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Experience HistoryExperience History

DAVIDSON • GIENAPP • HEYRMAN • LYTLE • STOFFDAVIDSON • GIENAPP • HEYRMAN • LYTLE • STOFF

Chapter 19: Chapter 19: The New Industrial Order, The New Industrial Order,

1870-19141870-1914

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PreviewPreview

““What made America in the 1880s so different What made America in the 1880s so different from just a few decades earlier was not the from just a few decades earlier was not the speed and comfort of travel or the wonders of speed and comfort of travel or the wonders of new technology. The true marvel was the new technology. The true marvel was the emerging industrial order that underlay those emerging industrial order that underlay those technologies and made them possible. …Its technologies and made them possible. …Its growth in scale, scope, and complexity…was at growth in scale, scope, and complexity…was at first slow and required innovations in many first slow and required innovations in many different areas of society.”different areas of society.”

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The HighlightsThe Highlights

The Development of Industrial SystemsThe Development of Industrial Systems Railroads: America’s First Big BusinessRailroads: America’s First Big Business The Growth of Big BusinessThe Growth of Big Business The Workers’ WorldThe Workers’ World The Systems of LaborThe Systems of Labor

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The Development of Industrial The Development of Industrial SystemsSystems

Natural Resources and Industrial TechnologyNatural Resources and Industrial Technology– Bessemer processBessemer process– Petroleum industryPetroleum industry– Environmental costsEnvironmental costs

Systematic InventionSystematic Invention– Edison’s contributionEdison’s contribution– The spread of an electrical power systemThe spread of an electrical power system

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Steel Production, 1880 and 1914Steel Production, 1880 and 1914

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Transportation and CommunicationTransportation and Communication– The problem of scaleThe problem of scale– Telegraph: timely information could be received Telegraph: timely information could be received

nationwidenationwide– Telephone: New Haven, Connecticut, opened the first Telephone: New Haven, Connecticut, opened the first

telephone exchangetelephone exchange

Finance CapitalFinance Capital– Sources of capital: savings of firms and later savings Sources of capital: savings of firms and later savings

and investment of individualsand investment of individuals– Growth of a complex network of financial institutionsGrowth of a complex network of financial institutions

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The CorporationThe Corporation– Advantages of the corporation: raise large sums of Advantages of the corporation: raise large sums of

money, outlive its owners, limited liability, separated money, outlive its owners, limited liability, separated owners from day-to-day managementowners from day-to-day management

– By the turn of the century, corporations were making By the turn of the century, corporations were making two-thirds of all manufactured products in the U.S.two-thirds of all manufactured products in the U.S.

An International Pool of LaborAn International Pool of Labor– Global labor networkGlobal labor network– Migration chainsMigration chains– Domestic sourcesDomestic sources

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Occupational Distribution, Occupational Distribution, 1880 and 19201880 and 1920

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Railroads: America’s First Railroads: America’s First Big BusinessBig Business

A Managerial RevolutionA Managerial Revolution– Pioneering trunk linesPioneering trunk lines– The new managers: beneath owners but with wide The new managers: beneath owners but with wide

authority over operationsauthority over operations

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Competition and ConsolidationCompetition and Consolidation– Railroads saddled with enormous fixed costs: Railroads saddled with enormous fixed costs:

equipment, payroll, high debtsequipment, payroll, high debts– Rate warsRate wars– Pooling: informal agreements among competing Pooling: informal agreements among competing

companies to act togethercompanies to act together

The Challenge of FinanceThe Challenge of Finance– New ways of raising moneyNew ways of raising money– Investment bankers advised companies about their Investment bankers advised companies about their

business affairsbusiness affairs

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Map: Railroads, 1870-1890Map: Railroads, 1870-1890

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The Growth of Big BusinessThe Growth of Big Business

Strategies of GrowthStrategies of Growth– Salt makers drew together in the nation’s first poolSalt makers drew together in the nation’s first pool– Horizontal growth: joining loosely together with rivalsHorizontal growth: joining loosely together with rivals– Vertical integration: integrated several different Vertical integration: integrated several different

activities inside one companyactivities inside one company

Carnegie Integrates SteelCarnegie Integrates Steel– 1875: Carnegie opens first mill in midst of a severe 1875: Carnegie opens first mill in midst of a severe

depressiondepression– Expanded horizontally, purchasing rival steel mills Expanded horizontally, purchasing rival steel mills

and constructing new onesand constructing new ones

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Rockefeller and the Great Standard Oil TrustRockefeller and the Great Standard Oil Trust– Rockefeller’s methods of expansionRockefeller’s methods of expansion– The trust: stockholders of corporation surrendered The trust: stockholders of corporation surrendered

their shares “in trust”their shares “in trust”

The Mergers of J. Pierpont MorganThe Mergers of J. Pierpont Morgan– The holding companyThe holding company– The merger movementThe merger movement

Corporate DefendersCorporate Defenders– The gospel of wealthThe gospel of wealth– Social DarwinismSocial Darwinism

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Corporate CriticsCorporate Critics– Socialist Labor partySocialist Labor party– Sherman Antitrust ActSherman Antitrust Act– United States v. E. C. Knight Co.United States v. E. C. Knight Co.

The Costs of Doing BusinessThe Costs of Doing Business– The boom-and-bust cycleThe boom-and-bust cycle– Three severe depressions rocked the economy in the Three severe depressions rocked the economy in the

last third of the nineteenth centurylast third of the nineteenth century

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““Andrew Carnegie invoked the gospel of wealth to justify Andrew Carnegie invoked the gospel of wealth to justify his millions, but a group of radical critics looked his millions, but a group of radical critics looked on his libraries and foundations as desperate attempts on his libraries and foundations as desperate attempts to buy peace of mind.” to buy peace of mind.”

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Boom and Bust Business Cycle, Boom and Bust Business Cycle, 1865-19001865-1900

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The Workers’ WorldThe Workers’ World

Industrial WorkIndustrial Work– Pattern of industrial workPattern of industrial work– Taylorism: time-and-motion studiesTaylorism: time-and-motion studies– Worker citizens: expected enough money to support Worker citizens: expected enough money to support

and educate, as well as enough time to stay abreast and educate, as well as enough time to stay abreast of current affairs of current affairs

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Children, Women, and African AmericansChildren, Women, and African Americans– On average, children worked 60 hours a weekOn average, children worked 60 hours a week– Even more than women, African American men faced Even more than women, African American men faced

discrimination in the workplacediscrimination in the workplace

The American Dream of SuccessThe American Dream of Success– Rising real wagesRising real wages– Social mobilitySocial mobility

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The Systems of LaborThe Systems of Labor

Early UnionsEarly Unions– National Labor UnionNational Labor Union– NLU wilted during the depression of 1873NLU wilted during the depression of 1873

The Knights of LaborThe Knights of Labor– Terence PowderlyTerence Powderly– Looked to abolish the wage system and replace with Looked to abolish the wage system and replace with

a cooperative economya cooperative economy

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The American Federation of LaborThe American Federation of Labor– Samuel GompersSamuel Gompers– Failure of organized laborFailure of organized labor

The Limits of Industrial SystemsThe Limits of Industrial Systems– Spontaneous protestsSpontaneous protests– Molly MaguiresMolly Maguires– Great Railroad StrikeGreat Railroad Strike– Laundresses strikeLaundresses strike– Haymarket Square riotHaymarket Square riot

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Management StrikesManagement Strikes– Pullman strike (1894)Pullman strike (1894)– Management weapons: “yellow dog” contracts, Management weapons: “yellow dog” contracts,

lockoutslockouts

““In a matter of only 30 or 40 years, the new industrial In a matter of only 30 or 40 years, the new industrial order transformed the landscape of America. It left its order transformed the landscape of America. It left its mark elsewhere in the world, too.”mark elsewhere in the world, too.”

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