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After the Civil War, the US was still an agricultural nation. But by 1920, it had become the leading industrial power of the world. This was due to several factors: *A wealth of natural resources *Government support for business *A growing urban population that provided cheap labor and markets for new products
Early Americans had little need for oil, until 1859. In that year, Edwin L Drake successfully used a steam engine to drill for oil, and suddenly removing oil from beneath the earth’s surface became practical. *This breakthrough started an oil boom that spread to Kentucky, Ohio, Illinois, Indiana, and later, Texas. *Petroleum-refining industries rose in Cleveland and Pittsburgh as entrepreneurs, (people who start new businesses), rushed to turn the oil into kerosene. *Gasoline was a by-product, and was thrown away until the automobile became popular.
Oil was not the only natural resource that was plentiful in the United States. There were also abundant deposits of iron and coal. *In 1887, prospectors discovered iron ore deposits 100 miles long in Minnesota. *At the same time, coal production skyrocketed from 33 million tons in 1870 to more than 250 million tons in 1900.
Iron is a dense metal, but is soft and tends to break and rust. It also generally contains other elements, such as carbon. Removing these other elements makes a lighter, more flexible, and rust-resistant metal- steel. *One of the most important innovations in modern history was the Bessemer Process of making steel. *This process was developed by Henry Bessemer and William Kelly around 1800. *It injected air into molten iron to remove all impurities. *Made the steel much more flexible, and therefore, much stronger.
Railroads, with thousands of miles of track, became the biggest customers for steel. But inventors soon found new uses for it. *Joseph Glidden’s barbed wire and the farm machinery of McCormick and Deere helped transform the Great Plains into the breadbasket of the nation. *William LeBaron Jenney designed the first skyscraper with a steel frame- the Home Insurance Building in Chicago. *Now, in tightly-packed cities, buildings could rise into the air rather than spread along expensive acres of ground.
*One of the most remarkable steel structures was the Brooklyn Bridge. Completed in 1883, it spans 1595 feet of New York’s East River. Its steel cables are supported by towers that were the tallest man-made weight-bearing structures in the world at the time, except for the pyramids of Egypt.
At this time, American inventors changed more than the landscape- they changed the very way people lived and worked. *In 1876, Thomas Alva Edison became a pioneer on the industrial frontier when he established the first research laboratory in Menlo Park, New Jersey. *There, Edison perfected the incandescent light bulb, patented in 1880. *He also invented the movie camera and phonograph. *One of his most important inventions was an entire system for producing and distributing electrical power to homes and businesses. *He eventually went on to have over 1,000 patents.
George Westinghouse was one of Edison’s main rivals. His alternating current allowed electricity to be run through transformers, greatly increasing the power that could be delivered. Westinghouse also invented railroad air brakes.
Steam and electrical power allowed factories to locate inside cities, near large supplies of cheap labor. The availability of jobs in these urban factories caused more and more people to move to cities, and millions of people from other nations to immigrate to America.
Other inventors of the late 19th century: *Christopher Sholes invented the typewriter in 1867, and changed the world of work.
*Alexander Graham Bell invented the telephone in 1876, and opened the way for worldwide communications.
The typewriter and telephone created new jobs, especially for women in offices. *In 1870, women made up less than 5% of all office workers. *By 1910, they accounted for nearly 40% of the clerical work force.
Railroads made local travel reliable and westward expansion possible for business as well as for people. Realizing how important railroads were for settling the West and developing the country, the government made huge loans to the railroad companies. *Also gave massive grants of free land to RR companies. *In 1869, the first US Transcontinental Railroad was completed, spanning the entire continent from the Atlantic to the Pacific. *At the start of the Civil War, the US had about 30,000 miles of track. By 1890, that number was 6 times greater.
The growth of railroads influenced the industries and businesses in which Americans worked. * Iron, steel, coal, lumber, and glass industries grew rapidly as they tried to keep pace with the railroads’ demand for materials and parts. *The rapid spread of railroad lines also fostered the growth of towns by linking isolated settlements.
In 1880, George Pullman built a factory for manufacturing sleeping cars on the prairie of Illinois. * Pullman’s factory was more of a town, providing housing, stores, doctor’s offices, and athletic fields. *Everything in the town remained firmly under control of George Pullman, however, and all of the rent paid and money spent went straight to the owner. *Residents were not allowed to sit on their front steps or to drink alcohol in their homes. *And when Pullman cut wages without cutting prices or rent, a violent strike broke out among his workers in 1894.
Some wealthy businessmen of the time became corrupt through riches and power. *One of the most famous schemes of the time happened when stockholders in the Union Pacific Railroad formed a company called Credit Mobilier. *The stockholders gave this company a contract to lay track at 3 times the actual cost, and stole the profits. *To keep the scheme going, and to avoid the law, the stockholders donated shares of stock to 20 representatives in Congress. *Reports in the New York Sun prompted an investigation, and it was discovered that the officers of the Union Pacific had stolen about $23 million. *Congressman James Garfield was implicated in the investigation, but received only a slap on the wrist. He later became President. *Most of those involved were Republicans, however, and the party’s name was tarnished.
Farmers became disturbed by the corruption of big business and the railroads. They joined the Grange, and began to demand government control of the railroads. *Farmers were angry because RRs sold the land given to them free by the government almost exclusively to businesses rather than settlers, as the gov. intended. *The RRs also charged different customers different rates, often demanding more for short hauls than long hauls. *In response, the Grangers sponsored state and local candidates and pressed for laws to protect farmers. *As a result, many states across the midwest passed “Granger Laws” to shield farmers from RRs.
One of the greatest victories of the Grangers was the Interstate Commerce Act in 1887, which established the right of the federal government to supervise RR activities. *Also started a five-member Interstate Commerce Commission (ICC) for that purpose.
Corporate corruption, mismanagement, overbuilding, and competition created financial problems for railroads late in the century. *In 1893, several RRs were near bankruptcy, and a nationwide depression seized the nation: the Panic of 1893. *600 banks and 15,000 businesses failed, and by 1895, 4 million people had lost their jobs. *The failing RRs were bought at low prices by investment firms, such as JP Morgan and Co. *At the dawn of the 20th century, 7 huge, rich RR companies owned two-thirds of the nation’s RR tracks.
JP Morgan did not like to be photographed, due to a facial skin disease. Here he attacks a photographer with his cane.
Andrew Carnegie was one of the nation’s first industrial moguls to make his own fortune.
*By 1899, the Carnegie Steel Company manufactured more steel than all the factories in Great Britain. *He made money by continually searching for ways to make better products more cheaply. * He adopted the newest machinery and techniques. *He started new bookkeeping practices that allowed him to track precise costs. * He increased production by encouraging competition among his assistants.
Carnegie also used VERTICAL INTEGRATION to drive out his competitors. *Vertical integration involves buying all the companies that supply products for your company, in order to control the raw materials and keep costs low. *Carnegie bought coal fields, iron mines, ore freighters (ships), and railroad lines.
He also tried to buy out all his competitors, called HORIZONTAL INTEGRATION, to create a monopoly. *Having controlled all his suppliers and driven out most of his competitors, Carnegie controlled almost the entire steel industry. *He sold his business in 1901.
Carnegie said he got his fortune through hard work and education, but late 19th century philosophers said it could be explained by a new theory: Social Darwinism. *In short, it said that in America, smart, hard-working people will automatically become rich. Poor people were poor, according to Social Darwinism, because they were lazy and unintelligent. *In theory, then, it would be better to let poor people starve, and be left with a nation of rich, hard-working people. *The result was a government that believed in policies called “laissez-faire:” hands off! This meant the government would not give money to help the poor in any situation. No welfare, no college aid, no unemployment, no disability pay, no nothing!
Some big businessmen reaped huge profits by paying their employees extremely low wages. *Critics called these men “Robber Barons.” *One of the most famous was John D Rockefeller, the owner of Standard Oil Company. *His enormous wealth allowed him to lower the price of his oil below what it cost to produce, in order to drive his competitors out of business. *By 1880, Rockefeller controlled 90% of the nation’s refining business.
Though ruthless in business, many of the Robber Barons were generous philanthropists (people who give money away for the public good.) *Rockefeller gave away $500 million. *Provided funds to start the University of Chicago. *Built Rockefeller Center in New York City. *Also created a medical institute that helped cure yellow fever. Andrew Carnegie donated about 90% of the wealth he accumulated in his lifetime in support of the arts and learning.
Carnegie Hall Rockefeller Center
Concerned that expanding corporations would stifle competition, the government passed the Sherman Antitrust Act in 1890, which made it illegal to form a monopoly, or “trust” which interfered with free trade between states or with other countries.
In response to horrible working conditions in urban factories, labor unions emerged. *The first large scale union of workers was organized in 1866 by iron worker William Sylvis. It was called the National Labor Union, or NLU. It admitted only skilled workers. *The Knights of Labor was formed by Uriah Stephens in 1869, and included both skilled and unskilled laborers. *Both of these pushed for an 8 hour workday by law. *The KOL also wanted equal pay for men and women.
Samuel Gompers served as President of the American Federation of Labor (AFL), and focused on collective bargaining, or negotiations, between employers and employees. *When collective bargaining failed, though, the AFL went on strike: refusal to work. *These strikes often turned violent, as employers tried to bring in new workers (called “scabs”) to replace those on strike.
*The Great Strike of 1877 broke out when workers for the Baltimore and Ohio Railroad struck to protest their second wage cut in two months. Most freight trains were unable to run for a week. Federal troops finally ended the strike.
*In 1886, a strike broke out at the McCormick Harvester factory in Chicago. When a striker was killed by the police, a protest erupted in Chicago’s Haymarket Square. A bomb was thrown, and seven police officers and several protesters were killed. Eight people were convicted, four were hanged, and one committed suicide in prison. This is called the Haymarket Massacre.
*In 1892, steelworkers at Carnegie’s Homestead Plant went on strike after their wages were cut. The plant manager hired armed Pinkerton Guards to break the strike, and a pitched battle broke out, leaving nine workers and three Pinkerton guards dead.
*During the Panic of 1893, the Pullman Sleeping Car company cut wages, but not rent and prices, for its workers, meaning many workers took home only $6 a week. A strike was called, led by socialist Eugene V Debs, and Pullman trains were boycotted. After the strike turned violent, President Grover Cleveland sent in federal troops. Pullman fired most of the workers.