The Rise of Industrial America & the Railroads

The Rise of Industrial America 1900: U.S. leading industrial power in the world Manufactured more than Great Britain, France, or Germany Several factors contributed to this rapid growth: Country was a treasure house of raw materials essential to industrialization Abundant labor supply, supplemented by hundreds of thousands of immigrants Growing population and advanced transportation made U.S. largest market for industrial goods Capital was plentiful- a lot of investment in economic expansion Labor-saving technologies, approx. 450,000 new patents granted Businesses benefited from friendly government policies (loans, land grants, protective tariffs, little regulation, low taxes on profits) Talented entrepreneurs built vast industrial/commercial empires

The Business of the Railroads After the Civil War, railroad mileage increased fivefold from 35,000 in 1865 to 193,000 in 1900 Railroads created a market for goods on a national market Encouraged mass production, consumption, and economic specialization Resources used for railroad building stimulated the growth of other industries Coal, steel

The Business of Railroads Railroads also affected other routines of daily life 1883: American Railroad Association split the country up into four time zones Soon after, railroad time became standard time for all Americans

Eastern Trunk Lines Early decades of railroading (1830-1860), dozens of local lines resulted in different gauges and incompatible equipment Inefficiencies were reduced by consolidating competing lines into integrated trunk lines Trunk lines were major routes between large cities

Western Railroads Railroad building coincided with the settlement of the western frontier Promoted settlement Linked the West with the East to create one great national market Federal government provided huge subsidies in the form of land grants and loans 170 million acres of public land given to the railroads Subsidies ultimately promoted hasty and poor construction, led to a lot of corruption

Transcontinental Railroad During the Civil War, Congress authorized the building of the first transcontinental railroad Two companies divided the task Union Pacific (UP) started from Omaha, Nebraska, and was built westward across the Great Plains Employed thousands of veterans and Irish immigrants Central Pacific started from Sacramento, California, and was built eastward 6,000 Chinese workers

The Transcontinental Railroad The two railroads came together on May 10, 1869, at Promontory Point, Utah Golden spike was ceremoniously driven into the rail to tie the mark linking the Atlantic and Pacific By 1893, a fifth transcontinental railroad had been built, but most failed as businesses Few customers, little profit in the near term

Competition and Consolidation Railroads were overbuilt by the 1870s-1880s suffered from mismanagement and outright fraud 1893: a financial panic forces a quarter of all railroads into bankruptcy Bankers move in to bankrupt and consolidate the railroads themselves to eliminate competition Without competition, these new owners could stabilize rates and reduce debts 1900: only seven companies controlled nearly two-thirds of the nation’s railroads Railroads became more efficient but were now controlled by monopolies

The Effects of the Railroads Every level of community and government invested in the railroads in the late 19th Century At the same time, customers and investors felt they were often victims of financial schemes and ruthless business practices Early attempts to regulate the railroads (Granger laws) did little good Not until the Progressive Era of the early 20th Century did Congress begin to protect the public interests

? What were three major effects of the railroads on American life in the late 1800s? How did railroad building coincide with western settlement? Which two companies were authorized to build the first transcontinental railroad? What happened to the railroads in 1893? How did their ownership change during this time? What did the railroad industry look like by 1900?