1. Sept. 28, 2010 What are the pros and cons of railroad expansion?
Speed Notes
Political Cartoons
Maps
Homework: Ch. 24 Sec. 3 Pts. 1, 2, and 3

2. Railroads span time and space
Realizing their importance, railroad companies given huge land grants and loans
A National Network:
Transcontinental railroad – other regional lines to follow

3. Railroads span time and space
Romance and Reality
Brought dreams of land, adventure, and fresh start for many
Chinese immigrants, Irish immigrants, and desperate veterans among the many to take on the dangerous job of laying track

4. Railroads span time and space
Railroad Time
Unified the nation
Individual cities on their own time still (noon when the sun was directly above the head)
1869 – time problem fixed by Professor Dowd
Earth’s surface was divided into 24 zones
1883 – clocks were synchronized
1884 – the world followed suit
1918 – Congress officially adopts this as standard for the nation

5. Opportunities & opportunists
Iron, coal, steel, lumber, and glass grew
New Towns and Markets
Linking isolated cities, towns, and settlements promoted trade and interdependence
Cities began specializing in particular products

6. Opportunities & opportunists
George Pullman
Built sleeper cars on Illinois prairie
Built nearby town for his employees that provided basic needs
Clean well-constructed homes
Doctors’ offices
Shops
Athletic fields
Town under strict control to ensure stable work force
Refusal to lower rents after cutting pay led to strike in 1894.

7. Opportunities and opportunists
Credit Mobilier
Union Pacific Railroad formed construction company
Stockholders gave the company a contract to lay track at 2 to 3 times the actual cost
Donated shares to members of Congress
Investigation found that many well-known and respected federal officials (including future president) involved
They kept their profits and received a slap on the wrist

8. The Grange and the Railroads
Farmers’ organization outraged by corruption
Railroad Abuses
Misuse of government land grants (to businesses rather than settlers)
Formal agreements to fix prices (kept farmers in debt)
Charged different customers different prices

9. The Grange and the railroads
Granger Laws
1871 – Illinois authorized commission to set rates and prohibit discrimination
Railroads fought constitutionality of such laws
Supreme Court upheld laws 7 to 2
States won right to regulate the railroads for benefit of farmers and consumers
Established federal government’s right to regulate private business to serve the public

10. The grange and the railroads
Interstate Commerce Act
1886 – Supreme Court ruled that a state cannot set rates on interstate commerce
Passed Interstate Commerce Act – established right of federal government to supervise railroads
Established Interstate Commerce Commission – watchdog for the Act (little effect or power)
Not allowed to set maximum rail rates

11. The grange and the railroads
Panic and Consolidation
Overbuilding and competition pushed many to bankruptcy
Played major role in economic collapse in 1893
600 banks and 15,000 businesses collapsed and 4 million lost their jobs