Rise of Industrial America

1. Rise of Industrial America Chapter 18

2. The Gilded Age Mark Twain’s Novel that satirizes the time period, era of industrial expansion • Happened due to: • Vast Coal Deposits • New Technology • Low production costs due to unskilled worker’s wages • Rule by a few corporations (oligopolies, monopolies drive economy)

3. 1870 1913 USA 23.3 35.8 Germany 13.2 15.7 U.K. 31.8 14.0 France 10.3 6.4 Russia 3.7 5.5 Italy 2.4 2.7 Industrial Statistics Table 1 Percentage Distribution of the World's Manufacturing Production, 1870 and 1913 (percentage of world total)

4. Industrial Expansion

5. Robber Baron – the Gilded Age entrepreneur takes away money from the economy through exploitation and illegal activities Philanthropist – the Gilded Age entrepreneur gives money that they earn back to the economy and the community 5) The Entrepreneur - Robber Baron v. Philanthropist

6. The Entrepreneurs of the Gilded Age • With the entrepreneur you are given: 1) What did he accomplish during the Gilded Age? 2) Was the person a “robber baron” or a “philanthropist”? Explain. Research using books and phones

7. Railroad Innovations • Political – bribed politicians, fought off government laws (rate discrimination, Interstate Commerce Act and ICC, Wabash v. Illinois) • Social – communication and travel network • Economic – controlled movement of goods, set rates on businesses and farmers, led way in consolidation of business, developed new accounting and managing methods

8. Railroad Entrepreneurs Collis Huntington Jay Gould

9. The Interstate Commerce Act railroad rates be "reasonable and just," but did not empower the government to fix specific rates. A failed attempt to control the railroads, showing the political power that the railroads had at the time

10. Carnegie’s Steel Carnegie attached himself politically to the railroads and helped the railroads create their social market network through his steel product Carnegie’s use of vertical and horizontal integration to dominate the industry was a new economic tactic

11. Rockefeller’s Oil Trust Creates the first trusts, which are politically challenged by the Sherman Anti-trust Act (ineffectively due to the US v. EC Knight case) A trust affects economics by not only consolidating companies but ruthlessly driving out competition using aggressive policies involving adopting new technology and claiming all of the resources

12. Rockefeller and Standard Oil

13. Sherman Anti-trust Act • Section 1: • "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." • ] • Section 2: • "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]"

14. EC Knight Case limited the government's power to control monopolies. That which belongs to commerce is within the jurisdiction of the United States, but that which does not belong to commerce is within the jurisdiction of the police power of the State. . . . Doubtless the power to control the manufacture of a given thing involves in a certain sense the control of its disposition, but . . . affects it only incidentally and indirectly.

15. Inventions During the Gilded Age Inventions such as the telephone by Alexander Graham Bell helped grow the economy

16. Thomas Edison’s Inventions

17. Aggressive Advertising Specialized products and advertising also led to economic growth and expanded sales of new products

18. Pros and Cons of Gilded Age Pros – healthy economy, wide array of new products, lower prices for consumers Cons – destruction of small businesses, exploitation of workers, environmental destruction, inability for money supply to keep up with economy

19. The New South and the “Creed” • The New South dealt with many obstacles regarding Gilded Age development: • Destruction of southern credit, capital during the Civil War • Federal government policies that help factories up North, not agricultural South (high tariffs) • Poor education and low literacy rate in South • The “New South Creed” attempts to solve this by: • Providing tax exemptions, industrial fairs for businesses • Using natural resources in the South

20. Northeast 15% Middle Atlantic 17% Midwest 43% South Atlantic 63% South Central 67% West 29% Development of the South Agriculture's Share of the Labor Force by Region, 1890 The “New South Creed” to bring industry to the area was difficult due to agricultural labor force, but the “cotton mill” economy was relatively successful because it combined agriculture and industry

21. Southern Industry Results • As well as the new “cotton mill” industry, other results were: • Increased iron, steel production in Southern cities • Job increase for blacks and poor whites, but up to 50% less pay than Northern workers leading to debt problems The South advanced much more slowly than the North, and Northern companies like the Burlington Coat Factory from Burlington, VT took much of the Southern capital

22. Discussion Question • Is the economic growth during the Gilded Age worth the problems that it causes?

23. Industrial Labor Hardships Child Labor Railroad Workers - Chinese • Diseases (black lung) • Frequent accidents (long hours, children) • No workers compensation or laws Triangle Shirtwaist Factory after the Fire

24. Immigrants and Women in Industry Immigrants had the lowest-paid, most dangerous jobs Women were hired for unskilled work over men due to lower pay (17% of workforce)

25. “Rags to Riches” (Carnegie) Student and Schoolmate published “Ragged Dick” by Horatio Alger, a story about a poor boy’s rise to wealth In reality, 95% of executives came from wealth, and the top 10% owned 73% of US wealth

26. American Federation of Labor seal Labor Unions Knights of Labor Seal • Unfavorable working conditions caused the rise of labor unions: • NLU (William Sylvis) – first labor union but dies out quickly • Knights of Labor (Terrence V. Powderly) – pushes for new social reforms (equal pay, child labor laws, graduated income tax, etc.) • AFL (Samuel Gompers) – promotes skilled workers (wages, hours)

27. Chinese Exclusion Act, 1882 Labor union success was spotty, but they did succeed in pushing for the Chinese Exclusion Act, which kept Chinese from getting jobs However, the union divisions of skilled v. unskilled, religious, ethnic, goals, etc. hurt the overall union agendas

28. Labor Violence Haymarket Riot – The Bomb Labor unions used violent strikes to try to achieve their goals when other attempts failed 1877 Railroad Strike

29. Yellow Dog Contracts • This agreement has been well named. It is yellow dog for sure. It reduces to the level of a • yellow dog any man that signs it, for he signs away every right he possesses in the Constitution and laws of the land and makes himself the truckling, helpless slave to the employer • Businesses responded with: • Yellow Dog Contracts – keep workers from striking • Police Forces (Government forces, injunctions) • Public Opinion (most people didn’t like the violence, blamed it on labor) • Lockouts, Blacklists

30. Social Darwinism Every progress of the whole must be preceded by a partial weakening. The strongest natures retain the type, the weaker ones help to advance it. To this extent, the famous theory of the survival of the fittest does not seem to me to be the only viewpoint from which to explain the progress of strengthening of a man or of a race.[ Social Darwinists (Spencer, Carnegie in “Gospel of Wealth”, Sumner, Smith) believed in laissez-faire government and survival of the fittest (no help to poor) Others believed that human-made problems must be solved (Lester Ward, Henry George, Edward Bellamy) through regulation of business, tax reform, and cooperation Socialists (Karl Marx, Eugene V. Debs) believed in the overthrow of capitalism to create an equal society

31. Labor Essay Question • Analyze the impact on labor of industrial development in the post-Civil War period. Your answer can include the effects on skilled, unskilled, southern, immigrant, and women workers. • Have at least a: 1) Thesis 2) At least two body paragraph opening sentences and two specifics listed for each 3) Concluding sentence