Industry comes of Age 1865-1900

1. Industry comes of Age 1865-1900 “The wealthy class is becoming more wealthy; but the poorer class is becoming more dependent.” Henry George 1879

2. Great men aren’t politicians Great men are lured to big business America is now an industrial giant in the world wide market Industry Comes of Age

3. RR’s explode after ACW US government subsidized the first two transcontinental RR because they are costly and risky, but if successful they can promote national unity and economic growth The Iron Colt Becomes an Iron Horse

4. Land grants Give RR’s broad strips of lands, can pick and choose, sometimes dragged their feet angering potential settlers People upset by “giveaways” but RR’s hook up government with preferential rates for postal service and military traffic The Iron Colt Becomes an Iron Horse

5. ACW-south leaves the union North (union) wants to secure gold rich California Union Pacific RR starts from Omaha Some corruption (Credit Mobilier) Workers are mainly “paddies” Many conflicts with Natives Spanning the Continent with Rails

6. Workers lived in tent towns Central Pacific RR starts in Cali. And moves east Less corruption More difficult terrain (Sierra Nevada) Mainly Chinese laborers Spanning the Continent with Rails

7. Both RR meet in Ogden Utah 1869 to lay the golden spike Transcontinental RR is complete West coast firmly connected to the Union Better trade with Asia Paves way for growth out west Spanning the Continent with Rails

8. Four other Transcontinental lines were built. None received cash grants, but three received land grants Many other RR went bankrupt and fleeced investors. Towns competed with bribes to RR promoters to get the RR to come to their town. Many of these RR took the money and ran. Binding the Country with RR ties

9. Robber Baron for RR = Cornelius Vanderbilt CV- uses steel rail to replace old iron tracks Standardization of RR tracks Westinghouse air brake (1870) Pullman Palace Cars RR Consolidation and Mechanization

10. Crash at Crush 1896

11. Transcontinental RR caused many changes: Stimulated American economy Stimulated manufacturing and industrialization Westward expansion of agriculture Stimulated immigration Bigger cities Settlement of the unsettled areas Time zones Created Millionaires “lords of rail” Changed Western ecology Revolution by RR

12. Jay Gould “Stock watering” – lie about RR assets and profitability, then sell stocks and bonds that exceed actual value Bribery- judges and congressmen Create oligopoly Rebates- hook up large companies, screw small farmers Wrongdoing in Railroading

13. Midwestern farmers (small) hate RR But society embraces free enterprise Depression in 1870’s groups farmers (Grange) to try to regulate RR Wabash, St. Louis & Pacific RR Co. v. Illinois- results = individual states have no power to regulate interstate commerce Government Bridles the Iron Horse

14. Interstate Commerce Act in 1887. Prohibited rebates and pools Required RR to publish their rates openly Outlawed discrimination against shippers outlawed charging more for short hauls than for long ones Set up the Interstate Commerce Commission to administer and enforce Government Bridles the Iron Horse

15. ICA Was not a revolutionary victory; simply modest regulation Helps end price wars 1st large scale attempt by Federal Government to regulate business in interest of society Government Bridles the Iron Horse

16. 1865-1895 saw a huge industrial boom. Reasons: Much more liquid capital Natural resources started to be exploited Massive immigration provided cheap unskilled labor American inventions made businesses and factories more efficient. Telegraph, mass production, cash register, stock ticker . Telephone (1876) and expanded telegraph; communications revolution. Edison and Electric Light Miracles of Mechanization

17. Businesses, left alone, hate competition. Ways to avoid competition 1. Vertical Integration-combining into one organization all phases of manufacturing from mining to marketing -Andrew Carnegie’s Steel operations. 2.Horizontal Integration-allying with competitors to monopolize a given market -Rockefeller and Standard Oil 3.Trusts-consolidate operations of all rivals Rockefeller 4. Interlocking Directorates- consolidate rival enterprises and to ensure future harmony by placing officers of his own banking syndicate on their various boards of directors J.P. Morgan The Trust Titans Emerges

18. Steel became King after the Civil War. Foundation for much of the industrial expansion America biggest Steel producer by 1900. Produced 1/3 of the world’s steel. Bessemer process. Supremacy of Steel

19. Andrew Carnegie-US Steel King of American Steel “Napoleon of the Smoke Stacks” Produced ¼ of nation’s steel Carnegie And Other Sultans Of Steel

20. JP “Jupiter” Morgan bought US Steel for over 400 million dollars Starts United States Steel Corporation (1st billion dollar Corp.) Carnegie- worried about dying with too much wealth, spends rest of life in philanthropy Carnegie And Other Sultans Of Steel

21. 1859 – First Oil Well- in Penn. “Drake’s Folly” pours out “black gold” Automobile industry drives oil industry Rockefeller and Standard Oil (1870, trusts formed in 1882) 1887- controlled 95% of all oil refineries in US Rockefeller and Standard Oil

22. “Reckafeller” big believer in commercial Darwinism. Ruthless business man Trusts = profits Rockefeller and Standard Oil

23. Some business ldrs equate success to god ( divine right of kings) Others – Social Darwinists (Herbert Spencer and William Graham Sumner) – are that ppl won their stations in life by competing on basis of natural talent. Later applied to countries Social Darwinists

24. Russell Conwell- “Acres of Diamonds” – “There is not a poor person in the US who was not made poor by his own shortcomings” Social Darwinists

25. Carnegie “Gospel of Wealth” Inequality is inevitable and good. Wealthy should act as “trustees” for their “poorer brethren.” Wealthy had to prove they deserved their wealth. Give back to the community as a whole, not to individuals “Gospel of Wealth”

26. Sherman Anti Trust Act of 1890. Forbids combinations in restraint of trade. Did not prove very effective because went after bigness and not badness. Not very effective because penalties weak and loopholes Biggest effect was unintended--Was used against unions. Importance of the law was not its immediate effect but the shift in thinking that it represented. Government Tackles the Trust Evil

27. Smaller production Most area is sharecropping James Duke - American Tobacco Company The South In The Age Of Industry

28. “New South” Henry Grady editor of Atlanta Constitution Become “Georgia Yankees” Major barrier to South development- RR regional rates- RR give better rates to manufactured goods moving from the North The South In The Age Of Industry

29. 1880’s Bring the mills to the cotton Why Cheap labor Less unions Tax benefits Most blacks excluded from mill jobs Entire poor white families worked “hillbillies and lintheads” Paid half as much as northern workers Often times paid in credit The South In The Age Of Industry

30. Standard of living rose sharply Workers enjoyed many more physical comforts Urban centers mushroomed Jeffersonian Ideal of nation of small farmers died Concept of time changed. Many more women in the workforce Delayed marriages and smaller families New class system Workers becoming more dependent and more vulnerable. The Impact Of Industrialization

31. New technology means less skilled workers Individual workers were powerless to bargain Companies- use lawyers, buy local press, pressure politicians, scabs, or hire thugs Court injunctions- make strikes illegal Companies can request federal troops Lockouts Yellow dog contracts Black lists Company “towns” In Unions There is Strength

32. Unions strengthened after the Civil War. National Labor Union organized in 1866 and did well, 600,000 members, both skilled and unskilled Did not recruit women or blacks (there was a Colored National Labor Union) Goals: arbitration of industrial disputes, 8-hour day damaged by the depression in the 1870s Labor Limps Along

33. Knights of Labor (1881 becomes public) took over where the National Labor Union had left off. Sought to include all labor in one big Union. They stayed out of politics, but campaigned hard for economic and social reform. Their biggest issue was the 8-hour work day. Won that fight from a number of industries and their ranks swelled. “An injury to one is the concern of all” Labor Limps Along Terence V. Powderly

34. 1886- ½ of May day strikes fail Haymarket Square Incident (Chicago 1886) Why does the KofL die? 1. KofL now wrongfully linked with anarchism 2. Fusion of skilled and unskilled workers Unhorsing The Knights Of Labor

36. Brain child of Samuel Gompers Confederation of self-governing independent unions for skilled laborers. Advocated closed shop- all union labor American Federation of Labor 1886