The American Industrialization (Industrial Revolution) 1860 – 1890
*These notes are continued from Granger and Populist Mvmnts. class notes
III. Big Business + Government Policy
1. Monopolies- the situation in which one producer totally controls an industry.
a. Three ways of consolidating (monopolizing)
I.
Pooling-the attempt of 2 or more business firms to limit competition by charging
the same prices + sharing the same market. (ex. cartel)
II.
Trusts-a business organization in which several competing firms are combined
into one by the exchange of stock for trust certificates
III.
Holding Companies-a corporation that, for the sake of eliminating competition,
holds a majority share of stocks in several co.’s
2. Government Intervention
a. Early intervention (pre 1880’s)
I. Tariffs
II. Land grants
III. Patents
b. Later intervention (1880’s)
I.
Interstate Commerce Act (1887)-regulated the railroad industry and created
the Interstate Commerce Commission (ICC), that had rule making +
enforcement powers. Regulations included: Railroad rates had to be reasonable
+ just, Pools were illegal, Returning rebates to favored customers was illegal,
RR’s could not charge more for a short haul than a long one.
II.
Sherman Anti-Trust Act (1890)- The Act was to prevent business combinations
or acts that would cause restraint of trade but was a weak and vaguely written
law used to help business against labor unions by the pro-business Courts. *The
law actually aided giant corporations against labor unions. No trusts were
successfully prosecuted in 1890’s. However weak the law was the start of govt.’s
intervention in regulating business abuse.
IV.
Organization of Labor-Workers organized because of low pay + long, hazardous working
conditions (60-70 work weeks). Workers insecurity (fear of losing their jobs) b/c of
competition with women + children, farmers migrating into cities, African Americans
migrating north, immigrants, labor saving technology.
a. The Knights of Labor (1869-1890’s) “The Noble Order of the Knights of Labor” consisted of
shopkeepers, farmers, and factory workers. This was a national Union that consisted of skilled
and unskilled workers, black + white, native + foreign born---all inclusive. Their leader was
Terrence Powderly. *they sponsored the 1st Labor Day on Sept. 5, 1882 which eventually became
a national holiday
Goals: 8 hour workday, equal pay for equal work, + end to child labor..
Method: to settle disputes through arbitration-the judging of a dispute by an impartial person
and cooperatives-businesses owned + operated by workers.
*The union preferred not to use striking as a tool but the membership thought differently.
I.
Peak- (1885)-Membership was over 700,00 and forced Jay Gould, railroad
owner to give up a wage cut.
II.
Decline-(1886)- Haymarket Strike (riot)- anarchists threw a bomb that killed
police. The union was blamed and favorable public opinion toward the union
fell. Other issues that led to the decline were Skilled workers did not want to
associate with unskilled workers. Their goals were to idealistic or to political +
not focused on “bread and butter issues” like higher wages + better working
conditions.
b. American Federation of Labor (1886 – present as AFL-CIO) national union that limited it
membership to skilled workers and excluded blacks+women.. their leader was Samuel Gompers.
Goals: “Bread + butter” issues-higher wages, better working conditions, and short hours.
Methods: practical methods whatever served necessary-strikes or Collective Bargainingnegotiating as a group with employers.
I.
Peak (1900)- 500,000 skilled workers.
c. Industrial Workers of the World (IWW) “the Wobblies”-unskilled workers of a radical
union that used violent methods. They consisted of a large socialist membership. During World
War I many of their leaders were jailed for promoting strikes.
d. National Womens Trade Union League- consisted of women + minorities marginalized by
other unions. Leader: Mary Kenney O’Sullivan Their goal was to change working conditions in
sweatshops and improve wages.
V.
VI.
Radical Groups
1. Anarchists- a group who believed that the capitalist + political systems could not be
reformed + violent means should be used to end them. (ex. 1886 Haymarket bombing in
Chicago).
2. Socialists – a group opposed to capitalism but sought peaceful means to ending it. They
organized into a political party = The Socialist Party. Leader-Eugene Debs who was the
leader of the American Railroad Union (ARU) and was jailed during the Pullman strike.
While in jail he became a Socialist. He ran for U.S. President 1900 to 1920 (except
1916) and lost every time.
Violent Strikes
About every 20 years there was some form of an economic depression 1853-1873-1893(Panic of 1907)-WWI (none b/c of the war)-1930. Many of these pay cuts/strikes occur in the
midst of a depression.
1. Great Railway Strike (1877) Jay Gould owner of the B+O Baltimore + Ohio) Railroad
cut workers pay by 10%. President Hayes sent in federal troops to end the strike because
strikers + sympathizers were strong enough to fight back the State militias. The strike
started in West Va. And eventually spread to Chicago, St.Louis + Pittsburgh where
soldiers fired on rioters. Many were killed or wounded. 20,000 angry men responded to
the shooting by setting fire to the RR + causing $5 million in damages.
2. Haymarket Strike (1886) ‘Haymarket riot” – Started off as a demonstration for an 8
hour work day. In Chicago on May 3rd at McCormick reaper factory the police broke up
a fight between strikers and scabs9a negative term for a worker called in by an employer
to replace a striking laborer). A protest rally on May 4th at Haymarket Square turned
violent when someone threw a bomb at the police killing 8 officers. Police fired upon the
crowd killing dozens. The union membership was blamed (Knights of Labor) even though
8 anarchists were tried and convicted. The major effect was that public view general
strikes as violent.
3. Homestead Strike (1892) –A strike occurred when Henry Frick a business associated of
Andrew Carnegie, who was vacationing in Europe, cut workers wages. Strikebreakers
(scabs) were called in to the Homestead Steel Plant in Pennsylvania to replace the
workers. The Pinkerton National Detective Agency was called in to move the strikers and
fierce fighting broke out.
4. Pullman Strike (1894) –George Pullman invented + manufactured sleeping cars for the
RR. In 1880 he constructed a town for his workers 12 miles south of Chicago. The town
included a park, a miniature lake, schools, a theatre, a church, and paved sidewalks that
were lined with shade trees. Health + sanitation conditioned were maintained. There was
also athletic programs and a military band. Pullman held his town to high standards
which some saw as unfriendly because he held too much control over their lives. (ex ban
on alcohol). Conditions in the town turned bad after the Panic of 1893. Pullman laid off
workers + cut wages by 25%, but rent and food remained the same price. A delegation of
workers went to protest to Pullman who fired 3 of them. Workers shut down the plant .
Workers turned to the newly formed ARU (American Railway Union) + Eugene Debs for
support. Debs told workers not to interfere with the U.S. mail but the strike disrupted
service because the mail was transported on the railroad. Railroad owners turned to the
federal government. Attorney General Richard Olney used the Sherman Anti-Trust Act
against the workers because the strike created a restraint on trade + therefore violated
the Act. Pres. Grover Cleveland sent in 2,500 federal troops and a week later the strike
was over. Effect: Factory owners apply for court orders (injunctions) to end future
strikes and the govt.’s position is to limit the power of unions
Pioneers to American Industrialization
Although the railroad is contributed to the rise in industrialization in the United States;
the following individual also participated in its development.
*1. Samuel Slater , 1793 opened the first successful textile factory in America.
2.Eli Whitney, 1796 mass production of rifles with interchangeable parts. The Cotton Gin
3.Robert Fulton, 1807 the steamship= the Clermont
4.Francis Cabot Lowell, 1813 he built the 1st totally centralized textile mill in Lowell,
Mass. Which became a booming industrial center.
5. William Underwood, 1820 Canning factory.