Industry Comes of Age

Although railroads instigated a great post Civil War industrial

transformation in America, workers struggled with ineffective labor

organizations

I. RailroadsA. Railway Pacific Act, 1869

1. Generous govt. subsidy with cash payments and land grants

2. Paddies (Irish on Union Pacific), Coolies (Chinese on Central Pacific), Big 4 (investors of Central Pacific) are notable people with the Transcontinental RR.

B. Railroad Expansion1. Partial govt. subsidy for additional

transcontinental RR’s with only land (no cash)2. Vanderbilt and Steel3. One exception: Panic of 1873 in which RR

overspeculation caused depression brought hard times for all

C. Revolution and Challenges1. Mr. T’s Impact of RR’s Memory Device:

Manufacturing, Mining, Moo (agriculture), Millionaires and Municipals

2. Robber Barons used illegal techniques of “stock-watering,” rebates, and “pools” to increase profits.

3. Wabash Case said that states could NOT regulate interstate commerce.a. Reformers in Congress agreed to do something about the

courts decision from the Wabash case and created the ICC to regulate interstate commerce, 1887Ceremony at Promontory Point, Utah where A golden spike was

ceremoniously driven by Leland Stanford-(it was immediately taken Out and replaced with a regular spike and sent with Stanford back to CA and is now on display at the Stanford Museum of Art). Actually Leland didn’t drive the spike very hard—he didn’t want to blemishit. It was quickly replaced with a regular spike.

You can identify the four transcontinental railroads by their titles, the fifth is the Atchinson/Topeka/Santa Fe RR.

II. Industrialization

A. Factors of Postwar Industrialization1. Increase in available capital from the federal govt and investors2. Exploitation of natural resources especially in Mesabi Range3. Unskilled labor used to make steel was readily available, thanks immigration4. American ingenuity motivated by huge profits namely Edison and Bell

B. Trust Titans Emerge1. A. Carnegie used vertical integration to control all aspects of industry.2. J. Rockefeller controlled competitors by controlling their stock called “Trusts”3. J.P. Morgan controlled competition through control of Board of Directors

C. Reactions to Industrialization1. Moral responsible to “Gospel of Wealth” was the attitude of JP Morgan

a. Gave away $350 of fortune2. Survival of the fittest was the attitude of Spencer & Sumner-rich don’t need to give

anything away to better society, they won the economic battle and were should enjoy the benefits

3. Politicians fostered a plutocracy that frustrated the consumers to actiona. Congress hammered through the Sherman Anti-trust Act, 1890

4. In South, industrialization was limited with the exception of textile mills.

III. Labor: “The Sweat of Industrialization”

A. Employer tools1. Unlimited capital due to ability to sell stocks 2. “scab” workers, “lockouts,” courts that issued

injunctions, federal troops, “iron-clad oaths” or “yellow-dog contracts,” “blacklists,” and company towns that charged high food prices and rent.

3. Middle class grew deaf to labor strife and viewed labor as radical revolutionaries when they simply wanted a little more return for their labors.

B. Labor Groups1. National Labor Union fought social reform until

1873 and Great RR Strike, 18772. Knights of Labor created one big union under T.

Powderly but Haymarket damaged labor’s reputation because they were viewed as anarchists and trouble-makers (when in reality the Knights of Labor preferred socialism to capitalism)

3. AFofL was a nonpolitical federation under S. Gompers but labor disputes continued with Homestead Strike and Pullman Strike of 1890’s.