Railroad Corporations Gain Power
Grade 8 students examine how railroad corporations became the most powerful businesses in post-Civil War America, using their control of transportation to charge discriminatory rates, receive government land grants, and corrupt state and federal politicians. Public anger over railroad abuses led to the Interstate Commerce Act of 1887, one of the first federal regulatory laws. This topic is in California myWorld Interactive Grade 8, Chapter 8.
Key Concepts
The new national railroad network connected the country like never before. It moved raw materials from the West to eastern factories and carried manufactured goods to western markets. This connection fueled the growth of industries and cities across America.
Soon, powerful railroad companies grew by taking over smaller lines. To eliminate competition, they offered secret discounts called rebates to their biggest customers. They also formed pools , which were agreements to keep shipping prices high. These practices angered small farmers and business owners who relied on the railroads.
Common Questions
How did railroad corporations gain power in the Gilded Age?
Railroads dominated the economy by controlling transportation, charging farmers and businesses discriminatory shipping rates, receiving millions of acres in government land grants, and using their wealth to bribe politicians.
What was the Interstate Commerce Act?
The Interstate Commerce Act of 1887 was the first major federal law regulating a private industry, establishing the Interstate Commerce Commission to oversee railroad rates and practices, though it was initially weakly enforced.
How did railroads abuse their economic power?
Railroads charged different rates to different customers, giving rebates to large shippers while overcharging small farmers, and used their monopoly power to extract maximum profit from captive markets.
What chapter covers railroad power in California myWorld Interactive Grade 8?
Chapter 8: Industrial and Economic Growth (1865-1914) covers how railroad corporations gained and abused their power in California myWorld Interactive, Grade 8.