Share of World Industrialization

Causes of Massive Industrialization

1. The Railroad fueled the growing US economy:

• First big business in the US.• Aided by government giving massive

land grants• 1865 35,000 miles 1900 192,

556 miles

• Major goal of Gov’t: finish Transcontinental RR• Union Pacific RR built from the east (Irish),

Central Pacific RR built from the west (Chinese) completed in 1869

• November 1883, time zones introduced because of railways

• Created a market for American raw materials and manufactured goods and stimulated agriculture & mining

2. Technological innovations• Henry Bessemer

Open Hearth Process to produce Steel

• Thomas Edison Light bulb/Electricity/Motion Picture

• Alexander Graham Bell Telephone

1790s 276 patents issued. 1790s 276 patents issued.

1860-1890 440,000 patents issued 1860-1890 440,000 patents issued

U.S. Patents Granted

3. Abundant Labor Source• Natural Growth & Immigration

4. Capital & Businessmen• Large fortunes created by Civil War• Nation now had “millionaires”

5. Growing Market6. Government Assistance

• Protection

7. Natural Resources• Coal, Iron, Oil

8. Reorganization of Labor• Assembly Line

Laissez-Faire

• No Government interference (except the tariff of course!)

• Will allow for massive expansion of businesses

• Individuals should compete freely in the marketplace– Including Labor

The Robber Barons• A businessman who dominates his

industry and amasses a large personal fortune normally through unfair business practices (monopolies)

• Often were corrupt and bribed judges and legislators

• Used the 14th amendment to protect themselves

• John Jacob Astor (real estate, fur) – New York City • Andrew Carnegie (railroads, steel) – Pittsburgh, Pennsylvania • Jay Cooke (finance) – Philadelphia, Pennsylvania • Charles Crocker (railroads) - California • Daniel Drew (finance) – New York state • James Buchanan Duke (tobacco) – near Durham, North Carolina • James Fisk (finance) – New York state • Henry Flagler (railroads, oil, the Standard Oil company) – New York City and Palm

Beach, Florida • Henry Ford (automobile) – Dearborn, Michigan and metropolitan Detroit, Michigan • Henry Clay Frick (steel) – Pittsburgh, Pennsylvania and New York City • John Warne Gates (steel, oil) – Chicago and Texas • Jay Gould (finance, railroads) – New York (both state and city) • Edward Henry Harriman (railroads) – New York state • Collis P. Huntington (railroads) – California, Virginia, and New York • Andrew Mellon (finance) - Pennsylvania • J. P. Morgan (finance) - New York • Mark Hopkins (railroads) - California • John D. Rockefeller (oil) - Cleveland, Ohio • Leland Stanford (railroads) – Sacramento, California and San Francisco, California • Cornelius Vanderbilt (railroads, shipping) - New York City, New York • James J. Hill (railroads) - St. Paul, Minnesota • George Mortimer Pullman (railroads) - Pullman, Chicago

Who are the Robber Barons?

• “Commodore” Cornelius Vanderbilt

• Dominated the RR industry

• Began using steel rails, air brakes & standardizing rail gauges

• Heavily abused the public by setting high rail rates

• John D. Rockefeller• Standard Oil

– 95% of U.S. oil refineries

• Initially important for Kerosene– By 1900, for gasoline in the automobile

• Andrew Carnegie• Dominated the

Steel industry• “Steel is King”

– RR, Skyscrapers

• Proponent of the “Gospel of Wealth”– Had to be morally

responsible to the less wealthy

• J.P. Morgan• The Banker’s Banker• Buys Carnegie Steel

in 1901– Launched U.S. Steel

Corporation– U.S.’s 1st billion dollar

corporation

Social Darwinism• Social Darwinism

based on the beliefs of William Graham Sumner

• Coined the phrase “Survival of the Fittest”

• Those doing well pulled themselves up by the “bootstraps”

• Poor must be lazy• Used to justify

growing stratification of society

New Business Entities• Competition was the nuisance of the

Robber Barons• Pool companies in the same industry

that work together to maintain high prices (RRs)

• Trust company with the intent to form a monopoly in an industry

• Two Types of Trusts:– Vertical Integration (U.S. Steel)– Horizontal Integration (Standard Oil)

Vertical vs. Horizontal Integration

The “Bosses” of the Senate

Results of the Trusts

Regulation• Munn v. Illinois (1876)

– Allowed states to regulate businesses within their borders

• Wabash v. Illinois (1886)– States could not regulate interstate trade– Undid states efforts to control RR pools

• Interstate Commerce Act (1887)– Allowed Federal gov’t to regulate interstate

trade– Outlawed RR pools– Established the ICC

• Sherman Anti-Trust Act (1890)– Meant to break up the trusts– Used against the unions

What is a Union?• A voluntary

association of workers who want better working conditions, wages, and benefits

• Needed for the changing American workforce

Working Conditions• 1st major union was the

National Labor Union (1866)

• Fell apart because of Panic of 1873

• Most workers had:– 60 hour weeks– No pensions, workmen’s

compensation– No unemployment benefits– Low wages– Dangerous working

conditions– Most strikes failed

Labor Unrest: 1870-1900Labor Unrest: 1870-1900

Management vs. Labor

Management vs. Labor““Tools” of Tools” of

ManagementManagement““Tools” of Tools” of

LaborLabor

““scabs”scabs”

P. R. campaignsP. R. campaigns

Pinkerton AgentsPinkerton Agents

lockoutlockout

BlacklistingBlacklisting

Yellow dog Yellow dog contractscontracts

court injunctionscourt injunctions

open shopopen shop

boycottsboycotts

sympathy sympathy demonstrationsdemonstrations

informational informational picketingpicketing

closed shopsclosed shops

organized organized strikesstrikes

““wildcat” strikeswildcat” strikes

Knights of Labor (1869)

Knights of Labor (1869)

Terence V. PowderlyTerence V. Powderly

An injury to one is the concern of An injury to one is the concern of all!all!

• By 1886 there were 800,000 members

• Employers were the new “Slave Power”

• All inclusive labor union:– skilled and unskilled– women and men– White and African-

American

Goals of the Knights of Labor

Goals of the Knights of LaborEight-hour workdayEight-hour workday

Workers’ cooperativesWorkers’ cooperatives

Worker-owned factoriesWorker-owned factories

Abolition of child and prison laborAbolition of child and prison labor

Increased circulation of greenbacksIncreased circulation of greenbacks

Equal pay for men and womenEqual pay for men and women

Safety codes in the workplaceSafety codes in the workplace

Prohibition of contract foreign laborProhibition of contract foreign labor

Great Railroad Strike of 1877

• 1st national strike of the Knights of Labor• Began because of pay cuts• Turned into riots in cities around the

country• Lasted 45 days• Hayes sent the militia

Haymarket Affair (1886)• K of L strike in Chicago• Strike at McCormick Harvesting Company• May 3: striking workers

were attacked by police – 4 killed

• May 4: protest rally in Haymarket Square.

• Bomb explodes killing a policeman

• Labor blamed• K of L loses popularity

American Federation of Labor (1886)

• Founded by Gompers to replace the K of L

• Umbrella organization of local unions

• Focused solely on skilled workers or craft unions

• Ex: Teamsters, Garment workers, Electrical workers Samuel Gompers

How the AF of L Would Help the Workers

How the AF of L Would Help the Workers

• Represented workers in matters of Represented workers in matters of national legislation.national legislation.

• Maintained a national strike fund.Maintained a national strike fund.

• Evangelized the cause of unionism.Evangelized the cause of unionism.

• Prevented disputes among the many Prevented disputes among the many craft unions.craft unions.

• Mediated disputes between management Mediated disputes between management and labor.and labor.

• Pushed for Pushed for closed shopsclosed shops..

Homestead Strike

Pullman Strike (1894)• Pullman Palace Car Company • Workers lived in company owned town• Company cut wages, but maintained

rents & other prices• Other RR unions refused to work on lines

& trains that had Pullman cars• Spread across entire

nation• President Cleveland sent

military to end strike– Justification: interfered

with the mail

Public Perception of Unions

• Fear of unions grew with violent strikes of 1880’s & 1890’s

• Unions portrayed as the result of foreign influence

• Seen as anarchists• Nativist feelings grew