Chapter 14: Industrial Age 1870 - 1900

1. Introduction Edwin Drake Henry Bessemer Thomas A. Edison George Westinghouse Chris Sholes: 1867 Telephone: 1876 Transcontinental Railroad: 1869 Immigrants Regulation George Pullman Credit Mobilier: 1864 Interstate Commerce Act: 1887 Intrastate Trade Social Darwinism Success Horatio Alger Jr. Monopoly Trust Octopus Andrew Carnegie Gospel of Wealth J.P. Morgan Holding Company Vanderbilt John D. Rockefeller Cut Throat Competition Robber Barons Sherman Anti-Trust Act 1890 Working Conditions Mother Jones Unions National Strike 1877 Yellow Dog Contracts Knights of Labor (KoL) Arbitration Haymarket Square Riot 1886 American Federation of Labor (AFL) Collective Bargaining Eugene Debs Government & Business Injunction Results of Injuctions Chapter 14: Industrial Age1870 - 1900

2. Introduction During the late 1800s, the United States will experience a 2nd Industrial Revolution that will change American industry Problems in the work place will be addressed by the creation of labor unions & the federal government

3. Bessemer & Drake • Oil Drill: Invented by Edwin Drake. • Effects: Drilling for oil becomes more practical • New use for the steam engine • Gasoline • Steel Production – “The Bessemer Process”: Invented by Henry Bessemer • Effects: Large scale building – cities • Many new inventions • Plow, windmill, skyscrapers, barbed wire • Efficient & cheap • Steel more flexible & stronger, won’t rust if made properly

4. New Uses for Steel • Railroad biggest consumer • Tracks & Spikes • Barbed wire, Mechanical reaper, John Deere’s Plow • Tin can • Brooklyn Bridge built in 1883 • Many were unsure of its safety so Barnum (the circus guy) marched elephants across it to prove its strength • Jenney: 1st skyscraper • Home Insurance Bldg., Chicago

5. Incandescent Light Bulb • Invented by Thomas A. Edison • Safer than the arc light • Effects: Safer form of electricity • 1,000s of inventions • Phonograph • Microphone • Stock ticker • Projecting Kinetoscope • Galvanized batteries • Electrical Distribution System: Invented by George Westinghouse • Effects: Safer & cheaper way to distribute electricity long distance

6. Typewriter1867 Invented by Chris Sholes Created jobs for women Letter arrangement was changed because workers were typing too fast!

7. Telephone: 1876 • Invented by Alexander Graham Bell & Thomas Watson • Considered toys at 1st until its usefulness was proved • Quicker & more efficient communication • More jobs for women • Telephone operators • Why not men? • 1910: Women made up 40% of the clerical workforce

8. Changes in Society • Consumer becoming important part of business • More products on the marker & we’re buying more stuff • More recreational activities like the phonograph, bikes & cameras become popular • How to balance industrialization & environmental pollution?

9. Social Darwinism • Survival of the fittest in business • Big business naturally takes over smaller businesses • Darwin’s Origin of Species • Process of Natural Selection • Sumner: Success & failure in business were governed by natural law that no one (gov’t) had right to interfere. • Favors a Laissez-Faire Gov’t where the gov’t. doesn’t control industry • New definition of success: God gave $ to deserving & the poor were lazy

10. New Business Practices:Horizontal Merger • Merging companies that make similar products Shell Gas Hess Gas Exxon Gas BP Gas

11. New Business Practice:Vertical Merger Stations Oil Trucks • 1 company takes over the suppliers, distributors, & transportation system to gain control of the entire industry Oil Pipelines Oil Refineries Oil Drills

12. New Business Practices • Oligopoly: Only a few sellers provide particular product • Usually result of merger • Monopoly: 1 company dominates the market = no competition • Buy out all competitors to control market (production, quality, sales) • Prices go up!! • Trust: Same as monopoly

13. Octopus represented trusts & monopolies in political cartoons

14. Big Business • Powerful industries • Oil • Steel • Railroad • Very involved in Gov’t.

15. Made $ in steel industry Founded US Steel Co. 1901: Controlled 80% steel industry Nearly monopolized steel industry Gospel of Wealth: Rich had a social obligation to help the poor & the community Andrew Carnegie

16. John D. Rockefeller • Standard Oil Company • 90% oil refining industry • Didn’t share benefits w/employees, paid low • Used Cut Throat Competition: Drive competitors out of business by lowering prices… • Once the competition is weak, her buys them & raises prices again!! • Control market, then raised prices • No alternative

17. J.P. Morgan • Made $ from banking & bought out many railroads • Holding Company: Buy stock of competing companies until it controls the majority • 1900: control 50% of RxR in US

18. Cornelius Vanderbilt • Made money from the railroads • Charged very high prices in the West • Poor farmers 

19. George Pullman • Built luxury railroad cars (Pullman Sleeper Cars) • Creature comforts • Plush chairs, temperature control etc. • Company Town: Employees forced to live in Pullman town…keeps them in debt to the company

20. Titles • Captains of Industry • Name given to industry leaders • Robber Barons • Monopolists who used unfair/cut throat tactics

21. Credit Mobilier: 1864 Railroad scandal linked to Grant’s VP One of the many reasons Northerners stopped paying attention to the South

22. Interstate Commerce Act: 1887 • Not enforced at 1st; until T. Roosevelt • Federal Gov’t. can supervise railroads & regulate interstate trade • Trade between states • Interstate Commerce Commission established to supervise, but difficult job • Too much paper work (red tape)

23. Horatio Alger Jr.“Pulling yourself up form the bootstraps” Not everyone agreed w/Social Darwinism Wrote dime novels: rags to riches stories No shame in humble beginnings People looked differently at poor Fault of individual, not economy

24. Other Monopolies • Charles Pillsbury • Flour • RJ Reynolds • Tobacco • J.B. Duke • Tobacco • All southern monopolies

25. Robber Barons Monopolists who used cut throat competition Defending themselves by contributing to charity: most gave very little Carnegie gave 90% of earning (he was the exception to the rule)

26. Sherman Anti-Trust Act1890 • Fighting back against monopolies • Drive prices up – many farmers, workers & poor can’t afford products • Stated any attempt to interfere with free trade was illegal • Monopolies, but later included strikes & workers’ union • Used to break up monopolies • Weak at 1st • Supreme Court didn’t support, monopolies continued • Used to control Unions

27. Working Conditions • Unsafe working conditions • Low pay ($3-$12 week) • Long hours (16) • No sick, vacation workman’s comp. • Injuries common • 1882: 675 died weekly • 1890-1917: 200,000+ workers killed, 2 mil. injured

28. Triangle Shirtwaist Co. 1911 • Fire spread throughout factory • Workers tried to escape, but doors were locked • No sprinkler system • Fire escape collapsed • 154 dead • Owner acquitted • Results • Established Fire codes • Abolished child labor • Sunday off • 54 hour work week

29. Child Labor • Cheap - .27 cents day • Could fit in machines to fix • 20% children working – no school • Chained to machines • Hunger & exhaustion lead to accidents • Overheads

30. Mother Jones • Called for reforms in child labor • Brought situation to public eye • Widespread publicity

31. Emergence of Unions Formed to protect rights of laborers Against immigrants because they could take American jobs (Work for less $)

32. National Strike1877 • Strike against the railroads • 1st national strike • Federal troops sent to stop strikers • Interfering with free trade, stopped 50,000 miles of track • Protesting long hours, bad pay • Supported by miners (experiencing same things) • To keep their jobs, strikers were forced to sign Yellow Dog Contracts • Would not join a union or strike

33. Knights of Labor (K.o.L.) • Focused on individuals “Injury to one, hurts us all” • Union opened to skilled & unskilled laborers; minorities • Used arbitration: to settle disputes • unbiased 3rd party settles disagreement • Used strikes

34. Haymarket Riot5/4/1886 • Chicago • Protesting the death of striker by cops • Cops show up • Bomb thrown into crowd • Leads to decline of K. o. L. • Anarchists linked to Knights of Labor • Public turns against them because of violence • Creation of AFL

35. American Federation of Labor (AFL) • Founded by Samuel Gompers • Union open to only skilled workers • No minorities • Usedcollective bargainingto settle disputes • Group negotiations • Done before striking • Raised wages, shortened work week • Different tactics used by K.O.L & AFL

36. Eugene V. Debs • Socialist Union leader • Dignity & solidarity • Wanted separate unions for skilled & unskilled laborers of different trades • Miners union, Electricians union etc. • Threatened wealthy, supported by poor

37. Pullman Strike • Laid off 3,000 workers • Cut wages by 40% • Making $6 a week • Rent high in company town • Workers on strike • Strikebreakers hired by Pullman (Pinkertons) • Violence erupted • Debs jailed • Strikers fired & Blacklisted

38. Government & Business Gov’t. supports business Injunction: Court order (in this case) to prohibit strikes Results of Injunctions Unions began to decline early 1900s Lost support, strikes caused shortage of goods Losing members