The Expansion of American Industry

1. The Expansion of American Industry

2. Daily Life in 1865 • Indoor and electric lighting did not exist in 1865 instead the rising and setting of the sun dictated the rhythm of work and play • Communications were also slow. In 1860 most mail from the East Coast took 10 days to reach the Midwest

3. Daily Life Transformed • By 1900, daily life had dramatically changed. The post-Civil War years saw new growth in ideas and inventions. • European investors and American business leaders used the profits from the Civil War to invest in these new inventions. • By 1900, industrial productivity and overall standard of living in the US was envied by the rest of the world.

4. Thomas Edison • He also experimented with electrical lighting and his goal was to develop affordable, practical, in-home lighting to replace oil lamps. • A key was to find a material that would glow without burning up when charged with an electrical current. After experimenting with many filaments, the team finally found a workable substance and when placed in a glass bulb it glowed

5. George Westinghouse • Edison at first used a form of electricity called direct current to transmit power from his stations. • Direct current was expensive and could only travel a few miles. • In the 1880s, George Westinghouse began to experiment with an alternating current, which could travel over long distances more cheaply. • Westinghouse also used a device called a transformer to produce voltage levels that made electricity more practical for use in the home. • By the early 1890s, financiers built on Edison’s and Westinghouse’s ideas and created General Electric and Westinghouse Electric companies.

6. How Electricity Changed Daily and Work Life • Electricity revolutionized daily life. One example is that electricity made it possible to refrigerate foods, which reduced food spoilage. • Electricity also transformed work life. Many of the country’s new immigrants, especially women and children found work making clothing in factories powered by electricity. • However, electricity’s benefits were not evenly distributed. • Many rural areas went without it for decades and other people could not afford it.

7. Transcontinental Railroad • The project had first begun in 1862, when absent of southern legislators enabled Congress to agree on a route. • Government backing was important because with the government’s funds the project would have a hard time getting completed. • The government granted loans and land grants to two companies. One the Union Pacific started in Omaha, Nebraska and built towards the west. • The other Central Pacific started out of Sacramento, California and headed east • On May 10, 1869 Leland Stanford completed the first transcontinental railroad.

9. Railway Travel • Even after improvements rail travel was still unpredictable and inconvenient. There were also many fears about traveling the railroads. • The railroad continued to growth despite these concerns and in 1883, the railroads helped introduce standardized time zones to improve scheduling. • Railroads also took time to introduce other safety measures. • George Westinghouse developed more effective air brakes. • Granville Woods invented a telegraph system for communications to and from moving trains. • Rail travel made things easier for businesses. It helped reduce the shipping costs.

10. Telegraph • Samuel Morse’s invention of the telegraph signaled the start of the communication revolution. • Using a code of short and long electrical impulses to represent letters, people were able to communicate. • The first message was sent in 1844. By 1900, Western Union owned 933,000 miles of wire and sent 63 million messages

11. Telephone • In 1876, Scottish immigrant Alexander Graham Bell achieved a “talking telegraph.” In 1884, Bell and a group of partners set up the American Telephone and Telegraph Company. • At first a telephone line could only connect two places, a home and a business. • However, soon central switchboards with operators linked homes and businesses in an entire city. • By 1900 1.5 million telephones were in use.

12. Steel • Throughout the mid-1800s the nation relied on iron for railroads and buildings. • However, in the 1850s, Henry Bessemer in England developed a new process for making steel, a metal that is lighter and stronger than iron. • People knew of steel, but it was expansive to make. • With the Bessemer converter, steel became more plentiful and more affordable.

13. Brooklyn Bridge • A new age of building was developing and an example of this would be the Brooklyn Bridge. As NYC’s status as a business center grew, so did its population. • Many people settled in Brooklyn, but the only way to get to Manhattan was by Ferry. • Engineer John A. Roebling envisioned a suspension bridge with thick steel cables suspended by high towers. At 1,595 feet long it would be the longest bridge yet built.

14. The Growth of Big Business • The period of invention of discovery would not have been the same without people willing to invest their money in these new inventions. • Without money people could not build factories, market their product, or create profitable businesses. • To succeed business leaders had to pool funds together and this started the age of big business.

15. Robber Barons? • The term robber barons, imply that business leaders built their fortunes by stealing from the public. • According to this view, they drained the country of its natural resources and corrupted public officials to interpret laws in their favor. • At the same time, these industrialists drove their competition to ruins and paid meager wages, while forcing their workers to work in dangerous and unhealthy conditions.

16. Captains of Industry? • Captains of industry suggest that the business leaders served their nation in a positive way. • This view credits them with increasing the availability of goods by building factories, raising productivity, and expanding markets. • By creating more jobs, the giant industrialists enabled many Americans to buy new goods. • They also funded and founded many of the nation’s greatest universities, museums, and libraries.

17. Andrew Carnegie • His first job was at a cotton factory making $1.20 a week. He wanted to improve himself and this became an urgent matter when his dad died in 1855, making him the family’s chief earner. • At age 18 Carnegie won the post of secretary to the superintendent in the Pennsylvania Railroad company. • When his boss went to the Civil War, Carnegie took over. He then started to invest his money wisely.

18. Andrew Carnegie cont… • He believed that steel would replace iron. He first invested in two furnaces that would make pig iron, which was a material needed to make steel. • Despite an economic depression in 1873, he cut steel prices, which drove his competitors from the market. • With a partner Henry Clay Frick, Carnegie took control of the steel industry. He had control of the mines, the ovens and the steel. Eventually he took control of the shipping and rail lines necessary for transporting his goods.

19. A “Gospel of Wealth” • His message was simple: People should be as free to make as much money as they can. As they make it, however, they should give it away. • The man who dies … rich dies in disgrace. • Never leave wealth to heirs, he warned because they will fail to learn how to survive o their own. • Never leave wealth it to others to administer, for they will never follow your instructions. • Give it away yourself; he advised, not as charity, but as philanthropy, gifts to institutions or to the public to help mankind.

20. Social Darwinism • In the late 1800s people applied Charles Darwin’s theory of evolution to society. Charles Darwin believed the strongest and fittest would survive. • Applying this idea between workers and employers, social Darwinism held that society should do as little as possible to interfere with the process by which people succeed or fail. • If government stayed out of business affairs, those who were the most ‘fit” would survive.

21. Laissez-Faire • Many Americans agreed with that philosophy and thought that the nation’s prosperity depended on laissez-faire, or hands off approach to the economy. As a result, government neither taxed the profits of businesses not regulated their relations with the workers.

22. Monopolies • In order to create a monopoly, a business bought out its competitors and all its patents. Thus the business would eliminate any competition for its product. • Toward the end of the 1800s, federal and state governments passed laws to prevent certain monopolistic practices. • However, these laws did not prevent nor destroy all monopolies, in part because government leaders were fearful in taking on big business leaders.

23. Cartels • Cartels are loose associations of businesses making the same product, usually formed in secret. • The goal of a cartel is to reduce the harmful side effects of competition on the businesses involved. Members agree to limit the supply of their product because when the supply is low the price tends to increase. • Cartels had a disadvantage and during hard times tended to fall apart.

24. John D. Rockefeller and Standard Oil • Rockefeller became rich from a grain and meat partnership during the Civil War. By 1870, he had formed Standard Oil Company of Ohio. • As Rockefeller sold more oil, he was able to undersell his competitors. In addition, he persuaded his railroad friends to give him illegal refunds on part of the cost of transportation. • Because Standard oil paid less to transport goods its prices were lower. • Rockefeller soon had enough money to buy out his competition. However, state laws prohibited one company from owning stock in another, since monopolistic practices reduced competition and restricted “free trade.”

25. Samuel Dodd’s Idea • Samuel Dodd’s idea of the trust got around the ban. In 1882, 40 companies agreed to turn over their assets to a board of nine trustees. In return, they were promised a share of the profits with the new conglomerate. The board of trustees, which was controlled by Rockefeller, managed the companies as a single unit called a trust. • The companies were not legally merged, so no laws were violated. Rockefeller’s trust controlled all of the nation’s oil-refining capacity. • Trusts proved an effective means of limiting industrial competition. Americans began depending change.

26. Sherman Antitrust Act • In 1890, the Sherman antitrust act was passed. The law was aimed to combat restraint of trade or commerce caused by trusts. • The act was ineffective or about 15 years because the federal government rarely enforced it and its vague ruling made it hard to apply in court.

27. Horizontal Consolidation • Rockefeller’s approach to consolidation – the creation of one giant business from many smaller enterprises was horizontal consolidation. • This method was involved in bringing together many firms in the same business.

28. Vertical Consolidation • Other industrialists practiced vertical consolidation, a method by which they gained control of all phases of a product’s development. • Andrew Carnegie used this method. By controlling all phases of steel production Carnegie could lower his costs and drive his competitors out of business.

29. Economy of Scale • Carnegie could charge less because of a phenomenon called economy of scale. • As he expanded his enterprises and produced more goods, his cost per item went down.

30. Public Reaction to Big Business • A lot of people disliked trusts and other large business organizations. However, mergers were the wave of the feature and big cooperation’s such as: GE, Westinghouse and DuPont, contributed to the wealth and productivity of the US • Rapid industrial growth did lead to strains on the economy. There were fluctuations in the economy when there were a lot of goods. The demand went down, so did the price and then people had to be laid off from their job. • Other problems occurred when people panicked over the fact that businesses would not be able to pay their debt. Investors would sell their stock in the company, stock prices would fall and companies went bankrupt. A period of depression would usually follow panics.

31. The Great Strikes: A Turning Point in History • Industrialization bought changes and great wealth to the US. However, these changes did not bring prosperity to the nations working people. • The rich grew richer and workers became bitter over their struggle for a decent standard of living. • Men and women began to take their complaints directly to their employers.

32. Socialism in the Industrial Age • Socialism is an economic and social philosophy that advocates collective or government ownership of factories and property. One goal of socialism is to distribute the nation’s wealth broadly. • Most Americans disagreed with the socialist idea and they felt that socialism threatened the deeply rooted American ideals of private property and free enterprise – the right of people to compete freely and succeed to whatever extent they can. • Most wealthy people also rejected socialism. They would not give up what they owned without a fight. Wealthy owners also believed that the US government would fight socialism with the military if necessary to preserve the American political and economic systems.

33. The Return of Labor Unions • These groups were initially designed to help in times of need. Soon they became a way of channeling workers’ demands for shorter workdays, higher wages, and better working conditions. • The emphasis on protest led to growing opposition to unions by employers. • Unions grew in the 1860s and 1870s. Labor activists tried to organize national unions. • The National Labor Union was formed in Baltimore nominated a candidate for president in 1872. However, this union failed to survive an economic downturn

34. The Knights of Labor • Another early national union, The Noble Order of the Knights of Labor, was formed in Philadelphia in 1869. The Knights hoped to organize virtually all working men and women into a single union. Members included farmers, factory workers, and white-collar workers. • The reforms included equal pay for equal work, an 8 hour working day, and an end to child labor. • The leaders of the Knights did not generally advocate the use of strikes, and they did not emphasize higher wages as their primary goal.

35. American Federation of Labor (AFL) • A third national union, the American Federation of Labor (AFL) followed the leadership of Samuel Gompers. • It was formed in 1886 and was different from the Knights because they sought to organize only skilled workers in a network of smaller unions, each devoted to a specific craft.. • Gompers and the AFL were primarily interested in the issues of wages, hours, and working conditions. • They sought to force employers to participate in collective bargaining, in which workers negotiate as a group with employers. The Federation believed that workers acting as a group had more power than a worker acting as an individual.

36. Growing Friction Between Labor and Employers • Employers disliked and feared unions. The preferred to deal with employers as individuals instead of in powerful groups. • Employers took measures to stop unions, such as forbidding union meetings and firing union organizers. • They even forced employees to sign a “yellow dog” contract that exacted a promise never to join a union or strike. Some business leaders refused to recognize unions as the workers’ representatives.

37. The Railroad Strike of 1877 • The strike began when the Baltimore and Ohio railroads announced a wage cut of 10%, the second cut in 8 months • Other railroads imposed similar curs and were ordered to run “double headers,” were trains would have two engines and 2x as many cars. This increased the risk of accidents and worker layoffs. • Local militia in Pittsburgh refused to help, so the employers called in troops from Philadelphia. They fired shots on demonstrators and killed and wounded many. • President Rutherford B. Hayes called on federal troops to help out, but that only led to more violence. • From that point on employers relied on federal and state troops to repress labor unrest, which led to more violence

38. Haymarket (1886) • On May 1, 1886 several groups demonstrated requesting an 8 hour work day. At Chicago’s McCormick reaper factory, police broke up fights between strikers and scabs. Scabs are individuals hired to replace striking workers. Police action caused several deaths • To protest the deaths anarchists, who are political radicals who oppose all government on the grounds that it limits individual liberty and acts on the interest of the wealthy and ruling class, called for a rally in Chicago’s Haymarket Square • During the event someone threw a bomb in a police formation, which then caused a riot. Seven policemen died from the bomb and dozens of civilians and policemen died in the riot after.

39. Results of Haymarket Strike • They never found the bomb thrower, but 8 anarchists were tried for conspiracy to commit murder. Four were hanged and another committed suicide in jail. • There was a belief that the convictions were a result of public hysteria, not evidence. • The governor of Illinois later pardoned the three remaining anarchists. • To union officials the anarchists were heroes, to employers they remained criminals.

40. Homestead (1892) • A union of iron and steel workers associated with the AFL had negotiated a labor contract with Andrew Carnegie’s steel company. • In the summer of 1892, while Carnegie was away his partner Henry Frick tried to cut wages. The union at the plant in Homestead, PA called a strike • Frick wanted to crush the strike and on July 1, 1892 he called in the Pinkertons, a private police force known for its abilities to break strikes. • The Pinkertons and the strikers fought and the result was death and injury on both sides.

41. Result of Homestead Strike • The public reaction was at first sympathetic to the strikers. However, when an anarchist tried to assassinate Frick, the public again blamed the strikers for the violence. • The strikers acknowledged defeat and Frick stated he would never recognize any unions. Carnegie Steel and its predecessor US Steel remained nonunionized until the mid 1930s. Carnegie always stated he supported unions, but remained silent.

42. Pullman (1894) • The Pullman Strike of 1894 involved the railroad industry and completed the turning point in the federal government’s involvement with labor-employer relations. • Sleeping car maker George Pullman always considered himself to be a kind industry owner. • He built a town for his workers near Chicago that had a school, bank, water and gas systems and affordable homes. • Conditions got worse during the Depression of 1893 and he had to lay off workers and cut wages by 25-40%. However, he also kept rent and food prices at the same level.

43. Pullman cont… • In 1894 a group of workers went to him to protest. He responded by firing all three and when the American Railway Union called a strike he refused to negotiate and shut down his plant. • The founder of the American Railway Union was Eugene Debs and by June of 1894 he encouraged 120,000 workers to join the Pullman strike. • Debs had instructed the strikers not to interfere with the mail, but the strike led to complete disruption of western mail traffic, including the delivery of the mail.

44. Pullman Results • Railroad owners turned to the federal government for help. Citing the Sherman Antitrust Act – Attorney General Richard Olney won court orders forbidding all union activity. • President Grover Cleveland sent in troops to ensure that strikers obeyed the court orders, which resulted in 12 deaths and numerous arrests. • Debs refused court orders and was jailed for 6 months. The American Railway Union fell apart with no leadership • The Pullman strike and its outcome set an important pattern. In the years ahead factory owners appealed frequently for court orders against unions. • The federal government regularly responded to these appeals and denied unions recognition as legally protected organizations. This helped limit union gains for over 30 years.

45. Work Cited • www.victoriana.comwww.countryporch.com • xroads.virginia.edu/~MAP/TERRITORY/us_1900.jpg • www.archives.gov • http://www.hhfi.org/tbdf/Portals/0/Swissvale%20Pictures/george%20westinghouse.jpg • www.tcrr.com/ • images.encarta.msn.com/.../pho/t014/T014805A.jpg • http://scienceaid.co.uk/chemistry/industrial/images/steel.png • www.spartacus.schoolnet.co.uk/SCbessem2.jpg • http://www.richard-seaman.com/Wallpaper/USA/Cities/BrooklynBridgeAtNight.jpg • www.mackinac.org/media/images/2002/v2002-43a.gif • www.hightowerlowdown.org/.../cartoon_200204.jpg • www.undercovertourist.com/.../carnegie-hall.html • www.explorepahistory.com/images/ExplorePAHist... • www.spdconline.org/.../images/CarnegieSteel3.JPG • http://www.awb.com/catalog/images/covers/94713.jpg • www.globaled.uconn.edu/.../image006.gif • www.amnesta.net/other/monopoly/MonopolyMan.jpg • http://www.greatbigstuff.com/thumbpics/monopolyhat.gif • johndrockefeller.net/images/rockefeller1a2.jpg • projects.vassar.edu/1896/sherman.gif • http://evatt.labor.net.au/news/images/strike.jpg • www.fresno.k12.ca.us/.../images/socialism.gif • www.utexas.edu/lbj/pubs/covers/0-89940-119-8.jpg • www.dismalworld.com/im/world_tour/labor-day-2.jpg • http://www.takver.com/history/lh_gifs/kol_seal.gif • www.historyteacher.net/.../Images/AFLSymbol.gif • www.fantasticfiction.co.uk/images/n12/n62200.jpg • americanpicturelinks.com/19rh.htm • http://www.employmentblawg.com/wp-content/uploads/2007/08/haymarket21.jpg • http://cpdweblog.typepad.com/photos/uncategorized/2007/05/24/haymarket_3.jpg • libcom.org/files/1892-homestead.jpg • www.spartacus.schoolnet.co.uk/USAfrick.jpg • www.eliillinois.org/30108_87/main/chsyounggeo... • www.stfrancis.edu/.../btopics/works/pulfig2.jpg • www.vw.vccs.edu/.../Images/PullmanStrike01.jpg