INDUSTRIAL AGE

1. INDUSTRIAL AGE

2. Industrial Innovations and Inventions • 1859 – Edwin L. Drake 1st to successfully use steam engine to drill for oil in PA • 1859 – Henry Bessemer & William Kelly improved the manufacturing process by removing carbon from iron • 1867 – Christopher Sholes invents the type writer • 1873 – James Desimore improved & marketed the type writer

3. Industrial Innovations and Inventions • 1876 – Thomas Alva Edison the light bulb (filament) The system of producing/generating & distributing electricity • 1876 – Alexander Graham Bell & Thomas Watson invent the telephone • 1883 William Le Baron Jenny built 1st sky scraper in Chicago • 1883 – Brooklyn Bridge built –longest suspension bridge in the world (1,595 ft)

4. Brooklyn Bridge • What do you see in this picture? • What are some of the important materials needed to construct a bridge of this size? • How is the construction of this bridge symbolic of America’s industrial transformation?

5. Brooklyn Bridge • The longest suspension bridge in the world was a symbol of America’s transition from a rural to an industrial nation • The impact of industry was vastly uneven, manufacturing was common in the northeast/mid-west & industry just began flourishing in the south • There was a huge gap between the few wealthy businessmen & the hundreds of thousands of laborers

6. Steel Workers at PA Plant • How does this steel plant represent an industrial improvement? • What might the steel made be used to construct? • How did this process help fuel industrial growth?

7. Steel Workers at PA Plant • The Bessemer Process increased production of steel from 2000 tons in 1867 to 7 million tons in 1900 • Steel was used to make train tracks, girders for skyscrapers, and the beams and cables for bridges, etc.

8. Skyscraper in NYC • What do you notice about this building? • What technological advancements created such buildings? • Why were these buildings necessary in increasingly urbanized areas?

9. Skyscraper in NYC • 20 story skyscrapers couldn’t have built w/ iron, only steel girders were strong enough to support it. • Thus impacting the construction industry. • Making American cities larger by supporting larger populations and businesses.

10. Andrew Carnegie

11. Big Business Emerges • Andrew Carnegie • Born in Scotland to poor parents came to US in 1848 worked in a cotton mill @ age 13 (12hrs/day 6days/week) • @ 19 became a telegrapher/ head of messenger service • Thomas Scott (Superintendent of PA RR) hires Carnegie & gives him opportunity to buy stock • Carnegie buys stock and begins to amass a great deal of wealth & becomes an industrial mogul

12. Andrew Carnegie • Andrew Carnegie was a Scotch immigrant who worked in a textile mill for $1.20 a week. • He put is savings and other investors into the largest steel making plant in America at Homestead PA • He became one of the wealthiest men in the world by controlling the steel industry • He donated millions to universities, parks, churches and other charities

13. Big Business Emerges • Carnegie’s Innovations • 1865 he earned so much money he quit his job • 1873 he enters steel business • 1899 Carnegie Steel Company manufactured more steel than all of Great Britain

14. Pennsylvania Oil Field • How is oil being extracted from the ground? • What would it be like to work in such an environment? • Why do you think oil fields such as this one became increasingly important in an age of industrialization?

15. Pennsylvania Oil Field • 1st successful oil well drilled at Titusville , PA in 1859 • Oil refining became big business in an age when automobiles, locomotives, and turbines were replacing steam and horse powered machines.

16. John D Rockefeller • How did he make his money? • What are the benefits of and drawbacks to allowing a few businessmen to become fabulously wealthy by selling a common goods such as oil?

17. John D Rockefeller • Rockefeller took over the oil refinery business • He used ruthless methods to eliminate his competition • His company Standard Oil would lower the price to gain customers, then when his competition went out of business he would raise prices • By 1879 he controlled over 90% of American refining

18. John D Rockefeller • Rockefeller created a huge trust • In a trust stockholders of independent companies agree to exchange their shares of stock for trust certificates issued by giant firms such as Standard oil. • The shareholders received dividends but lost control of their company • Therefore Rockefeller gained control of the entire industry (monopoly)

19. Cornelius Vanderbilt • What is happening in this picture? • Who might the men be? • Do you think their actions helped or hurt the growth of railroads? • What do you think the cartoonists opinion was of these men?

20. Cornelius Vanderbilt • After the Civil War railroad builders began building more efficient & economical railroads by consolidating small lines. • Vanderbilt bought most of the railroad lines linking NY to Chicago. He refused to let passengers or freight transfer from other lines to his until other railroad companies surrendered. • By his death in 1877 he controlled more than 4,500 miles of railroads

21. Guilded Age • A time of great wealth (for few) and wide spread corruption • Leads to the 16th Amendment – Established Income Tax (1913)

22. The Age of the Railroads • 1869 – Completion of the 1st transcontinental railroad • 1870 – Prof. C.F. Dowd proposed dividing earth into 24 time zones. US contained four time tones Eastern, Central, Mountain, & Pacific • 1883 Railroad crews around the country synchronized their watches

23. The Age of the Railroads • 1880 – George M. Pullman built a factory for manufacturing sleepers and other railroad cars • 1881 – Built a town nearby his Pullman Co. for his employees • Towns offered residents medical & legal offices, shops, a church, a library, a theater and an athletic field • Residents not allowed to loiter, or drink alcohol • Control led to violent strike in 1894

24. The Age of the Railroads • 1864 Credit Mobilier Corruption – Union Pac RR stockholders formed a construction company to lay track charging 2x or 3x the actual cost as they pocketed the difference (approx $23 million) • Congressional Investigation showed about 20 government officials had been paid off under the Grant administration • To prevent gov’t meddling stock was given to approx 20 members of congress (1867) • Leads to 17th amendment in 1913 to have direct elections of Senators • This time period is known as the “Guilded Age” because of wide spread wealth & corruption

25. The Age of the Railroads • Railroad Abuses • Misuse of government land grants • Fixed prices to keep farmers in debt • Charge different customers different rates • Granger Laws • 1871 est maximum freight/passenger rates • 1877 Munn vs. Illinois Granger Laws upheld in Supreme court • Interstate Commerce Act • Panic of 1893

26. The Age of the Railroads • Interstate Commerce Act • 1887 re-est. right of Fed. Gov. to supervise railroad activities • Interstate Commerce Commission (ICC) had little effect • Panic of 1893 • Corporate abuses, mismanagement, over building & competition bankrupted many railroads • w/o railroads nationwide economic collapse of banks & other businesses • Large firms & Entrepreneurs emerge such as J.P. Morgan and William Vanderbilt beginning the Age of Big Business

27. Big Business Emerges • Management Techniques • Searched for ways to make better products cheaper • Hired chemists & metallurgists to improve quality • Detailed accounting practices allowed him to keep track of costs • Hired the best people to do the job • Offered employees stock in the company • Encouraged competition between employees to increase production and decrease costs

28. Business Strategies • Attempted to control entire steel industry • Utilized vertical integration (bought out his suppliers) to control the raw materials, transportation systems & every aspect of manufacturing • Attempted to buy out competition (horizontal consolidation) • Controlled 80% of total US steel production

29. Coke fields Coke fields Coke fields Coke fields Coke fields purchased by Carnegie purchased by Carnegie purchased by Carnegie purchased by Carnegie purchased by Carnegie Iron ore deposits Iron ore deposits Iron ore deposits Iron ore deposits purchased by Carnegie purchased by Carnegie purchased by Carnegie purchased by Carnegie Steel mills Steel mills Steel mills purchased by Carnegie purchased by Carnegie purchased by Carnegie Ships Ships purchased by Carnegie purchased by Carnegie Railroads purchased by Carnegie Horizontal and Vertical Consolidation

30. Social Darwinism & Business • Carnegie explained his success through • hard work, • investments • business innovations • Principles of social Darwinism • Based from Charles Darwin’s theory of evolution (survival of the fittest) • Economists said the same applies in Laissez Faire business

31. New Definition of Success • Social Darwinism made sense to the 4,000 new millionaires since the civil war • Riches were a sign of God’s favor • Americans adopted the theme “rags to riches” aka “pulling yourself up by your bootstraps”

32. Fewer Control More • Growth & Consolidation • “If you can’t beat them, join them” fewer sellers of a product • Oligopoly=Businesses producing similar products join together (mergers) • Monopoly=Business has complete control over a particular industry • Holding Co. bought out stock in other companies • Ex. J.P. Morgan US Steel bought Carnegie Steel in 1901 for $500 million becoming the worlds largest business organization

33. Fewer Control More • John D. Rockefeller joined w/ companies in trust agreements • Trust companies turned stock over trustees and shared in total profits and losses

34. Should US “Trust” companies?

35. Rockefeller & Robber Barons • 1870 Standard Oil processed 2-3% of US oil by 1880 it controlled 90% of oil refining • He made large profits & didn’t pass this to the consumers or employees (high prices &low wages) low prices drove competition out of business • Rockefeller, Carnegie, & Morgan defend their wealth through philanthropy • Rockefeller-Rockefeller Foundation, Univ. of Chicago, supported the arts & medicine • Carnegie- Carnegie Hall (NYC) Carnegie Foundation, over 3,000 libraries

36. Sherman Antitrust Act • Gov’t took stand against monopolies • Act stated any interference w/ state or international trade by forming trusts was illegal (not truly enforced)

37. Sherman Anti-trust Act-1890 • Pressure begins from many sources to stop trusts • Declared illegal any combination in the form of trusts that restrained trade or commerce • Courts do not enforce the law, government officials not doing their job • Led to the belief that the two party system was ineffective in solving America’s problems • This belief was particularly strong among farmers who create a new party- Populist Party

38. Business Boom Bypasses the South • Economic Causes • Post civil war Northern investors controlled 90% of Southern stock in most profitable enterprises (railroads) • Southern economy based on agriculture, paid high prices for manufacturing • Social Causes • Southern business competed w/ established northern companies w/ better skilled workers • Southern Industries such as forestry, mining, tobacco, furniture, and textile industries • Northern wage earners weren’t better off than So. Laborers, low pay & poor working conditions led to National labor movement

39. Knights of Labor • Founder & Date – Uriah Stephens, 1868 • Members – All workers regardless of race, gender or degree of skill • Goals - 8 hr work day, “An injury to one is a concern to all”, “Equal pay for equal work” (men, women, or race), strikes as last resort advocated arbitration • Successes – Grew rapidly when Terence V. Powderly (mechanic) from Scranton PA took over membership jumped from 28,000 (1880) to 700,000 (1886) & inspired other unions to organize • Problems - Failure of series of strikes led to decline

40. American Railway Union • Founder & Date- Eugene V. Debs, 1894 • Members- skilled/unskilled laborers, engineers, & firemen • Goals- Higher wages foe all, more socialist economic system w/ more gov’t control, & equal distribution of wealth (no lassie faire economy) • Successes- Won strike for higher wages. Within 2 mo. Membership grew from 90,000 to 150,000 socialism appeals to the “have nots” • Problems- socialism to the extreme is communism when gov’t has complete control of society

41. American Federation of Labor • Founder & Date- Samuel Gompers, 1886 • Members- Skilled workers from many different industries • Goals- focused on collective bargaining (group negotiation) strikes were a major tactic rather then last resort • Successful strikes helped win higher wages. Avg weekly wage increased from $17.50-$24 between 1819-1915 avg. work week fell to 49 hrs. • Problems- Didn’t include skilled laborers, created separation among workforce

42. Industrial Workers of the World • Founder & Date – William “Big Bill” Haywood 1905 • Member- Wobbies included minors, laborers, cannery & dock workers (women & African Americans) • Goals- Equal wages for equal work regardless of gender or race • Successes- Only major strike victory in 1912 gave solidarity to unskilled workers barred from other groups • Problems- Membership never grew over 150,000