America’s industrial supremacy

1. America’s industrial supremacy Chapter 17 1870-1900: Unprecedented Progress in Industry Marked by Unequal Prosperity

2. Causes & Sources of Industrial Growth • Advantages of U.S. Industry • Huge supply of raw materials • Large (and growing) labor force • Technological innovations allowed production to be more efficient and quicker • Generation of Entrepreneurs—a group (of mostly men) who were energetic, and willing to take risks to “make it big” • What type of risks were they taking? • Expanding Domestic Market (which will soon turn to a world market)

3. Industrial Technologies • Communications • Telegraph—Transatlantic Telegraph completed in 1866 • Connected the U.S. to Europe with instantaneous intercontinental communication • Later would be used to transmit telephone signals, then television, then data.

4. Industrial Technologies • Communications • Commercial telephone technology—Alexander Graham Bell, 1876 • Telephone turned communication from graphic, to auditory

5. Industrial Technologies • Communications • Early Radio • First time instantaneous mass communication was possible • What are radio’s main benefits? • Typewriter • Cash Register • Adding Machine—calculator

6. Industrial Technologies • Electricity (1870’s)—light and power • Thomas Edison invents the incandescent light bulb in 1879 • How does this invention change life as American’s knew it? • Power plants begin to be built bringing electricity to businesses and homes • Where did electricity go to first? • Who was the first to use electricity? • How did electricity effect the American Economy? • Steam technology also becomes more efficient which helped lower rail shipping costs.

7. Iron and Steel • Steel • Steel first developed and produced in Pennsylvania and Ohio • Made from iron ore being shipped to factories in steam engine trains. • Steel is a metal alloy stronger, lighter, more durable metal than iron • More things can be made from it • It is easier to work • Bessemer/Kelly Process—creates stronger steel by blowing air threw molten metal to get out the impurities. • Allowed the steel industry to develop because people wanted steel over iron.

8. The Railroads • Advantages of the Railroads • Access to transportation • organization • great investment for wealth • Concentration of power among the very few— James J. Hill, and Cornelius Vanderbilt. • Stockholders become rich and powerful • “limited liability” of the railroads protect them from labor issues, safety regulations, etc.

9. The Railroads • Railroads contribute to economic growth by: • Providing mass transportation cheaply • Increasing access to distant sources of raw materials • Provides access to previously inaccessible markets (the West) • Promotes the construction business. • Governments subsidized the building of railroads after the Civil War. Why?

10. The Corporation • Corporations become the main element and cause of industrial development. WHY? • Taylorism—new method of business management that stressed a focus on using math to develop and plan the production process. • Led to: • The assembly line, scientific management, mass production, and the subdivision of labor.

11. The Corporation • Other Industries • U.S. Steel—founded by Andrew Carnegie • Meatpacking • Manufacturing Consumer Goods • New transportation manufacturing • The manufacturing of complicated, technology • Radios, cars, telephones, etc.

12. The Corporation • Managerial Techniques developed • Corporate hierarchy—levels of employees • Division of responsibilities among the labor force • Cost accounting—the investment of capital and the beginning of companies making money off of money • Middle managers within the corporate structure change the way power is distributed within the workplace.

13. The Corporation • Consolidation • Horizontal Integration • Combining many firms in the same business into a single corporation • Vertical Integration • Taking over all facets of production: Supply, production, transportation, sales, etc. • Example: U.S. Steel—buys mines, railroads, and steel production facilities to control their own operating costs • Standard Oil—John D. Rockefeller, starts by buying small oil firms, then buys companies that produce and build oil drilling and refining equipment, then branches out to other resources.

14. The Corporation • Consolidation Continued • Trusts—stocks transferred to a holding group that combines investments • Trustees (people who own the stocks) use wealth to consolidate businesses—example: Standard Oil • Results of trusts and holding companies—economic power held by the few (trustees) • Corporate Mergers and “Holding Companies” where one company owns the majority of another company by buying their stocks.

15. Capitalism and its Critics • Many people don’t like the new industrial age • Industrialists counter with “Survival of the Fittest” • Individuals given opportunity to succeed and gain wealth in the industrial system • “Self-made” men • Tycoons • This idea was called SOCIAL DARWINISM • In human society only the most fit individuals survive in the market place • Celebrates competition and the open market • Created by Herbert Spencer—Society benefits from the elimination of the unfit.

16. The Gospel of Wealth • The idea that a rich person should be a trustee of wealth and should use those funds for public benefit. (Carnegie) • people with great wealth responsible for progress of society

17. Fear of Monopolies • Monopolies—when one corporation or company controls the entire market for that good or service. (no competition) • Created through consolidation (pools, trusts, holding companies, purchasing companies, etc.) • What could happen if one company had no competition? • American’s Blamed monopolies for: • High prices on goods • An unstable economy • The wealthy being wasteful • And imbalance in the distribution of wealth

18. The Ordeals of the Worker • Era marked by progress in standard of living—yet, danger, less control, less power for regular individuals • Southern Blacks, foreign immigrants, eastern farmers, and young rural woman migrated to the industrial city after the Civil War. • The Immigrant Work Force • influx greater than any other era—25 million (Civil War to WWI) • Usually became unskilled workers • Created close-knit ethnic communities (China Town, Little Italy, etc.) • Germans and Jews were the most successful immigrants. Why? • Harsh working conditions • routine, strict schedule, monotony, impersonality, long hours • women and children tapped for labor—unskilled • child labor laws in response—often ignored

19. The Ordeals of the Worker • Emerging Unionization • Generally unsuccessful during the era—but small steps taken • public hostility and recession years undermine the movement • Railroad Strike of 1877—U.S.’s first major national labor conflict • RR announces 10% pay cut—rioting, looting, sabotage in response • State militias and fed troops put down widespread rioting • Scores of RR workers killed—potential strength for unions? • Who does the government/courts support? • The Knights of Labor • The first effort to create a truly national labor organization • Uriah S. Stephens as founder—open to all, inc. women and African-Americans • Focus: workday, child labor, but also economic reform and wage restructure • Initial success (700 k in 1886)—repression and violence undermine org the union

20. The Ordeals of the Worker • The American Federation of Labor (AFL) • Rivaled Knights—collection of autonomous craft unions—skilled workers • Haymarket Square Bombing (May, 1886)— radicals protest death of strikers • ordered to disperse, unknown throws bomb— police killed/wounded • police fire into crowd, kill several protesters • trial of anarchists who organized protest—seven sentenced to death • becomes symbol of social chaos and radicalism—anarchism decried

21. The Ordeals of the Worker • Anarchism (no government) is continually associated with goals of labor unions* • The Homestead Strike (1892) • Amalgamated Association of Iron and Steel Workers • Most powerful trade union—skilled, high demand—significant power • Henry Clay Frick—chief lieutenant of Andrew Carnegie • Amalgamated Association “had to go”—wages cut, union ignored • Strike called for (actually a lockout of unionists) • Strikebreakers (scabs) called in, protected by security specialists—Pinkertons • Pitched battle occurs, several killed—Pinkerton Detectives flee • National Guard intervention and attempt on Frick’s life sway public opinion

22. The Ordeals of the Worker • The Pullman Strike (1894) • Pullman Palace Car Company (Chicago)—company town for workers • George M. Pullman envisions town as solution to labor conflicts • marked by “regimentation” and high rent • citing depression, wages slashed by 25%--rent remains high • American Railway Movement (Eugene V. Debs) organize strikes • Thousands strike across 27 states—Chicago to Pacific paralyzed • State refuses militia—federal troops move in (mail)—injunction ordered • Arrests of union leaders and federal protection help to collapse strike

23. The Ordeals of the Worker • Sources of Labor Weakness • Few gains for labor despite organizing efforts • Perhaps less political power and less control of workplace? • Reasons for weakness—advantages lie with capital • Main labor organizations represent only a small % of workers • Divisions within workforce—tensions among ethnic groups • fluid nature –no long term plans for most workers—migration • corporate organization of vast wealth and power • determined to crush resistance • support of authorities to preserve order • public opinion bristles at militants and radicals • rugged individualism, bravery, courage not compatible with unions?