AMERICA’S INDUSTRIAL SUPREMACY

Chapter 171870-1900: Unprecedented Progress

in Industry Marked by Unequal Prosperity

Causes & Sources of Industrial Growth

Advantages of U.S. Industry Huge supply of raw materials Large (and growing) labor force Technological innovations allowed production

to be more efficient and quicker Generation of Entrepreneurs—a group (of

mostly men) who were energetic, and willing to take risks to “make it big” What type of risks were they taking?

Expanding Domestic Market (which will soon turn to a world market)

Industrial Technologies Communications

Telegraph—Transatlantic Telegraph completed in 1866 Connected the U.S. to Europe with instantaneous

intercontinental communication Later would be used to transmit telephone

signals, then television, then data.

Industrial Technologies Communications

Commercial telephone technology—Alexander Graham Bell, 1876 Telephone turned

communication from graphic, to auditory

Industrial Technologies Communications

Early Radio First time instantaneous mass communication

was possible What are radio’s main benefits?

Typewriter Cash Register Adding Machine—calculator

Industrial Technologies Electricity (1870’s)—light and power

Thomas Edison invents the incandescent light bulb in 1879 How does this invention change life as

American’s knew it? Power plants begin to be built bringing

electricity to businesses and homes Where did electricity go to first? Who was the first to use electricity? How did electricity effect the American

Economy? Steam technology also becomes more

efficient which helped lower rail shipping costs.

Iron and Steel Steel

Steel first developed and produced in Pennsylvania and Ohio

Made from iron ore being shipped to factories in steam engine trains.

Steel is a metal alloy stronger, lighter, more durable metal than iron

More things can be made from it It is easier to work Bessemer/Kelly Process—creates stronger steel by

blowing air threw molten metal to get out the impurities. Allowed the steel industry to develop because people

wanted steel over iron.

The Railroads Railroads contribute to economic growth by:

Providing mass transportation cheaply Increasing access to distant sources of raw materials Provides access to previously inaccessible markets (the West) Promotes the construction business.

Governments subsidized the building of railroads after the Civil War. Why?

Concentration of power among the very few— James J. Hill, and Cornelius Vanderbilt.

Stockholders become rich and powerful “Limited Liability” of the railroads protect themselves

from labor issues, safety regulations, etc., through political lobbying.

The Corporation Corporations become the main element

and cause of industrial development. WHY?

TAYLORISM—new method of business management that stressed a focus on using math to develop and plan the production process. Led to:

The assembly line, scientific management, mass production, and the subdivision of labor.

The Corporation Managerial Techniques

developed Corporate hierarchy—levels of

employees Division of responsibilities among

the labor force Cost accounting—the investment of

capital and the beginning of companies making money off of money

Middle managers within the corporate structure change the way power is distributed within the workplace.

The Corporation CONSOLIDATION—The creation of massive

corporations HORIZONTAL INTEGRATION— Combining many firms in the

same business into a single corporation Example: McDonalds, Burger King, Hardees, and Wendy’s consolidate

into one company. VERTICAL INTEGRATION—Taking over all facets of

production: Supply, production, transportation, sales, etc. Example: U.S. Steel—buys mines, railroads, and steel production

facilities to control their own operating costs Standard Oil—John D. Rockefeller, starts by buying small oil firms, then

buys companies that produce and build oil drilling and refining equipment, then branches out to other resources.

“The Erie War” 1868— Erie Railroad built with public funds then was taken over by private citizen, stock manipulated by railroad tycoons to buy out the Erie to create a monopoly

Monopolies MONOPOLIES—when consolidation completely

eliminates competition. People disliked monopolies because they:

eliminated jobs drove up prices and consolidated power to the very few

Three kinds of Monopolies TRUSTS—stocks transferred to a holding group that

combines investments Trustees (people who own the stocks) use wealth to consolidate businesses—

example: Standard Oil Results of trusts and holding companies—economic power held by the few

(trustees) HOLDING COMPANIES— where one company owns the majority of

another company by buying their stocks. POOLS– when large sums of money from multiple investors are used to

control an industry through one trustee

Capitalism and its Critics Many people don’t like the new industrial age Industrialists counter with “Survival of the

Fittest” Individuals given opportunity to succeed and gain

wealth in the industrial system “Self-made” men Tycoons This idea was called SOCIAL DARWINISM

In human society only the most fit individuals survive in the market place

Celebrates competition and the open market Created by Herbert Spencer—Society benefits from the

elimination of the unfit.

The Gospel of Wealth The idea that a rich person should be

a trustee of wealth and should use those funds for public benefit. (Carnegie) people with great wealth are responsible for

the progress of society

The Ordeals of the Worker Era marked by progress in standard of living—yet,

danger, less control, less power for regular individuals Southern Blacks, foreign immigrants, eastern farmers,

and young rural woman migrated to the industrial city after the Civil War.

The Immigrant Work Force influx greater than any other era—25 million (Civil War to WWI) Usually became unskilled workers Created close-knit ethnic communities (China Town, Little Italy,

etc.) Germans and Jews were the most successful immigrants.

Why? Harsh working conditions

routine, strict schedule, monotony, impersonality, long hours women and children tapped for labor—unskilled

child labor laws in response—often ignored

The Ordeals of the Worker Emerging Unionization

Generally unsuccessful during the era—but small steps taken public hostility and recession years undermine the movement

Railroad Strike of 1877—U.S.’s first major national labor conflict RR announces 10% pay cut—rioting, looting, sabotage in response State militias and fed troops put down widespread rioting Scores of RR workers killed—potential strength for unions? Who does the government/courts support?

The Knights of Labor The first effort to create a truly national labor organization

Uriah S. Stephens as founder—open to all, inc. women and African-Americans

Focus: workday, child labor, but also economic reform and wage restructure

Initial success (700 k in 1886)—repression and violence undermine organizing the union

The Ordeals of the Worker The American Federation of Labor (AFL)

National labor union formed in 1886 whose goal was to organize skilled labor by craft to affect change in management, pay, and working conditions.

Rivaled Knights—collection of autonomous craft unions—skilled workers

Haymarket Square Bombing (May, 1886)— radicals protest death of strikers ordered to disperse, unknown throws bomb— police

killed/wounded police fire into crowd, kill several protesters

trial of anarchists who organized protest—seven sentenced to death

becomes symbol of social chaos and radicalism—anarchism decried

The Ordeals of the Worker The Homestead Strike (1892)

Amalgamated Association of Iron and Steel Workers Most powerful trade union—skilled, high demand—significant power

Henry Clay Frick—chief lieutenant of Andrew Carnegie Amalgamated Association “had to go”—wages cut, union ignored

Strike called for (actually a lockout of unionists) Strikebreakers (scabs) called in, protected by security

specialists—Pinkertons Pitched battle occurs, several killed—Pinkerton

Detectives flee National Guard intervention and attempt on Frick’s life

sway public opinion

The Ordeals of the Worker The Pullman Strike (1894)

Pullman Palace Car Company (Chicago)—company town for workers George M. Pullman envisions town as solution to labor conflicts

marked by “regimentation” and high rent citing depression, wages slashed by 25%--rent remains

high American Railway Movement (Eugene V. Debs) organize strikes Thousands strike across 27 states—Chicago to Pacific paralyzed

State refuses militia—federal troops move in (mail)—injunction ordered

Arrests of union leaders and federal protection help to collapse strike

The Ordeals of the Worker Sources of Labor Weakness

Few gains for labor despite organizing efforts Perhaps less political power and less control of workplace?

Reasons for weakness—advantages lie with capital Main labor organizations represent only a small % of workers Divisions within workforce—tensions among ethnic groups fluid nature –no long term plans for most workers—migration corporate organization of vast wealth and power

determined to crush resistance support of authorities to preserve order

public opinion bristles at militants and radicals rugged individualism, bravery, courage not compatible with

unions?