The Triumph of Industry
1865-1914
Innovation Drives the Nation
 Patents
 A grant by the government to the inventor giving the right to
develop and sell inventions without competition
 Electricity
 Created by Thomas Jefferson brought lighting to homes and
businesses, as well as other things.
 Steel Industry
 Bessemer Process purified iron making it stronger.
 Bridges, skyscrapers, rail lines.
 Railroads
 Time zones were created to maintain schedules.
 Automobile
 First began in 1902
The Rise of Big Business
 The Corporation
 More than one person owns the company
 Raises money by selling stock
 Layered people structure
 For profit or non-profit
Gaining Competitive Edge in Business
 Monopolies
 When a corporation tries to gain complete control over a
market.
 Cartels
 Businesses come together and agree to limit production to
control prices.
 Trusts
 Companies assign their stock to a board of trustees who
combine them into a new corporation and take out the profits.
 Vertical Integration
 Companies that own the complete line of production.
 Enables then to control costs and prices.
Oil companies, both multinational (such as ExxonMobil, Royal Dutch
Shell, ConocoPhillips or BP) and national (e.g. Petronas) often adopt a
vertically integrated structure. This means that they are active along the
entire supply chain from locating crude oil deposits, drilling and
extracting crude, transporting it around the world, refining it into
petroleum products such as petrol/gasoline, to distributing the fuel to
company-owned retail stations, for sale to consumers.
Vertical Integration
• Crude Oil, drilling, refineries
• Distribution channels
• Retail store selling gas
 Horizontal Integration
 Consolidation of many like businesses to form one business.
 Purpose is to increase profits and remove competition.
Expansion via acquisition of a competitor or by adding outlets to a chain. For
example, a book publisher might acquire another publishing house to increase its
stable of editors and authors or to otherwise enhance its competitiveness.
Horizontal Integration
Wendy’s
McDonald’s
McWendy’s
The government Imposes Regulations
 Interstate Commerce Act (1877)
 First used to oversee railroads
 Regulated trade
 Sherman Antitrust Act (1890)
 Outlawed any trust that “restrained” trade or commerce.
 Clayton Antitrust Act (1914)
 Strengthened the Sherman Antitrust Act
The Organized Labor Movement
 Factory Work
 Sweatshops
 Working conditions 12 hour days, 6 days a week.
 Often dangerous places to work.
 Children worked (1 in 5, ages 10-16, by 1900)
 Factory Towns
 Had housing, stores and other amenities to keep worker in debt.
Labor Unions
 Collective bargaining
 Employees or representatives negotiating better working
conditions
 Strikes
 First formed union- National Trades Union (1834)
 Knights of Labor (1869)
 Was for all workers
 Mission was to replace capitalism ways
 Folded after growing to 700,000 workers
AFL (American Federation of Labor)
 Founded by Samuel Gompers
 AFL was a craft union for skilled workers.
 Women not allowed.
 Charges dues and focused on benefits for workers, such as
wages, hours, and conditions.
Strikes
Strike
Cause
Effect
Railroad Strikes (1877)
Response to cut in workers
wages
Set the scene for violent
strikes to come.
Haymarket Square (1886)
Part of a campaign to achieve Americans became weary of
an 8 hour work day
labor unions; the Knight of
Labor were blamed for the
riot and membership
declined
Homestead Strike (1892)
Economic depression led to
cuts in steelworkers wages
After losing the standoff,
steelworkers unions lost
power throughout the
country
Pullman Strike (1893)
Wags cut without a decrease
in the cost of living in the
company town
Employers used the courts to
limit the influence of unions.
Lasting Effects
 Strikes and discontent set the tone for the formation of labor
unions in the US.
 Government becomes more involved in big business.
 New laws and regulations are passed.
Progressivism
 Believe that new ideas and honest and efficient government
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could be social justice.
Came from all groups of people.
Women wanted the vote.
Wanted to see the end of corruption and ineffective
government.
Others wanted government to regulate big business, bust
trusts, and create more opportunities for small business.
Close the gap between rich and poor.
Muckrackers
 People who wrote about the social, government, and big
business issues.
 Jacob Riis- photographer
 Lincoln Steffens- editor known for uncovering social
problems
 Upton Sinclair-wrote The Jungle
Society Reforms
 Jane Adams Settlement House
 Florence Kelly
 Movement to ban child labor
 1912 U.S. Children’s Bureau created
 Keating-Owens Act also to ban child labor, repealed until 1938.
 National American Women Suffrage Association
 Headed by Carrie Catt pushed for the vote
 Improve education
 Improve working conditions
Reforming government
 Many cities went to city commissioners to run things and
improve city government
 Political bosses were being arrested or removed from office.
 Elections rules are changed
 Direct primaries-the people elect candidates
 Initiative-people could put laws on ballots
 Referendum- people could approve or reject laws passed by
legislators
 Recall- could remove politicians from office
Theodore Roosevelt (1901-1909)
 Becomes president after President McKinely is assassinated.
 Known as the “Square Deal” president.
 Started to regulate industry and bust trusts
Laws that were passed
 Hepburn Act (1906)
 Reinforced the ICC and regulated prices for shipping.
 Meat Inspection Act (1906)
 Processing plants to be inspected
 Food and Drug Act (1906)
 Correct labelling or products
 National Reclamation Act (1902)
 Controlled water rights
William H. Taft (1909-1913)
 Relaxed the rules for corporations and used the “rule of
reason” which allowed big business monopolies
 Undid many of the regulations that Roosevelt had put into
place.
 Defeats Roosevelt in presidential election and TR doesn’t
make a third term.
Wilson’s presidency (1913-1921)
 The New Freedom
 Placed strict controls over government
 Lowered tariffs on imports to promote lower prices
 The Federal Reserve Act (1913)
 Placed national banks under the federal government
 Sets interest rates
 Federal Trade Commission
 Watched business and its practices
Amendments passed
 16th Amendment (1913)
 Passes to create a federal income tax ( Underwood Tariff Act)
 18th Amendment (1919)
 Banned the sale of alcohol
 19th Amendment (1920)
 Gave women the right to vote
Progressivism Leaves a Legacy
 Expanded the role of government with regulation.
 A time for massive new legislation
 More protections were offered to its citizens.
 Although not a perfect solution it at least paved the way for
today.