Industrialization

American Industrialization

• Machine production rather then by hand• High involvement of population in production• Production in large factories• New technology and innovations• Specialization in economics

• Expanded markets, no longer localized• Growth in nationwide transportation based in railroad• Money saved for investment • Steady increase in urban centers (cities)• Growth in big business

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America After:

• Population shift away from rural communities and into urban centers– People move closer to factories

• Shift from cottage industry to factory production– Assembly line

• National business rather then local business– Trusts and monopolies replace partnerships

• Specialized work changes– Machine can do what artisan and craftsmen used to do

and for cheaper– One man to do what it used to take ten to do.

Business at the turn of the Century

• Proprietorships - small business owned by individuals or families.

• Partnerships – Businesses owned by two or more individuals .

• Trusts – a group of companies that turn control over to a board of directors.– Also known as combinations

• Monopolies – a trust that gains exclusive control over an industry.

Bigger = Better

• Proprietors and partnerships were not large enough to control the spread of large industry

• Could not afford to support expensive ventures such as railroads, steel, or oil.

• Corporations – money is raised by the selling of shares – Stockholders receive

shares of the profits• Ability to raise huge sums

of money to finance business

• Limited Liability - Stockholders don’t assume company debt

• More stable - corporations exists no matter who owns the stock

The Government

• With laissez faire government, no control over trusts and monopolies

• Government actually taxed foreign goods to help promote American sales

• Attempts to control monopolies resulted in the Sherman Anti-Trust Act, but was to difficult to enforce.

John D. Rockefeller• Early founder of Standard

Oil – created the first American trust

• Used vertical integration to make himself more competitive– He acquired the companies

that supplied him with the supplies he needed to be competitive

• Used horizontal integration to expand his business– One company’s ownership

of other companies in the same business.

Andrew Carnegie – America’s richest man!

• Scottish immigrant who established Carnegie Steel Company

• Used the concepts of buying and producing in bulk to make money– Economics of scale

• Used vertical integration• Combined all his

companies into one corporation, and then could sell steel for less then his competitors because he owned every step of the process

Workers

• Millions of workers were needed:– Production in factories– Acquisition of raw materials– Transportation of goods

• Women and African Americans met with especially fierce inequality– 1891 – 7400 Southern blacks have industrial jobs

• Remember – there were 4million freed slaves in 1865…

• Unskilled labor had dirty, disgusting jobs

• Women and children worked too – out of necessity– Husbands could not bring home enough money to appropriately care

for their families.

Owner opinion of labor

• Employees were inputs into the product– 6 days a week, many hours, bad conditions, little pay

– no humane considerations

• Owners felt no responsibility

• Company towns – paid in scrips– Similar to sharecropping

How to combat such injustice?• Knights of Labor

– Open to workers traditionally excluded from other unions– Women, men, skilled, and unskilled, and later, African

Americans too…– BUT NEVER CHINESE WORKERS

» Fits in with Chinese Exclusion Act – prejudice – need based entry

– Mother Jones – labor leader

• KOL were looking for • 8 hour days• Equal pay for equal work• End child labor

Great Upheaval

• Workers needed rights – huge wage cuts • In response, 1886 – 1500 strikes involving

400,000 workers

• Chicago workers – Haymarket Square – organized by anarchists -met with violence when a bomb exploded

How did companies fight back?

• Blacklists

• Yellow Dog Contracts

• Lockouts

• Strikebreakers

In response to the Knights’ cause

• American Federation of Labor (AFL) was created– Restricted to skilled labor

• Disassociate themselves with the trouble makers

– Samuel Gompers (the guy from the Triangle Shirtwaist factory packet)

Famous Strikes

• Homestead – Strike – lockout / strikebreakers (“Detectives”)

- violence

• Pullman– Company town prices went up, wages went

down, workers boycotted, trains were hooked up to mail cars, fed gov forced boycotts end!

Rural Progressivism

• Problems farmers faced:– Overproduction shrank profits and demand, prices

continue to drop

– Families bought more land to produce more (to make more money) but dropped prices even more

– Families could not pay loans

– Bank repossessed their land

Why were the farmers mad?

• Everyone got something good out of the deal except the farmers:– Cheap food

– Eastern banks made out quite well

– Which led to the creation of the …

Grange movement

• Farmers attempted to organize to help themselves – formed “cooperatives” – tried to increase profit

• Interstate Commerce Act• stopped RR from giving rebates• Created the Interstate Commerce Commission

» Random note – because of trains we have time zones…

Question of Money

• Farmers wanted more paper money (wanted inflation) - easier for debts

• Bankers wanted money backed by the gold standard – made repayment better for them – no inflation

Outcome of these Rural happenings was the Populist Party (populism)

• Farmers, labor leaders, reformers• Graduated income tax• Bank regulation• Government ownership of RR and

communication mediums• Immigration restrictions

Progressive Movement

• Increasing gap between rich and poor• Progressives were the urban populists

– Publicized the ills of industrial society!!!

• Wanted to:• Focus on urban problems• Unsafe working conditions• Bad sanitation• Corrupt political machines

Progressive Ideals

• Social justice – federal graduated income tax

• Different view of social darwinism

Reforms

• Inspired by mass-circulation journals:– Cosmopolitan magazine

• Muckrakers – realism!!!– Ida Tarbell – The History of Standard Oil– Jacob Riis – How the Other Half Lives– Upton Sinclair, The Jungle

• Seeking to solve some of the major social problems of the era

Reforming the workplace

• Considerations paid to:– Hours– Wages (national minimum wage – 1938)– Who was working?

• Laws were passed but they were hard to enforce

• Argument against laws:• “used 14th Amendment – “prohibits states from depriving any

person of life, liberty, pr property without process of law” – it was unfair to take away their livelihoods

Fighting for reform:

• AFL (still)– Growing in power– Fighting for closed shops (not open)

• International Workers of the World (Woblies)– Socialist – very radical – many did not like!– Bill Haywood

Societal Reforms

• Book publishing, movie production, baseball

• City planning

• Prohibition - 18th amendment – repealed in 1933

• Women’s suffrage (19th Amendment) 1920 (we’ll come back to this)

Race Related Reforms

• W.E.B. DuBois

• National Association for the Advancement of Colored People

• American Indian progressives

• Jane Addams too