A New Industrial Age

1. A New Industrial Age US History – Mr. Munoz

2. Bridge to the 20th Century • Industry, Immigration, and Reform

3. What changed? • 1840’s- production and buying habits. • Instead of producing all they needed they specialized in one or two goods and bought the others from other producers. • Free enterprise based economy grew. • Economic system where private businesses and individuals the factors of production.

4. Advances create new American way of life and business • Telegraph • Improved the rate of information exchange across the country. • The first “wiring” of the world

5. Water Transport • Steamships • The advent of steam powered boats brought faster more efficient ways to ship goods. • Canals • America dug canals to get waterways to where they wanted them to go. • Railroads • The railroads will quickly overshadow both of these innovations.

6. Delta King

7. Markets Spread and Regions Specialize • Markets Spread • With new innovations in transportation farmers in Ohio could share their goods with residents of New York City. • Regions Specialize • Geography gives central points in the transportation system special roles. • NYC- becomes link for American agriculture to Europe • Chicago- will become beef center due to railroad hub.

8. The Nature of Work Changes • Production went from being done by skilled workers (masters/journeyman/apprentices) in the shop to being done by the unskilled in the factories.

9. Working Conditions and Revolt • Many factories employed young women because they could pay them less. • Pay was still better than the women’s alternative choices. • Work area was usually poorly ventilated cramped, and hot for the 12+ hour work day

10. End Part I • Recap, ask questions, and retouch your notes

11. Revolt • Soon unskilled and skilled workers would unite and protest conditions and wages by striking. • Businesses usually won because they just replaced unskilled labor, often from the large immigrant labor pool. • Soon trade unions were being formed to protect workers interests. • The Supreme Court would validate their right to strike • Later these will become great agents for change in industry.

12. Immigration • 1830-1860 immigration dramatically increased • 1845-1855- 3 million came to the US, which had a population of 20 million. • Where are they from? • Northern and Western Europe • 1.3 million Irish came to the US during the Irish Potato Famine • Were targets for discrimination and violence for Roman Catholic faith and their willingness to work for cheap.

13. Expansion of Industry • Transition 1865-1920 • US goes from being an agricultural society after the Civil War to the leading industrialized nation in the world.

14. How and Why? • Natural Resources • Oil • Called “Black Gold” crude oil becomes the fuel of the late 19th and 20th century. • Cars, Ships, etc. • First practical use was as kerosene for lighting lamps. • Took a breakthrough of steam engines in 1859 being used to drill for oil before the industry could take off.

15. Steel Process • Becomes the building block for the world in the late 19th and 20th century. • Made of coal and iron • Discoveries of large iron ore deposits in the US drove this industry to grow.

16. Benefits of Steel • Stronger and more flexible than iron. • Took the invention and improvement of a cheap and efficient manufacturing process to grow the industry. • Uses • Railroads • Construction • Bridges • Skyscrapers

17. Inventions • Changed the way people and business functioned daily. • Electricity • This cheap and efficient source of energy changed the face of America like no other invention. • Effects • Powered all sorts of devices • Spurred the growth of the appliance industry • Made travel cheap • Allowed cities to expand. • With the advent of streetcars • Allowed business to locate wherever it wanted to • Enabled industry to grow immensely.

18. Effect of new innovations • The people gained power • The expanding population made people a force in American business as consumers • Created new industries • Some of which gave women new jobs- secretary and operators • Improved the overall standard of living.

19. The Age of Railroads • Crisscrossing the US • By 1869 railroad tracks crossed the entire US and created a monopolistic business full of greed and corruption. • The Transcontinental Railroad • Completed in 1869 it connected the entire US by rail.

20. End Part II • Recap, retouch, and ask questions in your notes

21. Discrimination • Ethnic Minorities • The Irish and Chinese were used and abused in the building of the railroad. • Some Results • Created a US market for business • California oranges could be shipped to NYC for sale • Time Zones • Forced the invention of time zones to coordinate rail schedule.

22. Opportunity and Opportunists • Opportunity • Isolated areas were now linked to the rest of the US promoting trade creating new markets for businesses. • Chicago- Sears and JC Penny’s are located here due to RR. • Extortion • LA paid a $600,000 subsidy to the RR to make sure it ran into LA instead of a more eastern route.

23. Opportunists • Train car manufacturer who built a town next to his factory for his workers • Why? • Wanted to create a tightly controlled environment that produced a stable work force. • No alcohol, no loitering.

24. Did it work? • No. Worker held a violent strike in 1894 (pullman strike).

25. Reigning in the Railroads • The Problems • Land Grants • Railroads sold land grants to businesses vs. settlers • Price Fixing • Farmers got screwed • Different rates depending on whom you were.

26. How the RR’s did this • Bribes • Free Passes • Extortion

27. Reform • Munn v. Illinois • Case where Supreme Court upheld state’s rights to regulate intrastate commerce to protect consumers. • Interstate Commerce Commission-1887 • It was the federal government’s regulatory arm over interstate commerce. • Ineffective till 1906 and Teddy Roosevelt.

28. Consolidation • Andrew Carnegie • Who? • Business entrepreneur (primarily investor) who amasses a tremendous fortune and becomes one of the world’s wealthiest men. • Innovations • Management Techniques • Improved Production Methods • Searched for the cheapest way to make better products. • Gathered Talent • Attracted the best and brightest to work for him

29. Business Strategies • Monopoly • Vertical integration • Bought and controlled all levels of the manufacturing process, from the raw materials to the transportation. • Horizontal Integration • Bought out or merged with all competitors • Created a monopoly that allowed him to control prices.

30. Vertical Consolidation

31. End Part III • Recap, retouch, and ask questions in your notes

32. Successful? • His company produced 80% of the nations steel in 1901.

33. Social Darwinism • What is it? • Application of Charles Darwin’s theory of evolution to the economic arena. • The fittest, most efficient business will survive in a free enterprise market. • Natural selection governs in this theory, and many say government has no right to interfere. • It’s Place in American Thinking • Fit in with Protestant work ethic • Individual responsibility and blame. • Religion- God’s will • Poor must be lazy and inferior because the selection process passed them by, and they deserved their lot in life.

34. Captains of Industry or Robber Barons? • Consolidation • Oligopoly • Through mergers and acquisitions entire industries came under the control of a few sellers. • Monopoly • This led to monopolies where one or a few companies controlled entire industries.

35. How to form a monopoly • Holding Companies • These were companies that did nothing but buy the stocks of other companies to form monopolies. • Trusts • Where separate companies merged and turned their stocks over to a group of trustees who ran the group as one corporation. • Not legal mergers- kind of a gray area.

36. Problems • Did not share the wealth • Paid workers poorly • Raised prices to reap profits • Discounts and Kickbacks • Often would get RR discounts and RR kickbacks

37. Criticism • Charity Defense • The robber barons defended their wealth by saying that they gave vast amounts to charity. • Rockefeller- $500 million • Rockefeller Center • Funded University of Chicago’s creation • Carnegie- $325 million- 90% of his wealth • Carnegie Hall • 3,000 libraries nationwide JdRockefeller

38. Reform • Sherman Antitrust Act- 1890 • What? • Made interference with free trade by forming a trust illegal. • Did it Work? • Not really • Written with too much gray area • Supreme Court struck down cases brought • Business outsmarted the law.

40. Workers of the Nation Unite • Exploitation • Long Hours • 12+ hours, 6 days a week • No vacation, sick leave, unemployment, or compensation for injury • Women and Children • All in family had to work to survive • Children and women were paid less. • Children were sacrificing their education

41. Child Labor

42. Labor Unions • Why? • Workers consolidated to gain power, just like the robber barons. • Reflection of Society • Some refused to admit minorities and women. • Women • Push for and get laws protecting women and minors in the workplace • Examples • Fire codes • Age limits for employment

43. Government vs. the labor unions • Sherman Antitrust Act • Companies got the courts to stop strikes by ruling they hurt interstate commerce.

44. End Part IV • Recap, retouch, and ask questions in your notes

45. B) Upton Sinclair • Finished his novel “The Jungle” in 1906 • “The Jungle” was a socialist view of life in the factory. • Most, however, ignored the socialist overtones and focused on 8 pages describing (in gruesome detail) how rats were ground into raw meat, fingers were lost to machinery, and basic sanitation and safety were absent from the meatpacking industry.

46. Roosevelt’s Reaction • Theodore Roosevelt (the president) was so taken by the work that he invited Sinclair to the white house to advise him on how to clean up the industry. • Roosevelt coined the term “muckrakers” to refer to Sinclair.

47. The Public and Lawmakers React Sinclair’s book scared the public and forced lawmakers to act. By June 30th they passed the Pure Food and Drug Act and the Meat Inspection act which laid the groundwork for the FDA.

48. The Growing Gap between rich and poor • The 1890 Census showed that the richest 9 percent of Americans owned 75 % of the wealth.

49. What were the Causes of Industrialization? • Wave of Immigrantion • Inventions • Capital • Migration to the cities • Urban growth

50. What were its Effects? • Growth of big businesses • Skyrocketing urban population with urban problems • Social reformers • Political machines seize control of cities