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1. Chapter 14: Industrialization

   AmericanHistory
2. The U.S. as an industrial power Several factors contributed to the increase in the nation’s gross domestic product, or the value of all goods and services produced by a country Abundance of raw materials (oil, timber, coal, iron, copper Large workforce (population tripled between 1860 and 1910) stemmed from large families and immigration
3. Free Enterprise system Another factor in the growth of industry was the free enterprise system Laissez-fair-calls for government not to interfere with the economy unless to protect individual property rights calls for supply and demand and competition supports low taxes to ensure individuals make the decisions on how the nation’s wealth is spent supports limiting nation’s debt, since money borrowed from banks is not available to individuals for their uses The concept of free enterprise attracted many entrepreneurs, or people who risk investing in organizing and running a business
4. U.S. involvement in economics The government not only adopted laissez-faire economics, but incorporated their own rules kept taxes and spending low did not negotiate wages and prices Struggle existed in regards to tariffs Northerners wanted high tariffs to protect industry from foreign competition and to subsidize internal improvements Southerners opposed subsidizing internal improvements and promoted low tariffs to improve trade When the Civil War ended, Congress passed the Morrill Tariff, increasing tariffs High tariffs contradicted laissez-faire economics because it raised the prices of foreign goods, which raised the prices on American goods
5. New inventions New inventions began to come up during this time period: The telephone-Alexander Graham Bell The phonograph, lightbulb, electric generator, battery, dictaphone, and motion picture-Thomas Edison The ice machine-Thaddeus Lowe The refrigerated rail car-Gustavus Swift The Transcontinental Telegraph Line-Cyrus Field Improvements to the textile and shoemaking industry also occured
6. Linking the U.S. via railroad Railroad boom began in 1862, when Lincoln signed the Pacific Railway Act, calling for the construction of a transcontinental rail line The rail line was built by two companies: the Union Pacific and the Central Pacific Central Pacific would sell its stock to four merchants, creating the “Big Four”
7. Consolidation and Timing Large railways began to consolidate with smaller rail lines in an ability to reach every portion of the United States To prevent confusion and tragedy (ex. Trains colliding because of confusion), the American Railway Association divided the country into four time zones were able to switch cars according to weather and to speed long distance travel
8. Land Grants and Robber Barons To encourage railway building, the government gave land grants to railway companies the railways would settle the land with settlers, real estate companies, and other businesses to raise money for the railroad Individual states would eventually get the land grants and disperse them to the railway companies Many company owners were accused of swindling investors, bribing government officials, and cheated on their contracts Robber barons: people who took from the land and gave nothing back Bribery was frequent because the government was already so entangled in funding the railroads Some companies were exceptions: James Hill and the Great Northerner
9. The Credit Mobilier Scandal Credit Mobilier was a construction company set up by several stockholders in the Union Pacific greatly overcharged the Union Pacific, and the investors agreed to pay the inflated bills Investors were rich, but railway used all their grants bribed Congress to give them more grants in exchange for investments Scandal ruined railway company and several politicians Many railroads went into bankruptcy for their briber, except for one: The Great Northern
10. Corporations Corporations begin to evolve during the 1830’s organization owned by stockholders, or individuals who own stock, or a piece of the company owned by many people, but treated by law like a single person Through investing in new technologies, hiring a large workforce, and purchasing machines, corporations could achieve economics of scale goods are produced cheaply because they produce more quickly
11. Economics of a Corporation Corporations pay two types of costs: Fixed cost: costs a company has to pay taxes, mortgage, etc Operating cost: costs a company pays to run itself wages, buying raw materials, etc. If an operating cost is low, which was common during this time, it would allow the corporation to produce goods cheaply and effinciently However, when prices fell, this became a problem because it cut into profits to prevent this, corporations organized pools, or agreements to maintain prices at a certain level not trusted by the government, so those in pools had no legal protection: method did not last long
12. Andrew Carnegie Philanthropist and Innovator of the steel industry Used the Bessemer process in making steel efficiently and cheaply Began the vertical integration method Company owns all different businesses on which it depends its operations on Also used horizontal integration method Combining many firms engaging in the same type of business into one large corporation
13. Monopoly! Monopoly is when a corporation gains control of an entire market some feared them because they could charge whatever they wanted for their goods some supported them because keeping prices low would keep competitors out To keep from breaking laws, corporations formed trusts, or a legal concept that allows one person (trustee) to manage another person’s property Ex. Standard Oil Company
14. Chain stores A law in New Jersey allowed corporations chartered in New Jersey to own stocks to other businesses Companies used this law to form holding companies, or companies that don’t produce goods, but instead hold stocks in companies that do Department and chain stores were created using this format sold array of different products in large, elegant buildings shipped mail-order catalogs to those who could not make it to the stores
15. Wealthy vs. workers Several factors contributed to poor relationships between wealthy and workers workers performing repetitive tasks working in poor conditions deflation, or a rise in the value of money, caused wages to be cut Workers came to believe that the only way to improve their conditions was to form unions
16. Unions Unions began with craft workers and common laborers craft workers began to form trade unions, limited to specific skills Corporations regarded unions as illegitimate conspiracies opposed industrial unions, or unions with craft workers and laborers from one industry Corporations made several changes to eliminate unions made workers sign contracts to not join a union hired detectives to go undercover to identify union organizers fired organizers and placed them on a “blacklist” that went to other employers If a union formed, companies issued a lockout, refusing entry onto the property and refusing to pay workers
17. Opposition towards unions Several problems occurred for workers trying to organize unions No laws giving workers the right to form unions Courts regarded them as conspiracies towards trade Was percieved to be related to Marxism, which threatened capitalism Basic force shaping capitalism was a class struggle between workers and owners Called for revolt and seizure of control from workers
18. The Great Railroad Strike of 1877 From the Panic of 1873 came wage cuts Railroad workers began to walk away from their jobs involved 80,000 workers in 11 states The strike began to turn violent militia was called in several cities to stop the violence President Hayes called for the railroad from Philadelphia and Pittsburgh to be open to transport troops to Chicago restored order, but left 100 dead
19. The Knights of Labor First nation-wide industrial union, formed after the Railroad Strike called for 8 hour days, government of labor statistics, equal pay for women, abolition of child labor, and creation of worker-owned factories supported boycotts and arbitration, a process in which a third party comes in and negotiates with workers and owners
20. Haymarket Riot Movement for 8 hour workday took support On May 1st, 1886, workers in many cities went on strike On May 3rd, a clash between workers and police left one striker dead The next evening, 3,000 protestors gathered in Haymarket Square in Chicago Police fired, workers fired back, and a bomb exploded, killing seven officers and four protestors Eight men were arrest, four were executed, and the reputation of the Knights of Labor dwindled
21. Pullman Strike Pullman Company, a railway car company, cut wages due to a depression in 1893 workers could not pay rent or other goods After three men were fired for complaining, the men went on strike Pullman company sent mail cars to be used in place of Pullman cars, and if the strikers blocked the shipment of mail, it was against federal law President Cleveland sent troops and issued an injunction, or formal court order, to disperse the strike and let the mail be sent strike collapsed
22. American Federation of Labor In 1886, delegates from 20 trade unions organized the American Federation of Labor, led by Samuel Gompers approach to labor relations was to stay out of politics, rejection of socialism and communism, and should fight for small gains had three goals get companies to recognize unions pushed for closed shops, or companies hiring union members only promoted an 8 hour workday
23. Women in labor Women workers increased after the Civil War Women workers did the following Domestic servitude Teaching, nursing, sales, and administrative tasks Light industrial work, such as textiles Women were paid less than men and were excluded from unions Two women labor organizers and 2 founders of settlement houses, organized the Women’s Trade Union League pushed for 8 hour workday, creation of minimum wage, end to evening work, and abolition of child labor