The Age of Railroads

Section Objectives Identify the role of the railroads in unifying the country. List positive and negative effects of railroads on the nation's economy. Summarize reasons for, and outcomes of, the demand for railroad reform.

Building the Railroads Congress passes Railroad Act in 1864 – National Network 1856 – rails extend to Mississippi river 1869 – Transcontinental Railroad completed in Promontory Point, Utah – Golden Spike marks the spot.

Immigrants used to build system Asians used mostly used in the West, Irish, African-Americans used mostly in the East They were paid $5 - $25 less per month than whites Used for much of the most dangerous work. Many die in the cause.

Both Irish and Chinese were abused IrishAsian

Railroad Time helps unify the US Initially each railroad used local time to set timetables. – couldn’t rely on train schedules, no synchronization of time from city to city – Professor C.F. Dowd comes up with new system divide world into 24 time zones – Greenwich, England is 0 longitude – U.S. divided into 5 time zones – 1883 U.S. synchronizes time and we still use time zones today.

Time Zones

People take advantage of the situation Building railroads spurs growth of other industries – iron, steel, lumber, glass industries grow along with railroads – Created new millionaires Towns grow up along the lines – Abilene, Flagstaff, Denver, Albuquerque, grow up along rails – towns specialize in products Minneapolis – grain Chicago, Omaha – beef

First bridge to cross the Mississippi At Rock Island, Il into Iowa

Company towns spring up. George Pullman builds sleeping cars for railroads – wants to control his workforce – builds a town for his employees – obey company rules 24/7 no drinking, no loitering, buy company products, go to church, rent company houses, etc. He wanted clean, sober, hard working employees for higher profits.

Pullman, Illinois

Credit Moblier Scheme set up by railroad owners to fleece the stockholders and taxpayers. – Union Pacific gives contract to Credit Moblier to build sections of railroad – pays them 2 -3 times the actual cost of construction to build road – skim off profits and pocket them, thus defrauding the company and the government – lots take advantage of the scheme – bilking over $23 million from the companies and the public. 20 Congressmen, future president, House speaker participated.

Credit Mobilier Scam

Grange to the Rescue Farmers form the Grange – – a cooperative – to fight the railroads. – Farmers upset over price fixing on freight charges. sponsor candidates to run for office, once elected they write legislation to regulate railroads. Set maximum rates for freight, passengers, prohibited price discrimination Railroads fight back, challenge constitutionality of the railroad legislation – Munn v. Illinios Supreme Court upheld Granger laws, states can regulate rates Federal Gov’t has right to regulate private industry serving the public interest.

I Feed You All

Interstate Commerce Act of 1887 Congress sets up Interstate Commerce Commission to regulate interstate railroad activities ICC ineffective due to Supreme Court ruling against setting prices for freight. – It’s unconstitutional to tell someone what to charge for their product.

Interstate Commerce Act Supposed to stop Trusts from controlling everything.

Railroad consolidations A. Pre 1893, hundreds of railroad companies operating in U.S. – Panic of 1893 is a depression – Banks and wealthy individuals take over railroads and other businesses. seven companies buy up 2/3 of railroad tracks – Age of Big Business begins.

Cornelius Vanderbilt Vanderbilt owned more railroads than anyone in the U.S. His family is still among the richest in the U.S.