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Railroad and Big Business

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1 Railroad and Big Business
Transcontinental Railroad George Pullman Interstate Commerce Act Andrew Carnegie Social Darwinism John D. Rockefeller Sherman Anti-Trust Act

2 Transcontinental RR Linked the coast by rail in 1869
Other lines followed 1890: 180,000 miles of track Towns grew and died because of the rr

3 George Pullman 1880: Built a sleeper car Created a “company town”
Pullman , IL Provided for the basic needs Company controlled the town No alcohol Depression in 1890s led Pullman to cut wages Didn’t cut prices in town

4 RR cont. Farmers wanted gov’t oversight of rr companies Granger Laws
Companies were corrupt Wanted farmers kept poor Price fixing Granger Laws Laws sponsored by the Grange Regulated rr companies

5 More rr RR companies challenged laws in court
Supreme Court found the laws to be constitutional It is okay for the gov’t to regulate private industry for the good of the public

6 Interstate Commerce Act
1887 Established the right of the Feds. to supervise rr activities and establish an interstate commerce commission ICC was ineffective until Theodore Roosevelt

7 Andrew Carnegie Former rr mogul Made production cheaper
Moved to producing steel in 1873 Carnegie Steel Company Made production cheaper

8 Vertical Integration Carnegie bought out supplier and shippers
He controlled everything from mining to production to delivery

9 Horizontal Integration
Buy out competition By 1901 Carnegie controlled most of the steel industry in the U.S. Both processes allowed Carnegie to control costs

10 Social Darwinism Based on Charles Darwin’s theory of evolution
“Natural Selection” weeded out the unsuccessful This allowed for monopolies to be created Social Darwinism said that the riches were a reward from God and the poor were lazy and deserved what they got

11 John D. Rockefeller Standard Oil Company
Joined into a trust with many other companies Board of directors controlled those companies Smaller companies were able to earn $$ from the larger trust Rockefeller was able to control the entire oil industry

12 John D. Rockefeller

13 J.D.R. cont. 1880: Rockefeller controlled 90% of the refineries in U.S. Paid low wages Drove competition out of business Sold oil at a below market price Killed his competition After comp. was gone he hiked oil prices up “Robber Barons”

14 Not All Bad Rockefeller and Carnegie were also philanthropists
R. gave $500 million to Univ. of Chicago Carnegie donated 90% of his wealth

15 Sherman Anti-Trust Act
Illegal to form a trust that interfered with free trade between states or with other countries Tried to stop monopolies Vocabulary of “trust” was hard to prove Consolidation of businesses continued

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