The following deals with events, conflicts, and people during the years 1865-1900.
DISCLAIMER: This does NOT serve as a replacement for reading Chapter 24.
During the latter half of the 19th century, all good men were in industry. When I say ‘good’, I mean smart and adventuresome, not good in a moral sense. In fact, many of the industry folk were very, very far from good.
The USA was in dire need of a transcontinental railroad to unite the two coasts. Alas, no one but the government had the money or resources to build such a monumental achievement. In midst of the Civil War in 1862, the overwhelmingly Republican majority Congress secured two railroad companies to build the railroad. For their work, they would receive money, land grants, and if they were lucky, hookers.
The most valuable gift from the government proved to be the land grants. Both the RR companies and the government controlled checkerboard-style land plots around the tracks. The RR tycoons took their time, choosing the priciest locals. Cleveland stopped this practice in 1887 and opened the government-owed land portions to settlement, driving down the price of RR-owed land.
Little villages sprung up all over the place. Some became great cities, while others became dust in the wind.
The two companies employed by Uncle Sam were the Union Pacific and the Central Pacific. The UP began in Omaha, Nebraska and the CP began in Sacramento. They were paid by the mile, $16,000 for flat land and $48,000 for mountainous terrain. The Native Americans, whose land we forgot it was, constantly tried to attack the workers to no avail. The UP was made of a variety of workers, mostly Irish, while the CP was overwhelming Chinese, who had to tackle the Sierra Nevada’s.
After lots of hesitation and internet chat rooms, the two finally met up in real life in Ogden, Utah.
Coming fashionably late to the railroad party were four other transcontinental RR companies who connected the northern half of our country. Paving the way with his Northern Pacific company was James J. Hill, who, unlike his fellow tycoons, was very respectable and cared for others.
The new railroad system also brought new life to the failing agriculture and mining industries. The railroads helped expand cities and could ensure a large population could be sustained. Next, the corrupt time system was reined when time zones were created to ensure trains arrived on-time. But, most of all, the RR’s tamed the Wild West and opened it to settlers as well as made a lot of men rich.
Commodore Vanderbilt was the original tycoon. First, he built steamboats that rivaled all others and then built the marvelous New York Central train network. He would later go on to form a university of his namesake. Vandy revolutionized the way RR’s were build by using tough steel. More improvements included the air brake and the Pullman Palace Car.
A favorite of the rich tycoons was ‘stock watering’– selling bonds for far more than they were worth. The tycoons would also pay off civil servants and propel those who they deemed fit into office. Another gift from God was the ‘pool’– an agreement to divide business in a given area and share profits.
In order to stop a plutocracy (gov’t run by the rich), reform was deeply needed. The 1886 Wabash case ruled states had no power to regulate interstate commerce. The flood-gates were opened when in 1887, Cleveland passed the Interstate Commerce Act. The railroads now had to publish their rates and abolish all pools. The act also set up the ICC to help enforce it. Not really a surprise, the RR companies soon found loopholes and business went on as usual.
Let’s forget about all this negative energy concerning the railroads and look at the fun the other industrial tycoons were having!
First, remember that the USA was a large jackpot of untapped resources. With the help of railroads, we became a powerhouse for mineral mining and steel production. Good ol’ America also had loads of geniuses such as Alexander Graham Bell, inventor of the telephone, and Tommy Edison, inventor of the light bulb and the phonograph.
Imagine for a moment, three badass guys walking away from an explosion.
These men are Andy C. (Andrew Carnegie: steel king), Johnny D. (John D. Rockefeller: oil king), and J.P. (John P. Morgan: banking king). All three men would employ devious tactics, mostly just the trust, throughout their careers.
Andy C. championed vertical integration. He controlled all aspects of the business, all the way from mining to shipping to the market itself. In contrast, Johnny D. chose horizontal integration and monopolized his oil industry. Johnny left his competition with two options: join him or let your business wilt away.
For a while, steel was a luxury, but the new Bessemer-steel method made steel affordable and stronger than ever. Andy C. was one of the first to learn of this new method and bought into it right away. Being a dwarf Scotsman (he was only 5’3″), he had worked his entire life to achieve the dreams his mother had set for him. Andy would go on to control 1/4 of the world’s steel, based out of Pittsburgh.
J.P. had grown up middle class unlike his poorer fellow badasses. He had a harsh rep for being crazy and drastically reorganizing companies. J.P. would eventually buy out Andy C.’s steel company for $400 million (about $10 trillion in today’s money) in 1900. Andy C. spent the rest of life giving away his fortune.
J.P. organized Andy’s enterprises into the US Steel Corporation. He would make $1 billion– the first company to ever do so. As was the war-cry, “Steel is king!”
Originally used for kerosene in lamps, oil had a lot of potential. Rockefeller formed the Standard Oil Company of Ohio in 1870. In 1882, it would grow to become a giant trust. Rocky focused more on the refinement of oil rather than the extractment or sale of it. With the rise of oil-fueled automobiles, Rocky’s empire grew all the more.
Most tycoons believed they were entitled to their money by God. So became the ‘Gospel of Wealth’, coined by do-gooder Andy C. However, most ended up embracing social Darwinism– the rich got richer while the poor remained poor.
Johnny D. originated the trust. There were loads of other trusts, such as the meat, sugar, and leather trusts. The gov’t finally got around to tackling them when in 1890, the Sherman Anti-Trust Act was passed. It deemed all good and bad trusts to be horrid. No real reform would happen until Teddy Roosevelt took office more than a decade later.
Compared to the North, the South was desolate of industry and poor. However, there was a bevy of cheap labor and soon cotton would see new light.
The industrial revolution changed America forever. Profoundly changed were women. Many worked in the clerical field out of economic necessity. Many farmers abandoned their self-employment for wages as factories sprung up everywhere. Soon, unions would take form as workers’ right became an issue.
Before unions, workers were slaves, or so says our liberal textbook. The Industrial Revolution caused bosses to not care about their workers and treat them like scum. The union served as a voice for workers. Industrial giants immediately saw the power of the union and made employees sign iron-clad and yellow-dog contracts to ensure their loyalty. Workers could also be black-listed and never work again.
Leading the charge for the workers were three more badasses: the National Labor Union, the Knights of Labor, and the AF of L. The NLU worked for arbitration and gained 8-hour workdays for civil employees, but lost touch after the 1870s depression. The Knights wanted every skilled and unskilled worker to join and eventually got involved in the Haymarket Square bombing and lost popularity.
The most successful was the AF of L. Led by Sam Gompers, they only included skilled workers and didn’t want to be involved in politics. The unions would continue their popularity and eventually reached their peak in the 1950s. Until the trusts were busted and big business dismantled, workers needed to fight.
If you have some time to break away from studying, watch some more badasses walking away from explosions: