1. The Age of Railroads

2. Section Objectives • Identify the role of the railroads in unifying the country. • List positive and negative effects of railroads on the nation's economy. • Summarize reasons for, and outcomes of, the demand for railroad reform.

3. Building the Railroads • Congress passes Railway Act in 1862 • National Network • 1856 – rails extend only to the Mississippi river • 1869 – Transcontinental Railroad completed in Promontory Point, Utah • Golden Spike marks the spot.

4. Immigrants used to build system Asians used mostly used in the West, Irish, African-Americans used mostly in the East They were paid $5 - $25 less per month than whites Used for much of the most dangerous work. Many die in the cause.

5. Both Irish and Chinese were abused Irish Asian

6. Railroad Time helps unify the US • Initially each railroad used local time to set timetables. • couldn’t rely on train schedules, • no synchronization of time from city to city • Professor C.F. Dowd comes up with new system divide world into 24 time zones – Greenwich, England is 0 longitude • U.S. divided into 6time zones • 1883 U.S. synchronizes time and we still use time zones today.

7. Time Zones

8. People take advantage of the situation • Building railroads spurs growth of other industries • iron, steel, lumber, glass industries grow along with railroads • Created new millionaires • Towns grow up along the lines • Abilene, Flagstaff, Denver, Albuquerque, grow up along rails (Route 66 follows the railroad) • towns specialize in products • Minneapolis – grain • Chicago, Omaha – beef

9. First bridge to cross the Mississippi • At Rock Island, Il into Iowa

10. Company towns spring up. • George Pullman builds sleeping cars for railroads • wants to control his workforce – builds a town for his employees • obey company rules 24/7 • no drinking, no loitering, buy company products, go to church, rent company houses, etc. • He wanted clean, sober, hard working employees for higher profits.

11. Credit Moblier • Scheme set up by railroad owners to fleece the stockholders and taxpayers. • Union Pacific gives contract to Credit Moblierto build sections of railroad • pays them 2 -3 times the actual cost of construction to build road • skim off profits and pocket them, thus defrauding the company and the shareholders. • lots take advantage of the scheme – bilking over $23 million from company profits. • 20 Congressmen, future president, House speaker participated.

12. Grange to the Rescue • Farmers form the Grange – • a cooperative – to fight the railroads. • Farmers upset over price fixing on freight charges. • sponsor candidates to run for office, once elected they write legislation to regulate railroads. • Set maximum rates for freight, passengers, prohibited price discrimination • Railroads fight back, challenge constitutionality of the railroad legislation • Munn v. Illinios • Supreme Court upheld Granger laws, states can regulate rates • Federal Gov’t has right to regulate private industry serving the public interest.

13. Interstate Commerce Act of 1887 • Congress sets up Interstate Commerce Commission to regulate interstate railroad activities • ICC ineffective due to Supreme Court ruling against setting prices for freight. • It’s unconstitutional to tell someone what to charge for their product.

14. Interstate Commerce Act • Supposed to stop Trusts from controlling everything.

15. Railroad consolidations • A. Pre 1893, hundreds of railroad companies operating in U.S. • Panic of 1893 is a depression • Banks and wealthy individuals take over railroads and other businesses. • seven companies buy up 2/3 of railroad tracks • Age of Big Business begins.

16. Cornelius Vanderbilt • Vanderbilt owned more railroads than anyone in the U.S. • His family is still among the richest in the U.S.

17. Review Questions What is the significance of: Transcontinental Railroad George Pullman Munn v. Illinois Interstate Commerce Act What did the Grange do to push push for railroad reform? Who was the most influential railroad tycoon?