Industry in America
1850-1900
America’s Rise as an Industrial
Power
Science and Technology Transform
American Life:
• Factors Aiding Transformation:
– Natural resources: crude oil, coal, iron, water
– Innovation and outlets for creativity
– Government support for business
– Increasing urban (city) population with cheap
labor and markets for new products
Science and Technology Transform
American Life:
• Edwin Drake- 1859 steam engine to drill
for oil
• Bessemer Process-extracts carbon for
iron= steal
– 1850 William Kelly and Henry Bessemer
– Pittsburgh Steelers
– Steel Mills->near waterways
Why was steel such an important
innovation?
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Farming
Industry
Transportation
Structures -> William Le Baron Jenney’s
skyscraper
Home Insurance Building:
Chicago, Illinois, 1885
Inventions:
• Thomas Alva Edison
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1876- first research laboratory in Menlo Park, NJ
1877-phonograph
1880-incondescent light bulb
1890’s-> electrical system to power America
• Christopher Sholes
– 1867- typewriter
– Brought many women into the workforce
• Alexander Graham Bell & Thomas Watson
– 1876-telephone
– Communications around the world
– Women operate switch boards
Technology and Sciences Impact
on the Workforce:
1. Women join workforce
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Especially clerical jobs
Make $$ and can spend $$
2. Mass-production of cheap consumer goods
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Material items now sought
Buy factory goods instead of making them at home
Assembly lines: production efficiently
Can be shipped across country via railroad
3. More people move to cities to get jobs in factories.
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Cities become industrial centers (i.e. Cleveland and Pittsburgh)
4. Titans of Industry Emerge
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Carnegie and Rockefeller
Create monopolies that control entire industry and
prices/wages
Titans of Industry: Andrew
Carnegie
Titans of Industry: Andrew
Carnegie
• Rags to Riches Story
– Horatio Alger
– One of the richest people in the world
• 1873-enters steel business
– Carnegie Steel
• Business strategies:
– Vertical integration: suppliers
– Horizontal integration: competitors merge
• Gospel of Wealth
– Libraries/philanthropy
Titans of Industry: John D.
Rockefeller
Titans of Industry: John D.
Rockefeller
• Businessman from a young age (turkeys)
• Standard Oil Company of Ohio
– Set up trusts to control oil industry
– Trusts- competing companies allowed a board
of trustees to run company as one large
corporation and divided profits.
– Robber Baron tactics
• Philanthropy
– Gave away $500 million
Theories on Wealth
• Social Darwinism- applied Charles Darwin’s idea of
natural selection/ “survival of the fittest” to wealth and
society.
– Wealthy =work hard/God’s favor
– Poor= lazy/ God disapproves
• Gospel of Wealth- Carnegie’s belief that wealth should
be given to people/charities that could assist in
improving society (i.e. libraries)
– Interpret the following quote:
“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
Carnegies Library Specifications:
• demonstrate the need for a public library;
• provide the building site;
• annually provide ten percent of the cost of the library's
construction to support its operation; and,
• provide free service to all.
Robber Baron Tactics: 20th Century
Historical View
• Unethical business practices: exploitation
of labor to often form monopolies
• Built large fortunes that aided US
becoming one of the top industrial nations
• Many also became philanthropists
• Past:
– Carnegie and Rockefeller
• Present:
– Bill Gates, Steve Jobs, ???
Government fights, but loses:
Sherman Antitrust Act
• 1890, made it illegal to form a trust that
interfered with free trade between states
and with other countries.
• Definition of trust not defined clearly->
hard to convict companies
• Most politicians did not pursue till Teddy
Roosevelt
Problems with Industry for the
worker:
• No benefits, insurance, sick/vacation days
• Poor working conditions (injuries)
• Production Orientated (worker not
important)
• Support for industrialist, not workers
• Children work as well
• Women and children paid the least
Labor Unions: The Voice of the
Worker
• National Labor Union, Colored Labor
Union, Knights of Labor, American
Federation of Labor, American Railway
Union, Industrial Workers of America, etc.
• Tactics:
– Strike
– Collective bargaining
– Arbitration
Knights of Labor
• All workers allowed to join
• Platform: political and economic reform
– More control for workers
– 8 hour work day
– Arbitration, not strikes
• 1886 had 700,000 members
• Lost popularity after Haymarket Riot
(1886)
#1 Haymarket Riot/Strike: 1886
• Chicago, IL
• Strike against McCormick and police
brutality
• Meeting ends in violence -> bomb thrown
at police
• Results: Bad P.R. for labor unions
American Federation of Labor
(AFL): 1886
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Skilled craftsmen only (why important?)
Samuel Gompers
All were at least 2nd generation Americans
Collected dues (why important?)
Tactics: strikes
Platform:
– Less hours
– Higher wages
• Problem:
– Most not skilled craftsmen thus not a strong force.
#2 Homestead Strike: 1892
• Against Carnegie Steel
• Carnegie Reaction:
– Tried to destroy union by cutting wages and
no negotiations
– Locked out and Pinkerton agents
– Calls in Pennsylvania militia
George Pullman: Luxury Railroad
Cars
Pullman Factory Town, Chicago, IL
#3 Pullman Strike: 1894
• Pullman created communities for workers
– If lost job-> lost home
• 1893 Panic hurts workers:
– Wages cut by 40%, but rent remains same
– Laid off workers
• Workers strike and join American Railway Union
– Eugene V. Debs
– Skilled and unskilled workers for entire industry
• Pullman Co. Reaction:
– Court injunction against leaders
– Hired guards to put down strikes
– Railroads blacklist strikers
Eugene V. Debs: ARU and Strike
Wobblies and Socialism
Mother Jones
Problems with Unions:
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To easy to replace unskilled workers
No $$ for unskilled workers when strike
Spies from company-> expose leaders
Ethnic differences -> immigrants
Too much support for industrialists and
Social Darwinism
Whose side does the government
take regarding strikes from 18701900?
Railroad Industry and Corruption:
• Credit Mobilier:1864
– company that administered money transactions of
Union Pacific
– scandal with government funds
– T.C. Durant: VP of Union Pacific and manager of
Credit Mobilier
– Hurt Republican party
• Granger Laws fight corruption: 1870’s
– Upheld in Munn v. Illinois: 1877, okay to regulate
railroad prices
– 1886: Granger laws set back by Supreme Court
• Said Federal Government, not states must regulate interstate
commerce
Response by Government to
Grangers
• Interstate of Commerce Act of 1887
– Government supervised railroad activities
– 5 member Interstate Commerce Commission
(ICC)
– Difficult to enforce
– 1897: Supreme Court said fed. gov. can’t set
maximum railroad rates
• Not effective until Teddy Roosevelt
How did the Supreme Court hurt
the regulation of the railroad
industry?