Industry in America 1850-1900

America’s Rise as an Industrial Power

Science and Technology Transform American Life:

• Factors Aiding Transformation:– Natural resources: crude oil, coal, iron, water– Innovation and outlets for creativity– Government support for business– Increasing urban (city) population with cheap

labor and markets for new products

Science and Technology Transform American Life:

• Edwin Drake- 1859 steam engine to drill for oil

• Bessemer Process-extracts carbon for iron= steal– 1850 William Kelly and Henry Bessemer– Pittsburgh Steelers– Steel Mills->near waterways

Why was steel such an important innovation?

• Farming

• Industry

• Transportation

• Structures -> William Le Baron Jenney’s skyscraper

Home Insurance Building: Chicago, Illinois, 1885

Inventions:

• Thomas Alva Edison– 1876- first research laboratory in Menlo Park, NJ– 1877-phonograph– 1880-incondescent light bulb– 1890’s-> electrical system to power America

• Christopher Sholes– 1867- typewriter– Brought many women into the workforce

• Alexander Graham Bell & Thomas Watson– 1876-telephone– Communications around the world– Women operate switch boards

Technology and Sciences Impact on the Workforce:

1. Women join workforce– Especially clerical jobs– Make $$ and can spend $$

2. Mass-production of cheap consumer goods– Material items now sought– Buy factory goods instead of making them at home– Assembly lines: production efficiently– Can be shipped across country via railroad

3. More people move to cities to get jobs in factories.– Cities become industrial centers (i.e. Cleveland and Pittsburgh)

4. Titans of Industry Emerge – Carnegie and Rockefeller– Create monopolies that control entire industry and

prices/wages

Titans of Industry: Andrew Carnegie

Titans of Industry: Andrew Carnegie

• Rags to Riches Story– Horatio Alger– One of the richest people in the world

• 1873-enters steel business– Carnegie Steel

• Business strategies:– Vertical integration: suppliers– Horizontal integration: competitors merge

• Gospel of Wealth– Libraries/philanthropy

Titans of Industry: John D. Rockefeller

Titans of Industry: John D. Rockefeller

• Businessman from a young age (turkeys)• Standard Oil Company of Ohio

– Set up trusts to control oil industry– Trusts- competing companies allowed a board

of trustees to run company as one large corporation and divided profits.

– Robber Baron tactics

• Philanthropy– Gave away $500 million

Theories on Wealth

• Social Darwinism- applied Charles Darwin’s idea of natural selection/ “survival of the fittest” to wealth and society.– Wealthy =work hard/God’s favor– Poor= lazy/ God disapproves

• Gospel of Wealth- Carnegie’s belief that wealth should be given to people/charities that could assist in improving society (i.e. libraries)– Interpret the following quote:“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”~ Andrew Carnegie

Carnegies Library Specifications:• demonstrate the need for a public library; • provide the building site; • annually provide ten percent of the cost of the library's

construction to support its operation; and, • provide free service to all.

Robber Baron Tactics: 20th Century Historical View

• Unethical business practices: exploitation of labor to often form monopolies

• Built large fortunes that aided US becoming one of the top industrial nations

• Many also became philanthropists• Past:

– Carnegie and Rockefeller

• Present: – Bill Gates, Steve Jobs, ???

Government fights, but loses: Sherman Antitrust Act

• 1890, made it illegal to form a trust that interfered with free trade between states and with other countries.

• Definition of trust not defined clearly-> hard to convict companies

• Most politicians did not pursue till Teddy Roosevelt

Problems with Industry for the worker:

• No benefits, insurance, sick/vacation days

• Poor working conditions (injuries)

• Production Orientated (worker not important)

• Support for industrialist, not workers

• Children work as well

• Women and children paid the least

Labor Unions: The Voice of the Worker

• National Labor Union, Colored Labor Union, Knights of Labor, American Federation of Labor, American Railway Union, Industrial Workers of America, etc.

• Tactics:– Strike– Collective bargaining– Arbitration

Knights of Labor

• All workers allowed to join

• Platform: political and economic reform– More control for workers– 8 hour work day– Arbitration, not strikes

• 1886 had 700,000 members

• Lost popularity after Haymarket Riot (1886)

#1 Haymarket Riot/Strike: 1886

• Chicago, IL

• Strike against McCormick and police brutality

• Meeting ends in violence -> bomb thrown at police

• Results: Bad P.R. for labor unions

American Federation of Labor (AFL): 1886

• Skilled craftsmen only (why important?)• Samuel Gompers• All were at least 2nd generation Americans• Collected dues (why important?)• Tactics: strikes• Platform:

– Less hours– Higher wages

• Problem:– Most not skilled craftsmen thus not a strong force.

#2 Homestead Strike: 1892

• Against Carnegie Steel

• Carnegie Reaction:– Tried to destroy union by cutting wages and

no negotiations– Locked out and Pinkerton agents– Calls in Pennsylvania militia

George Pullman: Luxury Railroad Cars

Pullman Factory Town, Chicago, IL

#3 Pullman Strike: 1894

• Pullman created communities for workers– If lost job-> lost home

• 1893 Panic hurts workers:– Wages cut by 40%, but rent remains same– Laid off workers

• Workers strike and join American Railway Union– Eugene V. Debs– Skilled and unskilled workers for entire industry

• Pullman Co. Reaction:– Court injunction against leaders– Hired guards to put down strikes– Railroads blacklist strikers

Eugene V. Debs: ARU and Strike

Wobblies and Socialism

Mother Jones

Problems with Unions:

1. To easy to replace unskilled workers

2. No $$ for unskilled workers when strike

3. Spies from company-> expose leaders

4. Ethnic differences -> immigrants

5. Too much support for industrialists and Social Darwinism

Whose side does the government take regarding strikes from 1870-

1900?

Railroad Industry and Corruption:

• Credit Mobilier:1864– company that administered money transactions of

Union Pacific– scandal with government funds– T.C. Durant: VP of Union Pacific and manager of

Credit Mobilier– Hurt Republican party

• Granger Laws fight corruption: 1870’s– Upheld in Munn v. Illinois: 1877, okay to regulate

railroad prices– 1886: Granger laws set back by Supreme Court

• Said Federal Government, not states must regulate interstate commerce

Response by Government to Grangers

• Interstate of Commerce Act of 1887– Government supervised railroad activities– 5 member Interstate Commerce Commission

(ICC)– Difficult to enforce– 1897: Supreme Court said fed. gov. can’t set

maximum railroad rates

• Not effective until Teddy Roosevelt

How did the Supreme Court hurt the regulation of the railroad

industry?