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Chapter 24 - Industry Comes of Age

Chapter 24 - Industry Comes Of Age (1865-1900)

I. The Iron Colt Becomes The Iron Horse

* When Lincoln was shot in 1865 there was only 35,000 miles of stream 

railways in the United States. By 1900 there were 192,556 miles. *Transcontinental railroad building was very costly and risky; the  government gave railroad companies loans 2. Frontier settlements touched with railroads became flourishing cities,  cities that were bypassed withered to ghost towns * Towns fought for host privileges

II. Spanning The Continent With Rails

  1. When the South seceded the union wanted to bind the pacific coast
    • The Union Pacific Railroad was commissioned by congress.
  2. The construction companies made fabulous profits; they used construction  gangs containing many Irish "paddies"
  3. When Indians would attack to defend their lands; the paddies would grab  their rifles
  4. On the California end the Central Pacific Railroad was in charge of  working Eastward
    • They used Chinese laborers and had a hard time chipping through Sierra  Nevada
  5. A wedding of the rails was consummated near Ogden, Utah. The Union  *acific built 1,086 miles; the Central Pacific 689 miles
  6. Completion of the transcontinental line was one of America's most  impressive peacetime undertakings. It facilitated trade, penetrated through  deserts and linked the nation.

III. Binding The Country With Railroad Ties

  1. Four other railroads were completed by the century's end:
    • North Pacific (1883) - from lake Superior to Puget Sound
    • The Atchison, Topeka, and Santa Fe (1884) - Through deserts to  California
    • The Southern Pacific (1884) - New Orleans to San Francisco
    • The Great Northern - from Duluth to Seattle
  2. Some railroad companies bankrupt in post-Civil War decades

IV. Railroad Consolidation And Mechanization

  1. "Commodore" Cornelius Vanderbilt offered superior, cheaper railway  services and became rich.
  2. The steel rail was a new improvement, tougher than the iron rails, safer  and more economical because it could carry heavier load
    • Standard track gauge came into use, eliminated inconveniences;  Westinghouse air brake contributed to efficiency and safety.

V. Revolution By Railways

  1. For the first time the nation became untied with ribs of iron and steel,  railroads emerged as the nation's biggest business. The railroad had an amazing  economic growth, trains hauled raw materials to factories and then back as  finished goods
  2. Railroads simulated immigration by offering land
  3. Railroads helped regulate time, until the 1880's every town had its own  local time, dictated by the sun. It was a nightmare for figuring out schedules  thus on November 18, 1883 railroad lines decided that the continent would be  divided into 4 "time zones".

VI. Wrongdoing In Railroading

  1. Corruption lurked nearby the fortune made by the railroads; one of the  favorite devices of corruption was "stock watering" - where stock promoters  inflated claims about a line's assets and sold more stocks than the railroad's  actual value.
  2. The railroaders abused the public and bribed judges and legislatures  when breaking the law. The railroad kings were virtual industry monarchs.  Eventually the companies allied together in dependence of their profits.

VII. Government Bridles The Iron Horse

  1. Farmers wondered if America has escaped slavery only to fall into  economic injustice. The depression of 1870 led people to protest the railroad  monopoly.
  2. The Supreme Court decreed that individual states had no power to  regulate interstate commerce. If the mechanical monsters were to be stopped, it  was up to the federal government
  3. Congress passed the Commerce Commission - forbade unfair behaviors and  promoted orderly forums
    • 1st large scale attempt by Washington to regulate hustlers in the  interest of society at large.

VIII. Miracles Of Mechanization

  1. Post-war industrial expansion grew and America ranked 1st in  mechanization by 1894.
  2. The term millionaire coined for the first time in 1840's. The civil war,  though profiteering created fortunes. Investors loaned more money than the U.S.
  3. Innovations in transportation fueled growth too, by bringing the  nation's natural resources to the factory door.
  4. Anyone who could make an appealing new product available for good price  in large quantities and could market it, thrived. Machines made it possible to  replace skilled workers with masses of immigrants working 12 hour shifts, 7 days  a week.
  5. Thomas Edison, a great inventor, best known for the light bulb.

IX. The Trust Titan Emerges

  1. Competition was the driving force of most business leaders. Carnegie -
    • The Steel King - pioneered the tactic of vertical integration: combining into  one organization, all phases of manufacturing. Helped control quality. 
    • Horizontal integration: allying with competitors to monopolize a given market.
  2. Interlocking directorates - placing his own officers on other's boards  of directors.

X. The Supremacy Of Steel

  1. Steel was a scarce commodity in the America of Lincoln and was  expensive; was used for cutlery. Within 20 years America started pouring out  more steel.
  2. What caused the transformation? A new method of making cheaper steel -  the Bessemer Process.

XI. Carnegie And The Sultans Of Steel

  1. Andrew Carnegie worked hard from a young age, he surrounded himself with  influential people and then became rich and involved with steel.
  2. J. Pierpont Morgan, another financial giant, also was involved in steel  business. 

  3. Carnegie sold his industry to Morgan for 400 million. He gave away about  350 million to giants or libraries. Morgan's new company was America's 1st  billion dollar corporation.

XII. Rockefeller Grows An American Beauty Rose

  1. The oil industry grew almost overnight.
    • Kerosene - 1st major product, made fire burn brighter than whale oil.
    • Whaling became a sick industry while oil rose
  2. Eventually the light bulb diminished the market for kerosene but with  the invention of the automobile, oil for gas shot up
  3. John D. Rockefeller came to dominate the oil industry. He became a  successful businessman at 19. He was aggressive and extinguished other  companies.
  4. New trusts for every industry were sprouting up and the "new rich" were  elbowing aside the aristocracy.

XIII. The Gospel Of Wealth

  1. "Godliness is in league with riches" preached a bishop of Massachusetts.  They thought that millionaires are a product of natural selection. Poor people  were only poor because they didn't try hard enough.
  2. Trusts sought refuge behind the 14th amendment. Courts interpreted  corporations to be a legal "person" and couldn't be deprived of rights. XIV. Government Tackles The Trust Evil
  3. Sherman Anti-Trust Act of 1890 forbade combination in restraint of trade  without distinguishing "good" trusts from "bad." Not very effective and had lots  of loop holes until 1914.

XV. The South In The Age Of Industry

  1. The North's increase in industry after the civil war was not shared by  the south.
  2. The South received a welcome boost when machine made cigarettes shot up  tobacco consumption. James Buchanan Duke absorbed his main competitors into the  American Tobacco Company.
  3. Industrialists tried coaxing the South into the factories but they had  obstacles that kept them from it. The South did have cotton and textile mills  which was a mixed blessing. The southern workers were paid half what the  northerners were but it provided the first steady jobs and wages.

XVI. The Impact Of The Industrial Revolution On America

  1. The standard of living rose sharply and Americans enjoyed more physical  comforts than their counterparts in another industrial nation.
  2. Older way of life changed. Rural immigrants used to living by nature had  to adapt to factory whistles.
  3. Women were profoundly affected by the new industrial age. They were  introduced to the age with the typewriters and telephone switchboard, a new  image of an independent and athletic girl came out.
  4. The machine age also accentuated class driven. By 1900 1 of 10 people  owned 90% of the nation's wealth.
  5. By the 1900's 2/3 workers depended on wages and the economy's swing or  worker's illness could mean disaster for the whole family. International trade  was becoming faster, cheaper, and easier.

XVII. In Unions There Is Strength

  1. Individual originality and creativity were stiffed when it came to the  workers.
  2. New machines displayed employees in the short run.
  3. Railroads let bosses bring in laborers that would work cheaper from all  over the country.
  4. The workers didn't have much power to battle against giant industry.  Middle class annoyed by constant strikes grew deaf to the outcries.

XVIII. Labor Limps Along

  1. Labor unions were given a strong boost by civil war because human lives  and labor was valued after the drain on human resources.
  2. The National Labor Union, 1866, represented a great change. It claimed  to unify workers across locals and trades to challenge their bosses. It lasted 6  years with 600,000 members but it was the 1870's depression knocked the union  out.
  3. Knights of Labor began inauspiciously in 1869 as a secret society with a  private ritual, passwords and special handshakes. It was sought to include all  workers in "one big union." They wanted reform and membership was 3/4 million  workers.

XIX. Unhorsing the Knights of Labor

  1. The knights eventually fell because of a run-in with anarchists where a  bomb went off in Chicago – a.k.a. The Haymarket Square episode.
  2. They lost their skilled members and they ended dwindling to 100,000  members.

XX. The AF of L to the Fore

  1. The elitist American Federation of Labor, 1886, only for skilled  laborers, mainly ran by Samuel Gompers. He didn't like socialism and demanded  fairer share of labor. He sought better wages and working conditions.
  2. Public eventually gave in to workers rights and made a legal holiday.
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