Industry Comes of Age
CHAPTER 24 NOTES
AP US HISTORY
MRS. MARSHALL
American Society
Reasons for transformation of American
society:
 Industrialization
 Development
of labor unions
 Massive immigration
 Creation of urban centers
Needs for the Industrial Revolution
For the Industrial Revolution of develop
the nation needed:
 A national transportation system
 Large deposits of iron, coal and later oil
 New sources of power
 A supply of labor
 Capital for investment
 A stable banking system
 Surplus agricultural production
Reasons for Subsidies
Reasons private railroad promoters gave
the government for needing subsidies:
 Too risky and expensive without
government help
 It was not profitable in thinly populated
areas
In return for subsidies the government
received long-term preferential rates for
postal service and military traffic.
First Transcontinental Railroad
 Pacific Railway Act- passed by
Congress 1862
 Union Pacific Railroad- built west from
Omaha, Nebraska, relied on Irish
immigrants
 Central Pacific Railroad- built easy from
Sacramento, California, relied on
Chinese immigrants.
 The 2 lines joined 1869 at Promontory
Point, Utah
Other Railroads
Other transcontinental railroads
completed by end of the century:
 Northern
Pacific railroad
 Atchison, Topeka and Santa Fe
 Southern Pacific
 Great Northern
 James. J. Hill’s Great Northern Railroad-
only one not built with government
subsidies
Innovations
Important innovations contributing to
growth of railroads:
 Standardization of time zones
 Standard gauge of track width
 Air brakes
 Steel rails replacing iron tracks
 Pullman Palace Cars
Cornelius Vanderbilt
 An American entrepreneur who built
his wealth in shipping and railroads.
 Through graft and bribery he built the
New York Central into the largest
single railroad line in America.
Stimulus from Railroad
Railroads in the late nineteenth
century provided a significant
stimulus to:
 Agriculture
 Urbanization
 Immigration
 Industrialization
Wealth of Railroads
Tactics used by railroads to amass large wealth:
 Stock-watering people selling stock would inflate
their claims about the companies assets/profits
and sold stock way above the actual value
 Bribery bribed judges, congressmen, lobbyists
 Pool an agreement between railroad
corporations to divide the business in a given
area and share the profits
 Rebates and Kickbacks would pay to big
shippers in return for steady business
Regulation of Railroads
Efforts by government to regulate practices of
railroad corporations:
 1st attempt came from state legislatures
 Interstate Commerce Act- created 1st federal
regulatory agency. This act prohibited rebates
and pools, required railroads to publish their
rates, prohibited discrimination against
shippers, outlawed charging more for short
hauls than long hauls.
 Interstate Commerce Commission-created to
enforce the new legislation
Growth of Manufacturing
Factors which promoted growth of
manufacturing in post-Civil War
America:
 Plentiful cheap labor
 Available investment capital
 Abundant natural resources
 Massive immigration
Inventors
 Eli Whitney- mass production
 Alexander Graham Bell- telephone,
resulted in building of a giant
communication network.
 Thomas Edison- electric light,
mimeograph machine, motion picture
Andrew Carnegie
 Scottish immigrant who became a
giant in the steel industry
 Two methods he used:
 Vertical
integration- process in which a
company buys out its suppliers
 Horizontal integration- process in which
companies producing similar products
merge
John D. Rockefeller
 Industrialist who organized the
Standard Oil Company
Trusts
 Trusts- combination of firms or
corporations formed by a legal
agreement. It reduces competition.
Bessemer Process
 Henry Bessemer and the Bessemer
Process
 Cheap and efficient process for
making steel from iron (around 1850)
JP Morgan
 Became the head of one of the most powerful
banking houses in the world.
 Bought out Carnegie
 United States Steel Corporation
Oil Industry
 Discovered kerosene (which comes from oil)
could be used in lamps. Increased the demand.
 Edwin Drake (1859) used a steam engine to
drill for oil.
 Gasoline was another by-product.
 Gasoline was not demanded until the
automobile.
 Oil industry became a huge business with the
invention of the internal combustion engine.
Social Darwinism
 An economic and social philosophy based
on the biologist Charles Darwin’s theory of
evolution by natural selection-holding that a
system of unrestrained competition will
ensure the survival of the fittest.
 Two notable Social Darwinist:
Herbert Spencer and William Graham
Sumner
“Gospel of Wealth”
 “Gospel of Wealth” –essay by Carnegie-
argues that accumulation of wealth was
beneficial and government should not
take action to impede it. People with
money had duty to help others.
Sherman Antitrust Act (1890)
 Was intended to prevent the creation
of monopolies by making it illegal to
establish trusts that interfered with
free trade.
 Textile mills provided jobs for many
southerners in the “new south.”
 Henry Grady editor of the Atlanta
Constitution
 Women were most affected by the new
industrial age. Image of the “Gibson
Girl” represented an independent and
athletic “new woman”
Working Against the Worker
Tactics used by corporations against workers:
 Lockout- closing factories so worker could not
work
 Yellow dog contract- signed agreement not to
join a union
 Blacklist- put name of union members/ agitators
on list circulated among industries
 Company town- corporation owned stores in
town-workers became deeply in debt
National Labor Union (1866)
 Successful in gaining 8 hour work
day for government workers. A
major setback was Depression of
the 1870’s
Knights of Labor
 1869-Uriah Stephens
 Skilled and unskilled workers
 Terence Powderly replaced Stephens in
1879
 Favored open arbitration/discouraged
strikes
 Haymarket Riot
 Disappeared by 1900
American Federation of Labor (AFL)
 Samuel Gompers
 Affiliation of craft unions for skilled
workers
 Lobbied for 8 hour day, 6 day week,
higher wages, better working
conditions, protection for workers
Attitude Towards Labor
 By 1900, American attitude toward
labor began to change as the public
came to recognize the rights of
workers to bargain collectively and
strike. The vast majority of
employers continued to fight
organized labor.