9/18/12Industrial America1869-1899: population of U.S. nearly tripled, farm production doubled, and value of manufacturers grew six fold-Basis to this economic growth was the growth of railroads Railroads-First big business-Magnet for financial markets-Develop large-scale management bureaucracy-Opened the West-Connected raw materials to factories and markets-Created a national market-They themselves were gigantic markets for iron, steel, lumber, and other capital goods-1890: 167,000 miles of railroad-1900: 199,000 miles-One of the most important developments of railroads was building the transcontinental lines-So risky that it required government subsidies-1862: Congress decides to start giving money to two favorite transcontinental lines Washington gives 155 million acres of land and the West gives another 49 million, $16,000 per mile built on level land, $48,000 mountainous land, $32,000 for other land-Union Pacific to build west from Omaha-Central Pacific to build East from Sacramento-Grenville Dodge (Union Pacific)-Much danger involved with building railroads, including Indian attacks-Credit Mobilier Construction Company (pocket $73 million for $50 million ofwork, bribed Congressmen to look the other way)-Theodore P. Judah was chief engineer of Central Pacific until he died and Big Four took over-Big Four-Charles Crocker-Mark Hopkins-Collis P. Huntington-Leland Stanford-Central Pacific used 10,000 Asian workers called “coolies” who proved to be cheap, efficient, docile, and expendable-May 10, 1869 @ Promontory Point: Leland Stanford drove a gold spike to complete the first transcontinental railroad-Four others are completed before the end of the century-Other companies received generous land grants as well, though not as much as the first two-Great Northern (only one not to receive land grants)-Northern Pacific-Southern Pacific-Atchinson, Topeka, and Santa Fe-James J. Hill associated with Great Northern and Northern Pacific, probably greatest railroad builder of all-“Hill Country” he believed that if the people who his railroad serviceddid well, he would do well.-Commodore Cornelius Vanderbilt easily amassed a fortune of $100 million by offering superior services at lower prices-These men were called “Robber Barons” – use unethical means to achieve financial success-Captains of Industry-Prince of railroading: Jay Gould, who developed the art of buying up run-down railroads, making cosmetic improvements to them, paying dividends ofcapital, and then selling out for a profit-Daniel Drew: financier on Board of Directors of Erie railroad-Jim Fisk associated with Gould during Grant administrationImprovements on Railroad Transportation-Steel Rail: safer, more economical b/c it could carry a heavier load-Standard gauge track width -Westinghouse Air Brakes, 1869-Pullman Palace cars, 1864 considered gorgeous travel hotels for people whocould afford itRailroad Abuses-Belief that railroads contributed to the Panic of 1873 by stimulating production ahead of market needs-High freight charges (rates so high that sometimes farmers burned their corn for fuel rather than ship it)-Discrimination in rates/service (might cost more to send something 20 miles away than to send something 60 miles away)-Short Haul/Long Haul-Granted secret rebates to powerful shippers-Slashing rates at competitive points + made up loss at noncompetitive points-Corrupt activities in politicsRailroad Regulation-1887: Congress passes Interstate Commerce Act, which prohibited-Prohibited pooling and rebates-Prohibited discrimination of any character-Prohibited higher charges for a short haul than a long haul-Required reasonable/just prices-Required prices to be posted-Established Interstate Commerce Commission.-Hepburn Act 1906: got power to set rates of railroadsAndrew Carnegie “Steel King”-By 1900, Carnegie was creating ¼ of the nation’s Bessemer Steel.J.P. Morgan “Bankers’ Banker”John D. Rockefeller “Oil Baron”-By 1879, controlled 95% of the refining capacity of the country.-Standard Oil CompanyThese men step forth as industrial giants and revolutionize the way things are done.Flour milling Mid-West, especially Minnesota becomes center of flour milling.Meatpacking Mid-West, especially Chicago, becomes center of meatpacking.Leader of meat packing industry: Philip Armour, Gustavus SwiftMovement toward industrial pools, trusts (stock of a company handed over to a group of trustees), and holding companies The objective of each of these was to control output and prices in market in order to ensure a satisfactory level of profits.Results Weeded out weaker competition, kept consumer prices high Inventions1860-1890: 440,000 patents issues1867: Christopher Sholes’s improved typewriter referred to as the “literary piano”, sell rights to typewriter to a company called RemingtonUrbanization-Refrigerator car-Electric dynamo/generator-Electric railway1876: Alexander Graham Bell invented telephoneThomas Edison “Wizard of the Wires” perfected electric lights, invented, perfected, or did exploratory work on phonograph, mimeograph, Dictaphone, and movie
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