Monday, August 12, 2019 The Industrial Age Section 1-The Expansion of Industry - Natural Resources Fuel Industrialization • Black Gold - Edwin L. Drake successfully used a steam engine to drill for oil in 1859 • Breakthrough started an oil boom that spread from Pennsylvania to Kentucky, Ohio, Illinois, Indiana, and eventually, Texas - Petroleum refineries were built in Cleveland and Pittsburgh • Refineries enabled entrepreneurs to turn crude oil into kerosene • Gasoline was a byproduct of the refining process and was originally thrown away, and only became useful after the invention of the automobile • Bessemer Steel Process - New method of making steel - Developed by Henry Bessemer and William Kelly around 1850 - Technique involved injecting air into molten iron to remove the carbon and other impurities - The process featured a quicker production time, and was a cheaper and more efficient process that greatly increased the rate of steel production • By 1880, the process had produced more than 90% of the nation’s steel - Increased production of steel meant a faster expansion of railroad and construction of buildings • New Uses for Steel - Innovative construction became possible • Brooklyn Bridge - Bridge was completed in 1883 - Spanned 1,595 feet of the East River in New York City 1 Monday, August 12, 2019 - Steel cables were supported by towers higher than any man-made and weight-bearing structure except the pyramids in Egypt • Home Insurance Building - First skyscraper built with a steel frame - Designed by William Le Baron - Differed from existing buildings in that the weight of large buildings had been supported by their walls or iron frame, which limited the height of the building. • With a steel frame, architects could build as high as they wanted to • Inventions Promote Change - The Power of Electricity • Thomas Alva Edison - Established the first research lab in Menlo Park, New Jersey in 1876 - Perfected the incandescent light bulb in this lab, which was patented in 1880 - Later invented and entire system for producing and distributing electrical power • George Westinghouse - Worked with Edison to add innovations that would make electricity safe and less expensive • By 1890, electricity was running numerous machines, and eventually became available in homes as an inexpensive, convenient source of energy • Electric streetcars made urban travel cheap and efficient, which lead to the outward spread of cities • Manufacturers were able to locate their plants wherever they wanted which enabled industry to grow like never before - Huge operations and the efficient processes that they used became the models for new consumer industries - Inventions Change Lifestyles 2 Monday, August 12, 2019 • Typewriter - Invented by Christopher Sholes in 1867 • Telephone - Invented by Alexander Graham Bell and Thomas Watson in 1876 • Opened the way for a worldwide communication network • The invention of the typewriter and telephone affected office work in particular and created new jobs for women - Women accounted for only 5% of office workers in 1870 • Percentage grew to nearly 40% of the clerical workforce by 1910 • New inventions heavily impacted factories - New machines enabled clothing to be mass produced in factories - Freed some factory workers from back-breaking work and improved their standard of living • By 1890, the average work week had been reduced by about 10 hours - Section 2-The Age of the Railroads • Railroads Span Time and Space - A National Network • On May 10, 1869 the first transcontinental railroad opened - Paved the way for other transcontinental railroads, and increased regional rail lines - Romance and Reality • The romantic ideas of available land, adventure, and a fresh start were made available to Americans with the advent of the transcontinental railroads • These dreams were only made possible by the harsh lives of the railroad workers who built the tracks - Central Pacific Railroad employed thousands of Chinese immigrants 3 Monday, August 12, 2019 - Union Pacific hired Irish immigrants and desperate, out-of-work Civil War veterans to lay tracks across the rough terrain while defending themselves in attacks from Native Americans - Accidents and diseases disabled and killed thousands of men each year • By 1888, when the first statistics were published, casualties from railroad work totaled more than 2,000 employees and 20,000 injured - Railroad Time • Communities were operating on their own time, with noon being the time of day when the sun was directly overhead - Noon is Boston was almost 12 minutes later than noon in New York - This caused railroad travelers to have to reset their watches numerous times throughout a transcontinental journey • In 1869, Professor C.F. Dowd proposed that the earth’s surface be divided into 24 time zones-one for each our of the day - The United States would have four zones under Dowd’s plan: Eastern, Central, Mountain, and Pacific time zones - Railroad companies happily endorsed this plan and many towns followed suit - On November 18, 1883, railroad crews and towns across the country synchronized their watches • In 1884, a worldwide conference was held that incorporated railroad time in setting worldwide time zones • Railroad time was not officially recognized by U.S. Congress as the standard for the nation until 1918 • Opportunities and Opportunists - New Towns and Markets • Railroads enabled an expansion of trade, and some towns began to specialize in particular products 4 Monday, August 12, 2019 - Chicago was known for its stockyards, and Minneapolis was known for its grain industries • Towns that specialized prospered from selling their products to the entire country • New towns and communities popped up along the railroads - Cities like Abilene, Kansas, Flagstaff, Arizona, Denver, Colorado, and Seattle, Washington owed their prosperity, if not their very existence, to the railroads - Pullman • George M. Pullman began manufacturing sleepers and other railroad cars in Illinois in 1880 • Pullman built a nearby town for his employees and provided for almost all of their basic needs - Residents lived in clean, well-constructed brick houses and apartment buildings, and had access to doctor’s offices, shops, and an athletic field • The town of Pullman was firmly under company control - Residents were not allowed to loiter on their steps or drink alcohol - Pullman hoped that by strictly controlling his employees, his work force would be stable - After cutting employee wages, Pullman refused to lower rents, which caused a violent strike in 1894 - Credit Mobilier • One of the most infamous schemes to arise from the success of the railroads was born in 1864 - Union Pacific Railroad formed a construction company called Credit Mobilier • Union Pacific stockholders gave this company a contract to lay track at two to three times the actual cost—and pocketed the profits 5 Monday, August 12, 2019 • A congressional investigation of the company revealed that Union Pacific had taken up to $23 million in stocks, bonds, and cash - Testimony implicated well-known and respected officials like Vice President Schuyler Colfax and Congressman James Garfield, who later became president • The Grange and the Railroads - The Grange was a farmers’ organization founded in 1867 • Members were called Grangers • Grangers began demanding governmental control over the railroad industry - Railroad Abuses • Farmers were angry with the railroad companies for many reasons - Misuse of government land grants • Railroads sold grants to other businesses instead of the settlers they were meant for - Railroads entered into formal agreements to fix prices, which helped keep farmers in their debt - Railroads charged different customers different rates, often demanding more for short hauls (when there was no alternative carrier) than for long hauls - Granger Laws • In response to the abuses by the railroads, Grangers took political action - Sponsored state and local political candidates, elected legislatures, and successfully pressed for laws to protect their interests • Illinois authorized a commission to “establish maximum freight and passenger rates and prohibit discrimination” in 1871 - Grangers throughout the West, Midwest, and Southeast convinced state legislatures to pass similar laws, called Granger laws • Railroad companies fought back, challenging the constitutionality of these regulatory laws 6 Monday, August 12, 2019 - In 1877, in Munn vs Illinois, the Supreme Court upheld the Granger laws , winning states the right to regulate the railroads for the benefit of farmers and consumers • This Supreme Court decision set a precedent for the government’s right to regulate private industry to serve the public interest - Interstate Commerce Act • In 1886, the Supreme Court ruled that a state could not set rates on interstate commerce (railroad traffic that either came from or was going to another state - This cause a public outrage, and the Supreme Court responded by passing the Interstate Commerce Act in 1887 • Established the right of the federal government to supervise railroad activities and established a five-member Interstate Commerce Commission (ICC) for that purpose - The ICC had difficulty in regulating railroad rates because of a long legal process and railroad resistance - In 1897, the Supreme Court ruled that it could not set maximum railroad rates, which deflated the ICC - It wasn’t until 1906, under President Theodore Roosevelt that the ICC was given the power it needed to be effective - Panic and Consolidation • Corporate abuses, mismanagement, overbuilding, and competition pushed many railroads to the brink of bankruptcy - The financial problems played a major role in a nationwide economic collapse • The panic of 1893 was the worst depression up to that time - By the end of that year, around 600 banks and 15,000 businesses had failed and by 1895 4 million people had lost their jobs - By the middle of 1894, 1/4 of the nation’s railroads had been taken over by financial companies - Section 3-Big Business and Labor 7 Monday, August 12, 2019 • Carnegie’s Innovations - Andrew Carnegie • One of the first industrial moguls to make his own fortune • Rise from rags to riches, along with his passion for supporting charities, made him a model of the American success story • Entered the steel business in 1873 after touring a British steel mill and witnessing the awesome spectacle of the Bessemer process in action - By 1899, the Carnegie Steel Company manufactured more steel than all of the factories in Great Britain - New Business Strategies • Carnegie continuously searched for ways to make better products more cheaply - Incorporated new machinery and techniques, such as accounting systems that enables him to track precise costs - Attracted talented people by offering them stock in the company and encouraged competition among his assistants • Vertical Integration - A company’s taking over its supplies and distributors and transportation system to gain control over the quality and cost of its products - Carnegie attempted to control as much of the steel industry as he could through vertical integration • Horizontal Integration - The merging of companies that make similar products - Carnegie used horizontal integration to limit his competition • Through both vertical and horizontal integration, Carnegie controlled almost the entire steel industry • Social Darwinism and Business - Principles of Social Darwinism 8 Monday, August 12, 2019 • Applied biological concepts of natural selection and survival of the argument that the strong should see their wealth and power increase while the weak should see their wealth and power decrease • Social Darwinism was a justification for laissez faire economics/capitalism - Means “allow to do” - According to this doctrine, the marketplace should not be regulated - William G. Sumner, a Yale political science professor, promoted the theory that success and failure in business were governed by natural law and that no one had the right to intervene - A New Definition of Success • Because Social Darwinism supported the notion of individual responsibility and blame, it also appealed to the Protestant work ethic of many Americans who believed that the rich and prosperous were favored by God, and that the poor were lazy or inferior people who deserved the life they were living • Fewer Control More - Growth and Consolidation • Many industrialists took the path of horizontal integration in the form of mergers - “If you can’t beat ‘em, join ‘em” • A firm that bought out all it’s competitors could achieve a monopoly - Complete control over its industry’s production, wages, and prices - One way to create a monopoly was to form a holding company • A company that did nothing but buy out the stock of other companies • United States Steel - Headed by banker J.P. Morgan • Financial capitalist who grew to control several banks, companies, and stock markets 9 Monday, August 12, 2019 - Eventually bought Carnegie Steel, which made Andre Carnegie the richest man in the world and United States Steel the world’s largest business • Standard Oil Company - Founded by John D. Rockefeller - Controlled 90% of the refining business - America’s first trust • An arrangement in which a number of businesses unite under one system, basically forming a monopoly • Trusts were ended by the Sherman Antitrust Act in 1890 - Made it illegal to form a trust that interfered with free trade between states or with other countries - The act didn’t clearly define what a trust was, so companies viewed as monopolies simply formed into individual corporations - The Supreme Court threw out seven of eight cases that the federal government brought against trusts - Eventually the government stopped trying to enforce the Sherman Antitrust Act, and the consolidation of businesses continued - Rockefeller and the “Robber Barons” • Rockefeller’s Standard Oil company earned him huge profits - He payed his workers low wages and drove competitors out of business by selling his oil at a lower cost that’s it cost to produce it • He then hiked the prices of oil once he controlled the market • Critics of the industrialists began calling the “robber barons” - A business man who used ruthless business tactics to amass a huge personal wealth • Although Rockefeller kept most of his assets, he still gave away over $500 million 10 Monday, August 12, 2019 - Established the Rockefeller Foundation, provided funds to found the University of Chicago, and created a medical institution that helped find a cure for yellow fever • Andrew Carnegie donated about 90% of the wealth he accumulated during his lifetime and his fortune still supports the arts and learning today - “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.” - Business Boom Bypasses the South • The South was still trying to recover from the Civil War, hindered by a lack of capital (money for investment) - After the war, people were unwilling to invest in risky ventures • Northern businesses already owned 90% of the stock in the most profitable Southern enterprise (railroads) • Entrepreneurs suffered not only from excessive transportation costs but also from high tariffs on raw materials and imported goods, and from a lack of skilled workers • Growth in forestry and mining, and in the tobacco, furniture, and textile industries offered hope to Southern entrepreneurs • Labor Unions Emerge - Long Hours and Danger • Steel mills often demanded a seven day work week • Seamstresses worked 12 or more hours a day, six days a week • Employees were not entitled to vacation, sick leave, unemployment compensation, or reimbursement for injuries suffered on the job • Injuries were common - Workers had to perform repetitive, mind-dulling tasks, sometimes with dangerous or faulty equipment in dirty, poorly ventilated factories • In 1882, an average of 675 laborers were killed in work-related accidents each week 11 Monday, August 12, 2019 • Wages were so low that families could not survive unless everyone held a job - Between 1890 and 1910, the number of women working for wages doubled, from 4 million to more than 8 million - 20% of boys and 10% of girls under age 15–some as young as 5 years old —also held full time jobs • This caused children to give up their education and their futures to help make ends meet - Children and women worked in sweatshops, which was tedious and required few skills - Early Labor Organizing • Skilled workers had formed small, local unions since the late 1700s • The first large-scale national organizations of laborers was called the National Labor Union (NLU) and was formed in 1866 by iron worker William H. Sylvis - The refusal of some NLU local chapters to admit African Americans led to the creation f the Colored National Labor Union (CNLU) • In 1868, the NLU persuaded Congress to legalize an eight-hour day for government workers • NLU organizers concentrated on linking existing local unions - Uriah Stephens focused his attention on individual workers and organized the Noble Order of the Knights of Labor • Early union open to all workers no matter the race, gender, or skill • Grew to 700,000 members • Preferred to use political activity and education (arbitration)rather than strikes • Eventually fell due to internal strife and mismanagement • Union Movements Diverge - Craft Unionism • Included skilled workers from one or more trades • Samuel Gompers 12 Monday, August 12, 2019 - Led the Cigar Makers’ International Union to join with other craft unions in 1886 - Focused on trade unionism; believed that unions should concentrate on better collective bargaining agreements and legislation affecting labor, while avoiding broad social issues - Became the labor union leader of the American Federation of Labor • The more effective craft union that replaced the Knights of Labor • Grew to 3 million members (only skilled laborers) • Focused in “bread and butter” economic issues of wages, working hours, working conditions • Used successful economic pressures of strikes and boycotts - Industrial Unionism • Eugene V. Debs - Attempted to form the American Railway Union - Was to include members who were both skilled an unskilled laborers - ARU won a strike in 1894 for higher wages • Drove membership to climb to 150,000 - Never recovered after 1894 strike, but added to the momentum of union organizing - Socialism and the IWW • Socialism - Debs and other labor activists eventually turned to socialism • An economic and political system based on government control of businesses and property and equal distribution of wealth - Most socialists in late-19th-century America drew back from this goal in favor of working within the labor movement to achieve better conditions for workers • Industrial Workers of the World (IWW) also called Wobblies 13 Monday, August 12, 2019 - Group of radical unionists and socialists in Chicago - Included African Americans, with a total 100,000 membership - IWW only had one strike victory, in 1912, which gave dignity and a sense of solidarity to unskilled workers • Other Labor Activism in the West - In April 1903, about 1000 Japanese and Mexican workers organized a successful strike in the sugar-beet fields of Ventura County, California - The State Federation of Labor supported a union of Chinese and Japanese miners who sought the same wages and treatment as other union miners • Strikes Turn Violent - The Great Strike of 1877 • The first major case of nationwide unrest; federal troops sent to put down protests; showed big business owners that they could appeal to the government for help in dealing with strike workers - The Haymarket Affair • Gathering of 3,000 people at Chicago’s Haymarket Square to protest police brutality - Strikers had been killed and several had been wounded at the McCormick Harvester plant the day before - Rain began to fall around 10:00 and the strikers were starting to disperse when police arrived - Someone tossed a bomb into the police line, and police fired on the workers • 7 police officers and several workers dies in the chaos that followed - The three speakers at the demonstration and five other radicals were charged with inciting a riot • All eight were convicted; 4 were hanged and one committed suicide in prison • The incident caused the public to turn against the labor movement 14 Monday, August 12, 2019 - The Homestead Strike • Involved steel workers in 1892 in Carnegie’s steel plant • Became violent when strikes and Pinkerton Detective Agency started shooting at one another • Ended when the public viewed the strikers as an instigation of the violence - The Pullman Company Strike • The last great nationwide strike • Involved the railroad industry • Ended when strikers disrupted the US Mail - Federal troops were sent to enforce a federal injunction against the union • Established the precedence for factory owners appealing to the courts to end strikes - Women Organize • Mother Jones (Mary Harris Jones) - Union activist and organizer of the women’s labor movement who endured death threats and prison as she continued to expose the cruelties of child labor - Led the children’s march in front of Teddy Roosevelt’s home • Influenced the passage of child labor laws - Collaborated with the Knights of Labor • Florence Kelly - An advocate for powerless women and children and the improvement of factory conditions - Wrote many articles and books about child labor and other reform issues • Triangle Shirtwaist Factory Fire - 1911 fire that broke out in a NYC seamstress factory - Workers were unable to escape because employers had locked exit doors 15 Monday, August 12, 2019 - The one unlocked door was blocked by fire and the building had no extinguisher system - 146 women were killed and the employers were acquitted of manslaughter - Led to the state of New York setting up a task force to study factory working conditions 16
