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Natural Resources
Inventions
Railroads
Big Business & Labor
Labor Unions

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We went from an agricultural nation to an industrial power
Black Gold: Indians used it for fuel & medicines, Americans used it to light kerosene lamps
Big Break came in 1859 by Edwin L. Drake

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In 1859 Drake successfully used a steam engine to drill for oil in Pennsylvania
This breakthrough started an oil boom that spread to Kentucky, Ohio, Illinois,
Indiana and later Texas.
At first oil was transformed into kerosene
But with automobile, gas became the most important form of oil

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Coal production skyrocketed
33 million tons in 1870 to 250 million tons in 1900
Steel is made from removing the carbon from iron
Steel is more flexible and durable
Henry Bessemer developed a cheap & efficient manufacturing process to do this
Known as the Bessemer Process

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Steel’s biggest customer became the railroads – used it for laying tracks
Barbed wire
Farm machinery
Used on construction sites: Brooklyn
Bridge, skyscrapers (with steel frames you could build as high as you wanted)

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Thomas Edison: light bulb, electricity
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Electricity completely changed the nature of business in America
Electric power ran all types of machines
Soon became available in homes & appliances for the home
Streetcars made travel cheap & expanded the outward growth of cities
Industries grew as never before – could locate anywhere they wanted

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Typewriter invented by Christopher
Sholes changed how we work
Telephone invented by Alexander Graham
Bell changed how we communicate
Created more jobs, especially for women
In 1870: women made up 5% of workforce, by 1910 they accounted for
40% of the workforce

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Jobs that were previously done at home were now being mass produced in a factory
Some jobs became easier with the help of machinery
Standard of living increased: due to machinery & inventions the workweek was reduced by 10 hours
Urban expansion allowed for new inventions & products

“An industrial explosion created a demand for shipping routes for both raw materials and finished products and increased the demand for rail networks. Technological advances in the production of steel made rapid expansion of the railroads possible.”

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To identify the role of the railroads in unifying the country
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To list positive & negative effects of railroads on the nation’s economy
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To summarize reasons for, and outcomes of, the demand for railroad reform.

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In 1869 Central Pacific & Union Pacific
Railroads met at Promontory, Utah
It was a linking of the first transcontinental railroad – a gold spike marks the spot where they connected
In 1861 the nation had 30,000 miles of track. By 1890 it had 210,000 miles of track.

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Railroads brought a romance to travel by bringing dreams of adventure, unsettled land
& a fresh start to many Americans
Reality: The workers, who made the above possible, had harsh and stark lives
Central Pacific hired Chinese immigrants
Union Pacific hired Irish immigrants
Accidents, pneumonia and diseases killed thousands of workers each year
In 1888, 2,000 killed, 20,000 injured

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All railroad workers-surveyors, tracklayers, engineers, firemen & brakemen- faced difficult conditions & numerous hazards.
Were paid very little for a tremendous amount of hard work
Whites were paid $40-$60 a month with free meals, Chinese were paid $35 a month and had to supply their own food

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Laborers worked hard to transform the country from disconnected & individual locations into a united nation.
Each city worked on it’s own time – so no two stops had the same time.
Each city/town said noon arrived when the sun was overhead
In 1870, Prof. C.F. Dowd suggested that the earth’s surface be divided into 24 time zones & that the U.S. should have 4 time zones (Eastern,
Central, Mountain, Pacific)
By1883, everyone adopts a standardized time system

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How did the role of the railroad unify the country?

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Iron, coal, steel, lumber & glass industries grew rapidly trying to keep up with the railroads’ demand for raw materials & parts
Growth of railroads led to a growth in towns, helped establish new markets & offered opportunities

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Isolated cities became linked due to railroads
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Trade was promoted among cities/towns – a network of suppliers nationwide
Towns began to specialize in certain products
Chicago = stockyards, Minneapolis=grain,
Pennsylvania=steel
Towns prospered due to mass production & mass selling of goods

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George Pullman manufactured rail cars/sleepers
Required a large & steady workforce
Built a town for his employees: brick houses/apartment buildings, medical & legal offices, shops, church, library, theatre & an athletic field
Town was controlled by Pullman. He didn’t want employees to make the company look bad. He wanted a stable workforce & more profits
Workers became dissatisfied and went on strike

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Stockholders in the Union Pacific Railroad formed a construction company called
Credit Mobilier
Gave their own company a contract to lay tracks at 3 times the costs
Kept the profits and paid off government officials
Pocketed $32 million in stocks, bonds & cash

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Railroads themselves took advantage of farmers
Would charge outrageous prices for hauling goods of farmers
Price fixing
Would charge different customers different rates
Wanted to keep farmers in their debt

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Grangers were poor farmers
Took political action against railroads
They sponsored state & local political candidates, elected legislators *&* pressed for laws that would protect their interests
Due to the Grangers’ persistence: Illinois first to establish maximum freight & passenger rates
Ended discrimination against farmers

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States challenged the Granger laws on regulation
Supreme Court upheld the Granger laws
States won the right to regulate the railroads for the benefit of farmers & consumers
Established an important principle: the federal government’s right to regulate private industry to serve the public interest. (Is this good or bad?)

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To identify management and business strategies that contributed to the success of business tycoons such as Andrew Carnegie
To explain Social Darwinism and its effects on society
To cite methods used by ruthless businessmen to eliminate free competition
To describe the reasons for the slow industrialization of the South

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Rags to riches story
At age 13 worked 12 hr days at a cotton mill
Then worked as a messenger for telegraph service. Worked his way up the ladder
Thomas A. Scott hires him as a personal secretary at Pennsylvania Railroad
Was given a chance to buy stock in the company
When he earned his first dollars from dividends off that stock he said, “Here’s the goose that lays the golden eggs!”

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Made so much off dividends he left PR and opened up his own steel company

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Continually sought for ways to make better products more cheaply
Used detailed accounting systems to track the cost of every item and process he used
Hired the best of assistants and encouraged competition among them
Offered them stocks in the company
Increase production – cut costs

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Attempted to control the entire steel industry
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Vertical Integration: bought out all of his suppliers (coal, iron, freighters & railroads)
Controlled every aspect: raw materials, transportation, & manufacturing process
Gave him total power over the quality & cost of his product

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Horizontal Consolidation: Buying out competing businesses. (a merger)
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Controlled both his supplier & competitors
Carnegie was producing 80% of the steel business
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Almost a monopoly

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Social Philosophers explained Carnegie’s success like this:
No government regulation of business
Free competition in the market place
Survival of the fittest companies
Success & failure in business were governed by natural law (free market) & that no one – especially the governmenthad no right to interfere

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Made sense to the millionaires
Also appealed to the working class: if they worked hard, they too could become rich
Stories of rags to riches success became popular

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Oligopoly: a market in which only a few sellers provided a particular product
Usually resulted when businesses with similar products merged
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Monopoly: When a business bought out all of its major competitors and had complete control over its industry’s production, quality, wages paid & prices charged

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Holding Companies: A corporation that did nothing but buy out the stock of other companies
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Trust agreement: Participants in a trust turned their stock over to a group of trustees – people who ran the companies as one large corporation. In return those companies would receive dividends on profits earned by the trust
Trusts were considered illegal but had many gray areas & loopholes

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First job was a produce clerk at the age of
16
Started his first company at the age of 19
& grossed $450,000
Took advantage of trusts and gained control of the oil industry in America
(Standard Oil)
In 1870 controlled 2-3% of the oil industry, by 1880 controlled 90%

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Instead of passing on the savings to customers, Rockefeller kept the profits
He paid his employees low wages, drove his competition out of business by selling his oil at a lower price than it cost to produce it.
When he had control of the market he hiked the price up far above the original price to gain back lost profits
Because he dominated businesses he received rebates and kickbacks

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Due to their ruthless tactics, some business men are called Robber Barons
Carnegie & Rockefeller defended their wealth by pointing out they gave a large percentage of their profits/wages to charities.
Sherman Antitrust Act: Formed by the government to prevent big businesses from interfering in free competition – or forming monopolies
Was hard to enforce & eventually the government stopped trying to enforce it

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Utility companies (gas & electric)
Comcast (now there is AT&T, Direct TV)
Microsoft
Pharmaceutical drug companies
National Healthcare????

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South was still trying to recover form the
Civil War
Lacked money to invest
Had few major cities
Southern economy remained agricultural
– farmers were at the mercy of railroad rates & going into debt
Northerners controlled 90% of the railroad business

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Southern businesses had to compete with not only well established Northern companies, but also had to fight for the skilled workers
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Some businesses prospered: forestry, textile, tobacco, furniture
Exploitation of both the Southern laborers & the Northern wage earners drew all
American workers together in a nationwide labor movement demanding their rights

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To describe the exploitation of workers – including women & children
To summarize the emergence & growth of unions
To explain the violent reactions of industry & government to union strikes
To identify the influence of women in the labor movement
To describe the role of the government in opposing union activity

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Industrial innovations diminished workers’ skills & accomplishments
Most factory workers worked 12 hour days or more and 6 days a week
Steel mills often demanded 7 days of work
No vacations, or sick leave
No unemployment compensation
No reimbursement for injuries sustained on the job, yet injuries happened frequently

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Hazardous working conditions
Factories were dirty, poor ventilated & poorly lit
Dangerous or faulty equipment
Workers had to perform repetitive, minddulling tasks hour after hour with this poor equipment
Workers had little choice but to put up with these conditions because they needed money

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Most families could not survive on the little pay one person received in the household.
Everyone in a family had to work
In 1890: 4 million women worked
In 1910: 8 million women worked
20% of boys under the age of 15 held full time jobs
10% of girls under the age of 15 held full time jobs
Some were as young as 5 years old
Many worked from dawn to dusk

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Children went hungry & were exhausted by the long hours
Many had crippling or fatal accidents
Worked so many hours that there wasn’t anytime for school
Forfeited there own future to help their families
Many of the work was tedious & tiresome
Paid the lowest wages: 27 cents for a 14 hour days of work.

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Women: $269 per year
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Men: $498 per year
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Andrew Carnegie made $23 million per year – with no income tax.

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Unsafe working conditions
Extremely long hours of work
No benefits
Low, low wages
On the job injuries with no compensation
Tedious jobs that required no skills

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National Labor Union
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Knights of Labor

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Small unions existed since the early 1800’s
The NLU was the first large scale union to organize in 1866.
Formed by William H. Sylvis
Had 300 local unions from 13 states
To make the NLU most effective he encouraged women & blacks to join
Some did, others did not leading to: Colored
National labor Union (CNLU)

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Grew to 640,000 members
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Convinced Congress to legalize an 8 hour work day for government workers
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Formed its own political party – The Labor
Reform Party
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Main goal was to link existing unions together

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How would forming their own political party help them in their quest to gain better wages and working conditions?

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Focused its attention of industrial workers
Organized in 1868
It’s motto: “An injury to one is the concern of all”
Open to all workers regardless of race, gender or degree of skill
Supported an 8 hour work day & equal pay for equal work

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Advocated arbitration before striking
Strikes were a last resort
Terrence Powderly became head of
Knights of Labor in 1881
Under Powderly’s leadership expanded membership from 28,000 in 1880 to
700,000 in 1886

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Labor activism diversified
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Different movements within the union emerged
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Received support from socialists and social reformers

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All skilled workers from many different industries organized unions
Led by Samuel Gompers, the Cigar Makers’
International Union joined with other trade
& craft unions in 1886
Formed the American Federation of Labor
(AFL)
AFL focused on collective bargaining (group negotiations) to reach written agreements
AFL used strikes as a major tactic to achieve its goal

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AFL had successful strikes that helped them win higher wages & shorter work weeks for skilled workers
Weekly wage in 1890: $17.50
Weekly wage in 1915: $ 24.00
Average work wee fell from 54.5 hours to just under 49 hours

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Wanted to reach beyond just skilled laborers and include all laborers who worked in a specific industry
Eugene Debs made the first attempt to form an industrial union – the
American Railway Union (ARU)
In 1894 he won a strike for higher wages
Membership climbed to 150,000
Due to losses suffered due to major strikes this union didn’t last long, but it made its mark

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Some activists thought there was an underlying problem that had to do with a capitalist system
Private ownership and free competition make the rich richer and the poor poorer
Turned to socialism: government control of business & property and equal distribution of wealth
Appealed to the poor workers – felt that they could be empowered

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Threatened the wealthy whose wealth it could confiscate
In 1905, an extremist group organized the Industrial Workers of the World
(IWW)
Headed by William “Big Bill” Haywood
& included miners, lumberers, & dock workers
Membership never exceeded 150,000 – included women & black workers
Gave dignity & solidarity to unskilled workers barred from other groups

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Began in July, 1877 in Martinsburg, WV
Workers for the Baltimore & Ohio railroads went on strike due to reduced wages
President Rutherford Hayes intervenes and calls the militia and
Federal troops to get involved
Strike quickly spreads from coast to coast
Railroads were stopped in their tracks

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Riots broke out and violence erupted
In Baltimore the militia shot and killed 10 people including a 16 year old student and a newsboy
Striking workers burned a town, and sent a
part of a train crashing into freight cars.
In Pittsburgh, Federal troops fired and killed
20 civilians
Across the country over 100 people died
Eventually strikers retreated. Strike lasted for almost two weeks

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On May Day 1886, the workers at the
McCormick Harvesting Machine Co. in
Chicago began a strike in the hope of gaining a shorter work day
Knights of Labor represented these workers
On May 3, police were used to protect
strikebreakers and a scuffle broke out; one person was killed and several others injured.
The following day, May 4, 2,000 gathered for a rally

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The gathering was peaceful until police sent units into the crowd to force it to disperse
At that point, a pipe bomb was thrown into the police ranks; the explosion took the lives of seven policemen and injured more than 60 others
The police fired into the crowd of workers, killing four.
Knights of Labor reputation was
tarnished and they never recovered from the bad press
Mood was hysteria

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8 men convicted – 7 sentenced to death
1 killed himself in prison, 4 others killed hanged themselves
In 1892 clemency was granted to the remaining 3 that were still in jail
All in all it was a setback for labor
unions and the labor movement

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Work conditions at Carnegie Steel Co were poor
Steelworkers went on strike on July 6, 1892 after the plant manager Henry Frick announced he was cutting wages
Frick hired guards to protect the plant
Hired scab workers
Riots erupted and the National Guard had to be called in. 3 guards and 6 workers dead
Union lost much support & the workers gave in

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Began May 11, 1894
Workers walked out of the Pullman
Palace Car Co. due to declining wages & stalled negotiations
ARU supported these workers & stood by them declaring they would no longer work trains of Pullman’s
Crippled railroad traffic nationwide
Federal government intervened: no boycotts, sent soldiers in

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Vandalism & violence occurred: rail cars were damaged
Workers were angry and burned the yards and anything in it
President Cleveland ordered the strikers to return to work. This enraged the workers.
A riot ensued, Eugene Debs (head of ARU) was arrested.
The strike became a lost cause – nothing was gained – same wages & working conditions
Pullman was now recognized as a greedy & intolerant man

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Demanded better working conditions
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Equal pay for equal work
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End child labor

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Mary Harris “Mother” Jones
*most prominent woman organizer
*daughter of an Irish union activist
*supported the Great Strike of 1877
*joined the United Mine Workers of America (UMW)
*Led miners in strike & had their wives march in front of the mine entrance banging pots and pans
*led women mill workers in strike and persuaded their husbands to join a union
*led children who worked in a march to President
Theodore Roosevelt’s home
*She had a tremendous impact & influenced child labor laws to be passed

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Pauline Newman & the Garment
Workers
* at 16 became the first female organizer of the International Ladies’ Garment
Workers Union
* Supported the “Uprising of 20,000” – the massive 1909 strike against shirtwaist companies (Triangle Waist
Fire)

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Management took steps to weaken unions by refusing negotiate didn’t allow union meetings fired union members hired new employees only if they signed a contract saying they wouldn’t join the union
Industrial leaders & courts turned Sherman
Anti-Trust Act against unions: federal injunction against all strikes saying it hurt trade

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Consumers are sympathetic but get frustrated when there is a shortage of goods due to a strike
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People feared riots & a socialistic revolt
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Union was losing members