THE EXPANSION OF INDUSTRY AND THE AGE OF RAILROADS A New Industrial Age

September 25, 2012 Bell Ringer: Why did we see such a large expansion of industry in the late 19 th Century?

The Expansion of Industry: Why Now? A Wealth of Natural Resources  Gasoline becomes the most important form of oil.  Coal and iron Steel  Railroads  Innovative Construction Government Support for Business A Growing Urban Population  Cheap Labor  New Markets Inventions  Electric Power  Typewriter  Telephone

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The Government, the Railroads, and Expansion The government made huge land grants and loans to the railroad company, because RR were important to:  Settling the West  Developing the Country Railroad Expansion Timeline:  1856 – RR extend west to the Mississippi River  1859 – RR cross the Missouri River  1869 – Central Pacific and Union Pacific RR meet at Promontory Utah  Start of the Civil War = 30,000 miles, by 1890 = 180,000 miles

The Golden Spike marked the connection of the Central Pacific and Union Pacific Railroads making the 1st Transcontinental RR

Positive Aspects of Railroad Expansion Unifying Force RR brought together the dreams of available land, adventure, and a fresh start for many. Growth of Towns Establish New Markets Opportunities for Visionaries and Profiteers

Negative Aspects of Railroad Expansion RR workers lived harsh lives   Union Pacific Hired: Irish Immigrants and desperate unemployed Civil War veterans  Central Pacific Hired: thousands of Chinese Immigrants Laid track across treacherous terrain. Workers attacked by Native Americans Accidents & diseases disabled and killed thousands each year. Opened the way for abuses that led to social & economic unrest.

Railroad Time Though the RR linked the country each community still operated on its own time. Noon when the sun was overhead.  For example, in Boston noon was about 12 minutes later than in NY – C.E. Dowd proposes the division of Earth into 24 time zones – one for each hour of the day.  Under his plan the U.S. would contain four zones: the Eastern, Central, Mountain, and Pacific  The RR Companies liked the idea November 18, 1883 – RR crews and towns across the country synchronize their watches – an international conference sets worldwide time zones. Railroad Time is officially adopted by the U.S. Congress in 1918

1913 U.S. Time Zone Map

The Influence of Railroads Industries grow rapidly as they try to keep up with the RRs’ demand for materials and parts.  Iron  Coal  Steel  Lumber  Glass Trade  Trade and interdependence are promoted  Towns begin specializing in particular products Cities  New towns and communities grow up along railroad lines  Denver, CO  Seattle, WA

George M. Pullman George M. Pullman owns a factory manufacturing RR Cars.  Desired control and profit Pullman built a town for his employees  Housing –  Doctors’ Offices  Shops  Athletic field Tightly controlled – no alcohol or loitering Cut employees pay but refused to lower rent

Pullman Dining Car, 1891

Credit Mobilier Scandal Construction Company formed by Union Pacific RR Stockholders in  Gave this company a contract to lay track at two or three times the actual cost and kept the profits Paid off about 20 representatives in Congress in Congressional Investigation – officers of the Union Pacific had taken up to $23 million. Federal officials, Vice President Schuyler Colfax, and Congressman James Garfield were all implicated The men kept their profits The reputation of the Republican Party was tarnished.

Credit Mobilier Scandal

The Grangers and the Railroads The Grange, a farmers organization (1867) demanded govt. control over the RR industry. Claimed RR Abuses  Misuse of govt. land grants  Fixed prices  Charged different customers different rates Granger Laws – The Grangers sponsored political candidates pressing for laws to protect them.  “Establish maximum freight and passenger rates and prohibit discrimination.  Munn v. Illinois – Granger Laws upheld  Established the principle that the federal govt. has a right to regulate private industry in order to serve the public interest.

The Grangers and the Railroads Members of the Grange, a farmers organization (1867) demanded govt. control over the RR industry. Claimed RR Abuses  Misuse of govt. land grants – the RR sold to other businesses rather than settlers as intended  Fixed prices, keeping farmers in their debt  Charged different customers different rates, demanding more for short trips where their was no alternative carrier Granger Laws – The Grangers sponsored political candidates pressing for laws to protect them.  “Establish maximum freight and passenger rates and prohibit discrimination.  RR Challenge these laws.  Munn v. Illinois – Granger Laws upheld  Established the principle that the federal govt. has a right to regulate private industry in order to serve the public interest.

Interstate Commerce Act The Supreme Court ruled that a state could not set rates on interstate commerce (RR traffic that came from or was going to another state) in The Interstate Commerce Act passed in 1887  Established the Interstate Commerce Commission to supervise RR activities. ICC experiences difficulty – long legal processes and RR resistance Supreme Court ruled in 1897 the ICC could not set maximum RR rates. In 1906 the ICC gains the power it needed to become effective.

The Panic of 1893 The RRs’ financial problems would play a large role in the Panic of Worst depression to that time. By mid-1894, 25% of the nation’s RRs had been taken over by financial companies. By 1900 seven powerful company owned the majority of 2/3 of the nation’s RR tracks.

The Age of the Railroads The growth and consolidation of railroads benefited the nation but also led to corruption and required government regulation. Railroads made possible the expansion of industry across the United States