
The Rise of Big
Business
 1900 – U.S. is leading
industrial power
 Exceeds Great
Britain, France, and
Germany
 4% growth per year

Reasons:
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Natural resources
Massive labor supply
Growing population
Capital - $$$$
Labor-saving
technologies
 Friendly govt. policies
 Talented
entrepreneurs

The Business of
Railroads
 BIGGEST business
 1865 – 35,000 miles of
track
 1900 – 190,000 miles
 1883 – split U.S. into four
time zones
 Created market for
commercial goods

Eastern Trunk Lines:
 1830-1860 – Huge
growth
 Different gauge tracks
 After Civil War – RRs
consolidated
 Cornelius Vanderbilt – 1867
– New York Central
 4,500 miles of track
 NYC to Chicago

Western Railroads:
 Played a role in settling
West
 Promoted settlements on
Great Plains
 Linking East to West
creating one market
 Federal land grants
 80 rail companies
 Problems:
 Hasty and poor construction
 Led to widespread
corruption

Transcontinental RR
 Pre-Civil War land grants
 Link CA to Union
 Union Pacific – started at
Omaha, NE
 Central Pacific –
Sacramento to ???
 Constructed by Chinese
and Irish
 Met at Promontory Point,
UT – May 10, 1869

Panic of 1893
 ¼ of all RRs went
bankrupt
 J. Pierpont Morgan
 Consolidated RRs
 Eliminated competition
 Controlled 7 companies by
1900

Industrial Empire
 Major shift in output
 Antebellum
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Textiles
Clothing
Lumber
Leather products
 Postbellum
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Heavy industry
Steel
Petroleum
Electrical power

Steel Industry
 1850s – Henry Bessemer
and William Kelly
 Bessemer Process
 Great Lakes region
becomes hotbed for steel
 Minnesota’s Mesabi
Range

Andrew Carnegie
 1848 – Scottish
immigrant
 Superintendant of RRs
 1870s – Pittsburgh, PA
 Technology
 Salesmanship
 Horizontal and Vertical
Integration

Carnegie Steel Corp.
 20,000 employees
 Produced more steel than
ALL of Great Britain

U.S. Steel
 Carnegie retires
 Sold company in 1900 for
$400 million to J.P.
Morgan
 Control 3/5 of all steel
 168,000 employees

Petroleum Industry
 1859 – Edwin Drake –
Titusville, PA
 1863 – John D.
Rockefeller – Standard
Oil Company
 By 1891 – controlled 90%
of oil industry
 Established “trusts” –
conglomerates of businesses
 $900 million fortune

Laissez-Faire
Capitalism
 Adam Smith (1776)
 Wealth of Nations
 Social Darwinism
 “Survival of the Fittest”
 Gospel of Wealth
 Carnegie

Anti-Trust Movement
 Trusts came under harsh
scrutiny
 Middle class believed
trusts controlled
everything
 Sherman Anti-Trust Act
(1890)
 Prohibited creation of trusts
 Tried to make trade honest

Marketing Consumer
Goods
 Increased demand for
goods
 Increased output
 Decreased price
 R.H. Macy
 Frank Woolworth
 Sears Roebuck and
Montgomery Ward

Inventions and Inventors
 Between 1860 – 19,591
patents
 By 1900 – over 400,000
patents
 Changed the way we did
everything!!!

American Workforce
 Workers were poor
 Top 10% of wealthiest
owned 90% of income
 “New Money”
 Working conditions were
horrible
 Living conditions were
unsanitary
 Horatio Alger Myth
 “Rags to Respectability”

Organized Labor
 National Labor Union
 1860s
 First union to try to
unionize all workers
 Higher wages
 8-hour day
 Equal rights
 Lost members during
Panic of 1873

Knights of Labor
 1869 – secret society
 Wanted members from
ALL work forces
 Demands:
 Worker cooperatives
 Abolish child labor
 Abolish trusts and
monopolies
 Settled disputes legally
 Haymarket Bombing – May
4, 1886

American Federation
of Labor
 Samuel Gompers – 1886
 Economic-minded
 Method:
 Collective bargaining
 1901 – 1 million members
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Immigration
 1850 – 23.2 million
 1900 – 76.2 million
 1850-1900 – 16.2 million
immigrants entered U.S.

Pushes
 Poverty
 Overcrowding
 Religious persecution

Pulls:
 Tolerance
 Jobs!!!
 “Streets were paved with
gold”

Old vs. New
 Old immigrants:
 England
 Germany
 Scandinavia
 New immigrants:
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Russia
Italy
Greece
Croatia
Poland

Incoming Terminals
 Ellis Island, New York
 Europeans
 Angel Island, California
 Asians

Urbanization
 By 1900 – 40% of
Americans lived in cities
 Tenements
 Lousy conditions
 Ethnic neighborhoods
 Safe havens

Political Machines
 Tammany Hall – NYC
 Boss Tweed
 1860s – 1871
 Backed and protected
immigrants
 New York County
Courthouse (1870)
 Thomas Nast
 Harper’s Weekly
 Mugwumps – wanted to end
reform

Awakening of Reform:
 Problems in cities were
brought to attention
 Books of social criticism
 How the Other Half Lives
 A History of Standard Oil
Company
 The Jungle

Settlement House
Movement
 Educated reformers
 Moved into ghettos
 Hull House – Chicago
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Jane Addams (1889)
Taught immigrants English
Childhood education
Industrial arts education
 By 1900 – 400 settlement
houses
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Women’s Movements
 Women’s Christian
Temperance Movement
(1874)
 Frances Willard
 Anti-Saloon League
(1893)
 Cary Nation