Industrial Revolution

Post Civil War• Between the Civil War &

1900, steam & electricity replaced human labor

• Iron > wood• Steel > iron• Pre Bessemer process,

3-5 tons of iron was hardened into steel per day

• Now done in 15 min

• People & goods could move by railroad

• Telephone, typewriter, & adding machine sped up business work

• Machines changed farming (pre Civil war = 61 hrs of labor to produce an acre of wheat)

• By 1900 it took 3 hrs, 19 min

• Manufactured ice allowed food to be transported over long distances

• By 1884, 100 million tons of coal were mined

• More coal = more steel• Electricity started

replacing steam = more copper

Hard Work & Corruption

• Inventors created new processes & machines

• This led to thousands of humans doing dangerous work

• Immigrants from Europe & China made up the railroad labor force

• 1st transcontinental railroad was built when Union & Central Pacific railroads combined

• Central Pacific started on the West & headed East

• Spent $200,000 in Washington on bribes for 9 million acres of free land

• Paid 3,000 Irish & 10,000 Chinese $1 per day to construct the railroad

• The Union Pacific started in Nebraska & went West

• Built on 12 million acres of free land

• Created own construction company (Credit Mobilier) and overpaid them ($94 vs $44 million)

• +20,000 workers: Irish immigrants, war vets, 5 miles of track per day, thousands died from weather & Indian attacks

• Sold shares cheaply to Congressmen to prevent investigation

• “Wild fraud” led to more control of railroad finances by bankers

• Bankers wanted profit by law, not theft

• By the 1890s, the country’s railways were ran by 6 large companies

The Big Names

J.P. Morgan • Son of a banker that sold

stocks for railroads• Relative on mother’s side

founded Yale• After high school he

studied in Europe, learning French & German

• Gained fame by reorganizing & consolidating troubled railroads

• Eventually controlled 1/6th of the entire nations’ railroads

• The US had no central bank, so he used his influence to save the nation from economic crisis

• Rescued America’s gold standard by loaning the govt $60 million

• Led Wall Street out of the 1907 financial crisis

• Fed Reserve was created to keep down his power

Cornelius Vanderbilt• Born in NY• Transported ship

cargo as a teen, eventually owned fleet of small boats & learned ship design

• Liked marrying cousins

• 1820s started own business building steamships & operating ferry lines

• Became dominant by engaging in fare wars w/ rivals

• Hated by many for shrewd ways• His steamship service gained fame during

California Gold Rush (pre-railroads)

• Shifted focus from shipping to railroads

• Gained controlled of lines operating from Chicago to NY

• Established an interregional railroad system, cutting costs & increasing efficiency

• Gave $1 million towards creation of Vanderbilt University in Nashville, TN

John D. Rockefeller • Started as a bookkeeper

in Cleveland, became a merchant, & saved $$$

• He bought his first oil refinery in 1862

• Married the daughter of a rich abolitionist

• By 1870, he set up Standard Oil Company

• Made secret agreements w/ railroads to ship his oil w/ them if they gave him discounts

• This drove competition out of business

“If we did not sell out…we would be crushed out…

There was only one buyer on the market and we had to sell at

their terms.”

• He developed the Standard Oil Trust (controlled 90% of nation’s refineries & pipelines)

• Rockefeller was worth $200 mill b4 he moved into iron, copper, coal, shipping, and banking (Chase Manhattan Bank)

• Donated half a billion dollars b4 passing

Andrew Carnegie• Born poor in Scotland, family

moved to Pittsburgh• Telegraph clerk at 17, secretary

to the head of the Penn Railroad, soon succeeded boss as railroad superintendent

• Started making investments in coal, iron, & oil

• Left post w/ railroad & started building iron bridges & a telegraph firm

• By 30s he was wealthy broker in Wall Street selling railroad bonds for commissions

• Went to London in 1872, saw the Bessemer method of producing steel, & returned to the US to build a million dollar steel plant

• Kept out foreign competition by using high tariffs set by Congress

• By 1900 Carnegie was making $40 million a year

• Sold his steel company to J.P. Morgan for +$480 million

• Morgan merged Carnegie Steel w/ other steel companies to create US Steel (world’s 1st billion dollar corporation)

• After retiring, Carnegie devoted his life to charity ($350 million)

• “The man who thus rich dies disgraced”