1. 14.2 – “The Age of the Railroads”

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

3. 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

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

6. Transcontinental Railroad
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

9. “John Chinaman”

10. 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

12. 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)

13. 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