Railroad and Big Business

1
Railroad and Big Business

• Transcontinental Railroad
• George Pullman
• Interstate Commerce Act
• Andrew Carnegie
• Social Darwinism
• John D. Rockefeller
• Sherman Anti-Trust Act

2
Transcontinental RR

• Linked the coast by rail in 1869
• Other lines followed
• 1890 180,000 miles of track
• Towns grew and died because of the rr

3
George Pullman

• 1880 Built a sleeper car
• Created a company town
• Pullman , IL
• Provided for the basic needs
• Company controlled the town
• No alcohol
• Depression in 1890s led Pullman to cut wages
• Didnt cut prices in town

4
RR cont.

• Farmers wanted govt oversight of rr companies
• Companies were corrupt
• Wanted farmers kept poor
• Price fixing
• Granger Laws
• Laws sponsored by the Grange
• Regulated rr companies

5
More rr

• RR companies challenged laws in court
• Supreme Court found the laws to be constitutional
• It is okay for the govt to regulate private
  industry for the good of the public

6
Interstate Commerce Act

• 1887
• Established the right of the Feds. to supervise
  rr activities and establish an interstate
  commerce commission
• ICC was ineffective until Theodore Roosevelt

7
Andrew Carnegie

• Former rr mogul
• Moved to producing steel in 1873
• Carnegie Steel Company
• Made production cheaper

8
Vertical Integration

• Carnegie bought out supplier and shippers
• He controlled everything from mining to
  production to delivery

9
Horizontal Integration

• Buy out competition
• By 1901 Carnegie controlled most of the steel
  industry in the U.S.
• Both processes allowed Carnegie to control costs

10
Social Darwinism

• Based on Charles Darwins theory of evolution
• Natural Selection weeded out the unsuccessful
• This allowed for monopolies to be created
• Social Darwinism said that the riches were a
  reward from God and the poor were lazy and
  deserved what they got

11
John D. Rockefeller

• Standard Oil Company
• Joined into a trust with many other companies
• Board of directors controlled those companies
• Smaller companies were able to earn from the
  larger trust
• Rockefeller was able to control the entire oil
  industry

12
John D. Rockefeller
13
J.D.R. cont.

• 1880 Rockefeller controlled 90 of the
  refineries in U.S.
• Paid low wages
• Drove competition out of business
• Sold oil at a below market price
• Killed his competition
• After comp. was gone he hiked oil prices up
• Robber Barons

14
Not All Bad

• Rockefeller and Carnegie were also
  philanthropists
• R. gave 500 million to Univ. of Chicago
• Carnegie donated 90 of his wealth

15
Sherman Anti-Trust Act

• Illegal to form a trust that interfered with free
  trade between states or with other countries
• Tried to stop monopolies
• Vocabulary of trust was hard to prove
• Consolidation of businesses continued