Reform & Railroads, Part 2 Essential Questions:

Identify significant individuals, events, and issues regarding the effects of the growth of railroads and the contributions of James Hogg

Explain the political, economic, and social impact of the agricultural industry and the development of West Texas resulting from the close of the frontier

Main Idea: Railroads impacted the growth of

towns and industries and the state government regulated big businesses and railroads.

Texans Demand Railroads

Before 1900 most people traveled by wagons and buggies.

Poor transportation slowed Texas’ development.

Farmers and Merchants could only market goods in nearby areas – not many opportunities to make profits.

A Network of Steel Connects Texas

Before the Civil War, only 400 miles of railroad in Texas.

1872 – First Rail connections with other states made.

Towns paid railroads to build tracks in their cities.

A Network of Steel Connects Texas

State encouraged building through Land Grant Law of 1876:

16 sections (10,240 acres) of land given to rail company for every mile of track built.

32 million acres given until 1882.

A Network of Steel Connects Texas By 1900 10,000 miles of track

in Texas. Travel times across the state

went from days or weeks to hours.

New towns built near railroads. Existing towns near railroads grew up. Towns located away or outside of railroads dried up.

Towns where rail lines met became center of business – Houston, Fort Worth, Dallas, Austin, San Antonio – grew into major cities.

Downtown Dallas, TX 1900 Downtown Ft. Worth, TX 1900

Improving Transportation

No state road system existed in 1880s.

Every county built and maintained its own roads. Most roads were unpaved and became mud pits, or were very dusty and dirty.

Improving Transportation More and more roads

were built in 1880s and 1890s.

Streetcars and trolley cars appeared in 1870s and by 1900, cars were starting to be seen in Texas.

Growing popularity of cars led state to improve roads.

Monopolies Use Unfair Tactics

In the late 1800s, large companies that operated in Texas joined together and formed trusts.

These trusts: helped to prevent other companies from selling

the same product or service; reduced or eliminated competition and free trade; could hold a monopoly on a business, which

allowed them to pay very low prices for materials they bought and charge very high prices for the goods they sold = huge profits.

Overall, companies formed trusts to ensure their business partners would have control over an industry.

The Cycle of Debt

Farmers worried about shrinking profits received from their crops.

They found themselves in a “cycle of debt” they could not get out of.

How did the cycle of debt run?

How did the “the Cycle of Debt” run?1. Cotton prices fell during 1875 and remained low

through 1900.

2. To offset the drop in prices, farmers borrowed extra money to buy more land, equipment, seed, and other supplies to produce more crops = overproduction.

3. This overproduction dropped the price of cotton even more.

4. With lower crop prices and increased debts from land/equipment/seed purchases, many farmers could not get out of the cycle of debt. They must produce more and more crops to try to pay debts and make profits.

Casualty of Commercial Farming

The rise of commercial farming in the lower Rio Grande Valley resulted in displacement of Mexican American landowners.

Technological Advancements in Agricultural Industries

Barbed Wire – fencing that prevented cattle and other animals from destroying crops

Windmills – allowed cattle, sheep, goats, and crops to be watered on a farmer’s land, they did not have to be near a river or water source

Irrigation – is an artificial application of water to the soil; usually used to assist the growing of crops in dry areas and during period of inadequate rainfall

New Laws Prohibits Trusts

1889 - TX legislature passed antitrust laws stopping companies from joining together to fix prices or limit production.

Main reason for antitrust laws – unfair business practices by railroads.

The law often has been used to prevent unfair practices.

New Laws Prohibits Trusts

In 1887, the U.S. Congress created the Interstate Commerce Commission (ICC). The ICC set rules for interstate railroads that connected two or more states.

As an authority to control intrastate railroads was also needed. Intrastate shipments went from one part of the state to another.

James Hogg Regulates the Railroads

At the request of Governor James S. Hogg in 1891, the legislature created the Texas Railroad Commission, a state agency to regulate railroads operating in Texas.

Soon, many railroads ceased unfair practices, such as fixing prices and charging more for short hauls than for long hauls.

James Hogg Regulates the Railroads

Since then, the Railroad Commission has been expanded to regulate other industries, particularly the oil industry.

Governor Hogg is remembered as one of Texas’s most important governors, in part, because of his establishment of the Texas Railroad Commission (TRC).

Economic Impact of the Agricultural Industry

Products were moved, sold, and transported across the nation

New cash crops were grown in Texas (ex: wheat, sorghum)

Cotton and corn grown across the state

Crops affect inflation Income from agriculture

exceeded income from cattle ranching by 1900s