INDUSTRIALIZATION (1865-1901)

Chapter 9

Section 1- The Rise of Industry

Main Idea: American industry grew rapidly after the Civil War, bringing revolutionary changes to American society.

After the Civil War, millions of Americans left farms to work in mines & factories.

* By 1914, the nation’s gross national product, or GNP, (value of all goods & services produced by a country) was eight times greater than when the Civil War ended.

Why was American industrialization so successful?

1. Abundance of natural resources.* Water, timber, coal, copper, & petroleum

-- Settlement of the West created a large market for manufactured goods.-- RRs carried settlers west and

carried raw materials back east for industry.

-- 1859 - Edwin Drake drilled first oil well near Titusville, Pa.Edwin Drake

2. Large workforce * 1860-1910, population more than tripled. Why?

-- Large families.-- Immigration (over 20 million) * Due to conditions in Europe & Asia;

they were looking for a better life. * More demand for industrial products.

3. Free enterprise system * Laissez-faire policy by U.S. gov’t.

-- Did not interfere w/ business.-- Supply & demand regulated markets.

* Profit motive attracted many entrepreneurs (people willing to risk their $$, or capital, by

investing it in industry) * European investors could make big $$ by investing in American industry.

Capitalism

• Capitalism=free enterprise: individuals own most businesses

• an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition

4. Government helped, not hindered, business. * Morrill Tariff - tariff on foreign imports; made American goods cheaper, more attractive to buyers. * Land grants to railroad companies & businesses; this further spurred settlement of the west and boosted the economy.

New inventions also helped American industry.

* Telephone - Alexander Graham Bell

Bell and his Telephone

“'Mr. Watson -- come here -- I want to see you.” : Bell to his assistant.

*Thomas Alva Edison - phonograph, better light bulb, electric generator, battery, motion picture, power company for cities, etc…….

Thomas Edisonwas the mostprolific inventorin Americanhistory…….

* Thaddeus Lowe - ice machine (the basis for refrigeration). * Gustavus Swift - refrigerated railroad car. * George Pullman - sleeping railroad car * Northrup automatic loom. * Clothing industry - standard sizes, power sewing machine.

THE TYPEWRITER

• Christopher Sholes invented the typewriter in 1867

• His invention forever affected office work and paperwork

• It also opened many new jobs for women

• 1870: Women made up less than 5% of workforce 1910: They made up 40%

BESSEMER STEEL PROCESS

• Coal and iron were plentiful within the U.S.

• When you removed the carbon from iron, the result was a lighter, more flexible and rust resistant compound – Steel

• The Bessemer process did just that (Henry Bessemer & William Kelly)

BESSEMER CONVERTOR CIRCA 1880

NEW USES FOR STEEL• The railroads, with

thousands of miles of track, were the biggest customers for steel

• Other uses emerged: barbed wire, farm equipment, bridge construction (Brooklyn Bridge- 1883),and the first skyscrapers

BROOKLYN BRIDGE SPANS 1595 FEET IN NYC

Nothing…..NOTHING….contributed to the settling of the West and the realization of “Manifest Destiny”

more than the RAILROAD!!!

Section 2 - The Railroads

Main Idea: After the Civil War, the rapid construction of railroads accelerated the nation’s industrialization and linked the country together.

Pacific Railway Act -1862; provided for constructionof a transcontinental railroad. * Would connect country from

east to west. * Mostly built w/ immigrant

labor (Irish & Asian)

TheTranscontinental Railroad

Meeting point….Promontory Point, Utah

Cornelius Vanderbilt - One of the most famous &successful RR magnates. He built NY City’s famous Grand Central Station.

Cornelius Vanderbilt

PROFESSOR DOWD CREATES TIME ZONES

• In 1869, to remedy this problem, Professor C.F. Dowd proposed dividing the earth into 24 time zones

• The U.S. would be divided into 4 zones: the eastern, Central, Mountain, and Pacific

• 1883 – Railroads synchronized their watches across U.S.

• 1884 – International Conference adopts zones

PROFESSOR DOWD EXPLAINS HIS TIME ZONES

Time zones were created to make RR travel saferand more reliable.

Much of the financing of RRs depended on federal gov’t landgrants to RR companies.

Companies would then sell the land to raise $$$ forconstruction of theRR.

RAILROADS SPUR OTHER INDUSTRIES

• The rapid growth of the railroad industry influenced the iron, coal, steel, lumber, and glass businesses as they tried to keep up with the railroads demand for materials

• The spread of the railroads also led to the growth of towns, new markets, and opportunity for profiteers

Railroads spur further inventions•1869: George Westinghouse patented air brakes for trains

•1887: Granville Woods patented a telegraph system for trains

•Gustavus Swift developed refrigerated cars for transporting food

•By 1883, 3 transcontinental railroad lines existed in the U.S.

RAILROADS LED TO GROWTH OF CITIES

• Many of today’s major cities owe their legacy to the railroad

• Chicago, Minneapolis, Denver, and Seattle all grew up thanks to the railroad

“MY KIND OF TOWN”

Some big-name RR magnates were called“Robber Barons” for their practice of swindlinginvestors & bribing government officials.

Example of someone who has been labeled a “Robber Baron” - Jay Gould, who manipulated stock values bypracticing “insider trading.”He used information he received as a railroad owner to manipulate stock prices to his benefit.

ROBBER BARONS• Alarmed at the cut-

throat tactics of industrialists, critics began to call them “Robber Barons”

• Famous “Robber Barons” included Carnegie, Rockefeller, Vanderbilt, Stanford, and J.P. Morgan

J.P MORGAN IN PHOTO

AND CARTOON

ROBBER BARONS WERE GENEROUS, TOO

• Despite being labeled as greedy barons, rich industrialists did have a generous side

• When very rich people give away lots of money it is called “Philanthropy”

• Carnegie built libraries, Rockefeller, Leland Stanford, and Cornelius Vanderbilt built schools

ROCKEFELLER CHAPEL – UNIVERSITY OF CHICAGO

Credit Mobilier Scandal - RR construction company - greatly inflated construction costs & pocketed ridiculous profits! Cheated the stockholders of theRR company. BUT…

Not all RR entrepreneurs were “Robber Barons”!Ex: James J. Hill - took no federal land grants, etc. He was honest and smart in the the way he ran his company.

James J. Hill Great Northern Railroad

Section 3 - Big Business

Main Idea: After the Civil War, big business assumed a more prominent role in American life.

Big business began to dominate the American economy!Why?….

Big businesses boomed because……

Favorable business climate. Ex: Corporations were easy to form:

* An organization owned by many people; stockholders own shares of stock,

each representing a percentage of the business.

* Selling stock allows a business to raise huge amounts of capital ($$ to invest

in the business).* It is run like it is owned by a single person.

Economies of scale – the cost of manufacturing is decreased by producing goods quickly in large quantities.

Big corporations could squeeze out smaller businesses and force them to close.

Many corporations began to consolidate (mergetheir businesses w/ others like them). * Pools - agreements among companies to maintain prices at a certain level. Did this practice interfere w/ the law of supply & demand, and keep costs to consumers high?

•The Men Who Built America: Rockefeller, Edison, Carnegie, Morgan and Vanderbilt

Andrew Carnegie - “Captain of the Steel Industry”

* Used the Bessemer Process - a cheap way of making steel.

* Vertical integration:

-- Company owns all of the different businesses on which it depends for its operation.-- Ex: w/ Carnegie: Coal mines, limestone quarries, iron ore fields. (He didn’t have to pay profits to “middle-men” who owned those businesses.)

Horizontal integration - Companybuys out his competitors! Reducescompetition…does this hurt theconsumer? How?

Ex: John D. Rockefeller’sStandard Oil had control of 90%

of the oil business in the US.

Monopoly - When a single company achieves control of an entire market for a particular product or service.

Trust - new way of merging businesses that did not violate the monopoly laws. Allows one person to manage another person’s property. Tactic to avoid state laws which had been passed to stop horizontal integration and monopolies.

Increased American business competition advertising and chain stores.

Department stores became popular:* Woolworth’s* Mail order/catalog stores:

-- Montgomery Ward-- Sears & Roebuck

Section 4 - Unions

Working conditions were:1. Monotonous & repetitive.2. Unhealthy & dangerous:

-- Dusty; toxic fumes-- Heavy machinery w/ few safety devices.

3. Huge gap between rich & working poor.-- Avg. wage - 22 cents/hour

4. Avg. work week - 59 hours

Early Unions:1. Craft workers - machinists, stonecutters,

printers, carpenters, etc.2. Common laborers - few skills, lower wages.

CRAFT UNIONS • Craft Unions were unions of

workers in a skilled trade• Samuel Gompers led the Cigar

Makers’ International Union to join with other craft unions in 1886

• Gompers became president of the American Federation of Labor (AFL)

• He focused on collective bargaining: negotiating as a group to improve conditions, wages and hours

American Federation of Labor (AFL) - * Leader - Samuel Gompers * Preferred to negotiate rather than strike. * Goals: -- To convince companies to recognize unions. -- Closed shops - companies could only hire union members. -- 8 hr. workday.

Trade Unions - workers w/ specific skills.

How did companies try to prevent unions from forming?

1. Made workers take oaths not to join unions.

2. Blacklists - list of “union troublemakers” - those on lists couldn’t get jobs.3. Lockouts - locked workers out & refused to pay them.4. Strikebreakers - hired replacement

workers for those on strike.

Public opposition to unions grew…..1. Courts often ruled against unions’ right to

strike.2. Public often viewed unions as dangerous to America:

* Marxism - Communist theory of KarlMarx…that workers would have aworldwide revolution & overthrowgov’ts. Many Americans fearedthat unions were a first step!!!

* More immigrants come to USmore nativism increaseddislike of unions.

SOCIALISM AND THE IWW• Some unionists (including Debs)

turned to

socialism – an economic and political system based on government control of business and property and an equal distribution of wealth among all citizens

• The International Workers of the World (IWW) or Wobblies, was one such socialist union

PROMOTIONAL POSTER FOR THE IWW

3. Police & army used to break up unions’ violence & bloodshed!Great Railroad Strike of 1877 -Workers for the Baltimore and Ohio Railroad struck to protest wage cutsOther rail workers across the country struck in sympathy Federal troops were called in to end the strike – over 100 people died

Knights of Labor - First national union. Their goals were:

* 8 hr. workday * Equal pay for women * End to child labor * Arbitration - a third party negotiates a deal.

Terence Powderly

THE HAYMARKET AFFAIR• Labor leaders continued to push

for change – and on May 4, 1886 3,000 people gathered at Chicago’s Haymarket Square to protest police treatment of striking workers

• A bomb exploded near the police line – killing 7 cops and several workers

• Radicals were rounded up and executed for the crime

THE HOMESTEAD STRIKE• Even Andrew Carnegie could not

escape a workers strike• Conditions and wages were not

satisfactory in his Steel plant in Pennsylvania and workers struck in 1892

• Carnegie hired Pinkerton Detectives to guard the plant and allow scabs to work

• Detectives and strikers clashed – 3 detectives and 9 strikers died

• The National guard restored order – workers returned to work

THE PULLMAN STRIKE• After the Pullman Company

laid off thousands of workers and cut wages, the workers went on strike in the spring of 1894

• Eugene Debs (American Railroad Union) tried to settle dispute which turned violent

• Pullman hired scabs and fired the strikers – Federal troops were brought in

• Debs was jailed

By 1900 - women were 18% of national workforce. *1/3 - domestic workers *1/3 - teachers, nurses, sales clerks, secretaries *1/3 - industrial workers…BUT…

Women were paid less than men for the same jobs!

EMPLOYERS FIGHT UNIONS• The more powerful the unions

became, the more employers came to fear them

• Employers often forbade union meetings and refused to recognize unions

• Employers forced new workers to sign “Yellow Dog Contracts,” swearing that they would never join a union

• Despite those efforts, the AFL had over 2 million members by 1914