• What are the pros and cons of railroad expansion?•Speed Notes•Political Cartoons•Maps• Homework: Ch. 24 Sec. 3 Pts. 1, 2, and 3

Realizing their importance, railroad companies given huge land grants and loans

A National Network:Transcontinental railroad – other regional lines to follow

Romance and RealityBrought dreams of land, adventure, and fresh start for many

Chinese immigrants, Irish immigrants, and desperate veterans among the many to take on the dangerous job of laying track

Railroad TimeUnified the nationIndividual cities on their own time still

(noon when the sun was directly above the head)

1869 – time problem fixed by Professor DowdEarth’s surface was divided into 24

zones1883 – clocks were synchronized 1884 – the world followed suit1918 – Congress officially adopts this as

standard for the nation

Iron, coal, steel, lumber, and glass grew

New Towns and MarketsLinking isolated

cities, towns, and settlements promoted trade and interdependence

Cities began specializing in particular products

George PullmanBuilt sleeper cars on Illinois prairieBuilt nearby town for his employees that

provided basic needsClean well-constructed homesDoctors’ officesShopsAthletic fields

Town under strict control to ensure stable work force

Refusal to lower rents after cutting pay led to strike in 1894.

Credit MobilierUnion Pacific Railroad formed construction

companyStockholders gave the company a contract

to lay track at 2 to 3 times the actual costDonated shares to members of Congress

Investigation found that many well-known and respected federal officials (including future president) involved

They kept their profits and received a slap on the wrist

Farmers’ organization outraged by corruption

Railroad AbusesMisuse of government land grants (to

businesses rather than settlers)Formal agreements to fix prices (kept

farmers in debt)Charged different customers different prices

Granger Laws1871 – Illinois authorized commission to set

rates and prohibit discriminationRailroads fought constitutionality of such

laws Supreme Court upheld laws 7 to 2 States won right to regulate the railroads for

benefit of farmers and consumersEstablished federal government’s right to

regulate private business to serve the public

Interstate Commerce Act1886 – Supreme Court ruled that a state

cannot set rates on interstate commercePassed Interstate Commerce Act –

established right of federal government to supervise railroads

Established Interstate Commerce Commission – watchdog for the Act (little effect or power) Not allowed to set maximum rail rates

Panic and ConsolidationOverbuilding and competition pushed many

to bankruptcyPlayed major role in economic collapse in

1893600 banks and 15,000 businesses collapsed

and 4 million lost their jobs