APUSH Chapter 24
The supremacy of Steel- King
"Steel is king!" might well have been the exultant war cry of the new industrialized generation. The mighty metal ultimately held together the new steel civilization, from skyscrapers to coal scuttles, while providing it with food, shelter, and transportation. Steel making, notably rails for railroads, typified the dominance of "heavy industry," which concentrated on making "capital goods," as distinct from the production of "consumer goods" such as clothes and shoes.
Wedding
A "wedding of the rails" was finally consummated near Ogden, Utah, in 1869, as two locomotives— "facing on a single track, half a world behind each back"—gently kissed cowcatchers. The colorful ceremony included the breaking of champagne bottles and the driving of a last ceremonial (golden) spike, with ex-governor Stanford clumsily wielding a silver maul. In all, the Union Pacific built 1,086 miles, the Central Pacific 689 miles. Completion of the transcontinental line—a magnificent engineering feat for that day—was one of America's most impressive peacetime undertakings. It welded the West Coast more firmly to the Union and facilitated a flourishing trade with Asia. It penetrated the arid barrier of the deserts, paving the way for the phenomenal growth of the Great West. Americans compared this electrifying achievement with the Declaration of Independence and the emancipation of the slaves; jubilant Philadelphians again rang the cracked bell of Independence Hall.
Pittsburgh plus
A bitter example of this economic discrimination against the South was the "Pittsburgh plus" pricing system in the steel industry. Rich deposits of coal and iron ore near Birmingham, Alabama, worked by low-wage southern labor, should have given steel manufacturers there a competitive edge, especially in southern markets. But the steel lords of Pittsburgh brought pressure to bear on the compliant railroads. As a result, Birmingham steel, no matter where it was delivered, was charged a fictional fee, as if it had been shipped from Pittsburgh. This stunting of the South's natural economic advantages throttled the growth of the Birmingham steel industry.
Job Security
A nation of farmers and independent producers was becoming a nation of wage earners. In 1860 half of all workers were self-employed; by the century's end, two of every three working Americans depended on wages. Real wages were rising, and times were good for workers who were working. But with dependence on wages came vulnerability to the swings of the economy and the whims of the employer. The fear of unemployment was never distant. A bread-winner's illness could mean catastrophe for an entire family. Nothing more sharply defined the growing difference between working-class and middle-class conditions of life than the precariousness of the laborer's lot. Reformers struggled to introduce a measure of security—job and wage protection, and provi- sion for temporary unemployment—into the lives of the working class.
The Knights of Labor
A new organization—the Knights of Labor— seized the torch dropped by the defunct National Labor Union. Officially known as the Noble and Holy Order of the Knights of Labor, it began inauspiciously in 1869 as a secret society, with a private ritual, passwords, and a special handshake. Secrecy, which continued until 1881, would forestall possible reprisals by employers. The Knights of Labor, like the National Labor Union, sought to include all workers in "one big union." Their slogan was "An injury to one is the concern of all." A welcome mat was rolled out for the skilled and unskilled, for men and women, for whites and blacks, some ninety thousand of whom joined. The Knights barred only "nonproducers"—liquor dealers, profes- sional gamblers, lawyers, bankers, and stockbrokers.Setting up broad goals, the embattled Knights refused to thrust their lance into politics. Instead they campaigned for economic and social reform, including producers' cooperatives and codes for safety and health. Voicing the war cry "Labor is the only creator of values and capital," they frowned upon industrial warfare while fostering industrial arbitration. The ordinary workday was then ten hours or more, and the Knights waged a determined campaign for the eight-hour stint. Under the eloquent but often erratic leadership of Terence V. Powderly, an Irish American of nimble wit and fluent tongue, the Knights won a number of strikes for the eight-hour day. When the Knights staged a successful strike against Jay Gould's Wabash Railroad in 1885, membership mushroomed to about three-quarters of a million workers.
Carnegie and Steel
After accumulating some capital, Carnegie entered the steel business in the Pittsburgh area. A gifted organizer and administrator, he succeeded by pick-ng high-class associates and by eliminating many middlemen. Although inclined to be tough-fisted in business, he was not a monopolist and disliked monopolistic trusts. His remarkable organization was a partnership that involved, at its maximum, about forty "Pittsburgh millionaires." By 1900 he was producing one-fourth of the nation's Bessemer steel, and the partners in these pre-income tax days were dividing profits of $40 million a year as their take-home pay, with the "Napoleon of the Smokestacks" himself receiving a cool $25 million.
Altgeld
Agitation for clemency mounted. In 1892, some six years later, John P. Altgeld, a German-born Democrat of strong liberal tendencies, was elected governor of Illinois. After studying the Haymarket case exhaustively, he pardoned the three survivors. Violent abuse was showered on him by conservatives, unstinted praise by those who thought the men innocent. He was defeated for reelection and died a few years later in relative obscurity, "The Eagle Forgotten." Whatever the merits of the case, Altgeld displayed courage in opposing what he regarded as a gross injustice. The Haymarket Square bomb helped blow the props from under the Knights of Labor. They were associated in the public mind, though mistakenly, with the anarchists. The eight-hour movement suffered correspondingly, and subsequent strikes by the Knights met with scant success.
Alarmists
Alarmists condemned them as "wheeled torture chambers" and potential funeral pyres, for the wooden cars were equipped with swaying kerosene lamps. Appalling accidents continued to be almost daily tragedies, despite safety devices like the telegraph ("talking wires"), double-tracking, and (later) the block signal.
Unskilled Workers
Another fatal handicap of the Knights was their inclusion of both skilled and unskilled workers. Unskilled labor could easily be replaced by strikebreaking "scabs." High-class craft unionists, who enjoyed a semimonopoly of skills, could not readily be supplanted and hence enjoyed a superior bargaining position. They finally wearied of sacrificing this advantage on the altar of solidarity with their unskilled coworkers and sought refuge in a federation of exclusively skilled craft unions—the American Federation of Labor. The desertion of the skilled craft unionists dealt the Knights a body blow. By the 1890s they had melted away to 100,000 members, and these gradually fused with other protest groups of that decade.
Manufacturing
As late as 1870, agriculture remained the nation's biggest business. By 1900 it accounted for less than half of the national economy. Until the end of the Civil War, the United States imported more merchandise than it exported. By 1900 it annually delivered more than $600 million worth of manufactured goods to the world's marketplace. Foreign investment, labor, trade, and technology made it possible. Although in many ways still a political dwarf, the United States was about to stand up before the world as an industrial colossus— and the lives of millions of working Americans would be transformed in the process.
The Best Men
As the nineteenth century drew to a close, observers were asking, "Why are the best men not in politics?"One answer was that they were being lured away from public life by the lusty attractions of the booming private economy. As America's Industrial Revolution slipped into high gear, talented men ached for profits, not the presidency. They dreamed of controlling corporations, not the Congress.What the nation lost in civic leadership, it gained in an astounding surge of economic growth.
Government Tackles the Trust Evil-Sherman Anti-Trust Act
At long last the masses of the people began to mobilize against monopoly. They first tried to control the trusts through state legislation, as they had earlier attempted to curb the railroads. Failing here, as before, they were forced to appeal to Congress. After prolonged pulling and hauling, the Sherman Anti-Trust Act of 1890 was finally signed into law. The Sherman Act flatly forbade combinations in restraint of trade, without any distinction between "good" trusts and "bad" trusts. Bigness, not badness, was the sin. The law proved ineffective, largely because it had only baby teeth or no teeth at all, and because it contained legal loopholes through which clever corporation lawyers could wriggle. But it was unexpectedly effective in one respect. Contrary to its original intent, it was used to curb labor unions or labor combinations that were deemed to be restraining trade.
Social Darwinists
But most defenders of wide-open capitalism relied more heavily on the survival-of-the-fittest theories of English philosopher Herbert Spencer and Yale professor William Graham Sumner. Later mislabeled Social Darwinists, these theorists argued that individuals won their stations in life by competing on the basis of their natural talents. The wealthy and powerful had simply demonstrated greater abilities than the poor. Spencer and Sumner owed less to English evolutionary naturalist Charles Darwin, who stressed the adaptation of organisms, than to British laissez-faire economists David Ricardo and Thomas Malthus. In fact, Spencer, not Darwin, coined the phrase "survival of the fittest." "The mil- lionaires are a product of natural selection," Sumner declared. In 1883 he asked, "What do social classes owe each other?" then answered his own question: nothing. Some Social Darwinists later applied this theory to explain why some nations were more powerful than others or had the right to dominate "lesser peoples," often defined by race.
Lightbulbs
But what technology gives, technology takes away. By 1885, 250,000 of Thomas Edison's electric lightbulbs were in use; fifteen years later, perhaps 15 million. The new electric industry rendered kerosene obsolete just as kerosene had rendered whale oil obsolete. Only in rural America and overseas did a market continue for oil-fired lamps.
Carnegie
Carnegie integrated every phase of his steel-making operation. His miners scratched the ore from the earth in the Mesabi Range; Carnegie ships floated it across the Great Lakes; Carnegie railroads delivered it to the blast furnaces at Pittsburgh. When the molten metal finally poured from the glowing crucibles into the waiting ingot molds, no other hands but those in Carnegie's employ had touched the product. Carnegie thus pioneered the creative entrepreneurial tactic of vertical integration, combining into one organization all phases of manu- facturing from mining to marketing. His goal was to improve efficiency by making supplies more reliable, controlling the quality of the product at all stages of production, and eliminating middlemen's fees.
Wrongdoing in Railroading- Corruption
Corruption lurks nearby when fabulous fortunes can materialize overnight. The fleecings administered by the railroad construction companies, such as the Crédit Mobilier, were but the first of the bunco games that the railroad promoters learned to play. Methods soon became more refined, as fast-fingered financiers executed multimillion-dollar maneuvers beneath the noses of a bedazzled public. Jay Gould was the most adept of these ringmasters of rapacity. For nearly thirty years, he boomed and busted the stocks of the Erie, the Kansas Pacific, the Union Pacific, and the Texas and Pacific in an incredible circus of speculative skullduggery.
Spanning the Continent with Rails- The North Got Its Way
Deadlock in the 1850s over the proposed transconti- nental railroad was broken when the South seceded, leaving the field to the North. In 1862, the year after the guns first spoke at Fort Sumter, Congress made provision for starting the long-awaited line. One weighty argument for action was the urgency of bolstering the Union, already disrupted, by binding the Pacific Coast—especially gold-rich California—more securely to the rest of the Republic.
The Trust Titan Emerges-Tycoons
Despite pious protests to the contrary, competition was the bugbear of most business leaders of the day. Tycoons like Andrew Carnegie, the steel king; John D. Rockefeller, the oil baron; and J. Pierpont Morgan, the bankers' banker, exercised their genius in devising ways to circumvent competition.
Unhorsing the Knights of Labor -Falls
Despite their outward success, the Knights were riding for a fall. They became involved in a number of May Day strikes in 1886, about half of which failed. A focal point was Chicago, home to about eighty thousand Knights. The city was also honeycombed with a few hundred anarchists, many of them foreign-born, who were advocating a violent overthrow of the American government.
Jeffersonian Ideals
Early Jeffersonian ideals were withering before the smudgy blasts from the smokestacks. As agriculture declined in relation to manufacturing, America could no longer aspire to be a nation of small freehold farms. Jefferson's concepts of free enterprise, with neither help nor hindrance from Washington, were being thrown out the factory window. Tariffs had already provided assistance, but the long arm of federal authority was now committed to decades of corporation curbing and "trust-busting."
Early prosecutions
Early prosecutions of the trusts by the Justice Department under the Sherman Act of 1890, as it turned out, were neither vigorous nor successful. The decisions in seven of the first eight cases presented by the attorney general were adverse to the government. More new trusts were formed in the 1890s under President McKinley than during any other like period. Not until 1914 were the paper jaws of the Sherman Act fitted with reasonably sharp teeth. Until then, there was some question whether the government would control the trusts or the trusts the government. But the iron grip of monopolistic corporations was being threatened. A revolutionary new principle had been written into the law books by the Sherman AntiTrust Act of 1890, as well as by the Interstate Commerce Act of 1887. Private greed should henceforth be subordinated to public need.
The Impact of the New Industrial Revolution on America- New Standard of Living
Economic miracles wrought during the decades after the Civil War enormously increased the wealth of the Republic. The standard of living rose sharply, and well-fed American workers enjoyed more physical comforts than their counterparts in any other industrial nation. Urban centers mushroomed as the insatiable factories demanded more American labor and as immigrants swarmed like honeybees to the new jobs.
Foreign Trade
Finally, strong pressures for foreign trade developed as the tireless industrial machine threatened to saturate the domestic market. Aided by developments like the laying of a transatlantic telegraph in 1866 and the opening of the Suez Canal in 1869, international trade became ever faster, cheaper, and easier. American products radiated out all over the world—notably the five-gallon kerosene can of the Standard Oil Company. The flag follows trade, and empire tends to follow the flag—a harsh lesson that America was soon to learn.
Millionaires
Finally, the railroad, more than any other single fac- tor, was the maker of millionaires. A raw new aristocracy, consisting of "lords of the rail," replaced the old southern "lords of the lash." The multiwebbed lines became the playthings of Wall Street, and colossal wealth was amassed by stock speculators and railroad wreckers.
The Big Four
Four far-seeing men—the so-called Big Four— were the chief financial backers of the enterprise. The quartet included the heavyset, enterprising ex-governor Leland Stanford of California, who had useful political connections, and the burly, energetic Collis P. Huntington, an adept lobbyist. The Big Four cleverly operated through two construction companies, and although they walked away with tens of millions in profits, they kept their hands relatively clean by not becoming involved in the bribing of congressmen.
Manufacturing Cotton Textiles
In manufacturing cotton textiles, the South fared considerably better. Southerners had long resented shipping their fiber to New England, and now their cry was "Bring the mills to the cotton." Beginning about 1880, northern capitalists began to erect cotton mills in the South, largely in response to tax benefits and the prospect of cheap and nonunionized labor. The textile mills proved to be a mixed blessing to the economically blighted South. They slowly wove an industrial thread into the fabric of southern life, but at a considerable human cost. Cheap labor was the South's major attraction for potential investors, and keeping labor cheap became almost a religion among southern industrialists. The mills took root in the chronically depressed Piedmont region of southern Appalachia and came to dominate utterly the communities in which they were located.
Rockefeller
John D. Rockefeller—lanky, shrewd, ambitious, abstemious (he neither drank, smoked, nor swore)— came to dominate the oil industry. Born to a family of precarious income, he became a successful businessman at age nineteen. One upward stride led to another, and in 1870 he organized the Standard Oil Company of Ohio, nucleus of the great trust formed in 1882. Locating his refineries in Cleveland, he sought to eliminate the middlemen and squeeze out competitors. Pious and parsimonious, Rockefeller flourished in an era of completely free enterprise. So-called piratical practices were employed by "corsairs of finance," and business ethics were distressingly low. By 1877 Rockefeller controlled 95 percent of all the oil refineries in the country.
The Fight Against Industry
Individual workers were powerless to battle single-handedly against giant industry. Forced to organize and fight for basic rights, they found the dice heavily loaded against them. The corporation could dispense with the individual worker much more easily than the worker could dispense with the corporation. Employers could pool vast wealth through thousands of stock- holders, retain high-priced lawyers, buy up the local press, and put pressure on the politicians. They could import strikebreakers ("scabs") and employ thugs to beat up labor organizers. They could call upon the federal courts— presided over by well-fed and conservative judges—to issue injunctions ordering the strikers to cease striking. If defiance and disorder ensued, the company could request the state and federal authorities to bring in troops. Employers could lock their doors against rebellious workers—a procedure called the "lockout"— and then starve them into submission. They could compel them to sign "ironclad oaths" or "yellow-dog contracts," both of which were solemn agreements not to join a labor union. They could put the names of agitators on a "black list" and circulate it among fellow employers. A corporation might even own the "company town," with its high-priced grocery stores and "easy" credit. Often the worker sank into perpetual debt—a status that strongly resembled serfdom. Countless thousands of blackened coal miners were born in a company house, nurtured by a (high-priced) company store, and buried in a company graveyard— prematurely dead.
Transportation
Innovations in transportation fueled growth, too, by bringing the nation's amazingly abundant natural resources—particularly coal, oil, and iron—to the factory door. A shipping system through the Great Lakes carried the rich iron deposits in the Mesabi Range of Minnesota to Chicago and Cleveland for refining. This priceless bonanza, where mountains of red-rusted ore could be scooped up by steam shovels, ultimately became a cornerstone of a vast steel empire. Copper, bauxite, and zinc made similar journeys from mine to manufacture.
J. P. Morgan
Into the picture now stepped the financial giant of the age, J. Pierpont Morgan. "Jupiter" Morgan had made a legendary reputation for himself and his Wall Street banking house by financing the reorganization of railroads, insurance companies, and banks. An impressive figure of a man, with massive shoul- ders, shaggy brows, piercing eyes, and a bulbous, acne-cursed red nose, he had established an enviable reputation for integrity. He did not believe that "money power" was dangerous, except when in dan- gerous hands—and he did not regard his own hands as dangerous.
Government Bridles the Iron Horse- The American Dream?
It was neither healthy nor politically acceptable that so many people should be at the mercy of so few. Impoverished farmers, especially in the Midwest, began to wonder if the nation had not escaped from the slavery power only to fall into the hands of the money power, as represented by the railroad plutocracy. But the American people, usually quick to respond to political injustice, were slow to combat economic injustice. Dedicated to free enterprise and to the principle that competition is the soul of trade, they cherished a traditionally keen pride in progress. They remembered that Jefferson's ideals were hostile to government interference with business. Above all, there shimmered the "American dream": the hope that in a catch-as-catch-can economic system, anyone might become a millionaire.
Brilliant Ideas
Just as industry served as a hothouse of invention, brilliant ideas gave rise to whole new lines of business. Between 1860 and 1890, some 440,000 patents were issued. Business operations were facilitated by machines such as the cash register, the stock ticker, and the typewriter ("literary piano"), while the refrigerator car, the electric dynamo, and the electric railway speeded urbanization.
Kerosene
Kerosene, derived from petroleum, was the first major product of the infant oil industry. Burned from a cotton wick in a glass chimney lamp, kerosene produced a much brighter flame than whale oil. The oil business boomed; by the 1870s kerosene was America's fourth most valuable export. Whaling, in contrast, the lifeblood of ocean-roaming New Englanders since before the days of Moby Dick, swiftly became a sick industry.
Carnegie and Other Sultans of Steel- Carnegie's Background
Kingpin among steelmasters was Andrew Carnegie, an undersized, charming Scotsman. As a towheaded lad of thirteen, he was brought to America by his impoverished parents in 1848 and got a job as a bobbin boy at $1.20 a week. Mounting the ladder of success so fast that he was said to have scorched the rungs, he forged ahead by working hard, doing the extra chore, cheerfully assuming responsibility, and smoothly cultivating influential people.
Labor disorder
Labor disorders continued, peppering the years from 1881 to 1900 with a total of over 23,000 strikes. These disturbances involved 6,610,000 workers, with a total loss to both employers and employees of $450 million. The strikers lost about half their strikes and won or compromised the remainder. Perhaps the gravest weakness of organized labor was that it still embraced only a small minority of all workingpeople—about 3 percent in 1900.
Labor Limps Along- Labor Unions
Labor unions, which had been few and disorganized in 1861, were given a strong boost by the Civil War. This bloody conflict, with its drain on human resources, put more of a premium on labor and the mounting cost of living provided an urgent incentive to unionization. By 1872 there were several hundred thousand organized workers and thirty-two national unions, representing such crafts as bricklayers, type-setters, and shoemakers.
Rockefeller
Less justifiable on grounds of efficiency was the technique of horizontal integration, which simply meant allying with competitors to monopolize a given market. Rockefeller was a master of this stratagem. He perfected a device for controlling bothersome rivals— the trust. Stockholders in various smaller oil companies assigned their stock to the board of directors of his Standard Oil Company, formed in 1870. It then consolidated and concerted the operations of the previously competing enterprises. Ruthlessly wielding vast power, Standard Oil soon cornered virtually the entire world petroleum market. Weaker competitors, left out of the trust agreement, were forced to the wall. Rockefeller's stunning success inspired many imitators, and the word trust came to be generally used to describe any large-scale business combination.
Millionaires
Liquid capital, previously scarce, was now becoming abundant. The word millionaire had not been coined until the 1840s, and in 1861 only a handful of individuals were eligible for this class. But the Civil War, partly through profiteering, created immense fortunes, and these accumulations could now be combined with borrowings from foreign capitalists. Investors from abroad loaned more money to the United States in the postwar period than any country had previously received. Unlike in other countries, in America they mostly put the money into private hands, not public coffers. Investors primarily from Britain, but also from France, Germany, the Netherlands, and Switzerland, sometimes owned all or part of an American business. Other times they simply lent their money to the thousands of European companies set up to manage investment in U.S. industry. Either way, Europeans were usually content to let Americans run the business—until hard times hit and they demanded more say over company operations or government economic policies.
The Gospel of Wealth-God
Monarchs of yore invoked the divine right of kings, and America's industrial plutocrats took a somewhat similar stance. Some candidly credited heavenly help. "Godliness is in league with riches," preached the Episcopal bishop of Massachusetts, and hardfisted John D. Rockefeller piously acknowledged that "the good Lord gave me my money." Steel baron Andrew Carnegie agreed that the wealthy, entrusted with society's riches, had to prove themselves morally responsible according to a "Gospel of Wealth."
United States Steel Corporation
Morgan moved rapidly to expand his new industrial empire. He took the Carnegie holdings, added others, "watered" the stock liberally, and in 1901 launched the enlarged United States Steel Corporation. Capitalized at $1.4 billion, it was America's first billion-dollar corporation—a larger sum than the total estimated wealth of the nation in 1800. The Industrial Revolution, with its hot Bessemer breath, had come into its own.
Criticism
Noisy criticism, especially in later years, was leveled at the "giveaway" of so valuable a birthright to greedy corporations. But the government did receive beneficial returns, including long-term preferential rates for postal service and military traffic. Granting land was also a "cheap" way to subsidize a much- desired transportation system because it avoided new taxes for direct cash grants. The railroads could turn the land into gold by using it as collateral for loans from private bankers or, later, by selling it. This they often did, at an average price of $3 an acre. Critics were also prone to overlook the fact that the land did not have even that relatively modest value until the railroads had ribboned it with steel. Frontier villages touched by the magic wand of the iron rail became flourishing cities; those that were bypassed often withered away and became "ghost towns." Little wonder that communities fought one another for the privilege of playing host to the railroads. Ambitious towns customarily held out monetary and other attractions to the builders, who sometimes blackmailed them into contributing more generously.
Scarcity
Now taken for granted, steel was a scarce commodity in the wood-and-brick America of Abraham Lincoln. Considerable iron went into railroad rails and bridges, but steel was expensive and was used largely for products like cutlery. The early iron horse snorted exclusively (and dangerously) over iron rails. When in the 1870s "Commodore" Vanderbilt of the New York Central began to use steel rails, he was forced to import them from Britain.
Automobiles
Oil might thus have remained a modest, even a shrinking, industry but for yet another turn of the technological tide—the invention of the automobile. By 1900 the gasoline-burning internal combustion engine had clearly bested its rivals, steam and electricity, as the superior means of automobile propulsion. As the century of the automobile dawned, the oil busi- ness got a new, long-lasting, and hugely profitable lease on life.
Time
Older ways of life also wilted in the heat of the factory furnaces. The very concept of time was revolutionized. Rural American migrants and peasant European immigrants, used to living by the languid clock of nature, now had to regiment their lives by the factory whistle. The seemingly arbitrary discipline of industrial labor did not come easily and sometimes had to be forcibly taught.
Oil
On the other side of the ledger, Rockefeller's oil monopoly did turn out a superior product at a relatively cheap price. It achieved important economies, both at home and abroad, by its large-scale methods of production and distribution. This, in truth, was the tale of the other trusts as well. The efficient use of expensive machinery called for bigness, and consolidation proved more profitable than ruinous price wars.
Stock Watering
One of the favorite devices of the moguls of manipulation was "stock watering." The term originally referred to the practice of making cattle thirsty by feeding them salt and then having them bloat themselves with water before they were weighed in for sale. Using a variation of this technique, railroad stock promoters grossly inflated their claims about a given line's assets and profitability and sold stocks and bonds far in excess of the railroad's actual value. "Promoters' profits" were often the tail that wagged the iron horse itself. Railroad managers were forced to charge extortionate rates and wage ruthless competitive battles in order to pay off the exaggerated financial obligations with which they were saddled. The public interest was frequently trampled underfoot as the railroad titans waged their brutal wars. While abusing the public, the railroaders blandly bought and sold people in public life. They bribed judges and legislatures, employed arm-twisting lobbyists, and elected their own "creatures" to high office. They showered free passes on journalists and politicians in profusion.
Telephone
One of the most ingenious inventions was the telephone, introduced by Alexander Graham Bell in 1876. America was suddenly turned into a nation of "telephoniacs," as a gigantic communications network was built on his invention. The social impact of the telephone further expanded when it lured "number please" women away from the stove to the switchboard. Telephone boys were at first employed as operators, but their profanity shocked patrons.
Other Trusts
Other trusts blossomed along with the American Beauty of oil. These included the sugar trust, the tobacco trust, the leather trust, and the harvester trust, which amalgamated some two hundred competitors. The meat industry arose on the backs of bawling western herds, and meat kings like Gustavus F. Swift and Philip Armour took their place among the new royalty. Wealth was coming to dominate the commonwealth.
Plutocracy
Plutocracy, like the earlier slavocracy, took its stand firmly on the Constitution. The clause that gave Congress sole jurisdiction over interstate commerce was a godsend to the monopolists; their high-priced lawyers used it time and again to thwart controls by the state legislatures. Giant trusts likewise sought refuge behind the Fourteenth Amendment, which had been originally designed to protect the rights of the ex-slaves as persons. The courts ingeniously interpreted a corporation to be a legal "person" and decreed that, as such, it could not be deprived of its property by a state without "due process of law". Great industrialists sought to incorporate in "easy states," like New Jersey, where the restrictions on big business were mild or nonexistent. For example, the Southern Pacific Railroad, with much of its trackage in California, was incorporated in Kentucky.
Miracles of Mechanization-Surge
Postwar industrial expansion, partly a result of the railroad network, rapidly began to assume mammoth proportions. When Lincoln was elected in 1860, the Republic ranked only fourth among the manufacturing nations of the world. By 1894 it had bounded into first place. Why the sudden upsurge?
Women
Probably no single group was more profoundly affected by the new industrial age than women. Propelled into industry by recent inventions, chiefly the typewriter and the telephone switchboard, millions of and "hello girls" discovered new economic and social opportunities. The "Gibson Girl," a magazine image of an independent and athletic "new woman" created in the 1890s by the artist Charles Dana Gibson, became the romantic ideal of the age. For middle-class women, careers often meant delayed marriages and smaller families. Most women workers, however, toiled neither for independence nor for glamour, but out of economic necessity. They faced the same long hours and dangerous working conditions as did their mates and brothers, and they earned less, as wages for "women's jobs" were usually set below those for men's.
Grady
Prominent among the boosters of a "new South" was silver-tongued Henry W. Grady, editor of the Atlanta Constitution. He tirelessly exhorted the ex-Confederates to become "Georgia Yankees" and out-play the North at the commercial and industrial game.
Californians
Rail laying at the California end was undertaken by the Central Pacific Railroad. This line pushed boldly eastward from boomtown Sacramento, over and through the towering, snow-clogged Sierra Nevada.
Immigration
Railroad companies also stimulated the mighty stream of immigration. Seeking settlers to whom their land grants might be sold at a profit, they advertised seductively in Europe and sometimes offered to transport the newcomers free to their farms.
Monarchs
Railroad kings were, for a time, virtual industrial monarchs. As manipulators of a huge natural monopoly, they exercised more direct control over the lives of more people than did the president of the United States—and their terms were not limited to four years. They increasingly shunned the crude bloodletting of cutthroat com- petition and began to cooperate with one another to rule the railroad dominion. Sorely pressed to show at least some returns on their bloated investments, they entered into defensive alliances to protect precious profits.
Cities
Railways were a boon for cities and played a leading role in the great cityward movement of the last decades of the century. The iron monsters could carry food to enormous concentrations of people and at the same time ensure them a livelihood by providing both raw materials and markets.
Mercilessness
Rockefeller—"Reckafellow," as Carnegie had once called him—showed little mercy. A kind of primitive savagery prevailed in the jungle world of big busi- ness, where only the fittest survived. Or so Rockefeller believed. Employing spies and extorting secret rebates from the railroads, he even forced the lines to pay him rebates on the freight bills of his competitors! Rockefeller thought he was simply obeying a law of nature. "The time was ripe" for aggressive consolidation, he later reflected.
Rural southerners
Rural southerners—virtually all of them white, for blacks were excluded from all but the most menial jobs in the mills—poured out of the hills and hollows to seek employment in the hastily erected company mill towns. Entire families—often derided as "hillbillies" or "lintheads"—worked from dawn to dusk amid the whirring spindles. They were paid at half the rate of their northern counterparts and often received their compensation in the form of credit at a company store, to which they were habitually in debt. But despite their depressed working conditions and poor pay, many southerners saw employment in the mills as a salvation, the first steady jobs and wages they had ever known. With many mills anxious to tap the cheap labor of women and children, mill work often offered destitute farm-fugitive families their only chance to remain together.
Self-Justification
Self-justification by the wealthy inevitably involved contempt for the poor. Many of the rich, especially the newly rich, had pulled themselves up by their own bootstraps; hence, they concluded that those who stayed poor must be lazy and lacking in enterprise. Such attitudes were a formidable roadblock to social reform.
American Federation of Labor
Significantly, the American Federation of Labor was just what it called itself—a federation. It consisted of an association of self-governing national unions, each of which kept its independence, with the AF of L unifying overall strategy. No individual laborer could join the central organization.
James Buchanan Duke
Southern agriculture received a welcome boost in the 1880s, when machine-made cigarettes replaced the roll-your-own variety and tobacco consumption shot up. James Buchanan Duke took full advantage of the new technology to mass-produce the dainty "coffin nails." In 1890, in what was becoming a familiar pattern, he absorbed his main competitors into the American Tobacco Company. The cigarette czar later showed such generosity to Trinity College, near his birthplace in Durham, North Carolina, that the trustees gratefully changed its name to Duke University. Industrialists tried to coax the agricultural South out of the fields and into the factories, but with only modest success. The region remained overwhelmingly rural.
Interstate Commerce Act
Stiff-necked President Cleveland did not look kindly on effective regulation. But Congress ignored his grumbling indifference and passed the epochal Interstate Commerce Act in 1887. It prohibited rebates and pools and required the railroads to publish their rates openly. It also forbade unfair discrimination against shippers and outlawed charging more for a short haul than for a long one over the same line. Most important, it set up the Interstate Commerce Commission (ICC) to administer and enforce the new legislation. Despite acclaim, the Interstate Commerce Act emphatically did not represent a popular victory over corporate wealth. One of the leading corporation lawyers of the day, Richard Olney, shrewdly noted that the new commission "can be made of great use to the railroads. It satisfies the popular clamor for a government supervision of railroads, at the same time that such supervision is almost entirely nominal. . . . The part of wisdom is not to destroy the Commission, but to utilize it."
The Irish
Sweaty construction gangs, containing many Irish "Paddies" (Patricks) who had fought in the Union armies, worked at a frantic pace. On one record-breaking day, a sledge-and-shovel army of some five thousand men laid ten miles of track.
Haymarket Square
Tensions rapidly built up to the bloody Haymarket Square episode. Labor disorders had broken out, and on May 4, 1886, the Chicago police advanced on a meeting called to protest alleged brutalities by the authorities. Suddenly a dynamite bomb was thrown that killed or injured several dozen people, including police. Hysteria swept the Windy City. Eight anarchists were rounded up, although nobody proved that they had anything to do directly with the bomb. But the judge and jury held that since they had preached incendiary doctrines, they could be charged with conspiracy. Five were sentenced to death, one of whom committed suicide, and the other three were given stiff prison terms.
Foundations
The AF of L thus established itself on solid but narrow foundations. Although attempting to speak for all workers, it fell far short of being representative of them. Composed of skilled craftsmen, like the carpenters and the bricklayers, it was willing to let unskilled laborers, including women and especially blacks, fend for themselves. Though hard-pressed by big industry, the federation was basically non-political. But it did attempt to persuade members to reward friends and punish foes at the polls. The AF of L weathered the panic of 1893 reasonably well, and by 1900 it could boast a membership of 500,000. Critics referred to it, with questionable accuracy, as "the labor trust."
The Central Pacific
The Central Pacific, which was granted the same princely subsidies as the Union Pacific, had the same incentive to haste. Some ten thousand Chinese laborers, sweating from dawn to dusk under their basket hats, proved to be cheap, efficient, and expendable (hundreds lost their lives in premature explosions and other mishaps). The towering Sierra Nevada presented a formidable barrier, and the nerves of the Big Four were strained when their workers could chip only a few inches a day tunneling through solid rock, while the Union Pacific was sledgehammering westward across the open plains.
The National Labor Union
The National Labor Union, organized in 1866, represented a giant bootstride by workers. One of the earliest national-scale unions to organize in the Americas or Europe, it aimed to unify workers across locales and trades to challenge their ever more powerful bosses. The union lasted six years and attracted the impressive total of some 600,000 members, including the skilled, unskilled, and farmers, though in keeping with the times, it excluded the Chinese and made only nominal efforts to include women and blacks. Black workers organized their own Colored National Labor Union as an adjunct, but black workers' support for the Republican party and the persistent racism of white unionists prevented the two national unions from working together. The National Labor Union agitated for the arbitration of industrial disputes and the eight-hour workday, winning the latter for government workers. But the devastating depression of the 1870s dealt it a knockout blow. Labor was generally rocked back on its heels during the tumultuous years of the depression, but it never completely toppled. Wage reductions in 1877 touched off such disruptive strikes on the railroads that nothing short of federal troops could restore order.
The Union Pacific Railroad
The Union Pacific Railroad—note the word Union—was thus commissioned by Congress to thrust westward from Omaha, Nebraska. For each mile of track constructed, the company was granted 20 square miles of land, alternating in 640-acre sections on either side of the track. For each mile the builders were also to receive a generous federal loan, ranging from $16,000 on the flat prairie land to $48,000 for mountainous country. The laying of rails began in earnest after the Civil War ended in 1865, and with juicy loans and land grants available, the "groundhog" promoters made all possible haste. Insiders of the Crédit Mobilier construction company reaped fabulous profits. They slyly pocketed $73 million for some $50 million worth of breakneck construction, spending small change to bribe congressmen to look the other way.
Incentive
The captains of industry had a major incentive to invent machines: they made it possible to replace expensive skilled labor with unskilled workers, now cheap and plentiful as a result of massive immigration. Steel, the keystone industry, was built largely on the sweat of low-priced immigrant labor from eastern and southern Europe, working in two 12-hour shifts, seven days a week.
Socialists
The clattering machine age likewise accentuated class division. "Industrial buccaneers" flaunted bloated fortunes, and their rags-to-riches spouses displayed glittering diamonds. Such extravagances evoked bitter criticism. Some of it was envious, but much of it rose from a small but increasingly vocal group of socialists and other radicals, many of whom were recent European immigrants. The existence of an oligarchy of money was amply demonstrated by the fact that in 1900 about one-tenth of the people owned nine-tenths of the nation's wealth.
Changes
The depression of the 1870s goaded the farmers into protesting against being "railroaded" into bankruptcy. Under pressure from organized agrarian groups like the Grange (Patrons of Husbandry), many midwestern legislatures tried to regulate the railroad monopoly.
Combination
The earliest form of combination was the "pool"— an agreement to divide the business in a given area and share the profits. Other rail barons granted secret rebates or kickbacks to powerful shippers in return for steady and assured traffic. Often they slashed their rates on competing lines, but they more than made up the difference on noncompeting ones, where they might actually charge more for a short haul than for a long one. As a result, small farmers usually paid the highest rates, while large customers got the best deals.
The AF of L to the Force- Gompers
The elitist American Federation of Labor, born in 1886, was largely the brainchild of squat, square-jawed Samuel Gompers. This colorful Jewish cigar maker, born in a London tenement and removed from school at age ten, was brought to America when thirteen. Taking his turn at reading informative literature to fellow cigar makers in New York, he was pressed into over-time service because of his strong voice. Rising spectacularly in the labor ranks, he was elected president of the American Federation of Labor every year except one from 1886 to 1924.
Collision
The force of circumstances brought Morgan and Carnegie into collision. By 1900 the canny little Scotsman, weary of turning steel into gold, was eager to sell his holdings. Morgan had meanwhile plunged heavily into the manufacture of steel pipe tubing. Carnegie, cleverly threatening to invade the same business, was ready to ruin his rival if he did not receive his price. The steelmaster's agents haggled with the imperious Morgan for eight agonizing hours, and the financier finally agreed to buy out Carnegie for over $400 million. Fearing that he would die "disgraced" with so much wealth, Carnegie dedicated the remaining years of his life to giving away money for public libraries, pensions for professors, and other such philanthropic purposes—in all disposing of about $350 million.
The Iron Colt Becomes and Iron Horse- Railroads
The government-business entanglements that increasingly shaped politics after the Civil War also undergirded the industrial development of the nation. The unparalleled outburst of railroad construction was a crucial case. When Lincoln was shot in 1865, there were only 35,000 miles of steam railways in the United States, mostly east of the Mississippi. By 1900 the figure had spurted up to 192,556 miles, or more than that for all of Europe combined, and much of the new trackage ran west of the Mississippi.
Morgan
The imperial Morgan devised still other schemes for eliminating "wasteful" competition. The depression of the 1890s drove into his welcoming arms many bleeding businesspeople, wounded by cutthroat competition. His prescribed remedy was to consolidate rival enterprises and to ensure future harmony by placing officers of his own banking syndicate on their various boards of directors. These came to be known as interlocking directorates.
The South in the Age of Industry- Same Old South
The industrial tidal wave that washed over the North after the Civil War caused only feeble ripples in the backwater of the South. As late as 1900, the South still produced a smaller percentage of the nation's manufactured goods than it had before the Civil War. The plantation system had degenerated into a pattern of absentee landownership. White and black sharecroppers now tilled the soil for a share of the crop, or they became tenants, in bondage to their landlords, who controlled needed credit and supplies.
The Land
The land also felt the impact of the railroad— especially the broad, ecologically fragile midsection of the continent that Thomas Jefferson had purchased from France in 1803. Settlers following the railroads plowed up the tallgrass prairies of Iowa, Illinois, Kansas, and Nebraska and planted well-drained, rectangular corn- fields. On the shortgrass prairies of the high plains in the Dakotas and Montana, range-fed cattle rapidly displaced the buffalo, which were hunted to near-extinction. The white pine forests of Michigan, Wisconsin, and Minnesota disappeared into lumber that was rushed by rail to prairie farmers, who used it to build houses and fences.
Revolution by Railways-Economic Growth
The metallic fingers of the railroads intimately touched countless phases of American life. For the first time, a sprawling nation became united in a physical sense, bound with ribs of iron and steel. The railroads emerged as the nation's biggest business, employing more people than any other industry and gobbling up nearly 20 percent of investment dollars from foreign and domestic investors alike. More than any other single factor, the railroad network spurred the amazing economic growth of the post-Civil War years. By stitching North America together from ocean to ocean, the puffing locomotives opened up the West with its wealth of resources. Trains hauled raw materials to factories and sped them back as finished goods for sale across the continent, making the United States the largest integrated national market in the world. The forging of the rails themselves generated the largest single source of orders for the adolescent steel industry.
The Middle Class
The middle-class public, annoyed by recurrent strikes, grew deaf to the outcry of the worker. American wages were perhaps the highest in the world, although a dollar a day for pick-and-shovel labor does not now seem excessive. Carnegie and Rockefeller had battled their way to the top, and the view was common that the laborer could do likewise. Somehow the strike seemed like a foreign importation—socialistic and hence unpatriotic. Big business might combine into trusts to raise prices, but the worker must not combine into unions to raise wages. Unemployment seemed to be an act of God, who somehow would take care of the laborer.
Edison
The most versatile inventor of all was Thomas Alva Edison (1847-1931), who as a boy had been considered so dull-witted that he was taken out of school. His severe deafness enabled him to concentrate without distraction. Edison was a gifted tinkerer and a tireless worker, not a pure scientist. "Genius," he said, "is one percent inspiration and ninety-nine percent perspiration." Wondrous devices poured out of his "invention factory" in New Jersey—the phonograph, the mimeograph, the dictaphone, and the moving picture. He is probably best known for his perfection in 1879 of the electric lightbulb, which turned night into day and transformed ancient human habits as well. People had previously slept an average of nine hours a night; now they slept just a bit more than seven.
Wabash, St. Louis & Pacific Railroad Company v. Illinois
The scattered state efforts screeched to a halt in 1886. The Supreme Court, in the famed Wabash, St. Louis & Pacific Railroad Company v. Illinois case, decreed that individual states had no power to regulate interstate commerce. If the mechanical monster were to be corralled, the federal government would have to do the job.
Mining and Agriculture
The screeching iron horse especially stimulated mining and agriculture in the West. It took farmers out to their land, carried the fruits of their toil to market, and brought them their manufactured necessities. Clusters of farm settlements paralleled the railroads, just as earlier they had followed the rivers.
Size
The sheer size of the American market encouraged innovators to invent mass-production methods. With cheap transportation crisscrossing the nation and an ever-larger population able and eager to consume, anyone who could make an appealing new product available for a good price in large quantities—and figure out how to market it—thrived. Industrialists continued to refine the pre-Civil War "American System" of using specialized machinery to make interchange- able parts, culminating in 1913 with Henry Ford's fully developed moving assembly line for his Model T.
Railroad Consolidation and Mechanization- Vanderbilt
The success of the western lines was facilitated by welding together and expanding the older eastern networks, notably the New York Central. The genius in this enterprise was "Commodore" Cornelius Vanderbilt—burly, boisterous, white-whiskered. Having made his millions in steamboating, he daringly turned, in his late sixties, to a new career in railroading. Though ill-educated, ungrammatical, coarse, and ruthless, he was clear-visioned. Offering superior railway service at lower rates, he amassed a fortune of $100 million. His name is perhaps best remembered through his contribution of $1 million to the founding of Vanderbilt University in Tennessee.
Rockefeller Grows and American Beauty Rose- Oil
The sudden emergence of the oil industry was one of the most striking developments of the years during and after the Civil War. Traces of oil found on streams had earlier been bottled for back-rub and other patent medicines, but not until 1859 did the first well in Pennsylvania—"Drake's Folly"—pour out its liquid "black gold." Almost overnight an industry was born that was to take more wealth from the earth than all of the gold extracted by the forty-niners and their western successors.
In Unions There is Strength- Worker or Slave?
The sweat of the laborer lubricated the vast new industrial machine. Yet the wage workers did not share proportionately with their employers in the benefits of the age of big business. The worker, suggestive of the Roman galley slave, was becoming a lever-puller in a giant mechanism. Individual originality and creativity were being stifled, and less value than ever before was being placed on manual skills. Before the Civil War, the worker might have toiled in a small plant whose owner hailed the employee in the morning by first name and inquired after the family's health. But now the factory hand was employed by a corporation—depersonalized, bodiless, soulless, and often conscienceless. The directors knew the worker not, and in fairness to their stockholders, they were not inclined to engage in large-scale private philanthropy. New machines displaced employees, and though in the long run more jobs were created than destroyed, in the short run the manual worker was often hard hit. A glutted labor market, moreover, severely handicapped wage earners. Employers could take advantage of the vast new railroad network and bring in unemployed workers, from the four corners of the country and beyond, to beat down high wage levels. During the 1880s and 1890s, several hundred thousand unskilled workers a year poured into the country from Europe, creating a labor market more favorable to the boss than the worker.
New Rich
These untrustworthy trusts, and the "pirates" who captained them, were disturbingly new. They eclipsed an older American aristocracy of modestly successful merchants and professionals. An arrogant class of "new rich" was now elbowing aside the patrician families in the mad scramble for power and prestige. Not surprisingly, the ranks of the antitrust crusaders were frequently spearheaded by the "best men"—genteel old-family do-gooders who were not radicals but conservative defenders of their own vanishing influence.
Time Zones
Time itself was bent to the railroads' needs. Until the 1880s every town in the United States had its own "local" time, dictated by the sun's position. When it was noon in Chicago, it was 11:50 a.m. in St. Louis and 12:18 p.m. in Detroit. For railroad operators worried about keeping schedules and avoiding wrecks, this patchwork of local times was a nightmare. Thus on November 18, 1883, the major rail lines decreed that the continent would henceforth be divided into four "time zones." Most communities quickly adopted railroad "standard" time.
Transcontinental railroad building
Transcontinental railroad building was so costly and risky as to require government subsidies, as it had in many other industrializing nations. Everywhere, the construction of railway systems promised greater national unity and economic growth. The extension of rails into thinly populated regions was unprofitable until the areas could be built up, and private promoters were unwilling to suffer heavy initial losses. Congress, impressed by arguments pleading military and postal needs, began to advance liberal loans to two favored cross-continent companies in 1862 and added enormous donations of acreage paralleling the tracks. All told, Washington rewarded the railroads with 155,504,994 acres, and the western states contributed 49 million more—a total area larger than Texas Grasping railroads tied up even more land than this for a number of years. Land grants to railroads were made in broad belts along the proposed route. Within these belts the railroads were allowed to choose alternate mile-square sections in checkerboard fashion. But until they determined the precise location of their tracks and decided which sections were the choicest selections, the railroads withheld all the land from other users. President Grover Cleveland put an end to this foot-dragging practice in 1887 and threw open to settlement the still-unclaimed public portions of the land-grant areas.
Improvements
Two significant new improvements proved a boon to the railroads. One was the steel rail, which Vanderbilt helped popularize when he replaced the old iron tracks of the New York Central with the tougher metal. Steel was safer and more economical because it could bear a heavier load. A standard gauge of track width likewise came into wide use during the postwar years thus eliminating the expense and inconvenience of numerous changes from one line to another. Other refinements played a vital role in railroading. The Westinghouse air brake, generally adopted in the 1870s, was a marvelous contribution to efficiency and safety. The Pullman Palace Cars, advertised as "gorgeous traveling hotels," were introduced on a considerable scale in the 1860s.
Benefits
What the new legislation did do was to provide an orderly forum where competing business interests could resolve their conflicts in peaceable ways. The country could now avoid ruinous rate wars among the railroads and outraged, "confiscatory" attacks on the lines by pitchfork-prodded state legislatures. This was a modest accomplishment but by no means an unimportant one. The Interstate Commerce Act tended to stabilize, not revolutionize, the existing business system.
Indians
When hostile Indians attacked in futile efforts to protect what once rightfully had been their land, the laborers would drop their picks and seize their rifles. Scores of people—railroad workers and Indians—lost their lives as the rails stretched ever westward. At rail's end, workers tried their best to find relaxation and conviviality in their tented towns, known as "hells on wheels," often teeming with as many as ten thousand men and a sprinkling of painted prostitutes and performers.
Kelly
William Kelly, a Kentucky manufacturer of iron kettles, discovered that cold air blown on red-hot iron caused the metal to become white-hot by igniting the carbon and thus eliminating impurities. He tried to apply the new "air boiling" technique to his own product, but his customers decried "Kelly's fool steel," and his business declined. Gradually the Bessemer-Kelly process won acceptance, and these two "crazy men" ultimately made possible the present steel civilization.
Binding the Country with Railroad Ties- Next Four
With the westward trail now blazed, four other trans- continental lines were completed before the century's end. None of them secured monetary loans from the federal government, as did the Union Pacific and the Central Pacific. But all of them except the Great Northern received generous grants of land. The Northern Pacific Railroad, stretching from Lake Superior to Puget Sound, reached its terminus in 1883. The Atchison, Topeka and Santa Fe, stretching through the southwestern deserts to California, was completed in 1884. The Southern Pacific ribboned from New Orleans to San Francisco and was consolidated in the same year. The last spike of the last of the five transcontinental railroads of the nineteenth century was hammered home in 1893. The Great Northern, which ran from Duluth to Seattle north of the Northern Pacific, was the creation of a far-visioned Canadian American, James J. Hill, a bearlike man who was probably the greatest railroad builder of all. His enterprise was so soundly organized that it rode through later financial storms with flying colors.
Obstacles
Yet formidable obstacles lay in the path of southern industrialization. One was the paper barrier of regional rate-setting systems imposed by the northern-dominated railroad interests. Railroads gave preferential rates to manufactured goods moving southward from the North, but in the opposite direction they discriminated in favor of southern raw materials. The net effect was to keep the South in a kind of servitude to the Northeast—as a supplier of raw materials to the manufacturing metropolis, unable to develop a substantial industrial base of its own.
Regulation of Business
Yet the act still ranks as a red-letter law. It was the first large-scale attempt by Washington to regulate business in the interest of society at large. It heralded the arrival of a series of independent regulatory com- missions in the next century, which would irrevocably commit the government to the daunting task of monitoring and guiding the private economy. It foreshadowed the doom of freewheeling, buccaneering business practices and served full notice that there was a public interest in private enterprise that the gov- ernment was bound to protect.
Overoptimism
Yet the romance of the rails was not without its sordid side. Pioneer builders were often guilty of gross overoptimism. Avidly seeking land bounties and pushing into areas that lacked enough potential population to support a railroad, they sometimes laid down rails that led "from nowhere to nothing." When prosperity failed to smile upon their coming, they went into bankruptcy, carrying down with them the savings of trusting investors. Many of the large railroads in the post-Civil War decades passed through seemingly endless bankruptcies, mergers, or reorganizations.
Bessemer
Yet within an amazing twenty years, the United States had outdistanced all foreign competitors and was pouring out more than one-third of the world's supply of steel. By 1900 America was producing as much as Britain and Germany combined. What wrought the transformation? Chiefly the invention in the 1850s of a method of making cheap steel—the Bessemer process. It was named after a derided British inventor, although an American had stumbled on it a few years earlier.