U.S. History Since 1865
Lesson 1
The Change of Industry
A. Railroads – America’s First Big Business
1. RR linked markets in west to eastern business
2. 1870-1880 – U.S. track doubled - overbuilding
3. 1900 – 193,000 miles of track
4. Gilded Age – era of business, politics, and corruption
a) Jay Gould – RR speculator
1) bought bankrupt RR – resold to other companies for profit
2) cleverly sold RR stock on paper – big profits
b) New York Stock Exchange
1) 1830 – 31 shares traded/day
2) 1886 – million shares/day
3) investors became speculators – wanted quick money
c) Pennsylvania RR – owned by Gould – largest business in U.S. –
1) competed w/ Cornelius Vanderbilt – richest men in U.S.
d) Republicans helped business grow – free land to RR, etc.
1) 180 mil. acres of free land to RR - $64 mil. in aid
2) towns grew up quickly along RR lines
5. Telegraph – Samuel Morse – put in along RR lines
a) made communication quicker – 63 million msg/yr.
6. Wealthy Am. were hated by average public
B. Andrew Carnegie – Steel & Vertical Integration
1. Born poor in Scotland – didn’t want to be speculator
a) Henry Bessemer created a way to make cheap steel
b) went to work at an early age – telegraph operator
- invested all his money
1) was a millionaire by age 13
2. Built a Bessemer Steel Mill in PA
a) Vertical Integration – controlled all aspects of steel industry
1) mines, transportation, steel mills
b) undersold all competition – ran others out of business
3. Carnegie Steel – largest steel mill – very rich
a) gave $300 mil. to charity
C. John D. Rockefeller – Standard Oil & Trust
1. created an oil company called Standard Oil
2. made deal w/ RR to transport oil – could then undersell comp.
a) bought other business when they went bankrupt
1) ExxonMobil, Amoco, Chevron, Sunoco, Phillips, Conoco
3. Trust – kept separate companies – controlled by St. Oil
1) Am. people did not like “monopolies”
2) Ida M. Tarbell – wrote book about evils of Rockefeller St. Oil
(a) Rock. slept w/ revolver by bed
4. 1890’s – controlled 90% of oil industry – U.S.’s first billionaire
D. New Inventions – Telephone & Electricity
1. Alexander Graham Bell – transmit voice over wire
a) Created American Bell & Am. Tel. & Telegraph (AT&T)
b) 1900 – over 1.5 million phones in Am.
2. Thomas Edison – inventor from New Jersey
a) pioneered using electricity as energy
1) lighting, trolleys, factories, etc.
b) Edison General Electric (GE) became a huge company in Am.