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Chapter 6
After the Civil War, US was still an agricultural nation
Wealth of natural resources
Oil- Black Gold- 1859- Edwin L. Drake used steam engine to drill for oil Petroleum refining for
kerosene huge business in Cleveland
Automobile engines drove demand for gasoline
Coal and Iron Ore- Henry Bessemer, British -
Bessemer Process – inject cool air into molten iron ore removes carbon to create steel More railroads, bridges,
buildings,
Thomas Alva Edison create research laboratory in Menlo Park, New Jersey
Light bulb 1880 and entire system of producing and distributing electricity
Power ran machines – electric street cars and light
Telegraph 1844- Samuel Morse 1866 transatlantic cable Can locate factories any place
not just near rivers Alexander Graham Bell -1876-
invent telephone Work moved from homes to
large factories including clothing
More garment workers- Prices drop
Skyscrapers Invention of steel frame- support floors and walls Invention of elevators
Transit Subways or street cars transport people
Printing 1890 higher literacy rate, paper mass produced=cheap,
printing on both sides of page, faster production brought down newspapers prices= higher demand
Airplanes – Orville and Wilber Wright Glider with an engine- 1903 Kitty Hawk N.C. 12 seconds and
120 ft. (2 yrs= flew 24 miles) Photography- George Eastman
developed convenient camera with flexible film
1. How did Railroads unify the country
2. What were the reasons of the demand of railroad reform?
Made travel reliable and westward expansion possible
Nation’s first “big business” Federal govt. provided huge
subsidies and land grants 80 companies receive 17 million acres
of public land Transcontinental Railroad- During Civil War, Congress
authorized land grants and loans for a transcontinental railroadCentral Pacific (From West)
and Union Pacific (from east) used army veterans and Immigrants for labor
Railroads met at Promontory Utah May 10, 1869 “Golden Spike”
By 1900 four other transcontinental railroads are completed
Growth of railroads led to growth in towns and established new markets
Promotes trade and interdependence towns begin to specialize in specific products (Pittsburgh- Steel, New York-Clothing, Massachusetts-Textiles, Chicago- Meatpacking
Time Zones 1869 Professor C.F. Dowd
proposed the earth be divided into 24 time zones
1884 international conference set world wide time zone
Farmers upset over railroad corruption Railroad companies sold land to
other businesses rather than individual settlers
Railroad companies agree to fix prices charge different customers different rates.
Grange farmers organization 1867 demand government control over
railroad industry Sponsored state and local
candidates and pressed for laws to protect interests (Set rates) (Granger Laws)
Laissez Faire? Railroad companies fight back
Munn v. Illinois 1877 - Supreme Court upheld granger laws and government won right to regulate railroads for benefit of farmers and consumers Establish right of government to
regulate private industry to serve public interest.
1887 U.S. Congress passes Interstate Commerce Act to regulate railroad rates Only Federal govt. can regulate
interstate trade
Bessemer Process creates new demand for steel.
Great Lakes region emerges as leading steel region due to abundant coal and iron resources
More jobs = Expanding Middle Class
What is Social Darwinism?
How did Big Business leaders use Vertical Integration and Horizontal Integration to build monopolies?
Grew out of Charles Darwin’s belief of evolution- to pass successful traits to a new generation Natural selection would weed out less suited
individuals Economist justified doctrine of laissez faire
“leave alone” Economy should not be regulated for success
or failure of business Individual responsibility of success or failure Riches were a sign of success while poor must be lazy
or inferior people who deserved their lot in life Violates Munn v. Illinois 1877
Companies form monopolies- complete control over an industry production, wages and prices (Violate Adam Smith’s Markets)
To avoid monopolies Rockefeller sold trusts Friends sat on boards of other competing
companies -individual businesses but ran as one large business
Large quantities of natural resources and cheap labor is the key to businesses
Andrew Carnegie enters steel business in 1873 in Pittsburgh
Search for new machines and techniques to make better products more cheaply.
Attracted talented chemists and organizers by offering stock in the company
Maintained Vertical integration- bought our suppliers (coal fields)Transportation (ships and railroads)
Maintain Horizontal integration- buying out competitors
Controls most of the steel industry 1899 he manufactured more steel than all the factories in Great Britain
Resources Mines Mines Mines
Factories factories factories factories
Transportation Trains/ Ships Trains/ Ships Trains/ Ships
Markets Stores Stores Stores
Edwin Drake’s oil drill in Pennsylvania John D. Rockefeller Standard Oil Company of
Ohio processed 90% of American oil reaped huge profits by paying his employees
extremely low wages and driving competition out of business sold oil at a lower price than the cost to produce it. Then raised prices far above original levels
Did not pass profits to workers or prices for consumers
Industrialists got the name Robber Barons Philanthropists- Rockefeller gave away $500
million for good works such as research Carnegie donated over $325 million Rich had a moral duty to spread their wealth
George Pullman (Horizontal integration) Manufactured sleepers
and railroad cars Also built town which
provided all basic needs (Company Town) Clean brick homes, one
window in every room Doctors, shops, athletic
fields Under company control Residents not allowed to
loiter on front porches or drink alcohol
Ensure a stable workforce
Industrial Revolution-Raised Standard of living but Middle class consumers fear the power of monopolies
Sherman Antitrust Act 1890 - illegal to form a trust that would interfere with free market trade between states or countries Trust wasn’t easy to define trustees would own and
make decisions for the companies Large trusts would quickly divide into a single
corporationHard to prosecute
Effects of Industrialization Change- from self employed Farmer became the
factory worker Standard of living increases Workers life miserable US looks overseas for new markets to sell goods
Social Darwinism and Working Conditions Steel mills demanded 7 day workweek Most factory workers worked 12 or more hours per
day 6 days per week Employees were not entitled to vacation, sick leave,
unemployment compensation, or reimbursement for injuries that occurred on the job.
Dirty, poor ventilated factories, workers performed repetitive mind dulling tasks with dangerous equipment 1882- average 675 laborers were killed per week in
accidents Wages were so low families could not survive unless
everyone held a job $.27 / day child 14 hour day, women earned $267/ year men- $498/ year Carnegie made $23 Million no income tax
Organize to be recognized- Tactics used Strikes, Picketing, Boycotts, Slowdowns
Employers fight back Large supply of labor
Fire striking workers Lock outs- close factory if labor organizes Blacklist -union leaders names Yellow Dog Contracts- force employers to sign
agreement not to join union
National Labor Union formed 1866 Skilled and unskilled workers Craft Union based on each industry Convinced congress to grant 8 hour work day
for government employees
Great Strike of 1877 1873 depression- railroads cut worker wages 1877 –B.&O. R&R in Maryland workers
stopped working Next day W. Virginia workers stopped
working (500,000 workers join strike) Federal troops restore services but strike
spread to other railroad lines Pittsburgh militia refused to stop strike,
Philadelphia militia shot 26 people Sympathizers attacked militia support for strikers spread across the
Midwest Federal and local troops broke up strikes but
hundreds lost lives Violence cause many people to not support
striking
1869 Knights of Labor- “An injury to one is a concern to all”
Great Strike indicated that workers would unit to support others
Included all workers Abolish Child Labor Support 8hr work day, Equal pay for equal work Saw strikes as a last resort,
Haymarket Square Riot May 4 1886, members held meeting in Haymarket Square Police attempt to break up- someone threw a bomb kill 7
police officers Americans again fear organized labor too radical and
violent
American Federation of Labor (AFL) Samuel Gompers Most successful led by Samuel Gompers
Focused on Collective Bargaining or negotiations between leaders of labor and management to reach written agreement on wages, hours, and working conditions.
Organized only skilled workers AFL used strikes as a major tactic American Railway Union - Eugene V. Debs -
included both skilled and unskilled workers Unskilled workers easily replaced.
Many strikes turned violent, Unions still ineffective because of the stream of
Immigrants who would work for low wages= scabs
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