CHAPTER 6The Second Industrial Revolution

1865-1905

6:2 The Rise of Big Business

CAPITALISM: private bus. run most industries, competition deter. how much goods cost & workers are pd

LAISSEZ-FAIRE: “let people do as they choose”—no govt intervention in econ

FREE ENTERPRISE/MARKET: supply, demand, & profits deter. by what goods are prod. & how much

ECONOMY

Some felt capitalism was unfair to working class

MARXISM: pol. system to get rid of inequalities of wealth (Karl Marx)—overthrow capitalism

COMMUNISM: society where indiv. ownership

Think about it…

How have inventions in the past help to launch a NEW industrial revolution?

Printing Press?

Cotton Gin?

Railroads?

6:1 The Age of Invention

All became possible b/c of using steam & coal as fuel

Three major types of advancements: Industry Transportation Communication

INDUSTRY STEEL

Able to make more quickly & more cost effective b/c of Bessemer Process Developed in 1850s by Henry Bessemer in G.B. &

William Kelly in U.S. Allowed impurities to burn off using blast of hot air Went from 15,000 tons (1865) to 28 million tons

(1910) Iron ore from Midwest shipped to areas near

Lake Michigan & Erie Gary, IN Cleveland, OH Pittsburg, PA Coal from PA/WV as fuel for steel mills

New steel used for RR rails (inst. of iron), framework of buildings & bridges

No rust, so good for nails/screws/wire/etc

INDUSTRY, cont. OIL

Needed to be able to refine more b/c demand was increasing Kerosene for lamps (whale oil hard to get)

Edwin Drake (1859) used steam engine to drill for oil in PA “Drake’s Folly” b/c people thought it was crazy @ 1st,

until it started pumping 20 barrels/day Like Gold Rush, people rushed to PA (OH, WV soon

after) to find “Black Gold” 1880: 25 million barrels were being pumped

Anthony Lucas (1901) struck oil in Beaumont, TX & started the TX oil boom 1902: 17 million barrels pumped (20% of all oil prod.) 1904: down to 10,000 barrels/day (reserve almost

out!)

INDUSTRY, cont.

OIL, cont. 1880: started refining oil for kerosene, waxes,

lubricating oils, etc Elijah McCoy (son of runaway slave) got

patent on lubrication cup to feed oil into machine while still running

TRANSPORTATION RAILROADS

Increased rapidly b/c of steel prod., and drop in $

Example: 1860: NY to Chicago, change trains 17x over 2

days 1870: same trip w/ no changes, 24 hrs

Transcontinental Railroad done in 1869 From Omaha, NE to Pacific Ocean Last spike in place in Promontory, Utah

1900: 6 major rail lines (trunk lines) that crossed Great Plains to Pacific, linked every state

George Westinghouse devel. air brake to allow all cars of trains to stop @ same time

Comm. system set up from trains to stations

TRANSPORTATION, inc

Railroad, cont. Double tracks b/c of more rails allowed trains to

pass Standard rails allowed passengers to not have to

change trains when reached a diff. line Encouraged expansion west, & growth of

towns/cities Provided many jobs on the RR & industries

related Businesses grew (& competition) b/c of being

able to sell goods nationally

TRANSPORTATION, cont.

HORSELESS CARRIAGE Self propelled vehicle in 1770, but a

steam engine in a “car” was expensive/inefficient

Nikolaus Otto invented 1st internal combustion engine that was powered by gas in 1876 Used in 1893 for 1st motorcar in US Only wealthy people could afford @ 1st, but as

prod. costs decreased, supply increased…more people could afford one

TRANSPORTATION, cont

AIRPLANES Wilbur & Orville Wright (OH) started w/ glider

planes, then Euro. Engines, & finally internal combustion engine Dec. 17, 1903: Kitty Hawk, NC made 1st piloted

flight (12 sec. & 120 ft) Very little press, but word spread slowly &

soon inventors were working quickly to improve on what they were able to do

COMMUNICATIONS

TELEGRAPH: Samuel Morse devel. commun. system that sends elec. signals over wires (patent in 1837) Businesses Morse Code (dots & dashes) Western Union (1866) was leading telegraph

comp. w/ over 2,000 offices Followed RR & trains stations

COMMUNICATIONS

TELEPHONE Alexander Graham Bell (1876) called it the

“talking telegraph” Businesses found it a MUST HAVE item By end of 1800s, 1 million+ phones installed Bell Telephone Co. became Amer. Telephone &

Telegraph: one of the biggest, longest monopolies of its time

Early operators had to connect callers Women, very fast paced

COMMUNICATIONS

TYPEWRITER Christopher Sholes (1867) was 1st to market it Keyboard design has changed little from the

original Used carbon paper to make duplicate copies Typing pool: group of women that do nothing

but type documents for businesses gave women a chance to work in a skilled job Believed he was helping women not have to

work so hard

EDISON & MENLO PARK

THOMAS ALVA EDISON Amateur scientist, inventor born in OH

Telegraph that could send 4 msgs @ once Elec. Vote recorder Telegraphic stock ticker

MENLO PARK (NJ) Research facility where he gathered other inventors Promised 1 minor invention/10 days & 1 major

invention/6 months Phonograph Improved phone (better signal & sound) LIGHTBULB!!!

MENLO PARK, cont

1882: opened one of the 1st electric power plants in NYC Used DC (direct current) to local locations only Later inventors dev. AC (alternating current) to

be able to power other locations 1893: World’s Columbian Exposition in

Chicago included twinkling lights outlining the major buildings Electric streetcars began to dev. in cities also

Died in 1931 as the “Wizard of Menlo Park” w/ 1,000+ patents

6:2 THE RISE OF BIG BUSINESS

CAPITALISM

LAISSEZ-FAIRE

FREE ENTERPRISE/MARKET

ECONOMY

Some felt capitalism was unfair to working class

MARXISM

COMMUNISM

SOCIAL DARWINISM

CORPORATIONS

Organizers raise $ by selling shares of stock Stockholders get % of profits called dividends Little to no part in daily operations Limited liability

Businesses can raise a lot of $ through stock sales

More stability b/c not dependent on spec. owners

TRUSTS

TRUST: group of comp. turn control of stock over to bd. of trustees, who run all companies as 1 Reduce competition MONOPOLY: trust w/ total control of industry

Little to no competition Total control of prices & quality

ANDREW CARNEGIE & STEEL

Started wk in a RR office Bought stock in RR, oil, iron, telegraph &

used profits to start investing in steel in 1860s

Didn’t know much about steel, but hired best people in business

Made mills most tech adv. Bought supplies in bulk & prod. lg amts.

of goods @ once to keep costs low & profits high

CARNEGIE, cont

VERTICAL INTEGRATION Combined all smaller bus. into Carnegie

Steel Comp. in 1899 Sold to J.P. Morgan for $500 mill Donated $350 mill to charities (libraries) Believed that wealthy had moral

obligation to help society

ROCKEFELLER & OIL

Founder of Standard Oil Comp Used vertical integration HORIZONTAL INTEGRATION Made deals for cheaper supplies & rates,

could keep prices low & drive others out of bus.

1880: controlled 90% of oil refineries Donated $550 mill in charities, incl. $80

mill to Univ. of Chicago

RR GIANTS VANDERBILT: had successful shipping bus. 1st,

then invest. in RR Combined small lines to make direct routes betw.

Cities 4,500 miles of track & $100 mill when died

WESTINGHOUSE: air brake inventor

PULLMAN: built factory for comfy train cars (sleep, eat, wealthy) over long distances Poor Chicago neighborhood in hopes of helping Planned community (homes, schools, recreation, etc)

Was too controlling though, and many became upset w/ him

MASS MARKETING

MARKETING: brand names, logos, slogans, packaging, advertising, etc

MAIL ORDER: catalogs w/ large # of products Sears, Roebuck, & Comp.

DEPT. STORE: lg # of items, bought in bulk to keep prices down Created jobs Macys, Marshall Fields

6:3 LABOR STRIVES TO ORGANIZE

GOVT. & BUSINESS

Supporters of laissez-faire capitalism liked govt intervention when it helped them!

High tariffs on imports made US made goods less expensive

Govt gave little assist. to industrial workers

1890: 10% of population controlled 75% of wealth

50% unskilled workers made less than $500/yr

TRUST ISSUES!

Amer. Arguments Against Trusts

Govt. Response

Problems with Act

NEW WORKING CLASS

Lg. demand for labor—by 1900, 1/3 of indust. workers were immig.

Many Afr-Amer came north to find jobs, but still not every bus. would hire them (even if skilled!)

Women & Kids: WOMEN: doubled from 1870-90

1900: 18% of workforce KIDS: 1890: 20% of kids from ages 10-15

1:4 in textile mills(NC), 1:20 in Mass.

WORKING CONDITIONS Kids worked 12hr shifts (often @ night) for

pennies/day

Unskilled white males: @ least 10hr/day, 6 days/wk, less than $10/wk African/Asian/Mexican men worked same, less $ Women & kids often did same for ½ pay

Dangerous jobs, fatigue

Company Towns: housing & stores owned by company to control workers Rec’d wages in “scrip” that could only be used for

rent & company stores where prices were high

KNIGHTS OF LABOR Nat’l Labor Union (1866) had some success w/

8 hr wk day, but fell apart in 1870s

1869: KNIGHTS OF LABOR Started for white males, then added others not

allowed in other unions in 1879 (skilled, unskilled, women) MARY HARRIS JONES: organiz. strikes, marches, etc. to

educate & unite workers until she died @ 100 Afr-Amer. were able to join in 1883, but not as open

minded about Chinese workers Fought for 8 hr/day, =$ for =work, & end child labor 700,000 members by 1886

Progressive Paragraph

Woman African American Chinese Immigrant 13 yr old boy Irish Immigrant

I have to work to support my family. This is an idea of what it is like to work for me…..

THE GREAT UPHEAVAL

RR strike in 1877 helped Knights of Labor to grow Reaction to pay cut Pres. Hayes used troops to protect RR, angered

many & spread to 14 states

Many strikes in 1886: push for better working conditions…some were violent

HAYMARKET RIOT

1886:40,000 workers in Chicago @ McCormick Harvesting Mach. Comp wanted an 8 hr/day ANARCHISTS took over Confrontation w/ police, 2 strikers killed Peaceful mtg next day, until 200 police

showed up: bomb went off, shooting started 60 officers wounded 7 officers & 1 civilian killed

Arrested 8 anarchists (only 1 had been there) & chgd them w/ conspiracy All 8 guilty, 4 hung

AFTERMATH OF RIOTS

Union supporters on “blacklists”—hard time finding work

Some had to sign “yellow-dog” contracts, promising NOT to join union if hired

Union membership dropped, comp. used non-union strikebreakers Skilled unions split from unskilled

Amer. Federation of Labor (AFL) created by Samuel Gompers for skilled workers

HOMESTEAD & PULLMAN STRIKES

Homestead, PA: Carnegie Steel (1892) Protest wage cut, managers locked strikers out Hired guards to protect plant Violent, 16 dead

Pullman, IL Cut wages, didn’t lower rent/prices Amer. Railway Union supported workers, stopped

most RR traffic in midwest RR turned to govt for help, ordered to move again b/c

stopping mail delivery Union ignored govt & were jailed

Pres. Grover Cleveland ordered troops to plant to stop strike & restore operations