A New Industrial Age

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A New Industrial Age

• Chapter 14

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Part I -The Expansion of Industry
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• Before the 1860s, the US was mostly
  agricultural. By the 1920s, it was the most
  industrialized nation on Earth.
• How?

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• This was due to several factors
• a wealth of natural resources
• government support for business
• a growing urban population that provided cheap
  labor and markets for new products

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Black Gold

• Early Americans had little use for oil until they
  wanted to use kerosene in lanterns
• Edwin Drake was the first to successfully drill.
  He did so near Titusville, PA in 1859, starting
  an oil boom across the nation.
• Oil became even more important with the invention
  of the automobile.

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Compare Drakes oil well to todays technology.
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Bessemer Steel Process

• Along with oil, coal and iron are also plentiful
  across the US.
• Iron is soft and tends to rust and break due to
  impurities. Removing carbon produces steel,
  which is really strong and wont rust.
• Henry Bessemer and William Kelly invented the
  process around 1850.

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Air is injected into molten iron, removing
impurities like carbon. iron impurities
steel.
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Workers making steel
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New Uses for Steel

• Railroads were the biggest customers, with 1000s
  of miles of tracks.
• It made barbed wire and the steel plow possible.
• It changed building techniques. With steel to
  support the weight of buildings, structures rose
  taller and taller.
• The Brooklyn Bridge, completed in 1883, spanned
  1,593 feet and was the tallest structure on Earth
  other than the pyramids in Egypt.

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Inventions That Promoted Change

• Thomas Edison established the worlds first
  research laboratory at Menlo Park, NJ in 1876. He
  invented and patented the light bulb there in
  1880.
• Edison, along with George Westinghouse, made
  electricity safe to use in homes and businesses.
• Electricity allowed businesses to locate anywhere
  they wanted not just near moving water or
  sources of coal.

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Inventions That Changed Lifestyles

• Christopher Sholes invented the typewriter in
  1867, giving way to a change in the workplace.
• All documents had to be created by hand before
  the typewriter came along.

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• Next to the light bulb, the most important
  invention of this era is the telephone.
• Alexander Graham Bell invented it in 1876
• It was of particular importance to homes and
  offices and, along with the typewriter, allowed
  women to work in offices.
• In 1870, women made up only 5 of office workers.
  In 1910, they made up 40.

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Bell
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The original telephone
The device consisted of a coil of wire, a
magnetic arm and a taut membrane. Any sound
caused the membrane, and hence the magnetic arm,
to vibrate. The movement of the magnet induced a
fluctuating electric current in the coil. This
electrical signal could be reconverted into
sound by an identical apparatus at the other end
of the circuit.
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"Watson, come here! I want to see you!"
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Part II The Age of Railroads
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Opportunities and Opportunists

• The growth of railroads influenced the industries
  and businesses in which Americans worked.
• The iron, coal, steel, lumber, and glass
  industries grew to keep up with the growth of the
  railroads.
• The rapid spread of the railroads also fostered
  the growth of towns, help establish new markets,
  and offered many opportunities to people and
  businesses.

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• Chicago, Minneapolis, Denver, Seattle, Flagstaff,
  and Abilene, owed their existence to the railroads

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Pullman

• Using the old model of textile mills, George
  Pullman built his own city for workers who helped
  build sleepers and railroad cars at his factory
  in Illinois.
• The town was considered luxurious compared to
  most with workers having their own homes and
  having access to doctors, shops, and athletics.
• However, Pullman controlled every aspect of his
  workers lives, which led to resentment and
  eventually to a violent labor strike in 1894
  after cutting pay, but not rent.

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Interstate Commerce Act

• The Grange/Populist Party had tried to have the
  government regulate the railroads to cap costs.
• States tried to regulate the railroad companies,
  but since trains cross state lines, the Supreme
  Court ruled that states didnt have the right.
• Interstate commerce can only be regulated by the
  national government.

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• In response, the government passed the Interstate
  Commerce Act in 1887.
• It created a 5 member Interstate Commerce
  Commission (ICC) to regulate the railroads.
• It will not be effective, however, until Theodore
  Roosevelt strengthens it in 1906.

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Panic of 1893

• Corporate abuses, mismanagement, overbuilding,
  and competition pushed many railroads to the
  brink of bankruptcy.
• By the middle of 1894, a quarter of the nations
  railroads had been taken over by financial
  companies like J.P. Morgan Company.
• By 1900, 7 powerful companies controlled over
  2/3rds of the nations railroads.

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Part III Big Business and Labor
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Andrew Carnegie
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Carnegie

• Immigrated from Scotland at age 12
• Worked for railroads became private secretary to
  the superintendent of Pennsylvania Railroad
• As a reward, he was given a chance to buy stock.
  He started investing his money and by 1865, he
  left the r.r. and started his own steel mill.

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New Business Strategies

• Carnegies success was due in part to management
  practices that he put in place.
• 1. He continually searched for ways to make
  products cheaper. He perfected machines and
  accounting systems.
• 2. He attracted talented people by offering them
  stock in the company and encouraged competition
  among employees.

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• He also attempted to control as much of the steel
  industry as he could.
• He did this through vertical integration buying
  out his suppliers like coal fields, freighters,
  railroads, etc.
• And through horizontal integration buying out
  the competition.
• Through buying out his competition and his
  suppliers, he controlled almost the entire steel
  industry.
• He sold his business in 1901 to J.P. Morgan for
  480 million.

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Social Darwinism

• Carnegie attributed his success to hard work,
  shrewd investment, and innovative business
  practice.
• Others attributed it to a new theory Social
  Darwinism.
• This is how they explained why some were so
  wealthy, while others remained poor.
• They believed natural selection weeded out less
  capable people, therefore the rich were the most
  adapted and capable.
• They saw riches as a sign of Gods favor and that
  the poor must be inferior and deserved what they
  got in life.

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Horatio Alger

• People like Horatio Alger promoted the
  possibility of rags-to-riches success for people
  who were virtuous and hard-working.

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Consolidation

• Many industrialists pursued horizontal
  integration in the form of mergers.
• Mergers usually occurred when one company bought
  out the stock of another.
• A firm that bought out all its competitors could
  achieve a monopoly, or control over its
  industrys production, wages, and prices.

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• One way to create a monopoly was to form a
  holding company, a corporation that did nothing
  but buy out the stock of other companies.
• Banker J.P. Morgan created the worlds largest
  corporation when United States Steel (a holding
  company) bought out Carnegie Steel in 1901.

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J.P. Morgan
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Standard Oil Company

• Others like John D. Rockefeller took a different
  approach to achieving a monopoly they joined
  with competing companies in trust agreements.
• Participants in a trust turned their stock over
  to a group of trustees people who ran the
  separate companies as one large corporations.
  They were not legal, but used anyway.
• Rockefeller used a trust to gain control of the
  oil industry in the US.

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• In 1870, Rockefellers company refined 3 of US
  oil. By 1880, they refined 90.
• How? Rockefeller paid his employees poorly,
  undersold his competition, and when the
  competition went out of business, he raised
  prices above the original levels.
• Tactics like these earned industrialists the
  nickname, Robber Barons.

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John D. Rockefeller
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• Many industrialists like Carnegie and Rockefeller
  were also philanthropists, or people who give
  money away for the good of mankind.
• Carnegie's Philanthropy
• It will be a great mistake for the community to
  shoot the millionaires, for they are the bees
  that make the most honey and contribute the most
  to the hive even after they have gorged
  themselves full. - Andrew Carnegie

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Sherman Antitrust Act

• The government was concerned that the growing
  power of corporations would stop free trade, so
  they passed the Sherman Antitrust Act in 1890.
• It made it illegal to form a trust that
  interfered with free trade between states or with
  other countries.
• It was poorly written and all 8 cases brought
  against corporations were thrown out. The
  government eventually gave up trying.

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Part IV Labor Unions
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Bad Working Conditions

• 7 day work weeks, 12 hr days, no vacation or sick
  days were common for men in steel mills.
• Women faced similar conditions, but not as bad.
• In 1882, an average of 675 laborers were killed
  in accidents each week.
• Wages were so low that every family member, even
  children, had to work.
• 25 of boys and 10 of girls ages 5-15 held jobs.
• In 1899, men made 498 a year, women 267, with
  kids averaging around 27 cents for a 14 hour day.

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Child Laborers
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Early Labor Unions

• Small unions for skilled workers had existed
  since the 1700s.
• The first nation wide union was the National
  Labor Union (NLU).
• In 1869, Uriah Stephens organized the Knights of
  Labor.
• Its motto was, An injury to one is a concern of
  all.
• It was open to all workers, man or woman. At its
  height in 1886, it had over 700,000 members

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Uriah Stephens
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Craft Unions

• In 1886, the American Federation of Labor (AFL)
  with Samuel Gompers as president was formed. It
  was a craft union, which consisted of workers
  from a specific craft.
• It focused on collective bargaining and used
  strikes as a way of getting higher wages and
  shorter work weeks.

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Industrial Unions

• Eugene V. Debs was the first to combine all
  workers, skilled and unskilled, from one industry
  into a union.
• He organized the American Railway Union (ARU),
  which grew to over 150,000 members.

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Socialism and the IWW

• Debs eventually turned to socialism (an economic
  system in which the government controls
  business).
• The Industrial Workers of the World (IWW) headed
  by Big Bill Haywood never topped 100,000
  members.

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Strikes Turn Violent

• Industry and the government responded forcefully
  to union activity, which they saw as a threat to
  the entire capitalist system
• The Great Strike of 1877 workers on the
  Baltimore Ohio R.R. went on strike for a wage
  cut. President Hayes ordered it ended using
  federal troops since it interfered with
  interstate commerce.

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• The Haymarket Square Affair workers gathered to
  protest police brutality. As protesters were
  leaving, someone threw a bomb into the police. 7
  police and several workers were killed.

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• The Homestead Strike Workers were protesting a
  pay cut at the steel plant in PA. Henry Frick
  hired police so he could hire scabs (replacement
  workers). 3 police and 9 workers were killed.
  The PA national guard was called in and the plant
  was closed down for 5 months.

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• Pullman Company Strike Workers went on strike
  over cut wages. Pullman refused to negotiate
  with strikers, so the ARU boycotted Pullman
  trains. Pullman hired strikebreakers and it
  turned violent. Federal troops were sent in to
  stop it.

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Triangle Shirtwaist Factory Fire

• People could no longer ignore conditions in
  factories after the Triangle Shirtwaist fire in
  1911.
• 146 women died after the building caught fire.
  The doors were locked to keep them from leaving
  and many jumped to their death or died inside the
  building.
• This disaster led to some changes in local rules
  for women and children in the workplace.

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Employers Fight Back

• Employers feared unions as they grew more
  powerful.
• They finally, with the courts help, turned the
  Sherman Antitrust Act against labor.
• All they had to say was that a strike hurt
  interstate trade and the government would
  intervene.
• Despite all, labor unions continued to grow.