14.2

The Age of the Railroads

• Overview: The expansion and consolidation of railroads significantly influenced American industry and life while also leading to corruption that prompted calls for government regulation.

Key Concepts and Events

• Transcontinental Railroad: A pivotal construction that linked the East and West coasts of the United States.

• George M. Pullman: An industrialist known for building the Pullman company town for his railroad employees and for creating luxury railroad cars.

• Credit Mobilier: A construction company created by stockholders of the Union Pacific Railroad, infamous for its corrupt practices to inflate profits by overpricing contracts.

• Munn v. Illinois: A landmark Supreme Court case that upheld states' rights to regulate private industries in the public interest.

• Interstate Commerce Act: A federal law passed in 1887 to regulate railroad rates and practices, establishing the Interstate Commerce Commission (ICC) to oversee this regulation.

Richard Ely's Visit to Pullman

• In October 1884, economist Richard Ely visited Pullman, Illinois, and documented the town designed for railroad workers.

• Initially impressed by its order and planning, Ely found the town restrictive, noting:

  • Pullman employees had no input in rules governing their lives.

  • He concluded that the structure was fundamentally "un-American," reflecting a form of controlled society.

Influence of Railroads on American Life

• Railroads significantly influenced various aspects of American life, including:

  • Establishing standard time and time zones, necessary for efficient scheduling.

  • Promoting the growth of new towns and communities as areas became more connected.

• The unchecked power of railroad companies led to societal abuses, stirring public demand for regulation.

Growth Statistics

• By 1856, railroads extended to the Mississippi River; three years later they crossed the Missouri River.

• By the Civil War's onset, there were about 30,000 miles of railroad track; by 1890, this expanded to nearly 180,000 miles.

Working Conditions and Labor

• The railroads represented a dichotomy: opportunities for expansion versus harsh realities for laborers.

• Large groups of workers, including Chinese and Irish immigrants, were hired under severe conditions:

  • Chinese laborers on the Central Pacific Railroad often earned $35 a month, required to provide their own food, while white workers earned between $40 to $60 a month plus meals.

  • Living conditions were deplorable, such as their experience while digging tunnels through snow-covered mountains.

• Accidents and health issues led to high mortality and injury rates, with statistics indicating over 2,000 deaths and 20,000 injuries in 1888 alone.

Time Standardization

• Prior to railroad time, noon varied by location, causing travelers to reset watches multiple times.

• Professor C. F. Dowd proposed creating 24 time zones to standardize time across the United States in 1869.

• Approval led to synchronized timekeeping on November 18, 1883, though official adoption by Congress did not occur until 1918.

Effects of Railroad Expansion

• Opportunities Created: Railroads spurred growth in multiple industries, including:

  • Iron, coal, steel, lumber, and glass, all rapidly expanding due to rail demands.

• Railroads encouraged development of towns and interdependence:

  • Cities like Chicago became known for stockyards, and Minneapolis for grain, both thriving through established trading networks.

  • New towns emerged, significantly impacted by nearby rail lines such as Denver, Seattle, Abilene, and Flagstaff.

Pullman and the Company Town Concept

• George M. Pullman's factory established in 1880 showcased a model company town, radically accommodating workers' needs:

  • Provided housing, services, and strict community control over behaviors.

  • Ely noted the stringent control, including prohibitions on loitering and alcohol consumption.

  • Tension escalated when Pullman raised rents without reducing payments, leading to a strike in 1894.

Credit Mobilier Scandal

• Credit Mobilier exemplified the corruption in the railroad industry:

  • Organizers inflated costs of railroad construction contracts, pocketing substantial profits.

  • Approximately $23 million was exploited, leading to a scandal involving high political figures including Vice President Schuyler Colfax and Congress member James Garfield.

Farmers and Railroad Issues

• Farmers, represented by the Grange, became increasingly frustrated with railroad practices, citing:

  • Misuse of land grants resulting in sales to businesses rather than settlers.

  • Price fixing practices that kept farmers in debt.

  • Different pricing structures where short hauls were more expensive due to lack of competition.

Granger Laws and Legal Battles

• The Grange lobbied for state regulation of the railroads:

  • Illinois initiated a commission to set maximum rates and prevent discrimination.

  • The Supreme Court upheld these regulations in Munn v. Illinois, establishing a fundamental principle for federal oversight of private industries.

Interstate Commerce Act of 1887

• Following public outcry against railroad abuses, the Interstate Commerce Act was established:

  • Allowed federal supervision over railroad activities.

  • Created the Interstate Commerce Commission (ICC), which faced challenges in effectively regulating rates.

  • The act was further strengthened under President Theodore Roosevelt in 1906, enhancing regulatory power.

Economic Context and Consolidation

• The Panic of 1893 marked a severe economic downturn:

  • Approximately 600 banks and 15,000 businesses failed, leading to 4 million job losses.

  • Financial firms reorganized troubled railroads, resulting in dominance by a few large companies over the majority of tracks in the early 20th century.

Vocabulary

• Consolidation: The act of uniting or combining various entities into one.

Terms & Names Significance

• Transcontinental Railroad: Pioneered national connectivity and economic integration.

• George M. Pullman: Influential in shaping worker community but also demonstrated control over labor.

• Credit Mobilier: Symbolized the corruption endemic in the railroad finance sector.

• Munn v. Illinois: Affirmed state rights to regulate industries for public welfare.

• Interstate Commerce Act: Established federal authority to oversee interstate rail operations and protect consumers.

Summary

Overview

• Expansion of railroads → influenced American industry & life

• Led to corruption → calls for government regulation

Key Concepts & Events

• Transcontinental Railroad → linked East & West coasts

• George M. Pullman → created Pullman company town for workers

• Credit Mobilier → inflated profits via overpriced contracts

• Munn v. Illinois → upheld state rights to regulate private industries

• Interstate Commerce Act (1887) → regulates railroad rates & practices, established ICC

Richard Ely's Visit to Pullman

• Richard Ely (1884) → visited Pullman, documented life

• Impressed initially → found restrictions on workers

• Concluded Pullman → controlled society, "un-American"

Influence of Railroads on American Life

• Standard time established → necessary for scheduling

• New towns developed → increased connectivity

• Unchecked power → societal abuses → demand for regulation

Growth Statistics

• 1856 → railroads to Mississippi River

• 1859 → crossed Missouri River

• ~30,000 miles by Civil War → ~180,000 miles by 1890

Working Conditions & Labor

• Dichotomy: expansion opportunities vs. harsh labor realities

• Laborers (Chinese & Irish) hired → severe conditions

• Chinese workers → $35/month, provided own food

• White workers → $40-$60/month, meals included

• Deplorable living conditions → health issues, high mortality

• 1888 stats → >2,000 deaths, >20,000 injuries

Time Standardization

• Prior to railroads → noon varied by location

• 1869 → C. F. Dowd proposed 24 time zones

• Synchronized timekeeping approved (Nov 18, 1883)

• Official adoption by Congress → 1918

Effects of Railroad Expansion

• Growth in industries → iron, coal, steel, lumber, glass

• Towns developed via rail connections

• Chicago → stockyards, Minneapolis → grain trading

• New towns: Denver, Seattle, Abilene, Flagstaff

Pullman & Company Town Concept

• Pullman's factory (1880) → model company town

• Provided housing, services, strict community control

• Ely noted control → rules on loitering, alcohol

• Rents raised → led to 1894 strike

Credit Mobilier Scandal

• Credit Mobilier → corruption in railroad finance

• Inflated costs → organizers pocketed profits

• $23 million exploited, involved high political figures

Farmers & Railroad Issues

• Farmers (Grange) frustrated with practices

• Misuse of land grants → sales to businesses

• Price fixing kept farmers in debt

• Short hauls → more expensive, lack of competition

Granger Laws & Legal Battles

• Grange lobbied for railroad regulation → state commissions

• Illinois set maximum rates, prevented discrimination

• Munn v. Illinois upheld state regulations

Interstate Commerce Act of 1887

• Public outcry → Interstate Commerce Act established

• Federal supervision over railroads initiated

• Created ICC → faced regulatory challenges

• Strengthened under Theodore Roosevelt (1906)

Economic Context & Consolidation

• Panic of 1893 → economic downturn

• ~600 banks, ~15,000 businesses failed

• 4 million job losses

• Financial firms reorganized railroads → dominance by few companies

Vocabulary

• Consolidation → act of uniting entities

Term & Name Significance

• Transcontinental Railroad → national connectivity, economic integration

• George M. Pullman → worker community control

• Credit Mobilier → example of corruption

• Munn v. Illinois → state regulation upheld

• Interstate Commerce Act → federal oversight initiated