Chapter 24 Notes As 19th Century closed most were lured away from politics & into industry-major economic growth Iron Belt----Iron Horse Boom of RR & government entanglements-by ,500 miles Transcontinental RR was costly & risky-many government subsidies-Why? Congress began to allocate land and $ liberally 155 million acres given by DC and western states contributed 49 million more Tied up lands-checkerboard agreements-until RR chose location none of the land was available-1887-Grover Cleveland put an end Much criticism to government for giveaway yet received preferential rates for postal service and military traffic Cheap way for government to subsidize transportation-land worth little until RR laid Cities Grew-Competition for RR

Spanning the Continent 1862-Congress made provisions for Transcontinental RR-North pushed to connect gold rich California-Union Pacific Pushed westward from Omaha-each mile of track the company was granted 20 sq. miles of track, alternating 640 acre sections on either side-each mile, builders received federal loan ranging from $16,000 on flat land to $48,000 for mountainous land Building began in earnest after 1865 Promoters made millions-bribes for Congress Many battles with Native Americans took place Various RR emerged & met for the first time at Ogden, Utah in 1869 Much gained and much lost Major improvements also-steel rails, standard gauge, Westinghouse airbrake, Pullman Palace Cars

RR Revolution RR unified the nation, enormous domestic market for raw materials & manufactured goods-spurred industrialization Stimulated mining and agriculture-farm settlements surrounded RR Boom for cities-carry food & provide raw materials & markets Stimulated Immigrants Ecological Imperialism? Established time zones

Wrongdoings Jay Gould-corrupt speculator-Stock Watering-inflated claims of lines’ assets & profitability & sold stocks well in excess of actual value-RR managers had to charge huge rates in order to pay off-public usually lost Abused public-bought and sold judges and politicians-kings of RR-monarchs-huge control & eventually aligned themselves- ”pool”-divide business in an area & share profits, kickbacks & slashed rates on competing lines

Government Intervention Many commoners concerned-slow to act-free enterprise- competition! Small government! Depression of the 1870s forced farmers to act-Midwest legislatures tried to regulate RR monopoly-1886 Wabash case. Many felt federal government needed to act 1887 Congress passed the Interstate Commerce Act-prohibited rebates & pools & RR had to publish rates openly, forbid discrimination vs. shippers Set up the ICC Provided an orderly forum to resolve conflicts

Miracles of Mechanization By 1894 manufacturing was tops in the world-why? 1. Capital-Civil War spurred wealth-profiteering 2. Natural resources(Iron Ore) 3. Immigration (Steel spurred by cheap labor) 4. US ingenuity-mass production ,000 patents/ex. Telephone, T. Edison-Genious

Trust Titans Carnegie, Rockefeller, & JP Morgan devised ways to limit competition How did this work? Mining to marketing-improve efficiency by making supplies more reliable, controlling quality & eliminating middlemen fees-Vertical Integration Horizontal Integration-allying w/ competitors to monopolize a market Stockholders in various oil companies assigned stock to Standard Oil Company-consolidate operations of competing companies-total control of oil Morgan-consolidated rivals by placing officers of his own banks on their boards-”Interlocking Directorates”

Steel Production of capital goods-eventually formed rails of RR By 1900 we were producing as much steel as Britain & Germany combined-Bessemer Process-cold air blown on red hot iron-America allowed for close proximity of coal, iron ore & other essentials Carnegie Scottish immigrant-partnership involved 40 “Pittsburgh Millionaires” By /4 of nation’s Bessemer Steel-millions tax free Carnegie wanted to sell-Morgan into steel tubing-Carnegie threatened to enter business & Morgan bought out Carnegie for $400 million

Rockefeller Real Discovery in Pennsylvania in 1859-Quickly became large export Kerosene was first product for light-eventually done away by light bulbs-Oil may not have been a big deal except for gas burning internal combustion engine John D. Rockefeller-1870 organized Standard Oil Company in Cleveland-employed questionable tactics-by 1877 controlled 95% of all refineries-had spies and received secret rebates from RR-Ruthless! Turned out a great product-cheap-large scale production became the model-New Aristocracy-Anti Trust campaigns

Gospel of Wealth “Godliness in the league of riches”, “Natural Selection”, according to Carnegie society’s riches belonged to those who had proven themselves morally responsible “Poor made poor by their own shortcomings” Growth of plutocracy taking on the Constitution-Congress had sole control of Interstate Commerce-used this to stop efforts by state legislatures-14th Amendments-corporation like a person could not be deprived-also looked for easy states

Government Tackles the Evil Trusts Masses began to mobilize-Sherman Anti-Trust Act of 1890 Act forbid combinations in restraint of trade without distinctions between good and bad trusts Too many loopholes-actually used to curb labor unions Early persecutions futile-1890s under McKinley more trusts formed 1887 Interstate Commerce Act & Sherman Anti-Trust 1890 threatened iron grip-private greed must be subordinate to the public need!

South-Age of Industry 2nd Industrial wave had not affected South greatly-plantation system replaced by tenant farming and sharecropping South received a boost w/machine made cigarettes-James Duke Industrialists could not change the South-still rural Why?-1. Rate-setting systems imposed by Northern RR interests-rate cuts to Southward moving yet not Northward moving-kept South in in developing world attitude as supplier unable to develop industry 2. Economic discrimination-”Pittsburgh Plus”-Pressure on RR by steel Southern cotton and textile mills grew-1880s Northern capital began to erect mills in South(Why?) Mixed blessing-took advantage of cheap labor-took root in depressed Piedmont region of S. Appalachia Rural Southerners(white) worked tirelessly and earned little- better than farming

Impact of New Industrial Revolution Great wealth after the Civil War-standard of living rose-cities grew rapidly(Jefferson ideas dying) government would no longer be hands-off Women-propelled into industry-typewriter, switchboard-new opportunities-delayed marriages/smaller families-not glamorous-dangerous Class division-wealthy few-socialists and radicals protested /10 of people owned 9/10 of nation’s wealth Nation of wage earners-by /3 of workers depended on wages-very dependent on economy and employers Reformers worked for job security(job & wage) & provision for temporary unemployment Strong pressures for foreign trade developed

Union Strength Workers were being taken advantage of -depersonalized atmosphere-New machines emerged-glutted labor market brought down wages-Industrial workers were powerless- Employers could pool wealth from stockholders, retain lawyers, buy local press, & pressure politicians-Bring in scabs and employ thugs They could also call on federal courts to order strikes stopped & troops could be brought in or “lockouts” & sign contracts to not join Unions-”Blacklist” or own “Company Towns” Not much sympathy for the worker or strikes

Labor Limps Civil War w/ premium on labor pushed forth Unions-National Labor Union(1866)-lasted 6 years-600,000 members Knights of Labor-1869-secret union-include workers in 1 large Union-barred only non producers Campaigned for social and economic reform-pushed for 8 hour day & won several strikes Knights May Day Strikes /2 failed-focus on Chicago Haymarket Square Riot-May 4-Police advanced on a meeting and a bomb was thrown-8 anarchists rounded up-severe sentences Illinois Gov. J. Altgeld pardoned-Reaction? Knights faltered & including unskilled a mistake?-AFL formed- skilled only

AF of L American Federation of Labor-1886-Samuel Gompers Association of self-governing unions-sought better wages, hours, & working conditions-wanted “closed shop”, “walkout”, “boycott” Willing to let unskilled fend for themselves By ,000 members-some successes yet not enough workers were members Labor Day-1894 Act of Congress Big Business had dawned yet Big Labor was still distant