Ch 24 Rise of Industry RRs, Industrialization, Immigration, Labor Unions

Post Civil War RR expansion Some RR production from Post CW RR production skyrocketed. – Congress encouraged w/ land grants totaling over 155million acres. – Cos were allowed 10 mile wide strips of land, mapped in alternating 1 mi square sections some to keep & some to sell Cleveland stopped practice 1887 – Towns where RR came through became sprawling cities; those skipped by RRs bcm ghost towns

Transcontinental RR When south seceded congress commissioned Union Pacific RR for the northern route – Omaha, NE to CA 1862 – Co received huge $$ grants to build but Credit Mobilier netted 23 mill in profits Central Pacific RR in CA built eastbound route – Irish hired to lay westward route; Chinese hired to lay eastern route. RR workers defended tracks from Indian attacks Averaged 7-10 miles of track per day Central Pac backed by ‘Big 4’: (with) – Leland Stanford (ex gov CA)& Collis P. Huntington (lobbyist)

RRs (3) Central Pac also had to drill through Sierra Nevadas First Transcontinental route completed at Ogden, UT in 1869 By 1900, 4 other Transcontinental routes built – Northern Pacific RR (Lake Superior  Puget Sound) – Atchison, Topeka & Santa Fe crossed SW deserts – Southern Pacific from Orleans to SF, CA – Great Northern (Duluth to Seattle) James J. Hill project- greatest RR builder

RRs consolidate Many pioneers over invested in land & banks that supported them often failed when land value turned out to be low Cornelius Vanderbilt (NY Central RR) financed many western RRs RR advances: – Steel rails (stronger than iron) – Westinghouse Air Brake – Pullman Palace Cars – Telegraphs – Double racking & block signals Train accidents still common, many fatalities

Effects of RRs Tied nation together, created huge market & many jobs – Helped industrialize US – Stimulated mining, agriculture by bringing people, supplies – Creation of 4 time zones: Nov 18, 1883 Stopped independent times/ scheduling nightmare – Created millionaire class

RR wrong doings Credit Mobilier Jay Gould made millions watering stock – Embezzled from Erie, KS Pacific, Union Pacific, TX Pacific etc Inflated worth of stocks; sold over value Owners abused public – Bribed judges, legislatures, hired lobbyists – Elected their own to office – Used free passes as bribes w/ press – Formed defensive alliances, Trusts, then called Pools

Government’s first attempts to regulate business Gov position had always been pro business – Adam Smith: the market will regulate itself The People attempted to regulate RRs to stop injustices through the Grange – Several state cases allowed States to intervene, as in the Wabash case – Each time, the Supreme Ct overturned; only Congress can reg. interstate commerce – Interstate Commerce Act 87- banned rebates, pools, req’d RRs to publish rates openly, banned charging more for short hauls Set up ICC to enforce

Mechanization US: 4 th largest mfctr in world – 1894: #1 Abundant liquid capital Exploited natural resources: coal, iron, oil Abundant cheap labor: immigration American ingenuity (inventions) – Mass production – Cash register, stock ticker, typewriter, refrigerator car, electric dynamo, electric railway – Bell’s telephone – Thomas Edison (wizard of Menlo Park): light bulb, phonograph & dozens more

Trust Titans & Robber Barons Andrew Carnegie (steel) – Vertical integration Controlled all aspects of industry (from ground up) John D. Rockefeller (oil) – Horizontal integration Controlled certain parts of process, ie: all mining or all shipping – Standard Oil forced all weaker competitors to the wall Trusts: giant monopolistic corporations – Rockefeller also put his own men on boards of directors of other rival companies “interlocking directories”

Supremacy of Steel 1860: scarce, expensive 1900, US produced more than England & Germany together – Due to Bessemer process (though American, Wm Kelly discovered it first) Cold air blown over molten steel allows iron burned carbon impurities to rise up and be skimmed off – Purifies iron into steel – US had abundant iron, coal (heating)

Carnegie Began as poor clerk for RR co – Acted quickly to resolve company crisis Rewarded w/ opportunity to buy stock.. Quickly bought up as much as he could Eventually owned RR On to Steel. Pittsburgh area- produced ¼ nation’s Bessemer Steel – J.P. Morgan (banker) attempted to move into Steel tubing Carnegie threatened to ruin him Negotiated settlement: Morgan bought out Carnegie for $400 million – Carnegie gave away $350 mill to charity, pensions, libraries Added other steel holdings, formed: US steel 1901: first billion $$ corp in world

Rockefeller 1859 Drake first mined oil in Titusville PA – By 1870s used to light kerosene lamps all over nation (whale oil – obsolete) – By /4mill Edison Electric light bulbs in use- made kerosene obsolete – Industry shifts to gas burning internal combustion engine Rockefeller already owned 95% oil production in US when he org’d Standard Oil of Ohio 1882 – Crushed weaker competitors – American Beauty Rose theory of competition Trusts: built superior product at cheaper price, Gustavus Swift & Philip Armour: meat barons

Gospel of Wealth Many rags to riches stories (Horatio Alger) in real life – Newly rich feel some are destined to become rich (predestination.. Calvinist) AND help society w/ $$ – Rev. Russell Conwell (Phila) bcm rich on his lecture: “Acres of Diamonds” preached poor people made themselves poor, rich made themselves rich.. Everything was based only on your actions – Corporate lawyers used 14 th amendment to defend trusts as living entities (big people) entitled to their property Plutocracy ruled

Gov attacks trusts 1890: Sherman Anti-trust Act – Forbade combinations in restraint of trade No distinction between good & bad trusts Could not be enforced enforced, violators first punished

South in Age of Industry Agrarian – James Buchanan Duke: cigarette industry: American Tobacco Company Donations to Duke University – Henry Grady (Ed. Atlanta Constitution) urged S. to industrialize – No. companies set rates to keep S from gaining competitive edge Textile mills developed in S Cheap labor led to creation of many jobs, (low wages) still welcomed in S

Impact of Industrial Age Standard of Living rose Immigrants poured in for opportunities Jeffersonian ideas of dominance of agriculture faded Women swarmed to factories, found new opportunities – Gibson Girl (Charles Dana Gibson): romantic ideal of the age Pressures of foreign trade developed Overproduction will drive us to develop more foreign markets – Leads to Imperialism

In Unions There Is Strength National Labor Union – ,000 members- lasted only 6 yrs Excluded Chinese Never recruited blacks; women Worked for arbitration of industrial disputes – & 8 hr day Won 8 hr day for Gov workers- till Depression 1873

Unions (2) Knights of Labor – 1869 – 1881 (in secret) Barred only liquor dealers, prof. gamblers, lawyers, bankers, stockbrokers – Campaigned for economic & social reform – Led by Terence V. Powderly Won many strikes for 8 hr day After strike against Jay Gould’s Wabash RR 1885, membership went up to ¾ million

End of Knights of Labor Involved in several May Day strikes; half failed – Chicago: (80K knights & hundreds anarchists) May 4, Police advancing on meeting called to protest brutality by authorities (Haymarket Sq) – Bomb thrown, killing & injuring many – 8 anarchists rounded up; no proof – Jury sentenced 5 to death for conspiracy – Other 3 long prison terms 1892 John P. Altgeld, Dem Gov IL pardoned 3 survivors after studying case – Defeated in re-election bid – Forever assoc w/ anarchists- KOL membership dropped

A F of L Samuel Gompers founded Am Fed of Labor – Assoc of self gov’d unions, all indep – Demanded ‘fairer share for labor’ Better hours, wages – Skilled workers only (labor trust) – over 23,000 strikes; w/ 6.6 mill workers Still less than 3% of all workers unionized Labor Day became legal holiday Most owners fought unions still