Chapter 24
AP Notes

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Post Civil War Inventions
Raw materials
Growing population
New sources of power
Government policies
Improved transportation and communication
Effects of the Civil War

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Introduction of machinery and a factory system
New inventions and inventors
◦ 1790- 1860 US Patent Office – 36,000 patents
◦ 1860-1890 – U.S. Patent Office – 500,000 patents

Thomas Edison
– “The Wizard of
Menlo Park”

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High birth rate
Immigration
1800s – pop. doubled every 25 years
1800 – 5 million
1900 – 76 million
Provided sufficient labor and demand for consumer goods

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Granted land and cash subsidies to rail road builders
Levied high tariffs to protect manufacturing
Laissez-faire policies

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Industry prospered
Emergence of a millionaire class
Liquid capital –people had money to invest and spend
Increased mechanization
Government now in the hands of the Republican Party with probusiness policies

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Key to industrial growth
Created a national market
Allowed people to settle the Great
Plains
Maker of millionaires
Demand for steel – spurred iron and steel industries
Creation of 4 time zones

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Railroad production grew
Deadlock over route for transcontinental railroad broken
◦ Union Pacific Railroad – west from
Omaha
◦ Central Pacific RR from California
◦ 1869 – met at Odgen, Utah

Meeting at Promontory Point – Utah -
1869

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Northern Pacific RR – L. Superior
 Puget Sound
Atchison, Topeka, and Santa Fe – through southwest
Southern Pacific – New Orleans
 San Francisco
Great Northern – Duluth  Seattle

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Subsidies
Loans
Land grants
◦ 155,504,994 acres
◦ along routes – alternate one-mile sq. sections
◦ choicest sections closest to the rail lines

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Railroads expensive to build
West was thinly populated – risky investment
Military and postal needs
Encourage population to move into Great
Plains
Tie nation together economically

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Nation united physically
Raw materials from the West transported East
Manufactured goods from the East transported West
Stimulated mining and agriculture in the West
Stimulated growth of cities
Stimulated immigration

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Corruption – Credit Mobilier Scandal
“Stock watering”
Bribed judges and legislatures – free passes
Natural monopoly
Pools
Rebates
Charge higher rates for short haul than long

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Being “railroaded”
Farmers particularly at the mercy of railroads
Midwestern legislatures tried to regulate railroads – unconstitutional (
case) – states can not regulate interstate commerce

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Prohibited rebates
Required the railroads to publish rates openly
Outlawed charging more for short haul
Forbade discrimination against shippers
Established the Interstate Commerce
Commission to enforce law
1 st attempt by Washington to regulate big business in the public interest

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Competition was wasteful
Vertical integration – Carnegie Steel
Horizontal integration – trusts –
Rockefeller and Standard Oil Company
Interlocking directorates – J.P. Morgan and banking

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Heavy industry – capital goods
Foundation for tall buildings
 railroad industry
Bessemer process made cheap steel possible
By 1900 U.S. producing as much as Great Britain and Germany combined

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Carnegie Steel
“Watch the costs – profits will take care of themselves”
Vertical consolidation
1900 - $40 million profit
Philanthropist

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Carnegie’s philosophy
The wealthy are entrusted with the public wealth and must use is wisely
Gave away the bulk of his fortune - $350 million
◦ Libraries
◦ Church organs
◦ Schools

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“Banker’s Banker”
Wall Street banker – financed railroads, insurance cos., and banks
Bought Carnegie
Steel for $0.5 billion
Created U.S. Steel –
1 st $1 billion company

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1870 – organized
Standard Oil
Company
1877 controlled
95% of nation’s oil
Forced competitors out of business –

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Survival of the fittest
The wealthy are rich because they worked hard and are the product of natural selection
The poor need to work harder – pull themselves up by the
“bootstraps”

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Employed thousands of workers
Increased availability of goods
Raised the standard of living
Built factories, raised productivity, expanded markets
Philanthropists

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Built fortunes stealing from the public
Drained the country of natural resources
Corrupted public officials to interpret laws in their favor
Drove competition out of business
Paid meager wages and forced workers to work under dangerous and unhealthy conditions

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Concern – monopolies could hurt the consumer and worker
Sherman Anti – Trust Act of 1890
◦ Outlawed trusts and other combinations in restraint of trade
◦ Vague and not well enforced
◦ Supreme Court usually favored big business

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1900 produced smaller % of nation’s manufactured goods than before C.W.
RR gave favorable rates to northern industry in competition with southern
Textile mills
◦ Close to the source of raw materials
◦ Cheap labor

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Economy dominated by a few large companies – Standard Oil, U.S. Steel, General
Electric, Swift and Armour, AT&T,
Westinghouse, and DuPont
Strains on the economy  pressure for foreign trade  search for markets  imperialism
1900 1/10 of the population owned 9/10 of the wealth

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Custom made/small workshop  unskilled/impersonal factory work
Controlled own situation/set hours, pace, output  impersonal, routine work on a set schedule

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12 hrs/day
6 days/week
Child labor
Unsafe conditions – accidents were a normal risk in working
Management fought safety and health standards

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1890 – Richest 9% owned 75% of the nation’s wealth
Average working family only earned a few hundred dollars/ year
In working class family, it was necessary for most members to work for survival
Wealthy lived ostentatiously

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A political and economic theory of collective government ownership of factories and property
Goal – fair distribution of wealth
◦ Equality
Never a strong movement in US
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Karl Marx
◦ Criticized capitalist economic system and predicted its eventual overthrow by the working class

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Contrary to American ideals of free enterprise and private property
Most Americans did not support socialism
However, growing discontent among the workers fueled socialist rhetoric
Union movement was an alternative

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Organized by trade
Helped members during hard times
Became a voice for worker demands
◦ Shorter workdays
◦ Higher wages
◦ Better conditions
◦ Weak in the beginning

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Immigration – cheap labor
Ethnic and racial divisions
Religious divisions
Skilled vs. unskilled
Divided by crafts
Middle class fears of radicalism

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Organized all wage earners
Goals:
◦ Equal pay for equal work
◦ Graduated income tax
◦ End to child labor
◦ Cooperative ownership of factories
Strategies – restrict immigration and strikes

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Success:
◦ Won strike against Jay Gould’s Wabash RR
◦ 600,000 joined
Failure:
◦ Too big and diverse
◦ Political goals
◦ Later strikes unsuccessful
Leadership: Terence Powderly

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Loose federation of skilled trades
Goals:
◦ Bread and butter issues – wages, hours, safety
◦ Union recognition and closed shop
◦ Collective bargaining
Leadership: Samuel Gompers
Success: Steady – conservative – still exists today

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Great Railroad Strike of 1877
◦ Baltimore and Ohio RR
◦ RR wages cut 10% and workers cut
◦ Riot in Pittsburgh
 state militia called in
 10 people killed
 Strikers fought back
◦ President Hayes sent in federal troops to put down the strike
◦ Set precedent – govt represses labor unrest

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Haymarket Square -1886
◦ Workers wanted 8 hour day
◦ Strike breakers were brought in and a fight ensued
◦ Police broke up fight and several were injured
◦ Anarchists held protest rally where a bomb was thrown
 Police were killed/wounded and fired into crowd
 Dozens of deaths
Homestead Strike – 1892
◦ Union negotiated a new labor contract with Carnegie Steel,
Carnegie went to Europe.
◦ Carnegie’s partner (Frick) cut wages and a strike ensued
◦ Frick called in Pinkertons, strikers fired on them
◦ Governor called in troops to end violence
◦ Union acknowledges loss

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Pullman Strike – 1894
◦ Pullman built a company town (owned everything)
◦ During Depression, Pullman cut wages but did not reduce living costs
◦ Workers protested and were then fired
◦ Workers went on strike
◦ Pullman shut down plant, RR union refused to haul any
Pullman cars and strike spread (interrupted mail)
◦ Govt sends in troops (cites Anti-Trust law – restraint of trade)
Middle class Americans saw violence, radicalism, unions and immigration as all related.