Steel, Rails, and Steam—The Industrial Revolution: The Story of America Series [Ep. 34]

00:00:10
Speaker 1: And we returned to Our American Stories. Up next, the thirty-fourth installment of our series About Us, The Story of America series, with Hillsdale College Professor and author of Land of Hope, Dr. Bill McLay. This story: the story of the Industrial Revolution. Let’s get into it. Take it away, Bill.

00:00:35
Speaker 2: The impact of the Civil War on every single aspect of American life is something we can overestimate. The costs were profound in human and economic terms. It marked the dividing line between early America and what might best be called modern America. What was once a sparsely settled, mostly agrarian nation was transforming itself into a bigger, densely populated, more diverse, and mightier industrial nation. These huge tectonic forces were exhilarating to some and frightening to others, because there were winners and there were losers. But one thing was certain: industrialization was not some theoretical idea or abstraction. It was real, and there were real-life consequences to it. And it’s often the case with such things, it’s sometimes difficult to connect them with our real-life experience, with the things that we can touch and see and feel. Sometimes it takes an event to make it come to life. That’s where we’re going to try to do, and we can do it with a moment that occurred at the end of the Civil War: the Grand Review of the Union Army, a procession ordered by the Department of War thirty-nine days after General Lee had surrendered at Appomatics. This was a spectacle on a scale never before seen in our nation’s history. The procession was led by three hundred-plus regiments, nearly thirty cavalry regiments, forty artillery batteries, engineers, and ambulance drivers. They all marched like lords

00:02:30
Speaker 1: of the world.

00:02:42
Speaker 2: Over two hundred thousand troops marched for two long days the streets of America’s capital city, a line stretching at times to twenty-five miles. Massive crowds gathered along Pennsylvania Avenue. Many had traveled hundreds of miles to pay their respects. Soldiers had come from everywhere, almost anywhere but Washington, D.C. They were mostly small-town farm boys from states like Ohio and Michigan, Irish city dwellers from cities like New York, and don’t forget African Americans from the South. Though they’d been born and raised all across the North and the South, onlookers crammed in every nook and every space available, from the tops of buildings to stands that lined the streets. There were bands and choruses and church choirs everywhere, and countless flowers and bouquets were tossed at the feet of the marching soldiers. Banners of all kinds stretched along the parade route. One in front of the Treasury Building had these words emblazoned on it, all in capital letters: The only national debt we can never pay is the debt we owe to the victorious Union soldiers. No one in attendance would have disagreed. It was an awesome spectacle in the fullest sense of the word awesome, and it must be remembered. There was no such victory parade, no Grand Review of the armies for the soldiers at the end of the Revolutionary War or the War of Eighteen-Twelve, or the Mexican War. This was the parade, the pageant the new version of America deserved. These men had become national men through their participation in and membership in the most powerful military force anyone in this part of the world had ever seen. There was no more powerful symbol, no more powerful articulation of that truth, that reality than something simple we would take for granted: a long line of blue-uniformed soldiers, blue-uniform soldier marching as one through the crammed streets in front of adoring crowds in the nation’s capital. But there were questions in some people’s hearts: Was an older America being left behind? What lay ahead? What was in this new and uncharted future, a new version of America that was unavoidable but that no one had really chosen? Had Patrick Henry and the Anti-Federalists been right all along and their fear of centralized power being incompatible with the genius of republicanism, or were they going to be proved wrong in the years ahead? The big question even then was whether the Constitution itself would endure as an expression of enduring truths about the nature of government, or was it now rendered a relic, something that worked for the eighteenth century, when America was still a small, rural nation, but one that had little elevelance to this new emerging industrial power? The fact is, that is what America was now becoming, whether anyone liked it or not, and it was happening fast. At the time of the Grand Review, Americans’ industrial power didn’t rival that of a single European nation. A mere thirty-five years later, at the close of the nineteenth century, America had leapfrogged all of them. It was an astonishing, unprecedented move forward, and American business thrived. And the very first big business was the business that drove all others: the railroad.

00:06:44
Speaker 1: In the city.

00:06:54
Speaker 2: In eighteen sixty-five, there had been a total of thirty-five thousand miles of railroad track of the nation, which salot, but by nineteen hundred that number had grown by six times, to almost two hundred thousand miles, more railroad track than in all of Europe. This industry didn’t just grow; it exploded. Not really that surprising, because America had the ideal conditions, the perfect climate with the capital P and a capital C, the perfect climate for business growth. What did we have? We had great natural resources readily at hand, including rich mineral deposits, raw materials like coal, iron, ore, and copper, vast supplies of timber. And we had a rapidly growing population, which made for an expanding consumer market and also a growing labor market. And then there were the never-ending inventions and technological breakthroughs, which bolstered American productivity. Because America was also a colossus of innovation, the railroad industry went on to stimulate the economy in unimaginable ways, in remarkable ways. First and foremost, to build out the railroad, they need to purchase goods from all kinds of other industries. The railroad industry created the steel industry. In eighteen seventy, we were producing seventy-seven thousand tons of steel. By nineteen hundred, that number had skyrocketed to eleven point four million tons. It’s harder than cast iron, it’s tougher than wrought iron, simply better than iron for things like railroad tracks, girders of tall buildings and bridges, all the foundations and building blocks of industrial America and of the cities that rose up in it. And behind this remarkable rise in steel production was a man from Western Pennsylvania who had been a poor Scottish immigrant boy who rose from textile mill worker to the leader of the steel industry and one of the Captains of Industry, Andrew Carnegie.

00:09:19
Speaker 1: And you’ve been listening to Professor Bill McLay of Hillsdale College, and what a story he’s telling about America. Right after the Civil War. My goodness, there was the difference, that dividing line between Early America and Modern America, between Agrarian America and Urban America. The industrialization of the country was about to happen, and in rapid speed. Moreover, The Story of Us, the story of the Industrial Revolution. Here on Our American Stories, and we continue with Our American Stories and with Dr. Bill McLay and Our Story of America series. When we last left off, Dr. McClay was talking about the railroad’s impact on American life. Let’s return to the story.

00:10:31
Speaker 2: The new National Railroad created a new, improved, and scaled market. People could move any available good in product anywhere and everywhere, and do it quickly. And the scale and speed of transportation increased production of goods for the new and expanding national market, creating a virtuous economic cycle. A perfect example of this was the rise of the mail-order business, first by Reward and raised to a high art form by Sears, Roebuck and Company. The Amazon and Walmart of their day. Customers could rifle through the catalog to find whatever they needed and lots of things they didn’t need, and the company used the mail system to shift products directly to their doors quickly thanks to the transportation system. This was great for customers, especially rural customers. Railroads also stimulated growth and less developed parts of the country, luring savvy settlers to move to places and spaces where the railroads were located or scheduled to be located. There were also important technological advances that merit our attention: George Westinghouse’s air brake, a breakthrough, no pun intended, in railroad and engineering that allowed all the railroad cars on a train to brake at the same time. Imagine how difficult it is to stop a train if you can only stop the head train. In the railroads, as in other ways, time is money. This engineering feed allowed trains to be much longer and to travel at higher speeds safely. Add to that the invention of the Pullman’s Sleeping Car, which made long-distance travel not just something to be endured, but something to be looked forward to, something that was actually a kind of luxury. And then there was the development of the telegraph, a source of almost instantaneous communication needed for the control and operation of the rail lines functioning. Think of it being like the central nervous system of the body. Somebody steps on our foot, we wouldn’t know about it if we didn’t have a nervous system to relay the message to us and cause us to say, “Ouch!” So there was a relationship there, and the two were joined at the hip. The railroads could never function without the telegraph, and the telegraph lines could not have been built but for the cleared lands and lanes prepared by enormous crews that built the railroad tracks that made the trains possible. It was an impeccably timed marriage of technology that would change America. Railroads were all-in or nothing propositions. It wasn’t something that could be built cheaply. He couldn’t do it as a side gig, bid by bid. It takes a tremendous amount of capital investment to make a railroad system possible, let alone profitable. Give you an idea of just how expensive this was: the cost per mile was thirty-six thousand dollars, and this is a time when the average annual salary was generously about one thousand dollars annually. The scale and cost and size of this operation and outgrew what even the most wealthy family owned business could manage. What rose up to manage the problem was called the modern corporation, which was a further development of the joint-stock company so vital to the development of Early America. The modern business corporation had many advantages. Unlike a traditional partnership, there was limited legal liability for investors, a solid protection from financial ruin, ensuring investors that they wouldn’t be held responsible for suits and other liabilities directed at the business as a whole, and it was incentive for investors to invest to have that kind of protection from these scaled. Modern-day business corporations also grew modern management structures to coordinate the many and multifaceted aspects of running such a massive business as a railroad. One of the things that railroads needed more than anything to succeed was a high degree of standardization to become truly efficient. It’s hard for us to imagine now. Before the invention of the modern railroad system, time was a completely local sling. It was decided by the position of the sun at the place and discretion of any local town when the sun was at its zenith. If you were in Oshkosh, Wisconsin, it was noon. It wasn’t noon in Sacramento until the sun got there. Well, this is not something you could run a railroad on, or a railroad schedule. So the solution was something we don’t even give a second thought to today: the adoption of standard time zones, in which the nation’s clocks could be synchronized within those zones. And this made local time a relic of the American past. Suddenly, you’re on the clock. The whole world is on the clock. It’s quite a change. The other major development in modern American life was the modernization of finance. Remember, local banks didn’t have the capital to meet the needs of these growing industrial businesses, and so rose the world of investment bank. And no one was more prominent in that than J.P. Morgan, a forceful man with a forceful personality. A contemporary of has noted that after a visit with Morgan, has felt as if a gale had blown through the house. It’s worth noting Morgan believed to his core that competition was not good, that it was wasteful, inefficient, created chaos. So he did whatever he could to bring order and stability to the economy by working to consolidate, that is, to combine entire industries wherever and whenever possible. You may remember that back in the days of Patrick Henry, consolidation was kind of a dirty word. Not so in this time period. Not so in this economy. Indeed, through Morgan’s work and through his financially human, U.S. Steel became the world’s first billion-dollar company that is capitalized in terms of a billion dollars. Morgan would have massed so much wealth that he was called by the President of the United States not once, but twice, in eighteen ninety-five and nineteen oh-seven, to save the government and the country from financial panic and potential ruin. This kind of thing rattled Americans. How could their great national government become so dependent on one wealthy, massively wealthy private citizens? This kind of power, this monopolistic power, was the kind of thing that had given rise to fears of concentrated power in our earliest days, in the formation of our republic. This was not something new. This was not something un-American to have grave reservations about these enormous changes. And there were other concerns, concerns about big business itself, the ways it forced us to organize our lives around it in the image of big business. The fact is, with every new invention, every new technology, every new way of doing business, there’s going to be good news and bad news. There are going to be winners and losers. There’s going to be change. Local life in the wake of the Civil War had been changed forever, not just because of the events of the war, but even more because the modernization of the country. Lives that were measured by the daily rhythms of agricultural life are the time told by the ringing of the local church bells, now set by the outside world, by the national economy from which they had benefited, but which also placed its own demands on them. The locals really had no choice in the matter, for better or worse. The great forces transforming the economy were transforming American life itself, and soon would transform American culture in its image.

00:19:18
Speaker 1: The Story of the Industrial Revolution. Here on Our American Stories.