Industrialization & Big Business

Factors Fueling Industrialization

SWBAT

• Evaluate how different factors fueled industrialization

Do Now:

• Economically, how did the North benefit from the Civil War and Reconstruction?

Video Clip • Discovery Education: “The New

American City”

• We will review the questions at the end as a class

Factors Fueling Industrialization • Using the graphic organizer, fill in

details for each factor contributing to Industrialization in the United States

Civil War

•War created need for quick & efficient manufacturing •Post-war: factories used to manufacture civilian goods

Capital

•Capital = $ •North gained capital from the Civil War •Industry needs $ to invest in new inventions & tech.

Inventions

•Bessemer Process- new steel making process •Typewriter, Elevator, Telephone, Light Bulb •Refrigerated train car

1790-1860: 36,000 patents

1860-1890: 440,000 patents

Natural Resources

•Brought wealth to those who refined or exported them •Iron Ore, Coal, Silver & Gold, Copper, Oil, Lumber

Transportation

•Railroads- transported natural resources factories consumers!

• Seattle, Washington

• Revere, Massachusetts

What do you think… • What were the effects of the railroads

on the industrial growth of the USA?

- Faster, more practical means of transporting goods

- Lower costs of production

- Created national markets for goods

- Model of big business

- Stimulated growth of other industries

Labor

•Sources of Labor: 1.European Immigrants Northeast 2.Chinese Immigrants West 3. Civil War Veterans

• Chinese Immigrants, Angel Island

• European Immigrants, Ellis Island

Government Aid

•Allowed for cheap labor supply •Laissez-faire •Land grants & subsidies to build railroads •Protective tariffs •Gov’t need during C.W. fueled economy

Industrialization • Post Civil War:

- Industrialization causes shift from rural living to urbanization

Industrialization North

1. Economy stimulated by war ($)

2. Improvements in transportation

3. New labor supply- immigrants

South 1. Still

agriculturally based

2. Sharecropping

Industrialization

• Development of Business:

1. Pre-Civil War- most businesses were sole-ownerships or partnerships

2. Post-Civil War- rise in corporations & monopolies

Industrialization • American industry increased in the

following areas:

1. Transportation

2. Steel

3. Energy (coal, oil, electric)

4. Communications (telephone, telegraph)

Wrap Up • How did industrialization & new

technology affect the economy & society?

Wrap Up • Many reformers who opposed the laissez-faire

attitude of the late 19th century argued that:

1. the National Government should not interfere in the activities of big business

2. national wealth could best be assured by the accumulation of gold

3. the idea of rugged individualism is vital to the nation’s economic growth

4. government should protect society through the regulation of business

Rise of Big Business

SWBAT • Explain how big business shaped

economy

• Do Now:

What is a monopoly? Create an example with a partner.

- When a corporation has complete control of a product or service

Disadvantages of Monopolies

1. Prices were fixed because of the lack of competition

2. Exploitation of workers: long hours, low pay, dangerous conditions

Disadvantages of Monopolies

3. Growth in “distance” between the employer & the employee. (Ex: owners shut down factories without regard to workers or the community

Disadvantages of Monopolies

4. Big Business influenced politicians:

•Bribing officials

•Buying votes

•Intimidation

•Rebates (kickbacks to businesses)

•Special rates for politicians

Key Terms • Laissez-faire- policy of noninterference

by the government in a nation’s economy

• Social Darwinism- idea that government actions would interfere with process of natural selection; economic success comes to people who are hardworking & competent

Key Terms

• Horizontal Integration- company combines businesses involved in the same type of industry into one corporation

• Vertical Integration- company owns all the different businesses on which it depends for its operation

Integration

• Which is horizontal integration and which is vertical integration?

Integration • With a partner, choose a product and

explain what vertical integration would entail for that product

• Example: American Apparel- controls the dyeing, finishing, designing, sewing, cutting, marketing and distribution of the company's product

Government Regulation

• Before the 1870s, the government was not involved in Big Business- we had a laissez-faire policy

Government Regulation • Steps toward Government Regulation

(control):

1. Growing criticism of practices allowing Big Business to profit at the expense of the working class

Government Regulation

2. Increasing local political pressure for change

State Regulation • Regulation happened within states first

• States began to pass laws against monopolies, but these laws were NOT EFFECTIVE because:

1. monopolies moved to other states

2. the Supreme Court ruled against states regulating monopolies

Federal Government Involvement

1. Interstate Commerce Commission, 1887

- first time fed. gov. intervened in private business

- established precedent of fed. gov. intervention

Federal Government Involvement

• Weakness:

– vague language, shortage of people and no $ to run Interstate Commerce Commission

– not very effective at stopping monopolies, but it was a first attempt

Federal Government Involvement

2. Sherman Anti-Trust Act, 1890

- another attempt by fed. gov. to end monopolies

- law declares any business combination or trust is illegal if it restrains (inhibits) trade or commerce

Federal Government Involvement

• Weakness:

- business went around the law & formed other monopolies, lack of enforcement, & the Supreme Court continued to rule in favor of Big Business

Conclusion

• By 1890, both the federal and state governments tried to regulate or control Big Business but both failed still had a lot of monopolies in the US.

Wrap Up

• Read the excerpt from Carnegie’s “Wealth” and answer the Critical Thinking Questions

SWBAT • Explain how business practices of

entrepreneurs led to their success

Do Now:

- What is an entrepreneur? Can you give an example of one?

*people who invest $ into a product or innovation, in hopes of making a profit

Captains of Industry

• Finish Biography of America

• Read through the information in your packet and complete the “Questions” on your own

* I will be meeting with students about recommendations individually

Captains of Industry or Robber Barons?

SWBAT

• Explain criticisms of the monopolists

Do Now: What methods do workers use to achieve their aims?

- Collective bargaining, strikes

How are entrepreneurs viewed?

How is Standard Oil

viewed by the cartoonist?

“Bosses of the Senate”

The Trust Giants Point of View “What a funny little government”

Reading

• Read the excerpt from Wealth Against Commonwealth

Answer reading questions

Robber Barons

• The negative view of big businessmen was that they were Robber Barons, who created more harm than good

• Why did people in society criticize industrialists?

• They believed monopolies were not good for the common man

Social Critics

• Many criticized the practices of the “Captains of Industry” and Big Business during the Industrial Revolution

• 3 Social Critics:

Social Critics

1. Henry Lloyd- criticized methods used; concerned for the small businessman

2. Edward Bellamy- Looking Backwards, book showed a utopian socialist society; anti-capitalist

Social Critics 3. Henry George- Progress and Poverty, book explained how industrial progress leads to poverty, because it creates two opposing classes: rich and poor.

The Breakers • Vanderbilt’s

(steamships & railroad) summer “cottage” in Newport, RI

The Elms • Berwind’s (coal)

summer cottage in Newport, RI

Rosecliff • Oelrichs’

(silver) retreat in Newport, RI

Wrap Up • What led to Government

Regulations...

• Explain two criticisms people had about monopolies

• Do you think the industrialists of the time should be viewed as “Captains of Industry” or “Robber Barons”? Explain your answer.

Labor Unions

SWBAT

• Compare and contrast Knights of Labor and AFL

Do Now: Why do workers need labor unions?

• To help improve working conditions and pay

Labor Unions

• Pre-Civil War: labor unions local and for skilled workers only

• Post-Civil War: rise in national labor unions

Labor Unions Knights of Labor:

1869- 1890s American Federation of Labor (AFL): 1886-1955

Leaders Terence Powderly Samuel Gompers

Membership Large, inclusive union (skilled and unskilled workers, men, all ethnicities, EXCEPT Chinese)

Skilled white men ONLY; later included the ILGWU (women’s garment union)

Goals 8 hr work day, end to child labor, equal wages for women; “A Cooperative Commonwealth”

“Bread and Butter” unionism: 1.Better wages 2.Better hours 3.Better working conditions

Labor Unions Methods 1. Opposed to strikes

2. Encouraged boycotts & negotiation 3. Warned that liquor robbed workers of wages, just as greedy employers did

1. Collective bargaining (union leader represents workers negotiates issues with management) 2. Strikes/Boycotts 3. Wanted a “closed-shop”

Still in existence?

NO- blamed for Haymarket Riot and lost membership

YES- combined with another union AFL-CIO

Labor Unions • Management’s Reaction to Unions:

1.Blacklists- list of names of people who caused “trouble” and should not be hired

2.Lockouts- locked gates to factories so no one could go to work and get paid hired “scabs” (replacement workers)

Labor Unions

3. Used public opinion and laws (Sherman Anti-Trust) against labor unions

Labor Unions • Activity!

• It’s 1890: Choose a Labor Union from above and create a poster, urging workers to join!

• DUE AT THE END OF CLASS!

• MUST HAVE:

– name of union, color, & creativity!

Wrap Up

• What factors prompted the emergence of Labor Unions?

• How did the AF of L and Knights of Labor differ in terms of types of workers organized; their views of immigrants, African-Americans, Chinese and women workers; and their positions on strikes?

Strikes

SWBAT

• Explain major labor strikes, tactics used, the role of the government, and the outcome of the strikes

Do Now: What is the purpose of employees going on strike?

Your Task • Once in your group, follow the

directions on your notesheet

• When groups present you will complete the remaining questions using the information they provide you with

Period 5 • Strike #1: Evelyn, Elena, Katie

• Strike #2: Nayeli, Jose, Jannet, Evan

• Strike #3: Emerson, Nicole Girillo, Henry, Sabriy

• Strike #4: Julia, Frida, Michelle, Anahi, Phil

• Strike #5: Nicole Gonzalez, Suzanne

Period 6 • Strike #1: Jean Pierre, Torry, Shyanne, Erik

• Strike #2: Danny, Nelly, Liam, Leslie, Rosie

• Strike #3: Luci, Alejandro, Christian, Ashanti

• Strike #4: Alexis, Vanessa, Emily, Nicole, Irvin

• Strike #5: Alana, Kevin, Darin, Ruby

Period 7 • Strike #1: Steffani, Jesus, Lizbeth, David, Angelina

• Strike #2: Raul, Naomi, Roynell, Tom, Shawn

• Strike #3: Michelle, Cassie, Bianca, Oliver

• Strike #4: Maria, Leslie, Frank, Valerie, Aaliyah

• Strike #5: Ozzie, Cindy, Amanda

Pattern of Strikes • Increasing tensions between workers &

employers led to large, violent, often unsuccessful strikes stopped by the Federal Government

Era of Strikes Tensions increase between workers

& owners

Workers organize unions

Business owners oppose

unions

Era of strikes begins with

Railroad Strike, 1877

Major strikes continue

Government sides with

business owners, using army to put

down strikes

Gap between rich & poor

Supreme Court Decisions

SWBAT • Examine 3 Landmark Supreme Court

Decisions Do Now: • What do you think led the government

toward the regulation of business in the late 1800s?

- Criticism of big business practices, making a profit at the expense of the poor & working class; downturns in the economy; political pressure for change

Supreme Court Cases • In the late 1800s, railroads companies

formed policies discriminating against farmers & small shippers

• The groups pressured states to pass laws regulating railroad practices & the railroads sued to have the laws overturned

Supreme Court Cases

Your Task • Closely examine the 3 Supreme

Court Cases you’ve been given

• With a partner, answer questions on a separate piece of paper

Supreme Court Cases 1. Wabash v. Illinois, 1886

- S.C. changed its mind

ruled only Fed. Gov. can regulate interstate commerce/trade and most monopolies were considered interstate commerce/trade

Supreme Court Cases 2. U.S. v. E.C. Knight Company, 1895 - aka “Sugar Trust Case” - S.C. found the Sherman Anti- Trust Act did not apply to this case because this was not “commerce”; the case dealt with “manufacturing” many business were exempt from the Sherman Anti-Trust Act

Supreme Court Cases 3. In re Debs, 1895 - S.C. ruled the Fed. Gov. had the right to regulate interstate commerce & ensure operations of the U.S. Postal System slowed the momentum of labor unions

Wrap Up

• To what extent was the Sherman Anti-Trust Act effective in protecting competition?

• How effective was government regulation of railroads at the state level? National level?