INDUSTRIALIZATION AND THE “GILDED AGE”

1877-1890Libertyville HS

Andrew Carnegie

Haymarket Riots

John P. Morgan

Characteristics of Gilded Age

National industrial changes New technologies and forms

of business Great increase in national

production Growing union movement

Movement of People Creation of industrial towns Increased immigration Movement of people to cities Gap between rich, poor great

Political changes High political involvement Lowest ebb of post CW race

relationsNorwegian immigrants arriving atEllis Island

Tech: New Forms of Energy

Pre 1860 forms of energy Human muscle Animal muscle Steam power Coal (to power steam

engines) Post 1860 forms of

energy Oil (first oil well = 1859) Kerosene Electricity (Thomas Edison)

Steam powered electric generators, 1882

Hydroelectric generators, 1895

Tech: New Construction Materials

Steel Old production method =

expensive & time consuming, so people used wrought iron

Henry Bessemer’s Process, 1858 Blast furnace allowed air

to superheat iron, remove impurities to make steel

Capacity of furnaces = 15 to 30 tons!

New Methods of Business Skilled management and

labor Large amounts of capital Mass production

Division of labor Specialization Resulted in more products,

cheaper Marketing

Specialty stores (clothing, etc) Department stores (Marshall

Fields, 1881) Mail Order – aimed at rural

market Montgomery Ward (1872);

Sears, Roebuck (1887)

New Methods of Business Pre CW: Business

Organizations Sole proprietor Partnership

Post CW: Corporation “Artificial person” Liability to corp., not people Unlimited life

Corporation vocabulary Stock – certificate of ownership Stockholder – owner of stock Dividend – share in corporate

profits, distributed to stockholders

National Industrial Changes Great increase in

national production By 1900, national

industrial output came in 2nd only to Britain

Steel, coal production rose dramatically

500k patents issued between 1860-90

Relative share ofWorld Manufacturing

Coming of age of the union movement

Early unions were local or regionally based

Knights of Labor, 1869 First truly national labor org. Accepted all producers (workers),

regardless of race, gender, or job; led to huge growth

American Federation of Labor, 1881 Founded by Samuel Gompers Membership = different trade

unions, made up of skilled workers Fought for better laws for workers Rival to KOL

American Railway Union, 1893 Largest union of its time Unionized entire industry, not by

craft Led by Eugene Debs

Modern Union Movement: Major Strikes

Railroad strike of 1877 1873 Panic Distrust between employers,

workers (wage cuts, lower benefits, etc)

1876 election (Tilden popular with unions)

RR workers refused to work Employers, government: send in

the troops! 100s killed, buildings burned, RR

cars destroyed throughout Pittsburgh, Baltimore, Chicago, etc.

Effects of strike Unions realized their own strength Employers, government dug in Public became more aware of

workers’ poor conditions Union membership grew!

Soldiers fightingstriking workers, inBaltimore

Burning of Pittsburgh RR Depot

Modern Union Movement: Major Strikes

Haymarket Riot, 1886 Chicago rally, organized by

anarchists, in support of workers striking for an 8 hour work day

Police showed up to disperse crowd

Someone threw bomb at police, killing 1 and injuring several others; subsequent riot killed at least 4 civilians, injuring dozens

Eight anarchists charged; 4 executed

Riot was a set back for union, short term, but long term helped unions, socialists, organize world wide

Haymarket Riot (Harper’s)

Mathias Degan

Modern Union Movement: Major Strikes

Homestead PA Steel strike, 1892 (Carnegie) Economic downturn

caused drop in price of steel

Henry Frick, GM of plant, was determined to break steelworkers union

Frick cut wages; union burned Frick in effigy

Armed border sprang up between union, plant

100s of Pinkerton Detectives brought in, pitched battle fought

State militia sent in next

Modern Union Movement: Major Strikes

Pullman Strike, 1894 1893 economic panic hit

luxury railway cars, hard Workers living in Pullman,

IL angered by 25% wage cut due to lower demand

George Pullman refused to talk to workers; they struck

Pullman: send in the troops (12,000 soldiers)!

Violent end to strike: 13 strikers killed, dozens wounded; property damage = $7 million (2008 dollars)

Soldiers confronting Pullman strikers

Movement of People Creation of industrial towns, esp. in

NE Towns ran by a company to provide

living space for its employees Ex: Pullman, Illinois (1880)

Increased population Between 1865 and 1899, 13.5 million

people immigrated to US Between 1900 and 1920, another 14

million immigrants came to USA! What did these people need? Jobs!

Migration to cities This is where the most jobs were Relatively fewer immigrants moved

West, to become farmers Immigrants often stayed in port cities Second generations moved into the

continent Fewer farm workers needed due to

mechanization

Pullman, IL

Movement of People Gap between rich and

poor grew Wealthy lived in

opulence Poor were profoundly

poor Lived in cramped

tenements Unsafe jobs, unsafe

homes

% of Billionaires, by industry, 1900

Family intenementapartment

AndrewCarnegie’sNYC home

“Robber Barons” Wealthy industrialists

called “robber barons” due to questionable ethics

Owners of major industries

Andrew Carnegie (steel) John P. Morgan (banking) John D. Rockefeller (oil)

Industrialists were supporters of “laissez faire” capitalism

Government has little to no regulation of business

Businessmen were free to work together for their own benefit

“Protectors of our Industries”

“Welfare Capitalists” Some wealthy industrialists

believed that they had a duty to help their workers

Set up company towns for workers to live in Provided everything workers

needed One goal of owners: avoid

unions by keeping workers happy

Problem: company owned everything, profited from their workers daily living

Deducted money from their wages for debts; became form of wage slavery

Capitalists & Philanthropy Philanthropist = someone

who makes charitable donations intended to increase human well being

Andrew Carnegie Scottish immigrant who

built large steel company Sold it to JP Morgan who

created US Steel, in 1901 Carnegie became

wealthiest man in the world (at the time): what to do with his money?

“Gospel of Wealth” (1901) Carnegie’s belief that heirs of

large fortunes generally wasted money away

Rich had a duty to help their “poorer brethren”

Used his billions to establish the Carnegie Foundation Funded est. of libraries,

schools, universities, support of arts

Est. these institutions so people using them could better their position

By the time he died in 1919, Carnegie gave away an estimated $350 million ($4.3 billion in 2005 dollars)

Ex of Industry: Railroads, 1870-1900

Railroads = largest US industry 1870: 53k miles of track 1900: 190k miles of track

Tech advancements Use of steel instead of iron

(stronger, lighter) Use of coal as fuel, instead of

wood Use of steam brake instead of

hand brake (George Westinghouse)

Pullman sleeper car (George Pullman)

Block system of regulating RR traffic

Railroads How did railroad grow so

fast? Federal government

WANTED TRR!! Little / no regulation of RRs

Railroads opened up West Resulted in conversion of

US transport network from canal, horse to RR

Faster, more efficient = save money, time

Allowed interregional agricultural trade

Resentment Against Railroads Railroads tended to

charge farmers more for goods shipped Less population density =

more expensive to ship RRs charged more to ship

grains, etc than equivalent manufactured goods or industrial products

RR owners worked together to set prices

Farmers organized into the “Grange” to collectively negotiate better rates, demand favorable laws, etc.