Unit 6: Industrialization
I. Factors that led to Industrialization
A. Abundance of raw materials/natural resources
1. timber, coal, iron, copper, and oil
2. Transcontinental Railroad allows the shipment of natural resources to eastern factories
B. Large Immigrant workforce and larger families
1. between 1860 and 1910 the population tripled
2. Creates a large workforce and consumer demand
C. New inventions and technology:
1. Alexander Graham Bell-telephone
2. Thomas Edison-Menlo Park research laboratory
a. phonograph, electric generator, light bulb, battery, motion picture, General Electric company (GE)
3. Ice Machine, Refrigerated railroad car, air brakes for trains…all improve transportation and trade
D. Free Enterprise System
1. Laissez-Faire “Let the people do as they choose” government should not interfere in the economy.
2. Supply and Demand regulates wages and prices
3. Entrepreneurs-people who risk capital to create business supported low taxes and limited government
4. Federal Government divided between North and South
a. North- supported high tariffs and Federal subsidies for building canals, roads and railroads
b. South-supported low tariffs
II. The Rise of Big Business
A. Corporations: a business owned by stockholders but considered by law and individual person.
B. Stockholders: owned shares of a corporation called stocks
1. stocks allows a corporation to raise large amounts of money and purchase new technologies, hire large
workforces and produce goods quickly.
C. Fixed costs vs. Operating costs
1. Fixed costs: have to be paid, loans, mortgages and taxes, regardless of whether it is operating
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Unit 6: Industrialization
2. Operating costs: costs when running; wages, shipping costs, buying raw materials and supplies
D. Types of Business organizations
E. Pools: Agreement between compromises to fix prices did not last when economic struggles occurred.
F. Trusts: Group of trustees managed companies stocks as one large merged company but don’t own it
G. Holding companies: owned stock of companies creating one large enterprise but produce nothing
H. Investment Banking: Purchasing large amounts of stock at a discount and selling it for profit
I. Vertical Integration: owns all the steps in the production and shipping/sale of product
J. Horizontal Integration: owning other businesses that produce the same product.
K. Monopoly: a single company controls the entire market of a product.
III. Industrialists of America
A. Captain of Industry: uses vast wealth to help others and create a better society.
B. Robber Baron: creates vast wealth by ruthless business tactics used against workers and other business owners.
C. Industrialists:
1. Andrew Carnegie: Rags to Riches story of a poor immigrant to wealthy industrialist. Owned Carnegie Steel
Corporation.
2. John D. Rockefeller: owned Standard Oil, largest national oil refinery owning 90% of industry
3. J.P. Morgan; Investment Banker, created large wealth buying railroad companies, bought Carnegie Steel and
other steel companies creating U.S. Steel Company worth $1.4 billion in 1901.
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Unit 6: Industrialization
IV. Workers in the United States
A. Craft Workers: had special skills and training
B. Common Laborers: few skills and lower wages
C. Trade Unions: organizations of skilled workers
D. Industrial Unions: united all workers in a particular industry
E. Knights of Labor: 1869, Leader Terrence Powderly opposed strikes, used boycotts (refused to buy or use a service)
or arbitration (third party helps negotiations), 8 hour work day, equal pay for women, no child labor, all workers were
allowed to join.
F. American Federation of Labor (AFL): 1886 Leader Samuel Gompers, focused on wages, working hours, and working
conditions, used collective bargaining, pushed for closed shops (only hire union members) promoted an eight hour
work-day, only allowed skilled workers.
G. Opposition to strikes
1. blacklist-list of “troubled workers” not to hire
2. lockouts-locked out of property and refused to pay them
3. injunction-court order to stop boycotting/strikes
H. Major Strikes
V. Old vs. New Immigrations: 25 million immigrants between 1865-1914
A. Old Immigrants: Pre-1890 Northern and Western Europe
B. New Immigrants: 1890 to 1914 Southern and Eastern Europe (Italy, Greece,Austria-Hungary, Russia, and Serbia)
70% men, Asian (China and Japan)
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Unit 6: Industrialization
C. Reasons for Immigration: Industrial job opportunities, escape poverty and social classes, avoid military service,
high costs of living/food, overpopulation, and escape religious persecution.
D. Immigration Process
1. Steerage: passage to the U.S. on the lowest level of the steamship, crowded, dirty and miserable.
2. Ellis Island: Immigration processing center in NY harbor, included medical exam before entrance
3. Angel Island: Immigration processing center in San Francisco, hearings were held to decide immigration
status of Asians, mostly in teens and twenties.
E. Nativism: extreme dislike of immigrants by native born people
1. Focused on Irish, Asian and Eastern European
2. Reasons: Religious differences, stealing jobs and different cultural beliefs
3. Chinese Exclusion Act: 1882, banned Chinese immigration for 10 years and prevented immigrants in U.S.
from becoming citizens. Renewed law in 1892, made permanent in 1902 and repealed in 1943
VI. Urbanization: population triples in cities between 1870 to 1900
A. Reasons for Urbanization: Immigrants lacked funds to buy farmland, factory job opportunities for unskilled
workers, rural farmers moved to cities for better paying jobs, bright lights, running water, and modern plumbing.
B. Skyscrapers help cities build up with limited space to build out.
C. Cable cars, electric trolley cars, elevated railroads, and subways help improve urban transportation
D. Society and neighborhoods became divided by social classes and ethnic groups
1. working class tenements: small crowded apartments with multiple families
E. Urban Problems
1. Crime: minor criminals thrived in crowded cities, murders rose 200% from 1880-1900, saloons were blamed
for breeding corruption, crime and family suffering
2. Disease: typhoid fever and cholera epidemics spread because of unsanitary urban conditions
3. Political Machines: informal political groups designed to gain and keep power
a. provided jobs, housing, food, heat and protection in exchange for votes
b. graft-gaining money through dishonest methods from the city treasury
c. Tammany Hall & Boss Tweed-ran NY through the 1860’s and 1870’s
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