Improving the Railroads • Each R/R built it’s own tracks to its own specs • no unified code • tracks not interchangeable • made travel inefficient • adopted a standard gauge
Objective: To examine the growth of the railroad industry. Two problems early railroads had. Problems: 1. The South had short rail lines that didn’t form a network. 2. The tracks in the North and the South had different widths, or gauges, so they couldn’t be connected. Railroads in 1890 Solution: Southern railroads adopted the rails of the North.
Growth of Railroads - Once the gauge, or width, of tracks was standardized, railroads formed a network, or system of connected lines. Top: Railroads in 1890 Right: Railroads in 1918
Railroad stimulates the Economy • carried raw materials • iron ore • coal • timber • carried manufactured goods from factories to market • carried produce from farms to cities
Railroad Technology • 4 major technological developments • 1. Air brakes-Westinghouse • 2. Janney car coupler—Janney • 3. Refrigerator Cars—Gustavus Swift • 4. Pullman sleeping car—George Pullman • next
Railroads change America Eastern business started moving West Redistributed the population Changed the way people thought of time How far is it to Tallahassee? Orlando? Mobile? Opened up the United States to economic growth; united different regions of the nation
- Large companies bought smaller ones or forced them out of business. Cornelius Vanderbilt and James Fisk are shown in a race for control of New York's rails. Vanderbilt unsuccessfully tried to take over the Erie R.R. by buying out its stock.
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- Railroad companies began to consolidate, or combine, in order to compete with large companies, such as Cornelius Vanderbilt’s. - Cornelius Vanderbilt was one of the richest men in America, and the most powerful railroad baron. Cornelius Vanderbilt
The Breakers, Newport, RI - The 1895 Cornelius Vanderbilt II mansion, facing the Atlantic Ocean, is perhaps the finest example of American Renaissance architecture. - Cornelius Vanderbilt II became the Chairman and President of the New York Central Railroad system in 1885. - Cornelius Vanderbilt II was the grandson of Cornelius Vanderbilt. - The Breakers is the grandest of Newport’s summer “cottages” and a symbol of the Vanderbilt family’s social and financial preeminence in turn of the century America.
Marble House, Newport, RI - Completed in 1892 for Mr. and Mrs. William K. Vanderbilt, the interior Marble House is designed almost exclusively of imported Italian marble. - William K. Vanderbilt was the grandson of Cornelius Vanderbilt. - The mansion cost $11 million to build, $7 million of which was for the marble. - The house was given to Mrs. Alva Vanderbilt as a gift on her 39th birthday. - Alva used the house frequently to hold rallies in support of women’s suffrage.
Abuses: - Railroad companies offered rebates, or discounts, in order to keep or win customers. - This forced many small railroad companies out of business. - In order to end competition and keep prices high, railroad companies agreed to divide up business in an area and set high prices. This was known as pooling.
Effects on Industry: - The railroad industry created thousands of new jobs. Examples: steelworkers, lumberjacks, miners, railroad workers - The railroads opened up the country to settlement and growth. Anti-railroad propaganda
Objective: To examine the growth of the steel industry in America. Do Now: Read the following quotations made by Andrew Carnegie. “I started life as a poor man and I wish to end it that way.” “The man who dies thus rich, dies disgraced.” What message was Carnegie trying to make in these quotations, and do you agree with this message? Why, or why not?
The Steel Industry 1850’s – The Bessemer Process allowed steel to be produced cheaply. · Therefore, the steel industry grew rapidly. Examples: railroads, skyscrapers, nails, pins Bessemer converter, Kelham Island Museum, Sheffield, England (2002) Henry Bessemer
Steel: Vertical Integration Rolling The billets and slabs are heated and rolled into finished products. Raw Materials Example: Iron Ore 1 4 Melting Hot air is pumped into a furnace, melting iron at 1600 degrees Celsius. (2,912 degrees F) Casting The liquid steel is cast into billets and slabs. 2 3 Refining Impurities are removed and alloys are added from the molten metal through the use of a ladle.
· Scottish immigrant Andrew Carnegie became the “King of Steel”, producing the majority of America’s steel. Andrew Carnegie
· Carnegie reportedly gave $350 million of his $400 million fortune to charities, including $60 million to build libraries. Harper's Weekly April 11, 1903
Andrew Carnegie’s best known philanthropy was founding libraries. • The first was in his hometown, Dunfermline, Scotland, opened in 1881. • By 1919, 2,811 libraries had been founded at a total cost of $56,704,188. • - U.S. libraries – 1,946 • - British libraries – 660 (England and Wales, 423; Scotland 147; Ireland 90) • - Canadian libraries – 156 • - New Zealand – 23, South Africa – 13, West Indies – 6, Australia – 4, Seychelles, Mauritius, and Fiji – 1 each
Andrew Carnegie in his “Great Double Role” This cartoon originally appeared in the July 9, 1892 edition of The Saturday Globe, a pro-union weekly out of Utica, New York. Caption reads: "Forty-Millionaire Carnegie in his Great Double Role. As the tight-fisted employer he reduces wages that he may play philanthropist and give away libraries, etc.”
Objective: To examine the causes and effects of the Sherman Anti-trust Act. Do Now: Name as many oil/gas companies as you can. Sen. John Sherman John D. Rockefeller J. Pierpont Morgan
Standard Oil Trust · John D. Rockefeller formed the Standard Oil trust in 1890.
· The Standard Oil trust ended competition, forming a monopoly. · The Sherman Antitrust Act was passed in 1890, banning the formation of trusts and monopolies.
This Harper's Weekly cartoon by W. A. Rogers portrays the rise of the large business corporation ("monopoly") as an illicit enterprise (a pirate ship) which menaces economic competition, and depicts the response of the federal government as woefully inadequate (Uncle Sam shooting a toy cannon).
“Congress—Who’s In It and Who Owns It”; cartoon by Jacob Burck reflecting the opinion that big money interests were able to maneuver the politicians.
The Role of Banks · J. Pierpont Morgan used profits earned as a banker to purchase other major corporations. · By 1898, Morgan controlled most of the major rail lines in America. · By 1901, Morgan became head of the U.S. Steel Company, which became the first U.S. company to be worth over $1 billion.
An Age of Big Business: Why an octopus to represent Standard Oil?
Labor troubles, 1914 • Early January, 1914: threats of labor troubles – factory workers are tired of the long days and little pay • Auto workers experience strain from assembly-line methods • Stop going to work in Ford’s factories • High turnover (Ford must hire 40,000 workers/year in order to keep 10,000 on the job) • Our textbook makes Ford sound like a revolutionary man when he introduces changes to the factory workers’ day on January 5, 1914. But in reality, he had no choice – he was facing a complete shut down of his factories.
Ford if forced to change: A New Day in the Life of a Factory Worker • January 5, 1914: Ford changes the day of a factory worker
Were Ford’s changes as good as they sounded? • Thousands of people rush to accept Ford’s “changes.” • But they find that Ford will pay only $2.60/day, plus a $2.40/day bonus if the worker remains at his automobile plants for 1 year. • All workers were required to do the following: • No smoking • No drinking • Must learn English • Become US citizens • Open bank accounts Relates to USA population growth at this time • Were these demands unreasonable?
Industrial Relations • Ford’s news made the headlines in every major newspaper b/se the changes were so revolutionary for the time. • Think back to Britain’s working conditions… • Began an era of industrial relations & made automobile workers one of the highest paid groups in the American economy.
The “Ford Idea” • Despite the fact that Ford was forced to make changes to his workers’ day, he was credited with making a revolutionary change. • Soon other industries implemented the so-called “Ford Idea.” • Result: consumer spending began to increase • Higher wages => greater purchasing power => increased sale of Ford automobiles
Philanthropist & Pacifist • Henry Ford was both a philanthropist & a pacifist. • Ford did not want US to get involved in the world war, but nevertheless changed production in his factories to support the war movement • Claimed his automobile plan produced a bomber an hour • Ford & Edsel (his son) established the Ford Foundation to donate money to poverty, human rights & justice, education, culture, international affairs, & population issues
An Age of Big Business: Why an octopus to represent Standard Oil?
Factors of Production: • Land • Labor • Capital Can you give me examples of each of the above?
Land: • Productive resources occurring in nature, such as water, soil, plants and minerals. Like all factors of production, land is limited. Nature just isn’t inclined to make more resources at the pace producers might want. If a barrel of petroleum is used to produce gasoline, that material is not available to produce something else… So, Land resources are found in nature. Examples are soil, water, plants and minerals.
Labor: • The productive abilities of people. Labor, or human resources, is also limited. These terms refer to the productive abilities of people. Labor, or human resources, is also limited. There are only so many people at any given time. However the skills, knowledge and talents of people can be improved or made more productive through education and training. Labor can also be made more productive through the use of capital. For example, a person with a calculator can do mathematics problems more quickly and accurately than a person without a calculator. So, Labor resources are the skills, talent and knowledge provided by people.