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Chapter 24. “Industry Comes of Age”. Railroads. After the Civil War, railroad production grew enormously, from 35,000 mi. of track laid in 1865 to a whopping 192,556 mi. of track laid in 1900 Congress gave land to railroad companies totally 155,504,994 acres. Federal Land grants to RRs.
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Chapter 24 “Industry Comes of Age”
Railroads • After the Civil War, railroad production grew enormously, from 35,000 mi. of track laid in 1865 to a whopping 192,556 mi. of track laid in 1900 • Congress gave land to railroad companies totally 155,504,994 acres
Transcontinental Railroad • Congress commissioned the Union Pacific Railroad to begin westward from Omaha, Nebraska, to gold-rich California. • The company received huge sums of money and land to build its tracks, but corruption also plagued it, as the insiders of the Credit Mobilier reaped $23 million in profits • In California, the Central Pacific Railroad was in charge of extending the railroad westward, an it was backed by the Big Four: including Leland Stanford, the ex-governor of California who had useful political connections, and Collis P. Huntington, a adept lobbyist. • Used many Chinese as labor • In 1869, the transcontinental rail line was completed near Ogden, Utah; in all, the Union Pacific built 1086 mi. of track, compared to 689 mi. by the Central Pacific
Improvements of RRs • Steel Rails • Westinghouse Air brakes • Pullman Palace Cars • Standard time • Standard gauge
Corruption and the RRs • Credit Mobilier Scandal • Bribes • Overcharging • Monopolies • Pools • Kickbacks • Trusts • Horizontal Integration • Interlocking Directories
Farmers Unite • Patrons of Husbandry (Grange) - formed by farmers to combat corruption, and to stop the railroad monopoly • Wabash case – Setback for farmers when the Supreme Court ruled that states could not regulate interstate commerce • Interstate Commerce Act - passed in 1887, banned rebates and pools and required the railroads to publish their rates openly and also forbade unfair discrimination against shippers and banned charging more for a short haul than for a long one
Reasons Why U.S. Became #1 largest Manufacturer in the World • $$$$$ - Liquid capital • Fully exploited natural resources (like coal, oil, and iron) • Massive immigration made labor cheap • American ingenuity played a vital role, as such inventions like mass production • Telephone – Alexander Graham Bell – 1876 • Invention Factory – Thomas Edison
Andrew Carnegie • Immigrated to the U.S. from Scotland in 1835 at age 12 • Used Vertical integration to build Carnegie steel into a huge corporation. • Combined into one organization all phases of manufacturing from one mining to marketing. • Bessemer Process – Cheap way to make steel. Burning of impurities in iron ore to make steel • Later sold Carnegie Steel to JP Morgan for $400 million. • "Gospel of Wealth". In the article Carnegie argued that it was the duty of rich men and women to use their wealth to benefit the welfare of the community. He wrote that a "man who dies rich dies disgraced".
The Gospel of Wealth:Religion in the Era of Industrialization • Wealth no longer looked upon as bad. • Viewed as a sign of God’s approval. • Christian duty to accumulate wealth. • Should not help the poor. Russell H. Conwell
“On Wealth” • The Anglo-Saxon race is superior. • “Gospel of Wealth” (1901). • Inequality is inevitable and good. • Wealthy should act as “trustees” for their “poorer brethren.” Andrew Carnegie
Carnegie the Philanthropist • Carnegie set up a trust fund "for the improvement of mankind." This included the building of 3,000 public libraries, the Carnegie Institute of Pittsburgh, the Carnegie Institute of Technology and the Carnegie Institution of Washington for research into the natural and physical sciences. Carnegie also established the Endowment for International Peace in an effort to prevent future wars. • By the time Andrew Carnegie died in August, 1919, he had given away $350,000,000. A further $125 million was placed with the Carnegie Corporation to carry on his good works
John D. Rockefeller • Master of “horizontal integration,” and a giant among bankers, simply allied with competitors to monopolize a given market. • He used this method to form Standard Oil and control the oil industry by forcing weaker competitors to go bankrupt • Rockefeller also placed his own men on the boards of directors of other rival competitors, a process called “interlocking directorates
Standard Oil • Oil (kerosene) was used mostly for light at night • However, by 1885, 250,000 of Edison’s electric light bulbs were in use, and the electric industry soon rendered kerosene obsolete, just as kerosene had made whale oil obsolete. • Oil, however, had its profits from the gasoline-burning internal combustion engine • John D. Rockefeller, ruthless and merciless, organized the Standard Oil Company of Ohio in 1882
J.P. Morgan • In 1891 Morgan arranged the merger of Edison General Electric and Thompson-Houson Electric Company to form General Electric, which then became the country's main electrical-equipment manufacturing company. • Purchased Carnegie Steel and renamed it United States Steel
Sherman Anti-Trust • The Sherman Anti-Trust Act was designed to combat the rise in industrial combinations, the most notorious being the Standard Oil Trust. The law declared that: "Every contract combination in the form of trust or otherwise in restraint of commerce among several states or foreign nations is hereby illegal." • More effective against labor unions than against big business
Women in 1900 • Women, who had swarmed to factories and had been encouraged by recent inventions, found new opportunities, and the “Gibson Girl,” created by Charles Dana Gibson, became the romantic ideal of the age. • However, many women never achieved this, and instead toiled in hard work because they had to do so in order to earn money.
Industrial Revolution • No more Jeffersonian ideals • Nation of wage earners • Factory system • With the inflow of immigrants providing a labor force that could work for low wages and in poor environments, the workers who wanted to improve their conditions found that they could not, since their bosses could easily hire the unemployed to take their place • Big business could get rid of unruly workers easily and hire new workers • Lockout • Call in troops • Ironclad oaths • Blacklists • Company towns
Management vs. Labor “Tools” of Management “Tools” of Labor • “scabs” • P. R. campaign • Pinkertons • lockout • blacklisting • yellow-dog contracts • court injunctions • boycotts • sympathy demonstrations • informational picketing • closed shops • organized strikes
Labor Unions • National Labor Union • Knights of Labor • American Federation of Labor
Knights of Labor • Started in 1869 • “All workers unite” • Used arbitration • Pushed for an eight hour workday • Led by Terence V. Powderly, the Knights won a number of strikes for the eight-hour day, and when they staged a successful strike against Jay Gould’s Wabash Railroad in 1885, membership mushroomed to ¾ of a million workers.
Goals of the Knights of Labor • Eight-hour workday. • Workers’ cooperatives. • Worker-owned factories. • Abolition of child labor. • Increased circulation of greenbacks. • Equal pay for men and women. • Safety codes in the workplace. • Prohibition of contract foreign labor.
Downfall of Knights • Bad Strike record • Blamed for Haymarket Riot – name became synonymous with anarchists • Inclusion of skilled and non skilled workers together did not work
American Federation of Labor • In 1886, Samuel Gompers founded the American Federation of Labor • It consisted of an association of self-governing national unions, each of which kept its independence, with the AF of L unifying overall strategy. • “Bread and Butter Unionism” - All he wanted was “more,” and he sought better wages, hours, and working conditions. • Only skilled workers
