1. Industrialization and Railroads US History Chapter 5

2. Natural Resources RAW MATERIALS – Four major types in the US, Coal, Timber, Iron, and Copper – All were in abundance in the US – Materials were cheap

3. Natural Resources Most resources came from the west and were brought by railroads – This is why railroads were so important PETROLEUM (oil) – Before cars, petroleum was in demand for Kerosene oil lamps. – The first drilling for oil started in Pennsylvania and then grew across the country – The first oil well was in 1859 by Edwin Drake – By 1900 there were oil fields from Pennsylvania to Texas

4. LARGER WORK FORCE HUMAN RESOURCES – The human resources are as important as the natural resources – The US population tripled in size from1860-1910 – This growth meant that there were more people available and willing to work in factories – This also meant that the demand for goods created in these factories increased

5. LARGER WORK FORCE WHY DID THE POPULATION GROW? – There were 2 reasons for population growth at this time 1. Larger families 2. Larger immigrant population – Families were larger and children lived longer due to better living conditions – The bad living conditions and oppressive governments in China and Europe cause the increase in Immigrants coming to the US

6. LARGER WORK FORCE EFFECTS – Since children lived longer there were more people to put to work – With more workers production of products could increase. – With more production of products came more demand for these products

7. NEW INVENTIONS New technology was also important as it increased the nations productivity New technology also resulted in new industries

8. NEW INVENTIONS BELL AND THE TELEPHONE – 1874 Alexander Graham Bell suggested idea of Telephone to assistant Thomas Watson – Bell began to experiment and in 1876 succeeded in creating first Telephone First call to assistant said “Come here Watson, I want you” – 1877 Bell organized the Bell Telephone Company which became American Telephone and Telegraph Company (AT&T)

9. NEW INVENTIONS EDISON, WESTINGHOUSE, AND ELECTRICTY – Thomas Alva Edison was the leading pioneer in new technologies – Laboratory at Menlo Park was leader in modern research First five years of laboratory Edison patented an invention almost every month – First invention that brought him fame was the phonograph in 1877 – Two years later invented lightbulb and perfected electric generator Other inventions: battery, Dictaphone, and motion picture

10. NEW INVENTIONS EDISON, WESTINGHOUSE, AND ELECTRICTY – Edison Company changed American Society in 1882 when started supplying New York City with electric power 1889 Edison companies merged to form Edison General Electric Company (GE)

11. NEW INVENTIONS EDISON, WESTINGHOUSE, AND ELECTRICTY – George Westinghouse invented a new airbrake for railroads Allowed all brakes on each car to be applied at one time – This allowed trains to travel safely at faster speeds – Westinghouse also developed alternating current system Could distribute electricity from generators and transformers – Worked with Tesla to improve and formed Westinghouse Electric Company Also first to use hydroelectric power from Niagara Falls to light street cars in Buffalo 22 miles away

12. NEW INVENTIONS TECHNOLOGY’S IMPACT – All inventions changed how people lived Invention of ice machine started basis of refrigerator 1870 first refrigerated railroad car Kept food fresh longer – Invention of automatic loom in 1800s allowed cloth to be made at faster rate – Standard Sizes started to be used in making clothes Electric sewing machines made clothing companies into factories instead of small tailor shops Similar in shoe making (no more cobblers) – Improved communications (telegraph cables across Atlantic 1866)

13. FREE ENTERPRISE This was another reason why the US could industrialize rapidly. – Late 1800s American’s embraced “laissez-faire” – Laissez-faire supporters believe the government should not interfere in economy other than to: Protect private property rights And maintain peace

14. FREE ENTERPRISE Laissez-faire supporter believe that government regulation increases costs and hurts more than helps Business should rely on supply an d demand to regulate wages and prices. Free market and competing companies = greater efficiency and more wealth for everyone Low taxes and limited gov’t debt Individuals make the decisions on how nations wealth is spent.

15. FREE ENTERPRISE Laissez-faire encouraged people to become “entrepreneurs” – People who risk their own money to organize and run a business. – A lot of entrepreneurs were in New England due to wealth they had received by investing in trade, finishing and textile mills. – A lot of entrepreneurs had foreign investors

16. FREE ENTERPRISE In many ways the US did practice Laissez-faire in the 1800s – They did not control wages and prices – Kept taxes low – Did not regulate industry Other ways they did not (was a fight between North and South) – North wanted high tariffs to protect manufactures from foreign competition and federal help with companies building roads, canals and railroads – South opposed federal help and wanted low tariffs to promote trade and keep costs of imports low

17. FREE ENTERPRISE Civil War ended debate between North and South. – Congress passes Morrill Tariff Greatly increased Tariff rates 1865 tariff’s had tripled Gov’t loans to railroads Even with tariff’s in 1800s US was largest free enterprise in the world – Constitution bans states imposing tariff’s on each other and few regulations on commerce – However the tariffs in place were deemed necessary because the gov’t did not think America could compete with European business

18. CHAPTER 5 SECTION 1 QUESTIONS 1.How did abundance of natural resources contribute to economic growth in the late 1800s? 2.How did the principles of the free enterprise system, laissez-faire and profit motive encourage the rise of industry? 3.Make the chart below and fill in with how each invention affected American work and business. INVENTIONEFFECT Telephone Lightbulb Automatic Loom

19. TRANSCONTINENTAL RAILROAD 1865, US had 35,000 miles of railroad track mostly east of Mississippi. – After civil war, railroad construction expanded. – 1900 US had more than 200,000 miles of railroad track Railroad boom began 1862 – Pres. Lincoln signed “Pacific Railway Act” – Provided for the construction of transcont. RR by 2 companies Gov’t offered each company land while building (created competition!)

20. TRANSCONTINENTAL RAILROAD The Union Pacific – Under direction of “Grenvill Dodge” (former Union General) – Started moving west in Omaha Nebraska 1865 – Problems included Heat, mountains, angry Native Americans, labor, money and engineering Union Pacific Workers – Civil War vets, Irish immigrants, out of work miners and farmers, cooks, adventures and ex-cons – Employed over 10,000 workers

21. TRANSCONTINENTAL RAILROAD The Central Pacific – Began with engineer Theodore Judah – Sold stock to 4 people: Grocer “Leland Stanford” Shop owner Charley Crocker Harware store owners Mark Hopkins and Collis Huntington – All 4 made a lot of money Stanford became gov. of Califorina, a senator and founder of Stanford University

22. TRANSCONTINENTAL RAILROAD – Based in California (labor shortage) – Hired 10,000 workers from China Materials for Central Pacific – All equipment was shipped from eastern US – Took longer to get materials The Last Spike – Transcontinental railroad completed in 4 years – Central Pacific laid 688 miles, Union Pacific laid 1,086 miles – May 10 th 1869, In Promontory Summit Utah hammered in gold and silver spikes to join the 2 railroads – News spread and people celebrated as far as Philadelphia

23. RAILROADS SPUR GROWTH Transcont. Was first of many railroad lines that were built after civil war. – Linking entire nation allowed increased market for products – Helped industrial growth – Stimulated economy by spending large amounts of money on materials Many small railroad companies built before CW were consolidated to form larger lines that covered more ground – After railroads consolidated, there were 7 giant systems that went from major cities into the countryside that controlled most of the railroad traffic

24. RAILROADS SPUR GROWTH “Cornelius Vanderbilt” – one most successful railroad consolidators – By 1869 bought and merged 3 lines to connect New York City to Buffalo. – Within 4 years, extend railroad control to Chicago – Able to offer 1 st direct rail service between NYC and Chicago – 1871 began building NYC Grand Central Station

25. RAILROADS SPUR GROWTH Railroads development caused a need for “time zones”. – Before 1880s each community set time by sun. – Having so many local time zones caused problems with train schedules – American Railway company divided country into 4 time zones in 1883 – Federal Gov’t ratified change in 1918

26. RAILROADS SPUR GROWTH As RR grew, new technology meant they could pull larger, heavier loads – Combine new technology with good RR system = more efficient – Cost for a ton of freight dropped from 2 cents in 1860 to ¾ a cent in 1900 RRs also helped unit American’s from different Regions connect and feel like one nation

27. ROBBER BARONS Building RR cost more than private investors could afford on their own – Gov’t encouraged and helped with “land grants” – Companies sold that land to raise money to build RR. – 1860s gave RR companies more than 120 million acres of public land – Covered most of the cost of building RR lines

28. ROBBER BARONS Great Wealth of RR entrepreneurs = accusations of swindling – Some said they bribed officials, cheated on contracts and swindled taxpayers and investors – “Jay Gould” most corrupt railroad owner Bribery occurred most frequently b/c gov’t helped fund RR – More land grants from gov’t = more money for RR – Bribed Gov’t officials to get these land grants

29. ROBBER BARONS The Crédit Mobilier Scandal – Made RR corruption public in 1872 – Crédit Mobilier was construction company set up by stock holders of Union Pacific (including Oakes Ames a member of Congress) – Signed contracts between themselves (as Credit Mobilier and as Union Pacific) so no one questioned the higher prices the RR company was being charged – Union Pacific RR complete, investors had $, RR company did not and had no more land grants – Ames gave stock to others in congress (making them rich) to give Union Pacific more Land Grants

30. ROBBER BARONS The Crédit Mobilier Scandal – During election of 1872, letter was sent to newspaper listing members who had accepted stock in company (bribe) – This led to investigation of several members (including James Garfield who later was Pres.) and the current VP Schuyler Colfax) – No criminal or civil charges filed and did not affect election outcomes

31. ROBBER BARONS The Great Northern Railroad – Scandal gave impression that all RR entrepreneurs were “robber barons” People who steal from industries and give nothing back – Not all people deserved this reputation “James J. Hill” = not a robber baron – Built and opened Great Northern RR from Wisconsin and Minnesota to Washington – Did NOT use federal grants

32. ROBBER BARONS “James J. Hill” – Built close to towns – Raise money, gave low fairs to people living along the route of the train – Later sold homesteads to Norwegian and Swedish immigrants coming to the region – Sent goods that were in demand in China to Washington to be shipped to Asia – Great Northern was the only Transcont. RR not forced into bankruptcy.