Chapter 6 A New Industrial Age

Write a list in your binder of your favorite 5
inventions

After the Civil War, America is still an
agriculturally based society

By the 1920’s America was in the midst of an
industrial explosion
 Reasons for the explosion:
1. Wealth of Natural Resources
2. Government support for business
3. Growing urban population

Edwin L. Drake successfully used a steam
engine to drill for oil near Titusville, PA

This breakthrough started an oil boom that
spread to Kentucky, Ohio, Illinois, Indiana,
and Texas

Petroleum-refining industries arose in
Cleveland and Pittsburgh

America also had abundant deposits of coal
and iron

1887 prospectors discovered iron ore deposits
more than 100 miles long and up to 3 miles
wide in the Mesabi Range of Minnesota

All while coal production skyrocketed;
33millon tons in 1870 to more than 250 million
tons in 1900

Iron is a dense metal, but it is soft and tends
to break and rust; also contains other
elements like carbon

Removing the carbon from Iron makes steel

Bessemer process was a cheap and efficient
manufacturing process to make steel from
iron

Technique involved injecting air into molten
iron to remove the carbon and other
impurities

Bessemer process was used to make more
than 90% of America’s steel
Railroads, became the biggest customers for steel
http://www.jmhdezhdez.com/2013/06/home-insurance-building-chicago.html

New inventions affected the very way people
lived and worked
Thomas Alva Edison
1. Established the world’s first research lab

2.
Perfected the incandescent light bulb
3.
Made electricity safer and less expensive
with the help of George Westinghouse

Harnessing electricity completely changed
the nature of business

Electricity now appears in the workplace and
in homes

Allowed for faster urban travel, and
manufacturers to locate plants anywhere

Christopher Sholes, typewriter, changed the
world of work

Alexander Graham Bell, telephone, created a
platform for a global communications
network

Both inventions create new jobs
Chapter 6 A New Industrial Age
1.
2.
3.
A National Network
Romance and Reality
Railroad Time

Local transit becomes faster and reliable

Westward expansion becomes possible

Realizing the importance of railroads, the
government made huge land grants and loans
to railroad companies

May 10, 1869 crowds cheered as the Central
Pacific and Union Pacific Railroads met at
Promontory, Utah

This meeting was the first transcontinental
railroad
http://www.history.com/shows/america-the-story-of-us/videos/transcontinentalrailroad?m=5189719baf036&s=All&f=1&free=false
ROMANCE
Dreams of…
 Available land
 Adventure
 A new life
 A fresh start
REALITY
Dreams made possible by…
 Harsh lives of railroad
workers
 Chinese and Irish
immigrant labor
 More than 2,000
employees killed
 More than 20,000 injured

Communities still operated on its own time

Noon in Boston was nearly 12 minutes later than
in New York

1869 Professor C.F. Dowd proposed the 24 time
zones

Railroads strongly backed Dowd’s idea

1918 Congress officially adopts “railroad time”
1.
2.
3.
New Towns and Markets
Pullman
Credit Mobilier

Industry grows rapidly trying to keep pace
with RxR’s demand for parts

RxRs inspire growth, new towns establish
new markets and new economic
opportunities

RxRs ignite trade and interdependence by
connecting previously isolated cities, towns
and settlements

Towns began to specialize in particular
products (Chicago/Stockyards,
Minneapolis/Grain)
Without the RxR, cities like:
1. Abilene, Kansas
2. Flagstaff, Arizona
3. Denver, Colorado
4. Seattle, Washington

would not be in existence.

Built a factory for manufacturing railroad cars

Built a nearby town for his employees; modeled
after European industrialist concepts

Pullman provided almost all of workers’ basic
needs

Town strictly under the control of Pullman,
created for Pullman’s want of control and profit

Desire for profit and control leads RxR magnates
and wealthy industrialists toward corruption

Company made up by stockholders in the Union
Pacific RxR

Scandal included 20 members of congress

Stockholders of the Union Pacific Railroad used
the company to make huge, unearned profits for
themselves
http://www.youtube.com/watch?v=Spgdy3HkcSs
Move to 5:30
1.
2.
3.
4.
RxR abuses
Granger Laws
Interstate Commerce Act
Panic and Consolidation

The Grangers, members of the Grange were
farmers disturbed by railroad corruption

Began demanding governmental control
over the industry

Sold cheaply purchased governmental lands
to other businesses rather than to settlers

Fixed prices helping keep farmers in debt

Discriminated rates; charged different
customers different prices; charged more for
short hauls than long.

A response to railroad abuses

Established maximum freight and passenger
rates and prohibit discrimination

Made constitutional in the case of Munn v
Illinois; states now regulate the RxRs

This act established the right of the federal
government to supervise railroad activities
and established a five-member Interstate
Commerce Commission (ICC).

Not until 1906 did the ICC grow any real
power; thanks to President Theodore
Roosevelt, who allowed the ICC to create
maximum railroad rates
RxR companies faced many problems
1. ICC (tiny problem)
2. Corporate abuses
3. Mismanagement
4. Overbuilding
5. Competition


Many companies were on the brink of
bankruptcy

Financial problems contributed to a
nationwide economic collapse; the Panic of
1893

Firms such as J.P. Morgan & Company
reorganized the RxRs

Seven powerful companies held sway over
2/3’s of the nation’s tracks
Chapter 6 A New Industrial Age

Someone read the bottom of 241-top 242

Entered the steel business in 1873

Witnessed the Bessemer process first hand in
Britain brought it to America

By 1899 Carnegie produced more steel than
all of Britain with his Carnegie Steel Company

Searched to find ways to make better
products more cheaply

Attracted talented people by offering them
stock in the company, while also encouraging
competition within his company

Vertical Integration – When a company
expands into areas that are at different points
on the same production path; a manufacturer
owns its supplier and/or distributor.

helps companies reduce costs and improve
efficiency by decreasing transportation
expenses and reducing turnaround time

Example of Vertical Integration

The merger of Live Nation and Ticketmaster
created a vertically integrated entertainment
company that manages and represents
artists, produces shows and sells event
tickets.

Horizontal Integration - The acquisition of
additional business activities that are at the
same level of the value chain in similar or
different industries.

If the products offered by the companies are the
same or similar, it is a merger of competitors.

If all of the producers of a particular good or
service in a given market were to merge, it
would result in the creation of a monopoly

Someone read this section of the book
Carnegie’s success was contributed too
1. Hard work
2. Shrewd investments
3. Innovative business practices


Others believed it was Social Darwinism

Grew from Charles Darwin’s theory of
biological evolution

Some individuals of species flourish and pass
their traits along to the next generation,
while other do not

“Natural selection” weeded out less-suited
individuals and enabled the best-adapted to
survive

Herbert Spencer used Darwin’s biological
theories to explain the evolution of human
society

Became a way for economists to justify
laissez faire economics

William G. Sumner – success and failure in
business were governed by natural law

What personal qualities do you think a person
would need to become a billionaire in today’s
world?
Forbes 400

4,000 new millionaires since the Civil War

Hard work pays off

Riches were a sign of God’s favor

The poor must be lazy or inferior people who
deserved less

Read the top of 243

If you can’t beat’em, join’em

Many industrialists often pursued horizontal
integration in the form of mergers

A firm that bought out all its competitors
could achieve a monopoly

Complete control over an industry’s production,
wages, and prices

Holding company – a corporation that did
nothing but buy out the stock of other
companies (JP Morgan)

Trusts – joining with competing companies and
turning over stock to a groups of trustees, who
ran all the companies as one corporation
(Rockefeller)

1880 Rockefeller’s Standard Oil company
controls 90% of the refining business

Paid employees extremely low wages

Undercut employees by selling his oil at
cheap costs. Once he controlled the market,
prices soared

Made it illegal to form a trust that interfered
with free trade between states or with other
countries.

Did not work easily though, it was difficult to
determine what a trust was; the Supreme
Court did not rule on the side of the federal
government in cases brought against trusts

The South had a devastated economy from
the Civil War

It was at the mercy of Northern railroad
companies goods to markets.

It also paid added costs for raw materials due
to high tariffs

Read this section

Workers learn from ownership and join there
forces

Exploitation and unsafe working conditions
drew workers together across regions

Workers labored 6-7 days a week, for 12+
hours

No vacation, sick leave, or reimbursement for
injuries suffered on the job

Injuries were common at work

Poor working conditions and mindless tasks
were major factors in work related deaths

1882 – 675 laborers were killed in
work=related accidents each week

First large-scale national organization of
laborers, the National Labor Union (NLU)

Formed in 1866 the NLU persuaded Congress
to legalize an 8 hour work day for
government workers

Samuel Gompers – led the Cigar Makers’
International Union to organize with other
unions

American Federation of Labor (AFL)
President

Focused on collective bargaining or
negotiation between labor and management

Craft Unions only focused on skilled laborers

Many felt skilled and unskilled laborers
needed representation

Eugene V. Debs – American Railway Union
(ARU)
1894 led workers on a strike for higher wages
and won


“The strike is the weapon of the oppressed”

Debs and other labor activists turned to
Socialism

Socialism – an economic and political system
based on government control of business and
property and equal distribution of wealth

Socialism at its extreme = communism

Industrial Workers of the World (IWW), aka
Wobblies – miners, lumberers, and cannery
and dock workers

Created by a group of radical unionists and
socialists in Chicago

Led by William “Big Bill” Haywood

Allowed African Americans to join

Unionization spreads to the West and is
successful

1,000 Japanese and Mexican workers unionize
and strike in the Sugar Beet fields in California

Chinese and Japanese miners in Wyoming strike
searching for the rights that other unions are
receiving.

This movement aids in strengthening labor
unions

Read about – The great Strike of 1877

The Haymarket Affair

The Homestead Strike
http://www.history.com/topics/knights-oflabor/videos#homestead-strike and

The Pullman Company Strike

Class Discussion to follow

Eugene V. Debs

Mary Harris (Mother) Jones

Take out a sheet of paper and we will
construct an answer to the question listed
below as a class

What appears to have been the chief goal of
big business during the late 1800s, and why
did the government begin making efforts to
prevent big business from achieving this
goal?

1.
2.
3.
4.
5.
6.
Make sure these terms and
names are in your Binder
Sherman Antitrust Act
Samuel Gompers
Thomas Alva Edison
American Federation
Alexander Graham Bell
of Labor
George M. Pullman
10. Mary Harris Jones
Transcontinental
11. Triangle Shirtwaist
railroad
Factory (249)
Interstate Commerce
Act
Andrew Carnegie
7.
8.
9.
The Expansion of Industry (pages 230-233)
- How did the growth of the steel industry
influence the development of other industries?
Answer
The growth of the steel industry influenced the
development of other industries because steel
created demand for coal and iron ore; it was used
extensively in the railroad, agriculture , food, and
construction industries

The Expansion of Industry (pages 230-233)
- How did inventions and developments in the
late 19th century change the way people
worked?
Answer
Inventions and developments in the late 19th
century changed the way people worked by
creating new jobs for women, drew people to
cities, and made jobs less backbreaking

The Expansion of Industry (pages 230-233)
What factors allowed the United States to industrialize very rapidly
during the last half of the 19th century
Answer
The factors that allowed the United States to industrialize very rapidly during
the last half of the 19th century were abundant natural resources, such as coal
and iron. These resources gave inventors and entrepreneurs the means to
develop and implement new products and production methods. The explosion
of new inventions and manufacturing processes enabled industry to grow
rapidly. The harnessing of electricity allowed business owners to locate their
factories wherever they wanted and to produce more goods more efficiently
than ever before. A rapidly growing urban population provided potential
markets for new inventions and industrial goods, as well as a steady supply of
cheap labor for industry. Government policies, including laws and Supreme
Court decisions, generally favored business and industry

-
The Age of the Railroads (pages 236-240)
- Why did people, particular farmers, demand
regulation of the railroads in the late 19th
century?
Answer
People particularly farmers demanded regulation
of the railroads in the late 19th century because
railroad companies were very powerful and often
corrupt

The Age of the Railroads (pages 236-240)
- Why were attempts at railroad regulation
often unsuccessful?
Answer
Attempts at regulating the railroads were often
unsuccessful because railroads had a great deal
of political power and fought legal battles
against regulation.

Big Business and Labor (pages 241-249)
- Why were business leaders such as John D.
Rockefeller called robber barons?
Answer
Business leaders such as John D. Rockefeller
were called robber barons because of the use of
ruthless tactics to earn great wealth

Big Business and Labor (pages 241-249)
- Why did the South industrialize more slowly
than the North did?
Answer
The South industrialized more slowly than the
North did because the Southern economy and
terrain had been devastated by the Civil War and
had to be rebuilt. The South had less capital for
investment

Big Business and Labor (pages 241-249)
- Why did workers form unions in the late 19th
century?
Answer
Workers formed unions in the late 19th century
because workers realized that they needed to
unite to protect themselves and to increase
wages, shorten work hours, and improve working
conditions.

Big Business and Labor (pages 241-249)
- What factors limited the success of unions?
Answer
The factors that limited the success of unions
were government support of management, the
use of violence and scabs to break strikes.

Big Business and Labor (pages 241-249)
How did 19th century industrialists encourage
competition? How did they discourage competition?
Answer
19th century industrialists encouraged competition by
running their businesses in such a way that their own
employees competed with one another and other
businesses were forced to cut costs, run more efficiently,
and create better products to compete. 19th century
industrialists discouraged competition by driving their
competitors out of business by developing monopolies and
trusts that destroyed compeition.

-