US History Chapter 24 Notes

US History Chapter 24 Notes

Industry Comes of Age (1865-1900)
Rather than become politicians, intelligent people were running corporations.
So political force declined while the economy became strong.
The US became a global industrial power.
The Iron Colt Becomes and Iron Horse
Industry and corporations began to have a much stronger effect on the government.
Amount of railroad track more than quintupled during this time period, to almost 200,000 miles.
A lot of this was in the western part of the country.
Transcontinental Railroads:
A problem with building them, since they were dependent on large cities nearby, and those large cities were dependent on them. For that reason, private citizens wouldn’t fund them.
So in order to make one, Congress had to loan money to companies to build them.
They started doing this for two companies in 1862. They also loaned land.
Congress would give them vast areas of land in which to build- they would pick alternate square-mile chunks of land to build on.
But they wouldn’t let anyone settle anywhere until they’d chosen.
...Until Grover Cleveland stopped this in 1887.
In exchange for these grants, the government got help for the postal service and military.
Granting land was preferred over granting money because no new taxes had to be made.
Later, the land would be sold off by the railroad companies.
Important cities in the west were those that had a railroad nearby.
So towns really wanted railroads, and would bribe the builders.
Spanning the Continent with Rails
There had been arguments in the 1850s about which half would get the transcontinental railroad.
Then, the South seceded.
1862- Congress started the railroad in order to support the Union and secure CA.
They called this the Union Pacific Railroad- from Omaha, NB westward.
The company building it was given lots of land and loans depending on terrain difficulty.
1865- Railroad creation sped up, and Crédit Mobilier Construction Company did some underhanded practices, and was purposely ignored by bribed congressmen.
Many railroad workers were Irishmen, who also fought off Native Americans as they attacked.
So there were many, many deaths.
In CA, they built the Central Pacific Railroad from Sacramento through NV.
The “Big Four”, successful people with political connections, funded the project.
They made a lot of money, but not illegitimately.
They had the same subsidies, and employed a lot of Chinese-American workers.
They couldn’t build as fast because of the terrain (Sierra Nevada). Many died.
1869- The two railroad lines met in Ogden, UT. The UPR had built much more than the CPR.
This railroad allowed the west to thrive, and also helped trade with Asia.
Binding the Country with Railroad Ties
By 1900, there were another four transcontinental railroads.
But those ones didn’t get loans of money from the government, only land grants.
1883- Northern Pacific Railroad finished (Lake Superior to Puget Sound).
1884- Atchinson, Topeka, and Santa Fe finished.
1884- Southern Pacific Railroad finished (New Orleans to San Francisco).
1893- Great Northern Railroad finished (Duluth to Seattle).
This was made by James J. Hill (Canadian-American). He was excellent.
Railroad organizations had a lot of problems with bankruptcy and building unused, unwanted tracks.
Railroad Consolidation and Mechanization
In order for the western railroads to work, the eastern ones had to work too, especially NY Central.
Cornelius Vanderbilt led this expansion of NY Central. He made a fortune.
Vanderbilt also helped the railroads by introducing the stronger steel rail (instead of iron).
This was much safer and allowed for transport of heavier goods.
Also, railroad track widths were standardized, so people didn’t always have to change trains.
1870s- Westinghouse air brake adopted, making trains safer.
Pullman Palace Cars were made- this was like first-class. (But with kerosene lamps. Bad idea.)
There were many, many disasters, and vast numbers of people died in train accidents.
Revolution by Railways
Railroads allowed for the unification of the country and a stronger economy.
Railroads shipped raw materials and manufactured goods, leading to much investment.
Railroads also allowed for more industrialization because of fast transportation.
In the west, there was more mining and agriculture, since products could be transported.
Railroads brought food to cities, allowing for cities to expand greatly.
Railroads encouraged immigration.
The western plains were filled with cornfields and cattle fields (since buffalo were almost gone).
MI, WI, and MN forests were chopped down to build houses.
Railroads builders split the country into four time zones (before, everyone had gone by the sun).
New aristocrats were those who had made a fortune in building railroads.
Wrongdoing in Railroading
The Crédit Mobilier Company wasn’t the only one to engage in underhanded practices.
Jay Gould was a very notorious railroad financier who made illegitimate money through speculation.
The corrupt financiers would do “stock watering” very often. They would claim their railroads were much better than they actually would, and then would earn much more money from stocks.
This led to railroad managers have to charge the public more.
The public suffered a lot at the hands of corrupt financiers, who repeatedly did things to damage the public, and also bribed judges, congressmen, lobbyists, etc.
They would put their supporters into office and wouldn’t charge those politicians to ride.
Financiers had more power over the public than the government, especially when they started forming alliances and partnerships.
This began with the “pool”, which split up the business in an area. Profits were shared.
Financiers would also make deals with shippers of goods.
Government Bridles the Iron Horse
Americans, especially poor farmers in the Midwest, were not thrilled with the railroad aristocracy.
However, they also loved capitalism, so they weren’t quick to change their ways.
1870s- There was a depression, and farmers finally decided to strike back.
Some of them formed the “Grange”, and pressured lawmakers in the Midwest into regulation of monopolies.
1886- Supreme Court, in Wabash case, said that individual states couldn’t regulate interstate commerce, only intrastate commerce. Interstate regulation was left to the federal gov’t.
Grover Cleveland, president at the time, didn’t want to regulate anything.
1887- Congress didn’t care what GC wanted. They made the Interstate Commerce Act.
This stopped rebates and pools. Railroads had to openly declare rates for riding.
Shippers couldn’t be discriminated against.
No charging more for a short haul than a long one.
Interstate Commerce Commission (ICC) was made to enforce this.
The ICC didn’t really oversee the railroads as strongly as the public had wanted.
But it was a place for railroad companies to resolve disputes without corruption.
The ICA was the first big attempt by Washington to regulate business for the people’s sake.
Later, the government would make many more regulatory agencies.
Miracles of Mechanization
1860-1894- US went from fourth greatest manufacturing nation to first.
There was much more money available to fund projects. Millionaires became more common.
The Civil War and profiteering allowed for people to become rich.
The US started using natural resources such as coal, oil, and iron.
1890s- Mesabi Range of Minnesota-Lake Superior region being used for iron.
Steel became very important, and cheap immigrant labor allowed for more steel production.
As usual, conditions were terrible and many immigrants died.
Many people also got new technologies patented; Eli Whitney’s idea of mass production was used.
Cash register, typewriting, refrigerator car, electric railway, etc.
1876- Alexander Graham Bell makes the telephone. It becomes very important to everyday life.
Many women start working in the switchboards as operators.
Thomas Alva Edison also invented many things during this time: the phonograph, mimeograph, Dictaphone, and moving picture.
1879- He perfected the light bulb, which led to everyone sleeping fewer hours.
The Trust Titan Emerges
Competition was still central to the industrial leaders of the time.
Leaders were Andrew Carnegie (steel), John Rockefeller (oil), and J. Pierpont Morgan (bank).
Carnegie made an integrated his manufacture of steel- all steps of production were done by his employees- this was called “vertical integration”.
This helped control quality, eliminate fees, and make things more reliable.
Rockefeller did “horizontal integration”, where he would make alliances with competitors so that he could get a monopoly on the market.
He made the Standard Oil Company. Then, small oil companies would give stock to his company, and then he would make all their operations part of his operation.
This was a “trust”. Rockefeller used it to take over petroleum market.
1890s- Morgan was met with many bankrupt businessmen during the depression.
So he consolidated their enterprises and put his own men into boards of directors.
This was “interlocking directorates”.
The Supremacy of Steel
Steel was used to make everything- buildings, railroads, etc.
There was a new focus on capital goods instead of consumer goods (clothes, etc.)
But before Vanderbilt started using it in NY, steel was very rare and expensive.
By 1890, US made over 1/3 of the world’s steel.
1850s- Bessemer process was created for making steel much more cheaply.
William Kelly (American) had developed it first though
US had an advantage in steel production because of coal, iron, and cheap labor.
Carnegie and Other Sultans of Steel
Carnegie was a Scottish immigrant who came to US poor and quickly became rich.
He started a steel business in Pittsburgh and created a very strong business.
But he did NOT like monopolies, only partnerships.
1900- Carnegie was making ¼ of US Bessemer steel and getting rich. No income tax!
J. Pierpont Morgan was a banker who had financed railroad and insurance schemes.
He was supposedly very trustworthy.
1900- Carnegie wanted to sell his enterprise. Morgan was financing steel pipe tubing.
Carnegie threatened to ruin Morgan by entering that business.
So Morgan bought his enterprise for $400 million. Then Carnegie became a philanthropist.
1901- Morgan reorganized and expanded Carnegie’s business and made it the US Steel Corporation.
It was worth more than a billion dollars- the first of its kind.
Rockefeller Grows an American Beauty Rose
There had been a bit of oil found earlier which was used for medicines and such.
1859- “Drake’s Folly”, a well in PA, begins producing oil.
This became an extremely valuable asset- more valuable than the gold from before.
The oil industry began by producing kerosene, which was used in lamps.
It became an important export, and whaling (for whale oil) declined.
But...kerosene then was quickly replaced by electricity and the light bulb.
Then, the automobile was developed. It was better than steam and electricity, and by 1900 it was being used instead of those technologies. So oil was still useful.
John D. Rockefeller became a rich businessman with an interest in oil.
1870- He made the Standard Oil Company of OH (The trust was made in 1882).
His company did not follow ethical guidelines, and he tried to destroy all competition.
1887- He controlled nearly all the US oil refineries.
JDR valued combination of companies and monopolies with no competition.
Though this caused a lot of problems, he did make a good, cheap product.
Other trusts started too- sugar, tobacco, leather, harvester, and the meat industry.
The new rich business class replaced the old aristocracy.
The former aristocracy was mostly full of antitrust people, then.
The Gospel of Wealth
Some millionaires credited god and religious piety for their wealth.
Carnegie said moral responsibility had to come with wealth.
Others followed Social Darwinism, a survival-of-the-fittest philosophy of economics.
A lot of wealthy people at that time were self-made, and they hated the poor.
Plutocrats were greatly helped by the Wabash case- no states could regulate interstate trade.
Plutocrats used the 14th amendment (rights for former slaves) to their advantage by saying that a corporation was a person and that it had rights to due process, etc.
In fact, corporate lawyers may have stealthily made the amendment purposely vague.
Plutocrats would try to incorporate in states with the fewest restrictions, like NJ.
Government Tackles the Trust Evil
The public started trying to fight back against the plutocrats, first using state legislatures.
That failed, so they went to Congress.
Congress made Sherman Antitrust Act of 1890.
This forbade combinations to lower the amount of trade (trusts).
But this stopped good as well as bad trusts.
The law wasn’t really enforced well, and it had too many loopholes.
It was used to stop labor unions that lowered trade.
Lots of new trusts were still made during this time.
No well-enforced laws were made until 1914 to deal with trusts.
The South in the Age of Industry
The south still didn’t make many manufactured goods. Now they had sharecroppers and tenants.
1880s- A machine was made for manufacturing cigarettes (instead of hand-rolling them).
1890- James Buchanan Duke had made a business in this, and then absorbed the competitors to make the American Tobacco Company.
Some people wished the south would become industrialized, but it didn’t happen.
Henry W. Grady (Atlanta Constitution (newspaper) editor) supported this.
But the south was prevented from industrialization by northern railroad creators who made different rate setting systems.
The railroads also charged more for manufacturing goods to go north, and less for raw crops to go north than south.
In Birmingham, AL, there was coal and iron ore, but the steel industry never developed there because of the interference of Pittsburgh manufacturers.
1880- Northerners built cotton mills in the south for cheap labor in the textile industry.
Textile industry did become important in the south, but the workers were horrible treated and poorly paid. Many “owed their souls to the company store”.
The Impact of the New Industrial Revolution on America
Post-War, the economy and quality of life increased dramatically.
Cities expanded and multiplied, and immigrants constantly came to work in them.
Jefferson had wanted free enterprise with no restrictions, but now that small farms were replaced with industry, that wouldn’t work anymore.
In addition to tariffs, the federal government had to keep corporations in check.
Industries had strict discipline, in contrast to more casual farming lifestyles.
This came as a surprise to many new factory workers.
Women were the most affected by the rise of industry.
The typewriter (stenographers) and the switchboard (telephone operators) caused this.
The “Gibson Girl” image of a strong young woman became very popular (1899).
They married later and had fewer children.
Most of them worked because they needed the money. Working conditions were bad and they earned less than men.
There were stronger class divisions, leading to more class warfare.
Warfare was based on jealousy or on socialist ideas of some immigrants.
1900- 1/10 of people owned 9/10 of wealth in US.
1860-1900- US went from ½ of workers being wage workers to 2/3 being wage workers.
Wages were getting higher, but they were also subject to economic strains and employers.
People were also very afraid of unemployment.
Reformers wanted job security and unemployment provisions.
Industry filled the US markets with products, so they had to sell kerosene and such abroad.
In Unions There Is Strength
Wage workers faced poor conditions and the employers no longer cared about them on an individual basis. Creativity and individuality was discouraged.
Workers were replaced with machines (but this didn’t cause more unemployment long term).
In the short term though, many people lost jobs.
Wages didn’t have to be high since there were always more unemployed people to work.
Workers didn’t really have a chance standing up to corporations alone.
The corporations had bought out the press, the legislators, etc.
Corporations could also get the federal courts to get injunctions to stop strikes.
Then, if the strike continued, troops could be brought in.
Corporations also locked out strikers until they were starving.
Corporations made them sign “ironclad oaths” and “yellow-dog contracts”, that they wouldn’t join labor unions.
Corporations also had company stores, which many workers “owed their souls to”.
Middle class people didn’t care about the plight of the workers, since they thought workers could easily become millionaires if they worked harder.
They thought unions were too socialistic for the US.
Labor Limps Along
Post-War, labor unions became more common since labor was needed and livings costs were high.
1872- 32 national unions- bricklayers, typesetters, etc.
1866- National Labor Union that went for 6 years with thousands of members.
(It discriminated against Chinese, and somewhat against women and African Americans.)
Colored National Labor Union was made by blacks, but it couldn’t work with the NLU well.
(This was because of racism and support of different political parties.)
NLU wanted arbitration for conflict and an 8-hour workday.
They got the workday for government workers.
1870s- Depression.