Expansion of Industry, Age of the Railroads & Big Business & Labor

1. Expansion of Industry, Age of the Railroads & Big Business & Labor Ms. Garratt – American History – Chapter 6

2. Expansion of industry • What fueled American Industrialization? • Natural Resources • American ingenuity and inventiveness • Favorable business climate supported by government • Huge urban population that provided both cheap labor & markets for new products

3. Oil • Used for kerosene beginning in 1840s • Wasn’t until 1859 when Edwin L. Drake used a steam engine to drill for oil that drilling became practical • Started an oil boom • Gasoline was discarded until the auto came on the scene

4. Iron & coal=steel • Huge coal & iron deposits helped fuel industrialization • Mesabi Range in Minnesota • Bessemer process allowed steel to be produced by removing carbon from iron. • Bessemer process was eventually improved • RRs were biggest steel customers • Steel changed face of the nation • Farm machinery • Steel cables for Brooklyn Bridge • Skyscrapers

5. Edison & Electricity Perfected the 1st incandescent bulb in 1880 Edison also invents electrical distribution system This radically transforms the workplace Factories can be built anywhere instead of just where rivers are located

6. Other inventors • William Le Baron Jenney • Designed the 1st skyscraper with steel frame • William Kelly • Developed the Bessemer process along with Henry Bessemer

7. Inventions revolutionize The communications network • C. Sholes – typewriter • Alexander Graham Bell – telephone • Typewriter & phone created new jobs for women • By 1910 they were 40% of clerical work force

8. Expansion of us industry • Due to 3 factors: • (1) Abundant natural resources • (2) Increasing number of inventions • (3) Expanding urban population • Activity

9. Age of Railroads (rr) Sec 2 • RRs were important for settling the West and developing the country • As a result the gov made huge land grants and loans available to the rr companies

10. Impact of the rr • Transcontinental Railroad completed in 1869 • Encouraged immigration and provided employment • Harsh employment by rrs. • Central Pacific hired Chinese • Union Pacific “ “ Irish and civil war vets • Discriminatory practices against the Chinese • Paid a lot less and; • Meals were not included

11. Standardized time zones • Though the rr linked the nation in space each community still operated on its own time, with noon when the sun was directly overhead. • Noon in Boston was 12 minutes later than noon in NYC • Travelers from Maine to CA would have to reset their watches 20 x. • In 1869 Prof. C.F. Dowd remedied this problem • He divided the world into 24 time zones – one for each hour • Created 4 time zones in US

12. Time zone continued • Rrs supported the plan and in 1883 rr crews around the nation synchronized their watches • An international conference set worldwide time in 1884 which incorporated rr time • US Congress didn’t officially adopt until 1918 however

13. Trade & Interdependence • By linking previously isolated towns & cities the rrs promoted trade & interdependence • As part of a nationwide network of suppliers and markets individual towns began to specialize in particular products • Chicago, stockyards • Minneapolis, grain industries • Pittsburgh, steel • New towns grew up along the rrs that owed their existence to them. • Abilene, KS • Denver, CO • Seattle Wash

14. Pullman • Pullman built factory for manufacturing luxury “sleeping cars” • He built the town of Pullman for his employees • Provided housing as well as almost all of the workers’ basic needs • However, residents were highly restricted • They weren’t allowed to loiter on front steps or drink alcohol • Pullman hoped to tightly control his work environment to provide stable work force

15. Pullman Town

16. Pullman town

17. Pullman luxury train cars

18. Credit mobilier - fraud • Stockholders in the Union Pacific RR created the Credit Mobilier Co. in 1864 ostensibly to lay rr track. • They were paid 2-3 x what it would ordinarily cost & they pocketed about $23 million in profits • Shares of stock were donated to about 20 members of Congress including James Garfield the future POTUS. • Tarnished reputation of Repub party and Grant Admin.

19. The Grange & the railroads • The Grange was a farmer’s organization founded in 1867 • They began demanding gov regulation of the railroads WHY? Upset over misuse of land grants Price fixing Different rates for different customers or distances They took political action in Illinois pressured states for regulation “to establish maximum freight and passenger rates and prohibit discrimination.”

20. Granger Laws • Constitutionality of the laws was challenged in the 1877 Munn v. Illinois case • Supreme Court ruled in favor of the Grangers & consumers • By 1886 the Supreme Court reversed the decision arguing the states had no right to set rr rates on interstate commerce. • Congress passed Interstate Commerce Act in 1887 to supervise rr activities. • Established the Interstate Commerce Commission (ICC) • Overall the ICC was not very successful

21. Panic of 1897 • Worse depression up to this time • Financial problems and policies of rrs played major contributing role • As the 20 century begins 2/3 of rrs are controlled by 7 powerful companies. • Age of monopolies had started

22. Big Business & Labor – Section 3 • Andrew Carnegie • Carnegie Steel Co • Success was due to his cutting-edge management and ability to stay on top. • Continually searched how to make better products • Sought out best people • Attempted to gain control of the competition in two ways: • Vertical Integration • Bought out his suppliers (coal, iron mines) and transporters (ore & rr lines) in order to control both supply & transp systems. • Horizontal Integration p. 242 • Gain control of companies making a similar product

23. Social Darwinism • Based on Charles Darwin’s Onthe Origin of Species about evolution • He argued that some individuals of a species survive by passing off their superior traits to their offspring. • Natural selection allowed the strongest to survive while weeding out the less-suited. • This leads to the survival of the fittest (e.g. Carnegie) • Herbert Spencer applied this concept to business. • This was used by economists and industrialists to justify laissez-faire. • Success or failure in business was governed by natural law according to Social Darwinists

24. Holding companies • One way to create a monopoly was thru a “holding company” – a corp that did nothing but buy out the stock of other companies. • J.P. Morgan of US Steel created the largest holding co. & business when he bought Carnegie Steel

25. Rockefeller & standard oil • Created monopoly by creating trusts • Bought out his competitors or lowered price until competitors could no longer compete • Created trusts (group of trustees run businesses as one) • Stifled free competition • Considered robber baron because gained wealth through unscrupulous practices. • Firms like Standard Oil led to the creation of the 1890 Sherman Antitrust Act

26. Rockefeller & Standard Oil

27. philanthrophy • Although they were called robber barons Andrew Carnegie & Rockefeller were also philanthropists. • Carnegie donated 90% of his wealth. • Carnegie quoted as saying “It will be a great mistake for the community to shoot the millionaires for they are the bees that make the most honey and contribute most to the hive even after they have gorged themselves full” • Rockefeller donated over $500 m to various Rockefeller foundations & Univ of Chicago

28. Sherman Antitrust act 1890 • Made it illegal to form a trust that interfered with free trade among states or countries • Not very successful • Very difficult to prosecute • Still active today

29. Emergence of Labor Unions • Long hours – 12 or more hours a day • Hazardous working conditions • Low wages • No holidays, vacations, sick days • No compensation for injuries • Sweatshops or factories • Child labor • 1st large scale union was National Labor Union formed in 1866. • By 1868 it had convinced Congress to legalize an 8-hour day for gov workers

30. Craft Unions • Samuel Gompers organized the AFL • Consisted of skilled laborers • Used strikes to gain concessions

31. Industrial Unions • Industrial unionism believes that unions should include all laborers (skilled & unskilled) • Eugene V. Debs & the American Railway Union (ARU) • Industrial Workers of the World (IWW) welcomed AAs

32. Socialism & Unions • Socialists believe that government should control key industries and distribute the wealth more evenly. • Eugene Debs was a socialist who organized the American Railways Union (ARU) • Debs wanted all workers to be included in the union (skilled and unskilled) Industrial Workers of the World (IWW) formed by radical unionists & socialists IWW welcomed AAs

33. Strikes & violence pp.247-8 • Great Strike of 1877 – strikers protested 2nd wage cut in 2 months. • Work stoppage spread to other rr lines. • Most freight & even some passenger traffic covereing over 50,000 miles was stopped for more than a week. • Strike ended by fed’l troops • Haymarket Strike 1886 – became violent & public opinion turned against unions • Homestead Strike 1892 – Pinkerton hired to protect plant so that scabs could be hired. Resulted in violence & Nat’l Guard was called. Strikers lost

34. Pullman strike • Pullman laid off 3000 of 5800 employees as a result of the panic of 1893 depression • Also cut wages by 25 to 50% without cutting housing costs • When Pullman failed to restore wages or decrease rent strike was called • Eugene Debs asked for arbitration but Pullman refused to negotiate so ARU began boycotting Pullman trains • Pullman hired scabs and strike became violent • Fed’l troops were called in & strikers were blacklisted

35. Haymarket Strike

36. Homestead strike

37. Pullman strike • During depression of 1893 Pullman laid off 1000s of workers and cut wages by 25 – 50% without cutting costs of housing • Strike began • Debs requested arbitration but Pullman refused • Turned violent • Federal troops sent in • Debs jailed • Strikers were blacklisted.

38. Women Organize • Mary Harris Jones organized the United Mine Workers (UMW) • Exposed cruelties of child labor • Marched 80 mill children (some with hideous injuries)to the home of Teddy Roosevelt • That crusade led to passage of child labor laws • Pauline Newman (16) organized the ILGWU

39. Triangle shirtwaist Factory fire 1911

40. Impact of the fire • Women were locked in the factory with no escape • Fire truck ladders & hoses wouldn’t reach • 146 women died • Jury acquitted factory owner of manslaughter • Public outrage fueled investigation and legis that led to better working conditions in buildings

41. Management & gov pressure the unions • Business came to fear unions and many forced workers to sign “yellow-dog contracts” • Industrial leaders with the help of the courts used Sherman anti-trust act against labor • Companies claimed that strikes hurt interstate trade and the state or fed’lgov would issue an injunction against labor action • Despite legal limitations more and more people joined unions