The Rise of the Rail Roads Technology, Urban Growth, New Immigration & Big Business

The Rise of the Rail Roads

Technology, Urban Growth, New Immigration & Big Business

Focus Question’s & Identifications

• How did Americans respond to the depression that followed the Civil War? And justify the growing disparity of wealth?

• Negro Rule Jack Riis• Irish Bossism Immigration Legislation• Nativism• Gospel of Wealth• Yellow Peril

Focus Question’s & Identifications

• What factors allowed for the transportation revolution, or building of a trans-national railroad?

• 1862 Pacific Rail Road Act• Immigration

Focus Question’s & Identifications• What was the impact of an unregulated

industrial growth and the response by farmers and workers?

• Labor Exploitation• Pools• Interstate Commerce Act 1887• The Grange, Granger Laws, Munn V Illinois

(1877)• Mark Twain and “The Guilded Age”

Reconstruction Governments

• 11 states, new leadership included poor whites and blacks– Modern constitutions that embodied an active

role in government (antithesis of southern tradition)

– Public schools for blacks and whites– Modern prisons– Social reform organizations– Universal manhood suffrage

1873 Panic

• Worst depression in American history at the time– Wages cut repeatedly

• Wall Street Panic of 1873– Wave of Bankruptcies– 6,000 businesses failed in 1874 alone

Economic Disparity

• Increasing wealth & evidence of “progress”– Centennial Exposition

• Steam Engine• Electricity• Type writer• Telephone

• Further impoverishment & Depression– 30% unemployment In Massachusettes – Failure of small business

Explanations for Panic in the South

• The South & its upheaval to blame– Conservatives argued that it was the inclusion of African Americans in

Public that led to failures

• Propaganda campaign of the “Negro Rule”– Leadership of migrant northerners (Carpetbaggers) and modest

southern whites (Scalawags) and all blacks• Weakened business confidence in the south & undermined economic

growth• Myth of Negro Domination served to discredit the government that had

been selected by the southern masses• Began to reverse gains made by reconstruction governments

• Bolstered support for the return of white supremacy

“Negro Rule”

• The "Lost Cause" meant the restoration of the virtues, the economy, and, particularly, the social system of the Old South.

1877 Compromise

• Republican candidate, Ruthford B. Hayes– Accepted presidency in return for removing

troops from the South• New politics embraced “regulation of morals”

& return to white supremacy – “Wealth & Intelligence of the South,” the

Democrats recaptured or “redeemed” the former confederate states through rhetorical campaigns against debts, incompetence & corruption

– Myth of the “Negro Rule”

Post Reconstruction Politics

• Nationalist reforming temper of the 1860s transitioned to reaction of economically depressed in the 1870s– Politics turned away from policies of social equity

• African American struggle for rights abandoned• State Sponsored Education Abandoned• Women’s suffrage abandoned

African American Exodus

• Early 1870s legislation against terrorism re-interpreted from being criminal acts to the need for traditional political elites to return to power

• Antebellum power relations restored– Exodus to Kansas

• 1879: 10,000’s of African Americans from lower Mississippi valley fled Klan violence and threat of practical re-enslavement

Settling the west

• The first Transcontinental Railroad– 1862 the Pacific Rail Road Act– authorized the construction of a new

transcontinental link.– provided grants of land and other subsidies to the Rail

roads – Congress awarded 170 million acres (half billion dollars

worth)– By 1893 Minnesota and Washington had deeded a quarter of

their state lands to the Rail roads– Wisconsin, Iowa, Kansas, North Dakota and Montana turned over

a fifth of their acreage.

(c) 2003 Wadsworth Group All rights reserved

5

Railroad company and government collusion

Central pacific RR spent $2000 on bribes to get 9 million acres of free land & 24 million in bonds (paid 79 made a profit of $36 million dollars over the value)

Union Pacific RRGiven 12 million acres of free landGiven $27 million in government bondsCreated Credit Mobilier company

Gave them $94 million for what cost $44 million

Rise of the Rail Road Barons

• 1869 Rail Road Executive joined the Union and Central pacific Rail lines –– first transcontinental line– 1873 400 corporations criscrossed the northeast

• Businesses that sold bonds to finance their businesses ventures

• could not meet their actual costs or fulfill their bond obligation

– Northern Pacific Securities Bank, Jay Cooke, closed down

Financial Collapse

• Triggered other firms to collapse • Financial panic ensued• Stock Market crash – 5 year depression

– Farm prices plummeted, steel furnaces stood idle, 1 of 4 rail roads failed

– In two years 18,000 businesses went bankrupt• 3 million employees out of work

– Those employed saw their wages repeatedly cut» Labor protests mounted and industrial violence spread

1873 Panic



Completing the first transcontinental railroad, Promontory Point, Utah, May 10, 1869.


4Human cost: Irish, Chinese, War Veterans paid $2 a day1889, 22,000 killed or injured

Labor

• Central Pacific employed Chinese workers • chipped and blasted rail bed out of solid rock in the

sierra Nevada• preferred Chinese labor

– worked hard for low wages, – did not drink, – furnished their own food and tents

» 12,000 graded the road bed while Irish, Mexican-American and black workers laid track.

Explanation for Panic in the North• Irish Bossism

– Pejorative applied to leaders who control the selection of their political party's candidates for elected office and dispense patronage without regard for the public interest.

– The power of a boss turns on his ability to select single-handedly the candidates who will win an election.

– Indebted elected representatives then turn the reigns of government over to the boss, who makes policy decisions and uses government jobs and revenue to employ party loyalists and fund party functions.

– Credited for causing the crisis in government and the economy in the North– Irish were poor working class who were succeeding in politics

• Reality– 65% of industrial workers in 1870 were American Born– 11% Born in Germany– 5% From England & Wales– 12% from Ireland– 7% Other

– Revival of 1850s Nativism• Service of Irish and African Americans in the war had bolstered claims to full citizenship• These progressive ideas centered on equality and liberty quickly faded• Various ethnic groups in the United States scape-goated for the crisis

Explanations for Panic in the West • “Yellow-Peril”

– 9% of the population, ¼ of the work force were Chinese– 1880: population 160,000

• Fear of Chinese Domination– Migrated to Pacific coast 1840-1860s

• Vast majority young men

– Built western Rail Roads– Provided crucial services in the mining camps– Formed the work force in western cities (agricultural &

construction)– Established businesses

“Coolie Labor”

• 1870 shoe Manufacturer in north Adams, Massachusetts imported 75 Chinese to break a strike by the Knights of St. Crispin– They opposed contract labor– No tone of racial prejudice– Employers however used Chinese workers as a

bulwark against unionism – aggravated racial tensions among workers

Railroads

• Railroads: single most important agent of economic growth

• “pools”– Technique used by RR to divide up traffic and fix rates,

avoiding competition– Rate-cutting wars, benefited some shippers, ruined others


3

RR & Farmers Associations• Interstate Commerce Act (1887)

– Interstate Commerce Commission (ICC)• Outlawed pools, discriminatory rates, & rebates for

favored shippers• ICC had minimal enforcement, and federal courts

frequently chose to enforce law– Rates did decline slowly afterwards

• Standard time zones– Consequence of RR impact on every day life– Before 1883 time kept locally by suns meridian in each

locality• Played havoc with the trains time table, the RR

established standard times zones and established new time tables

Poster advertising the “gifts” of the Grangers.


5

Farmers exploited by high rates

Response: Cooperatives or Patrons of Husbandry known as “The Grange”

Marketing groups (Farmer’s Alliance) to sell crops and buy suppliesOrganize an anti-monopoly to protect from the RR Monopoly

"Granger laws“Elected state legislators who enacted laws

Fixed maximum freight rates & warehouse charges

Munn v. Illinois (1877)RR challenged the laws, Supreme court ruled that states could regulate businesses clothes with a public interest including railroadsEncouraged state regulation

Transformation of the WestMixed Legacy of Expansion

• In the North American trans Mississippi west miners, farmers, land speculators and rail road developers

• Westward re-settlement– Prairies of

• Iowa• Minnesota• Kansas

Protestant Profit & Work Ethic

• Many white families prospered on the plains,– heedless pursuit of land and profit threatened the

Native American way & environment. – exploited white, native American, Chinese and

Mexican laborers alike– Bison nearly exterminated – Miners skinned the mountainsides in search of

minerals– Farmers plowed the prairie and built sod houses

Government’s Hand in the “Free Market”

• Westerners attributed economic gain – American individualism and self reliance

• Reality: depended heavily on the federal government– sent troops to clear the lands of native people, to

subjugate them and dispossess them of resources– promoted the acquisition of farm land through the

Homestead Act of 1862– Subsidized the construction of the rail road lines– Eastern banks and foreign capitalists provided investment

capital and eased access to the international markets• Many chose to view the destruction of indigenous America as

necessary price of civilization and progress

Promoted re-settlement

• The companies recruited settlers and in their propaganda glorified the west as the new Garden of Eden. – One unintended consequence of land promotions

was to make land available to single women. • 18% of claimants in Wyoming were single women, 10-

20% in Colorado.– Kansas having been settled by exo dusters of the

south were now joined by Russian Mennonites in 1905.

The New Middle Class Woman

• Women challenge “separate spheres” • obtain high school and college degrees• work in professional and white collar

occupations– Work puts women away from supervision of

male family members– Wages gave them some independence

• Women and volunteer associations– Settlement Houses 15


Transformation of the Trans-Mississippi West


• 1869 Rail Road Executive joined the Union and Central pacific Rail lines –– first transcontinental line– 1873 400 corporations criscrossed the northeast

• Businesses that sold bonds to finance their businesses ventures

• could not meet their actual costs or fulfill their bond obligation

– Northern Pacific Securities Bank, Jay Cooke, closed down

Railroads

• Railroads: single most important agent of economic growth

• “pools”– Technique used by RR to divide up traffic and fix rates,

avoiding competition– Rate-cutting wars, benefited some shippers, ruined others


3

Farmers Associations• Farmers exploited by high rates • Grange (1867)

– Response: Cooperatives or Patrons of Husbandry known as “The Grange”

• Marketing groups (Farmer’s Alliance) to sell crops and buy supplies

• Organize an anti-monopoly to protect from the RR Monopoly

– "Granger laws“• Elected state legislators who enacted laws

– Fixed maximum freight rates & warehouse charges– Munn v. Illinois (1877)

• RR challenged the laws, Supreme court ruled that states could regulate businesses clothes with a public interest including railroads

• Encouraged state regulation

Poster advertising the “gifts” of the Grangers.


5

Interstate Commerce Act (1887)Interstate Commerce Commission (ICC)

Outlawed pools, discriminatory rates, & rebates for favored shippersICC had minimal enforcement, and federal courts frequently chose to enforce law

Rates did decline slowly afterwards

Standard time zonesConsequence of RR impact on every day lifeBefore 1883 time kept locally by suns meridian in each locality

Played havoc with the trains time table, the RR established standard times zones and established new time tables

Completing the first transcontinental railroad, Promontory Point, Utah, May 10, 1869.


4 Human cost: Irish, Chinese, War Veterans paid $2 a day1889, 22,000 killed or injured


5

Railroad company and government collusion

Central pacific RR spent $2000 on bribes to get 9 million acres of free land & 24 million in bonds (paid 79 made a profit of $36 million dollars over the value)

Union Pacific RRGiven 12 million acres of fee landGiven $27 million in government bondsCreated Credit Mobilier company

Gave them $94 million for what cost $44 million

Financial Collapse

• Triggered other firms to collapse • Financial panic ensued• Stock Market crash – 5 year depression

– Farm prices plummeted, steel furnaces stood idle, 1 of 4 rail roads failed

– In two years 18,000 businesses went bankrupt• 3 million employees out of work

– Those employed saw their wages repeatedly cut» Labor protests mounted and industrial violence spread

1873 Panic



Transformation of the WestMixed Legacy of Expansion

• In the North American trans Mississippi west miners, farmers, land speculators and rail road developers

• Westward re-settlement– Prairies of

• Iowa• Minnesota• Kansas

Protestant Profit & Work Ethic

• Many white families prospered on the plains,– heedless pursuit of land and profit threatened the

Native American way & environment. – exploited white, native American, Chinese and

Mexican laborers alike– Bison nearly exterminated – Miners skinned the mountainsides in search of

minerals– Farmers plowed the prairie and built sod houses

Government’s Hand in the “Free Market”

• Westerners attributed economic gain – American individualism and self reliance

• Reality: depended heavily on the federal government– sent troops to clear the lands of native people, to

subjugate them and dispossess them of resources– promoted the acquisition of farm land through the

Homestead Act of 1862– Subsidized the construction of the rail road lines– Eastern banks and foreign capitalists provided investment

capital and eased access to the international markets• Many chose to view the destruction of indigenous America as

necessary price of civilization and progress

Settling the west• The first Transcontinental Railroad

– 1862 the Pacific Rail Road Act– authorized the construction of a new transcontinental link.– provided grants of land and other subsidies to the Rail roads

• Labor – Central Pacific employed Chinese workers

• chipped and blasted rail bed out of solid rock in the sierra Nevada• preferred Chinese labor

– worked hard for low wages, – did not drink, – furnished their own food and tents

» 12,000 graded the road bed while Irish, Mexican-American and black workers laid track.

Pacific Rail Road Act

• Congress awarded the railroads 170 million acres, worth over ½ a billion dollars. – By 1893 Minnesota and Washington had deeded a

quarter of their state lands to the Rail roads– Wisconsin, Iowa, Kansas, North Dakota and

Montana turned over a fifth of their acreage.

Promoted re-settlement

• The companies recruited settlers and in their propaganda glorified the west as the new Garden of Eden. – One unintended consequence of land promotions

was to make land available to single women. • 18% of claimants in Wyoming were single women, 10-

20% in Colorado.– Kansas having been settled by exodusters of the

south were now joined by Russian Mennonites in 1905.

RR Influence on Agriculture

• to ensure a quick repayment of money owed • urged new immigrants to specialize in cash

crops– wheat on the Northern plains, – corn in Iowa & Kansas– cotton and tobacco in Texas.

Accelerated development of the West

• Used to ship army horses and men in the dead of winter to attack Indians when they were most vulnerable

• Used to gain quick access to bison, slaughter• Then used to rapidly settle colonists

Homesteading the Great Plains

• The Homestead Act passed in 1862 – Liberalized land laws– Encouraged westward settlement

• 160 acres to any individual who would pay a 10 dollar registration fee,

• live on the land for five years and cultivate and improve on it.

• 400,000 families claimed land 1860 – 1900

Dispossession of Homesteaders • Agents filed false claims for the choicest locations

– railroads acquired huge holdings• only 1 of every 9 acres went to pioneers

• Another problem was the 160 acre limit– Depending on the richness of the soil, a family needed more

than 160 to survive. • Congress passed the Land Act of 1877, the Timber Culture

act of 1873 and Timber and stone act of 1877– allowed farmers to buy additional acreage given their terrain.

• Again speculators, timber companies and cattle ranchers exploited the new legislation to their benefit.– While half the homesteaders adjusted to life on the frontier,

half also gave up their claims and moved on.

Farming Communities• farm mechanization and development of new strains

of wheat and corn to boost production dramatically – Steel plows – Wheat planters– Grain binders– Threshers– Windmills– Barbed wire

• cost of land, horses, machinery and seed exceeded the annual earnings of an industrial worker,– government supported big business rather than the small

business owners in such endeavors. • With increased mechanization & government support agribusiness

began to establish itself and hinder small business owners from proliferating.

Big Business Government

• 1887 President Grover Cleveland , with a huge surplus, • vetoed a bill providing $100,000 relief to Texas farmers

– to help them buy seed grain during a drought. • “federal aid in such cases… encourages the expectation of

paternal care on the part of the government and weakens the sturdiness of our national character”

• Cleveland used surplus to pay off wealthy bond

holders– at $28 above the $100 value of each

• a gift of 45 million dollars

Small Farmer’s plight • high mortgage payments

– forced to specialize in cash crops like corn or wheat • made them dependent on the railroads for shipping

– Charged what they wanted for shipping costs• put them at the mercy of the international grain markets

shifting prices. • Plight of mid westerners desperate by the late

1870s– Dry years of the 1870s– Grass hopper infestation

• Economic depression• Farmers could not meet costs of productions

– 25% of farmers lost their homes and became tenants, while others yet became farmer laborers unable to pay a rent

– 1900 4.5 million farm laborers n the country

Green-backers

• Government helped the bankers and hurt the farmers– it kept the amount of money based on gold

steady while the population rose, – less money was in circulation.

• If a farmer had to pay his debts in dollars, it was hard to get and by the time bankers got the dollars, they were worth less

• Farmers movements demanded more money be put in circulation by printing greenbacks.

Farmer’s Alliance

• Began in Texas• Southern crop-lien system

– farmer would get things he needed from the merchant, the use of a cotton gin during harvest time and other supplies.

– merchant would get a lien or a mortgage on his crop to pay for needs

– farmer might pay 25% interest– Farmer would owe more money each year– Land would be taken, he would become a tenant

Rebellions

• Delhi, LA in 1889• Gathering of small farmers rode to down and

demolished the stores of merchants– “to cancel their indebtedness”

Farmers Alliance, 1877

• Height of the Depression– By 1882 120 sub-alliances in 12 counties– 1886 100,000 farmers joined in 2,000 sub-

alliances• Offered alternatives to the old system • Join the alliance and form cooperatives• Get needed things at lower prices• “bulking” put cotton together and sell it cooperatively

• By 1886 the populist doctrine of “Cleburne Demands”.

• It was the Farmers Alliance at the core of what would become known as the populist movements during the 1880s and 1890s.

1886, Cleburne, Texas• Alliance drew up the “Clerburne Demands”• First document of what was becoming the

Populist party– Called for “such legislation as shall secure to our

people freedom from the onerous and shameful abuses that the industrial classes are now suffering at the hands of the arrogant capitalists and powerful corporations”

• asked that legislation be passed to protect workingmen from the abuses of capitalists and corporations

» included regulation of RR rates » a heavy taxation of land held only for speculative purposes » increase the money supply

Growth of Alliances• 1887 200,000 members of 3,000 sub-alliances• 1892 farmer lecturers

– 43 states– Reached 2 million families– “most massive organizing drive by any citizen

institution of 19th C America”• Movement based on ideas

– Cooperation– Farmers creating their own culture & Political parties

» Georgia 100,000 members in 134 of 137 counties» Tennessee 125,000 members and 3,600 sub-alliances in 92

of 96 counties

Texas Exchange• Formed from the alliance

– Handled the selling of the farmers cotton in one transaction

– Charged less for supplies– Charged less for land and machinery– Needed to be able to loan members money

• Scraped together needed capital for exchange to operate from the farmers– Collected 80,000, not enough and banks refused to

loan money to the exchange• Unable to operate, to poor to help themselves it convinced

them of the need of monetary reform

Rise of the Populist/Peoples Party

• 1890 38 alliance people were elected to congress– Georgia and Texas elected governors

• Georgia– Took over democratic party in Georgia– Won 3/4ths of the state legislature– Six of its ten congressmen

• Did not wrest real power away from the old political bodies, but spread new ideas and new spirit

1892, People’s Party Convention• Pre-amble• We meet in the midst of a nation brought to the verge of moral,

political and material ruin. Corruption dominates the ballot box, the legislatures, the congress, and touches even the ermine of the bench. The people are demoralized…The newspapers are subsidized or muzzled; public opinion silenced; business prostrate, our homes covered with mortgages, labor impoverished, and the land concentrating in the hands of the capitalists. The Urban workman are denied the right of organization for self protection; imported pauperized labor beats down their wages, a hireling standing army…established to shoot them down…the fruits of the toil of millions are boldly stolen to build up colossal fortunes…From the same prolific womb of governmental injustice we breed two classes-paupers and millionaires…– Nominated james Weaver, Iowa populist and former general in the union

army for president, lost.

Challenging the black-white dichotomyRevealing class

• From this movement grew a movement out of the Colored Farmers National Alliance (CFNA) – encouraged cross-racial alliances– it cut across boundaries of race to address the real

problem of class. – Considered breaking down the color barrier to create

real economic and political gain for small land owners and working classes

– Attempted to create a culture of cooperation, self respect and economic analysis among the rural labor movement.

Failure of the Populist Party

• Nativism and Racism dominated and hindered people from uniting on sufficient levels

• Lure of electoral politics– Populists allied with the Democratic party and

supported Williams Jennings Bryan in 1896• Pressure for electoral victory led populism to make deals

with major parties city after city– Populism lost in electoral politics and its ideals

negotiated, brokered and compromised away• William McKinley won Presidency of 1896• Declared war on Spain two years later

Territory to State• Communities grew large enough to petition congress

to pass an Enabling Act – Established the territory’s boundaries and authorized an

election to select delegates for a state constitutional convention.

– Once the constitution was drawn up and ratified by popular vote, the territory applied to congress for admission as a state.

• Kansas entered the Union 1861• Nevada in 1864• North Dakota , Montana, Washington , 1889• Utah 1896• Oklahoma 1907• Arizona and New Mexico 1912

Consequences of Westward Settlement

• Ideas of white supremacy, racism and Nativism– Established through violence and embedded in

the new American institutions throughout the west

– Impoverished minority working classes created – Class system further stratified – Further concentration of wealth produced– Rise of agri-business– Environmental devastation

Documents

The Rise of the Rail Roads Technology, Urban Growth, New Immigration & Big Business