No Slide Title

NEW INDUSTRIESOil Mining Sugar SteelMeatpackingBeef/Cattle ConstructionTelegraphTelephone

RailroadMarketingSewing MachineVacuumsTypewritersAutomobile SaltCoalAgriculturalLife in the 1860sNo indoor electric lightsNo refrigerationNo indoor plumbingKerosene or wood to heatWood stoves to cook withHorse and buggyIn 1860, most mail from the East Coast took ten days to reach the Midwest and three weeks to get to the West Coast. A letter from Europe to a person on the frontier could take several months to reach its destination.

Life in the 1900sUS Govt issued 500,000 patentselectricityRefrigerated railroad carsSewer systems and sanitationIncreased productivity made live easier and comfortable.Power stations, electricity for lamps, fans, printing presses, appliances, typewriters, etc.New York to San Francisco to 10 days using railroad.1.5 million telephones in use all over the countryWestern Union Telegraph was sending thousands of messages daily throughout the country.Changes in Daily LifeImmigrants from Europe

Old New New New

IMMIGRATION1,593,000181,18802,753,00926,0001,110,0001,847,0001,069,0005,780,000540,0002,928,000Chart: Rise of ImmigrantsOld = England and GermanyNew = Southern Europe: Italy, Russia, Poland 7

In 1856 Henry Bessemer devised a way of converting iron into ______ on a large scale. His invention involved blowing air through molten iron in a converter, or furnace, in order to burn off the excess carbon. His invention revolutionized the Industrial Age. New Uses for SteelSteel used in railroads, barbed wire, farm machinesChanges construction: Brooklyn Bridge; steel-framed skyscrapers

BESSEMER PROCESSRAILROAD INDUSTRYPullman Cars

What helped the railroad industry prosper?Bessemer Process Westinghouse Air BrakesSteel Rails Standard Gauge9An Empire on RailsU.S. industrial economy based on expansion of the railroadsSteamships made Atlantic crossings twice as fastThe telegraph and telephone transformed communications3Building the Empire1865-1916--U.S. lays over 200,000 miles of track costing billions of dollarsExpenses met by government at all levelsFederal railroad grants prompt ________Railroads save government $1 billion in freight costs 1850-19455"Emblem of Motion and Power"Railroads transform American lifeend rural _________allow regional economic specializationmake mass production, consumption possiblelead to organization of modern __________ stimulate other industriesRailroads capture the imagination of the American people4Railroad Construction, 1830-1920

Linking the Nation via Trunk LinesNo integrated rail system before Civil War After 1860 construction and consolidation of trunk lines proceeds rapidly East linked directly with __________, WestSouthern railroad system integrated in 1880s Rail transportation becomes safe, fast, reliable6Rails Across the Continent1862--Congress authorizes the transcontinental railroad Union Pacific works westward from Nebraska using Irish laborersCentral Pacific works eastward using ________ immigrantsMay 10, 1869, tracks meet in UtahBy 1900, four more lines to Pacific7KEY INVENTIONSBETWEEN 1860 TO 1900Elevator---1852Bessemer Process---1852Sewing Machine---1853Dynamite---1867Typewriter---1868Levi Blue Jeans/Basketball---1873Telephone---1876Phonograph---1878Light bulb and cash register---1879Zipper---1883Gasoline automobile and skyscraper---1885New York City---first city to have electricity--1890Radio---1895Subway---1897X-ray---1900Between 1800 to 1900, US Govt. issued 500,000 patents

With the Bessemer Process and Carnegie steel, Skyscrapers revolutionized the building industry..Major city skylines would be dotted with this new type of building as the 1900s begin.

Thomas Alva EdisonWizard of Menlo Park

Edison Inventions helped to shape modern society More than 1,000 inventions patentedLight bulb Phonograph Incandescent electric lamp Starter for automobiles that eliminated hand crankBatteriesPerfected stock ticker New York City first city to powered by electricityThe motion picture camera and projectorFirst used hello as phone greeting Helped Alexander G. Bell with the telephone

Wizard of Menlo Park Alexander Graham BellTelephone (1876)

The Airplane

Wilbur Wright Orville WrightModel T Automobile

Henry Ford

NEW STORESBETWEEN 1860 TO 1900Specialty stores----sold single line of goodsDepartment stores---combined specialty storesChain stores---stores with branches in citiesMail catalog storesNew ways to advertiseMontgomery Wards, J.C. Penney, Macys, Sears and Roebuck and WoolworthsLAISSEZ FAIREAn economic belief supported by the U.S. that opposes the government regulating business. In the late 1800s businesses operated without much government regulation. This is known as ____________economics. Laissez-faire means allow to be or the government stays out of a persons businessLaissez faire supports our economic system of ____________

New Business CultureLaissez Faire --> the ideology of the Industrial Age.Individuals should compete freely in the marketplace.Own their own business and use their skills to better our culture and make profit for themselves.The market was not man-made or invented and no room for government in the market. Government should allow for natural competition for the betterment of our society.CAPITALISMEconomic system characterized by private property ownership

Individuals and companies compete for their own economic gain _______

Capitalists determine the prices of goods and services.

Production and distribution are _________or corporately owned.

Reinvestment of profits

Supports laissez faire and the free enterprise systemEconomic system based on cooperation rather than competition Many Americans opposed capitalism and believed a socialistic economy would better suit the US because some capitalists were corrupt.Believes in ________ ownership of business and capital (money, natural resources)Government controls production, sets wages, prices and distributes the goods. No profit or competition.Opposite of laissez faire and capitalism

SOCIALISMMORRILL TARIFF ACT, 1862To protect and encourage American industry, Congress passed this tariff after the South seceded from the Union.NATIONAL BANKING SYSTEM, 1863To stimulate the economy and set up a banking system, Congress passed this act which was a significant step towards a unified, national banking system until replaced by the Federal Reserve in 1913.MORRILL ACT, 1862To promote education, Congress provided grants of public lands to the states for support of education. Land-grant colleges LAND GRANTS TO RAILROADS US Govt. donated land to railroad companies to encourage growth of this mode of transportation. US Govt. donated approx. 160 million acres of land.

US GOVERNMENT ASSISTS INDUSTRY___________: form of business consisting of a group of people authorized by law to act as a single person and with the ability to sell shares of stock to raise capital ________________: investors who invest their money into a corporation who each receive a share of ownership in proportion to the amount they investedif the corporation makes a profit---than investor gets a __________ or a share of the profit.___________: Important aspect of a corporation is limited liability. Shareholders have the right to participate in the profits, through dividends and/or the appreciation of stock, but are not held liable for the company's debts. Risk is spread over the __________ so if the company goes bankrupt, the lose is not so devastating

BUSINESS ORGANIZATIONSFORMATION

Individual or person decides to operate a business

OWNERSHIP

CONTROL AND MANAGEMENT

By owner or persons delegated by the proprietor

NET PROFITSLOSSES

Profits to ownerLosses absorbed by ownerUNLIMITED LIABILITY

PROPRIETORSHIPFORMATION

By agreement between associates (partners)

OWNERSHIP

Jointly by two or more individuals; or by terms of partnership agreement

CONTROL AND MANAGEMENT

NET PROFITSLOSSES

Shared according to partnership agreement

UNLIMITED LIABILITY

PARTNERSHIPFORMATION

Organized by associates and legalized through state charter

OWNERSHIP

CONTROL AND MANAGEMENT

Through Board of Directors, elected by the stockholders (usually one vote per share of stock held)

NET PROFITSAND LOSSES

Dividends: to stockholders = profitsLose: only the amount invested by stockholders according to number of sharesLIMITED LIABILITY

CORPORATIONConglomerate

A group of unrelated business owned by a single corporation. Still used today by companies that merge.

Competing companies that agree to fix prices and divide regions among members so that only one company operates in each area. Outlawed today.

Companies in related fields agree to combine under the direction of a single board of trustees, which meant that shareholders had no say. Outlawed today.

Holding Company

A company that buys controlling amounts of stock in related companies, thus becoming the majority shareholder, and holding considerable say over each company's business operations. Outlawed today.

BUSINESS ORGANIZATIONSNew Type of Business Entities

BUSINESS ORGANIZATIONSTrusts or Monopoly

Companies in related fields combine under the direction of a single board of trustees.

Shareholders had no say.

Outlawed today.

TRUSTS AND MONOPOLIESBIGGER IS BETTERA trust or monopoly controls an entire industrymake product cheaperlower prices to customerMONOPOLIES AND TRUSTS

Coke fieldspurchased by Carnegie

Coke fieldsIron ore depositspurchased by Carnegiepurchased by Carnegie

Coke fieldsIron ore depositsSteel millspurchased by Carnegiepurchased by Carnegiepurchased by Carnegie

Coke fieldsIron ore depositsSteel millsShipspurchased by Carnegiepurchased by Carnegiepurchased by Carnegiepurchased by Carnegie

Coke fieldsIron ore depositsSteel millsShipsRailroadspurchased by Carnegiepurchased by Carnegiepurchased by Carnegiepurchased by Carnegiepurchased by CarnegieVERTICAL AND HORIZONTAL INTEGRATION

MONOPOLYVertical Integration You control all phases of production from the raw material to the finished productHorizontal Integration Buy out your competition until you have control of a single area of industryModern Day Example of Vertical IntegrationFord Motor companyWhat goes in an automobile? Why is it an advantage for a company to own/control all production?

Vertical IntegrationYou control all phases of production from the raw material to the finished productAdvantages Vertical IntegrationYou are always in control of supply of the products you needIn control of labor cost, land/resourcesAlways in control of the costSchedule your production of autos because you are in control of all factorsCan you give another example of this?Other Vertical IntegrationsBoeingAnheiser-Busch: all grown by own producersMcDonalds: own cattle ranchesOil companiesAOL Time WarnerHorizontal IntegrationHorizontal Integration Buy out your competition until you have control of a single area of industryExamples:Standard OilUnited Fruit Company: bananasDole PineappleModern Day Examples of Horizontal IntegrationMicrosoftComcastStarbucksDe BeersROBBER BARRONSrobber_________: Forced against your will________: discount or refund on freight chargesDrawbacks / Kickbacks: Standard Oil gave certain railroads all its shipping business if it agreed to charge Standard Oil 25% to 50% less than its competitorsBuyouts: Larger corporations forced smaller businesses to sell out Congress was bought out by the monopoliesSpies: Stealing your competitor's ideas Corporate CriticsSocialist Labor partySherman Antitrust ActUnited States v. E.C. Knight Co.The Costs of Doing BusinessThe boom-and-bust cycleThree severe depressions rocked the economy in the last third of the nineteenth centuryAndrew Carnegie invoked the gospel of wealth to justify his millions, but a group of radical critics looked at his libraries and foundations as desperate attempts to buy peace of mind(629).19-111st LAWS TO REGULATE BIG BUSINESSGranger State LawsState representatives voted into office by members of the Grange who in turn represented the interests of farmers and passed state laws regulating railroad prices in 18 states.Munn v. Illinois(1876)Supreme Court decision stating that states had the ability to regulate private property if it affected public interest.Wabash Case(1886)Declared that it was unconstitutional for states to regulate interstate commerce. Showed need for Federal regulation of interstate commerce.1st LAWS TO REGULATE BIG BUSINESSThese are the first laws to regulate industry and big business.Congress passed Interstate Commerce Commission (ICC). U.S. government regulated interstate trade within the country. End railroad corruption of charging high prices to ship goods and Rockefellers illegal deals.Rebates/kickbacks/drawbacks were illegal.

In 1890, Congress passed a law which made trusts/monopolies illegal or any business that prevented fair competition.

Interstate Commerce Act(1887)

ShermanAntitrust Act(1890)

A person who organizes, operates, and assumes the risk for a business venture

ENTREPRENEURRobber BaronsBusiness leaders built their fortunes by stealing from the public. They drained the country of its natural resources.They persuaded public officials to interpret laws in their favor. They ruthlessly drove their competitors to ruin. They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions.Captains of IndustryThe business leaders served their nation in a positive way.They increased the supply of goods by building factories.They raised productivity and expanded markets.They created jobs that enabled many Americans to buy new goods and raise their standard of living.They also created museums, libraries, and universities, many of which still serve the public today.CAPTAINS OF INDUSTRY OR ROBBER BARONSANDREW CARNEGIE

Captain of IndustryMonopolized the steel industryRags to riches story---came from Scotland very poor.Used scientific ideas (Bessemer Process) to develop a better way to produce steel and sell a quality a product for an inexpensive price.50Carnegie and SteelLarge-scale steel production requiresaccess to iron ore deposits in Minnesota extensive transportation networkRequirements lead to ______________definition: a type of organization in which a single company owns and controls the entire process from obtaining raw materials to manufacture and sale of the finished product10Carnegie and Steel (2)1872--Andrew Carnegie enters steel businessBy 1901 Carnegie employs 20,000, produces more steel than Great BritainSells out to J. P. MorganMorgan heads incorporation of the United States Steel Company11JOHN ROCKEFELLERCaptain of IndustryCame from a wealthy familyBought a substitute during the Civil War.Formed the first modern corporations in the oil industry Standard Oil Was the first billionaire in the U.S. by 1900.Most known for using _______________ to gain a monopoly in the oil business. Sometimes used Vertical Integration

53Rockefeller and OilPetroleum profitable as kerosene for lighting1859--first oil well drilled in Pennsylvania 1863--John D. Rockefeller organizes Standard Oil Company of OhioRockefeller lowers costs, improves quality, establishes efficient marketing operationStandard Oil Trust centralizes Rockefeller control of member companies outside Ohio12New Type of Business EntitiesTrust:

* Horizontal Integration John D. Rockefeller * Vertical Integration: A. Gustavus Swift Meat-packingB. Andrew Carnegie U. S. Steel

CONRELIUS VANDERBILT

Formed a steamship company in 1829

Dominated shipping along the Atlantic

1849 established steamship that carried people from New York to San Francisco in Gold Rush days

Leading U.S. steamship owner, nicknamed The Commodore

Gained control of the Hudson River RailroadCONRELIUS VANDERBILT

After Civil War Vanderbilt bought most railroad lines from New York to Chicago 1877, controlled 4,500 miles of railroads Worth over $100 million_____________--donated $1 million to Vanderbilt UniversityThe effort of an individual or organization to increase the well-being of humankind, as by charitable aid or donations. PHILANTHROPYThe Gospel of Wealth:Religion in the Era of IndustrializationRussell H. Conwell

Wealth no longer looked upon as bad.Viewed as a sign of Gods approval.Christian duty to accumulate wealth.Acres of Diamonds speech

ANDREW CARNEGIE

PhilanthropistGave millions to colleges and libraries.It was the sacred duty of the wealthy to give back to society who has given to him.Stressed education as a means to better ones self.Carnegie Hall60On Wealth

Andrew CarnegieThe Anglo-Saxon race is superior.Gospel of Wealth (1889).Inequality is inevitable and good.Wealthy should act as trustees for their poorer brethren.JOHN ROCKEFELLER

PhilanthropistGave millions of his money to hospitals and colleges.University of ChicagoSpellman CollegeNational ParksUnited NationsWilliamsburgCancer Research62CONRELIUS VANDERBILT

Worth over $100 millionPhilanthropistdonated $1 million to Vanderbilt University63JOHN ROCKEFELLERControlled the railroad by forcing them to pay him rebates because of the volume of business he gave them.Was called Rock a Fellow by manyRuthless business man: Pay no man a profit

64Regulating the Trusts1877 Munn. v. IL regulation if industry substantially affect public1886 Wabash, St. Louis & Pacific Railroad Company v. IL states cannot regulation interstate trade created ICC1890 ______________________ * in restraint of trade * rule of reason loophole

1895 US v. E. C. Knight Co. Manufacturing monopoly ok, interstate distribution not ok.Social Darwinism

British economist, Herbert Spencer.Advocate of laissez-faire.Adapted Darwins ideas from the Origin of Species to humans.Belief that there was a natural upper class and lower class.Survival of the fittestSocial DarwinismBelief that in the economic world the strongest companies will surviveThe growth of a large business is merely a survival of the fittest. J. RockefellerSocial DarwinismSocial Darwinists believed that companies struggled for survival in the economic world and the government should not tamper with this natural process.

The fittest business leaders would survive and would improve society.

Belief that hard work and wealth showed Gods approval and those that were poor were lazy and naturally a lower class.1. All living things have always competed for survival. Survival of the fittest.2. All living things have evolved over millions of years as a result of genetic changes.3. Some plants and animals developed traits that helped them survive.1. Every human activity individuals compete for success.2. The unfit or incompetent lose and the strong or competent win.3. These winners make up a ______________4. Hard worked paid off, and lazy were inferior.Social Darwinism 2SOCIAL DARWINISM14th AMENDMENTRights of Citizens14th amendAll persons born in the U.S. are citizens of this country and the state they reside in. No state shall make or enforce any law which deprives any person of life, liberty, or property, without due process of law, nor deny to any person with its jurisdiction to the equal protection of the laws.__________ would use the 14th Amendment as a way to defend a corporation from the Sherman Anti-Trust Act.Picture: Workers vs OwnerThe old familiar relations between employer and employee were passing. A few generations before, the boss had known every man in his shop. He called his men by their first names, asked about the family and swapped jokes and stories with them. Today, you have large factories, the personal touch is gone! Theodore Roosevelt

IMPERSONALIZATIONWORKER VS EMPLOYER71Picture: Workers vs OwnerPoor working conditions

Unfriendliness/impersonalization

Immigrants taking jobs

Decrease work day

Machines replacing workers

Child labor

Job security INDUSTRALIZATION72In the 1880s, children made up more than 5 percent of the industrial labor force.Children often left school at the age of 12 or 13 to work.Girls sometimes took factory jobs so that their brothers could stay in school.If an adult became too ill to work, children as young as 6 or 7 had to work.

Rarely did the government provide public assistance, and unemployment insurance didnt exist.The theory of Social Darwinism held that poverty resulted from personal weakness. Many thought that offering relief to the unemployed would encourage idleness.WORKING FAMILIESWorking Men, Working Women, Working Children (4)Discriminatory wage structureadults earn more than childrenmen earn nearly twice as much as womenwhites earn more than blacks or AsiansProtestants earn more than Catholics or Jewsblack workers earn less at every level and skillChinese suffer periodic discrimination1879California constitution forbids corporations to hire Chinese1882Federal Chinese Exclusion Act prohibits Chinese immigration for 10 yearsDivision of LaborSome owners viewed workers as parts of the machinery.Unlike smaller and older businesses, most owners never interacted with workers.impersonalizationWork EnvironmentFactory workers worked by the clock.Workers could be fired for being late, talking, or refusing to do a task.Workplaces were not safe.Children performed unsafe work and worked in dangerously unhealthy conditions.In the 1890s and early 1900s states began legislating child labor. THE WORK ENVIRONMENT75Picture: Workers vs OwnerIndustrial millionaires were condemned in the Populist platform of 1892The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a fewand the possessors of these, in turn despise the Republic and endanger liberty. From the same prolific womb of government injustice we breed the two great classes---tramps and millionaires.76TWO DIFFERENT WORLDSThe wealthy would manifest itself in an elite class of Americans who lived extravagant lifestyles. Many common people resented their snobbish attitudes and wealth. In some respects, there was a caste system in the U.S.

1861---------3 millionaires----------1900--------3,800

By 1900, 90% of the wealth in the U.S. was controlled by 10% of population.

Labor UnionsEarly labor ________ like fraternal orders1886--Samuel _________ founds American Federation of LaborA.F.L. seeks practical improvements for wages, working conditionsfocus on ________workersignores women, African Americans17LABOR UNIONSPeople refuse to buy a company's product until the company meets demands. Labor Strike

The unions' method for having their demands met. Workers stop working until the conditions are met. It is a very effective form of attack. Labor Union

Workers who organize against their employers to seek better wages and working conditions for wage earners.New immigrants who would replace strikers and work for less pay. Often violence would erupt between strikers and scabs who were trying to cross picket lines to work.

Scab WorkerA working establishment where only people belonging to the union are hired. It was done by the unions to protect their workers from cheap labor.

LABOR UNIONS

.

Type of negotiation between an employer and labor union where they sit down face to face and discuss better wages, etc.

Collective Bargaining

Closed Shop

A written contract between employers and employees in which the employees sign an agreement that they will not join a union while working for the company

List of people disliked by business owners because they were leaders in the Union. Often would loose their jobs, beaten up or even killedLock Out

Owner of industry would lock out workers who were trying to form a union and replace them with scabs.

LABOR UNIONSCooperativesIndustry or business organization owned by and operated for the benefit of those using its servicesnon-profit

LABOR UNIONSNational Labor UnionWilliam Sylvis, 1866Skilled, unskilled, farmers but excluded ChineseCooperatives, 8 hr. work day, against labor strikesFounded a political party in 1872Involved in the Chinese Exclusion Act.Lost election, faded awayReplaced by Knights of Labor.

Knights of LaborTerrence PowderlyAll workers except Chinese8 hr. day, cooperatives, prohibition, end child laborSeveral strikes won some wage gains 1885 to 1886Unrealistic and vague goals Loss of important strikes and failure of cooperativesHaymarket Riot1886

American Federation of Labor or AFLSamuel Gompers, 1881Skilled workers in separate unions.Work within political system for change.Closed shop and collective bargainingOver 1 million workers joined and won several strikesSmall part of work force eligible to join.

LABOR UNIONSPicture: Workers vs OwnerAmericans were suspicious of labor unions because they tended to go against laissez faire and capitalism. Labor strikes were often violent.

HaymarketRiot83

Founder of the Socialist Party in the U.S.Overthrow the existing laissez faire and capitalisticBelieves in _______________ of business and capital (money, natural resources)Government controls production, sets wages, prices and distributes the goods. No profit or competition. Runs for the presidency several times.EUGENE DEBS

Debs and the American Railway UnionAt the time of the 1877 strike, railroad workers mainly organized into various brotherhoods, which were basically craft unions.Eugene V. Debs proposed a new industrial union for all railway workers called the American Railway Union (A.R.U.).The A.R.U. would replace all of the brotherhoods and unite all railroad workers, skilled and unskilled.Railroad Workers Organize

Railroad Workers OrganizeThe Great Railroad Strike of 1877Railway workers protested unfair wage cuts and unsafe working conditions.The strike was violent and unorganized.President Hayes sent federal troops to put down the strikes.

From then on, employers relied on federal and state troops to repress labor unrest.May 3, 1886, joining a nation wide strike for an 8 work day Chicago workers protested against the McCormick Reaper plant.A riot broke out and Chicago police officers killed several protestersTo protest the killing, protesters planned a rally for May 4

HAYMARKET RIOT

3,000 gather at Chicagos Haymarket SquareDuring the protest, a bomb exploded 7 police officers were killed and civilians killed and injured Chicago police hunt down murderers8 anarchists were convicted of conspiracy to murder4 were hung and 1 committed suicideThis caused the public to look down on labor unions especially the _______________Gov. Altgeld of Illinois later issued pardons for the remaining accused anarchists.

HAYMARKET RIOT

The five men are clockwise from 1:00 o'clock:

A. R. ParsonsAdolph FischerGeorge EngelAugust SpiesLouis Lingg (middle)

The first four were hanged on Friday, November 11, 1887.

Lingg committed suicide on November 10, 1887 by lighting a stick of dynamite in his mouth.

HAYMARKET RIOT

HOMESTEAD STRIKE1892, Carnegie Steel workers strike over pay cutsManagement locks out workers and hires scab workers.Violence erupted between strikers and scab workers.Pinkerton Security called in to settle violenceStrikers ambush them and forced Pinkertons to walk the gauntlet between striking families.Some killed and many injuredNational Guard was called in by the governor of Pennsylvania to stop violence and reopen plant

HOMESTEAD STRIKECarnegie successfully broke up the attempt to organize a union.No labor unions in steel industry until the 1920s.Carnegie would be remembered for events at Homestead.His public image suffered Strikes Rock the NationPullman, 1894Eugene Debs instructed strikers not to interfere with the nations mail.Railway owners turned to the government for help. The judge cited the Sherman Antitrust Act and won a court order forbidding all union activity that halted railroad traffic.Court orders against unions continued, limiting union gains for the next 30 years.Reaction of EmployersEmployers hated & feared unions. Why?European influences of socialismLabor strikes always tended to be violent.

Some took steps to stop unions, such as:forbidding union meetingsfiring union organizersOwner of industry would _________ workers who were trying to form a union and replace them with scabs._______: Employers would hire immigrants to replace strikers and work for less pay. Often violence would erupt between strikers and scabs who were trying to cross picket lines to work.refusing to recognize unions as their workers legitimate representatives