Chapter 17

Age of Industry1865-1900

The United States Industrializes

• After the Civil War, people moved from farming to working in mines and factories.

• Industrial success aided by:• Water, timber, coal, iron,

copper• Transcontinental RR • Petroleum (kerosene) -

lanterns and stoves.• Population tripled = more

labor and desire for goods.

Government’s Role

• Laissez-faire – Allow supply and demand to regulate prices and wages without gov’t interference

• Entrepreneurs built factories and RR’s and opened businesses

• Tariffs (taxes on imports) - necessary to protect American industry against foreign competition.

New Inventions

• Alexander G. Bell – telephone (1876)• Bell Telephone = American

Telephone and Telegraph (AT&T)• Thomas A. Edison (late 1800s)–

phonograph, light bulb, electric generator, dictaphone, motion picture. • Edison Electric Company supplied

electricity to NYC = General Electric• Trans-Atlantic telegraph cable (1866)=

instant communication between U.S. and Europe

• Italian Guglielmo Marconi (1880s)– radio• Common in American homes by

1920

Consumerism

• Clothing and shoe industry increased productivity• Automatic loom, power

sewing machine, cloth cutters• Standard sizes led to buying

“off the rack”• Department stores allowed

people to shop for goods at one place• Those in rural areas could

purchase by mail-order catalogues – Sears and Roebuck; Montgomery Ward

Railroads

• Gov’t encouraged building of RR’s by offering land grants.

• Chinese laborers were hired to help build the RR’s.

• Transcontinental RR was completed in 1869 in Utah.

Railroads (con’t)

• Smaller RR’s - consolidated into larger systems.

• Cornelius Vanderbilt – (1869) merged 3 RR lines to offer direct rail service from NYC to Chicago.

• 1883 – country divided into 4 time zones to aid in RR scheduling.

Big Business

• By 1900, large companies dominated the economy.

• Stockholders owned shares of the company called stock.

• As companies grew, trusts formed.

• Trust - combination of corporations to reduce competition.

• Led to a monopoly - one company gaining control of the entire market for a good or service

Andrew Carnegie

• A poor Scottish immigrant, he became the leader of the steel industry.

• Bessemer process -manufacture stronger steel for less cost.

• Carnegie Steel was successful because of vertical integration – owning all the resources needed to produce a product.

Carnegie Steel

Wholesale/RetailOutlets

Steel Mills

Shipping

Iron ore andCoal mines

U.S. Steel Corporation (Carnegie)

John D. Rockefeller

• Made millions in the oil business. • Formed the Standard Oil Trust• Used horizontal integration – combined

many smaller companies in the same business into one large corporation.

Standard Oil

Independent OilRefinery

Independent OilRefinery

Independent OilRefinery

“Growing the American Beauty Rose”

From a speech by Rockefeller (“Reck-a-fellow”) in which he stated:

“"The American Beauty rose can be produced in all its splendor only by sacrificing the early buds that grow up around it.”

Robber Barons vs. Captains of Industry

Two views of big business:1. “Robber Barons”

(negative) – destroyed small companies, charged high prices, exploited workers, corrupt.

2. “Captains of Industry” (positive) - organized new industries, provided better services, improved quality, were philanthropic.

New Ideas

• Andrew Carnegie – Gospel of Wealth – wealthy should use their resources to aid society through philanthropy.

• Charles Darwin – On the Origin of Species (1859) – theory of evolution through “natural selection” and “survival of fittest” challenged traditional religious views of creation

Social Darwinism

Social Darwinism - “survival of the fittest in society” supported laissez-faire and pure capitalism

Setting the Scene….

• 1860-1900 – 14 million immigrants came to the U.S.

• Capitalize on industrialization• Men, women, children all

worked• By 1890, 75% of wealth held by

9% of population• Some turned to socialism:

• Economic/political philosophies should favor the public

• Majority of nation’s wealth should be held by the public, not private individuals

Workers

• Laborers worked long hours, little pay, bad conditions, no benefits.

• To fight for rights, organized labor unions – united all workers within an industry.

Companies hated unions!

• Employees often forced to sign yellow-dog contracts (not be in union).

• People in a union or on strike often fired and put on a blacklist – list of troublemakers.

• Scabs (replacement workers) and lockouts used to break strikes.

Labor Unions: Knights of Labor (1870s)

• First nationwide industrial union

• Led by Terrance Powderly

• Both skilled and unskilled workers

• 8-hr. workday• Equal pay for

women• End to child labor• Unsuccessful –

untrue reputation for violence; unskilled easily replaced

Labor Unions: American Federation of Labor (AFL) - 1886• Trade union – skilled workers only• Leader was Samuel Gompers• Get companies to accept unions• Push for closed shop – only hire union members• “bread and butter” issues: 8-hr. workday, better

conditions

Great RR Strike: July 1877

• Pittsburgh, PA - Baltimore and Ohio Railroads cut wages.

• Strikers and rioters attacked RR property.

• President Rutherford B. Hayes sent in troops to stop strikers

Haymarket Square – May 1886

• Workers in Chicago on strike for 8-hour work day. • Anarchists in crowd threw a bomb, killing dozens. • American public began viewing unions as violent

radicals.

Homestead Steel Strike - 1892

• Homestead, PA• Carnegie Steel employees on strike to protest wage cuts. • Henry Frick (Carnegie’s manager) called in Pinkerton

Agency to put down strikers.

Pullman Palace Car Strike - 1894

• Chicago, IL• Led by Eugene Debs and American

Railway Union• Employees of Pullman Palace Car

company went on strike to protest wage cuts.

• President Grover Cleveland sent in troops to ensure no violence occurred.

• Court issued an injunction, forcing strikers to stop because it brought nation’s RR’s to a standstill.

• Debs arrested for ignoring injuction• Set precedent for court injunctions;

hurt union efforts.