Industrialization 1865 – 1901

1. Industrialization 1865 – 1901

2. Industrialization Causes Natural Resources The United States Becomes an Industrial Nation Large Workforce Free Enterprise New Inventions

3. Natural Resources • Water, timber, coal, iron & copper • Transcontinental Railroad played a part • 1859 – Edwin Drake drills first oil well in Titusville, Pennsylvania

5. Large Workforce • US population triples between 1860-1910 • 30 million to 90 million • Increased demand for goods and services • Immigration • 1870 to 1910 20 million immigrants

7. Free Enterprise • Laissez-faire – “let people do as they choose” • No government intervention • Free Markets • Entrepreneurs – risk takers and innovators • In late 1800’s invested in manufacturing

8. Railroads • Pacific Railway Act (1862) – construction of transcontinental railroad • Union Pacific • 10,000 workers – Civil War vets, Irish Immigrants, farmers, miners, ex-cons • Central Pacific • 10,000 Chinese workers • Met at Promontory, Utah

9. Railroads (cont) • Railroads linked the nation • Larger markets for goods • Stimulated the economy • Spent money on steel, coal, timber, etc.

10. Railroads (cont) • 1883 – American Railway Association divided country into four time zones

12. Railroad Abuses (Corruption) • Land Grants – free land given to railroad companies to encourage construction • Railroads sold the land to settlers, real estate agencies, and others • Price Fixing – agreements between companies to set prices • Kept farmers in debt

13. Railroad Abuses (cont) • Credit Mobilier – owned by Union Pacific • Awarded UP’s contracts, then overcharged UP • Money went into the pockets of the UP investors • Union Pacific almost went bankrupt • Congress gave more land grants • Investigation implicates many members of congress

14. Railroad Abuses (cont) • Interstate Commerce Act • Tried to stop railroad abuses and corruption • Federal govt oversees railroads

15. Rise of Big Business • By 1900 big businesses dominated economy • Corporation –organization owned by many people, but treated by law as if a single person • Owners buy shares of stock and are called stockholders • Allows a corp. to raise large sums of money

16. Corporations vs. Small Manufacturing Companies • Small Manufacturing Companies • Low Fixed Costs • High Operating Costs • Shut down during poor economies • Corporations • High Fixed Costs • Low Operating Costs • Lots of money to maintain factories during poor economies The Shoe Cobbler Versus Nike Shoe Corp.

17. Consolidation of Industry • Small companies were forced out of business-designed to eliminate or reduce competition, so are Corporations unethical? • Monopoly – when a single company controls an entire market

18. Consolidation of Industry (cont) • Vertical Integration • company that owns all the different businesses it depends on for operation

19. Consolidation of Industry (cont) • Horizontal Integration • combining many firms doing the same type of business into one large corporation

21. Consolidation of Industry (to eliminate or reduce competition) • Trusts – allows one person to manage another’s property • Standard Oil forms first trust • Controlled 90% of refining • Holding Company – Owns stock of other companies, does not produce anything • Robber Baron – Capitalist who became wealthy through exploitation or Captains of Industry…i.e. Andrew Carnegie -Steel/John D. Rockefeller-Oil

22. Consolidation of Industry (cont) • Andrew Carnegie • Poor Scottish immigrant who became very rich • Made early money in railroad • Invested in Carnegie Steel company in 1873 • Known for his work in the steel industry • Donated 90% of his total wealth to charity and the arts, “The Gospel of Wealth”

23. Consolidation of Industry (cont) • Sherman Antitrust Act – made it illegal to interfere with free trade

24. Between 1865 – 1897, the U.S. experienced deflation – rise in the value of money Prices fell Companies cut wages Workers begin to organize labor unions Labor Unions

26. Labor Unions (organize) • Reasons for Unions • Long hours, 12+ hours/day, 6 days/week • Low Wages • Poor, Unsafe conditions • No job security

27. Labor Unions (cont) • Child Labor • Long hours, Less pay • More Danger

28. Labor Unions (cont) • Trade Unions – formed by craft workers limited to those with a specific skill • By 1873, there were 32 trade unions • Industrial Unions –united craft and common laborers • Companies outwardly opposed them

29. Labor Unions (cont) • Strategies vs. Unions • Contracts promising not to join a union • Hiring private detectives (Pinkertons) • Blacklists – preventing troublemakers from getting new jobs in their industry • Lockouts – Workers were locked out of the worksite and not paid • Strikebreakers – workers hired to replace strikers • Also called “scabs”

30. Labor Unions (cont) • Karl Marx “The Communist Manifesto” • World history was a class struggle between the oppressing owners and the oppressed workers • The proletariat (working-class oppressed) would overthrow the bourgeoisie (middle-class oppressors) in a violent revolution and set up a dictatorship • Produce a society without classes

31. Labor Unions (cont) • American Federation of Labor • Large trade union • Samuel Gompers was first leader • Wanted to have unions accepted in America • Three goals: • Have companies recognize unions • Closed shops – can only hire union workers • 8 hour workday

32. Labor Unions (cont) • Knights of Labor • 8 hour workday • Equal pay for women • End of child labor • Worker-owned factories • Favored arbitration – third party helps workers and management come to an agreement

33. Labor Unions (cont) • By 1900, women were 18% of workforce • Paid less than men • Not allowed in unions • Women’s Trade Union League (WTUL) – first union dedicated to women’s labor issues • Created by Mary Kennedy O’Sullivan & Leonora O’Reilly

34. Labor Unions (cont) • Great Railroad Strike • 1877-Railroad workers strike to protest wages being cut • 80,000 workers in 11 states • Destroyed railroads and trains • Violence erupted • President Hayes forced to call out the army to stop it

35. Labor Unions (cont) • Haymarket Riot • 1886-Chicago-Protest against police brutality • Clash between strikers and police involving a bomb and gunfire • 7 police and 4 workers killed

36. Labor Unions (cont) • Homestead Strike-”The River Ran Red” • The Homestead Strike was an industrial lockout and strike which began on June 30, 1892, culminating in a battle between strikers and private security agents on July 6, 1892. • The dispute occurred at the Homestead Steel Works in the town of Homestead, Pennsylvania, between the Amalgamated Association of Iron and Steel Workers (the AA) and the Carnegie Steel Company. • The final result was a major defeat for the union and a setback for efforts to unionize steelworkers.

37. Labor Unions (cont) • Pullman Strike • 1894-The American Railway Union (ARU) led by socialist Eugene Debs strikes against the Pullman Palace Car Company • Turned violent after company hired strikebreakers

39. Effects of Industrialization • Growth of large corporations • New and plentiful manufacturing goods • Poor working conditions in factories and sweatshops • Increased labor activism