Unit 6 Ch.16 Natural resources Coal, iron ore, copper, lead, timber, oil Growing population Labor supply and largest market for goods Capital Technology Pro-business policies Entrepreneurs Business Created time zones in 1883 Modern corporation Complex financial structures Eastern Trunk Lines A major route between cities Cornelius Vanderbilt created the New York Central Railroad Western Railroads Promoted settlement in the west Federal land Grants Gave free land to railroads to build Promoted bad construction and led to bribery Transcontinental railroads First one completed in 1869 by the Union Pacific and Central Pacific Chinese, war veterans, and Irish were hired to work on the railroads Competition and Consolidation 1870s-1880s saw overbuilding, mismanagement, and fraud 1893 financial panic put 25% of RRs into bankruptcy Bankers like J.P. Morgan bought them up Bessemer process 1850s- Henry Bessemer and William Kelly Removing the carbon from the iron produces a lighter, more flexible, rust-resistant metal Andrew Carnegie Business Strategies New machinery and techniques Attracted new talent by offering them stock Vertical integration Controlling every stage of the industrial process from mining the raw materials to transporting the finished product U.S. Steel Corporation Headed by J.P. Morgan First billion dollar company First oil well was drilled by Edwin Drake in 1859 Rockefeller and Standard Oil Used horizontal integration (bought out competitors) Controlled 90% of oil industry by 1881 Kept prices low for consumers Middle-class feared the power of trusts Old money resented the new money Sherman Antitrust Act (1890) Illegal to form a trust that interfered with free trade between states or with other countries trust wasnt clearly defined and the act was unenforceable United States v. E.C. Knight ruled that the Sherman Act only applied to commerce and not manufacturing Laissez-faire capitalism First argued in 1776 by Adam Smith Business will be regulated by supply and demand Social Darwinism Herbert Spencer- the concentration of wealth in the hands of the fit would benefit the future of the human race William Sumner argued against helping the poor because it would weaken the evolution of the species Gospel of Wealth Belief that God gave leaders of industry their wealth Carnegie argued for using that money to benefit society Inventions Samuel Morse- telegraph Cyrus Field- improves transatlantic cable Alexander Graham Bell- telephone Research laboratory Thomas Edison set up a lab in Menlo Park, NJ Mechanics and engineers worked together George Westinghouse Airbrake for railroads Transformer that produced high-voltage alternating current Department Stores Marshall Field Chicago R.H. Macy- New York Chain stores Woolworths Mail-Order Montgomery Ward Sears Roebuck Packaged Foods Kellogg and Post American eating habits changed to mass-produced foods Concentration of Wealth By 1890s richest 10% controlled 90% of the wealth Horatio Alger myth People of modest means can become rich and successful Middle Class Growth of corporations led to more white collar jobs Wage Earners Barely made enough for subsistence living Working Women Usually young and single- both men and women believed a womans proper role was in the home raising children Labor Discontent Dangerous working conditions, unstable, mobile Employer tactics Lockouts, blacklists, yellow-dog contracts, private guards and state militia, court injunctions Great Railroad Strike of 1877 Wages cut during depression to reduce costs General strike shuts down 2/3 of rails President Hayes send in troops to end labor violence National Labor Union (1866) Attempted to organize all workers Lost support after 1873 depression began Knights of Labor (1869) Advocated worker cooperative, abolition of child labor, abolition of trusts and monopolies Haymarket Bombing (1886) Public meeting held by Knights to discuss a strike Police came to break it up Someone threw a bomb; 7 officers were killed American Federation of Labor (1886) Samuel Gompers- higher wages and improved working conditions Homestead Strike Steelworkers strike after announced wage cut Pinkerton Detective Agency was hired to protect the plant so scabs (strikebreakers) could work Pennsylvania national guard was called in to end the strike after two weeks and 12 deaths Pullman Strike Wages cut and rent not reduced in town of Pullman Most train traffic stopped U.S mail cars were attached to all trains Eugene Debs jailed; Pullman workers fired