1. The Rise of Industrial America & the Railroads

2. 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

3. The Business of the Railroads
After the Civil War, railroad mileage increased fivefold from 35,000 in 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

4. 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

5. Eastern Trunk Lines
Early decades of railroading ( ), 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. ?
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?