Section 1: The Expansion of Industry, Pages 228-251 A NEW INDUSTRIAL AGE U.S. Industrialization, 1870-1900 In the 1860s the U.S. lagged behind Great Britain, France, and Germany in industrial output. By 1900 the U.S. had moved so far into the lead that factories in the U.S. produced more than all THREE of the European leaders combined? How and why did this rapid change occur? Why did the U.S. industrialize so rapidly between 1870 and 1900? 1. America had abundant natural resources: coal, iron ore, oil, timber, rivers 2. Large and growing labor supply (workers) 3. Widespread faith in capitalism 4. Federal government and legal environment promoted the growth of big business 5. A surge in technological innovation 6. The nation had a group of talented and ambitious entrepreneurs along with a tradition of hard work and an adventurous American spirit 7. An expanding domestic marketplace Coal Miners How did Edwin L. Drake contribute to industrialization? He was the first to use a steam engine to drill for oil. Led to a boom in the oil business in the U.S. Oil was used for kerosene to light homes and later for automobiles. Oil Fields in Pennsylvania Kerosene Lamp What was the Bessemer process? Bessemer process was a way to remove air pockets from iron to produce steel. ***Steel was used for Railroads Bridges (Brooklyn Bridge) First Skyscrapers (Cities grew) Farm Machinery Barbed wire (fenced in the West) Small Appliances Steel Vide0: Steel and Skyscrapers Story of Us , Disc 2 Cities 12:30, Edison at 35:00 http://www.cleanvideosearch.com/media/acti on/yt/watch?videoId=1Lw9Px59gsY&name=A merica%3A+The+Story+of+Us+-+E07++Cities&uploadUsername=reuptakes&hitCou nt=2788 What inventions of the time changed the way people lived and worked? Light bulb Electricity Telephone Typewriter Refrigerated railroad cars EalexanA Thomas Edison What contributions did Thomas Edison make? 1. He perfected the light bulb 2. He set up the first research lab at Menlo Park 3. He helped design a system to distribute electricity GE: Revenue: $168.3 billion No. of employees: 300,000 How did the light bulb and electricity transform American life? Americans no longer worked by the sun Factories and businesses can operate 24 hours a day Electric street cars allowed people to travel faster Factories could produce goods faster and cheaper Video Thomas Edison Story of US Disc 2 Cities 34:00 What led to a revolution in communication in the U.S.? Alexander Graham Bell invented the telephone Americans could communicate faster and over longer distances Led to a worldwide communications network that changed the way people worked and lived Alexander Graham Bell (1876) U. S. Patents Granted 1790s 276 patents issued. 1990s 1,119,220 patents issued. Technology and New Inventions included…. Ice Machine Refrigerated railroad car Automated loom Mass produced shoes Standard sizes were developed from measurements taken from Union soldiers during the Civil War. Next: The Age of Railroads THE AGE OF THE RAILROADS CHAPTER 6, SECTION 2 Page 236-240 Question: What name would you give to the present age? What was the Transcontinental Railroad? • A Railroad that connected the West to the East • Central Pacific (began in CA) Union Pacific railroads connected at Promontory Point, Utah • Completed 1869 1 Foot a day How did Railroad Expansion Change American Life? Cities and towns grew, the West was settled Business corruption led to government regulation of railroads Standardized time—times zones were set up Better diets and cheaper goods for Americans Industry (factories) spread across the nation Americans traveled more LINKING THE NATION Standardized time (Time Zones) 1883 Railroad companies set up time zones to manage the train schedule 4 time zones in the U.S. Quickly adopted by other businesses ***Americans began to work and live by the clock Pullman Company Manufactured sleeper cars for trains Owned by George Pullman Pullman, Illinois was a town built to house company workers Luxury Travel Tourism in the West Reasons for Government Regulation of Businesses (1870-1900s) Some businessmen were corrupt Railroads impacted the entire economy Monopolies hurt the consumer (higher prices) What was the Credit Mobilier Scandal? Construction Company hired to lay tracks -Purpose: to steal railroad money for its shareholders -Stole $23 million -An Example of corrupt business practices of some companies Which laws were adopted to give the government more power to regulate the railroads? (1870-1900 Granger Laws –to set railroad fares Munn v Illinois court case Sherman Antitrust Act Interstate Commerce Act Cornelius Vanderbilt Takes on His Competitors: 9:00-19:00 What was Munn v Illinois, 1877? Supreme Court case States won the right to regulate the railroads Farmers and other consumers benefitted from regulation of fares What was the Interstate Commerce Act, 1887? Purpose: to lower railroad rates Stated the federal government had the right to regulate businesses (railroads) Set up the Interstate Commerce Commission (ICC) Advantages of Railroad Expansion (1877-1890) Travel across the country was faster and safer Goods traveled faster and cheaper to consumers Connected markets and spurred settlement of the West Supported economic growth Time zones were established Disadvantages of Railroads (1877-1890) Farmers resented railroad companies because they controlled shipping fees Some railroad owners were corrupt in abusing their power Workers were sometimes overworked and underpaid Carried more settlers West and led to decline of Plains Indians Stanford University (Leland Stanford) Vanderbilt Chapter 6 A New Industrial Age , Section 3, Pages 241-249 SECTION 3: THE RISE OF BIG BUSINESS Bill Gates, Harvard drop out, tech genius, and founder of Microsoft. Can a corporation have too much power and control in one industry? 4 Industrialists of the late 1800s Andrew Carnegie—steel John D. Rockefeller –oil J.P. Morgan—banking and U.S. Steel Cornelius Vanderbilt— railroads Video Series on History Channel: Men Who Built America http://www.history.com/shows/men-whobuilt-america/videos/the-men-who-builtamerica-andrew-carnegie Andrew Carnegie “Rags to Riches” story Grew up poor in Scotland Became rich in steel industry He used vertical and horizontal integration to increase profits He built one of the largest steel companies in the world Carnegie believed he should give most of his fortune to society . He gave away 90% of his money before he died to libraries, education foundations, and research Carnegie Mellon University Carnegie Hall What are 2 Ways to Organize a Business for Higher Profits? 1. Horizontal Integration –combining many firms engaged in the same type of business into one large corporation 2. Vertical Integration-a company owns all the different businesses on which it depends including resources, manufacturing, and distribution (page 242) Draw examples of vertical and horizontal integration in your notes Why were some men so successful? Ask Charles Darwin What was the philosophy of Social Darwinism? 1. Argument the wealthy used to explain their success 2. Based on the research of Charles Darwin: On the Origin of Species 3. Survival of the Fittest in nature and in business—the best, the strongest will survive and be successful John D. Rockefeller In 1913 he became world’s first billionaire. He was ruthless, but also a great philanthropist. He gave over $531 million to medical research, black educational institutions, and the University of Chicago. J.P. Morgan Made a fortune in banking Bought Andrew Carnegie’s steel business Formed U.S. Steel Cornelius Vanderbilt After the Panic of 1893, railroads will undergo consolidation. By 1890 seven companies controlled most of the country’s railroads. MOVIE Cornelius Vanderbilt home in New York City Vanderbilt Mansion NOTES!!!! JP Morgan Bank Still a force in the industry How did industrialists gain more control over their industries and limit competition? Formed Trusts Set up Holding Company Set up Corporations Created Monopolies Trust-one person controls another person’s property. Business owners formed trusts because monopolies were illegal. Monopoly When one company achieves control of the entire market Advantages of Monopolies Economies of scale--large efficient businesses could make produce goods faster and at a cheaper cost Disadvantages of Monopolies Too much power to control and industry and set costs and control supply TODAY = OPEC (Organization of Petroleum Producing Countries) What is a Corporation? An organization owned by many people but treated by law as though it were a single person. Stockholders own the corporation Corporations can raise money for large projects while limiting risk U. S. Corporate Mergers New York Stock Exchange, 1792 New York Stock Exchange WSJ: Establish in 1882 to spread financial news How did they sell new products in the late 1800s? 1. Advertising Magazines and newspapers 2. Mail order Catalogs Sears Montgomery Ward 3. Department stores and chain stores Woolworth’s Department Store Oldest continuously running department store in the South. CHAPTER 6 SECTION 3: INDUSTRIALIZATION THE RISE OF UNIONS Share of World Manufacturing Essential Question Industrialization increased the standard of living and the opportunities of most Americans, but at what cost? Sherman Antitrust Act (1890) Government declared trusts illegal The government was trying to rein in the power of big business The law was hard to enforce In the late 1800s, frustrated workers organized unions Working Conditions, 18701900 Machines replaced skilled workers Workers performed same task over and over Workplace was dangerous and dirty Children and women worked for low wages Breaker Boys photographed by Lewis Hine MOVIE Bobbin Boys photographed by Lewis Hine Boys on the Street photographed by Lewis Hine Girl in Factory by Lewis Hine FACTS Children sometimes worked 14 hours a day for less than 50 cents a day. In 1899, women averaged $267 a year, men $498 year and Andrew Carnegie made $23 million with no income tax. “It will be a great mistake for the community to shoot the millionaires, for they are the bees that make the most honey, and contribute most to the hive even after they have gorged themselves full.” ---Andrew Carnegie Labor Unions 1860s-1900s Workers organized for better working conditions and higher wages Craft unions(trade unions) included skilled workers Industrial unions Plumbers joined the Knights of Labor Haymarket Riot, 1886 Riot in Chicago in 1886 A bomb was thrown, shots were fired, 7 policemen and 4 workers were killed Anarchists were blamed and 8 were arrested and 4 hanged One of the men arrested was a member of the Knights of Labor Great Strike of 1877 (Railroads) 80,000 workers strike across the country Destroyed millions of dollars in property President Hays sent in federal troops (military) to end the strike Over 100 people died American Federation of Labor AFL, wanted 8 hour day Trade union of skilled workers Leader –Samuel Gompers Wanted a shorter work week and higher pay Closed shops—where companies could only hire union members Samuel Gompers Leader of the American Federation of Labor Focused on collective bargaining— negotiations between labor (workers) and management to reach an agreement International Workers of the World IWW or “Wobblies” Made up of radical unionists and socialists Iron & Steel Production Eugene V. Debs Ran the American Railway Union and ran for president as a socialist Socialist-an economic and political system based on government control of business and property and equal distribution of wealth Pullman Strike, Illinois, 1893 American Railway Union Leader—Eugene V. Debs Pullman Company –Pullman rail cars Economic depression of 1893—wage cuts Attached U.S. mail cars to Pullman cars to break up the strike. It was a federal offense to stop delivery of the mail. Homestead Strike Carnegie Steel –Pittsburg Pullman Strike BR: Labor Day Holiday MOVIE In September 1892, union workers in New York City took an unpaid day off and gathered in Union Square to support the holiday. 1894 - President Cleveland made a campaign promise to enact the holiday to win votes and he followed through with his promise. Should we honor U.S. workers with a holiday? Why or why not? Triangle Shirtwaist Fire Fire in in New York City where 146 female workers died Led to changes in local labor laws for women and children Video: The Story of Us What is Marxism? Karl Marx, German philosopher Das Kapital The Communist Manifesto , 1848 Government ownership of property Wealth and property evenly divided What is anarchism? Anarchists believe government is not needed Some believed in violence to overthrow the government . From 1865- 1897 the United States experienced DEFLATION What is deflation? Deflation: a rise in the value of money. Prices of goods fall. In other words, you can buy MORE GOODS with the same amount of money. Companies cut wages BUT you could buy more with your money…..so workers were better off, BUT they did not think so……. Working Women Women’s Trade Union League– the first national association dedicated to promoting women’s labor issues. Ways companies tried to prevent unionization: 1. Workers had to promise not to join unions “yellow dog contracts” 2. Fired striking workers 3. Placed names of union organizers on a “black list.” 4. Used Lockouts and strikebreakers Why Were Some Americans opposed Unions? 1. Fear of Marxism 2. Rise of Anarchism in Europe 3. Unions grow in Europe 4. European immigrants brought some of these ideas with them to America 5. Nativism-anti-immigrant feelings Why was it hard to form a union? 1. Only a small number of workers belonged to unions 2. There were no laws to protect workers 3. Workers did not agree on goals 4. Government sided with business 5. Violence turned public opinion against unions 6. Workers moved often BIG QUESTIONS…SO WHAT???? 1. Should the government take an active role in regulating business and industry? 2. What are the rights of workers and how far should the government go to protect those rights? 3. Which economic system best promotes prosperity and national health? Capitalism? Socialism? Communism? 4. Do individuals and businesses have a moral obligation to promote the good of society as a whole?? CHAPTER 10 URBANIZATION THE RISE OF CITIES The automobile transformed American life 1932 New York City Photograph by Lewis Hine Wright Brothers TRADE UNIONS As industrialization spread, craft workers formed TRADE UNIONS . TRADE UNIONS were limited to people with specific skills . INDUSTRIAL UNIONS United ALL workers –both skilled and unskilled– to ask for higher wages and better working conditions. Owners of large corporations opposed these unions The Knights of Labor First nationwide industrial union Accepted all workers including women and African Americans, skilled and unskilled Leader—Terence Powderly Declined after the Haymarket Riot in 1886 Andrew Carnegie Richest man in the world in 1901. He sold his steel company, which would later become US Steel, and spent the rest of his life giving away $350 million to fund public libraries, education, technology , and promote world peace. Story of Us Cities Steel production