14.2 – “The Age of the Railroads”

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14.2 – “The Age of the Railroads”

American Industrialization Key factors: Wealth of natural resources Government support of business Growing urban population Cheap labor force New markets

Steel Superior to iron Bessemer Process – injecting air into molten iron to remove carbon The ability to mass produce cheaply coupled with high demand for rail & bridge construction leads to a steel boom

New Inventions 1867 – Christopher Sholes – Typewriter 1876 – Alexander Graham Bell & Thomas Watson– Telephone 1880 – Thomas Edison – Incandescent light bulb

Transcontinental Railroad 1863-1869 Union Pacific (E-W) Central Pacific (W-E) Constructed largely by Irish and Chinese immigrants Authorized by Pacific Railroad Acts (1862 & 1864) Land grants Government bonds “Last Spike” – 5/10/1869 – Promontory, Utah

“John Chinaman”

Credit Mobilier Scandal Scandal exposed in 1872 Railroad construction was more lucrative than operating. So… Union Pacific formed the Credit Mobilier Construction Co. Charged higher rates (2-3x) Pocketed the profits Distributed shares of stock to Congressmen

Munn v. Illinois 1887 “Granger cases” U.S. Supreme Court upheld the right of the people to regulate railroads, which in effect had become public utilities (public interest)

Interstate Commerce Act The nation’s first federal regulatory agency The act declared illegal: Pooling Lower rates to favored customers Charging higher fees for shorter hauls Charging unreasonable rates