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Chapter 6: A New Industrial Age
Section 1: The Expansion of Industry
I. Natural Resources Fuel Industrialization (second industrial revolution)
A. What started this revolution?
1. Natural resources
2. Gov’t support of big business
3. Growing urban population that provided cheap labor and markets for
new products
B. Black Gold
1. Sold as a miracle cure for ailments
2. Canadian geologist Abraham Gesner discovered how to refine
kerosene from oil and coal
a. Gasoline was a byproduct that was thrown away
3. In 1859 Edwin Drake used a steam engine to drill for oil because
there was a demand for inexpensive fuel (Titusville, Penn)
a. They thought he was insane
b. By 1880, 25 million barrels of oil
C. Steel
1. In 1887 prospectors discovered massive iron ore deposits in the Mesabi
Range of Min
a. The ore traveled by rail on the company run-Duluth and Iron
Range Railroad to Lake Superior for shipment to eastern ports
(Pennsylvania industrialist Charlemagne Tower bought the land)
2. Henry Bessemer and William Kelly found a cheaper way to make
steel (1850s)
a. Inject air into molten iron to remove the carbon and other
impurities
b. Steel price dropped from $100 a ton to $10 a ton (cheaper to
lay train track)
c. Produce more steal in one day than in a week
3. Steel used for expansion:
a. Railroads the biggest customers for steel
b. Used to build heavy machinery (John Deere) that massed
which increased farm production
b. Built rails that moved heavy machinery
c. Electric street cars changed urban travel
d. Bridges (Brooklyn Bridge) and skyscrapers (William Le
Baron Jenney and the Home Insurance Building in Chicago)
II. Inventions Promote Change
A. Electricity
1. Thomas Edison invented an electric generator
a. Powered a factory
b. Opened a power plant but could not send electricity to far
places
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2. George Westinghouse and Nikola Tesla developed the transformer
to solve Edison’s problem
3. Edison then opened an inventing shop in 1876
a. Said he would make a small invention every ten days and a
huge invention every 6 months
b. Perfected the light bulb(1093 patents in 1880)
4. Manufactures could locate their factories wherever they wanted
a. Armour and Swift meatpacking plant became the model of
efficiency in business
B. Inventions change lifestyles
1. Samuel Morse patented his version of the telegraph in 1837
a. Send business orders in just minutes
2. Alexander Graham Bell’s talking telegraph patented in 1876
a. Millions of people bought phones
b. Operators were needed to run them (women accounted for
40% of the clerical work force)
3. Isaac Singer (1850s) built the first commercially successful machine.
a. Factories produced garments (women needed)
4. Christopher Sholes developed the typewriter in 1867
a. Produce documents quickly and many of them
Section 2: The Age of the Railroads
I.
Railroads Span Time and Space
A. Transcontinental Railroad was completed on May 10, 1869 when
Central Pacific and Union Pacific met at Promontory Point, Utah (Golden
Spike)
1. Cheaper steal meant laying more track
a. Trunk lines: or major railroads, crossed the Great Plains to the
Pacific coast
b. Smaller, feeder or branch lines, connected surrounding areas
c. Stimulated urban growth (research a town in ND and see
how it started)
2. By 1859 the tracks crossed the Missouri and kept going West
a. Marquis De Mores, founded the town of Medora in April 1883
b. Built a meat packing plant (failed in 1886), a brick plant, a hotel,
stores, and a large home (Chateau de Mores) overlooking his new
town
3. George Westinghouse’s developed air brakes(stop at same time)
4. Granville Woods developed telegraph system for trains
5. Double set of tracks (two direction traffic)
a. Standard gauge track in 1880s (all trains travel on same line)
B. CPR employed thousands of Chinese immigrants and Union Pacific
hired Irish immigrants and out-of-work Civil War vets
1. Often attacked by Indians as the moved West
2. 1888 2,000 workers died and 20,000 injured
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C. The U.S. was now connected but the country’s timing was off
1. 1869 professor C. F. Dowd proposed Eastern, Central, Mountain, and
Pacific time zones (railroads supported this idea to get times to sync)
a. The U.S. Congress finally adopted railroad time for the
nation in 1918
II.
Opportunities and Opportunists
A. George Pullman built sleeper cars for the railroads (Carnegie and Rockefeller
each had their own luxury sleeper cars)
1. Pullman town was built for the workers in the middle of the Illinois
prairie
a. Provided housing, doctors, and athletic fields
2. Eventually the Pullman strike occurred when he reduced wages, and, at
the same time, chose not to reduce rent
B. Discovered in 1872 that Grant’s Vice President Schuyler Colfax became
a stockholder in the Credit Mobilier Company when it donated stock to
about 20 representatives in 1867(actually Speaker of the House at this time).
Future President James Garfield also owned stock in Mobilier.
1. Jay Gould, President of UP, ran tracks parallel to those of his rivals
a. Set his rates below his cost
b. Engineered fluctuations in his competitors stock
c. Issued stock certificates far in excess of the actual value of
UP assets (watered down UP stock)
2. Union Pacific Railroad directors actually created Mobilier
Company (1864), which was a construction company
3. Mobilier received contracts from Union Pacific Railroad to lay track
on the transcontinental railroad
4. Mobilier raised additional money by selling shares of stock, which
were mainly given and/or sold at bargain prices to members of
Congress
5. In return for the cheap stock, stockholding legislators were to vote
funds, land grants, and construction subsidies for Union Pacific
construction and prevent an investigation of their financial
dealings
6. Union Pacific paid Credit Mobilier according to the contracts, which
were two to three times higher than the actual expense to lay the track
($20-$50 million profits, which went directly into the stockholder’s
and Pacific Union’s directors pockets)
C. The Whiskey Ring
1. Federal gov’t supposed to collect revenue tax on every bottle of
whiskey sold
2. Distillers bribed treasury officials in order to avoid paying those taxes
3. Grant’s private secretary was involved (General Orville E. Babcock
and 238 others indicted)
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D. Grant awarded jobs based on the patronage/spoils system: giving supporters
gov’t jobs
III.
The KKK Tried to help Democrats Take Back the South (formed by six
ex-Confederates in the 1860s)
A. Head of the KKK-Grand Wizard Nathan Bedford Forrest warned
that he intended to kill the radicals (Republicans)
1. Wanted to prevent Republicans (shot Senator John Stephens) and
blacks (murdered legislator Richard Burke) from voting
2. Lynched freedman Dan Black and would not allow his family to bury
him
a. Served as an example to other blacks
B. Enforcement Acts (1870-1871): outlawed the use of force to prevent
people from voting and authorized President Grant to use federal troops to
enforce the law
1. Democrats called them the Force Acts
IV.
The Grange and the Railroads
A. The Grangers, members of the Grange organization founded in 1867
wanted the gov’t to regulate railroads
1. Railroads sold land grants to businesses instead of farmers
2. Railroads agreed to fix prices to keep farmers in debt
3. Customers were charged different rated for shipping (charges more
for short hall b/c often no other carrier was available)
B. Grangers joined the political realm and helped elect candidates that
supported their causes
1. In 1871 Illinois created a commission “to establish maximum freight
and passenger rates (Granger Laws)
2. Munn v Illinois (1877): Supreme Court upheld the Granger Laws and
allowed states to regulate the railroads for the benefit of farmers and
consumers
3. Wabash v Illinois (1887): Supreme Court ruled only the federal gov’t
can regulate traffic moving across state boundaries (interstate commerce)
a. Congress responded to the court’s decision by passing the
Interstate Commerce Act (1887): federal gov’t can supervise
railroad activities and est a five member Interstate Commerce
Commission (ICC) for that purpose (a hard fight until TR)
C. Panic of 1893 occurred mainly b/c of mismanagement and corruption that
pushed railroads into bankruptcy
1. 600 banks failed, 15,000 businesses failed, 4 million unemployed
2. Investment firms such as J.P. Morgan & Company reorganized the
railroads
a. Seven powerful companies controlled 2/3rds of the tracks
Section 3: Big Business and Labor
I. Big Business
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A. Laissez-faire capitalism (allow to do): No government regulations of
economic matters
1. Social Darwinism (Charles Darwin): Some species flourish and pass on
their traits to the next generation, while others don’t
a. Natural selection
2. Herbert Spencer: Society progresses through competition. The fittest
people (business or nation) should and would rise to positions of wealth
and power, while the unfit failed.
a. Helping the poor slows down progress.
b. Riches were a sign of God’s favor and therefore the poor
must be lazy or inferior
3. Most businesses were proprietorships-small enterprises owned by
individuals or families-or partnerships-enterprises owned by two or more
people.
B. New businesses were corporations, which raised capital by selling shares of
stock, or certificates of ownership.
1. Stockholders-those who buy the shares-receive a % of the corporation’s
profits in the form of dividends
2. Advantages of a corporation
a. Raise enormous sums of money
b. Stockholders enjoy limited liability-that is, they are not responsible for
the corporation’s debt
c. Corporations are stable no-matter who owns the stock
II. Andrew Carnegie (1873 steel)
A. Established first monopolies
1. Knew nothing about steel but knew how to run a business
2. Economies of scale: buy in bulk and produce in bulk to increase profit
3. Vertical integration: bought the companies that he needed services and
material from (control raw materials and transportation)
4. Horizontal integration: one company’s ownership of other companies
involved in the same business
5. Sold his company for $500 million to J.P. Morgan (1901)
a. Carnegie gave away 90% of his wealth (Carnegie Hall 1890)
b. Holding Company (JP Morgan): a corporation that does nothing but
buy out the stock of other companies (type of merger)
III. John Rockefeller (Standard Oil Company)
A. Drove his competitors out of business
1. Trust agreements: participants in a trust turn their stock over to a group
of trustees-people who ran the separate companies as one large
corporation
a. Trusts were not legal
2. By 1880 Standard Oil refined 90% of the oil in America
a. Cut prices to drive competitors out of business and then jacked prices
up
3. Gave away over $500 million, Rockefeller Foundation, University of
Chicago, funded efforts to find a cure for yellow fever
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a. Rockefeller Center is named after J.D.R. Jr.
IV. Government and Business
A. High tariffs on imports (US could dominate market)
1. Sherman Antitrust Act (1890): declared all monopolies and trust
illegal that interfered with free trade b/w states and countries
a. Not enforced until 1911
B. Business Boom Bypasses the South
1. The South is still trying to recover from the Civil War
a. Southerners didn’t have capital to invest
b. No skilled workers, high tariffs, excessive transportation costs
2. Northerners owned 90% of the stock in profitable companies in
V. New working class
A. Labor soared from industry
1. Flood of immigrants met demand for workers
2. 1/3 of countries industrial workers were foreign born
3. Rural Americans moved to cities
4. African Americans moved to North in hopes of finding jobs
a. In south African Americans were barred from factory jobs
b. African Americans had dangerous jobs
c. Best jobs went to native born whites
5. Working women = 15% of working force
a. Why are families falling apart and what has created the high
divorce rate in the US?
6. 20% of boys and 10% of girls under the age of 15 held full-time jobs
(some were as young as five)
a. Why is school so hard and so much work for some?
VI. Working Conditions
A. Conditions for workers
1. Children worked 12 hour shifts, at night, for pennies a day
2. Unskilled male workers
a. 10 hours days, 6 days a week, $10 a week ($.17 a hour)
b. Women and children worked for half as much ($.08 a hour)
3. Results of the hard work
a. In 1881 30,000 railroad workers were killed or injured
b. In 1882 an average of 675 laborers were killed on-the-job each week
4. Company towns and the Jungle: a company owned the housing and the
businesses
a. Workers in these towns received their wages in scrip-paper money that
could only be used to pay rent to the company or to buy goods at
company stores (whole paychecks spent here)
5. Conspicuous consumption: wealthy bought whatever they wanted nomatter what the cost
B. Jacob Riis
1. Concerned about sweatshops and tenement homes (How the Other
Half Lived)
VII. Unions
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A. National Labor Union (1866): 1st large-scale nation organization of laborers
formed by ironworker William H. Sylvis
1. Persuaded Congress to pass eight hour workday for gov’t workers
2. Didn’t admit African Americans
B. Knights of Labor (wanted temperance, shorter work day, equal pay, no child
labor)
1. Founded in 1869 by nine Philadelphia garment workers led by Uriah
Stephens
a. Focused on combining existing Unions for mainly white workers both
skilled and unskilled
b. Strikes were a last resort
2. Terence Powderly took control in 1879 (membership exploded)
a. He opened the doors to all skilled and unskilled laborers, women, and
blacks
3. The Knights opposed Chinese workers: claimed they stole jobs from
whites (supported the Chinese Exclusion Act of 1882)
a. (California) Chinese were attacked and killed in the Panic of 1873 (no
jobs)
b. Chinese asked authorities for help, and in return they were told they
could not own property or work at certain jobs
c. 1882 Chinese Exclusion Act: denied citizenship to people born in
China & prohibited the immigration of Chinese labors
C. Mary Harris Jones (the most dangerous women in America or Mother Jones)
devoted her life to the labor movement
1. Became an organizer for the Knights of Labor and the United Mine
Workers (supported the great strikes of 1877, etc.)
a. 1903 led a march of 80 severely injured children to TR’s home
(passed child labor laws
2. Sentenced to 20 years in jail for her part in a 1912 West Virginia strike
a. Public outcry forced governor to set her free
D. ILGWU (International American Ladies’ Garment Workers Union)
1. Pauline Newman (16) was the first female organizer of the Union
a. Included unskilled workers, many were Jewish and Italian immigrants
b. Nov 1909 seamstresses’ engaged in the Uprising of 20,000
2. Triangle Shirtwaist factory fire in New York City (1911)
a. Company locked all the doors (from the outside) except one to
prevent theft and nailed the windows shut from the outside
b. The unlocked door was blocked by fire and the fire escape collapsed
c. Many women jumped from 8th, 9th, and 10th floor
E. American Federation of Labor (1886 and only skilled)
1. Founded by Samuel Gompers whose members were only skilled
workers
a. Craft Union: local union of persons practicing the same occupation
(independent, but follows general AFL policies)
b. Craft Union affiliated with state and local union
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c. They wanted collective bargaining (negotiating), written agreements
on wages, hours, and working conditions
d. Striking was a major tactic used often
F. IWW or Wobblies (Industrial Workers of the World)
1. Leader William “Big Bill” Haywood (1905)
2. Rally unskilled workers to overthrow the capitalist system (accepted all)
a. 1912 protested a 30-cent wage cut and won in Massachusetts
b. Short-lived success: Wobbly leaders disagreed, Americans feared the
IWW, government cracked down, and strikes started to fail
G. American Railway Union
1. Eugene Debs wanted all laborers in a specific industry to join together
2. Believed in Socialism (want gov’t control of business, property, and
equal distribution of property)
VIII. Strikes Turn Violent
A. 1877 the nation entered a period of intense strikes and violent labor
confrontations that became known as the Great Upheaval
1. Economic depression led to wage cuts
2. Negotiations failed between management and workers
3. End of 1886 400,000 workers had at one time been on strike
4. State governors pleaded with President Hayes to intervene
a. Stated strikes impede interstate commerce (federal troops step in)
B. Haymarket Riot (picketing McCormick Harvesting plant)
1. 40,000 Chicago workers went on strike May 1, 1886
a. Anarchists took control of strike-people who oppose all forms of
government
2. May 3rd strikers and police had a confrontation that left 2 strikers dead at
the Harvesting plant
3. In protest strikers called for a peaceful meeting in the Haymarket
Square in Chicago on May 4th
a. 200 hundred policemen showed up and a bomb exploded
b. Police opened fire and 70 people were wounded
c. Anarchist George Meng probably exploded the bomb, was not
arrested, and died in a bar fire.
d. 8 arrested (4 were hanged, one committed suicide, but only three
were actually there
4. Turned public against organized labor
C. Employers strike back at the Haymarket Riot
1. Blacklists-lists of union supporters (these people couldn’t get jobs)
2. Workers had to sign yellow-dog contracts-promises not to join unions
3. If these measures failed employers instituted lockouts-barred workers
from plants and brought in nonunion strikebreakers
4. Injunctions: court order prohibiting a certain action (strike)
a. Strikers pay for economic losses of employer during strike
D. Homestead Strike (1892)
1. Occurred at Carnegie’s Homestead steel plant in Pennsylvania
2. Manager Henry Frick announced a wage cut
a. Floors so hot the water boiled
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3. Lockouts were instituted, strikebreakers were hired, and 300 detectives
(Pinkerton Detective Agency) were hired to guard plant
a. A violent clash occurred resulting in 16 deaths
b. The state militia had to restore order
a. Union leaders did not get their jobs back, prices stayed the same,
and wages dropped 50%
E. Pullman strike (1894)
1. Occurred at a railroad car factory in Chicago (American Railway Union
supported workers-Debs in charge)
2. George Pullman cut wages but did not reduce the prices on goods in
the company’s stores or reduce rent
a. Asked the federal gov’t for help because workers were tying up railroad
traffic (interstate traffic)
3. How did the gov’t stop the strike?
a. Attached mail cars to Pullman cars, which allowed the gov’t to say
these workers were preventing mail delivery
b. Federal troops were ordered into to Chicago and violence broke out
but the troops maintained order (Public thought union corrupt)
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