Industry Comes of Age
Theme: American accomplished heavy industrialization in the post-Civil War
era. Spurred by the transcontinental rail network, business grew and consolidated
into giant corporate trusts, as epitomized by the oil and steel industries.
Theme: Industrialization radically transformed the practices of labor and the
condition of American working people. But despite frequent industrial strife and
the efforts of various reformers and unions, workers failed to develop effective
labor organizations to match the corporate forms of business.
Theme: With the concentration of capital in the hands of a few, new moralities
arose to advance justifications for the social and economic phenomenon. A
“survival of the fittest” theory emerged, a popular theory based on the thought of
Herbert Spencer and William Graham Sumner, which argued the millionaires
were products of natural selection. Another theory known as the “Gospel of
Wealth” argued that societies well-to-do had to prove themselves morally
responsible.
I. Railroads
A.
Railway Pacific Act, 1869
1.
2.
B.
Railroad Expansion
1.
2.
3.
C.
Partial govt. subsidy for additional
transcontinental RR’s with only land (no cash)
Vanderbilt and Steel
One exception: Panic of 1873 in which RR
overspeculation caused depression brought hard
times for all
Revolution and Challenges
1.
2.
3.
Ceremony at Promontory Point, Utah
Generous govt. subsidy with cash payments and
land grants
Paddies (Irish on Union Pacific), Coolies (Chinese
on Central Pacific), Big 4 (investors of Central
Pacific) are notable people with the
Transcontinental RR.
Mr. T’s Impact of RR’s Memory Device:
Manufacturing, Mining, Moo (agriculture),
Millionaires and Municipals
Robber Barons used illegal techniques of “stockwatering,” rebates, and “pools” to increase profits.
Wabash Case said that states could NOT regulate
interstate commerce.
a. Reformers in Congress agreed to do something about the
courts decision from the Wabash case and created
the ICC to regulate interstate commerce, 1887
You can identify the four transcontinental railroads by their titles, the fifth is the Atchinson/
Topeka/Santa Fe RR.
II. Industrialization
A.
Factors of Postwar Industrialization
1.
2.
3.
4.
B.
Increase in available capital from the federal govt and investors
Exploitation of natural resources especially in Mesabi Range
Unskilled labor used to make steel was readily available, thanks immigration
American ingenuity motivated by huge profits namely Edison and Bell
Trust Titans Emerge
1.
2.
3.
C.
A. Carnegie used vertical integration to control all aspects of industry.
J. Rockefeller controlled competitors by controlling their stock called “Trusts”
J.P. Morgan controlled competition through control of Board of Directors
Reactions to Industrialization
1.
Moral responsible to “Gospel of Wealth” was the attitude of JP Morgan
a. Gave away $350 of fortune
2.
3.
Survival of the fittest was the attitude of Spencer & Sumner-rich don’t need to give anything
away to better society, they won the economic battle and were should enjoy the benefits
Politicians fostered a plutocracy that frustrated the consumers to action
a.
4.
Congress hammered through the Sherman Anti-trust Act, 1890 which forbade combinations of trade
but ended up curbing labor.
In South, industrialization was limited with the exception of textile mills.
III. Labor: “The Sweat of
Industrialization”
A.
Employer tools
1.
2.
3.
B.
Unlimited capital due to ability to sell stocks
“scab” workers, “lockouts,” courts that issued
injunctions, federal troops, “iron-clad oaths” or
“yellow-dog contracts,” “blacklists,” and
company towns that charged high food prices and
rent.
Middle class grew deaf to labor strife and viewed
labor as radical revolutionaries when they simply
wanted a little more return for their labors.
Labor Groups
1.
2.
3.
National Labor Union fought social reform until
1873 and Great RR Strike, 1877
Knights of Labor created one big union under T.
Powderly but Haymarket damaged labor’s
reputation because they were viewed as
anarchists and trouble-makers (when in reality the
Knights of Labor preferred socialism to
capitalism)
AFofL was a nonpolitical federation under S.
Gompers in which pushed “closed shop” but
labor disputes continued with Homestead Strike
and Pullman Strike of 1890’s.
Putting Things in Order
(Put the following events in correct order by numbering them 1 to 5)
1. _____ J.P. Morgan buys out Andrew Carnegie to form the first billion-dollar
U.S. corporation
2. _____ The first federal law regulating railroads is passed
3. _____ The killing of policemen during a labor demonstration results in the
execution of radical anarchists and the decline of the Knights of Labor
4. _____ A teacher of the deaf invents a machine that greatly eases communication
across distance
5. _____ A golden spike is driven, fulfilling the dream of linking the nation by rail
Answers
1.
2.
3.
4.
5.
5
4
3
2
1