An Industrial Giant

1
An Industrial Giant

• Reference
• Chapter 18
• The American Nation 12th edition

2
Essentials of Industrial Growth

• American manufacturing flourished-late 1800s
• National market grew
• Protected by tariff
• European immigrants provide labor
• Advances in science and technology

3
Railroads The First Big Business

• Railroads were a significant part of the economic
  boom in the late 1800s
• Contributed to the growth of other industries
• Cornelius Vanderbilt and Jay Gould
• Times zones are standardized
• Land grant railroads sell land cheaply, thus
  helping settle the West
• New technology like air brakes and locomotives

4
Iron, Oil, Electricity

• Bessemer process-mass production of steel
• Huge supply of iron ore-steel production more
  possible
• Mesabi range yields lots of iron ore (Minn.)
• Pittsburgh-iron and steel center
• Urban centers grow-need electricity, telephones
• Alexander Graham Bell (1876)
• Edison and the light bulb
• Electricity replaces steam in the factories

5
Competition and Monopoly The Railroads

• Deflation set in in the 1870s
• Leads to falling railroad prices and increased
  competition
• Railroads counter by giving rebates
• Made up for it by raising prices in areas where
  there was no competition
• Forced some railroads into receivership (limited
  bankruptcy)
• Some railroads formed interregional systems-first
  corporate giants

6
Notables Cornelius Vanderbilt and Jay Gould

7
Competition and Monopoly Steel

• Andrew Carnegie-Carnegie Steel Company
• Almost corners market
• Makers of steel products consider pooling their
  resources to start making steel
• Carnegie threatens to make steel products
• J.P. Morgan buys out Carnegie and makers of steel
  products
• Forms United States Steel-first billion dollar
  corporation in America

8
Notables Andrew Carnegie and J.P. Morgan

9
Oil

• John D. Rockefeller founds the Standard Oil
  Company in 1870
• By 1879, he controlled 90 of the nations oil
  refining capacity
• To maintain his monopoly, he formed a new type of
  business organization-the trust

10
Retailing and Utilities

• Electric companies and telephone companies also
  form monopolies to prevent duplication and
  protect patents
• General Electric and White Westinghouse
• Life insurance business expands
• Urban dept. stores expand
• Wanamakers
• Marshall Field

11
American Ambivalence to Big Business

• Laissez-faire attitude toward government
  intervention into economic and social affairs
• Intellectual trends encouraged this attitude
• Charles Darwin-The Origin of the Species
• William Graham Sumner-applies Darwinism to social
  and economic institutions

12
American Ambivalence cont

• Attitudes begin to change
• Growth of large corporations frighten people
• Fear of high prices, destroy economic
  opportunity, threaten democratic institutions
• People wanted some government intervention
  eventually

13
Reformers

• Some reformers became alarmed at the
  misdistribution of wealth and power of the
  corporations
• Henry George proposed a single tax in Progress
  and Poverty (1879)
• Edward Bellamy predicted a completely socialized
  America in Looking Backward (1888)
• Henry Demarest Lloyd criticized the Standard Oil
  Company in Wealth Against Commonwealth (1894)

14
Notables George, Bellamy, and Lloyd

15
The Marxists

• Unequal distribution of wealth also brought about
  some advocating Marxism
• Marxist Socialist Labor Party-1877
• Laurence Gronlund explained Marxism to Americans
  in The Cooperative Commonwealth (1884)
• Daniel De Leon-leader in Socialist Labor Party

16
Railroad Regulation

• State governments react to railroads first
• National Granges lead the way
• Maximum rates and unjust prices
• Munn vs. Illinois (1877)-Supreme Court ruled
  states can regulate railroads as long as these
  regulations help the public interests
• Wabash case (1886)-Supreme Court rules states
  cannot regulate railroads that run across state
  lines
• Interstate Commerce Act (1887) and Commission
  regulates railroads

17
The Sherman Antitrust Act

• First antitrust legislation comes from the states
• Feds get involved with the Sherman Antitrust Act
  of 1890
• Declares trusts illegal as well as any
  combination that restrained trade
• Intended to restore competition
• Supreme Court iffy when it comes to the act

18
Labor Union Movement

• National craft unions grew after 1865
• National Labor Union founded in 1866
• Knights of Labor founded in 1869
• KOL very political, not good on labor issues
• Strikes against railroads helped KOL grow
• Eight hour workday
• Workers and police clash in Chicago in 1886
• Bomb tossed into crowd-seven police killed

19
American Federation of Labor

• Violence in Chicago damaged labor unions
• National craft unions and the American Federation
  of Labor replaced the KOL
• Led by Adolph Strasser and Samuel Gompers
• AFL advocated for higher wages and shorter work
  days
• Avoided politics and used strikes

20
Labor Militancy Rebuffed

• More machines and foreign workers scares some in
  the labor force
• 1877-railroad strike shuts down 2/3 of the
  nations rail traffic
• Violence ensues, army breaks the strike up
• Eugene Debs and the American Railway Union
  strikes against Pullman Company
• President Cleveland sends in federal troops to
  kill the strike
• Eugene Debs files an injunction and is jailed