Industrialization: Technology, Railroads, Monopolies

1. Industrialization:Technology, Railroads, Monopolies The Gilded Age

2. US Foremost Industrial Power • After Civil War, US primarily agricultural • By 1900 foremost industrial power, producing over 1/3 of world’s manufactured goods • How did this happen?

3. Natural Resources Fuel Industrialization • Edwin Drake uses a steam engine to drill for oil in Titusville, PA Petroleum-refining industries grow up in Pittsburgh & Cleveland • Also abundant deposits of coal and iron ore • Bessemer process discovered. More efficient way to create steel

4. William Kelly & Henry Bessemer Discover How to Make Steel Cheaply & Efficiently

5. Steel Changes the Face of America • Railroads become biggest customers for steel • In agriculture, used for barbed wire & farm equipment that transforms Great Plains into food producer of nation • Bridges-Brooklyn Bridge • Skyscrapers

6. New Inventions Promote Change • Thomas Alva Edison • Light bulb (1880) • First Research Lab (1876) • Christopher Sholes • Typewriter (1867) • Alexander Graham Bell • Telephone (1876) Last two inventions affected office work & created new jobs for women

7. Age of the Railroads • Union Pacific and Central Pacific meet in Promontory Point, Utah on May 10th, 1869 • First Transcontinental Railroad • By 1890, nation had over 180,000 miles of track

8. Railroad Create Worldwide Time Zones • Before time zones, each community operated on own time. Travelers west might reset watches 20 times • C.E. Dowd proposed 24 time zones. Why? • Railroads unifying force for nation

9. Advantages of Railroads to Nation • US iron, coal, steel, lumber, and glass industries grow rapidly to keep pace with railroad demand for materials & parts • RR fostered growth of towns, established new markets, & offer rich opportunities for both visionaries & profiteers • Promotes trade & interdependence

10. Railroad Abuses • Railroad misused govt. land grants (selling to other businesses rather than settlers), fixed prices to keep farmers in debt, charged different customers different rates • Farmers especially affected by railroad corruption &, through Grange demanded govt. control over RR’s

11. Granger Laws • Grangers took political action, pressing for laws to protect their interests • Illinois authorized commission “to establish maximum freight & passenger rates & prohibit discrimination.” Railroads fight back • Munn v Illinois (1877): Supreme Court upholds Granger Laws; Federal Govt. has right to regulate private industry to serve public interest.

12. Interstate Commerce Act (1887) • Supreme Court ruled that individual states could not set rates on interstate commerce • In response, Congress passes Interstate Commerce Act to reassert right of federal govt. to supervise RR activities • Five man commission

13. Corrupt Railroads Hurt Nation • Corporate Abuses, mismanagement, overbuilding, and competition pushed many RR’s to brink of bankruptcy • Played major role in nationwide economic collapse: Panic of 1893 • Brought on worst depression up to that time: 600 banks & 15,000 businesses; 4 million people out of work

14. Railroads Provide Business Model • Railroads First Large US Business • Other Large Industries Copy the RR Business Model • Modern Corporation Provided Structural Framework for Transformation of US economy

15. The Corporation • Definition: Association of individuals legally authorized to act as a fictional person and relieve its members of individual legalliability. Raises Capital by selling shares of stock (ownership) • Corporation has 2 advantages: • Can outlive its founders • Corporation’s officials & owners not personally liable for corporation’s debts Responsible for much of US industrial growth in 19th Century

16. Vertical Integration • Company takes over the whole process of production, from its suppliers and distributors and transportation systems to gain total control over the quality and cost of its product.

17. Horizontal Integration • Through merger, the complete control of one phase of production • End Result: Monopoly, trusts • Examples: Standard Oil, US Steel

18. “Captains of Industry” or “Robber Barons”

19. Wealthy Industrialists: Pro & Con • Pro: Everyone is dependent on the millionaires to run business efficiently and to provide for the needs of the surrounding communities • Con: If the millionaires control everything, they will always make people work unfairly and pay unfair prices

20. Social Darwinism • Grew out of naturalist’s Charles Darwin’s theory of evolution • “Natural Selection” • Used to explain evolution of human society • Business success & failure governed by natural law; no one has right to intervene • Appealed to Protestant work ethic: riches sign of God’s approval; therefore poor must be lazy or inferior

22. Sherman Antitrust Act (1890) • Concern that expanding corporations would stifle free competition • Sherman Antitrust Act made it illegal to form a trust that interfered with free trade between states or other countries

23. Workers Face Difficult Conditions • Trend towards unskilled & semi-skilled jobs • Long Hours • Low Wages • Unsafe Working Conditions • Women & Children enter work force • Solution:Consolidate Workers Just As Business Consolidated

25. Sweatshops

27. Workers Fight Back; Form Unions • Knights of Labor under Terrence Powderly: Welcomed Women & Blacks Motto: An Injury to One is the Concern of All • American Federation of Labor under Samuel Gompers • Craft Unionism: skilled workers from one or more trades