Industry comes of age 1865 1900
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Industry comes of Age 1865-1900. “The wealthy class is becoming more wealthy; but the poorer class is becoming more dependent.” Henry George 1879 . Great men aren’t politicians Great men are lured to big business America is now an industrial giant in the world wide market.

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Industry comes of Age 1865-1900

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Industry comes of Age 1865-1900

“The wealthy class is becoming more wealthy; but the poorer class is becoming more dependent.” Henry George 1879


Great men aren’t politicians

Great men are lured to big business

America is now an industrial giant in the world wide market

Industry Comes of Age


RR’s explode after ACW

US government subsidized the first two transcontinental RR because they are costly and risky, but if successful they can promote national unity and economic growth

The Iron Colt Becomes an Iron Horse


Land grants

Give RR’s broad strips of lands, can pick and choose, sometimes dragged their feet angering potential settlers

People upset by “giveaways” but RR’s hook up government with preferential rates for postal service and military traffic

The Iron Colt Becomes an Iron Horse


ACW-south leaves the union

North (union) wants to secure gold rich California

Union Pacific RR starts from Omaha

Some corruption (Credit Mobilier)

Workers are mainly “paddies”

Many conflicts with Natives

Spanning the Continent with Rails


Workers lived in tent towns

Central Pacific RR starts in Cali. And moves east

Less corruption

More difficult terrain (Sierra Nevada)

Mainly Chinese laborers

Spanning the Continent with Rails


Both RR meet in Ogden Utah 1869 to lay the golden spike

Transcontinental RR is complete

West coast firmly connected to the Union

Better trade with Asia

Paves way for growth out west

Spanning the Continent with Rails


Four other Transcontinental lines were built. None received cash grants, but three received land grants

Many other RR went bankrupt and fleeced investors.

Towns competed with bribes to RR promoters to get the RR to come to their town. Many of these RR took the money and ran.

Binding the Country with RR ties


Robber Baron for RR = Cornelius Vanderbilt

CV- uses steel rail to replace old iron tracks

Standardization of RR tracks

Westinghouse air brake (1870)

Pullman Palace Cars

RR Consolidation and Mechanization


Crash at Crush 1896


Transcontinental RR caused many changes:

Stimulated American economy

Stimulated manufacturing and industrialization

Westward expansion of agriculture

Stimulated immigration

Bigger cities

Settlement of the unsettled areas

Time zones

Created Millionaires “lords of rail”

Changed Western ecology

Revolution by RR


Jay Gould

“Stock watering” – lie about RR assets and profitability, then sell stocks and bonds that exceed actual value

Bribery- judges and congressmen

Create oligopoly

Rebates- hook up large companies, screw small farmers

Wrongdoing in Railroading


Midwestern farmers (small) hate RR

But society embraces free enterprise

Depression in 1870’s groups farmers (Grange) to try to regulate RR

Wabash, St. Louis & Pacific RR Co. v. Illinois- results = individual states have no power to regulate interstate commerce

Government Bridles the Iron Horse


Interstate Commerce Act in 1887.

Prohibited rebates and pools

Required RR to publish their rates openly

Outlawed discrimination against shippers

outlawed charging more for short hauls than for long ones

Set up the Interstate Commerce Commission to administer and enforce

Government Bridles the Iron Horse


ICA

Was not a revolutionary victory; simply modest regulation

Helps end price wars

1st large scale attempt by Federal Government to regulate business in interest of society

Government Bridles the Iron Horse


1865-1895 saw a huge industrial boom.

Reasons:

Much more liquid capital

Natural resources started to be exploited

Massive immigration provided cheap unskilled labor

American inventions made businesses and factories more efficient.

Telegraph, mass production, cash register, stock ticker .

Telephone (1876) and expanded telegraph; communications revolution.

Edison and Electric Light

Miracles of Mechanization


Businesses, left alone, hate competition.

Ways to avoid competition

1. Vertical Integration-combining into one organization all phases of manufacturing from mining to marketing -Andrew Carnegie’s Steel operations.

2.Horizontal Integration-allying with competitors to monopolize a given market -Rockefeller and Standard Oil

3.Trusts-consolidate operations of all rivals Rockefeller

4. Interlocking Directorates- consolidate rival enterprises and to ensure future harmony by placing officers of his own banking syndicate on their various boards of directors J.P. Morgan

The Trust Titans Emerges


Steel became King after the Civil War.

Foundation for much of the industrial expansion

America biggest Steel producer by 1900.

Produced 1/3 of the world’s steel.

Bessemer process.

Supremacy of Steel


Andrew Carnegie-US Steel

King of American Steel “Napoleon of the Smoke Stacks”

Produced ¼ of nation’s steel

Carnegie And Other Sultans Of Steel


JP “Jupiter” Morgan bought US Steel for over 400 million dollars

Starts United States Steel Corporation (1st billion dollar Corp.)

Carnegie- worried about dying with too much wealth, spends rest of life in philanthropy

Carnegie And Other Sultans Of Steel


1859 – First Oil Well- in Penn. “Drake’s Folly” pours out “black gold”

Automobile industry drives oil industry

Rockefeller and Standard Oil (1870, trusts formed in 1882)

1887- controlled 95% of all oil refineries in US

Rockefeller and Standard Oil


“Reckafeller” big believer in commercial Darwinism.

Ruthless business man

Trusts = profits

Rockefeller and Standard Oil


Some business ldrs equate success to god ( divine right of kings)

Others – Social Darwinists (Herbert Spencer and William Graham Sumner) – are that ppl won their stations in life by competing on basis of natural talent.

Later applied to countries

Social Darwinists


Russell Conwell- “Acres of Diamonds” – “There is not a poor person in the US who was not made poor by his own shortcomings”

Social Darwinists


Carnegie “Gospel of Wealth”

Inequality is inevitable and good.

Wealthy should act as “trustees” for their “poorer brethren.”

Wealthy had to prove they deserved their wealth.

Give back to the community as a whole, not to individuals

“Gospel of Wealth”


Sherman Anti Trust Act of 1890.

Forbids combinations in restraint of trade.

Did not prove very effective because went after bigness and not badness.

Not very effective because penalties weak and loopholes

Biggest effect was unintended--Was used against unions.

Importance of the law was not its immediate effect but the shift in thinking that it represented.

Government Tackles the Trust Evil


Smaller production

Most area is sharecropping

James Duke - American Tobacco Company

The South In The Age Of Industry


“New South”

Henry Grady editor of Atlanta Constitution

Become “Georgia Yankees”

Major barrier to South development- RR regional rates- RR give better rates to manufactured goods moving from the North

The South In The Age Of Industry


1880’s Bring the mills to the cotton

Why

Cheap labor

Less unions

Tax benefits

Most blacks excluded from mill jobs

Entire poor white families worked “hillbillies and lintheads”

Paid half as much as northern workers

Often times paid in credit

The South In The Age Of Industry


Standard of living rose sharply

Workers enjoyed many more physical comforts

Urban centers mushroomed

Jeffersonian Ideal of nation of small farmers died

Concept of time changed.

Many more women in the workforce

Delayed marriages and smaller families

New class system

Workers becoming more dependent and more vulnerable.

The Impact Of Industrialization


New technology means less skilled workers

Individual workers were powerless to bargain

Companies- use lawyers, buy local press, pressure politicians, scabs, or hire thugs

Court injunctions- make strikes illegal

Companies can request federal troops

Lockouts

Yellow dog contracts

Black lists

Company “towns”

In Unions There is Strength


Unions strengthened after the Civil War.

National Labor Union organized in 1866 and did well,

600,000 members, both skilled and unskilled

Did not recruit women or blacks (there was a Colored National Labor Union)

Goals: arbitration of industrial disputes, 8-hour day

damaged by the depression in the 1870s

Labor Limps Along


Knights of Labor (1881 becomes public) took over where the National Labor Union had left off.

Sought to include all labor in one big Union.

They stayed out of politics, but campaigned hard for economic and social reform.

Their biggest issue was the 8-hour work day.

Won that fight from a number of industries and their ranks swelled.

“An injury to one is the concern of all”

Labor Limps Along

Terence V. Powderly


1886- ½ of May day strikes fail

Haymarket Square Incident (Chicago 1886)

Why does the KofL die?

1. KofL now wrongfully linked with anarchism

2. Fusion of skilled and unskilled workers

Unhorsing The Knights Of Labor


Brain child of Samuel Gompers

Confederation of self-governing independent unions for skilled laborers.

Advocated closed shop- all union labor

American Federation of Labor 1886


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