America’s Industrial Age

1. America’s Industrial Age

2. Becoming an Industrial Power • Before the 1860s – U.S. mostly agricultural. • By 1920s – Most industrialized nation ON EARTH. • How?

3. Becoming an Industrial Power • Wealth of Natural Resources • Oil (“Black Gold”), Coal, Iron • Government Support for Business • Growing Urban Population • Cheap Labor • Markets for New Products

4. Steel Industry • Iron is soft (rusts & breaks b/c of impurities), removing carbon makes steel (strong, won’t rust) • Bessemer Process: Air is injected into molten iron, removing impurities (like carbon). Iron – impurities = steel

6. Steel Industry • Railroads = biggest customers (1000s of miles of tracks) • Barbed wire & steel plows • Building techniques change: • Steel supports building weight = taller structures • Brooklyn Bridge (1883) was tallest structure on Earth (other than the pyramids in Egypt)

13. New Inventions • Thomas Edison patents the incandescent lamp (1880) • Electricity made safe to use in homes, businesses • Businesses can now locate to ANYWHERE (not just by moving water or coal source) • Christopher Sholes invents typewriter (1867) • Alexander Graham Bell invents telephone (1876)

14. New Inventions in the Workplace • More women employed in offices with invention of telephone, typewriter • 1870, women = 5% of office workers • 1910, women = 40% of office workers

15. In Summary…

16. Railroads • Iron, coal, steel, lumber, glass industries grow to keep up w/ railroad growth • Chicago, Minneapolis, Denver, Seattle, Flagstaff, all exist because of railroads

17. Railroads • George Pullman (using textile mill model) built a city for workers who built sleepers and RR cars at his IL factory • Town considered luxurious (most workers had own homes, access to doctors, shops, athletics) • HOWEVER – Pullman controlled every aspect of their lives. • Eventually, workers went on strike in 1894 when Pullman cut pay but not rent.

18. Railroads and the Panic of 1893 • Corporate abuses, mismanagement, overbuilding, competition push many RRs to brink of bankruptcy. • By mid-1894 many taken over by financial companies (J.P. Morgan & Company) • By 1900, 7 powerful companies controlled over 2/3 of nation’s RRs.

19. BIG Business and Great Man History

20. Andrew Carnegie • (From Scotland) Worked on the RRs, was superintendent of the PA RR. Given chance to buy stock as a reward. • Used invested money to start his own steel mill.

21. Andrew Carnegie • Successful due to Management Practices: • Kept trying to make products cheaper. Perfected machines, accounting systems. • Offered talented people company stock, encouraged competition among employees.

22. Andrew Carnegie • Success also due to Business Practices: • Vertical Integration – Bought out his suppliers (coal fields, freighters, RRs, etc) • Horizonal Integration - Bought out his competition • By buying out competition, he controlled almost ALL the steel industry. • Sold his business to J.P. Morgan in 1901 for $480 million (approx. 1.3 billion in 2010 dollars)

23. Social Darwinism • Explanation for why some people were so wealthy & some remained poor. • “Natural Selection” weeded out less capable(Ergo, rich = most adapted, capable) • Riches = God’s favorPoor = Inferior, deserve what they get

24. Social Darwinism • Popularity of “rags to riches” stories (Horatio Alger)

25. Consolidation • Industrialists wanted mergers (horizontal integration) • Mergers – One company buys out another’s stock • Monopoly – One firm buys out all its competitors, has control over its industry’s production, wages, prices • Monopolies could also be created via holding companies – corporations that existed to buy out stock of competitors. • J.P. Morgan created world’s largest corporation when United States Steel (holding company) bought out Carnegie Steel (1901)

26. Standard Oil • John D. Rockefeller used different approach to monopolies: joining w/ competing companies in trust agreements. • Trust participants turned stock over to a group of trustees (people who ran separate companies as one large corp.)Not legal, used anyway. • Rockefeller used a trust to gain control of the US oil industry

27. Standard Oil • 1870, Rockefeller’s company refined 3% of US oil • By 1880, they refined 90% • How? • Paid employees poorly • Undersold competition • When competition went out of business, raised prices ABOVE original levels

28. “Robber Barons” • Term for wealthy & powerful businessmen who used exploitative tactics to gain their wealth. • Exerting control over national resources • Getting high levels of Gov. influence • Paying extremely low wages • Squashing competition • Acquiring competition/creating monopolies • Schemes to sell stock at inflated pricesto unsuspecting investors (impoverished them)

29. Sherman Antitrust Act • Gov. worried growing power of corps. would stop free trade. • Passed Sherman Antitrust Act (1890) • Illegal to form a trust that interfered w/ free trade between states or other countries • Poorly written. All 8 cases were thrown out. Gov. gave up.

30. Labor Unions

31. Bad Working Conditions • 7-day work weeks, 12 hr days, NO vacation OR sick days (common for men working in steel mills) • Women = similar conditions (but not as bad) • 1882 – average of 675 laborers were killed in accidents EACH WEEK

32. Bad Working Conditions • Wages were so low every family member, even children, had to work. • 25% of boys, 10% of girls ages 5-15 held jobs • 1899: men made $498/yr, women $267/yr.kids averaged about 27 cents for a 14 hrday

33. Early Labor Unions • Formed to demand fair treatment • First nation-wide union: National Labor Union (NLU) • 1869 – Uriah Stephens organizes Knights of Labor • Motto: “An injury to one is a concern of all.” • Open to ALL workers (man or woman). • At height in 1886, over 700,000 members

34. Labor Unions

35. Labor Unions Craft Unions Industrial Unions Eugene V. Debs: first to combine ALL workers (skilled & unskilled) from ONE industry into a union. Organized American Railway Union (ARU) Grew to +150,000 mems. • 1886: American Federation of Labor (AFL) formed. • Samuel Gompers president • Members: workers from a specific craft • Focus: Collective Bargaining • Used strikes to get higher wages, shorter work weeks

36. Labor Unions • Eugene V. Debs later turned to socialism • Industrial Workers of the World (IWW) created (though membership never topped 100,000)

37. Labor Strikes • Industry & Government saw union activity as a threat to the entire capitalist system. Responded with force.

38. The Great Strike of 1877 • Workers on Baltimore & Ohio RR went on strike for a wage cut. • President Rutherford B. Hayes ordered federal troops to end it. It “interfered with interstate commerce.”

39. Haymarket Square Affair • May 4 1886: Workers gathered to protest police brutality and to promote the 8-hr workday. • As protesters dispersed, a bomb was thrown into the police. • In the chaos that followed 7 policemen were killed, 60 injured; civilian casualties likely as high. • A major setback for the labor movement. (labor activities = violence & danger)

41. Homestead Strike • Workers protested pay cut at PA steel plant. • Police hired so scabs (replacement workers) could be hired. • 3 police, 9 workers killed. • PA National Guard called in, plant closed for 5 mo.

42. Pullman Company Strike • Strike over cut wages. • Pullman refused to negotiate, ARU boycotted Pullman trains. • Pullman hired strikebreakers, violence ensued. Federal troops sent in to stop it.

43. Triangle Shirtwaist Factory Fire • Poor conditions in factories could no longer be ignored after the fire in 1911. • Factory only had 1 fire escape, no sprinklers. Full of cloth & oil. • 146 women died. Doors locked to keep them from leaving, many jumped to their death or died inside the building. • Some changes in local rules (for women & children in workplace) made after.

47. Response to Labor Unions • Employers feared unions as they grew more powerful. With help of courts, turned Sherman Antitrust Act against labor. • Saying a strike “hurt interstate trade” got Gov to intervene. • Labor Unions continued to grow anyway.