Railroad and Big Business Transcontinental Railroad George Pullman Interstate Commerce Act Andrew Carnegie Social Darwinism John D. Rockefeller Sherman Anti-Trust Act

Transcontinental RR Linked the coast by rail in 1869 Other lines followed 1890: 180,000 miles of track Towns grew and died because of the rr

George Pullman 1880: Built a sleeper car Created a “company town” Pullman , IL Provided for the basic needs Company controlled the town No alcohol Depression in 1890s led Pullman to cut wages Didn’t cut prices in town

RR cont. Farmers wanted gov’t oversight of rr companies Granger Laws Companies were corrupt Wanted farmers kept poor Price fixing Granger Laws Laws sponsored by the Grange Regulated rr companies

More rr RR companies challenged laws in court Supreme Court found the laws to be constitutional It is okay for the gov’t to regulate private industry for the good of the public

Interstate Commerce Act 1887 Established the right of the Feds. to supervise rr activities and establish an interstate commerce commission ICC was ineffective until Theodore Roosevelt

Andrew Carnegie Former rr mogul Made production cheaper Moved to producing steel in 1873 Carnegie Steel Company Made production cheaper

Vertical Integration Carnegie bought out supplier and shippers He controlled everything from mining to production to delivery

Horizontal Integration Buy out competition By 1901 Carnegie controlled most of the steel industry in the U.S. Both processes allowed Carnegie to control costs

Social Darwinism Based on Charles Darwin’s theory of evolution “Natural Selection” weeded out the unsuccessful This allowed for monopolies to be created Social Darwinism said that the riches were a reward from God and the poor were lazy and deserved what they got

John D. Rockefeller Standard Oil Company Joined into a trust with many other companies Board of directors controlled those companies Smaller companies were able to earn $$ from the larger trust Rockefeller was able to control the entire oil industry

John D. Rockefeller

J.D.R. cont. 1880: Rockefeller controlled 90% of the refineries in U.S. Paid low wages Drove competition out of business Sold oil at a below market price Killed his competition After comp. was gone he hiked oil prices up “Robber Barons”

Not All Bad Rockefeller and Carnegie were also philanthropists R. gave $500 million to Univ. of Chicago Carnegie donated 90% of his wealth

Sherman Anti-Trust Act Illegal to form a trust that interfered with free trade between states or with other countries Tried to stop monopolies Vocabulary of “trust” was hard to prove Consolidation of businesses continued