimited immigration supplied labor-high tariffs protected American business; made imported goods more expensive-public financing of railroads: Federal Land Grants!!!!Laissez Faire the ideology of the Industrial Age.Individual as a moral and economic ideal.Individuals should compete freely in the marketplace.The market was not man-made or invented.No room for government in the market!
19 Entrepreneurs and Innovations -late 1800’s saw an explosion of innovation and invention-telephone: Alexander G. Bell-light bulb: Edison-electric power -Nikola Tesla—AC Power and George WestinghouseGenerator= Edison, N.Y.C-Bessemer Process: injected air into IRON creating STEEL-typewriter = Sholes
20 Entrepreneurs and Innovations -photography : Eastman= KODAK-phonograph- Edison-motion pictures-radio—Nikola Tesla-retail stores: sold all of the goods produced in the new factories-canned foods= created from new tin can steel after the rise of the Bessemer process!
21 Entrepreneurs and Innovations -John D. Rockefeller: Standard Oil Company-Andrew Carnegie: U.S. Steel Company-J.P. Morgan: banker and leader of HUGE holding company-Cornelius Vanderbilt: Railroad consolidator; offered first direct service from NY-Chicago, built NYC Central Station-Dupont Family-James B. Duke- mechanized production of cigarettes
22 Railroads lead the Way-”iron horse”-Leading consumer of goods: steel, iron, coal, timber-better transportation leads to growth-transcontinental, golden spike driven at Promontary Point, UTAH 1869-standardization of time: 4 Time zones
23 Railroad Prosperity-growth of urban areas-Development of Company TownsPullman, Illinois makes RR cars: employees given housing, medical care, entertainment-railroad scandalsCredit Mobilier: Union Pacific created CM construction company, hired themselves, charged high fees, skimmed profits into their pocketsgov’t land grants: RR would sell land to businesses instead of new settlers
24 Grange and the Railroads -Created after Wabash caseInterstate Commerce Act, 1887=made rebated and pools illegal; railroads had to publish their rates to public; unfair discrimination illegal and can’t charge more for short haul than longInterstate Commerce Commission (ICC)=Federal Gov. attempt to regulate big businesses, especially RR companies= government will intervene to protect the public!-Railroad abuses: often charge more for short haul than long haul, charge discriminatory rates-Granger Laws: passed to regulate RR companies to protect FARMERS-Supreme Court rulings”Munn v. Illinois= Supreme Court upheld Granger lawsWabash v. Illinois=overturned Munn and said that states have no power to regulate interstate commerce
25 Big Business-corporations develop-limited liability leads to public investment-mass market selling
26 Advantages-greater efficiency-economy of scale: the larger the business the more efficient they can produce-manager system-productivity studiesFrederick Taylor: scientifically studied assembly lines and production to make factories and wage workers more productive
27 Disadvantages-unfair competition practices: when monopolies develop they can control all prices and pay low wages-corruption and bribery: they would skim profits and bribe Congressmen for government kickbacks-destroyed labor union movements:Did not want workers to unite for higher wages
28 Public Reactions -mixed public feelings -Social Darwinism -based on Darwin’s theory of evolution-survival of the fittest-also applies to the business world-the best businesses survive-justified their wealth-”Gospel of Wealth”: should be able to make as much money as possible as long as they gave back to society-rags to riches“American Dream”Horatio Alger dime novels promoted individualism, you can pull yourself up by your bootstraps
29 Social Darwinism British economist. Advocate of laissez-faire. Adapted Darwin’s ideas from the “Origin of Species” to humans.Notion of “Survival of the Fittest.”Herbert Spencer
30 Social Darwinism in America Individuals must have absolute freedom to struggle, succeed or fail.Therefore, state intervention to reward society and the economy is futile!William Graham Sumner Folkways (1906)
31 New Business Culture: “The American Dream?” Protestant (Puritan) “Work Ethic”Horatio Alger [100+ novels]Is the idea of the “self-made man” a MYTH??
32 New Type of Business Entities Pool Interstate Commerce Act Interstate Commerce Commission created.Trust John D RockefellerStandard Oil Co.
34 New Type of Business Entities Trust:Horizontal Integration John D RockefellerVertical Integration:Gustavus Swift Meat-packingAndrew Carnegie U. S. Steel
35 Types of Big Businesses -monopoly—when a business controls all or most of the supply of a product-trust—when several businesses act as one under the control of a board of directors-merger—when two or more businesses join to become one larger business-holding company---business which exists in order to control other businesses as a parent company-horizontal integration —type of monopoly formed by controlling all of the same type of business-vertical integration —monopoly formed by controlling businesses related to the primary business
36 Types of Big Businesses -monopoly—when a business controls all or most of the supply of a product-trust—when several businesses act as one under the control of a board of directors-merger—when two or more businesses join to become one larger business-holding company---business which exists in order to control other businesses as a parent company-horizontal integration —type of monopoly formed by controlling all of the same type of business-vertical integration —monopoly formed by controlling businesses related to the primary business
37 Robber Barons-extreme profits made by business owners-Philanthropy??? Donating money for social progress-big business practices exposed(cheap wages, high profits!)-public finally began to call for regulation by government-Sherman Anti-trust Act, 1890-forbade combinations in restraint of trade- made no distinction between good and bad trusts-weak law but set a precedent for future regulation by the government to protect public
38 Regulating the Trusts 1877 Munn. v. IL 1886 Wabash, St. Louis & Pacific Railroad Company v. IL1890 Sherman Antitrust Actin “restraint of trade”“rule of reason” loophole1895 US v. E. C. Knight Co.
41 The Gospel of Wealth: Religion in the Era of Industrialization Wealth no longer looked upon as bad.Viewed as a sign of God’s approval.Christian duty to accumulate wealth.Should not help the poor.Russell H. Conwell
42 “On Wealth” The Anglo-Saxon race is superior. “Gospel of Wealth” (1901).Inequality is inevitable and good.Wealthy should act as “trustees” for their “poorer brethren.”Andrew Carnegie