Share of World Industrialization Causes of Massive Industrialization

Share of World Industrialization

Causes of Massive Industrialization 1. The Railroad fueled the growing US economy: • First big business in the US. • Aided by government giving massive land grants • 1865 35, 000 miles 1900 192, 556 miles

• Major goal of Gov’t: finish Transcontinental RR • Union Pacific RR built from the east (Irish), Central Pacific RR built from the west (Chinese) completed in 1869 • November 1883, time zones introduced because of railways • Created a market for American raw materials and manufactured goods and stimulated agriculture & mining

2. Technological innovations • Henry Bessemer Ø Open Hearth Process to produce Steel • Thomas Edison Ø Light bulb/Electricity/Motion Picture • Alexander Graham Bell Ø Telephone

U. S. Patents Granted 1790 s 276 patents issued. 1860 -1890 440, 000 patents issued

3. Abundant Labor Source • Natural Growth & Immigration 4. Capital & Businessmen • • Large fortunes created by Civil War Nation now had “millionaires” 5. Growing Market 6. Government Assistance • Protection 7. Natural Resources • Coal, Iron, Oil 8. Reorganization of Labor • Assembly Line

Laissez-Faire • No Government interference (except the tariff of course!) • Will allow for massive expansion of businesses • Individuals should compete freely in the marketplace – Including Labor

The Robber Barons • A businessman who dominates his industry and amasses a large personal fortune normally through unfair business practices (monopolies) • Often were corrupt and bribed judges and legislators • Used the 14 th amendment to protect themselves

• • • • • • John Jacob Astor (real estate, fur) – New York City Andrew Carnegie (railroads, steel) – Pittsburgh, Pennsylvania Jay Cooke (finance) – Philadelphia, Pennsylvania Charles Crocker (railroads) - California Daniel Drew (finance) – New York state James Buchanan Duke (tobacco) – near Durham, North Carolina James Fisk (finance) – New York state Henry Flagler (railroads, oil, the Standard Oil company) – New York City and Palm Beach, Florida Henry Ford (automobile) – Dearborn, Michigan and metropolitan Detroit, Michigan Henry Clay Frick (steel) – Pittsburgh, Pennsylvania and New York City John Warne Gates (steel, oil) – Chicago and Texas Jay Gould (finance, railroads) – New York (both state and city) Edward Henry Harriman (railroads) – New York state Collis P. Huntington (railroads) – California, Virginia, and New York Andrew Mellon (finance) - Pennsylvania J. P. Morgan (finance) - New York Mark Hopkins (railroads) - California John D. Rockefeller (oil) - Cleveland, Ohio Leland Stanford (railroads) – Sacramento, California and San Francisco, California Cornelius Vanderbilt (railroads, shipping) - New York City, New York James J. Hill (railroads) - St. Paul, Minnesota George Mortimer Pullman (railroads) - Pullman, Chicago

Who are the Robber Barons? • “Commodore” Cornelius Vanderbilt • Dominated the RR industry • Began using steel rails, air brakes & standardizing rail gauges • Heavily abused the public by setting high rail rates

• John D. Rockefeller • Standard Oil – 95% of U. S. oil refineries • Initially important for Kerosene – By 1900, for gasoline in the automobile

• Andrew Carnegie • Dominated the Steel industry • “Steel is King” – RR, Skyscrapers • Proponent of the “Gospel of Wealth” – Had to be morally responsible to the less wealthy

• J. P. Morgan • The Banker’s Banker • Buys Carnegie Steel in 1901 – Launched U. S. Steel Corporation – U. S. ’s 1 st billion dollar corporation

Social Darwinism • Social Darwinism based on the beliefs of William Graham Sumner • Coined the phrase “Survival of the Fittest” • Those doing well pulled themselves up by the “bootstraps” • Poor must be lazy • Used to justify growing stratification of society

New Business Entities • • Competition was the nuisance of the Robber Barons Pool companies in the same industry that work together to maintain high prices (RRs) Trust company with the intent to form a monopoly in an industry Two Types of Trusts: – Vertical Integration (U. S. Steel) – Horizontal Integration (Standard Oil)

Vertical vs. Horizontal Integration

The “Bosses” of the Senate

Results of the Trusts

Regulation • Munn v. Illinois (1876) – Allowed states to regulate businesses within their borders • Wabash v. Illinois (1886) – States could not regulate interstate trade – Undid states efforts to control RR pools • Interstate Commerce Act (1887) – Allowed Federal gov’t to regulate interstate trade – Outlawed RR pools – Established the ICC • Sherman Anti-Trust Act (1890) – Meant to break up the trusts – Used against the unions

What is a Union? • A voluntary association of workers who want better working conditions, wages, and benefits • Needed for the changing American workforce

Working Conditions • 1 st major union was the National Labor Union (1866) • Fell apart because of Panic of 1873 • Most workers had: – 60 hour weeks – No pensions, workmen’s compensation – No unemployment benefits – Low wages – Dangerous working conditions – Most strikes failed

Labor Unrest: 1870 -1900

Management vs. Labor “Tools” of Management “Tools” of Labor M “scabs” M boycotts M P. R. campaigns M sympathy demonstrations M Pinkerton Agents M lockout M informational picketing M Blacklisting M closed shops M Yellow dog contracts M court injunctions M organized strikes M open shop M “wildcat” strikes

Knights of Labor (1869) • By 1886 there were 800, 000 members • Employers were the new “Slave Power” • All inclusive labor union: – skilled and unskilled – women and men – White and African. Terence V. Powderly American An injury to one is the concern of all!

Goals of the Knights of Labor Eight-hour workday Workers’ cooperatives Worker-owned factories Abolition of child and prison labor Increased circulation of greenbacks Equal pay for men and women Safety codes in the workplace Prohibition of contract foreign labor

Great Railroad Strike of 1877 • • • 1 st national strike of the Knights of Labor Began because of pay cuts Turned into riots in cities around the country Lasted 45 days Hayes sent the militia

Haymarket Affair (1886) • K of L strike in Chicago • Strike at Mc. Cormick Harvesting Company • May 3: striking workers were attacked by police – 4 killed • May 4: protest rally in Haymarket Square. • Bomb explodes killing a policeman • Labor blamed • K of L loses popularity

American Federation of Labor (1886) • Founded by Gompers to replace the K of L • Umbrella organization of local unions • Focused solely on skilled workers or craft unions • Ex: Teamsters, Garment workers, Electrical workers Samuel Gompers

How the AF of L Would Help the Workers • Represented workers in matters of national legislation. • Maintained a national strike fund. • Evangelized the cause of unionism. • Prevented disputes among the many craft unions. • Mediated disputes between management and labor. • Pushed for closed shops.

Homestead Strike

• • Pullman Strike (1894) Pullman Palace Car Company Workers lived in company owned town Company cut wages, but maintained rents & other prices Other RR unions refused to work on lines & trains that had Pullman cars • Spread across entire nation • President Cleveland sent military to end strike – Justification: interfered with the mail

Public Perception of Unions • Fear of unions grew with violent strikes of 1880’s & 1890’s • Unions portrayed as the result of foreign influence • Seen as anarchists • Nativist feelings grew