The Iron Colt Becomes an Iron Horse

Industry Comes of Age (1865-1900)

• Railroad production grew considerably after the Civil War, increasing from 35,000 miles of track in 1865 to 192,556 miles in 1900.

The Iron Colt Becomes an Iron Horse

• Congress gave land to railroad companies, totaling 155,504,994 acres.
• Railroad companies were alloted alternate square-mile sections in checkerboard fashion for railroad routes.
• Until companies determined which land was best for railroad building, all of it was withheld from other users.
• Grover Cleveland stopped this practice in 1887.
• Towns with railroads grew into sprawling cities, while those skipped by railroads became ghost towns.

Spanning the Continent with Rails

• After the South seceded, deadlock over where to build a transcontinental railroad ended.
• In 1862, Congress commissioned the Union Pacific Railroad to begin westward from Omaha, Nebraska, to gold-rich California.
• The company building the transcontinental railroad received huge sums of money and land, but corruption plagued it.
• Insiders of the Credit Mobilier reaped $23 million in profits.
• Many Irishmen worked on the tracks laying as much as 10 miles a day.
• When Indians attacked to save their land, many workers and Indians died during construction.
• The Central Pacific Railroad, backed by the Big Four (including Leland Stanford and Collis P. Huntington), extended the railroad eastward in California.
• The Central Pacific used Chinese workers, receiving the same incentives as the Union Pacific.
• Chinese workers had to drill through the hard rock of the Sierra Nevada.
• The transcontinental rail line completed in 1869 at Promontory Point near Ogden, Utah.
• The Union Pacific built 1,086 miles of track, compared to 689 miles built by the Central Pacific.

Binding the Country with Railroad Ties

• Before 1900, four other transcontinental railroads were built.
• The Northern Pacific Railroad stretched from Lake Superior to the Puget Sound and finished in 1883.
• The Atchison, Topeka, and Santa Fe stretched through the Southwest deserts, completed in 1884.
• The Southern Pacific, completed in 1884, went from New Orleans to San Francisco.
• The Great Northern ran from Duluth to Seattle and was created by James J. Hill.
• Many pioneers over-invested in land, causing the banks that supported them to fail when the land wasn't worth as much as initially thought.

Railroad Consolidation and Mechanization

• Older eastern railroads like the New York Central, headed by Cornelius Vanderbilt, often financed the successful western railroads.
• Railroad advancements included steel rails, the Westinghouse air brake, Pullman Palace Cars, telegraphs, double-tracking, and block signals.
• Despite those advancements, train accidents and death were still common.

Revolution by Railways

• Railroads stitched the nation together, generated a huge market, created jobs, and helped the rapid industrialization of America.
• Railroads stimulated mining and agriculture and allowed expansion in the West by bringing people and supplies to areas where work occurred.
• Railroads helped people settle in the previously harsh Great Plains.
• Due to railroads, four national time zones created on November 18, 1883 as opposed to each city having its own time zone.
• Railroads helped create millionaires and the millionaire class.

Wrongdoing in Railroading

• Railroads were not without corruption; illustrated by the Credit Mobilier scandal.
• Jay Gould made millions embezzling stocks from the Erie, Kansas Pacific, the Union Pacific, and the Texas and Pacific railroad companies.
• "Stock watering" was one method of cheap moneymaking, inflating the worth of railroad companies stock to sell at huge profits.
• Railroad owners abused the public, bribed judges and legislatures, employed lobbyists, elected their own to political office, gave rebates, and used free passes to gain favor in the press.
• Railroad giants entered into defensive alliances to show profits, beginning with trusts or "pools" where supposed competitors worked together to set prices and share profits.

Government Bridles the Iron Horse

• People were slow to combat such injustice, but they were aware of it.
• The Grange formed by farmers to combat corruption, occurring with many state efforts to stop the railroad monopoly.
• States were stopped when the Supreme Court ruled in the Wabash case that states could not regulate interstate commerce like trains.
• The Interstate Commerce Act passed in 1887 banned rebates and pools, required railroads to publish rates openly, forbade unfair discrimination against shippers, and banned charging more for a short than a long haul.
• The Interstate Commerce Commission (ICC) set up to enforce the act.
• The act represented the first attempt by Congress to regulate businesses for society's interest, even though people like Richard Olney, a shrewd corporate lawyer, could use the act to their advantage.

Miracles of Mechanization

• By 1894, the U.S. was the #1 manufacturer in the world, a large increase from being 4th in 1860.
• Growth attributed to abundant liquid capital, as well as exploitation of natural resources.
• The Mesabi Range in the Minnesota-Lake Superior region yielded iron deposits, serving as the single largest source of raw material.
• Massive immigration created a cheap labor population.
• American ingenuity played a vital role, as inventions like mass production were being refined and perfected.
• Popular inventions included the cash register, stock ticker, typewriter, refrigerator car, electric dynamo, as well as the electric railway.
• Alexander Graham Bell invented the telephone in 1876.
• Thomas Edison ("Wizard of Menlo Park") a versatile inventor best known for his electric light bulb, also had many other inventions.

The Trust Titan Emerges

• Industry giants used ways to eliminate competition and maximize profits.
• Andrew Carnegie used "vertical integration," buying and controlling all aspects of an industry.
• Carnegie mined the iron, transported it, refined it, and turned it into steel, controlling all parts of the process.
• John D. Rockefeller employed "horizontal integration" by allying with or buying out competitors to monopolize a given market.
• Rockefeller formed Standard Oil, controlling the oil industry by forcing weaker competitors to go bankrupt.
• Industrial leaders known for trusts, or giant, monopolistic corporations.
• Rockefeller placed his own men on the boards of directors of rival competitors to gain influence and reduce competition, a process called "interlocking directorates."

The Supremacy of Steel

• By 1900, Americans produced as much steel as England and Germany combined.
• The increase in steel production attributed to the Bessemer process making steel-making cheaper and effective.
• Cold air blown on red-hot iron burned carbon deposits and purified it.
• America had a lot of coal to fuel iron smelting, becoming #1.

Carnegie and Other Sultans of Steel

• Andrew Carnegie started off as a poor boy in a bad job, and he worked hard, assuming responsibility, and charming influential people to make his way to wealth.
• By 1900, from his start in the Pittsburgh area, he was producing 1/4 of the nation's Bessemer steel, and earning $25 million a year.
• J. Pierpont Morgan with his fortune in the banking industry and in Wall Street, wanted to step into the steel tubing industry, but Carnegie threatened to ruin him.
• Morgan eventually bought Carnegie's entire business at $400 million.
• Carnegie donated $350 million to charity, pensions, and libraries
• Morgan launched the United States Steel Corporation in 1901, becoming the world's first billion-dollar corporation capitalized at $1.4 billion.

Rockefeller Grows an American Beauty Rose

• In 1859, Drake first used oil to get money.
• By the 1870s, kerosene, a type of oil, used to light lamps all over the nation.
• By 1885, 250,000 of Edison's electric light bulbs in use.
• The electric industry soon made kerosene obsolete, as kerosene had made whale oil obsolete.
• The gasoline-burning internal combustion engine was beginning
• John D. Rockefeller ruthless and merciless, he organized the Standard Oil Company of Ohio in 1882.
• By 1877 Controlled 95% of oil refineries.
• Rockefeller crushed weaker competitors but produced better at a cheaper price.
• Other trusts, which produced better products at cheaper prices, emerged, like the meat industry of Gustavus F. Swift and Philip Armour.

The Gospel of Wealth

• Many newly rich workers had worked from poverty to wealth, feeling some people in the world were destined to become rich and help society with their money.
• This was the "Gospel of Wealth."
• "Social Darwinism" applied Charles Darwin's survival-of-the-fittest theories to business saying a Carnegie was at the top of the steel industry because he was most fit to run such a business.
• Believers in the doctrine of "survival of the fittest," argued the wealthy deserved their riches because they had demonstrated greater abilities than the poor.
• Reverend Russell Conwell of Philadelphia delivering his lecture, "Acres of Diamonds" thousands of times. He preached that people made themselves poor and rich, as everything was because of one's actions.
• Corporate lawyers used the 14th Amendment to defend trusts, arguing corporations were legal people entitled to their property, creating plutocracy.

Government Tackles the Trust Evil

• In 1890, the Sherman Anti-Trust Act was signed into law forbidding combinations in restraint of trade without distinction between "good" and "bad" trusts.
• The law proved ineffective and couldn't be enforced until 1914.

The South in the Age of Industry

• Despite industrial advances, the South remained agrarian.
• James Buchanan Duke developed a huge cigarette industry as the American Tobacco Company and made donations now Duke University.
• Men like Henry W. Grady, editor of the Atlanta Constitution newspaper, encouraged the South industrialize.
• Many northern companies set rates to keep the South from gaining any competitive edge.
• Competitive edge was contained from the deposits of iron and coal near Birmingham, Alabama, and the textile mills of the South.
• Cheap labor led to job creation, and many white Southerners saw employment as a blessing despite poor wages.

The Impact of the New Industrial Revolution on America

• As the Industrial Revolution spread in America, the standard of living rose, immigrants swarmed to the U.S., and Jeffersonian ideals about the dominance of agriculture fell. Inventions such as the typewriters and Bell's telephone expanded the industrial employment among women in the late nineteenth century.
• Women had swarmed factories and encouraged by recent inventions found new opportunities, and the "Gibson Girl" became the romantic ideal of the age.
• The Gibson Girl was young, athletic, attractive, and outdoorsy.
• Many women never achieved this, and toiled in hard work so they could earn money.
• A nation of farmers became a nation of wage earners, but the fear of unemployment was never far, especially with the illness of a breadwinner in the family.
• Strong pressures in foreign trade developed with the industrial machine threatening to flood the domestic market.

In Unions There Is Strength

• With the inflow of immigrants providing a labor force open to low wages in poor work environments, workers who wanted better conditions could not achieve them since their bosses could easily hire the unemployed.
• Corporations hired strikebreakers and ask courts to order strikers to stop or bring in trooops.
• Other methods included hiring "scabs" or replacements, "lockouts" to starve strikers, and workers signing "ironclad oaths" or "yellow dog contracts" banning them from joining unions.
• Workers could be "blacklisted" and denied privileges elsewhere.
• The middle-class grew annoyed and deaf to worker's outcry.
• People such as Carnegie and Rockefeller battled and worked to get to the top, and workers could improve their situation.

Labor Limps Along

• The Civil War put premium on labor and helped labor unions grow.
• Formed in 1866, the National Labor Union represented a giant boot stride by workers and attracted 600,000 members, but it only lasted six years.
• The Labour Union excluded Chinese and ignored Blacks and women and only getting them to join.
• The Labor Union arbitrated industrial disputes and the eight-hour workday, and it won the latter for government workers.
• The depression of 1873 knocked it out.
• The Knights of Labor beginning in 1869 operated secretly until 1881, was similar to the National Labor Union.
• The Knights of Labor believed that conflict between capital and labor disappear when labor owned and operated businesses and industries, and they only barred liquor dealers, professional gamblers, lawyers, bankers, and stockbrokers, campaigning for economic and social reform.
• Led by Terence V. Powderly, the Knights won number of strikes for the eight-hour day and a successful strike against Jay Gould's Wabash Railroad in 1885, mushrooming to ¾ of a million workers.

Unhorsing the Knights of Labor

• The Knights became involved in a number of May Day strikes of which half failed.
• In Chicago, home to about 80,000 Knights and a few hundred anarchists that advocated overthrow of the American government, tension building.
• The Chicago police were advancing on May 4, 1886 on a meeting to protest brutalities by authorities when a dynamite bomb thrown.
• The throwing killed or injured several dozen people.
• Eight anarchists rounded up without proof of association, but had preached incendiary doctrines.
• A jury sentenced five of them to death on account of conspiracy, the other three given stiff prison terms.
• In 1892, John P. Altgeld, a German-born Democrat, was elected governor of Illinois
• He pardoned the three survivors after studying the case extensively but received violent verbal abuse and was defeated re-election.
• The Haymarket Square Bombing associated the Knights with anarchists, lowering effectiveness.
• Membership declined, and those that remained fused with other labor unions.

The AF of L to the Fore

• In 1886, Samuel Gompers founded the American Federation of Labor.
• The AF of L consisted of effective labor unions of the post-Civil War period containing self-governing national that keeping independence.
• Gompers demanded a fairer share for labor seeking better wages, hours, and working conditions.
• The AF of L solid narrow foundations tried to speak for all workers but fell short.
• The AF of L composed of skilled laborers let unskilled laborers fend for themselves, leading critics to call it "the labor trust."
• From 1881 to 1900, over 23,000 strikes involving