Railroads And Robber Barons

ASU HST 200 (Historical Themes) Industrialization and the Rise of Big Business, 1870-1900 Railroads And Robber Barons The first transcontinental railroad and its follow-up spur lines laid the groundwork for the railroad industry's dramatic growth earlier in the nineteenth century. They also encouraged the expansion of the iron, wood, coal, and associated industries. Railroads were a strong, reliable, and affordable mode of transportation that fueled the growth of almost every other sector in the nation, and they soon emerged as the first "big business" in the country. Railroads connected almost every part of the country by 1890, transporting completed commodities to consumer markets and raw materials to industrial enterprises. By the conclusion of the Civil War, there were 35,000 miles of track; by the end of the century, there were over 200,000 miles. Car couplers, air brakes, and Pullman passenger cars are a few examples of inventions that made it possible for the number of people and freight to rise consistently. Both the volume of cargo and the number of people using the railroads quadrupled between 1877 and 1890. All of this expansion was funded by a combination of grants and loans from the government and private investment. A total of $150 million in cash loans and 185 million acres of public property were given by the federal and state governments, respectively. To draw investors from the US and Europe, railroads also listed their bonds and stocks on the New York Stock Exchange. As corporations expanded and railroads amalgamated, individual investors' authority became more concentrated. These people went on to become some of the richest Americans in history. Due to their often dubious and exploitative business activities, wealthy railroad owners came to be known as "robber barons" by Midwest farmers who were incensed about their exploitative business tactics. One of their more dubious strategies was differential shipping rates, wherein larger corporations were granted discounted rates to ship their goods, while local producers and farmers were charged higher rates that effectively offset the savings. Maybe the first well-known railroad tycoon to be called a "robber baron" was Jay Gould. He acquired smaller, older, dilapidated railroads, made only minor repairs, and then profited from factory owners' desire to export their products on this more and more well-liked and economical mode of transportation. In an unsuccessful attempt to draw in foreign investors during a takeover attempt, he drove the firm to the verge of bankruptcy, making his work with the Erie Railroad legendary among other investors. In the American West, where railroads were still extensively dispersed throughout the region and forced farmers and businesses to pay whatever fees Gould requested in order to utilize his trains, his model performed well. Gould came to control over ten thousand miles of track throughout the United States, accounting for fifteen percent of all railroad transit, in addition to controlling the Union Pacific Railroad, which contributed to the construction of the first transcontinental railroad line. Despite being a very hated guy, Gould had a personal fortune of over $100 million when he passed away in 1892. Unlike Gould, who prioritized monetary gain above real industrial accomplishments, Commodore Cornelius Vanderbilt was a "robber baron" who really cared about the prosperity of his railroad company and its contribution to the American economy. The New York Central train Company, one of the most influential organizations in the United States at the time, was formed by Vanderbilt through the consolidation of various smaller train lines known as trunk lines (Figure 18.6). Later on, he invested in the main rail lines that would link his business with Chicago, expanding his influence and authority while also building a railroad network that would link Chicago with New York City. Greater efficiency in connecting Midwestern suppliers to Eastern customers was made possible by this combination. By 1900, seven significant railroad tycoons controlled more than 70 percent of all operational lines as a result of this consolidation. Vanderbilt was one of the three richest people in American history when he passed away in 1877, with a personal fortune of over $100 million.