Industrialization 1865 – 1901

The United States

Becomes an Industrial

Nation

CausesNatural Resources

Large Workforce

Free Enterprise

New Inventions

Industrialization

Natural Resources Water, timber, coal,

iron & copper– Transcontinental Railroad

played a part 1859 – Edwin Drake

drills first oil well in Titusville, Pennsylvania

Large Workforce US population

triples between 1860-1910– 30 million to 90

million– Increased demand

for goods and services

Immigration– 1870 to 1910 20

million immigrants

Free Enterprise Laissez-faire – “let people do as they

choose”– No government intervention– Free Markets

Entrepreneurs – risk takers and innovators– In late 1800’s invested in manufacturing

Railroads Pacific Railway Act (1862) –

construction of transcontinental railroad– Union Pacific

10,000 workers – Civil War vets, Irish Immigrants, farmers, miners, ex-cons

– Central Pacific 10,000 Chinese workers

– Met at Promontory, Utah

Railroads (cont)

Railroads linked the nation– Larger markets for goods– Stimulated the economy

Spent money on steel, coal, timber, etc.

Railroads (cont)

1883 – American Railway Association divided country into four time zones

Railroad Abuses (Corruption)

Land Grants – free land given to railroad companies to encourage construction– Railroads sold the land to settlers, real estate

agencies, and others Price Fixing – agreements between

companies to set prices– Kept farmers in debt

Railroad Abuses (cont)

Credit Mobilier – owned by Union Pacific– Awarded UP’s contracts, then overcharged

UP Money went into the pockets of the UP investors

– Union Pacific almost went bankrupt Congress gave more land grants

– Investigation implicates many members of congress

Railroad Abuses (cont)

Interstate Commerce Act– Tried to stop railroad abuses and

corruption– Federal govt oversees railroads

Rise of Big Business By 1900 big businesses dominated

economy– Corporation –organization owned by many

people, but treated by law as if a single person

– Owners buy shares of stock and are called stockholders

Allows a corp. to raise large sums of money

Corporations vs. Small Manufacturing Companies

Small Manufacturing Companies

• Low Fixed Costs• High Operating Costs• Shut down during poor

economies

Corporations• High Fixed Costs• Low Operating Costs• Lots of money to maintain

factories during poor economies

The Shoe Cobbler

Versus

Nike Shoe Corp.

Consolidation of Industry

Small companies were forced out of business-designed to eliminate or reduce competition, so are Corporations unethical?

Monopoly – when a single company controls an entire market

Consolidation of Industry (cont)

Vertical Integration– company that owns all

the different businesses it depends on for operation

Consolidation of Industry (cont)

Horizontal Integration– combining many firms doing the same type

of business into one large corporation

Consolidation of Industry (to eliminate or reduce competition)

Trusts – allows one person to manage another’s property– Standard Oil forms first trust– Controlled 90% of refining

Holding Company – Owns stock of other companies, does not produce anything

Robber Baron – Capitalist who became wealthy through exploitation or Captains of Industry…i.e. Andrew Carnegie -Steel/John D. Rockefeller-Oil

Consolidation of Industry (cont)

Andrew Carnegie– Poor Scottish immigrant

who became very rich– Made early money in

railroad– Invested in Carnegie Steel

company in 1873– Known for his work in the

steel industry– Donated 90% of his total

wealth to charity and the arts, “The Gospel of Wealth”

Consolidation of Industry (cont)

Sherman Antitrust Act – made it illegal to interfere with free trade

Labor Unions Between 1865 – 1897, the U.S.

experienced deflation – rise in the value of money– Prices fell– Companies cut wages

Workers begin to organize labor unions

Labor Unions (organize)

Reasons for Unions– Long hours, 12+ hours/day, 6 days/week– Low Wages– Poor, Unsafe conditions– No job security

Labor Unions (cont)

Child Labor– Long hours, Less pay– More Danger

Labor Unions (cont)

Trade Unions – formed by craft workers limited to those with a specific skill– By 1873, there were 32 trade

unions Industrial Unions –united

craft and common laborers– Companies outwardly opposed

them

Labor Unions (cont)

Strategies vs. Unions– Contracts promising not to join a union– Hiring private detectives (Pinkertons)– Blacklists – preventing troublemakers from

getting new jobs in their industry– Lockouts – Workers were locked out of the

worksite and not paid– Strikebreakers – workers hired to replace

strikers Also called “scabs”

Labor Unions (cont)

Karl Marx “The Communist Manifesto”– World history was a class

struggle between the oppressing owners and the oppressed workers

– The proletariat (working-class oppressed) would overthrow the bourgeoisie (middle-class oppressors) in a violent revolution and set up a dictatorship

Produce a society without classes

Labor Unions (cont)

American Federation of Labor– Large trade union– Samuel Gompers was first

leader Wanted to have unions

accepted in America– Three goals:

Have companies recognize unions

Closed shops – can only hire union workers

8 hour workday

Labor Unions (cont)

Knights of Labor– 8 hour workday– Equal pay for women– End of child labor– Worker-owned factories– Favored arbitration –

third party helps workers and management come to an agreement

Labor Unions (cont)

By 1900, women were 18% of workforce– Paid less than men– Not allowed in unions

Women’s Trade Union League (WTUL) – first union dedicated to women’s labor issues– Created by Mary Kennedy

O’Sullivan & Leonora O’Reilly

Labor Unions (cont)

Great Railroad Strike– 1877-Railroad workers

strike to protest wages being cut

80,000 workers in 11 states

Destroyed railroads and trains

Violence erupted– President Hayes

forced to call out the army to stop it

Labor Unions (cont)

Haymarket Riot– 1886-Chicago-Protest against police brutality– Clash between strikers and police involving a

bomb and gunfire– 7 police and 4 workers killed

Labor Unions (cont)

Homestead Strike-”The River Ran Red”– The Homestead Strike was an industrial

lockout and strike which began on June 30, 1892, culminating in a battle between strikers and private security agents on July 6, 1892.

– The dispute occurred at the Homestead Steel Works in the town of Homestead, Pennsylvania, between the Amalgamated Association of Iron and Steel Workers (the AA) and the Carnegie Steel Company.

– The final result was a major defeat for the union and a setback for efforts to unionize steelworkers.

Labor Unions (cont)

Pullman Strike– 1894-The American Railway Union (ARU) led

by socialist Eugene Debs strikes against the Pullman Palace Car Company

– Turned violent after company hired strikebreakers

Effects of Industrialization

Growth of large corporations New and plentiful manufacturing

goods Poor working conditions in factories

and sweatshops Increased labor activism