EXPANSION OF AMERICAN INDUSTRY 1850 1900 Technological Revolution

EXPANSION OF AMERICAN INDUSTRY 1850 -1900

Technological Revolution �Financial backing ($) & American ingenuity (creativity) helped to create new industries & expand old ones �By 1900, the U. S. standard of living was among the highest in the world �Standard of living = level of material comfort

Important People �Edwin Drake- first to drill for oil. �Made obtaining oil cheaper & more efficient �Thomas Edison- improved the light bulb �George Westinghouse- made home use of electricity practical �Achieved this through the use of alternating current, transformers, power stations, & substations �Many immigrants went to work in factories newly powered by electricity which were able to produce goods faster, thus making them cheaper

Important People (cont. ) �Samuel Morse- perfected the telegraph, & he devised a code of short & long electrical impulses to represent the letters of the alphabet (Morse Code). �First telegraph message sent 1844: “What hath God wrought!” �Alexander Graham Bell- invented the telephone in 1876 �Rutherford B. Hayes was the first President to enjoy a telephone in the White House

Transcontinental Railroad �Built by Irish & Chinese immigrants �Irish worked for the Union Pacific �Chinese worked for the Central Pacific �Completed on May 10, 1869 at Promontory Summit, Utah �Railroad improvements in the late 1800 s: �Steel rails replaced iron rails �Track gauges (width) & signals became standardized � 1869: George Westinghouse developed more effective air brakes � 1887: Granville Woods patented a telegraph system for communicating with moving trains � 1883: railroads adopted national system of time zones to improve scheduling

Joining of the rails Promontory Point, Utah May 10, 1869

Bessemer Process �Bessemer Process- made it easier & cheaper to remove the impurities from steel, & made possible the mass production of steel �A new age of building began in America �Brooklyn Bridge in New York City was built using steel & strung with electric lights �It became a symbol of the newly industrialized America

Henry Bessemer

Bessemer Converter at Work

Robber Barons or Captains of Industry? �Robber Barons~ implies that business leaders built their fortunes by stealing from the public �Captains of Industry~ credits them with doing good for the country by building factories, raising productivity, expanding markets, and creating jobs that enabled many Americans to buy new goods & raise their standard of living

Railroad Giants �Cornelius Vanderbilt �Edward Harriman �James J. Hill

John D. Rockefeller Formed Standard Oil Company in 1870 By the end of his life he had given over $500 million to charity Founded the University of Chicago & the Rockefeller Foundation

Vanderbilt’s New York Mansion

Andrew Carnegie Founded Carnegie Steel Corporation in Pittsburg Preached “Gospel of Wealth”~ he believed that people should make as much money as possible, but they should also give it away 80% of his $ went to some form of education ($350 million)

Birthplace of Carnegie (Scotland)

Carnegie’s New York Mansion

Social Darwinism �Promoted by Herbert Spencer & William Graham Sumner �It said that society should interfere with competition as little as possible in business. �Opposed government protection of workers or government interference in business of any kind �It is basically Charles Darwin’s theory of “survival of the fittest” applied to society & business

Late 19 th Century Businesses �Grew to include larger sums of money, more workers, & more products than ever before in America �Certain factors made big business different: �Larger pools of $ or capital �Wider geographic span �Often responsible for all the phases of production �Example= production of steel �Managers were needed �More complex systems of accounting were needed �Specialized departments were created

Late 19 th Century Businesses (cont. ) �In order to gain a competitive edge over rivals, businesses attempted to pay as little as possible for raw materials, labor, & shipping �This increased profits

New Market Structures �Monopoly~ a market that is dominated by a few large, profitable firms �Startup costs were high & only a few companies could compete �A business would buy its competitors out of business or drive them out by underselling �The sole remaining company could then raise its prices �End 1800 s, government had passed laws against monopolies, but they were ineffective �Government leaders refused to attack powerful businesses

New Market Structures (cont. ) �Cartel~ a loose association of businesses that make the same product �Members would agree to limit the supply of their product & thus keep prices high

New Market Structures (cont. ) �Vertical Consolidation~ gaining control of all of the phases of production �Ex= Andrew Carnegie owned the mines, factories, and shipping & rail lines used in the production and transport of Carnegie Steel �Horizontal Consolidation~ Owning all or most of a particular business �Ex= John D. Rockefeller owned all of the oil refineries in the U. S. at one time. �Rockefeller also created the idea of a trust, or companies managed by a board of trustees, to get around gov. law

Sherman Antitrust Act 1890 �The government was hesitant to interfere with businesses because they contributed to the level of wealth the country enjoyed � 1890 the Sherman Antitrust Act was passed however which outlawed any combination of companies that restrained interstate commerce or trade �It was INEFFECTIVE & was actually later used against labor unions

Growing Work Force � 14 million people immigrated to U. S. 1860 -1900 �Looking for work �Contract Labor Act (1864)~ encouraged immigration by allowing employers to pay the cost of passage for immigrants in return for their promise to work for a certain length of time, usually one year. �Late 1800 s, 8 -9 million people moved out of the country (rural) areas to the cities (urban areas) to find work �This was a major demographic shift in the late 1800 s

Factory Work �By 1860, most states had a 10 -hour workday law, but did not enforce it. �Most laborers worked over 12 hours a day �Many laborers were not paid by the hour, but by how much they produced (called production). �Division of Labor �Frederick Winslow Taylor in The Principles of Scientific Management devised a way to make factories more efficient by dividing tasks between workers. �No single worker made a product from start to finish

Factory Conditions �Poor ventilation & lighting �Noise was deafening �Frequent fires & accidents occurred �It was not unusual for a worker lose fingers, arms, or legs �Children used in the factories became stunted in mind & body �Not many laws against child labor at the time & they were mostly ignored � 1880 s, children represented 5% of the labor force � 1 in 5 children ages 10 to 16 was employed �Entire families worked in the factories

The Great Strikes �Industrialization lower the price of consumer goods �HOWEVER, in the late 1800 s, most factory workers still could not afford them � 1890, the richest 9% of America held nearly 75% of the national wealth �Socialists believed that wealth should be distributed equally among everyone �EARLY LABOR UNIONS: �Organized among workers of certain trades, such as construction �Demanded shorter days, higher wages, & better conditions

Knights of Labor �The only labor union of the time that welcomed everyone. �They realized that there was strength in numbers �Groups accepted: �Men & women �Skilled & unskilled workers �African Americans & others �Preferred not to use strikes to achieve results �Formed in 1869 �Membership reached 700, 000 under Terrence Powderly in 1880 s

1887 Knights of Labor Parade

American Federation of Labor (AFL) �Formed by Samuel Gompers in 1886 �Craft union = organized only skilled workers �It only represented a small number of workers �They relied on economic pressure in the form of strikes & boycotts to achieve results

Samuel Gompers

Industrial Workers of the World AKA Wobblies �Formed in 1905 �Focused on unskilled workers �Included many Socialists among their leaders �Many of their strikes were violent

Wobblies Poster

Reactions of Employers �Forbid union meetings; fired union organizers �Forced new employees to sign “yellow dog” contracts in which the employees promised not to join a union �Refused to bargain collectively when strikes occurred �They insisted on bargaining with strikers individually �Broke the power of union strikes by refusing to recognize unions as the representatives of the workers

Major Labor Strikes �Haymarket Square (1886)~ national demonstration for an 8 -hour workday �May 3, at the Chicago Mc. Cormick reaper factory, police break up a fight between strikers & scabs causing casualties among the workers �May 4, a protest rally is held in Chicago’s Haymarket Square �Someone threw a bomb into a police formation, killing a police officer. �A riot broke out, killing dozens on both sides

Major Labor Strikes (cont. ) �Eight anarchists were tried, & four were hanged. It was never proven they were to blame �The Knights of Labor were blamed as well, although their guilt could not be proven either. THIS EVENT MARKED THE DECLINE & DOWNFALL OF THE KNIGHTS OF LABOR

�“You have endured the pangs of want and hunger; your children you have sacrificed to the factory-lords. In short, you have been miserable and obedient slaves all these years. Why? To satisfy the insatiable greed, to fill to coffers of your lazy thieving master!” ~August Spies, newspaper editor speech at Haymarket Square

Major Labor Strikes (cont. ) �Homestead Strike (1892)~ �Henry Frick, who worked for Carnegie, called for wage cuts at Carnegie Steel. �The plant in Homestead, Pennsylvania called for a strike �Frick called in the Pinkertons & they end up in a shootout with protestors. Several people died. �Alexander Berkman, an anarchist, tries & fails to assassinate Frick. Although Berkman was not connected with the strikers, the public associated his act with the growing violence of the labor union movement

Major Labor Strikes (cont. ) �Pullman (1894)~ � Workers protested wage cuts & layoffs at the Pullman Railroad Car plant. Some get fired as a result. �The local union went on strike & also turned to the American Railway Union for help Eugene V. Debs, the leader, calls for a strike & called for a boycott of Pullman railroad cars By June 1894, 260, 000 workers were on strike The strike gets out of hand & interrupts western mail delivery Railroad owners, citing the Sherman Antitrust Act, argue for government interference on their behalf

Major Labor Strikes (cont. ) President Grover Cleveland sends 2, 500 federal troops to break up the strikes & ensure the court order is obeyed �The Pullman strike set a pattern. �Factory owners began to seek court orders against unions �The government refused to recognize unions as legally protected organizations �This prevented union gains for over 30 years

The End