Industry Comes of Age

Industry Comes of Age

1865-1900

The Iron Colt Becomes an Iron Horse

• In 1865 there were 35,000 miles of railways in the U.S., mostly east of the Mississippi. In 1900 there were 193, 556 miles with much west of the Mississippi

• It was risky and expensive and required government subsidies• Government gave land grants to railroads, rewarded 155,504,994 acres total • Small towns with railroads grew to cities, while towns bypassed became 'ghost

towns'.

Spanning the Continent with Rails

• The deadlock in railroad building during the 1850's was broken by secession- Congress made provision for the transcontinental railroad in 1862

• Union Pacific Railroad from east, Central Pacific Railroad from west

• Many Irish laborers (Paddies), and Chinese laborers were employed in construction

The rage for railroads is so great that many will be laid in parts where they will not pay. -George Stephenson

Binding the Country with Railroad Ties

• There were four more transcontinental railroads by 1900

The struggles of the men who built the first railroads were as those of Titans, and the detail of their struggles is even now almost lost in Titanic mists.- Logan McPherson

Railroad Construction and Mechanization

• The success of the western rails stemmed from the welding to and expansion of the old eastern lines, notably the New York Central

• Cornelius Vanderbilt was a genius of enterprise and ultimately made $100 million by offering superior services at lower rates

• There were many improvements such as the standard gauge of track, the use of steel, the Westinghouse air brake, and the Pullman Palace Car.

In the United States 'First' and 'Second' class can't be painted on railroad cars, for all passengers, being Americans, are equal and it would be 'unAmerican.' But paint 'Pullman' on a car and everyone is satisfied.' -Owen Wister 

Revolution by Railways

• The railroads spurred industrialization, and stimulated mining and

agriculture, especially in the West• It also stimulated immigration and growth of cities because of the need

for a labor force• There was a severe negative ecological impact• Standard time zones were created in order to organize railroad schedules

Railroad iron is a magician's rod, in its power to evoke the sleeping energies of land and water- Ralph Waldo Emerson

•Binding the continent from coast to coast created a gigantic domestic market for raw materials and manufactured goods

Wrongdoing in Railroading• Much corruption and

'stock watering’; Jay Gould was very adept at this game

• Railroaders bribed judges and legislatures, and employed lobbyists

• Railroader 'monarchs' created a ‘pool’ to protect their interests

Law! What do I care about the law? Hain't I got the power?-Cornelius Vanderbilt

Government Bridles the Iron Horse

• The depression of the 1870's finally forced farmers into being railroaded into bankruptcy

• In the Wabash case the Supreme Court ruled that the states didn't have power to regulate interstate commerce

• The Congress passed the Interstate Commerce Act in 1887, which prohibited rebates and pools, as well as requiring railroads to publish rates openly. It created the Interstate Commerce Commission, which provided a forum for the railroaders and enforced the legislation

• The ICC was the first attempt by the government to regulate business in the interest of society

[The new commission] can be made of great use to the railroads.  It satisfies the popular clamor for a government supervision of railroads, at the same time that such supervision is almost entirely nominal... The part of wisdom is not to destroy the Commission, but to utilize it. –Richard Olney

Miracles of Mechanization

• The Republic was 4th in manufacturing nations in 1865 and was 1st by 1894

• There was much liquid capital and many millionaires• The natural resources such as iron, coal and oil were exploited• There were many inventions, such as the stock ticker,

typewriter, telephone and notably the light bulb.

The Supremacy of Steel

• Steel held together the new civilization and provided food, shelter and transportation

• America produced 1/3 of the world's steel by 1900

• The Bessemer-Kelly process revolutionized the steel industry.

The men in the steel industry who sacrificed their all were not merely aiding their fellows at home but were adding strength to the cause of their comrades in all industry. – John J. Lewis

The Trust Titan Emerges

• Industry tycoons emerged in their respective araes: Andrew Carnegie (steel) John Rockefeller (oil) J. Pierpont Morgan (bankers' banker)

• Carnegie pioneered "vertical integration"; Rockefeller invented "horizontal integration"

• Rockefeller perfected the trust, thus controlling smaller business rivals

Do you know the only thing that gives me pleasure? It’s to see my dividends coming in. -John Rockefeller

Carnegie and Other Sultans of Steel

• Carnegie grew up in, and started an extremely successful steel business in, Pittsburgh

• He disliked monopolistic trusts• Carnegie sold his business to J.P. Morgan for over

$400 milllion, who then launched the United States Steel Corporation (first billion-dollar corporation)

The way to become rich is to put all your eggs in one basket and then watch that basket. -Carnegie

Rockefeller Grows an American Beauty Rose

• Oil was discovered in Pennsylvania in 1859• Kerosene was the first major product• Originally just for oil lamps, but then the internal combustion

engine was invented• Rockefeller owned 95% of all oil refineries in the United States

by 1877• Other trusts for products such as sugar, leather, tobacco and

harvesting sprang up

The Gospel of Wealth• Herbert Spencer and William

Sumner (social Darwinists) coined the phrase "survival of the fittest"

• The self-justification for wealth bred contempt for the poor

• Lawyers used the 14th Amendment to protect themselves by interpreting a corporation as a "legal person"

Government Tackles the Trust Evil

• Congress enacted the Sherman Anti-Trust Act of 1890

• It was ineffective in curbing giant trusts because of loopholes, but was later used to curb labor unions

The South in the Age of Industry

• White and black sharecroppers were tied to their landlords

• Agriculture of the South received a boost when machine-made cigarettes came about and there was an increase in tobacco consumption

• Railroads gave goods rates for North to South manufactured goods, but poor rates for South to North raw materials

• Textile mills dominated the communities