From the Orange Book Rise of industrialism in the United States and the interplay of business and politics Railroads encourage growth ◦ Local reliable travel, westward expansion possible ◦ Gov’t subsidies and land grants such as the Pacific Railway Act Government makes land grants/loans and subsidies to railroads to help them build ◦ Helped settle the west(Homestead Act) ◦ Develop the country and increase trade 1869 Central Pacific: (west) Chinese immigrants Union Pacific: (east) Irish immigrants, Civil war vets Dangerous job (accidents, disease) Were expected to continue to give up their lands Government moved many to reservations Some laws passed to assimilate the Natives- “act white” 3 Factors leading to 2nd Industrial Revolution: 1.Natural Resources 2.Creative Ideas- government supported (patents) 3.Growing Markets- increase in labor (immigration, migration) Coal resources in U.S. Black Gold ◦ Edwin L. Drake: uses steam engine to drill for oil (1859) Bessemer Steel Process ◦ Put air into iron to remove carbon steel ◦ Stronger, durable, rust resistant New uses for steel ◦ Railroads, barbed wire, farm machines ◦ Construction: Brooklyn Bridge, skyscrapers Thomas Edison ◦ 1880: patents incandescent light bulb ◦ Creates system for electrical production and distribution Electricity changes business Becomes available to homes ◦ Encourages invention of appliances (improve living) Allows manufacturers to locate plants anywhere (no longer dependent on water) Christopher Sholes Typewriter, 1867 Alexander Graham Bell Telephone, 1876 Iron, coal, steel, lumber, glass industries grow to meet demand from railroad building Railroads link isolated towns, promote trade & interdependence New towns grow along railroad lines RRs connected U.S. but time was still determined by towns 1883 U.S. towns adopt time zones George M. Pullman ◦ Build railcar factory on Illinois prairie (1880) ◦ Provides housing, doctors, shops, sports field for workers ◦ Company tightly controls residents to ensure stable work force (no drinking, loitering) Railroad Abuses ◦ Farmers angry over being overcharged for transportation prices Granger Laws ◦ The Grange (a farmers’ organization) presses for laws protecting farmers’ interests ◦ Sets principal that federal government can regulate private industry to benefit public interest Public outrage leads to Interstate Commerce Act of 1887 ◦ Federal government can supervise railroads ◦ Establishes Interstate Commerce Commission (ICC) Cars John D. Rockefeller Standard Oil Company Andrew Carnegie U.S. Steel Robber Barons: business men/bankers who dominated industries and built up huge fortunes Cornelius Vanderbilt Railroads J.P. Morgan Banking/Finance South recovering from Civil War, hindered by lack of capital ($) North owns 90% of stock in RR Duke family ◦ Duke Power, Duke University, American Tobacco Compared to Bill Gates Carnegie’s worth: Rockefeller’s worth: $298.3 billion $663.4 billion http://www.forbes.com/lis ts/2010/10/billionaires2010_The-WorldsBillionaires_Rank.html Gate’s worth: $53 billion 125,000 acres! 6 years to complete 4 acres of floor space -250 rooms-34 bedrooms-43 bathrooms-65 fireplaces-Pool, gym, and bowling alley in the basement- Biltmore House Clothing of the 1880s “What a funny little government” “Gospel of Wealth” ◦ Carnegie’s ideals on how the wealthy should use their money Carnegie says: rich should be involved with philanthropy- describes the danger of allowing large sums of money to be passed into the hands of persons or organizations ill-equipped mentally or emotionally to cope with them. -the wealthy entrepreneur must assume the responsibility of distributing his fortune in a way that it will be put to good use, and not wasted on frivolous expenditure -Urges the rich to administer surplus wealth for the good of the people 1. 2. John D. Rockefeller became a magnate of the: a. b. c. d. Oil industry Steel industry Railroad industry Cotton industry a. b. c. d. Andrew Carnegie Buck Duke J.D. Rockefeller J.P. Morgan Which of the following men became rich and powerful as a finance capitalist who exerted influence over a number of different types of businesses? Carnegie searches for ways to make better products more cheaply He hires talented staff, offers company stock, promotes competition Vertical Integration ◦ Buy out suppliers to control materials Horizontal Integration ◦ Merge with competing companies Carnegie controls almost entire steel industry Vertical Integration Horizontal Integration Steel Industry Steel Plant Iron Ore Steel Co. A U.S. Steel Steel Co. B Best-adapted will survive (survival of the fittest) Economists used Social Darwinism to justify laissez faire (government shouldn’t interfere with business) Social Darwinism ideals: the rich were the natural rulers – justified neglect of the poor in the name of “race progress” – emphasis on competition Sherman Antitrust Act (1896) ◦ Made trusts illegal if they interfere with free trade ◦ Not enforced: prosecuting companies difficult “The Bosses of the Senate” Exploitation and unsafe conditions unite workers across regions ◦ 12 hour days, 6 days a week ◦ Repetitive, mind-dulling tasks ◦ No vacation, sick leave, injury compensation Most family members work (including children) Women/children had jobs that require few skills and received lowest pay Child Labor National Labor Union (NLU)(1866)- first large scale national organization ◦ 1868 NLU gets Congress to give 8 hour work day to civil servants Local chapters of NLU reject blacks Colored National Labor Union forms Noble Order of the Knights of Labor1869 ◦ Open to women, blacks, unskilled ◦ Support 8 hour work day, equal pay, arbitration Skilled workers Samuel Gompers helps found American Federation of Labor (AFL) 1886 Uses collective bargaining for better wages, hours, conditions Strikes successfully, wins higher pay, shorter workweek Industrial unions include skilled, unskilled workers in an industry Eugene V. Debs forms American Railway Union, uses strikes Believed gov’t should be more involved in the economy- gov’t should regulate and make more decisions about what and how items are produced Wealth should be shared Some labor activists turn to socialism ◦ Wanted government control of business ◦ Wanted equal distribution of wealth Industrial Workers of the World (IWW)1905 ◦ Organized by radical unionists, socialists (included African Americans) ◦ Industrial unions gave unskilled workers dignity, solidarity Great Strike of 1877 ◦ Baltimore & Ohio Railroad strike spreads to other lines ◦ Governors says impeding interstate commerce ◦ Federal troops intervene Haymarket Affair 3,000 gather at Chicago’s Haymarket Square, protest police brutality Violence ensues, 8 charged with inciting riot, convicted Public opinion turns against labor movement Homestead Strike ◦ 1892 Carnegie Steel workers strike over pay cuts ◦ National Guard reopens plant ◦ Steelworkers don’t remobilize for 45 years Pullman Company Strike ◦ Pullman lays off 3,000 and cuts wages but not rent ◦ Pullman refuses arbitration ◦ Federal troops sent ◦ Most workers fired, many blacklisted Farmers were in huge debt: ◦ Price of crops while price of RR transportation Greenbacks (paper currency) taken out of circulation after the Civil War ◦ Farmers wanted more money in circulation Front Back Farmers joined to form the Grange ◦ Oliver Hudson Kelley fought for farmers ◦ http://www.nationalgrange.org/ Populist Party (“People’s Party”) Populism ◦ Movement giving power to the common people ◦ Impact: realized true change must come through political power Circulation of greenbacks Bimetallism- use gold and silver to back the currency Increased government regulation of business (railroads/warehouses) 8 hour work day Graduated income tax Election reform ◦ Direct election 1. Which of the following BEST describes reasons for joining the grange? a. b. c. d. The grange provided a means by which farmers could protect their interests collectively The grange was a political movement which farmers and low income workers felt represented their needs The grange gave a voice to railroad industrialists who felt unfairly criticized by angry farmers The grange provided a place where farmers could fight to protect laissez-faire economics Bimetallism (currency backed by gold AND silver) Would create more money Stimulate economy Mostly Democrats Silverites Gold would create more stable/expensive money Mostly Republicans Gold Bugs 1. Which of the following was a problem faced by farmers in the late 1800s? a. b. c. d. Falling railroad prices interfered with their ability to ship products. High farm prices caused financial problems because few people could afford their products Overproduction of agricultural products led to falling farm prices and made it hard to make a profit Because there was too much money in circulation it was impossible for farmers to get the price they needed for their goods •William McKinley Republican •William Jennings Bryan Democrat (endorsed by Populists) Populism collapses but proves that the powerless (common person) can organize and have political impact Why did Populism appeal to the common man? What is bimetallism and why did farmers support it? “You come to tell us and tell us that the great cities are in favor of the gold standard. I tell you that the great cities rest upon these broad and fertile prairies. Burn down your cities and leave our farms and your cities will spring back up again as if by magic. But destroy our farms and the grass will grow in the streets of every city in this country…” What point is Bryan trying to make about the importance of farms in the U.S.? “If they dare to come out and in the open defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.” What image is Bryan trying to create and why? Political Cartoons What does this image convey?