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• What are the pros and cons of railroad expansion?•Speed Notes•Political Cartoons•Maps• Homework: Ch. 24 Sec. 3 Pts. 1, 2, and 3
Realizing their importance, railroad companies given huge land grants and loans
A National Network:Transcontinental railroad – other regional lines to follow
Romance and RealityBrought dreams of land, adventure, and fresh start for many
Chinese immigrants, Irish immigrants, and desperate veterans among the many to take on the dangerous job of laying track
Railroad TimeUnified the nationIndividual cities on their own time still
(noon when the sun was directly above the head)
1869 – time problem fixed by Professor DowdEarth’s surface was divided into 24
zones1883 – clocks were synchronized 1884 – the world followed suit1918 – Congress officially adopts this as
standard for the nation
Iron, coal, steel, lumber, and glass grew
New Towns and MarketsLinking isolated
cities, towns, and settlements promoted trade and interdependence
Cities began specializing in particular products
George PullmanBuilt sleeper cars on Illinois prairieBuilt nearby town for his employees that
provided basic needsClean well-constructed homesDoctors’ officesShopsAthletic fields
Town under strict control to ensure stable work force
Refusal to lower rents after cutting pay led to strike in 1894.
Credit MobilierUnion Pacific Railroad formed construction
companyStockholders gave the company a contract
to lay track at 2 to 3 times the actual costDonated shares to members of Congress
Investigation found that many well-known and respected federal officials (including future president) involved
They kept their profits and received a slap on the wrist
Farmers’ organization outraged by corruption
Railroad AbusesMisuse of government land grants (to
businesses rather than settlers)Formal agreements to fix prices (kept
farmers in debt)Charged different customers different prices
Granger Laws1871 – Illinois authorized commission to set
rates and prohibit discriminationRailroads fought constitutionality of such
laws Supreme Court upheld laws 7 to 2 States won right to regulate the railroads for
benefit of farmers and consumersEstablished federal government’s right to
regulate private business to serve the public
Interstate Commerce Act1886 – Supreme Court ruled that a state
cannot set rates on interstate commercePassed Interstate Commerce Act –
established right of federal government to supervise railroads
Established Interstate Commerce Commission – watchdog for the Act (little effect or power) Not allowed to set maximum rail rates
Panic and ConsolidationOverbuilding and competition pushed many
to bankruptcyPlayed major role in economic collapse in
1893600 banks and 15,000 businesses collapsed
and 4 million lost their jobs