QUIZ

• 1. This was connected (completed) with the golden spike.

• 2. Is responsible for creating his own railroad town south of Chicago.

• 3. Scandal in which the Federal government was ripped off for $25 million

• 4. Through this, states won the right to regulate railroad rates

• 5. Set up a commission to regulate railroad rates from one state to another.

• A. George Pullman

• B. Credit Mobilier

• C. Interstate Commerce Act

• D. Munn v. Illinois

• E. Transcontinental railroad

14.2 The age of railroads

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

Promontory Point: Golden Spike!!

• Union Pacific (East to West) construction begins during Civil War

• Central Pacific (West to East) begins after

• Golden Spike driven in Ogden, Utah 1869

• Promontory Point

•

Effect: Unites East and West; Opens trade with Asia

RAILROADS OPEN THE WEST

• US govt. gives huge land grants to railroad companies to encourage construction

• Union Pacific and Central Pacific meet at Promontory Rock, Utah on May 10, 1869.

• Railroads built with Irish, Chinese, Mexican and African American labor.

• Homesteaders and immigrants flood west on new railways.

Introduction of time zones

•How did people keep track of the time before times zones?

•Why did they feel the need to adapt time zones for the railroads?

Map: Transcontinental Railroads and Federal Land Grants, 1850-1900

Transcontinental Railroads and Federal Land Grants, 1850-1900Despite the laissez-faire ideology that argued against government interference in business, Congress heavily subsidized American railroads and gave them millions of acres of land. As illustrated in the box, belts of land were reserved on either side of a railroad's right of way. Until the railroad claimed the exact one-mile-square sections it chose to possess, all such sections within the belt remained closed to settlement.

Copyright © Houghton Mifflin Company. All rights reserved.

New Towns and Markets

Examine the map on the next slide to understand how the

transcontinental railroad changed the economy.

Map: Mining and Cattle Frontiers, 1860-1890

Mining and Cattle Frontiers, 1860-1890The western mining and ranching bonanzas lured thousands of Americans hoping to get rich quick.

Copyright © Houghton Mifflin Company. All rights reserved.

Pullman, Illinois

• George Pullman created a town for his workers

• Created this town to ensure a steady workforce

• Medical offices

• Legal offices

• Church

• Library

• Theater

• Athletic field

Crédit Mobilier Scandal

• Example of profiteering and greed of industrialists

• Union Pacific stole over $25 million from the government

• Basically a “front company” formed by the financiers/builders of the Transcontinental Railroad

• Insiders of the Union Pacific Railroad hired and paid themselves as much as $50,000 a mile for construction that cost $30,000.

• Stock was sold to influential Congressmen to keep them quiet.

• New York Sun unearthed the scandal and kept attention on the “Trial of Innocents” = public figures in the Grant Administration and Congress that were involved. Only 2 Congressmen formally censured. Even Vice President Colfax escaped serious charges.

11

Granger laws

• Businesses were given the land grants instead of farmers

• Railroads entered into formal agreements to fix prices to keep the farmers in debt

• Railroads would charge different rates at different times to make a bigger profit (ex: RRs would charge a higher rate for a shorter trip, knowing there was no competition)

• Munn v. Illinois allowed the states to control the railroad rates• IMPORTANT because now the Federal government can

intervene with private businesses for the public good

Interstate commerce act

• Grangers success was short lived

• Wabash decision in 1886 overturned Munn v. Illinois because it dealt with interstate commerce• Why does this matter?

• BUT, they instead passed the Interstate Commerce Act to regulate rates• Didn’t really gain the power it needed for about

20 years

15

STRIKES

PULLMAN STRIKE1894

Pullman Comp. cuts wages

during Panic of 1893

Does not raise after ends

Workers strike

US troops end it

Debs arrestedWorkers

BlacklistedLABOR WEAK

GREAT STRIKE OF 1877

Railroad strikeParalyzed rail & commerce

Pres. Hayes Sent US troops

to end it

CHINESE EXCLUSION ACT

16

Railroads and Corruption

SCANDALS

Credit Mobilier

Stock watering

Bribery of officeholders

Creation of “pools”

Secret “rebates”

REFORM EFFORTS

Granger Laws (reversed by Wabash case)

Interstate Commerce Act of 1887

Were these effective? Why or Why Not?

18

What are the effects of the finalization of the transcontinental

railroad?• Closing of the “Wild West”-ecological disaster

• Spurs industrialization

• Tie the country together/decline in sectionalism

• Decline in Native American societies

• Corruption/Speculation

• Population shift

• Time zones created

• Millionaire class created (i.e Vanderbilt)

• 1886 – Supreme Court’s Wabash decision!!!

• Interstate Commerce Act-1887!!! the formation of the Interstate Commerce Commission

• TERMS:

• Transcontinental Railroad

• George M. Pullman

• Credit Mobilier

• Munn v. Illinois

• Interstate Commerce Act

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