Revolution by Railways and Government Regulation

This section examines the profound impact of railroads on American society and the economy, as well as early attempts at government regulation of the industry.

Railroads transformed the United States by:

• Creating a huge domestic market for goods
• Stimulating industrialization, mining, and agriculture
• Accelerating urbanization and immigration
• Introducing standardized time zones in 1883
• Giving rise to a new class of millionaire industrialists

Definition: Horizontal integration is the practice of acquiring or merging with competitors in the same industry to increase market share and reduce competition.

The growing power of railroads led to calls for government intervention:

• Farmers protested unfair pricing and monopolistic practices in the 1870s
• Some Midwestern states attempted to regulate railroads
• The Supreme Court's Wabash case ruled that states could not regulate interstate commerce
• Congress passed the Interstate Commerce Act in 1887, marking the beginning of federal regulation of big business

Quote: "The Interstate Commerce Act was the first important federal law to regulate private industry in the United States." - This highlights the significance of this legislation in APUSH Chapter 24: Industry Comes of Age.

The Rise of Big Business and Trusts

This section focuses on the emergence of large corporations, trusts, and industrial titans in the late 19th century. It covers key figures like Andrew Carnegie, John D. Rockefeller, and J.P. Morgan.

The growth of big business was fueled by:

• Abundant natural resources and capital
• A large immigrant workforce
• American inventiveness and technological innovations
• New business practices like vertical and horizontal integration

Vocabulary: Vertical integration refers to a company controlling all stages of production, from raw materials to finished products.

Key developments:

• Andrew Carnegie dominated the steel industry through vertical integration
• John D. Rockefeller's Standard Oil Company used trusts to monopolize the oil industry
• J.P. Morgan pioneered the use of interlocking directorates to control multiple companies
• The formation of the first billion-dollar corporation, U.S. Steel, in 1901

Highlight: By 1900, the United States had become the world's leading industrial nation, surpassing Great Britain.

The rise of industrial giants led to growing concerns about monopolies and economic inequality:

• Some industrialists justified their wealth through the "Gospel of Wealth" or Social Darwinism
• Critics called for government action to break up trusts
• Congress passed the Sherman Anti-Trust Act in 1890, but it proved largely ineffective initially

Example: The American Pageant textbook describes Rockefeller's Standard Oil as an "octopus" that crushed competition and dominated the oil industry.

Trust Regulation and Southern Development

The era saw the rise of powerful trusts and the government's first attempts to regulate them, while the South experienced a different pattern of industrial development.

Definition: Gilded Age industrialization led to the formation of trusts and monopolies that dominated American business.

Highlight: The Sherman Anti-Trust Act of 1890 represented the first federal attempt to control monopolies.

Example: The South remained primarily agricultural but saw growth in tobacco production and cotton mills.

Vocabulary: "Interlocking directorates" allowed J.P. Morgan to control multiple companies through shared board members.

The Iron Colt Becomes an Iron Horse

This section covers the massive expansion of railroads after the Civil War and their impact on American development. The growth of the railroad network helped spur economic growth and linked the country together.

Highlight: By 1900, the United States had over 193,000 miles of railroad track, more than all of Europe combined.

Key points:

• Towns and cities near railroads prospered
• Government provided land grants and loans to incentivize railroad construction
• Five transcontinental railroads were completed, linking East and West
• Railroads faced resistance from Native American tribes as they expanded westward
• Railroad consolidation led to improved technology and safety features

Vocabulary: "Groundhog" promoters - Unscrupulous railroad promoters who would resurface in new locations after failed projects.

The railroad boom also had negative consequences:

• Overbuilding led to bankruptcies in some areas
• Corrupt practices like stock watering and bribery were common
• Railroads wielded enormous economic and political power

Example: The transcontinental railroad was completed in 1869 when the Union Pacific and Central Pacific lines met at Promontory Point, Utah.