HIS 112 Chapter 18

1. HIS 112Chapter 18 Industrial Society

2. U.S. Industrial Revolution • By 1876, the U.S. was involved in another revolution, an industrial revolution • By 1860: • U.S. was 4th largest industrial nation • Had 100,000 factories worth $1.8 billion • 70%of population lived on farms • Fewer than 1 million worked in factories

3. By 1900: • U.S. ranked 1st among industrialized nations, ahead of Great Britain • Factories were worth $13 billion • Many had left the farm to work in industry • 5 million worked in industry

4. Basis for growth: • U.S. was rich in capital • Proved that it was a stable nation • Was open to foreign investors • U.S. kept control of industry • Large labor force, both native-born and immigrant

5. U. S. had abundant natural resources • Rich agricultural land • Lumber • Gold • Silver • Semi-precious metals • Lots of coal • Iron • Petroleum

6. U. S. also had a huge market for ready-made goods -- 1900, population was 76 million • We had inventors • Companies worked to cut costs and competition • Entrepreneurs flourished • Industry was concentrated in northeast

7. Transportation & Communication • Advances in railroads, ocean-going steamships, telegraph, and telephone • Railroads • More direct routes • Greater safety • Faster • More comfortable

8. More dependable schedules • Could carry more than a stagecoach • Year-round service • Covered 50 miles in an hour • Went where waterways could not 1865 – 1890, total railroad track in U.S. expanded from 35,000 to 200,000 miles

9. 4 Major Effects of Railroad Construction: • Economic • railroad revenues were over $1 billion • Steel and coal industries were greatly stimulated

10. Altered concepts of Time and Space • Space was transformed into time • Scheduling necessitated an agreement on time and time zones (Charles Dowd, 1883)

11. Technological and Organizational Reforms • Standardization of track used • Scheduling was better coordinated

12. Community Effects • American railroads often created the very communities they were to serve • Different from Europe • Towns grew up along railroad routes • Many towns not on or close to railroad routes shriveled up and often died

13. Aid to Railroads • Received government subsidies • Railroads (RRs) convinced government that expansion of rail routes would benefit public • Asked government to give them public land • Federal land grants totaled over 180 million acres

14. States gave railroads 50 million acres • Counties, cities, and towns offered loans or bought stocks and bonds in company

15. Problems • Discriminatory rate setting • Competition between different lines led to drastic rate reductions – usually on long-haul routes • RRs gave rebates to big shippers like Rockefeller • RRs gave free passenger passes to big companies

16. To make up the difference, RRs boosted rates on non-competitive short distance routes that most farmers would use • Then railroads consented to pools among railroads • This was an agreement among RRS to share traffic and earnings and to set common rates to reduce competition among major lines

17. These practices upset farmers, retailers, bankers, reformers, and some stock brokers • Cornelius Vanderbilt, Collis P. Huntington, Jay Gould, and James Hill were some of the best at re-organizing and expanding the railroad industry in the 1870s and 1880s

18. They devoured smaller RRs to create larger, integrated, & more consolidated lines • NORTH – lines were consolidated into 4 major ones called trunk lines • SOUTH – 400 smaller lines of 40 miles or less were consolidated into 5 major systems

19. West of the Mississippi, 5 major lines were created • All used standard equipment and scheduled with the help of the newly created U.S. time zones (1883) • The owners used cut-throat tactics to gain supremacy

20. Pools, rate-fixing, rebates, and passes for some, higher prices for others led to a demand in the 1870s for the government regulation of railroads • The Supreme Court upheld the principle of RR regulation in Munn v. Illinois (1877)

21. It resulted in the passage of the Interstate Commerce Act , 1877 (ICC) • Created the Interstate Commerce Commission • Satisfied those protesting the practices of the RRs

22. The ICC could • Investigate RRs • Issue cease & desist orders • Seek court assistance to enforce compliance with the law But there were LOOPHOLES and enforcement was weak

23. These business practices of the RRs were adopted by other businessmen • One was Andrew Carnegie in Steel, and another was John D. Rockefeller in oil

24. Andrew Carnegie • 1848- came from Scotland at age 12 • Was bobbin boy in Pittsburgh • Learned bookkeeping • Became a telegrapher and message boy for Western Union • Took job as telegrapher and secretary for Tom Scott of Pennsylvania Railroad, West

25. Later was an executive for Pennsylvania Railroad • Speculated in oil and the manufacture of iron bridges during Civil War and got rich • 1873 – constructed a steel plant outside of Pittsburgh during a depression when costs were low

26. Vertical Integration • His major contribution to business • Expanded the base of operation to include its many stages: • Raw materials • Barges and ports He owned the different stages of his operation, so he didn’t have to pay anyone else

27. Andrew Carnegie advocated Social Darwinism – survival of the fittest business

28. John D. Rockefeller • Established the Standard Oil Company of Ohio along with his brother William, Samuel Andrews, and Maurice Clark • 1870 – they refined 3 or 4% of the nation’s oil • 1890 – that grew to 90% • How? Horizontal Integration

29. Horizontal Integration • Control of an entire industry by controlling the key phase: the refining • Rockefeller established a monopoly across the business without owning all phases Rockefeller persuaded strong and cooperative competitors to join him and he drove weaker ones out of business

30. Trust • Formed by Rockefeller • He had his competitors surrender control of their refineries to Standard Oil • They, in turn, would receive trust certificates and would not have to manage their companies or fight the competion

31. Trustees would combine their factories and their incomes • They became very wealthy • Competition had to join them or be forced out of business • This created a monopoly

32. New Technology • 1866 – Telegraph Cables by Cyrus W. Field, linked Europe with America • 1867 – Typewriter, p. 536 – picture • 1867 – Stock Ticker • 1879 – Cash Register, p.532 - picture

33. 1887 – Calculating Machine • 1888 – Adding Machine • 1888 – Kodak Camera by George Eastman • 1876 – Telephone by Alexander Graham Bell, a Scottish immigrant • Made the discovery while perfecting a hearing aid for the deaf

34. President Hayes had a phone in the White House 1878 • His phone number was 1 • When the Treasury got a phone, its number was 2 • 1880s – 50,000 phones in U.S. • End of 1890s – 800,000 phones in U.S. • 1905 – 10 million or 1 for every 10 people

35. Thomas Alva Edison • “Wizard of Menlo Park” • Patented over 1,000 inventions 1876 – 1900 • Storage battery • Motion picture projector • Phonograph • In candescent light bulb – most important

36. Financier J.P. Morgan was among the first to electrically illuminate his house and his bank • 1882 – in New York – 80 illuminatewd homes • 1900 – 3,000 towns and cities were electrically illuminated • Safer than gas

37. Edison based electric current on low voltage direct current that could only go 2 miles • George Westinghouse perfected a means of transmitting alternating current over long distances • Westinghouse also perfected air brakes for trains using pneumatic pressure

38. Mass Production • Sometimes industries produced more than people could buy • To help increase sales new advertising and marketing techniques were used • Example: the flour industry came up with new products like cereals and cake flour

39. Many used advertising • H.J. Heinz • Campbell’s Soup • Pabst’s Beer of Milwaukee • Borden’s Milk • Swift Meats • Henry Crowell’s Quaker Oats • Proctor and Gamble’s Ivory Soap

40. Industry expanded and great fortunes could be made, but all on the backs of the poorly paid, mostly unskilled laborers. Industry polluted water, filled the sky with sooty smoke, and littered the landscape.

41. 1870 – 1900 – world’s manufactured goods produced by America rose from 25% - 33% • Population in U.S. doubled overall from 1860 – 1900 • Those working in industry grew 4 times during the same period

42. 1860 – 1.5 million worked in workshops and mills and 700,000 in mining and construction • 1900 – 6 million worked in manufacturing and 2.3 million in mining and construction The U.S. was moving away from being that agricultural nation of Jefferson

43. 1870 – Americans worked in small workshops along side of their employers. They were often skilled laborers • 1900 – Workshops had evolved into plants employing thousands of unskilled men, women, and children. Employers were distanced from employees.

44. Unskilled labor was preferable because employers didn’t have to pay them as much, and they could be replaced easily • Salaries for workers decreased in the second half of 19th century • However, workers could get more for their money because of mass production – cheaper prices

45. Still, 1 out of every 8 Americans lived in poverty in 1904 • Hours varied from job to job • Government employee – 8 hr. day • Skilled workers – 10 hr. day • Factory workers – 12 hours or more per day

46. Work week in 1860 was 66 hours • In 1910 – 55 hours • Most worked 5 ½ to 6 days a week • Some industries had shift work • Holidays were few, but there were lay-offs due to depressions and the off-season

47. Conditions in Workplace • Not much attention paid to safety • Boilers would explode – 10,000 from 1870 -1910 • Railway accidents – 1 worker in 26 injured each year and 1 in 400 was killed • Those working with machines could lose fingers and hands

48. Owners usually not held responsible • If a worker knew there was something wrong with the machine, and he used it anyway, then it was the worker’s fault • However, if the worker didn’t use the machine, then he would be fired • No workers’ compensation or death insurance

49. Employers were not held responsible for diseases caused by the job: black lung, white lung, etc. • The workers were men, women, and children – often unskilled immigrant labor • 1900 – 1.8 million children working full time

50. Women and children were employed because they could be paid less than men • 1900 – 20% of work force was female • ½ of textile workers were female • 2 million women were employed in service jobs like cooks, maids for subsistence wages