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Railroads Big Business and Robber BaronsBy Jack Garrity

Book pages 436-440

After the Civil War, the rapid construction of railroads accelerated the nations industrialization and linked the country together.

After the Civil War, big business assumed a more prominent role in American life.

Linking the NationIn 1865 the eastern United States had about 35,000 miles of railroad track, by 1900 the United States boasted over 200,000 miles of track.

Linking the NationIn 1865 the eastern United States had about 35,000 miles of railroad track, by 1900 the United States boasted over 200,000 miles of track.

Linking the NationIn 1865 the eastern United States had about 35,000 miles of railroad track, by 1900 the United States boasted over 200,000 miles of track.

Linking the NationThe railroad boom began in 1862 when President Abraham Lincoln signed the Pacific Railway Act. .

Linking the NationThe Pacific Railway Act enabled the construction of a transcontinental railroad by two corporations, the Union Pacific and the Central Pacific railroad companies.

Linking the NationThe task to build a railroad that went from the East Coast to California.

The Union Pacific and Grenville DodgeBy 1865, (former Union General) Grenville Dodge and the Union Pacific began pushing westward from Omaha, Nebraska.

The Union Pacific and Grenville DodgeThe laborers faced blizzards in the mountains, scorching heat in the desert, and sometimes hostile Native American tribes.

The Union Pacific and Grenville DodgeThe laborers faced blizzards in the mountains, scorching heat in the desert, and sometimes hostile Native American tribes.

The Union Pacific and Grenville DodgeThe laborers faced blizzards in the mountains, scorching heat in the desert, and sometimes hostile Native American tribes.

The Union Pacific and Grenville DodgeLabor, money, and engineering challenges plagued the supervisors of the project.

The Union Pacific and Grenville DodgeThe railroad workers included Civil War veterans, new immigrants from Ireland recruited especially for the task, frustrated miners and farmers, cooks, adventurers, and ex-convicts.

The Union Pacific and Grenville Dodge Camp life was rough, dirty, and dangerous, with lots of gambling, hard drinking, and fighting.

The Big Four and the Central Pacific Starting in the West. The Rocky Mountains made an even bigger challenge for the eastern bound Central Pacific.

The Big Four and the Central Pacific Theodore Dehone Judah convinced the California legislature to organize a state railroad

The Big Four and the Central Pacific Theodore Dehone Judah sold stock in his Central Pacific Railroad Company to four Sacramento merchants: grocer Leland Stanford, shop owner Charley Crocker, and hardware store owners Mark Hopkins and Collis P. Huntington.

The Big Four and the Central Pacific These so-called Big Four eventually made huge fortunes from their investment. Leland Stanford became governor and later served as a United States senator after founding Stanford University in 1885.

Huntington Beach California

The Big Four and the Central Pacific Because of a shortage of labor in California, the Central Pacific Railroad hired about 10,000 workers from China.

The Big Four and the Central Pacific Equipment had to be shipped from the East, either around Cape Horn at the tip of South America or over the Isthmus of Panama in Central America.

The Big Four and the Central Pacific Equipment had to be shipped from the East, either around Cape Horn at the tip of South America or over the Isthmus of Panama in Central America.

Engineering VictoryThe Union Pacific and Central Pacific were joined near Ogden, Utah. The last spike driven was made of gold

Engineering VictoryThe Central Pacific's engine Jupiter and the Union Pacific's engine No. 119 meet on May 10, 1869, at Promontory Summit, Utah.

Engineering VictoryThe Union Pacific and Central Pacific linked the USA for the first time. Goods, people, and resources could be shipped in two weeks rather than months.

The Big Four and the Central Pacific Goods from China in San Francisco could now be shipped across the country to the east and vise versa.

Linking Other Lines By 1865 hundreds of small unconnected lines existed.

Linking Other Lines The challenge for eastern capitalists was to create a single rail transportation system from this maze of small companies.

Linking Other Lines Railroad consolidation proceeded rapidly from 1865 to 1900.

Linking Other Lines Large corporations and investors took over smaller Railroads by horizontal integration.

horizontal integrationis a business strategy where a company buys similar smaller competitive businesses.

Linking Other Lines By 1890 the Pennsylvania Railroad was a consolidation of 73 smaller companies.

Linking the NationOne of the most famous and successful railroad consolidators was Cornelius Vanderbilt, a former boat captain who had built the largest steamboat fleet in America.

Linking the Nation Vanderbilt sold them all and invested in railroads, he would become the richest man in the USA.

Linking the NationVanderbilt controlled the only railroad bridges that came into NYC.

Linking the NationBy 1871 Vanderbilt took over all railroad lines between Chicago and New York City.

Linking the NationBy 1871 Vanderbilt began construction of New Yorks Grand Central terminal.

The Benefits of a National System The railroads standardized time in the USA.

The Benefits of a National System Before the 1880s each community set its clocks by the suns position in the sky at high noon. At noon in Chicago, for example, it was 12:50 P.M. in Washington, D.C., 12:09 P.M. in Louisville, Kentucky, and 11:41 A.M. in St. Paul, Minnesota..

The Benefits of a National System When two trains traveled on the same track, collisions could result from scheduling errors caused by variations in time.

The Benefits of a National System In 1883 the American Railway Association divided the country into four time zones, which the federal government ratified in 1918.

The Benefits of a National System The nationwide rail network also helped unite Americans in different regions.

The Benefits of a National System Railroads shipped seasonal goods from one section of the country to another and greatly sped up long-distance transportation.

The Land Grant SystemThe federal government gave land grants to many railroad companies

The Land Grant SystemRailroads sold the land to settlers, real estate companies, and other businesses.

The Land Grant SystemDuring the 1850s and 1860s, the federal land grant system awarded railroad companies over 120 million acres of land.

The Land Grant SystemDuring the 1850s and 1860s, the federal land grant system awarded railroad companies over 120 million acres of land.

Robber BaronsThe great wealth many railroad entrepreneurs acquired led to accusations that they had swindled investors and taxpayers, bribed government officials, and cheated.

Robber BaronsThe great wealth many railroad entrepreneurs acquired led to accusations that they had swindled investors and taxpayers, bribed government officials, and cheated.

Robber BaronsJay Gould practiced insider trading, using information he received as a railroad owner to manipulate stock prices to his benefit.

Stock: a share of the value of a company which can be bought, sold, or traded as an investment.

Robber BaronsWhen Cornelius Vanderbilt attempted to buy his railroad, Jay Gould infamously printed more and more stock for Vanderbilt to buy.

The Erie Railroad Line

Robber BaronsVanderbilt lost more than $7 million in his attempt to gain control over Erie Railway Company, although Gould under threat of litigation later returned most of the money.

Robber Barons Railroad investors quickly discovered that they could make more money by acquiring government land grants than by operating the railroad.

Robber BaronsMany investors bribed members of Congress and the state legislatures to vote for more grants.

The Crdit Mobilier ScandalThe stockholders of the Union Pacific (including Congressman Oakes Amers) set up a construction company called the Crdit Mobilier

The Crdit Mobilier ScandalThe Union Pacific's stockholders then hired the Crdit Mobilier to do most of its construction work for it.

The Crdit Mobilier ScandalCrdit Mobilier charged outrageous prices, which of course Union Pacific paid.

The Crdit Mobilier ScandalThe investors had made several million dollars, but the railroad itself had used up its federal grants and was almost bankrupt.

The Crdit Mobilier ScandalNext Ames sold cheap Union Pacific stock to the Vice President and members of Congress including James Blaine (Speaker of the House) , and future President James Garfield.

The Crdit Mobilier ScandalDuring the election of 1872, The New York Sun published the story, which became a sensation and symbol of crony capitalism.

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