An Industrial Giant
Important Questions to Consider While Reading:
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Why did American Manufacturing flourish?
What is the significance of the RR industry?
What are “Company towns”? Were company towns economic slavery?
How did Reforms change business and workers lives?
INTRODUCTION: INDUSTRIAL SUPREMACY
As the Civil War began, the U.S. didn’t compete industrially with European Powers.
By the end of the 19th Century, the USA was a colossus world manufacturer, above England and
Germany. (The I.R. began in England around 1750)
I. Industrial Growth Overview:
1. Civil War forced an advancement
2. Pop. Growth: 7.5 million Immigrants 1870-1900
a. Wisconsin transitioned: agricultural area w/ grain & lumber  urban
economy – Milwaukee / Green Bay / Madison
3. Discovery of natural resources: iron ore, coal, oil, copper, forests
b. Mesabi Mountain Range=iron ore
c. Resources created opportunities  Created Money and Jobs!
4. More Immigrant Migration
5. The Protective Tariff – shielded the market from foreign competition
a. Tariffs protect the profits of American Industries, but still allowed others
to invest in American Business
II. Increase in Productivity & Creation of New Industries
1. IR rapid advance in basic science
a. New machines, processes & power sources
2. Agriculture:
b. Combines -threshed and bagged 450 lbs grain/minute
c. Machinery replaced 50% of the muscular labor needed to formerly do a job.
3. Improvements in milling grain = packaged cereal = General Mills
4. (George) Canning = automatic line – canning factory.
5. James A. Bonsack – Cigarette – rolling machine.
6. George B. Eastman – mass produced roll of photographic film. Kodak Camera.
7. Eli Whitney – Inventor of the “Cotton Gin,” and “Interchangeable parts”
8. Alexander Graham Bell – The telephone - 1876
9. Thomas B. Edison – “The Wizard of The Wires,” & Electric Light bulb.
10. (Frederic) Remington – typewriter (1880’s)
III. Improvements in Railroads
1. 1867- “Commodore” Cornelius Vanderbilt
a. Consolidated NY Central RR
2. Mechanization
a. Steel Tracks
b. Standard Guage
c. Westinghouse Brake- air brakes
d. Pullman Palace Cars- sleeping cars
e. Thomas A. Scott- PA railroad
3. Erie Railroad 1869 NY to Cleveland
a. Daniel Drew, Jay Gould, and Jim Fisk.
i. Used “Stock watering” (manipulation of stock prices)
4. B&O 1830 Baltimore and Ohio- America’s First RR
5. A National Network: of rails that connected the east coast with the west coast. (New
York City to California)
IV. Railroads: First BIG Business- enormous amounts of land given for RR tracks
1. Dreams of land, adventure, and a new start in life drew people to work on the
railroads.
a. “Coolies”-Chinese Immigrants-recruited to build Central Pacific
b. “Paddies” – Irish Immigrants- recruited to build Union Pacific
2. Phase II of IR– Age of Steel
a. Henry Bessemer (pg.546)
i. Inventor of the Bessemer Process for making steel
3. First Transcontinental Railroad-1869.
a. The Union Pacific – Omaha to Utah  Built By Paddies
b. Central Pacific – Sacramento to Utah  Built by Coolies
4. Resulting demand for steel
a. 1865 – 35,000 miles of track / 1875 – 74,000 miles of track
b. 1890 - $1 billion made in passage and freight
i. Trunklines = mainlines
ii. Feeder lines = local lines connecting to Trunklines
5. Integrated RR system- necessary b/c all RRs required same amt. of work
6. Greater RR traffic = Greater profit
7. Other Transcontinentals
a. Northern Pacific: Atchison & Topeka
b. Southern Pacific: Great Northern (built by James J. Hill greatest builder
V. Railroad Problems:
1. Corruption that resulted:
a. Pooling- agreement to divide business in a given area and to fix prices
b. Stock Watering-stock price manipulation
c. Price Fixing- companies within an industry agree to charge same price for
service, rather than compete to offer lowest price
d. Wabash Case- 1886 Supreme Court said states can’t regulate interstate
commerce
e. Jay Gould- as mentioned above-used stock watering
i. Looked like insignificant pygmy- but really, ruthless, cynical &
aggressive
ii. 1870- bought 370,000 shares of U.P. stock
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VI.
iii. Took over Kansas Pacific RR (K.C. to Denver)
iv. Took over Missouri Pacific RR (K.C. to St. Louis)
Grange & Railroads:
a. Grange -organization of farmers that tried to stop railroads from cheating
farmers by over charging them to ship their products.
b. The Grangers-members of the Grange
c. Started in 1867 by Oliver Hudson Kelley
d. Granger Laws-laws that fought price fixing
1877 Munn v. Illinois:
a. Court determined they could regulate railroads
1886 Wabash v. Illinois
a. ruled state legislature had no power to regulate traffic across state
boundaries; federal responsibility
1887 Interstate Commerce Act
a. ICC (Interstate Commerce Commission) used act to fight monopolies
b. ICC consisted of 5 members
Financial Problems w/ Panic and Consolidation
a. Mismanagement
b. Competition
c. Corporate Abuses
d. Monopolies- to eliminate competition
e. Panic of 1893- depression caused by overspeculation in RRs
i. Business slowdown
ii. 600 banks closed
iii. 15,000 businesses went bankrupt
iv. 4 million workers lost their jobs
Opportunities and Opportunists
1.
New towns and new markets
a. Chicago-stockyards-Meat Packing Industry-Philip Amour
b. Minneapolis-Grain Industry-Cereal Capitol of U.S.
2.
Birth of the Skyscraper (1884)
a. Louis L. Sullivan-architect
b. First-The Home Insurance Building-Chicago-1884
c. James Otis-invented elevator-helped facilitate Skyscraper
3.
Pullman; City in Illinois
a. 1880- George M. Pullman-built factor for manufacturing sleeper cars
b. Built a company town (town for employees to live in)
c. The Pullman Strike- workers went on strike after Pullman refused to
lower rents after cutting employee pay
VII. Robber Barons
1.
Andrew Carnegie
a. Scottish immigrant who made fortune in steal and donated most profits to
libraries across the nation. Created Carnegie Steel
2.
J.P. Morgan
a. Bough Carnegie Steel
b. Made it America’s first billion dollar corporation
c. Financial Genius-nicknamed Jupiter
3.
J.D. Rockefeller
a. Oil Robber Barron – created trusts and was criticized as a robber baron
while serving as head of the Standard Oil Company.
4.
Edwin Drake
a. 1859- successfully used a steam engine to remove oil from beneath the
earth’s surface. Titusville, Pennsylvania- America’s first oil well
5.
Baron Terminology
a. Trusts- groups of companies centrally controlled to regulate production,
reduce expenses, and eliminate competition
b. Monopolies- seek to eliminate competition
c. Vertical integration- a company controls every stage of the industrial
process, from mining the raw materials to transporting the finished
product (Carnegie Steel)
d. Horizontal integration- former competitors are brought under a single
corporate umbrella (by controlling the supply and prices of oil products,
Standard Oil’s profits soared and so did Rockefeller’s fortune, which at
the time of his retirement amounted to $900 million)
VIII. Gospel of Wealth
3.
Darwin/Social Darwinism
a. Survival of the fittest race of people
b. Social Darwinism-discouraged Govt. regulation of business
c. Plutocracy-rule by the wealthy few
IX. Unions
1. The National Labor Union (1866-1872)
a. William Sylvis
b. 8-hour workday
c. social reform union killed by the depression of the 1870s
2. The Knights of Labor (1869-1886)
a. Uriah Stephens
b. Terrence v. Powderly
c. death after 1886- lost a strike to Jay Gould (Southwester RR)
d. Haymarket Affair- May 4, 1886
e. 8-hour workday
f. child labor laws
g. arbitration
h. the “one big union” that championed producer cooperatives and industrial
arbitration
3. The AFL (1881-Reorganized 1886)
a. Samuel Gompers
b. Haymarket Affair- May 4, 1886
c. 8-hour workday
d. 6 days a week
e. an association of Unions pursuing higher wages, shorter working hours,
and better working conditions
4. Labor Day-1884-National Holiday for Workers
5. Mother Jones-organized coal miners, wives, & children to fight for better working
conditions
6. Eugene V. Debbs- ran American Railway Union and later ran for president
several times as socialist