American Industrial Expansion 1850-1900: Technological Revolution & Financial Backing

1. Expansion of American Industry 1850-1900

2. Technological Revolution • Financial backing ($) & American ingenuity (creativity) helped to create new industries & expand old ones • By 1900, the U.S. standard of living was among the highest in the world • Standard of living = level of material comfort

3. Important People • Edwin Drake- first to drill for oil. • Made obtaining oil cheaper & more efficient • Thomas Edison- improved the light bulb • George Westinghouse- made home use of electricity practical • Achieved this through the use of alternating current, transformers, power stations, & substations • Many immigrants went to work in factories newly powered by electricity which were able to produce goods faster, thus making them cheaper

4. Important People (cont.) • Samuel Morse- perfected the telegraph, & he devised a code of short & long electrical impulses to represent the letters of the alphabet (Morse Code). • First telegraph message sent 1844: “What hath God wrought!” • Alexander Graham Bell- invented the telephone in 1876 • Rutherford B. Hayes was the first President to enjoy a telephone in the White House

5. Transcontinental Railroad • Built by Irish & Chinese immigrants • Irish worked for the Union Pacific • Chinese worked for the Central Pacific • Completed on May 10, 1869 at Promontory Summit, Utah • Railroad improvements in the late 1800s: • Steel rails replaced iron rails • Track gauges (width) & signals became standardized • 1869: George Westinghouse developed more effective air brakes • 1887: Granville Woods patented a telegraph system for communicating with moving trains • 1883: railroads adopted national system of time zones to improve scheduling

8. Joining of the railsPromontory Point, UtahMay 10, 1869

9. Bessemer Process • Bessemer Process- made it easier & cheaper to remove the impurities from steel, & made possible the mass production of steel • A new age of building began in America • Brooklyn Bridge in New York City was built using steel & strung with electric lights • It became a symbol of the newly industrialized America

10. Henry Bessemer

11. Bessemer Converter at Work

12. Robber Barons or Captains of Industry? • Robber Barons~ implies that business leaders built their fortunes by stealing from the public • Captains of Industry~ credits them with doing good for the country by building factories, raising productivity, expanding markets, and creating jobs that enabled many Americans to buy new goods & raise their standard of living

13. Railroad Giants • Cornelius Vanderbilt • Edward Harriman • James J. Hill

14. John D. Rockefeller • Formed Standard Oil Company in 1870 • By the end of his life he had given over $500 million to charity • Founded the University of Chicago & the Rockefeller Foundation

15. Vanderbilt’s New York Mansion

17. Andrew Carnegie • Founded Carnegie Steel Corporation in Pittsburg • Preached “Gospel of Wealth”~ he believed that people should make as much money as possible, but they should also give it away • 80% of his $ went to some form of education ($350 million)

18. Birthplace of Carnegie (Scotland)

19. Carnegie’s New York Mansion

20. Social Darwinism • Promoted by Herbert Spencer & William Graham Sumner • It said that society should interfere with competition as little as possible in business. • Opposed government protection of workers or government interference in business of any kind • It is basically Charles Darwin’s theory of “survival of the fittest” applied to society & business

21. Late 19th Century Businesses • Grew to include larger sums of money, more workers, & more products than ever before in America • Certain factors made big business different: • Larger pools of $ or capital • Wider geographic span • Often responsible for all the phases of production • Example= production of steel • Managers were needed • More complex systems of accounting were needed • Specialized departments were created

22. Late 19th Century Businesses (cont.) • In order to gain a competitive edge over rivals, businesses attempted to pay as little as possible for raw materials, labor, & shipping • This increased profits

23. New Market Structures • Monopoly~ a market that is dominated by a few large, profitable firms • Startup costs were high & only a few companies could compete • A business would buy its competitors out of business or drive them out by underselling • The sole remaining company could then raise its prices • End 1800s, government had passed laws against monopolies, but they were ineffective • Government leaders refused to attack powerful businesses

24. New Market Structures (cont.) • Cartel~ a loose association of businesses that make the same product • Members would agree to limit the supply of their product & thus keep prices high

25. New Market Structures (cont.) • Vertical Consolidation~ gaining control of all of the phases of production • Ex= Andrew Carnegie owned the mines, factories, and shipping & rail lines used in the production and transport of Carnegie Steel • Horizontal Consolidation~ Owning all or most of a particular business • Ex= John D. Rockefeller owned all of the oil refineries in the U.S. at one time. • Rockefeller also created the idea of a trust, or companies managed by a board of trustees, to get around gov. law

26. Sherman Antitrust Act 1890 • The government was hesitant to interfere with businesses because they contributed to the level of wealth the country enjoyed • 1890 the Sherman Antitrust Act was passed however which outlawed any combination of companies that restrained interstate commerce or trade • It was INEFFECTIVE & was actually later used against labor unions

27. Growing Work Force • 14 million people immigrated to U.S. 1860-1900 • Looking for work • Contract Labor Act (1864)~ encouraged immigration by allowing employers to pay the cost of passage for immigrants in return for their promise to work for a certain length of time, usually one year. • Late 1800s, 8-9 million people moved out of the country (rural) areas to the cities (urban areas) to find work • This was a major demographic shift in the late 1800s

28. Factory Work • By 1860, most states had a 10-hour workday law, but did not enforce it. • Most laborers worked over 12 hours a day • Many laborers were not paid by the hour, but by how much they produced (called production). • Division of Labor • Frederick Winslow Taylor in The Principles of Scientific Management devised a way to make factories more efficient by dividing tasks between workers. • No single worker made a product from start to finish

29. Factory Conditions • Poor ventilation & lighting • Noise was deafening • Frequent fires & accidents occurred • It was not unusual for a worker lose fingers, arms, or legs • Children used in the factories became stunted in mind & body • Not many laws against child labor at the time & they were mostly ignored • 1880s, children represented 5% of the labor force • 1 in 5 children ages 10 to 16 was employed • Entire families worked in the factories

30. The Great Strikes • Industrialization lower the price of consumer goods • HOWEVER, in the late 1800s, most factory workers still could not afford them • 1890, the richest 9% of America held nearly 75% of the national wealth • Socialists believed that wealth should be distributed equally among everyone • EARLY LABOR UNIONS: • Organized among workers of certain trades, such as construction • Demanded shorter days, higher wages, & better conditions

31. Knights of Labor • The only labor union of the time that welcomed everyone. • They realized that there was strength in numbers • Groups accepted: • Men & women • Skilled & unskilled workers • African Americans & others • Preferred not to use strikes to achieve results • Formed in 1869 • Membership reached 700,000 under Terrence Powderly in 1880s

32. 1887 Knights of Labor Parade

34. American Federation of Labor (AFL) • Formed by Samuel Gompers in 1886 • Craft union = organized only skilled workers • It only represented a small number of workers • They relied on economic pressure in the form of strikes & boycotts to achieve results

35. Samuel Gompers

36. Industrial Workers of the World AKA Wobblies • Formed in 1905 • Focused on unskilled workers • Included many Socialists among their leaders • Many of their strikes were violent

37. Wobblies Poster

39. Reactions of Employers • Forbid union meetings; fired union organizers • Forced new employees to sign “yellow dog” contracts in which the employees promised not to join a union • Refused to bargain collectively when strikes occurred • They insisted on bargaining with strikers individually • Broke the power of union strikes by refusing to recognize unions as the representatives of the workers

40. Major Labor Strikes • Haymarket Square (1886)~ national demonstration for an 8-hour workday • May 3, at the Chicago McCormick reaper factory, police break up a fight between strikers & scabs causing casualties among the workers • May 4, a protest rally is held in Chicago’s Haymarket Square • Someone threw a bomb into a police formation, killing a police officer. • A riot broke out, killing dozens on both sides

41. Major Labor Strikes (cont.) • Eight anarchists were tried, & four were hanged. It was never proven they were to blame • The Knights of Labor were blamed as well, although their guilt could not be proven either. • THIS EVENT MARKED THE DECLINE & DOWNFALL OF THE KNIGHTS OF LABOR

42. “You have endured the pangs of want and hunger; your children you have sacrificed to the factory-lords. In short, you have been miserable and obedient slaves all these years. Why? To satisfy the insatiable greed, to fill to coffers of your lazy thieving master!” ~August Spies, newspaper editor speech at Haymarket Square

43. Major Labor Strikes (cont.) • Homestead Strike (1892)~ • Henry Frick, who worked for Carnegie, called for wage cuts at Carnegie Steel. • The plant in Homestead, Pennsylvania called for a strike • Frick called in the Pinkertons & they end up in a shootout with protestors. Several people died. • Alexander Berkman, an anarchist, tries & fails to assassinate Frick. • Although Berkman was not connected with the strikers, the public associated his act with the growing violence of the labor union movement

44. Major Labor Strikes (cont.) • Pullman (1894)~ • Workers protested wage cuts & layoffs at the Pullman Railroad Car plant. Some get fired as a result. • The local union went on strike & also turned to the American Railway Union for help • Eugene V. Debs, the leader, calls for a strike & called for a boycott of Pullman railroad cars • By June 1894, 260,000 workers were on strike • The strike gets out of hand & interrupts western mail delivery • Railroad owners, citing the Sherman Antitrust Act, argue for government interference on their behalf

45. Major Labor Strikes (cont.) • President Grover Cleveland sends 2,500 federal troops to break up the strikes & ensure the court order is obeyed • The Pullman strike set a pattern. • Factory owners began to seek court orders against unions • The government refused to recognize unions as legally protected organizations • This prevented union gains for over 30 years

46. The End