Chapter 16 – The Rise of Industrial America, 1865-1900

1. Chapter 16 – The Rise of Industrial America, 1865-1900

2. Railroads • America’s first big business • 35,000 miles in 1865 to 193,000 miles in 1900 • Had the greatest impact on American economic life • Created a national market • Encouraged mass production and mass consumption • Promoted the growth of coal and steel industries • 1883 – divided the country into four time zones [railroad time]

4. Eastern Trunk Lines • 1830-1860 – dozens of separate lines with different gauges and incompatible equipment • Post Civil War – consolidation of competing railroads into integrated trunk lines • Major routes between large cities

5. Eastern Trunk Lines • Cornelius Vanderbilt used millions from a steamboat business to merge local railroads into the New York Central Railroad [1867] • Ran from New York to Chicago and operated more than 4,500 miles of track • Baltimore & Ohio Railroad and the Pennsylvania Railroad connected eastern seaports with Chicago • Set standards of excellence and efficiency for the rest of the industry

6. Western Railroads • Five transcontinental railroads were constructed across different sections of the West • Union Pacific Railroad – connecting Omaha, NE and Sacramento, CA • Southern Pacific Railroad – connecting New Orleans, LA to Los Angeles, CA • Atchison, Topeka, and Santa Fe Railroad – connecting Kansas City, MO to Los Angeles, CA • Northern Pacific Railroad – Duluth, MN to Seattle, WA • Great Northern Railroad – St. Paul, MN to Seattle, WA

8. Frontier SEttlement • The last of the frontier was settled by three groups of pioneers: miners, cattlemen and cowboys, and farmers • By 1890 there was virtually no more frontier

9. The Farming Frontier • 1862 – Homestead Act • Encouraged farming on the Great Plains by offering 160 acres of public land free to any family that settled on for it for 5 years • About 500,000 families took advantage of the act • 5 times that number had to purchase land because the best public lands ended up in the hands of railroad companies and speculators

11. Morrill Act [1862] • The Morrill Act was passed the same year as the Homestead Act • Through the Morrill Act, 140 million acres were set aside to allow states to raise money for public universities • These land-grant-colleges were to broaden educational opportunities and foster technical and scientific expertise

13. The Great American Desert • Lands between the Mississippi River and the Pacific Ocean • Land west of the 100th meridian had few trees and less than 15 inches of rainfall per year • Not enough moisture to support farming • Winter blizzards and hot, dry summers discouraged settlement

15. U.S. – Leading Industrial Power • By 1900, U.S. emerged as the leading industrial power in the world • Manufacturing output exceeded its 3 rivals [Great Britain, France, Germany] • U.S. economy averaged 4% growth annually

16. Reasons for US Industrial Growth • Raw materials essential to industrialization • Coal, iron ore, copper, lead, timber, oil • Abundant labor supply • 1865-1900 – hundreds of thousands immigrants • Advanced transportation network • Largest market in the world for industrial goods

17. Reasons for Industrial growth • Capital was plentiful • Development of laborsaving technologies increase productivity • Over 440,000 new patents were granted 1860-1890

18. Inventions • Samuel F. B. Morse – telegraph [1844] • Cyrus W. Field – transatlantic cable [1866] • Send message across the seas in an instant • Alexander Graham Bell – telephone [1876] • Typewriter [1867] • Cash register [1879] • Calculator [1887/1888] • George Eastman – Kodak camera [1888] • Lewis E. Waterman – fountain pen [1884] • King Gillette – safety razor and blade [1895]

19. Reasons for Industrial Growth Businesses benefited from friendly government policies [laissez-faire] • Protected private property, subsidized railroads, passed protective tariffs, refrained from regulating business or enacting heavy taxes Entrepreneurs built and managed vast industrial and commercial enterprises

20. Industrial Empires • Late 19th century – major shift in industrial production • From textiles clothing, and leather to steel, petroleum, electric power, and industrial machinery • 1869 – 2 million factory workers • 1899 – 4.7 million factory workers

21. Steel Industry • Bessemer Process • Blasting air through molten iron produced high-quality steel • Abundant coal reserves and access to iron ore made the Great Lakes region the leading steel producer

22. Andrew Carnegie • Poor Scottish immigrant who worked his way up in the Pennsylvania Railroad • 1870s – started manufacturing steel in Pittsburgh, PA • Outdistanced his competition with salesmanship and technology • By 1900, Carnegie Steel employed 20,000 workers and produced more steel than all the steel mills in Britain

23. Vertical Integration • A company controls every stage of the industrial process, from mining the raw materials to transporting the finished product

24. U.S. Steel • Carnegie sold his company for over $400 million to J.P. Morgan • United States Steel was the first billion-dollar company and the largest enterprise in the world • Employed 168,000 people • Controlled over 3/5 of the nation’s steel business

25. Oil Industry • 1863 – John D. Rockefeller founded an oil company • Took charge of a chaotic oil refinery business by applying new technologies and efficient practices • Forced rival companies to sell out by cutting prices • 1881 – Standard Oil Trust controlled 90% of the oil refinery business

26. trusts • Rockefeller’s trust consisted of various companies that he had acquired, all managed by a board of trustees that he and Standard Oil controlled

27. Horizontal integration • Former competitors of a single industry are brought under a single corporate umbrella • In essence, a monopoly • Controlling the supply and prices of oil products led to Standard Oil’s profits soaring

29. Gospel of Wealth • Religion justified the wealth of successful industrialists and bankers • Rockefeller – through his Protestant work ethic [hard work and material success are signs of God’s favor] he concluded “God gave me my riches” • Reverend Russell Conwell –“Acres of Diamonds” lecture preached that everyone had a duty to become rich • Carnegie – article “Wealth” argued that the wealthy had a God-given responsibility to carry out philanthropic projects for the benefit of society • Distributed over $350 million to build libraries and universities

30. Marketing Consumer Goods • The increased output of consumer goods created a need to find new ways of selling merchandise to a large public

31. Department Stores • Macy’s [New York] • Marshall Field’s [Chicago] • Woolworth’s Five and Ten Cent Stores [towns and urban neighborhoods]

32. Mail Order • Stores were able to ship to rural customers thanks to railroads • Sears • Montgomery Ward

33. Going “Shopping” • Created a consumer culture • Brand names like Kellogg and Post became common items in American homes • Refrigerated railroad cars and canning enabled packers to change eating habits of Americans with mass-produced meat and vegetable products

34. Working Women • 1 out of 5 adult women in 1900 was in the labor force • Most were young and single • Only 5% of married women worked outside the home • Factory work for women restricted to textile, garment and food-processing industries

35. Working Women • As demand for clerical workers increased they moved into formally male occupations • Secretaries, bookkeepers, typists, and telephone operators • Occupations that became majority women lost status and received lower wages/salary

36. Expanding Middle Class • Industrialization helped expand the middle class by creating jobs: • Middle management [between executives and factories] • Accountants • Clerical workers • Salespersons

37. Expanding Middle Class • In turn, these middle class employees increased the demand for services from other middle-class workers: • Professionals [doctors and lawyers] • Public employees • Storekeepers

38. Wage Earners • By 1900, 2/3 of all working Americans worked for wages • They worked 10 hours a day, 6 days a week • Wages were determined by the laws of supply and demand

39. Wage Earners • Due to large supply of immigrants, wages were usually barely above subsistence • Wage earners could not support a family on one income • Working-class families depended upon the additional income of women and children

40. Labor Discontent • Industrial workers performed semi-skilled tasks that were repetitive and monotonous • Workers had to learn to work under the tyranny of the clock • In many industries working conditions were dangerous • Workers were exposed to chemicals and pollutants that caused chronic illness and early death

41. Struggle of organized labor • Industrial Warfare • Surplus of cheap labor • Strikers could be replaced with scabs [unemployed persons desperate for jobs]

42. Struggle for organized labor • Employers used the following to defeat unions: • Lockout – closing the factory to break the labor movement before it can get organized • Blacklists – names of pro-union workers circulated among employers • Yellow-dog contracts – workers must sign an agreement to NOT join union as a condition for employment • Private guards and state militia – called in to put down strikes • Court injunctions – obtained against strikes

43. Great Railroad Strike of 1877 • Worst outbreak of labor violence of the century • Railroad companies cut wages in order to reduce costs during an economic depression • Strike on B & O Railroad spread across 11 states and shut down 2/3 of country’s rail tracks • Railroad workers were joined by 500,000 workers from other industries • Escalating strike to national scale

44. Great Railroad Strike of 1877 President Rutherford B. Hayes used federal troops to end the labor violence • First time in history • 100 people were killed Some employers addressed grievances, other took a hard line busting unions

45. Knights of labor • Led by Terence V. Powderly • 1881 – union went public opening membership to all workers, including African-Americans and women • Worker cooperatives “to make each man his own employer” • Abolition of child labor • Abolition of trust and monopolies • Favored using arbitration to settle labor disputes rather than striking

46. Haymarket Bombing • 1886 – 80,000 Knights in Chicago for first May Day [May 1] labor movement • Calling for a general strike to achieve an 8-hour work day • Violence broke out at the McCormick Harvester Plant • May 4 workers held a meeting in Haymarket Square • Police attempted to break up the meeting • Someone threw a bomb killing 7 police officers • 8 anarchist leaders were tried for the crime, with 7 sentenced to death, even though bomb thrower was never identified • Many Americans concluded that the union movement was radical and violent

47. American Federation of Labor [AFL] • Founded in 1886 as an association of 25 craft unions • Samuel Gompers led union from 1886 to 1924 • Higher wages • Improved working conditions • Directed unions to walk out until employer would negotiate through collective bargaining

48. Homestead strike • 1892 – Henry Clay Frick cut wages by nearly 20% at Carnegie’s Homestead Steel Plant • Used lockouts, private guards and strikebreakers to defeat the steelworkers’ walkout after 5 months • Failure of this strike set back the union movement