Ch. 24 Notes
Industry Comes of Age
The Rise of Industry
1. After the Civil War, agriculture was still the
largest economic activity of the U.S. and the U.S.
imported more goods than they exported.
2. By 1900, industry made up over half of the U.S.’s
economic activity and the U.S. was a major
supplier of manufactured goods in the global
market place.
3. The South didn’t participate in this rise, though.
4. The South remained largely rural and continued
to rely on agriculture, except for the influx of
new textile industries in certain areas.
Factors Supporting Industry
1. The U.S. had abundant natural resources to use as raw
materials.
2. The U.S. was able to harness early power sources, such as water
and coal.
3. The construction of roads, canals and (most importantly)
railroads allowed manufactures to get their goods to various
markets around the country – and abroad.
4. The U.S. had a cheap labor supply because of the large number
of immigrants entering the country.
5. The U.S. went through a burst of technological innovation after
the Civil War.
6. The U.S. developed new management and business techniques
to aid in industry.
7. The U.S. had large amounts of investment capital, from both
home and abroad.
The Iron Horse
1. One of the most
significant early industries
to develop in the U.S. was
the railroad.
2. The transcontinental
railroad, which was
financed through loans
and land grants from the
federal government,
united the nation into a
single, integrated national
market.
3. Agriculture and mining
were expanded greatly
(because you could get
your goods to eastern
markets faster and easier)
and foreign trade was
made easier as well.
The Influence of the Railroads
1. The railroad owners had a huge amount of influence
over trade in the U.S.
2. They were instrumental in getting the country to
adopt standard time zones.
3. They bribed judges and legislatures to enact laws
favorable to them (they allowed politicians and
journalists to travel free).
4. They inflated their stock prices to reap higher profits.
5. They created “pools” in order to avoid competing
with each other.
6. They offered rebates and took kickbacks from larger
shippers.
Regulating the Railroads
1. The federal government took a laissez faire approach to
regulating any type of industry (hands off) so it fell to the
state legislatures to try to regulate the railroads.
2. In 1877, in the case of Munn v. Illinois, the Supreme
Court said that the states did have the power to regulate
the railroads, but in 1886, in the case of Wabash v.
Illinois, the Supreme Court reversed that decision.
3. In 1887, the federal government passed the Interstate
Commerce Act, creating the Interstate Commerce
Commission to regulate the railroads.
4. The ICC wasn’t effective because it didn’t have much
enforcement power, but it was important because it
showed the government was (slowly) moving away from
the laissez faire approach to business and industry.
Industrialization and Women
1. As the Industrial Revolution changed the shape
of America, it also influenced the role of women
in the workforce.
2. In the lower classes, many women worked in the
factories – out of necessity.
3. Two inventions will bring women from the
middle class into the workforce as well – the
typewriter and the telephone.
4. Women will face many inequalities in the
workforce though and as the labor movement
grows, they will often be left out of it as well.
The Captains of Industry
1. The Industrial Revolution created a huge gap between
the upper and lower classes of our nation.
2. Men like Andrew Carnegie (steel), J.D. Rockefeller
(oil), J.P. Morgan (banking) and James Duke (tobacco)
will grow incredibly rich during this time, often
through nefarious business practices.
3. When Carnegie decides to sell his steel mills to J.P.
Morgan, U.S. Steel will be created ((1901), which was
the U.S.’s first billion dollar corporation.
4. These men, through various innovations, will change
the way America does business and bring about
major, positive effects on U.S. society.
The Robber Barons
1. The same men who brought about positive
change through their industries also brought
much negative change.
2. Carnegie (through vertical integration) and
Rockefeller (through horizontal integration)
virtually eliminated competition within their
fields of business – and of course the
government did nothing to stop them.
3. Over time, huge monopolies formed, controlling
the prices of numerous products bought and
sold in America.
The Robber Barons
Industries Influence on Government
Social Darwinism
1. The idea of Social Darwinism was actually
developed by Herbert Spencer and William
Graham Sumner.
2. According to their “survival of the fittest”
theory, the wealthy deserved their riches
because they had demonstrated greater ability
than the poor.
3. The writer Horatio Alger wrote “rags to riches”
stories about men like Carnegie and the working
class believed that they would be able to do that
as well.
Carnegie and the “Gospel of Wealth”
1. According to the “Gospel of Wealth”, men
like Rockefeller and Carnegie believed that
they had to prove themselves morally
responsible to handle their wealth.
2. Over time, their philanthropy would lead to
numerous public libraries, research centers,
scholarships and other items.
The Labor Movement
1. The working class worked 10 to 14 hour work
days.
2. Working conditions were dangerous and
abusive.
3. Wages were low.
4. Child labor was common.
5. The government of course will do nothing about
these conditions so the labor force began
forming unions to promote their interests.
Businesses Fight Back
1. Business leaders would use blacklists –
refusing to hire a union member.
2. They would use lockouts – closing down their
factories to drive the unions out.
3. They would hire scabs to work when the
union went on strike.
4. They would make workers sign yellow-dog
contracts promising not to join a union.
The National Labor Union
1. The NLU was organized in 1866.
2. The earliest national union, it aimed to unify
workers around the country in all types of
trades – it did exclude Chinese labors and
most women and African Americans as well.
3. Their main goals were to get arbitration of
industrial disputes and an eight hour work
day.
4. The Panic of 1873 brought about its collapse
The Knights of Labor
1. Led by Terence Powderly, the Knights of Labor became a
major national union in the 1880’s.
2. The Knights of Labor accepted anyone into their union,
as long as they were laborers.
3. Their main goal was an eight hour work day and were
actually able to get it (through strikes) in some instances.
4. The problem with the Knights of Labor was that they had
too many competing interests and no “class
consciousness” – they didn’t see themselves as a
permanent working class.
5. In 1886, the Haymarket Square Riot will bring about the
collapse of the Knights of Labor – people associate the
violence occurring in strikes with the labor union.
The American Federation of Labor
1. The American Federation of Labor, led by
Samuel Gompers, was formed for craftsmen.
2. It excluded unskilled laborers, women and
African Americans.
3. They sought better wages, hours and working
conditions.