Industrialization%20in%20America

1
Industrialization in America

• Chapter 6

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U.S. Natural Resources

• After the Civil War, US was still an agricultural
  nation
• Wealth of natural resources
• Oil- Black Gold- 1859- Edwin L. Drake used steam
  engine to drill for oil
• Petroleum refining for kerosene huge business in
  Cleveland
• Automobile engines drove demand for gasoline
• Coal and Iron Ore-
• Henry Bessemer, British -Bessemer Process
  inject cool air into molten iron ore removes
  carbon to create steel
• More railroads, bridges, buildings,

3
New Inventions

• Thomas Alva Edison create research laboratory in
  Menlo Park, New Jersey
• Light bulb 1880 and entire system of producing
  and distributing electricity
• Power ran machines electric street cars and
  light
• Telegraph 1844- Samuel Morse
• 1866 transatlantic cable
• Can locate factories any place not just near
  rivers
• Alexander Graham Bell -1876-invent telephone
• Work moved from homes to large factories
  including clothing
• More garment workers- Prices drop

4
New Inventions

• Skyscrapers
• Invention of steel frame- support floors and
  walls
• Invention of elevators
• Transit
• Subways or street cars transport people
• Printing
• 1890 higher literacy rate, paper mass
  producedcheap, printing on both sides of page,
  faster production brought down newspapers prices
  higher demand
• Airplanes Orville and Wilber Wright
• Glider with an engine- 1903 Kitty Hawk N.C. 12
  seconds and 120 ft. (2 yrs flew 24 miles)
• Photography- George Eastman
• developed convenient camera with flexible film

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The RailroadsLesson Objective

• 1. How did Railroads unify the country
• 2. What were the reasons of the demand of
  railroad reform?

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Age of Railroad

• Made travel reliable and westward expansion
  possible
• Nations first big business
• Federal govt. provided huge subsidies and land
  grants
• 80 companies receive 17 million acres of public
  land
• Transcontinental Railroad-
• During Civil War, Congress authorized land grants
  and loans for a transcontinental railroad
• Central Pacific (From West) and Union Pacific
  (from east) used army veterans and Immigrants for
  labor
• Railroads met at Promontory Utah May 10, 1869
  Golden Spike
• By 1900 four other transcontinental railroads are
  completed

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Age of Railroads

• Growth of railroads led to growth in towns and
  established new markets
• Promotes trade and interdependence towns begin to
  specialize in specific products (Pittsburgh-
  Steel, New York-Clothing, Massachusetts-Textiles,
  Chicago- Meatpacking
• Time Zones
• 1869 Professor C.F. Dowd proposed the earth be
  divided into 24 time zones
• 1884 international conference set world wide time
  zone

8
Railroad Corruption

• Farmers upset over railroad corruption
• Railroad companies sold land to other businesses
  rather than individual settlers
• Railroad companies agree to fix prices charge
  different customers different rates.
• Grange farmers organization 1867
• demand government control over railroad industry
• Sponsored state and local candidates and pressed
  for laws to protect interests (Set rates)
  (Granger Laws)
• Laissez Faire? Railroad companies fight back
• Munn v. Illinois 1877 - Supreme Court upheld
  granger laws and government won right to regulate
  railroads for benefit of farmers and consumers
• Establish right of government to regulate private
  industry to serve public interest.
• 1887 U.S. Congress passes Interstate Commerce Act
  to regulate railroad rates
• Only Federal govt. can regulate interstate trade

9
Big Business

• Bessemer Process creates new demand for steel.
• Great Lakes region emerges as leading steel
  region due to abundant coal and iron resources
• More jobs Expanding Middle Class

10
Objectives

• What is Social Darwinism?
• How did Big Business leaders use Vertical
  Integration and Horizontal Integration to build
  monopolies?

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Social Darwinism in Business

• Grew out of Charles Darwins belief of evolution-
  to pass successful traits to a new generation
• Natural selection would weed out less suited
  individuals
• Economist justified doctrine of laissez faire
  leave alone
• Economy should not be regulated for success or
  failure of business
• Individual responsibility of success or failure
• Riches were a sign of success while poor must be
  lazy or inferior people who deserved their lot in
  life
• Violates Munn v. Illinois 1877
• Companies form monopolies- complete control over
  an industry production, wages and prices (Violate
  Adam Smiths Markets)
• To avoid monopolies Rockefeller sold trusts
• Friends sat on boards of other competing
  companies -individual businesses but ran as one
  large business

12
Big Business and Labor

• Large quantities of natural resources and cheap
  labor is the key to businesses
• Andrew Carnegie enters steel business in 1873 in
  Pittsburgh
• Search for new machines and techniques to make
  better products more cheaply.
• Attracted talented chemists and organizers by
  offering stock in the company
• Maintained Vertical integration- bought our
  suppliers (coal fields)Transportation (ships and
  railroads)
• Maintain Horizontal integration- buying out
  competitors
• Controls most of the steel industry
• 1899 he manufactured more steel
• than all the factories in Great Britain

13
Vertical and Horizontal Integration of Business
Resources Mines Mines Mines
Factories factories factories factories
Transportation Trains/ Ships Trains/ Ships Trains/ Ships
Markets Stores Stores Stores
14
Big Business and Labor

• Edwin Drakes oil drill in Pennsylvania
• John D. Rockefeller Standard Oil Company of Ohio
  processed 90 of American oil
• reaped huge profits by paying his employees
  extremely low wages and driving competition out
  of business
• sold oil at a lower price than the cost to
  produce it.
• Then raised prices far above original levels
• Did not pass profits to workers or prices for
  consumers
• Industrialists got the name Robber Barons
• Philanthropists- Rockefeller gave away 500
  million for good works such as research
• Carnegie donated over 325 million
• Rich had a moral duty to spread their wealth

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Company controls your life

• George Pullman (Horizontal integration)
• Manufactured sleepers and railroad cars
• Also built town which provided all basic needs
  (Company Town)
• Clean brick homes, one window in every room
• Doctors, shops, athletic fields
• Under company control
• Residents not allowed to loiter on front porches
  or drink alcohol
• Ensure a stable workforce

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Business Too PowerAnti-Trust Movement

• Industrial Revolution-Raised Standard of living
  but Middle class consumers fear the power of
  monopolies
• Sherman Antitrust Act 1890 - illegal to form a
  trust that would interfere with free market trade
  between states or countries
• Trust wasnt easy to define trustees would own
  and make decisions for the companies
• Large trusts would quickly divide into a single
  corporation
• Hard to prosecute
• Effects of Industrialization
• Change- from self employed Farmer became the
  factory worker
• Standard of living increases
• Workers life miserable
• US looks overseas for new markets to sell goods

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Labor Unions Emerge

• Social Darwinism and Working Conditions
• Steel mills demanded 7 day workweek
• Most factory workers worked 12 or more hours per
  day 6 days per week
• Employees were not entitled to vacation, sick
  leave, unemployment compensation, or
  reimbursement for injuries that occurred on the
  job.
• Dirty, poor ventilated factories, workers
  performed repetitive mind dulling tasks with
  dangerous equipment
• 1882- average 675 laborers were killed per week
  in accidents
• Wages were so low families could not survive
  unless everyone held a job
• .27 / day child 14 hour day,
• women earned 267/ year
• men- 498/ year
• Carnegie made 23 Million no income tax

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Labor Unions Emerge

• Organize to be recognized- Tactics used
• Strikes, Picketing, Boycotts, Slowdowns
• Employers fight back
• Large supply of labor
• Fire striking workers
• Lock outs- close factory if labor organizes
• Blacklist -union leaders names
• Yellow Dog Contracts- force employers to sign
  agreement not to join union
• National Labor Union formed 1866
• Skilled and unskilled workers
• Craft Union based on each industry
• Convinced congress to grant 8 hour work day for
  government employees

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•  Great Strike of 1877
• 1873 depression- railroads cut worker wages
• 1877 B.O. RR in Maryland workers stopped
  working
• Next day W. Virginia workers stopped working
  (500,000 workers join strike)
• Federal troops restore services but strike
  spread to other railroad lines
• Pittsburgh militia refused to stop strike,
  Philadelphia militia shot 26 people
• Sympathizers attacked militia
• support for strikers spread across the Midwest
• Federal and local troops broke up strikes but
  hundreds lost lives
• Violence cause many people to not support
  striking

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Labor Unions Emerge

• 1869 Knights of Labor- An injury to one is a
  concern to all
• Great Strike indicated that workers would unit to
  support others
• Included all workers
• Abolish Child Labor
• Support 8hr work day,
• Equal pay for equal work
• Saw strikes as a last resort,
• Haymarket Square Riot
• May 4 1886, members held meeting in Haymarket
  Square
• Police attempt to break up- someone threw a bomb
  kill 7 police officers
• Americans again fear organized labor too radical
  and violent 

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Labor Unions Emerge

• American Federation of Labor (AFL) Samuel Gompers
• Most successful led by Samuel Gompers
• Focused on Collective Bargaining or negotiations
  between leaders of labor and management to reach
  written agreement on wages, hours, and working
  conditions.
• Organized only skilled workers
• AFL used strikes as a major tactic
• American Railway Union - Eugene V. Debs -included
  both skilled and unskilled workers
• Unskilled workers easily replaced.
• Many strikes turned violent,
• Unions still ineffective because of the stream of
  Immigrants who would work for low wages scabs