THE EXPANSIONOF INDUSTRY

Resources that Fueled Industrial Growth

Coal & Iron spur industry1870 – 77,000 tons steel1900 – 11.4 mil. tons steel

Black Gold1859 – Edwin Drake uses

steam engine to drill for oil○ Leads to the oil boom

Petroleum-refining industry○ Kerosene○ Gasoline (later)

Bessemer ProcessConverting iron into

steel

Steel is used for:RailroadsBarbed wireMachinesBuildings

○ Skyscrapers○ Brooklyn Bridge

Inventions Bring ChangeThomas Edison Most famous inventor of time

period – “The Wizard of Menlo Park”

Patents incandescent light bulb (1880)

Creates system for distributing electricityAllows plants (factories to be located

anywhereUsed in industry and homes to run

machines and appliances

Phonograph

Motion pictureKinetoscope

TypewriterChristopher Sholes

(1867)

TelephoneAlexander Graham

Bell & Thomas Watson (1876)○ By 1900 – 800,000

telephones in U.S.

THE GROWTH OF BIG BUSINESSCornelius Vanderbilt“The Commodore”

Gained early wealth through the shipping industry

Following the Civil WarSells ships and invests in the railroadNew York Central – ran from Albany to Buffalo

Became railroad tycoon; Self-made multi-millionaireWorth over $100 million at his death

The Growth of Big Business cont’d

Andrew CarnegieSearches for ways to make

better products more cheaplyGains control of almost entire

steel industry○ Carnegie Steel Company

John D. RockefellerFounded Standard Oil CompanyBy 1879 – controlled 90% of

U.S. refining of oil

Vertical integration

Buy out suppliers to

control materials

Horizontal integrationMerging with competing companies

Social Darwinism Grew from idea of Charles Darwin

Biological evolution“survival of the fittest”

Concept applied to businessesNo govt. interference

○ Laissez-faire economics

Trusts (monopolies) developed

Growth of Big Business cont’d John D. Rockefeller

Forms nations first monopoly (trust)○ Allowed for control of production,

wages, and prices

“Robber Barons”Rockefeller profits by paying

low wages and underselling others

Once competition was eliminated, prices went up

Critics called such industrialists “robber barons”

Sherman Antitrust ActGovernment concerned

about free competitionTrusts viewed as illegal if

interfering with free trade○ Prosecution of

companies was too difficult

Labor Unions Emerge

Lack of organization of laborersCigar makersPrintersCarpenters

IssuesUnsafe factoriesLow wagesLong working hours

○ 12 hour days○ 6 day work weeks

Early Labor Organizations:National Labor Union

○ 1st large-scale national organization

○ 1868 – worked for 8 hour workday

Knights of Labor○ Open to women, African

Americans, immigrants and unskilled workersDemanded an 8 hour workdaySupported equal pay

○ Violent strikes led union to dissolve

Labor Unions cont’d American Federation

of Labor (AFL)Founded by Samuel

GompersUsed collective bargaining

to get better:○ Wages○ Hours○ Conditions

Use of “strikes”

1886 – 150,000 members

1900 – over 1 million

American Railway UnionMostly unskilled workersHeaded by Eugene V.

Debs○ “the strike is the weapon

of the oppressed”

Industrial Workers of the World (IWW)Called “wobblies”Radical unionists and

socialists

Strikes Lead to Violence

“The Battle of Homestead” Homestead Strike

Carnegie’s steel plant○ Homestead, Penn.○ Organized wage cuts

Managers hired “scabs” (strikebreakers) to work

Homestead workers organized○ Management hired Pinkerton Detective Agents to end

strike

Protests and violence led to over 8,500 National Guard being called in

Company cut wages by 25%○ No adjustment to living

expenses

American Railway Union (ARU)○ Eugene Debs tries to

negotiate with PullmanBoycott of trains

Strike turns violent and federal troops are sent by President Cleveland

Debs is jailed

Striking workers “blacklisted”

THE PULLMAN STRIKE