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Introduction • As the 19th century drew to a close, America’s Industrial Revolution slipped into high gear, and talented men ached for profits not the presidency. As late as 1870, agriculture was the nation’s biggest business. By 1900 its share of the economy was half that. • By 1900 it annually delivered more than 600 million worth of manufactured goods to the world’s marketplace. The United States was about to stand up before the world as an industrial rollercoaster, and the lives of millions of working Americans would be transformed in the process.
The Iron Colt Becomes an Iron Horse • When Lincoln was shot in 1865, there were only 35,000 miles of steam railways in the United States, mostly in the east. By 1900 it spurted up to 192,556 miles. The construction of railway systems promised greater national unity and economic growth. • Frontier villages touched by the iron rail became flourishing cities, those that were by passed often withered away and became ghost towns. Little wonder that communities fought one another in playing host to the railroads.
Spanning the Continent with Rails • The union pacific railroad was commissioned by Congress to move westward from Omaha, Nebraska. For each company they were granted 20 square miles of land, alternating in 640 acre sections on either side of the track. For each mile the builders received a federal loan, ranging from 16,000 to 48,000 mountainous countries. One company laid 10 miles of track in one day. • Hostile Indians attacked efforts to protect their land, and the laborers would drop their picks and get their rifles. Tons of people lost their lives as the rails stretched westward. • Central Pacific Railroad pushed through the Sierra Nevada’s four men called the Big Four were the financial backers of the enterprise. The Big Four cleverly operated through two construction companies and they walked away with tens of millions in profits, they kept their hands clean by not involving themselves bribing congressmen.
Spanning the Continent with Rails • The Central Pacific was granted the same things as the Union Pacific. Some ten thousand Chinese laborers, sweating from dawn to dusk. The Sierra Nevada’s were a formidable barrier and the Big Four were losing money as they were only chipping inches every day. • Ogden Utah in 1869 was where the two lines met and the completion of the transcontinental line was met with a golden spike. Americans compared this achievement with the Declaration of Independence and the emancipation of slaves. • Finally, the railroad, more than any other single factor, was the maker of millionaires. A raw new aristocracy became the playthings of Wall Street, and major wealth was amassed by stock and speculators and railroad.
Government Bridles the Iron Horse • Farmers especially in the Midwest began to wonder if the nation had not escaped from the slavery power only to fall into money power. The American people usually quick to respond to political injustice were slow to combat economic injustice. • The depression of the 1870’s goaded the farmers into protesting against being railroaded into bankruptcy. Many legislatures tried to regulate the railroad monopoly. State efforts came to a halt in 1886. • The Supreme Court case Wabash St. Louis and Pacific Railroad Company vs. Illinois that states had no power to regulate interstate commerce. In order to keep the railroad company in check the federal government will have to do the job.
Government Bridles the Iron Horse • President Cleveland did not look kindly on effective regulation. But Congress ignored and passed the Interstate Commerce Act in 1887. This act prohibited rebates and pools and required the railroads to publish their rates openly. This act also forbade unfair discrimination against shippers and outlawed charging more for a short haul for a long one over the same line. • This new legislation did do was to provide competing businesses interests could resolve their conflict in peaceable ways. The ICC tended to stabilize not revolutionized the existing business system.
Miracles of Mechanization • Innovations in transportation fueled growth by bringing the nation’s natural resources particularly coal, oil, and iron to the factory door. The sheer size of the American market encouraged innovators to invent mass production methods. Industrialist continued to refine the American System of using special machinery to make interchangeable parts. Using this system, Henry Ford fully developed his Model T. • Between 1860 and 1890 some 440,000 patents were issued. One of the most ingenious inventions was the telephone by Alexander Graham Bell. The social impact of the telephone further expanded when it lured women to the switchboards. • The best inventor was Thomas Alva Edison who invented the light bulb and phonograph. With the invention of the light bulb people went from nine hours of sleep to seven hours.
The Trust Titan Emerges • Tycoons like Andrew Carnegie, the steel king: John D. Rockefeller, the oil baron: and J.P Morgan, the banker, exercised ways in which to be competitive. • Carnegie pioneered vertical integration which they combined into one organization all phases of manufacturing from mining to marketing. His goal was to improve efficient by making supplies more reliable, controlling and eliminate the middleman’s fees. • Rockefeller used Horizontal Integration which simply meant allying with competitors to monopolize a given market. Rockefeller was a master of this technique. He perfected a device for controlling rivals which was called the trust. • Stockholders in various smaller oil companies assigned their stock to the board of directors of his Standard Oil Company, formed in 1870. Standard Oil soon cornered the entire world petroleum market. Many other competitors were forced to the wall.
The Supremacy of Steel • The United State within 20 years had outdistanced all foreign competitors and was pouring out more than one-third of the world’s supply of steel. By 1900 America was producing as much as Britain and Germany combined. • What brought about this transformation was the Bessemer process. It was discovered that cold air blown on red hot iron caused the metal to become white hot by igniting the carbon and it eliminated the impurities.
Carnegie and Other Sultans of Steel • Andrew Carnegie was an undersized charming Scotsman. At 13 he was brought to America by his parents in 1848 and got a job as a bobbin boy at 1.20 a week. He forged ahead by working hard, doing extra chores, and influencing people. • Carnegie entered the steel business in Pittsburg. His remarkable organization was a partnership that involved at its maximum about forty millionaires. In the 1900’s he was producing about one-fourth of the nation’s steel, and taking home 40 million a year. • JP Morgan came into the picture and made a reputation for himself and his Wall Street. He financed the railroads, insurance companies, and banks. He did not believe in money power was dangerous, except when in dangerous hands, and he regarded his own hands not dangerous. • Morgan and Carnegie by the 1900’s, Carnegie was eager to sell his earnings. Morgan agreed to buy out Carnegie for 400 million. Fearing that he would die disgracefully he spent the remaining of his wealth to fund public libraries, pensions for professors, which disposed about 350 million. • Morgan then took that money and made the United States Steel Corporation which capitalized at 1.4 billion, and it was America’s first billion dollar corporation.
Rockefeller Grows an American Beauty Rose • The sudden emergence of the oil industry was one of the most striking developments of the years during and after the Civil War. • John D Rockefeller was lanky, shrewd, and ambitious, he never drank, smoked nor swore, and he came to dominate the oil industry. He was born to a family of precarious income; he became a successful businessman at age 19. He organized the Standard Oil Company and formed a great trust in 1882. • A kind of primitive savagery prevailed in the jungle world of big business, where only the fittest survived. Or so Rockefeller believed. His son later explained that the giant American Beauty rose could be produced only by sacrificing the early buds that grew around it. His father pinched of the small buds with complete ruthlessness. • He employed spies and extorting secret rebates from the railroads. He thought that he was simply obeying the laws of nature. Rockefeller’s oil did not turn out a superior product at a cheap price, but on a large scale he achieved great methods of production and distribution.
The Gospel of Wealth • Monarchs invoked the divine right of kings and America’s industrial powers took a somewhat similar stance. Rockefeller and Carnegie both agreed that the wealthy was entrusted with society’s riches, and had to prove themselves morally responsible according to a Gospel of Wealth. • Social Darwinism argued that individuals won their stations in life by competing on the basis of their natural talents. The wealthy and powerful had simply demonstrated greater abilities than the poor. • Self-justification by the wealthy involved contempt for the poor, and many of the rich, and newly rich had pulled themselves up by their own bootstraps. Hence they believed that those who stayed poor must be lazy and lacking in enterprise.
Government Tackles the Trust Evil • Long last the masses of the people began to mobilize against the monopolies. They first tried to control to trusts through state legislation, as they had earlier attempted to curb the railroads. Then it went to Congress and they past the Sherman Anti-Trust Act. This forbade combinations in restraint of trade, without any distinction between good trusts and bad trusts. Bigness, not badness was the sin. • This act contains loopholes, but this act was used to curb labor unions and labor combinations that were deemed to be restraining trade. The act as it turned out was neither vigorous nor successful. • Not until 1914, was this act put into full use. However, a new principle was put into the law books which was the Interstate Commerce Act of 1887, were private greed should henceforth be helping the public need.
The Impact of the New Industrial Revolution on America • Economic miracles during the decades after the Civil War increased wealth of the Republic. The standard of living rose, as well as Americans enjoyed more physical comforts than their counterparts in any other industrial nation. • Women were most affected by the new industrial age than women. They were propelled into the industry by recent inventions like the telephone switchboards, and the typewriter. Most of these women toiled neither for independence nor for glamor, but out of economic necessity. • They faced the same long hours and dangerous working conditions, and earned less than their brothers or husbands.
Labor Limps Along • Labor unions were given a strong boost by the Civil War. This conflict put more of an emphasis on labor; and the mounting cost of living, which provided an urgent incentive to unionization. By 1872, there were several hundred thousand organized and 32 national unions. • A new organization the Knights of Labor began in a secret society with private rituals and passwords and a special handshake. The campaigned for economic and social reform, including producers cooperatives and codes for safety and health.
Unhorsing the Knights of Labor • Despite success, the Knights were riding for a fall. They became involved in strikes in 1886, about half of which failed. One of the focal points and home to 80 thousand Knights was the city of Chicago. • Tension rose and bloody in the Haymarket Square. Labor disorders had broken out, and on May 4, 1886, the Chicago police advanced on meeting called to protest alleged brutalities by authorities. Suddenly a bomb was thrown that killed or injured several dozen people, including police. • The Haymarket Square bomb helped blow the props from under the Knights of Labor. They were associated in the public mind, with those that blew up the bomb. By the 1890’s they had melted away to 100,000 members, and these gradually fused with other protest groups of that decade.
The AF of L to the Fore • The American Federation of Labor, was established in 1886, and led by Samuel Gompers. He was elected president of the American Federation every year except one from 1886 to 1924. This federation consisted of no individual laborer could join. • The AF of L established itself on solid but narrow foundations. They attempted to speak for all workers; it fell far short of being representative of them. This federation was hard pressed but they were nonpolitical. • Labor disorders continued, peppering the years from 1881 to 1990 with a total of 23,000 strikes. The strikers lost about half of their strikes and won or compromised the remainder. Perhaps the weakness of organized labor was that it still embraced only a small minority of all working people, about 3 percent in 1990. • The attitudes of labor had begun to change by the 1900. The public was beginning to concede the right of workers to organize, to bargain collectively, and to strike. The age of big business had begun; the age of big labor was still some distance over the horizon.
