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Industrialization & Labor

Business Practices• How to increase profits:

• Consolidate into monopolies

• Form trusts – centralized control over multiple companies.

• Vertical Integration and Horizontal Integration

• Emphasize efficiency

Railroads – Cornelius Vanderbilto increased the ability to ship products

to all parts of the country

o made new cities.

o Gilded Alert! - The Union Pacific RR went bankrupt as details surfaced about overcharges for its construction.

o Cornelius Vanderbilt

o Replaced iron rail with steel

o boasted power over the lawo http://www.history.com/shows/men-who-built-

america/videos/the-men-who-built-america-the-rise-of-cornelius-vanderbilt?m=5189719baf036&s=All&f=1&free=false

Steel – Andrew Carnegie• Bessemer process = cheap and easy steel

• Bridges, tools, ships, cars, machines, appliances, weapons, and skyscrapers.

• Carnegie Steel - Vertical Integration (controlled processes from beginning to end)

• Andrew Carnegie

• rags to riches story

• philanthropic

• Gospel of Wealth

• http://www.history.com/shows/men-who-built-america/videos/the-men-who-built-america-andrew-carnegie

Carnegie Steel - Vertical Integration

• mines where the iron ore and coal were extracted

• coke ovens where the coal was cooked

• mills where the steel was made

• ships that transported the iron ore

• railroads that transported the coal to the factory

Oil – John Rockefeller• Spindletop, TX (1901) - produced 80,000

barrels a day and changed the country forever.

• Model T = more oil production

• Standard Oil - horizontal integration (control of almost all oil refineries in America).

• John D. Rockefeller

• Kerosene then gasoline

• Ruthless elimination of competition• http://www.history.com/topics/john-d-rockefeller/videos

More “Men Who Built America”

• Henry Ford - assembly line

• J.P. Morgan - investment banking

Belief Systems• Laissez Faire = little gov’t intervention

promoted growth.

• Social Darwinism: survival of the fittest (hard work = rich, lazy = poor)

• Gospel of Wealth: the rich had a responsibility to help others care for themselves.

• Dominated industry, gained fortunes via unfair business practices.

• ruthlessly drove rivals out of business

• raised prices by limiting competition.

• robbed the nation of its natural resources

• bribed officials to ensure their success

• kept wages low

• imposed dreadful working conditions

Robber Barons:

• Business leaders, contributed positively to the country

worked hard

took advantage of new technology.

found new ways to finance and organize businesses for greater efficiency and productivity.

created jobs for millions of Americans.

the growing middle class profited from the up-surge in business.

living standards climbed along with the rising economy.

Captains of Industry:

Captain or Robber?

Labor Issues• Mechanization = less need

for skilled labor• Large and diverse pool of

unskilled labor (immigration, migration) kept wages down

• Wealth gap emerged (despite overall improvements in living standards)

• Poor working conditions• Anti-worker policies

• Strikebreakers (scabs)• Injunctions • Yellow dog contracts • Black list • Company town

Labor Unions• National Labor Union (1866)

• skilled + unskilled + farmers

• No Chinese, few women or blacks.

• Knights of Labor (1869)

• Included all workers – skilled, unskilled, men, women, whites, blacks.

• Associated with anarchists (Haymarket Square)

• scabs could easily replace the unskilled in strikes.

• American Federation of Labor (1886)

• Samuel Gompers• skilled workers (not women or

minorities)• Concrete, manageable goals (less

utopian)• Used walkouts and boycotts

• Industrial Workers of the World (Wobblies)

• Eugene Debs• Desired to replace capitalism with

socialism• Skilled/unskilled – reached out to fringes

of society

social, political, economic

Only workplace related

widespread systematic change

Caption: Always Killing the Goose that Lays the Golden Eggs. Communistic Statesman (Without Responsibility). "Nothing In It, After All; It's Too Bad Now I thought He Was Just Full of Them."

Source/Date: Harper's Weekly, March 16, 1878

capital

labor

Labor UnrestMolly McGuires – PA Miners

• pay cuts (Panic 1873)

• owners crushed strikes

• MM’s resort to violence -10 were hanged

Railroad Strike of 1877

• pay cuts (Panic 1873)

• troops were called

• by July - 100 killed - 300 wounded

• Haymarket Riot (1886)

• Rally > violence/bomb

• Increased association with anarchists/socialists

• Homestead Strike (1892)

• Carnegie Steel

• stalled bargaining process

• 300 Pinkerton guards & 8000 militia

• Results = Loss of 8 hour workday, pay cuts

• Pullman Strike (1894)

• wage cuts and layoffs

• President Cleveland sent in federal troops (strike interfered with interstate commerce)

Background on Homestead Strike• Andrew Carnegie (robber baron, captain of the steel industry) owned a

steel mill in Homestead, PA, near Pittsburgh.

• Homestead Mill was run by Henry Clay Frick whose goal was to break the union.

• When the union’s contract was up in 1892, Frick refused to negotiate a new contract and locked workers out. Frick hired the Pinkerton Detectives to provide security and break the strike.

• When the Pinkertons tried to enter the mill, conflict left 16 people dead. The strike lasted four more months until the union gave in.

Homestead Strike AnalysisA: Emma Goldman

H –

A –

P –

P –

Y –

B: Henry Frick

H –

A –

P –

P –

Y –

A Call To Action

Extra Stuff

Industrialization Thesis Activity1. All of the following contributed to the emergence of

American industrialism. Examine the list, and divide the items into 3 categories (buckets). Label each category.

2. Write a thesis statement for the following question: What factors helped to promote America’s huge industrial growth during the period from 1860-1900?

western mining immigration government subsidies and tax breaks to

railroads

advances in communication

laissez faire attitude of government

Bessemer process new sources of power high tariffs

Entrepreneurs vertical and horizontal integration

national markets improved transportation

…To End: Labor Synthesis Activity

1. Brainstorm specific information that could be used to answer the question above. (notes from class and readings)

2. Examine each of the provided documents. What do you know? What can you infer?

3. Brainstorm specific historical facts related to each document (aka –“outside information”).

4. Determine how each document could be used to answer the question.

How successful was organized labor in improving the position of workers in the period from 1875 to 1900? Analyze the factors that contributed to the level of success achieved.