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An Industrial Giant

An Industrial Giant. "I have been insane on the subject of moneymaking all my life." -- Cornelius Vanderbilt, quoted in the New York Daily Tribune , March 23, 1878. Read The Gospel of Wealth - Carnegie. How was the first transcontinental railroad constructed?.

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An Industrial Giant

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  1. An Industrial Giant "I have been insane on the subject of moneymaking all my life." -- Cornelius Vanderbilt, quoted in the New York Daily Tribune, March 23, 1878. Read The Gospel of Wealth - Carnegie

  2. How was the first transcontinental railroad constructed? May 10, 1869, Promontory Point, Utah

  3. Transcontinental Railroad Pacific Railway Act: Cash and Land grants – “checkerboard” Central Pacific – The Big Four Union Pacific – Congressman Oakes Ames & Credit Mobilier Crocker’s challenge through the High Sierras Cost $280,000 per mile, Paid $48,000

  4. Credit Mobilier Scandal: UNCLE SAM'S EYES OPEN AT LAST. (1873) Smiler — : “I am an honest man. If Nesbitt were here, he'd say so. I never took anything that wasn't given to me.”   Uncle Sam: “Jes' so! jes' so! You took all you could git; but you perjured yourself by saying you got nothing. Commit hari-kari.”   Schurz: “The old man has found them out; but he wouldn't believe us, when we told him, last Summer.”

  5. The WestBoomtowns and Bonanzas • Comstock Lode 1859 • Territories NV, AZ, ID, MT • Boomtowns • US Finances • Homesteads • Corporate farming

  6. RR : Competition Cut into Profits • Selective Rebates • Then drawbacks • Increased prices on short hauls • By 1879 65 smaller RRs bankrupt • 1880s – Larger RRs buy and expand • 1893 – Depression damages most RRs • Big Banks to the rescue: Morganizations

  7. Tweed Ring Graft • Boss William Tweed • 1877: Est. $25-200 million theft from NYC • $1-8 billion today • Captured due to Nast images

  8. Competition and Monopoly • Expansion went hand in hand with concentration. • Economies of scale • Expensive machinery • Deflation: economy outpaces money supply after 1873, when silver is demonetized.

  9. Love of Competition: Carnegie • Andrew Carnegie • J Edgar Thomson Steel Works 1875 • 1890 dominated 25% of all • 1901 sold everything to JP Morgan • About $500 million - half of which went to Carnie • Steel war abated • Morgan’s consolidation • US Steel • 67% of all steel production • “Gospel of Wealth”

  10. Eliminating Competition: Oil • Col. Edwin Drake 1859 – Titusville, PA • Standard Oil Co founded 1870 in Cleveland • John D Rockefeller • 1879 – controlled 70% of oil refining, later 90+% • Built by vertical combination • And horizontal combination • The Trust formed secretly 1882 • Died with $1 billion value • That’s about $190 billion value today • Carlos Slim: $73 bill • Bill Gates’ : $56 bill

  11. Hated Competition: JPMorgan • Inherited wealth and father’s bank • European connections • Physically imposing • Nose • Morganizations • Morganizations made Wall Street • Other corps. moved to NYC to be near finance • RRs, Steel…his influence was wide • Senator Beveridge called Morgan "the greatest constructive financier" in the history of mankind. • Not everybody agreed • Would help end Panic in 1894, prevent Panic in 1907

  12. Ambivalence toward the Gilded Age? • Who were the reformers and what did they want?

  13. Seeking to Regulate/Reform • Reformers: • Henry George – property tax = property value rise • Edward Bellamy – Looking Backward • Henry Demarast Lloyd – Wealth Against Commonwealth • The Marxists • Social Labor Party 1877 • Marx’s ideas published widely in US 1880s • Daniel De Leon – editor of The People

  14. “The Optical Delusion” Henry George

  15. A Utopian Novel • Julian West goes to sleep in 1887 and awakes in 2000, with the world a socialist paradise • "no man any more has any care for the morrow, either for himself or his children, for the nation guarantees the nurture, education, and comfortable maintenance of every citizen from the cradle to the grave" (59). • The transition had occurred without revolution.

  16. Them Western Farmers Git Their Gander Up • National Grange 1867 • Fought for state regulations • Transporting crops to market • Munn v. Illinois ’77 – grain elevator case • Wabash v. Illinois ’86 • “the long-and-short-haul evil” may be evil but this state law can’t regulate!, sayeth the court • Commerce clause says federals must do it

  17. A First: Interstate Commerce Commission • Congress : ICA creates ICC 1887 • Cleveland signs it • A prototype • Bans “personal discrimination” • Rebates, drawbacks,” long and short-haul evil” • But commission could not set rates or enforce much • Court cases drag on • Later acts in Progressive Era strengthen it • Elkins Act (1903) RR must publish standard rates

  18. Labor Union Movement • Post Civil War national craft unions grew • Objectives were local and trade specific • National Labor Union – ’66-72 • CW and RR spur this • Sought a more unified effort, but disorganized. • Knights of Labor 1869 – founded in Philadelphia • Initially a social club • Uriah Stephens: deal with underlying social realities • Terrence Powderly • Mix of disconnected political objectives • Social reform, 8 hour workday, blacks, women, unskilled • Initially disliked strikes, would embrace in 80s

  19. The Great Upheaval 1877 • A response to bad times of 1870s as RR strikes enflamed nation • Hayes sends troops to quell things • Spurs growth of Knights • Revolution?

  20. Occupy Haymarket Square Knights of Labor • Success against Jay Gould’s Missouri Pacific • Haymarket Strike 1886 – 80,000 workers • “8 hour” agitation • Chicago - McCormick Reaper Factory • Anarchists get involved • Demands for societal reform • Bomb thrown into ranks of policemen • 7 police die, 4 anarchists executed

  21. AFL: “Let’s Get Practical”advance the working class • Avoid politics and pipe dreams • Use strikes • Improve wages • 8 hour day • Employers’ liability • Mine safety laws • Solid growth: by 1901 over 1 million

  22. There was also a USS Samuel Gompers! Washington DC monument

  23. Samuel Gompers AFL ‘86-1924 • Gompers was born in London, England, on January 26, 1850. • Parents were poor immigrant Jews from Holland. • Became a cigar maker, a trade he brought with him to New York in 1863. • Most work was done in a thousand or more sweatshops, crowded apartments • Thousands of little children labored with parents • Elected him as president of Cigar Makers Union Local 144 • Reconstituted in 1886 as the American Federation of Labor. • His office was not much more than an 8x10 room in a shed. His son was the office boy. There was $160 in the treasury. It was "much work, little pay, and very little honor." • Four years later, the AFL represented 250,000 workers. • By 1892, the number had grown to over one million. • Concentrate on collective bargaining with employers, and on legislative issues directly affecting the job. • Broad social goals and political entanglements were left to others. • 1919 went to Paris, negotiated International Labor Organization (ILO) under the League of Nations “Samuel Gompers.” Illinois Labor History Society. 8 January 2006. http://www.kentlaw.edu/ilhs/gompers

  24. Analyze this…

  25. Owners saw labor as a commodity • Referred to law of supply and demand as excuse for cutting wages • There were many changes going on • Confusion and fear were real • What to do? • Fight radical change

  26. What was the First Federal Anti-Trust Law? Sherman Anti-Trust Act ,1890 • Was it effective? Why?/Why not? • “It is said that this bill will interfere with lawful trade, with the customary business of life. I deny it. It aims only at unlawful combinations. It does not in the least affect combinations in aid of production where there is free and fair competition. It is the right of every man to work, labor and produce in any lawful vocation and to transport his production on equal terms and conditions and under like circumstances.” • - John Sherman, Speech in Senate on his bill , 1890 • How was it undermined?

  27. United States v. EC Knight • 1895: The Supreme Court emasculated Sherman! • Sugar trust operating in FL • Manufacturing ≠ commerce, i.e. trade • Whooppee!; Late 1890s : a spate of mergers • Carnegie: “Nobody ever mentioned the Sherman Act to me.”

  28. Homestead Strike:Clash between Capital &Labor • 1892: Near Pittsburgh: Homestead a mill town • 7/300 Guards killed by strikers/Guards pushed out • Carnegie and Frick decided to stop union at all costs • Pinkerton Security Guards brought in • Lasted 5 months • Strikers damaged by an anarchist’s assassination attempt on Henry Frick • Major setback for AFL and 24,000 union of Amalgamated Association of Iron and Steel Workers

  29. "Homestead: Patrol Guard, Company "D," 15th Penn., Passing the Railroad Station to Disperse Groups of Strikers. Pennsylvania Gazette, 1892. 

  30. Pullman Factory Strike 1894 • Depression begun 1893 • Pullman reduced wages but keeps rents up in Pullman factory town near Chicago • American Railway Union – Eugene Debs • Union votes to not handle trains with Pullman cars • Mail cars in dispute • Cleveland steps in: injunction from court • Debs jailed when he refuses to end strike

  31. Debs: 5X candidate for pres…

  32. Jacob Riis

  33. Tenement Life

  34. What was the Hull House? Addams in 1885 Addams in 1934

  35. Intellectual Critics • Henry Demarast Lloyd • Wealth Against the Commonwealth, 1894 • Thorstein Veblen • Theory of the Leisure Class, 1899 • Conspicuous Consumption

  36. Social life • Immigration’s impact…? • How were streetcars changing cities? • Why was there new opportunities for leisure time?

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