Chapter 13
The Triumph of Industry
How did the industrial growth of the late
1800s shape American society and the
economy?
Standards
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SSUSH 11 The student will describe the economic, social, and geographic
impact of the growth of big business and technological innovations after
Reconstruction.
a.
Explain the impact of the railroads on other industries, such as steel, and
on the organization of big business.
b.
Describe the impact of the railroads on the development of the West;
include the transcontinental railroad, and the use of Chinese labor.
c.
Identify John D. Rockefeller and the Standard Oil Company and the rise
of trusts and monopolies.
d.
Describe the inventions of Thomas Edison; include the electric light
bulb, motion pictures, and the phonograph, and their impact on American life.
Life in 1865
Life in 1900
Americans embrace technology and
innovation with the goals of expanding
business and improving daily life.
Technology and Industrial Growth
Section 1
• How did industrialization and new
technology affect the economy and
society?
• Vocabulary:
entrepreneur
protective tariff
laissez faire
Thomas Edison
patent
Bessemer process
suspension bridge
time zone
mass production
Technology and Industrial Growth
Encouraging Industrial Growth
Main Idea: The Civil War challenged industries to make products more
quickly and efficiently than they had been made before. Factories stepped
up production, the food industry transformed itself, and railroads
expanded. Meanwhile, the government encouraged immigration to meet
the increasing demand for labor in the nation’s factories.
Innovation Drives the Nation
Main Idea: By the late 1800s, the drive for innovation and efficiency
seemed to touch every sphere of life in the United States. The number of
patents grew exponentially during this time. Businessmen invested heavily
in these new innovations, hoping to create new industries and expand old
ones.
The Impact of Industrialization
Main Idea: Industrialization touched every aspect of American life, from
the way businesses and farms operated to the kinds of products used by
average Americans. It also affected the country’s relationship with the rest
of the world and with its own environment.
Encouraging Industrial Growth
• Vast supply of natural resources fuel growth
(coal mines, forests, rivers for transportation,
oil)
• Workforce grows (European and Asian
immigrants)
• Capitalism encourages entrepreneurs (Horacio
Alger wrote Ragged Dick, or Street Life in New
York)
• Government policies encourage free enterprise
(land to railroads, tariffs, laissez-faire policies)
Electric Power
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Thomas A. Edison: built his “invention factory”
1000 patents
Phonograph, 1877
Electric glass bulb: 1880, made of bamboo fiber
Power plant in New York City
Alternating Current
• George Westinghouse developed alternating current
• Used transformer to boost power levels
• Created Westinghouse Electric
Communications
• Telegraph – Morse code
• Western Union had
900,000 miles of wire by
1900
• Alexander Graham Bell
invented the telephone
• Set up American
Telephone and
Telegraph Company
• By 1900, 1.5 million
phones
Bessemer Process
• Henry Bessemer in
England developed steel
process in 1850s
• Easier to remove the
impurities from
production, resulting in
lightweight, strong steel
• Mass production now
possible
• Led to a new age of
building with
skyscrapers, elevators,
and suspension bridges
Brooklyn Bridge
• Engineer John A. Roebling
designed suspension bridge
with thick steel cables suspended
from high towers
• His son Washington took over
• After many set-backs, the
bridge opened May 24, 1883.
Transcontinental Railroad
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Began in 1862
Central Pacific Railroad- from
Sacramento, CA
Union Pacific Railroad- from
Omaha, Nebraska
Met 1869 at Promontory Point,
UT
George Westinghouse-air brakes
on trains
Gustavus Swift-refrigerated cars
Developed time zones-four in
U.S.; Eastern, Central,
Mountain, Pacific
Led to new towns, streetcars,
commuter trains, subways
24 Time Zones
• Divided the globe
into 24 time zones
• Needed to
efficiently run
railroad schedules
NOTE TAKING
Reading Skill: Identify Causes and Effects
Impact of Industrialization
• Linking world markets – grain, steel, and
textiles shipped to other countries
• Changing American society – farms
became mechanized; farmers moved to
cities
• The environment – Congress began
setting aside protected lands that would
become the National Park Service;
Yellowstone park established in 1872
TRANSPARENCY
Industry in the United States
The Rise of Big Business
Section 2
• How did big business shape the American
economy in the late 1800s and early
1900s?
• Vocabulary:
corporation
Andrew Carnegie
monopoly
cartel
John D. Rockefeller
horizontal integration
trust
vertical integration
Social Darwinism
ICC
Sherman Antitrust Act
The Rise of Big Business
Fighting for Profits
Main Idea: Until the mid-nineteenth century, most businesses were run by one person
or family and were local. Industrialization and railroads changed all this. Business
leaders, lured by the profits offered by these larger markets, responded by combining
funds and resources.
Debating the Role of Big Business
Main Idea: Throughout the 1880s, business mergers created powerful empires for
those who invested in steel, railroads, meat, farm equipment, sugar, lumber, and a
number of other enterprises. However, while business leaders grew wealthy, many
smaller companies and consumers began to question their goals and tactics.
The Government Imposes Regulations
Main Idea: The great industrialists’ methods and their stranglehold on the nation’s
economy worried some Americans. The railroad industry, for example, was renowned
for unjust business practices. In 1887, the United States Senate created the Interstate
Commerce Commission (ICC) to oversee railroad operations. This was the first federal
body ever set up to monitor American business operations.
The Corporation Develops
• Group ownership of a business
• Same rights as an individual
• Access to huge amounts of capital, ability to
operate in different regions
• Maximized profits by decreasing costs
• Advertising
• Horizontal and vertical integreation
CHART
Structure of a Corporation
Monopolies and Cartels
Monopoly
• Complete control of
a product or service
• A business bought its
competitors or drove
them out of business
• Could then charge
high prices
Cartel
• A loose association of
businesses that make
the same product
• Members agreed to
limit the supply of
their product and
keep prices high
• OPEC
Horizontal and Vertical Integration
Horizontal Integration
• Create a giant company
by bringing together
many firms that were in
the same business
• Example: Standard Oil
Trust
Vertical Integration
• Gaining control of the
many different
businesses that make up
all phases of a product’s
development
• Example: Carnegie Steel
• Could charge less
because of economies of
scale; as production
increases, the cost goes
down
COMPARING
VIEWPOINTS
What is the legacy of the business tycoon?
Business Leaders of the Late 1800s
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• Robber Barons?
Drained the country of
its natural resources
Persuaded officials to
interpret laws in their
favor
Drove competitors to
ruin
Paid their workers
meager wages
Workers forced to work
in dangerous and
unhealthy conditions
• Captains of Industry?
• Increased the supply of
goods by building
factories
• Created jobs that
allowed Americans to
buy their goods
• Founded and funded
museums, libraries, and
universities
Andrew Carnegie
• Emigrated to the U.S. in 1848; used money earned as
superintendent of PA railroad to invest in steel mills
• Established Carnegie Steel Company, drove competitors out of
business, and soon controlled the entire steel industry
• Bought the iron ore mines, mills,
shipping and rail lines to transport
his steel products to market
• Philanthropist: gave away $350 million
• “Gospel of wealth”: free to make money and
should give it away
The Standard Oil Trust
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Edwin L. Drake struck oil in Titusville, PA in 1858.
John D. Rockefeller set up a refinery in Ohio in 1863.
He undersold his competitors and bought them out.
In 1882 the owners of Standard Oil and other
companies combined their operations, appointing nine
trustees. Rockefeller controlled the trust.
• Forty companies joined the trust and controlled the
nations oil, limiting competition
• 1890 Congress passed the Sherman Antitrust Act,
outlawing any combination of companies that
restrained commerce; proved ineffective for 15 years.
Social Darwinism
• Darwin: all animal life had evolved by a process of
“natural selection”
• Social Darwinism: society should do as little as possible
to interfere with people’s pursuit of success
• Government should stay out of the affairs of business.
• The most “fit” would become rich and society would
benefit
• Most Americans agreed that government should not
tax business nor regulate their relations with workers.
Business Cycle
• “Boom and bust”
• Rapid industrial growth
placed strains on the
economy
• Businesses overproduced
then cut wages and laid
off workers
• Often caused a panic,
resulting in bank and
business failures
• Panic of 1893
Government Imposes Regulations
• Interstate Commerce Commission (ICC) –
created to oversee railroad operations
- First federal body set up to monitor business
operations
- Government will set up many other federal
agencies to monitor business
• Sherman Antitrust Act – outlawed any trust
that operated in restraint of trade
NOTE TAKING
Reading Skill: Identify Supporting Details
Railroad industry controls economy.
• Midwestern states pass laws regulating
railroad freight rates
• Supreme Court strikes down these laws
• Senate creates the Interstate Commerce
Commission
• Senate passes the Sherman Antitrust Act
TRANSPARENCY
Robber Barons
The Organized Labor Movement
Section 3
• How did the rise of labor unions shape
relations among workers, big business, and
government?
• Vocabulary:
sweatshop
Samuel Gompers
company town
AFL
collective bargaining Haymarket Riot
socialism
Homestead Strike
Knights of Labor
Eugene V. Debs
Terence V. Powderly Pullman Strike
The Organized Labor Movement
Workers Endure Hardships
Main Idea: The industrial expansion in the United States made the American
economy grow by leaps and bounds. However, the people who actually performed
the work in factories and industries struggled to survive. In addition, workers—
especially immigrants, women, and minorities—often faced ridicule and
discrimination.
Labor Unions Form
Main Idea: Industrialization lowered the prices of consumer goods, but in the late
1800s most factory workers still did not earn enough to buy them. Increasingly,
workers took their complaints directly and forcefully to their employers, often
through organized unions. Employers usually opposed the growing labor movement,
which they saw as a threat to their businesses and profits.
Strikes Rock the Nation
Main Idea: As membership in labor unions rose and labor activists became more
skilled in organizing large-scale protests, a wave of bitter confrontations between
labor and management hit the nation.
Workers Endure Hardships
CHART
Shifts in U.S. Labor Force
The Growing Work Force
• 14 million immigrants
between 1860 and 1900
• Contract Labor Act, 1864
• 8 to 9 million moved to the
cities
• Every family member
worked; little relief for the
poor
• Company towns – owned by
business and houses rented to
workers
• Company stores sold on
credit, but charged high
interest
Factory Work
• Laborers worked 12 hours, 6
days a week
• Piecework: fixed amount for
each finished piece produced
• Frederick Winslow Taylor
increased efficiency, The
Principles of Scientific
Management
• Division of Labor: workers
performed one small task,
over and over
• Work boring and dangerous
Working Women and Children
• Women operated simple
machines and had no
chance to advance
• Children made up more
than 5 % of the labor
force
• Children stunted in body
and mind
• Jacob Riis attacked child
labor in Children of the
Poor
Gulf Between Rich and Poor
• Socialism: economic and political philosophy that
favors public or social control of property and income,
not private control
• Communism: Complete government ownership of land
and property; Karl Marx, along with Friedrich Engels,
wrote a pamphlet called the Communist Manifesto that
denounced capitalism and predicted that workers
would overturn it
Rise of Labor Unions
• National Trades Union, 1834; ended with Panic of 1837
• National Labor Union, 1866; failed during a depression
• Knights of Labor, 1869; men, women, skilled and unskilled;
Terence Powderly wanted equal pay, 8 hour day, end to child
labor; disappeared by 1890s
• American Federation of Labor, 1886; Samuel Gompers wanted
skilled workers only; supported collective bargaining, negotiation
between labor and employers
• The Wobblies (Industrial Workers of the World), many Socialists,
radical union of unskilled workers such as miners, lumbermen,
migrant farm workers, textile workers
Reaction of Employers
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Feared unions
Tactics to stop unions
1. Forbade union meetings
2. Fired union organizers
3. “Yellow dog” contracts – promised never to join a
union
4. Refused collective bargaining
5. Refused to recognize unions as workers’
representatives
Strikes Rock the Nation
• Haymarket Riot, 1886, at Chicago’s McCormick reaper factory;
bomb killed seven policemen, gunfire killed dozens. Eight
anarchists, radicals who oppose all government, were tried for
conspiracy to commit murder.
• Homestead Strike, 1892, Homestead, PA. Frick called in the
Pinkertons. In a shootout, several died and many were wounded.
• Pullman Strike, 1894, Eugene V. Debs called for a boycott of
Pullman cars. Disrupted western railroad traffic. Federal troops
sent to see that mail got through. Set pattern for the employers to
get court orders against unions. Government opposition limited
union gains for more than 30 years
TRANSPARENCY
Labor Riots
NOTE TAKING
Reading Skill: Identify Main Ideas
TRANSPARENCY
The Haymarket Riot
QUICK STUDY
Major Strikes of the Late 1800s
TRANSPARENCY
Analyzing Political Cartoons: A Different Kind of Knight