Age of Railroads

1. What problems did employees of the railroad companies face?
      
     Railroad employees faced numerous problems. The railroads payed all of their employees poorly, the working conditions were often terrible and dangerous and accidents and diseases injured and killed thousands of men each year. In addition the railroads controlled not only the work lives of the employees but also their personal lives. 
 
2. What was it like to live as a Pullman employee in the town of Pullman?


     The town of Pullman provided for almost all of a workers' basic needs. The citizens of Pullman resided in clean, well built brick houses and apartment buildings. The buildings had at least one window in every room which was considered a luxury for people who live in a city. There were also town services and facilities including doctors, shops, and an athletic field. However, under the surface the resident employees were not happy as they were strictly controlled in every way by the railroad. For example,  they were not allowed to pass anytime on their front steps or to drink alcohol. This tightly controlled environment and Pullman's refusal to lower rents after cutting his employees pay led to a violent strike in 1894. 

3. Who was involved in Crédit Mobilier, and what was the purpose of this company?   


    Credit Mobilier was made up of stock holders in the Union Pacific railroad who in 1864 created a construction company calling it Credit Mobilier. Stock holders included well known and respected federal officials such as Vice President Schuyler Colfax and congressman James Garfield, who later became president. The stock holders created the company out of a desire for control and monetary profit. They gave the company a contract to lay track at two to three times the actual cost and pocketed the profits.    

4. In what ways did the railroad companies use their power to hurt farmers?


     Railroads used their powers in a number of ways that especially effected farmers. The railroads miss used government land grants by selling them to other businesses, rather than to settlers as the government had planned. The railroads also made formal agreements to fix prices in order to keep farmers in their dept. Also, they charged different costumers different rates. They often demanded more money for short hauls-as there was no other carrier- than they did for long hauls.
 
5. Why didn’t the decision in the Munn v. Illinois case succeed in checking the power of the railroads?

     The case of Munn v. Illinois gave the states the right to regulate the railroads for the benifit for farmers and consumers. It also established the federal government's right to regulate private industry to serve the public interest. However, the railroads continued to fight and in 1886 the supreme court ruled that a state could not set rates on interstate commerce.

6. Why didn’t the Interstate Commerce Act immediately limit the power of the railroads?

     The Interstate Commerce Act, passed in 1887, re-established the right of the federal government to supervise railroad activities and created a five member interstate commerce commission (ICC) for that purpose. However, the ICC had problems regulating railroad rates as the railroads continued to resist and there was a long legal process. A heavy blow to the commission came in 1897 when the supreme court ruled that it could not set maximum railroad rates. Not until 1906, did the ICC get the power it needed to be effective.

Big Business and Labor

1. What is it?                    B.  How did it help businesses such as the Carnegie Company and tycoons like Andrew Carnegie?

1. Vertical integration

A.  Vertical integration is a process of buying out suppliers in Carnegie's case, coal field, iron mines or freighters and railroad mines (resources, manufacturing, and distribution)-in order to control the raw materials and transportation systems.
 
B.  By using a vertical integration system, Carnegie was able to control much of the steel industry.
2. Horizontal integration

A. In the process known as horizontal integration companies producing similar products merge.


B. Carnegie became more powerful by gaining control over his suppliers and limiting his competition, he controlled almost the entire steel industry.

3. Social Darwinism

A. Social Darwinism is a theory that grew out of Charles Darwin's theory of biological evolution which states that some individuals of a species flourish and pass their traits along to the next generation while others do not. A process of "natural selection" enabled only the best adapted to survive.


B. This promoted the theory that success and business were achieved by the most able.

4. Monopoly

A. A monopoly is a complete control over an industries production, wages, and prices.


B. A firm that bought out all of it's competitors could gain a monopoly and getting complete control, thus getting all of the profits of an industry.

5. Holding company

A. A corporation that was created to do nothing but to buy out the stocks of other companies.


B. It provided horizontal integration and allowing a company to gain more control over an industry.

6. Trust

A. A trust was competing companies joining together and turning their stock over to a group of trusties who were people who ran the separate companies as one large corporation. In return, the companies earned dividends on profits earned by the trusts.


B. Businesses tycoons could gain total control of the companies through trusts.

7. The perception of tycoons as “robber barons”

C. How did it harm businesses such as Standard Oil and tycoons like John D. Rockefeller?

The perception of tycoons as "robber barons" harmed businesses because the perception of robber barons where industrialists who gained huge profits through questionable and perhaps illegal business practices. Their power alarmed and caused fear among many. 

8. Sherman Antitrust Act

C. How did it harm businesses such as Standard Oil and tycoons like John D. Rockefeller?

The Sherman Antitrust Act caused businesses such as Standard Oil to reorganize into single corporations. As the Sherman Antitrust Act made it illegal to make a trust to form a trust that interfered with free trade or in the states or other countries.