Chapter 24: Industry Comes of Age

Carnegie, cleverly threatening to invade the same business, was ready to ruin his rival if he did not receive his price; Morgan finally agreed to but out Carnegie for over _____ —Carnegie then dedicated his remaining years to giving away money.

$400 million

Liquid capital was now becoming abundant; the word millionaire had not been coined until the 1840s and in ____ only a handful of individuals were eligible for this class

1861

A "wedding of the rails" was finally consummated near Ogden, Utah, in ____ , as two locomotives met (the Union built 1,086 miles and the Central Pacific 689 miles)

1869

The depression of the ____ finally goaded the farmers into protesting against being "railroaded" into bankruptcy; under pressure from organized agrarian groups like the ____, many Midwestern legislatures tried to regulate the railroad monopoly (scattered state efforts screeched to a halt in 1886).

1870s, Grange,

The Northern Pacific Railroad, stretching from Lake Superior to Puget Sound, reached its terminus in ____; the Atchison, Topeka and Santa Fe, stretching through the southwestern deserts to ____ was completed in 1884, and the Southern Pacific ribboned from New Orleans to San Francisco and was consolidated in the 1884 as well

1883, California,

Methods soon became more refined;____ ____ was the most adept at rapacity. For nearly thirty years, he boomed and busted the stocks of the Erie, the Kansas Pacific, the Union Pacific, and the Taxes and Pacific in an incredible circus. One of the favorite devices of the moguls of manipulation was "____ ____". Railroad stock promoters grossly inflated their claims about a given line's assets and profitability and sold stocks and bonds far in _____ of the railroad's actual value

Jay Gould, stock watering, excess

Construction gangs, containing many _____ "Paddies" who had fought in the Union armies, worked at a frantic pace; when hostile Indians attacked in futile efforts to protect what once rightfully had been their ____, the laborers would drop picks and seize guns. Scores of men—railroad workers and Indians—lost their lives as the rails stretched

Irish, land

The law proved ____ because of legal loopholes and contrary to its original intent, it was used to curb labor unions or labor combinations (restraining trade). Early prosecution of the trusts by the Justice Department under the Sherman Act of 1890 was neither vigorous nor successful—more new trusts were formed in the ____.

ineffective, 1890s

American ____ at the same time played a vital role in the ____ American industrial revolution; techniques of mass production, pioneered by ____ ____, were being perfected by the captains of industry (440,000 patents between 1860 and 1890).

ingenuity, second, Eli Whitney

His remedy was to consolidate rival enterprises and to ensure future harmony by placing officers of his own banking on their various boards of directors (these came to be known as "____ ____").

interlocking directorates

Frontier villages touched by the ____ rail became flourishing cities. Those that were bypassed often withered away and became "____ towns"; little wonder that communities fought one another for the privilege of playing host to the railroads

iron, ghost

Railroads were "wheeled torture chambers" and potential funeral pyres, for the wooden cars were equipped with swaying ____ lamps; appalling accidents continued to be almost daily tragedies, despite safety devices like the ____.

kerosene, telegraph

Wondrous devices poured out of his "invention factory"—the phonograph, the mimeograph, the Dictaphone, and the moving picture. He is probably best known for his perfection in 1879 of the electric _____ ____; this turned night into day and transformed ancient human habits as well.

light bulb

Offering superior railway service at ____ rates, he amassed a fortune of $100 million; his name is perhaps remembered through his contribution to the Vanderbilt University

lower

The white pine forests of Michigan, Wisconsin, and Minnesota disappeared into ____ that was rushed by rail to prairie farmers to build houses and fences Time itself was bent to the railroads' needs (until the _____ every town in the United States had its own local time, dictated by the sun's position—even in same time zones)

lumber, 1880s

The ____ industry arose on the backs of bawling western herds and the kings like Gustavus F. Swift and Philip Armour took their place among the new royalty.

meat

The screeching iron horse stimulated ____ and ____, especially in the West; it took farmers to their land, carried their products to the market, and brought items Railways were a boon for ____ and played a leading role in the great city-ward movement of the last decades of the century (food, raw materials, and markets)

mining, agriculture, cities,

With the westward trail now blazed, four other transcontinental lines were completed before the century's end; none of them secured _____ loans from the federal government but all of them except the Great Northern received generous grants of ____.

monetary, lands

At long last the masses of the people began to mobilize against ____; they first tried to control the trusts through ____ legislation, as they had earlier (curb railroads).

monopoly, state

The amazing ____ ____ of the nation were now about to be fully exploited, including coal, oil, and iron (Mesabi Range providing iron ore by the 1890s) Massive immigration helped make unskilled labor ____ and plentiful; ____, the keystone industry, built its strength largely on the sweat of low-priced immigrant labor from eastern and southern Europe (working in twelve-hour shifts every week).

natural resources, cheap, steel

One was the paper barrier of regional rate-setting systems imposed by the ____-dominated railroad interests; railroads gave preferential rates to northern goods. They discriminated in favor of southern ____ materials; the net effect was to keep the south in a kind of "Third World" servitude to the Northeast—as a supplier of these materials to the manufacturing metropolis, unable to develop an industrial base

northern, raw

The earliest form of combination was the "_____"—an agreement to divide the business in a given area and share the profits; other rail barons granted secret refunds to powerful shippers; often they _____ their rates on competing lines, but they ____ on non-competing ones.

pool, lowered, raised

Too often, pioneer builders pushed into areas that lacked enough potential ____ to support a railroad and sometimes laid rails that led "from nowhere to nothing"

population

He achieved important economies, both at home and abroad, by its large-scale methods of ____ and distribution—the efficient use of expensive ____ called for bigness and consolidation proved more profitable than price wars.

production, machinery

The government-business entanglements also undermined the industrial development. The unparalleled outburst of ____ construction was a crucial case; by 1900, the miles of this had spurted up to 192,556, much of which was west of the _____ River.

railroad, Mississippi

The huge empire of commerce beckoned to foreign and domestic investors alike. The ____ network spurred the amazing industrialization of the post-Civil War years; this opened up fresh markets for manufactured goods and sped raw materials to ____ (single largest order for the fawning steel industry)

railroad, factories

Postwar industrial expansion, partly a result of the ____ network, rapidly began to assume mammoth proportions; by 1984, the US was the largest ____ nation.

railroad, manufacturing

While abusing the public, the ____ blandly bought and sold people in public life; they bribed judges and legislatures, employed lobbyists and elected their own into office

railroaders

Many of the large ____ in the post-Civil War decades passed through seemingly endless bankruptcies, mergers, or reorganizations (trusting investors let down)

railroads

The country could not avoid ruinous rate wars among the ____ and outraged "confiscatory" attacks on the lines by pitchfork-prodded state legislation.

railroads

For the first time, a sprawling nation became united in a physical sense, bounds with ribs of iron and steel; by stitching North America together from ocean to ocean, the trans-continental lines created an enormous domestic market for American ____ ____ and manufactured goods—probably the ____ integrated national market area in the world.

raw materials, largest

Self-justification by the wealth inevitably involved contempt for the poor; many of the _____ had pulled themselves up and hence they concluded that those who stayed ____ must by lazy and lacking in enterprise (formidable roadblock to social reform)

rich, poor

The Interstate Commerce Act tended to ____, not revolutionize, the system. It was the first large-scale attempt by ____ to regulate business in the interest of society at large; it heralded the arrival of a series of independent regulatory ____ in the next century, which would be an irreversible commit by the ____ to the task of monitoring and guiding the private economy.

stabilized, Washington, commissions, government

_____ ultimately held together these new civilization, from skyscrapers to coal scuttles, while providing it with food, shelter, and transportation (rails for railroads). Steel making typified the dominance of "heavy industry," concentrated on making "____ ____," which was entirely different from "consumer goods".

steel, capital goods

Tycoons like Andrew Carnegie, the ____ king; John D. Rockefeller, the ____ baron; and J. Pierpont Morgan, the bankers' ____, exercised genius to circumvent competition.

steel, oil, banker

Two significant new improvements proved a boon to the railroads. One was the ____ rail, which Vanderbilt helped popularize when he replaced the old iron tracks of the New York Central with the tougher metal; this was ____ and more ____ because it could bear a heavier load

steel, safer, economical

Industrialists tried to coax the agricultural South out of the fields and into the factories, but with only modest ____; the region remained overwhelmingly rural. Prominent among the boosters of a "new South" was Henry W. Grady, editor of the Atlanta Constitution; he exhorted the ex-Confederates to outplay the North at the commercial and ____ game (obstacles lay in path of southern industrialization).

success, industrial

His goal was to improve efficiency by making _____ more reliable, controlling the _____ of the product at all stages of production, and eliminating middlemen ____.

supplies, quality. fees

Most important, it set up the Interstate Commerce Commission (ICC) to administer. The Interstate Commerce Act did not represent a popular ____ over ____ wealth; what the new legislation did do was to provide an orderly forum where competing ____ interests could resolve their conflicts in peaceful ways

victory, corporate, business

Almost overnight an industry was born that was to take more wealth from the earth. _____ derived from petroleum, was the first major product of the infant oil industry (it produced a much brighter flame than whale oil).

Kerosene

____ ____ 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 (the railroads withheld all the land from other users).

Land grants

The most versatile inventor of all was ____ ____, his severe deafness enabled him to concentrate without distraction; he was a gifted tinkerer and a tireless worker.

Thomas Edison

The last spike of the last of the five transcontinental railroads of the 19th century was hammered home in _____; the Great Northern, which ran from Duluth to Seattle, was the creation of a far-visioned Canadian-America, James J. Hill.

1893

Morgan moved rapidly to expand his new industrial empire; he took the Carnegie holdings, added others, "watered" the stock liberally, and in ____ launched the enlarged United States Steel Corporation (capitalized at $1.4 billion, it was America's ____ billion-dollar corporation—the Industrial Revolution had come into its own).

1901, first,

One of the most ingenious inventions was the telephone, introduced by ____ ____ ____ in 1876; gigantic communication network was built on his invention The social impact of this instrument was further revealed with an additional army of "number please" ____ was attracted from the stove to the switchboard.

Alexander Graham Bell, women

Monarchs of yore invoked the divine right of kings, and America's ____ autocrats took a somewhat similar stance; Rockefeller piously acknowledged the Lord. Steel baron Andrew Carnegie agreed that the wealthy, entrusted with society's riches, had to prove themselves morally responsible according to a "____ ____ ____ ".

industrial, Gospel of Wealth

____ was one of the few places in the world where abundant coal for fuel, rich iron ore for smelting, and other ingredients for making steel flourished. The nation also boasted an abundant ____ supply, guided by the high order.

American, labor

Kingpin among steel masters was ____ ____; he was brought to America from Scotland in 1848 mounting the ladder so fast that he was said to have scorched the rungs.

Andrew Carnegie,

Completion of the transcontinental line was one of the America's most impressive peacetime undertakings; it welded the West Coast more firmly to the Union and facilitated a flourishing trade with ____ (phenomenal growth of the Great West)

Asia

Rail laying at the California end was undertaken by the _____ ____ _____; this line pushed boldly eastward from Sacramento, over and through the Sierra Nevada.

Central Pacific Railroad

President ____ did not look kindly on effective regulation but Congress passed the epochal ____ ____ ____ in 1887, which prohibited rebates and pools and required the railroads to publish their rates openly; it forbade unfair discrimination against shippers, and outlawed charging more for a short haul than a long one (same line)

Cleveland, Interstate Commerce Act

Corruption lurks nearby when fabulous fortunes can materialize overnight. The fleecing administered by the railroad construction companies, such as the ____ ____, were but the first of the games that the railroad promoters learned to play.

Credit Mobilier

Carnegie dug ore from the earth in the ____ ____, Carnegie ships floated it across the Great Lakes, and Carnegie railroads delivered it to the blast furnaces at Pittsburgh. Carnegie thus pioneered the creative entrepreneurial tactic of "____ ____," combining into one organization all phases of manufacturing from mining to market

Mesabi Range, vertical integration

The imperial ____ devised still other schemes for eliminating "wasteful" competition. The ____ of the 1890s drove into his welcoming arms many bleeding business people, wounded by the cutthroat competition in America.

Morgan, depression

The Union Pacific Railroad was thus commissioned by Congress to thrust westward from ____, Nebraska; for each mile of track constructed, the company was granted ____ square miles of land and a generous federal loan ranging from $16,000 to $48,000. The laying of rails began in earnest after the Civil War ended in ____ and with juicy loans and land grant available, the promoters made all possible haste (gain of $23 M).

Omaha, 20, 1865

One weighty argument for the action was the urgency of bolstering the Union, by binding the ____ Coast more securely to the rest of the Republic

Pacific

He forged ahead by working hard, doing the extra chore, cheerfully assuming responsibility, and smoothly cultivating influential people into his business. After accumulating some capital, Carnegie entered the steel business in the ____ area; he succeeded by picking high-class associate and eliminating many middlemen.

Pittsburgh

They were forced to appeal to Congress and after prolonged pulling and hauling, the ____ ____ ____ of 1890 was finally signed into law. It flatly forbade combinations in restraint of trade, without any distinction between "good" trusts and "bad" trusts; bigness, not badness, was the sin

Sherman Anti-Trust Act

Four farseeing men—the so-called Big Four—were the chief financial backers of the enterprise; the quartet include the ex-governor Leland _____ of California, who had useful political connections, and the burly Collis P. ____, an adept lobbyist

Stanford, Huntington

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 ____—he shifted from steamboating to railroading

Vanderbilt

Supreme Court, in the famed ____ case, decreed individual states had no power to regulate interstate ____; the federal government would have to do the job

Wabash, commerce,

The financial giant of the age, J. Pierpont Morgan made a legendary reputation for himself and his ____ ____ banking house by financing the reorganization of railroads, insurance companies, and banks (he had established an enviable reputation for integrity).

Wall Street

Refinements played a vital role in railroading; the ____ air brake was a marvelous contribution to efficiency and safety; the ____ Palace Cars, advertised as "gorgeous traveling hotels," were introduced on a considerable scale in the 1860s.

Westinghouse, Pullman

Railroad kings were for a time virtual ____ monarchs; they exercised more direct control over the lives of more people than the president of the United States did; they began to _____ with one another to rule the railroad dominion

industrial,cooperate

An American had stumbled on it a few years earlier; ____ ____, 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 eliminating impurities

William Kelly

James J. Hill perceived that the prosperity of his railroad depended on the prosperity of the ____ that it served; his enterprise was soundly organized and had no major problems

area

Oil might have remained a modest industry but another turn of the technology came—the invention of the ____; by 1900, the gasoline-burning internal combustion engine had clearly bested its rivals, steam and electricity for the car. John D. ____ came to dominate the oil industry; he was a successful businessman at nineteen and one upward stride led to another, and in 1870, he organized the ____ ____ _____ of Ohio, nucleus of the great trust formed in 1882.

automobile, Rockefeller, Standard Oil Company

The Big Four operated through two construction companies, they kept their hands relatively clean by not becoming involved in the ____ of congressmen The Central Pacific, which was granted the same subsidies as the Union Pacific, had the same incentive to haste; some ten thousand ____ laborers, proved to cheap, efficient, and expendable (the towering Sierra Nevada presented a formidable barrier)

bribery, Chinese

But most defenders of wide-open ____ relied more heavily on the survival-of-the-fittest theories of ____ ____; captains of industry provided material progress.

capitalism, Charles Darwin

Southern agriculture received a welcome boost in the 1880s, when machine-made ____ replaced the roll-your-own variety and tobacco consumption shot up. James Duke took full advantage of the new technology to mass-produce and in 1890 he absorbed his main competitors into the American ____ Company (Duke University)

cigarettes, Tobacco

Plutocracy, like the earlier slavocracy, took its strand firmly on the Constitution; the clause that gave Congress sole jurisdiction over interstate ____ was a godsend to the monopolists—their lawyers used it time and again to thwart controls by state legislatures.

commerce

The land also felt the impact of the railroad (especially the midsection of the continent) Settlers following the railroads in Iowa, Illinois, Kansas, and Nebraska and planted well drained, rectangular ____ (shortgrass prairies in Dakotas, and Montana)

cornfields

He tried to apply this new "air boiling" technique to his own product but business ____ —gradually the Bessemer-Kelly process won acceptance and created steel.

declined

The American people were slow to take down _____ injustice; dedicated to free enterprise and believing competition is the soul of ____, they cherished progress

economic, trade

A standard gauge of track which came into wide use, thus eliminating the ____ and inconvenience of numerous changes form one line to another.

expense, Westinghouse, Pullman

Transcontinental railroad building was so ____ and risky as to require government subsidies; the extension of rails into thinly populated regions was unprofitable. Private promoters were unwilling to suffer heavy initial losses; Congress thus began to advance liberal money loads to favored cross-continent companies in ____.

expensive, 1862

In the age of Lincoln, considerable iron went into railroad rails and bridges, but steel was ____; when in the 1870s "Commodore" Vanderbilt of the New York Central began to use steel rails, he was forced to import them from ____.

expensive, Britain

Impoverished ____, especially in the Midwest, began to wonder if the nation had escaped from the ____ power only to fall into the hands of the ____ power

farmers, slavery, money

For railroad operators worried about keeping schedules and avoiding wrecks, this patchwork of local times was a nightmare (on November 18,1883, the major rail lines decreed that the continent would henceforth be divided into _____ "time zones") The railroad was the maker of millionaires; a raw new aristocracy, consisting of "lords of the rail" and colossal _____ was amassed by stock speculators and railroad wreckers

four, wealth

Noisy criticism was leveled at the "____" of so valuable a birthright to greedy corporations; but the government did receive beneficial returns (rates for service).

giveaway

The force of circumstances brought Morgan and Carnegie into collision; by 1900 Carnegie, weary of turning steel into ____, was eager to sell his holdings while Morgan had plunged heavily into the manufacture of ____ pipe and tubing.

gold, steel

At rail's end, workers tried their best to fine relaxation and conviviality in their tented towns, known as "____ ____ ____," often teaming with as many as ten thousand men and a sprinkling of painted prostitutes and performers for the men

hells on wheels

Railroad managers were forced to charge _____ rates and wage ruthless competitive battles in order to pay off the exaggerated financial obligations with which they were saddled The ____ interest was frequently trampled underfoot; Cornelius Vanderbilt did not care about the law and his son, William H. Vanderbilt, when asked in 1883 about the discontinuance of a fast mail train, reportedly snorted, "The public be damned!"

high, public

Less efficient was the technique of "____ ____," which meant allying with competitors to monopolize a given market; Rockefeller was a master of this strategy. He perfected a device for controlling bothersome rivals—the "____".

horizontal integration, trust

Railroad companies also stimulated the mighty stream of ____; seeking settlers advertised seductively in Europe and sometimes offered to transport the newcomers

immigration

The sudden emergence of the ____ industry was one of the most striking developments. Traces of oil found on streams had been collected but not until 1859 did the first well in Pennsylvania—"____ ____"—pour out its liquid "black gold".

oil, Drake's Folly

His remarkable organization was a partnership that involved, at its maximum, about forty men—by 1900 he was producing _____ of the nations' Bessemer steel.

one-fourth

Within twenty years, the United States had outdistanced all foreign competitors and was pouring out more than ____ of the world's supply of steel (Britain and Germany). What brought the transformation was the invention in the 1850s of a method of making cheap steel—the ____ process (it was named after a derided British inventor).

one-third, Bessemer

Giant trusts likewise sought refuge behind the Fourteenth Amendment; the courts ingeniously interpreted a corporation to be a legal "____" and decreed that, as such, it could not be deprived of its property by a ____ 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

person, state

Dedicated and cheap, Rockefeller flourished in an era of completely free enterprise; Rockefeller pursued a policy of ___ or ruin (corsairs of finance). By 1877, he controlled ____% of all the oil refineries in the country.

rule, 95

The plantation system had degenerated into a pattern of absentee land ownership; white and black ____ now tilled the soil for a share of the crop and became tenants, in bondage to their landlords, who controlled needed credit and supplies

sharecroppers

The industrial 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 ____ percentage of the nation's manufactured goods that it had before the Civil War

smaller

Stockholders in various ____ oil companies assigned their stock to the board of directors of his Standard Oil Company, formed in ____. It then consolidated and concerted the operations of the previously competing enterprises (Standard Oil soon cornered virtually the entire world ____ market)

smaller, 1870, petroleum

Rockefeller showed little mercy in employing ____ and extorting secret rebates from the railroads, he forced the lines to pay him ____ on the freight bills of his competitors. Rockefeller thought "the time was ripe" for aggressive consolidation, but on the other side of the account book, Rockefeller's oil monopoly did turn out a superior product at a relatively ____ price.

spies, rebates, cheap

Deadlock (a situation, typically involving opposing parties, were no progress is made) in the 1850s over the proposed ____ ____ was broken when the South seceded, leaving the field to the North (in 1862, Congress made provisions)

transcontinental railroad

Granting land was also a "cheap" way to subsidize a much-desired ____, because it avoided new taxes for direct cash grants; critics overlooked the railroad's ability to give land a modest value after the railroads had covered it with ____.

transportation, steel

Other ____ blossomed along with the American Beauty of oil; these included sugar, tobacco, leather, and harvester (wealth).

trusts

The kerosene lamp signaled the decline of the _____ industry just as the new electrical industry rendered the kerosene useless (Thomas Edison's invention).

whaling

Such machines as the cash register, the stock ticker, and the typewriter, which attracted ____ from the home to industry, facilitated business operations ____ grew due to the refrigerator car, the electric dynamo, and the electric railway, which displaced animal-drawn cars.

women, urbanization