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Industrialization
Industrialization 1865 – 1901
Causes:
Long--Term:
Long
Effects:
– Abundant natural resources
– Harnessing of power sources
(water/coal)
– Invention of steam engine
– Transportation (canals,
roads, railroads)
Immediate:
– Growth of large corporations
– New and plentiful
manufactured goods
– Poor working conditions in
factories and sweatshops
– Increased labor activism
– Railroad expansion
– Cheap labor supply through
immigration
– Technological innovation
– New management and
business strategies
– Investment Capital
Natural Resources
Water, timber, coal, iron &
copper
1859 – Edwin Drake
drills first oil well in
Titusville, Pennsylvania
Free Enterprise
Laissez--faire – “let people do as they choose”
Laissez
– No government intervention
– Free Markets
Entrepreneurs – risk takers and innovators
– In late 1800’s invested in manufacturing
Long--Term:
Long
– Regional economies are now
linked
– Labor movement wins
shorter workweek
Large Workforce
US population triples
between 18601860-1910
– 30 million to 90 million
– Increased demand for
goods and services
– Transcontinental Railroad
played a part
Immediate:
Immigration
– 1870 to 1910 20
million immigrants
Railroads
Pacific Railway Act (1862) – construction
of transcontinental railroad
– Union Pacific
10,000 workers – Civil War vets, Irish Immigrants,
farmers, miners, exex-cons
– Central Pacific
10,000 Chinese workers
– Met at Promontory, Utah
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Railroads (cont)
Railroads (cont)
Railroads linked the nation
– Larger markets for goods
– Stimulated the economy
Spent money on steel, coal,
timber, etc.
Railroad Abuses
(Corruption)
Land Grants – free land given to railroad
companies to encourage construction
Railroad Abuses
(cont)
Credit Mobilier – owned by Union Pacific
– Awarded UP’s contracts, then overcharged UP
– Railroads sold the land to settlers, real estate
agencies, and others
1883 – American Railway Association
divided country into four time zones
Money went into the pockets of the UP investors
– Union Pacific almost went bankrupt
Price Fixing – agreements between
companies to set prices
Congress gave more land grants
– Investigation implicates many members of congress
– Kept farmers in debt
Railroad Abuses
(cont)
Interstate Commerce Act
– Tried to stop railroad abuses and corruption
– Federal govt oversees railroads
Rise of Big Business
By 1900 big businesses dominated economy
– Corporation –organization owned by many
people, but treated by law as if a single person
– Owners buy shares of stock and are called
stockholders
Allows a corp. to raise large sums of money
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Corporations vs. Small
Manufacturing Companies
Small Manufacturing Companies
Corporations
•Low Fixed Costs
•High Fixed Costs
•High Operating Costs
•Low Operating Costs
•Shut down during poor economies
•Lots of money to maintain factories
during poor economies
The Shoe Cobbler
Consolidation of Industry
Small companies were forced out of
business--designed to eliminate or reduce
business
competition, so are Corporations
unethical?
Monopoly – when a single company
controls an entire market
Versus
Nike Shoe Corp.
Consolidation of Industry
Consolidation of Industry
(cont)
(cont)
Vertical Integration
– company that owns all the
different businesses it
depends on for operation
Horizontal Integration
– combining many firms doing the same type of
business into one large corporation
Consolidation of Industry
Consolidation of Industry
(to eliminate or reduce competition)
(cont)
Trusts – allows one person to
manage another’s property
– Standard Oil forms first trust
– Controlled 90% of refining
Holding Company – Owns
stock of other companies, does
not produce anything
Robber Baron – Capitalist
who became wealthy through
exploitation or Captains of
Industry…i.e.. Andrew Carnegie
Industry…i.e
-Steel/John D. Rockefeller
Rockefeller--Oil
Andrew Carnegie
– Poor Scottish immigrant who
became very rich
– Made early money in railroad
– Invested in Carnegie Steel
company in 1873
– Known for his work in the steel
industry
– Donated 90% of his total
wealth to charity and the arts,
“The Gospel of Wealth”
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Consolidation (cont)
Sherman Antitrust Act – made it
illegal to interfere with free trade
Labor Unions
Between 1865 – 1897, the U.S. experienced
deflation – rise in the value of money
– Prices fell
– Companies cut wages
Labor Unions (organize)
Reasons for Unions
Labor Unions (cont)
– Long hours,
12
12+
+ hours/day, 6 days/week
– Low Wages
– Poor, Unsafe conditions
– No job security
Labor Unions (cont)
Trade Unions – formed by craft
workers limited to those with a
specific skill
– By 1873, there were 32 trade unions
Industrial Unions –united craft
and common laborers
– Companies outwardly opposed them
Workers begin to organize labor unions
Child Labor
– Long hours, Less pay
– More Danger
Labor Unions (cont)
Strategies vs. Unions
– Contracts promising not to join a union
– Hiring private detectives (Pinkertons
(Pinkertons))
– Blacklists – preventing troublemakers from
getting new jobs in their industry
– Lockouts – Workers were locked out of the
worksite and not paid
– Strikebreakers – workers hired to replace strikers
Also called “scabs”
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Labor Unions (cont)
Karl Marx “The Communist
Manifesto”
– World history was a class
struggle between the oppressing
owners and the oppressed
workers
– The proletariat (working
(working--class
oppressed) would overthrow the
bourgeoisie (middle
(middle--class
oppressors) in a violent
revolution and set up a
dictatorship
Knights of Labor
– 8 hour workday
– Equal pay for women
– End of child labor
– WorkerWorker-owned factories
– Favored arbitration – third
party helps workers and
management come to an
agreement
Labor Unions (cont)
American Federation of
Labor
– Large trade union
– Samuel Gompers was first leader
Great Railroad Strike
– 18771877-Railroad workers
strike to protest wages
being cut
80,000 workers in 11
states
Destroyed railroads and
trains
Violence erupted
Wanted to have unions accepted in
America
– Three goals:
Have companies recognize unions
Closed shops – can only hire union
workers
8 hour workday
Produce a society without classes
Labor Unions (cont)
Labor Unions (cont)
Labor Unions (cont)
By 1900, women were 18% of
workforce
– Paid less than men
– Not allowed in unions
Women’s Trade Union League
(WTUL) – first union dedicated to
women’s labor issues
– Created by Mary Kennedy O’Sullivan &
Leonora O’Reilly
Labor Unions (cont)
Haymarket Riot
– 18861886-Chicago
Chicago--Protest against police brutality
– Clash between strikers and police involving a bomb
and gunfire
– 7 police and 4 workers killed
– President Hayes forced
to call out the army to
stop it
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Labor Unions (cont)
Homestead Strike - ”The River Ran Red”
– The Homestead Strike was an industrial lockout and
strike which began on June 30, 1892, culminating in
a battle between strikers and private security agents
on July 6, 1892.
1892.
– The dispute occurred at the Homestead Steel Works
in the town of Homestead, Pennsylvania, between
the Amalgamated Association of Iron and Steel
Workers (the AA) and the Carnegie Steel Company.
Company.
– The final result was a major defeat for the union and
a setback for efforts to unionize steelworkers.
Labor Unions (cont)
Pullman Strike
– 18941894-The American Railway Union (ARU) led by
socialist Eugene Debs strikes against the Pullman
Palace Car Company
– Turned violent after company hired strikebreakers
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