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 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
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
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
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
Workers lived in tent towns
Central Pacific RR starts in Cali. And moves east
More difficult terrain (Sierra Nevada)
Mainly Chinese laborers
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
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.
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
Transcontinental RR caused many changes:
Stimulated American economy
Stimulated manufacturing and industrialization
Westward expansion of agriculture
Settlement of the unsettled areas
Created Millionaires “lords of rail”
Changed Western ecology
“Stock watering” – lie about RR assets and profitability, then sell stocks and bonds that exceed actual value
Bribery- judges and congressmen
Rebates- hook up large companies, screw small farmers
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
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
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
1865-1895 saw a huge industrial boom.
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
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
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.
Andrew Carnegie-US Steel
King of American Steel “Napoleon of the Smoke Stacks”
Produced ¼ of nation’s 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
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
“Reckafeller” big believer in commercial Darwinism.
Ruthless business man
Trusts = profits
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
Russell Conwell- “Acres of Diamonds” – “There is not a poor person in the US who was not made poor by his own shortcomings”
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
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.
Most area is sharecropping
James Duke - American Tobacco Company
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
1880’s Bring the mills to the cotton
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
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.
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
Yellow dog contracts
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
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”
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
Brain child of Samuel Gompers
Confederation of self-governing independent unions for skilled laborers.
Advocated closed shop- all union labor