Chapter 17: Industrial Supremacy

1. Chapter 17: Industrial Supremacy Doffers at the Bibb Mill No. 1, Macon, Georgia, 1909. Photograph by Lewis Hine. When bobbins of thread became full, doffers would replace them with empty ones.

2. Chapter Seventeen: Industrial Supremacy • Rapid Industrialization between 1870-1900 • Industrial Manufacturing: It had begun in the U.S. as early as the 1790s, but the last three decades of the 19th century saw explosive industrial growth. • Growth of Wealth Inequality: The new industrial economy produced enormous wealth, but distributed it more unequally than the older American economy. • Winners and Losers: Owners and big investors in industrial enterprises, professionals who served their needs (lawyers, insurance brokers, bankers, etc.), and a growing middle class experienced prosperity; industrial workers, and farmers generally did not.

3. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth: • Industrial Technologies • Key Inventions • Cyrus Field’s transatlantic • telegraph cable (1866) • Christopher L. Sholes’s typewriter (1868) • Alexander Graham Bell’s telephone (1876): 1.35 million phones by 1900; 13.3 million by 1920. • James Ritty’s cash register (1879) • William S. Burrough’s adding machine (1891) • Guglielmo Marconi’s radio telegraph (1895)

4. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Industrial Technologies: Impact of Electric Power • Generators: English scientist Michael Faraday invents the first device that converts rotary mechanical power into electricity (1831), starting the race to make electricity a commercially viable source of power. • Thomas A. Edison (1847-1931): Perfects the incandescent light bulb (1879); opens the Pearl Street generating station in Lower Manhattan (1882) to provide electricity to 59 customers; switch from direct current to alternating current improves transmission; large power plants begin providing enough current for public lighting, street railways, skyscraper elevators, factories, etc. • High-Efficiency Steam Engines: Improvements in steam engines not only made large generators possible, but also high-speed ships that by the 1890s could cross the Atlantic in less than six days.

5. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Industrial Technologies: The Technology and Steel Production • Key Industry: The new American economy relied on railroads and urban construction, which required iron and steel. The iron and steel industry grew slowly until the 1870s, and then took off. • Bessemer Process: In the 1850s, the English engineer Henry Bessemer and American William Kelly separately arrived at the same process for converting iron into steel by blowing air through molten iron, burning off the impurities. • New Blast Furnaces: Industrialist Abram S. Hewitt imported the European “open hearth” steel-making method in the late 1860s that could produce 500 tons a week, a big leap in productivity. (Hewitt would later become mayor of New York City and one of the the major forces behind the construction of the NYC subway.)

6. Chapter Seventeen: Industrial Supremacy Nineteenth-century schematic of a Bessemer converter Open-hearth furnace in operation ca. 1900

7. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Industrial Technologies: The Technology of Iron and Steel Production • New Transportation Systems: Steel-making expanded into the Great Lakes regions because of the development of large steam freighters that could carry ore. Steel and the railroads became intertwined; Andrew Carnegie started working for the Pennsylvania Railroad, but then moved to steel production initially financed by the railroad. • Rise of the Petroleum Industry: New York businessman George Bissell decided to market refined “rock oil” as an illuminant for lamps and lubricant for machines; his company drilled the first oil well in 1859 in Titusville, Pennsylvania.

8. Chapter Seventeen: Industrial Supremacy The Titusville, PA, oil well (1859)

9. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • The Automobile • Automobile Invented: German engineer • Gottlieb Daimler builds the first auto that • contains an internal combustion engine and is not affixed to a horse carriage in 1889. Used gasoline, a byproduct of oil refinement, as fuel. • Duryea Brothers: Charles and Frank Duryea of Springfield, Mass., built the first American-made gas-powered car, which resembled a “horseless buggy,” and began commercial production. • Henry Ford (1863-1947): Produced the “Ford Quadricycle,” a gas-powered auto, while working for Thomas Edison in 1896. In 1901, he founded the Henry Ford Company, which was reincorporated as the Ford Motorcar Company in Detroit in 1903. He introduced the Ford “Model T” in 1908, which sold for $825. He was able to lower production costs by introducing assembly-line techniques in Dec. 1913. Henry Ford in 1919

10. Chapter Seventeen: Industrial Supremacy A Ford Model T in 1912

11. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • The Airplane • Wright Brothers: Orville (1871-1948) and Wilbur (1867-1912), who had a bicycle shop in Dayton, Ohio, began experimenting with a glider in 1899-1900, which led to the first heavier-than-air, powered, human-controlled flight for 12 seconds over the beach dunes in Kitty Hawk, North Carolina, on Dec. 17, 1903. • Slow Development of Aeronautics in the U.S.: European governments, like in France, were faster to sponsor research than in U.S. federal government. It did create a National Advisory Committee on Aeronautics in 1915, and development was accelerated by World Way One. The first U.S. airmail service began in 1918.

12. Chapter Seventeen: Industrial Supremacy First Flight of the Wright Flyer, Dec. 17, 1903

13. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Research and Development • Menlo Park: Thomas Edison founded the first industrial research laboratory at Menlo Park, New Jersey, in 1876, and there developed products like the incandescent light bulb, early phonographic and film technologies, etc. • General Electric: In 1900, this corporation based in Schenectady, New York, created one of the first corporate research labs, at a time when government support for scientific research was dwindling.

14. Chapter Seventeen: Industrial Supremacy Recreation of Edison’s Menlo Park laboratory at the Henry Ford Museum in Dearborn, Michigan.

15. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • The Science of Production • “Taylorism”: Frederick Winslow Taylor • (1856-1915), an American mechanical engineer, developed the principles of “scientific management” and served as one of the first management consultants. He advocated developing work tasks into smaller, simpler, tasks that could be standardized, done quickly and without much special skill. • Assembly Line: The moving assembly line was introduced into Ford’s automobile plants in late 1913; it sped up productivity while making workers interchangeable. Other manufacturers quickly imitated this innovation, as well as the use of electricity for lighting, ventilation, etc. The Model T dropped from $950 in 1914 to $290 in 1929, and enabled the raising of wages and shortening of hours.

16. Chapter Seventeen: Industrial Supremacy Model T Assembly Line

17. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Railroad Expansion and the Corporation • Significance of Railroads: Gave industrialists improved access to distant markets as well as raw materials, developed new and more complex forms of corporate organization, and stimulated the American economy through money spent on construction and equipment. Total trackage expanded from 30,000 miles in 1860 to 193,000 miles in 1900. • Importance of Government Subsidies: Federal, state, and local government subsidies were critical for railroad expansion. • The Rise of the Tycoon: Mergers of railroads under tycoons like Cornelius Vanderbilt (1794-1877) of the New York Central, James J. Hill (1838-1916) of the Great Northern, and Collis P. Huntington (1821-1900) of the Central Pacific generated massive wealth.

18. Chapter Seventeen: Industrial Supremacy Railroads, 1870-1890

19. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Railroad Expansion and the Corporation • “Limited Liability” and Public Sales of Stock: Corporations existed in the early nineteenth century, but had to perform a public good to obtain a charter. State laws in the 1840s and 1850s loosened this idea and allowed corporations to sell stock directly to the public, and offer “limited liability” to investors (legal liability for only the amount invested). Public sales of stock greatly increased the amount of capital and overall scale of enterprises. • U.S. Steel Created: In 1901, Andrew Carnegie (1839-1919) sold his massive steel holdings to banker J. P. Morgan (1837-1913) for $450 million, who merged them with other steel companies to create the U.S. Steel Corporation, a gigantic $14 billion corporation controlling 2/3rds of the country’s steel production.

20. Chapter Seventeen: Industrial Supremacy Andrew Carnegie J.P. Morgan

21. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Railroad Expansion and the Corporation • National Corporations: Isaac M. Singer (1811-1875) created one of the first modern manufacturing corporations around his invention, the sewing machine. With the advent of the refrigerated boxcar, Gustavus Swift (1839-1903) was able to build a massive meatpacking empire centered on Chicago. • “Horizontal Integration” and “Vertical Integration”: The former means the control of companies that do the same thing; the latter means the control of companies that do different aspects of a process; Carnegie Steel, for instance, integrated vertically by not only owning steel mills, but also the ore mines and the railroad and steamship lines that carried the ore.

22. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Railroad Expansion and the Corporation • Standard Oil: John D. Rockefeller (1839-1937) founded the Standard Oil Company with several partners in 1870, in Cleveland, one of the nation’s main refining centers. Over the financially tumultuous 1870s, the company bought up 22 of its 26 Cleveland competitors, and by 1880, Standard refined 90 percent of the nation’s oil. Then it began to expand vertically by buying its own pipelines, tank cars, barrel factories, and delivery networks. It was the largest corporation in the world by this time.

23. Chapter Seventeen: Industrial Supremacy 1904 Political Cartoon depicting Standard Oil as an octopus with tentacles in all facets of business and government

24. Chapter Seventeen: Industrial Supremacy • Sources of Industrial Growth • Railroad Expansion and the Corporation • “Cuttthroat Competition”: Gilded Age business tycoons, despite public endorsement of free market competition, sought to eliminate it because they saw it as destructive. To do so, they created cooperative arrangements like railroad pools—informal agreements to keep rates stable—and later, “trusts,” in which competitors would come together in “trusts” to share profits. Standard Oil became a trust. These new corporate forms inspired the Sherman Anti-Trust Act of 1890. • “Holding Company”: An 1889 incorporation law in New Jersey allowed corporation to buy up competitors. Standard Oil relocated there and began buying up the stock of trust members, becoming a “holding company,” establishing direct control of the trust’s companies. By 1900, one percent of corporations in the U.S. controlled a third of all manufacturing.

25. Chapter Seventeen: Industrial Supremacy • Capitalism and Its Critics • Survival of the Fittest • Ideology of Individualism: New economic forms were not taking away opportunities for advancement, but giving everyone a chance to become wealthy. • Social Darwinism: English philosopher Herbert Spencer (1820-1903) took Darwin’s ideas on evolution of species and applied it to human society, coining the phrase “survival of the fittest” in the sense of market competition. • Corporate Wealth Legitimized: Spencer’s ideas about competition were used by industrialists to legitimize their wealth, but in fact most were trying to avoid competition.

26. Chapter Seventeen: Industrial Supremacy • Capitalism and Its Critics: Gilded Age Literature • “Gospel of Wealth”: Andrew Carnegie first publishes a version of this essay in 1889, emphasizing the social responsibility of wealthy self-made men to ensure that their money is distributed through philanthropy in socially useful ways, and not frivolously through heirs or organizations ill-equipped to handle these great sums. • Horatio Alger, Jr. (1832-1899): Wrote a series of wildly popular juvenile novels that were formulaic “rags-to-riches” stories in which an impoverished boy “made good” through a combination of hard work, but also a great stroke of luck. These books were nominally critical of the new economy, but later came to represent only “by-your-own-bootstraps” success. • Louisa May Alcott (1832-1888): Publishes Little Women in 1869; features an independent and ambitious young heroine, Jo March, who challenges the passive, sentimental female characters of most novels of the era.

27. Chapter Seventeen: Industrial Supremacy • “This, then, is held to be the duty of the man of Wealth: First, to set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial result for the community-the man of wealth thus becoming the sole agent and trustee for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer--doing for them better than they would or could do for themselves.” • --From The Gospel of Wealth

28. Chapter Seventeen: Industrial Supremacy Horatio Alger Jr.

29. Chapter Seventeen: Industrial Supremacy • Capitalism and Its Critics: Alternative Visions • Socialist Labor Party: Founded in the 1870s, the party became obtained a modest following under the leadership of Daniel De Leon (1852-1914), an intellectual who had emigrated from the Caribbean. It sought to gain control of the state through elections, but never polled more than 82,000 votes. A faction broke off in 1899, ultimately joining the more influential American Socialist Party. • Henry George’s “Single Tax”: Henry George (1839-1897), a California writer and activist, published the bestseller Poverty and Progress (1879) that proposed a land tax to solve social problems. He believed increased value of land was produced by society at large, and not the owner, so a tax could be used to redistribute that wealth. • Edward Bellamy’s Looking Backward (1888): This science-fiction bestseller envisioned a future in which all destructive competition and class conflict had been eliminated through the evolution of a single great trust controlled by the government by the year 2000.

30. Chapter Seventeen: Industrial Supremacy • Capitalism and Its Critics • The Problems of Monopoly • Economic Concentration Challenged: Critics argued that monopolies—like railroads—could charge whatever they want due to lack of competition, fostering economic instability. • Economic Instability: Beginning with the Panic of 1873, the American economy passed into a cycle of severe recessions every five or six years, leading people to believe the new business consolidation was at least partly to blame. Bank panics happened in 1873, 1884, 1890, and 1893.

31. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • The Immigrant Workforce • Rapidly Expanding Working Class: Domestic migration into industrial areas from rural ones, as well as foreign migration: 25 million arrivals between 1865 and 1915, mostly from Europe but also from Asia, Mexico, Canada, the Caribbean, etc. • “New” Immigration: In the 1860s and 1870s, most Europeans came from Northern Europe, but after 1880 the flow came increasingly from South and Eastern Europe (Italians, Jews, Poles, Russians, Greeks, Hungarians, etc.).

32. Chapter Seventeen: Industrial Supremacy Immigrants landing at the Castle Garden Emigrant Depot in Battery Park in 1880.

33. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • The Immigrant Workforce • Labor Contract Law: Industrial recruiters could pay the passage of workers and deduct the cost from later wages, recreating a form of indentured servitude that had long since disappeared. This practice had been set up during the Civil War, but was outlawed in 1885. It continued illegally under the Italian padrone system, where an informal “boss” would recruit and the control labor of immigrants. • Growing Ethnic Tensions: Newcomers like Poles, Greeks, and French Canadians accepted lower wages than Irish and English workers in New England textile factories. Italians, Slavs, and Poles became prominent in mining industries. Chinese and Mexicans competed against other migrant groups for low-wage work in the Far West.

34. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • Wages and Working Conditions • Wages: The average American laborer made between $400 and $500 a year, below the $600 that was considered minimally comfortable. • Harsh Work Conditions: Many newcomers from agricultural areas were not used to the harsh time discipline and repetitiveness of factory work. Most worked ten hour days six days a week. • Women Workers: Since women and children could be paid lower wages, hiring them became common practice. By 1900, 20 percent of the manufacturing workforce were women, with many concentrated in the textile industries. • Child Labor: During this period, roughly 1.7 million children work in factories and in agricultural work. By the 1890s, thirty-eight states had passed child labor regulations, but they were weak and not well enforced. Furthermore, they did not apply to agricultural work.

35. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • Emerging Unionization • “Molly Maguires”: Secret labor organization in Pennsylvania’s northeastern anthracite coal region of largely Irish workers who used violence and intimidation in their struggle for better wages and conditions, but often after being instigated by provocateurs. Mine operators, who received death threats called “coffin notices,” used private detectives to arrest and prosecute them. Several “Molly” leaders were tried and executed in 1876-1877, ending the movement. • The Great Railroad Strike of 1877: In July, Eastern railroads announced a 10 percent wage cut due to the depression, which triggered a massive strike that brought the nation’s transportation network to its knees. Workers blocked rails, destroyed equipment, and rioted. State militias and even federal troops were called out to impose order. Troops often opened fire, and roughly 100 people were dead by the time the strike collapsed after forty-five days.

36. Chapter Seventeen: Industrial Supremacy Molly Maguire “Coffin Notice”

37. Chapter Seventeen: Industrial Supremacy Police beating back railroad strikers in Philadelphia in 1877

38. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • The Knights of Labor • First National Labor Organization: Founded in 1869, it was the first attempt to create a genuinely national labor organization, and was opened to anyone who “toiled”—almost any worker except bankers, lawyers, liquor dealers, and gamblers—and even included African Americans and women in their efforts. The Knights fought for an eight-hour day and and end to child labor, and ultimately wanted cooperative worker ownership of businesses. • Terence V. Powderly (1849-1924): This son of Irish immigrants led the the Knights from 1879 to 1893 and transformed it from a secret organization to one that was out in the open. He embraced a “producerist” ideology that included small business owners rather than socialism. He was a nationally prominent spokesperson, although the Knights were not very effective due to disorganization. Seal of the Knights of Labor

39. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • The American Federation of Labor (AFL) • Rival to the Knights: In 1881, the Federation of Organized Trade and Labor Unions was formed, and was renamed the American Federation of Labor in 1886. It rejected the Knights’ idea of one big union for everyone, and embraced the idea of many semi-autonomous unions under a larger umbrella organization. • Samuel Gompers (1850-1924): This English-born cigar maker became leader of the AFL from 1886 to 1924 (with onsmall break). He focused on immediate concerns: better wages and working conditions, and a shorter work day. The AFL organized a national “general strike” for May 1, 1886 to demand an eight-hour day.

40. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • Haymarket Bombing: In Chicago, a hotbed of labor agitation, a strike at the McCormick Harvester Company was already in progress when the May Day strike of 1886 started. On May 4, a protest was organized since police had been harassing strikers, having killed four protesters the previous day. As police ordered the crowd to disperse, someone threw a bomb, killing seven policemen and injuring 67 others, leading police to shoot into the crowd, killing four more. • Haymarket Trial: Eight anarchists—who did not throw the bomb—were put on trial for having incited the bombing. Seven were sentenced to death, four were hanged, one committed suicide in jail, and two had their sentences commuted to life in prison. • Labor Discredited: After the Haymarket Affair, many middle-class Americans had little sympathy for the labor movement, associating it with “anarchism.”

41. Chapter Seventeen: Industrial Supremacy Mainstream press depiction of the Haymarket bombing

42. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • The Homestead Strike • Amalgamated Association of Iron and Steel Workers: This was one of the most powerful trade unions in the country, but new technologies had replaced many specialized skills, so by the mid-1880s Carnegie Steel got rid of the union in all but the oldest of the company’s three major plants: Homestead, near Pittsburgh. • Henry Clay Frick (1849-1919): Carnegie’s chief lieutenant decided to get rid of the union at Homestead, so he began lowering wages in 1890, to which the union acquiesced. In 1892, he did so without even consulting with the union.

43. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • The Homestead Strike • Strike: The union struck on June 30, setting up twenty-four hour pickets and even a patrol boat on the Monongahela River. On July 6, Frick sent in 300 strikebreakers from the Pinkerton Agency armed with rifles by boat. In the ensuing battle, three Pinkertons and ten strikers were killed, but the Pinkertons were forced to surrender and driven out. • Government Intervention: At the Carnegie Company’s request on July 7, the Pennsylvania governor, Robert Pattison, sent almost all the state miltia, on July 12. That morning, 4,000 troops surrounded the plant and removed the picketers, and the company quickly brought in “scab” workers to replace the union workers. The town was placed under martial law, and popular opinion was behind the union, yet this sentiment was lost when an anarchist shot Frick in his office on July 23 (Frick survived the attack).

44. Chapter Seventeen: Industrial Supremacy Engraving depicting the Battle at Homestead, July 6, 1892

45. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • The Pullman Strike • Pullman Car Company: This firm built sleeping and parlor railroad cars, and was lucrative but ran into trouble with the depression of the 1890s. It had created the town of Pullman for its workers, renting them small but orderly houses. • American Railway Union: In the winter of 1893-94, the Pullman Company slashed wages by 25 percent, but refused to lower rents. Workers went on strike, and convinced the leader of the American Railway Union, Eugene V. Debs, to not allow his members handle Pullman cars, which shut down the nation’s rail system from Chicago to the West Coast. The Illinois governor refused to send out the state militia to break up the strike, so the company convinced President Grover Cleveland to send federal troops instead.

46. Chapter Seventeen: Industrial Supremacy • The Ordeal of the Worker • Sources of Labor Weakness • Few Gains for Labor: A few minor gains were made, like some compensation for on-the-job injuries, but for the most part were not enforced. • Sources of Labor Weakness: It was hard to unite both skilled and unskilled workers who often had different agendas; unions were often poorly run; immigrant workers were often reluctant to organize; and laborers often moved around. • Capital’s Strength: Big corporations had vast wealth and power, and could count on the state and federal governments to protect their interests against striking workers.