Ch. 19: The Growth of Industry 1865-1914 Why It Matters: Innovations in technology and new business combinations helped the United States develop into a great industrial power. By the year 1900, U.S. industrial production was the greatest in the world. The Impact Today: Innovations in technology and economics have transformed national and regional economies into a global economy. Developments in transportation and communications have made international trade an economic driving force in today’s world.

Section 1: Railroads Lead the Way Main Idea: A growing transportation network spread people, products, and information across the nation. Key Terms: Consolidation Standard Gauge Rebate Pool

I. Railroad Expansion A. Railroads became an important part of America’s economic growth. The first transcontinental railroad was completed in 1869. In 1860 the United States had about 30,000 miles of track. By 1900, nearly 250,000 more miles had been laid. The country had five major railroad lines that crossed the country and hundreds of smaller lines that branched off from there.

I. Railroad Expansion cont. B. Large railroad companies expanded by buying smaller companies or driving them out of business. This was called consolidation. Major railroad barons controlled these large companies and the rail system. 1. One of the first railroad barons was Cornelius Vanderbilt from New York. He made a fortune consolidating several companies and controlled the New York Central Line, a railroad empire from New York to the Great Lakes. 2. James J. Hill built the Great Northern Line between Minnesota and Washington State. 3. Collis P. Huntington, Leland Stanford, and two others founded the Central Pacific that connected California and Utah.

II. Railroads Stimulate the Economy A. The railroad system helped the nation’s economy grow. It became the nation’s largest industry. The railroads carried raw materials to factories, manufactured goods from factories to markets, and farm produce to the cities. 1. The national railroad system helped the lumber and coal industries grow. Railway ties were made of wood, and coal provided fuel for the locomotive engines. 2. The demand for iron tracks helped the iron mining and processing industries grow. 3. The steel industry began to prosper around 1880 when railroad companies switched to steel, a stronger metal for their tracks. 4. Railroad companies provided jobs for laying tracks, building stations, and manufacturing cars and equipment. They also became the nation’s largest employer.

II. Railroads Stimulate the Economy cont. B. The railroad system was improved as railroad companies consolidated. A standard gauge, or distance between rails on a railway, was adopted for all tracks so that it was no longer necessary to load and unload goods to different train lines. One train could now travel the entire length of the track. C. New technology improved the railroads. 1. George Westinghouse devised air brakes, a safer way to stop trains. 2. Eli H. Jenney invented car couplers that linked cars together. 3. Gustavus Swift invented refrigerated cars to carry perishable goods longer distances. 4. George Pullman developed the Pullman sleeping car, a luxury car with seats that converted into beds. He also created the dining car, which made travel more comfortable.

II. Railroads Stimulate the Economy cont. D. Railroads competed for customers. Congress and some states passed laws to regulate the industry, but the laws did not do much. E. Large companies offered secret discounts or rebates to their bigger customers to keep them. The discounts raised freight rates for farmers and other smaller customers, making it expensive for them to use the railroad. F. Railroad barons also made secret agreements among themselves. Known as pools, they divided the railroad business among their companies and set rates. This allowed the railroads to keep more of their money because they did not have to compete for customers or lower their prices to stay competitive.

II. Railroads Stimulate the Economy cont. G. Railroads helped American industry expand to the West. The center for the flour-milling industry shifted from the East Coast to Ohio, Minneapolis, and then Kansas City. The manufacturing center for agricultural equipment moved from central New York State to Illinois and Wisconsin. People also moved their home into the Great Plains and the West. H. The growth of the railroad system led to a national system of four time zones. As train travel became more common, people measured distances by the number of hours a trip would take rather than by how far one place was from another

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Wrap Up Questions What made the railroad the nation’s largest industry? Describe the methods used by the railroad barons to drive smaller companies out of business.