Industrialization Module 3 CRASH COURSE Industrial Age Section

Industrialization Module 3 CRASH COURSE: Industrial Age

Section 1: The Expansion of Industry: • Main Idea: At the end of the 19 th century, natural resources, creative ideas, and growing markets fueled an industrial boom. • Why it Matters Now: Technological developments of the late 19 th century paved the way for the continued growth of American Industry. • Key Terms: • Bessemer Process • • • Key Names: Edwin L. Drake Thomas Alva Edison Christopher Sholes Alexander Graham Bell

Section 1: The Expansion of Industry: • As the settlers continued to push west, America was still largely agricultural – that will all change • 1920’s leading industrial power in the world • 1) Natural Resources • Oil, coal, iron, streams, farmland • Coal was cheap resource • Cleveland + Pittsburg • 2) Governmental support • Free Market Economy • Coin money, tariff on imports, patents • Laissez Faire – government leaves the business sector alone • 3) Urbanization • 1800 – 5 Million people • 1900 – 76 Million • 4) Technological innovations • Inventions, transportation, communication, factory systems

Black Gold: • Native Americans • Used oil for medicine and fuel • Europeans used Kerosene as fuel • In 1859, Edwin Drake • used a steam engine to drill for oil • Titusville, PA • This started an oil boom throughout the Midwest and Southern States • Ohio, Kentucky, Illinois, Texas • Cleveland Pittsburg emerged as oil refining cities

Bessemer Steel Process: • Natural resources • Coal and Iron • Plentiful throughout the US. • Samuel Slater – • Left England, brought inventions and techniques • Andrew Carnegie is soon going to use the Bessemer Process • When you removed the carbon from iron, the result was a lighter, more flexible and rust resistant compound – Steel (Bessemer process) • Henry Bessemer

National Markets and the Expansion of the Railroad • Railroads helped tie the nation together by lowering transportation costs railroads. • Allowed manufacturers to reduce prices, attract more buyers, and increase business.

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: NYC • Steel will change the construction industry and America’s economy • Growth of cities • Jobs, urban society/culture • Increase trade • Rest of the world look to America for trade

Inventions Promote Change • Electricity • Thomas Alva Edison perfected the incandescent light bulb in 1880 • Later he invented an entire system for producing and distributing electricity • Carbon Filament • Lewis Latimer Thomas Edison: History. com “One percent inspiration and • Improved the lightbulb – invented the carbon filament 99 percent perspiration. ”

Inventions • Typewriter • Christopher Sholes invented the typewriter in 1867 • His invention forever affected office work and paperwork • It also opened many new jobs for women • Mostly stayed at home to take care of the family • Telephone: • Alexander Graham Bell • Thomas Watson unveiled their invention in 1876 • We are still using their invention today

Section 2: The Age of the Railroads: • Main Idea: The growth and consolidation of railroads benefited the nation but also led to corruption and required government regulation. • • Key Terms: Transcontinental Railroad Munn vs. Illinois Interstate Commerce Act • Why it Matters Now: Railroads made possible the expansion of industry across the United States.

The Age of Railroads • As railroad companies continued to grow, their influence over others became out of control • “charge what the traffic will bear” • Had a monopoly over their area • High Prices • Pooling Agreements – secret agreements between companies to raise prices • Government began to loan money and grant land to Railroad Companies. • Politicians were bribed https: //www. youtube. com/watch? v=kl 0 lx. IMMb 9 E • Campaign contributions • Free RR passes • New reforms will be needed to keep the railroad companies in check

A National Network: • The transcontinental Railroad - cross country route, connecting many cities. • Union Pacific and Central Pacific RR Companies • Promontory, Utah May 10 1869. • Out-of-work Civil War vets and immigrants from China and Ireland provided most of the difficult labor • Railroad and Time zones • Before 1883, each city still operated on its own time • 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

THE UNITED STATES IS DIVIDED INTO 4 TIME ZONES

C. Opportunities and Opportunist 1. Supply and Demand • Railroads require great supply of materials, parts • Iron, coal, steel, lumber industries grow to meet demand 2. New Towns and Markets • Railroads link isolated towns, promote trade, interdependence • • • Nationwide network of suppliers, markets develops Towns specialize, sell large quantities of their product nationally New towns grow along railroad lines

Cornelius (“The Commodore”) and W. H. Vanderbilt • Cornelius. Vanderbilt • Created a network of Railroads • Linked smaller railroads together • Decreased time to travel from city to city. • • An active philanthropist, giving extensively to a number of philanthropic causes: • Funded the Metropolitan Opera • Funded College of Physicians and Surgeons at Columbia University. • In 1880, he provided the money for Vanderbilt University in Nashville, Tennessee

Pullman and the Sleeper car • George M. Pullman • Factory owner • Pullman Palace Car Company • Built Sleeper/ dinning / parlor cars • Pullman built a town for his employees • Housing, parks, factory • Provided his employees with basic needs • Doctor offices, shops and athletic fields • Pullman Company controlled the town • No loitering on front steps, no alcohol. • Violent strike due to low pay and high rent • Slashed wages, outlawed saloons

• Business owners desired control and profit • Credit Mobilier • Construction company formed in 1864 by Union Pacific RR Company • “Dummy Company” • Stock holders gave contact to lay track • 2 to 3 times the cost – profited and paid congressmen • Bribe Congress to pass RR Laws/Acts • Vice President • Congress investigated • Public figures kept profit, but Republican party took a hit.

The Grange and the Railroads: • Farmers upset • Misuse of government land • Sold to other businesses and not settlers • Fixed the prices • Charged customers differently • Farmers had no alternative method of shipping • Farmers create and join the Grange • Farmers (with the help from the Grange) continued to push for fairness in the railroad industry – and they got political! • Granger Laws – prohibit discrimination in Railroad shipping • They got the Supreme Court to pass…. . • Munn vs. Illinois: States were given regulation control of railroads by the Courts

Interstate Commerce Act: • In 1887, the Federal government reestablished their control over railroad activities • Congress passed the Interstate Commerce Act – federal government regulation of railroads • Set a standard of governmental regulation on private businesses • Can’t discriminate passengers by special rebates • Prohibit the amount they charge for short and long hauls • Rates should be reasonable and just • 1906 – The Hepburn Act allowed the ICC to set rates and end numerous monopolies • Panic of 1983 – worst depression of the time, many RR companies started to fail.

Section 3: Objectives • By the end of the lesson, I will be able to: • 1. Identify management and business strategies that contributed to the success of business tycoons such as Andrew Carnegie. • 2. Explain Social Darwinism and its effects on society. • 3. Summarize the emergence and growth of unions. • 4. Explain the violent reactions of industry and government to union strikes.

Section 3: Big Business and Labor • Main Idea: The expansion of industry resulted in the growth of big business and prompted laborers to form unions to better their lives. • Terms: • Vertical and horizontal integration • Social Darwinism • Sherman Antitrust Act • American Federation of Labor (AFL) • Industrial Workers of the World (IWW) • Why it Matters Now: Many of the strategies used today in industry and in the labor movement, such as striking, have their origins in the late 19 th century. • • • Names: Andrew Carnegie John D. Rockefeller Samuel Gompers Eugene V. Debs Mary Harris Jones

Section 3: Big Business and Labor • Andrew Carnegie was one of the first industrial tycoon • Owned the entire steel industry • “rags to riches” • Supported charities Carnegie Mellon University • Immigrated to USA when he was 12. • At 18 he was local superintendent of the Pennsylvania RR company • His boss, Thomas, Scott gave Carnegie the opportunity to buy stock in the company. • He entered the steel industry in 1873 after making BIG $ with the railroad industry • Carnegie attempted to control as much of the steel industry as possible http: //www. history. com/topics/andrew-carnegie

Rationalizing Big Business • Social Darwinism • Used Darwin’s theory to explain business, promoted by Harvard professor William Graham Sumner • Natural Selection, Survival of the Fittest • Laissez-faire -policy that US had followed sinception to not allow govt. to interfere with business • Govt. should not interfere • Gospel of Wealth -belief that the wealthy are “chosen by God” to be successful and were therefore responsible to look out for the well being of those less fortunate. • Many Industrialist shared wealthough rarely through direct welfare. Started museums, etc. • Captains of Industry: a positive idea that industrial leaders worked hard and deserved their wealth

Carnegie Business Practices: • Carnegie initiated many new business practices such as; • 1. Searching for ways to make better products more cheaply • Owned the entire steel industry • Iron Ore mines • Mills, Railroads, steamships • Undersold competitors • Drove out companies • 2. Accounting systems to track expenses • ANDREW CARNEGIE Balance the budget • 3. Attracting quality people 1835 -1919 http: //www. history. com/topics/andrewcarnegie/videos/the-men-who-built-americaandrew-carnegie • Stock options • Sense of ownership • Benefits

Carnegie’s Smart Plan: • Vertical integration - buying out his suppliers coal fields, iron mines, ore freighters, and rail lines • Horizontal Integration – buying out companies that produce similar products

John D. Rockefeller • He was a co-founder of the Standard Oil Company, which dominated the oil industry and was the first great U. S. business trust • As kerosene and gasoline grew in importance, became the world's richest man and the first American worth more than a billion dollars • Often cited as the richest person in history • Like Carnegie, was a philanthropist under the Gospel of Wealth: • • • An abolitionist Creator of Spelman College Major donator to the University of Chicago and other major medical universities • Owned a large portion of real estate in Manhattan, NYC

J. P. Morgan • Industrialist and financier who started U. S. Steel from Carnegie Steel and other companies • Became 1 st billion- dollar corporation • Bailed out the U. S. economy on more than one occasion

Social Darwinism • Charles Darwin – Evolution • Survival of the fittest • Herbert Spencer – English Philosopher • Social Darwinism – evolution of human society • Way to justify Laissez Faire marketplace. • Success and failure in business was governed by natural law. • Success = individual responsibility and high work ethic, then came riches

Business Growth and Consilidation • Horizontal integration- merger • “if can’t beat em’ join em’” • These kinds of business practices could result in a monopoly - complete control over an industry • Example: • In 1870, Rockefeller Standard Oil Company owned 2% of the country’s crude oil • By 1880 – it controlled 90% of U. S. crude oil • Is this ok? http: //www. history. com/topics/john-drockefeller/videos/the-men-who-built-americamonopoly

Robber Barons: • As more and more monopolies formed and abused their power, critics began using the term “Robber Barons” • Bought other companies out • Rockefeller lowered his prices of oil • • • Lower than cost to produce it Controlled the market then hiked prices Made its own barrels, cans, and whatever else it needed. “Pay nobody a profit • Even though they made LOTS of $, they still gave back (schools, hospitals, etc. ) • Rockefeller gave away more than $500 million • Carnegie donated about 90% of his earnings • $350 Million • Built 2, 509 libraries around the world • ”

Sherman Anti-Trust Act: • The government had to respond – the “robber barons” were getting way to powerful. • Stifle competition = monopoly, bad for capitalism • Sherman Anti-Trust Act made it illegal to form a monopoly (Trust) • This was tough to govern • – big companies would just split up into smaller companies • Standard Oil – just formed one corporation • Government couldn’t enforce the Act • North advanced during the industrial boom! • South still recovering from the Civil War • Southern farmers were at the mercy of Railroad companies • Hope was in mining tobacco, furniture and cotton. • South didn’t have the capital to expand

Lesson 4 Rise of Labor Movement

Labor Unions Emerge • Why? ? • Low wages, unsafe working conditions, drew workers together to try to improve conditions. • No vacation, sick days, workers comp, etc. • Working conditions bad – dirty, poorly ventilated, led to injuries. • Repetitive takes on sometimes faulty equipment. • In 1882 675 workers killed. • Low wages - whole families had to work, even children as young as 5.

Labor Unions Emerge: • WORKING CONDITIONS • Workers were working 6 -7 days a week for more than 10 hours a day • In 1882, an average of 675 workers were killed PER WEEK on the job • Workers realized they needed to organize to get change to happen • Workers created Unions to negotiate wages, hours, conditions, striking • Everyone in the family had to work • Wages were so low • $3 for skilled work and $1. 50 for unskilled work a Day • Women and Children HAD to work • Some children did not go to school and went to work • 8 yr olds • 27 cents for a 14 hr day • Andrew Carnegie earned 23$ million a year

Striking and Violence: • Skilled workers started to organize • NLU – National Labor Union 1866 • CNLU – Colored National Labor Union • Unions fought for a 8 hr work day • Knights of Labor – open to all workers regardless of gender, race or skill level • Equal pay for equal work • AFL – American Federation of Labor • Collective bargaining • Negotiations between workers and business owners • Some strikes, turned deadly – labor leaders and • Eugene V. Debs – labor leader that helped to organize unions • • Include all skilled and unskilled workers Outcomes – 1. Companies learned to treat their employees better 2. Unions became more powerful

The Growth of Labor Unions • Collective Bargaining • Negotiating as a group with their employers • Higher wages, better conditions, lower rent • Strike – workers refuse to work • Local, state, region, country, groups. • Unions • National Trades Union – 1833 • Changes start • 10 hr days, 6 days a week (mid 1800’s)

Labor Unions • Knights of Labor – 1869 • Social gains for unskilled and skilled workers • Uriah Stephens • Recruited women + African Americans • Terence V. Powderly – took over • Used collective bargaining, strikes, boycotts • American Federation of Labor - 1886 • Samuel Gompers • Skilled workers, 100’s of different specific crafts, • Union Dues • Wages, Hours and conditions • Outcomes – • 1. Companies learned to treat their employees better • 2. Unions became more powerful

• Haymarket Strike – May 1886 • Haymarket Square Chicago • Strikers and police exchange violent attacks • Protestor threw a bomb • 8 anarchists tried for murder – 4 executed • Haymarket Riot • People feared the Knights of Labor / Strikers • Homestead Strike – • Homestead Penn. • Andrew Carnegie steel plant workers strike • Hires – Henry Frick – Pinkertons (private police force) • Several workers killed. • Public opinion turns against unions.

Labor Unrest • Pullman strike (1894) • Started in Chicago 3, 000 railway workers were laid off and wages cut 25 -40 percent. • President Cleveland sent in federal troops to protect interstate commerce. • Eugene V. Debs and the Socialist Party • Industrial Workers of the World • Fought for Unskilled Workers • Radical Unionists • Miners, Lumberers, dock workers

Strikes turn Violent • Labor unrest • 1881 -1905 37, 000 strikes • Yellow dog contracts – promised not to strike or form unions • Great Strike of 1877 • Ohio and Baltimore RR workers struck • Stopped interstate trade • National Guard came in to put down the strike • Haymarket Affair • Chicago 1877 • Worker was killed and several injured at the Mc. Cormick Harvester plant • Rioters tossed a bomb at the police • Police fired back • Eight organizers were charged and one hung • Police started to become Anti-Union • Marry Harris Jones • Most prominent female union organizer • Led to expose and end child labor

Impact of Labor Unions • Business owners backed by courts against unions • Unions denied legal protection • Collective bargaining, strikes became strategies