APUSH 24

What were the advantages and disadvantages of government subsidies for the railroads?

The railroads would often sell the land and make money off the land that was paid for by citizens (their tax money goes to the government, which gave the land grants). They also withheld land from other users until they figured out where their tracks would lay. A benefit was that railroad companies were able to expand further west. Granting land was a "cheap" way to subsidize a much-desired transportation system, because it avoided new taxes for direct cash grants.

Describe how the first transcontinental railroad was built.

The Central Pacific Railroad Company started building in Sacramento and continued east across the Sierra Nevada, while a second company, the Union Pacific Railroad, built westward from the Missouri River, near the Idaho-Nebraska border (Omaha). The two lines of track met in the middle.

Explain how the railroads could help or hurt Americans.

Americans would be connected across the country, which would help travel time, the ability to connect with different types of people, and allow people to get produce and meats from different parts of the country (due to the decreased travel time). People could also begin to move west. Trade with Asia increased. However, railroad construction was laced with scandal and corruption, which hurt Americans financially (ex. Credit Mobilier). Also, the work was very dangerous, and many people were killed on the job. In addition, railroads created many millionaires who could control the public and place large taxes on farmers.

What technological improvements helped railroads?

More efficient and economical steel rails, standard gauge of track (which reduced need for numerous car changes), the Westinghouse air brake which increased safety, and other safety devices like the telegraph.

What effects did the railroads have on America as a whole?

Railroads created a huge domestic market for raw materials and manufactured goods and spurred industrialization and urbanization; stimulated mining and agriculture; took farmers to land and goods to people; started cities, created more millionaires, drove creation of time zones.

What wrongdoing were railroads guilty of?

Stock watering (which enabled railroad stock promoters to inflate their claims about a given line’s assets and profitability and sell stocks and bonds in excess of the railroad’s actual value) as well as other corruption such as bribery.

Was the Interstate Commerce Act an important piece of legislation?

Yes, it prohibited rebates and pools and required the railroads to publish their rates openly. Most important, it set up the Interstate Commerce Commission to administer and enforce the new legislation.

What factors made industrial expansion possible?

Abundant liquid capital, natural resources like oil and coal, cheap labor in immigrant population, and easier transportation of raw materials and goods thanks to railroads.

How did businesses organize to try to maximize profits?

Used horizontal integration (allying with competitors to monopolize a market), trusts (consolidations of formerly competing companies’ stocks into a single enterprise large enough to drive out remaining competitors), and interlocking directorates (placing officers of a larger competitor on the various boards of directors of competitors).

Why was steel so important for industrialization?

The metal ultimately held together the new civilization, from skyscrapers to coal scuttles, while providing it with food, shelter, and transportation. Steel making, notably rails for railroads, typified the dominance of "heavy industry," which concentrated on making "capital goods," as distinct from the production of "consumer goods" such as clothes and shoes. The production of steel also became a major market.

Briefly describe the careers of Andrew Carnegie and J.P. Morgan.

After accumulating some capital, Carnegie entered the steel business. By 1900 he was producing one-fourth of the nation’s Bessemer steel. Morgan made a legendary reputation for himself by financing the reorganization of railroads, insurance companies, and banks (banker’s banker). Carnegie, looking to sell his business, bartered with Morgan until they finally came to the agreement of 400 million dollars. Morgan went on to buy other businesses and develop the first 1.4 billion dollar business.

How was John D. Rockefeller able to become so wealthy?

By ruthlessly employing horizontal integration and trusts to near-monopolize the oil industry with his Standard Oil Company of Ohio.

How did the wealthy justify their wealth?

Social Darwinism and the Gospel of Wealth (the rich were meant to be rich, and had worked hard to achieve it, so they deserved it).

What two methods were tried by those who opposed the trusts?

Labor unions and strikes.

How successful were Southerners at industrializing?

Their success was limited (often by Northerner industrialists) but they found some success with the innovation of the machine made cigarette.

Describe the positive and negative effects of the industrial revolution on working Americans.

The nation of farmers and independent producers was becoming a nation of wage earners. Industrialization gave women more independence. Brought corruption in economy and politics, widened class divides, connected nation more than ever, increased urbanization (and poor conditions in those urban areas).

What conditions existed in America that led Jay Gould to say, "I can hire one half of the working class to kill the other half"?

Job security was so low, workers were so easily replaced, people were always searching for and trying to keep their jobs to support themselves and their families so strikes were usually ineffective and often detrimental to the strikers.

Explain the similarities and differences between the National Labor Union and the Knights of Labor.

The National Labor Union Skilled included unskilled and farmers but excluded the Chinese; they didn’t try very hard to aid women and blacks. The Knights were created in 1869 as a secret society and sought to include all workers, barred only "nonproducers;" broad goals included economic and social reform, codes for safety and health; they frowned upon industrial warfare and wanted an 8 hour work day.

What factors led to the decline of the Knights of Labor?

They became involved in many failing May Day strikes in 1886. In Chicago they were accidentally involved with anarchists when the Haymarket Square Bomb occured in conjunction with a Knights of Labor strike. Another fatal handicap of the Knights was their inclusion of both skilled and unskilled workers.