Industrialization

The Rise of Big Business in America

America had abundant natural resources:

• coal

• oil

• iron ore

• water

America had new technologies

• factory system

• steam engine

• railroads and steamships

• new machines and tools

• interchangeable parts

America had good transportation and cheap labor

• canals, steamships, and railroads

• greatly improved the ability to transport both raw materials and finished products

• large families and the arrival of immigrants meant a huge population that needed work

Economic Environment

• Investment Capital: Local and International investors saw a bright future for American Industry (many investors had made their money through the old Triangle Trade)

• Laissez-Faire: the government did not get involved in setting prices and wages – the market was allowed to control this through “supply and demand” forces

Federal Government Support• High tariffs

• Gave away lands to railroad companies to promote railroad development

• Sold lands to mining companies for less than real value

• Stayed out of most of the affairs of business – allowed “free enterprise” to take place

Social AttitudesSocial Darwinism:• the ideas of “survival of the fittest” as

applied to the business community

Horatio Alger Myth:• Stories that featured the dream of a poor boy rising to become a wealthy businessman

Characteristics of big businessCorporations:• corporations are businesses that have many investors owning

shares of the business• shareholders hope to receive a share of the profits at a future time• losses are spread out to only what a shareholder owns• this increased capital investment in American industry

Trusts:• a group of corporations in a related field, such as oil, or railroads• they were later made illegal

Department Stores:• putting several small stores together under one roof – more efficient

shopping

Mail order catalogs:• Sears and Montgomery Ward opened up department store shopping

to rural areas

ROBBER BARONS

• Andrew Carnegie (steel)

• John Rockefeller (oil)

• Cornelius Vanderbilt (railroads, steel)

• JP Morgan (banking)

• Henry Ford (automobiles)

IMMIGRATION

Impact of Big Business

Why they came:• for jobs and better housing.

• visions of improved opportunities and prosperity

Where they went:

• Cities in the north (immigrants tended to settle in ethnic neighborhoods in the port city of where their boat landed)

Impact of Big Business Cont’d…

Influx of foreign immigrants• “Old” Immigration: Early 1800’s – mostly from

N & W Europe• “New” Immigration: Late 1800’s – mostly from

S & E Europe and also from Asia

Problems • crowded tenement apartment buildings • crime• corruption in political sectors

Immigration to US 1820-1990

What is an “American”?

Ellis and Angel Islands

• Immigrants coming from Europe were processed at Ellis Island in NYC

• Immigrants coming from Asia were processed at Angel Island in San Francisco

• Is America a Melting Pot (a place where cultures blend) or a Salad Bowl (a place where people retain their culture/identity but share common traits)?

• Many immigrants assimilated (blended) into American society by studying English and how to be an American citizen

Melting Pot or Salad Bowl?

Work and the Workers

• long hours (12-16 hour days)

• low pay

• unsafe conditions – machines, factories, mines

• replaceable workers

Factory Working Conditions

Child Labor• kids were used when possible because business

owners could pay them less• conditions were more dangerous to kids that

often had difficulties operating machines and working the long hours

Two wage earners

• Women began working outside the homeNew job opportunities for women

– Factories (textile factories):

• factory work for women was usually limited to textiles– Domestic:

• jobs as house cleaners, cooks, and nannies were prevalent

• usually done in homes of the wealthy, and sometimes the new middle class homes– Clerical:

• new inventions, such as the typewriter and telephone opened up new job opportunities for women

Abuses of Big Business

• Monopolies: attempts by companies to eliminate competition and “corner the market” for a certain business sector

• Influence on government: contributions to campaigns and candidates at a state and federal level in hopes to gain favorable legislation

• Anti-organized labor: government sided with management against unions at this time

• Unsafe products: companies often took advantage of lack of regulations on products

America Responds to Big Business

Populist Movement

• Farmers who wanted changes in national politics that would make their situation easier

The Grange

• originally organized as a social organization for farming families

• eventually turned into a powerful lobbying organization for pro-farmer legislation

• developed into a co-op for agricultural communities to help regulate farm product prices

The Granger Movement• pressed Congress to pass laws to regulate the railroads

and the prices they charged farmers• developed co-ops to store and distribute agricultural

products in order to better control prices of farm products

Interstate Commerce Act (1887)

• first federal government regulation of big business

• marks an end to the established concept of unquestioned “laissez-faire”

• created the Interstate Commerce Commission – monitor and regulate interstate businesses – especially railroads – and began to end the abuses in this industry

The Growth of Labor UnionsKnights of Labor

• led many general reforms: 8 hour days, end to child labor, equal pay for women

• declined in power after a few unsuccessful strikes and competition from the A.F. of L.A.F. of L.

• American Federation of Labor – led first by Samuel Gompers (1886 -1924)

• fought hard for basic rights and conditions for workers

• became very popular – but did not welcome women, immigrants, or African-Americans

Objectives of Labor Unions

• Better wages for workers

• Better working conditions: less hours and safer conditions

• Better associated benefits like health care, sick days, vacation time

Important Leaders of Labor

Samuel Gompers: early leader

of the A.F. of L.

Eugene Debs: leader of the American Railway Union organizer of the Pullman Strike

Conflict and StruggleTools of Management

• Yellow-dog contracts: owners required workers to sign oaths to not join a union

• Detectives were often hired to search out union organizers – then fire them

• Lock-outs prevented workers from working – and getting paid!

• Owners often hired replacement workers (scabs) during a strike

• Black lists: owners often shared names of troublemakers – wouldn’t hire them

Tools of Unions

• Mediation – third party representatives used to negotiate contracts

• Strikes – organized action of not reporting for work by employees

• Picket – standing near business with signs to call attention to unfair conditions

Major Strikes

Homestead (1892):• workers at a Carnegie Steel Plant in

Homestead, PA went on strike to protest a large wage cut

• management brought in security to protect the plant and continue work

• violence erupted and some people were killed and many wounded

• workers gave in and only a few of them got their jobs back

• a major setback for unions – especially in the steel industry

Pullman

• striking workers of railway-car makers clogged up the railways in much of the country

• President Cleveland sent in federal troops to keep the trains moving because they carried U.S. mail

• The Supreme Court case of U.S. v. Debs decided the federal government had a right to support the “general welfare” of the American people

Other Labor Unions (Mid-1900’s)

CIO: Congress of Industrial Organizations• organized skilled and unskilled laborers in

various industries• American Railway Union, United Mine Workers

AFL-CIO merger:• 1955 – two largest labor unions in America

merged to form an even more powerful labor organization – became largest in the world