Industry Comes To Age

1
Industry Comes To Age

• 1865 to 1900

2
The Iron Colt Becomes The Iron Horse

• In 1865 35,000 miles of railways east of the
  Mississippi
• 1900 192, 556 miles of railways west of the
  Mississippi
• Congress gave land to railroad companies. In
  return, the government received special rates for
  postal services and military traffic
• Companies were allowed alternate mile-square
  sections in checkerboard fashion for railroad
  routes, but until companies determined which part
  of the land was the best to use for railroad
  building, all of it was withheld from all other
  users
• President Grover Cleveland stopped this in
  1887Railroads gave cities value towns that were
  bypassed by railroads became ghost towns

3
Spanning The Continent With Rails

• Deadlock over the proposed transcontinental
  railroad was given to the North after the South
  had seceded
• The north wanted to connect the Pacific coast to
  the rest of the nation esp. California
• Union Pacific Railroad moved westward from Omaha,
  Nebraska
• Central Pacific Railroad in California pushed
  eastward from Sacramento through Sierra Nevada
  (biggest problem)
• Big Four chief financial bankers of
  enterpriseLeland Stanford ex-governor of
  California had useful political connections
• Collis P. Huntington skilled lobbyist 
• Railroads met near Ogden, Utah in 1869

4
Binding the Country with Railroad Ties

• 4 other transcontinental lines built before the
  century ended Atchison, Topeka, Santa Fe, and
  Southern Pacific
• James J. Hill created the Great Northern
  greatest builder
• People sometimes got overexcited and built
  railroads where there wasnt a large enough
  population to support them
• Caused bankruptcy with the savings of investors 

5
Railroad Consolidation and Mechanization

• Older eastern railroads, like the New York
  Central, were expanded and welded together with
  the western lines making them successful
• Lead by Cornelius VanderbiltImprovements Steel
  rail instead of iron. Steel was tougher, safer
  and more economic because it could handle a
  heavier load
• Standard gauge of track width eliminated the
  hassle and cost of changing lines
• Westinghouse air brake was adopted in the 1870s
  it increased safety
• 1860s Pullman Palace cars luxurious  passenger
  cars
• Accidents still happened despite telegraphs,
  double-tracking, and block signals

6
Revolution by Railways

• Railroads stitched the nation together
• Generated a huge market and many jobs
• Helped Americas rapid industrialization
• Environment was affected by the construction of
  railroads. Prairies were plowed up, forests cut
  down and the buffalo population challenged
• Before railroads, each town had its own local
  time
• Railroads introduced time zones (November 18,
  1883) to keep schedules and avoid wrecks
• Railroads made millionaires
• New aristocracy lords of the rail replaced
  lords of the lash

7
Wrongdoing in Railroading

• Credit Mobilier scandal Insiders of the company
  reaped 23 million in profits when the Union
  Pacific began westward construction from Omaha,
  Nebraska
• Jay Gould embezzled stocks from Erie, Kansas
  Pacific, Union Pacific, and the Texas and Union
  Pacific
• Used stock watering method railroad stock
  promoters inflate and sold stocks and bonds more
  than the railroads actual value
• Railroad managers were forced to charge
  ridiculously high rates and compete to payoff the
  financial obligations
• Railroad owners abused the public by bribing
  judges and legislatures, employing lobbyists,
  electing their own people into political office,
  giving rebates, and free passes to gain favor
  from the press
• Built defensive alliances to rule the railroad
  industry
• Pools group of supposed competitors who agree
  to work together usually to set prices 

8
Government Bridles the Iron Horse

• Grange farmers protesting against being
  railroaded into bankruptcy
• States stopped the railroad monopoly, but in 1806
  the Supreme Court said states could not regulate
  interstate commerce that was up to the federal
  court
• Interstate Commerce Act of 1887 prohibited rebate
  and pools railroads had to publish their rates
  openly
• Outlawed charging more for short hauls than long
  hauls forbade discrimination against shippers
• Interstate Commerce Commission was set up to
  enforce the act
• The act was set up to stabilize the American
  business system, not revolutionize it
• Showed Congress has a responsibility to interfere
  with private enterprise for the interest of
  society

9
Miracles of Mechanization

• In 1860 the US was the 4th largest manufacture in
  the world in 1894 it was the 1st  because...
• Liquid capital became abundant
• Coal, iron, and oil were fully exploited
• Massive immigration made unskilled labor cheap
  and plentiful
• American ingenuity blossomed
• Mass production was refined and perfected 
• Cash register, stock ticker, typewriter,
  refrigerator car, electric dynamo, and electric
  railway were introduced
• In 1876, Alexander Graham Bell invented the
  telephone
• Thomas Edison was the most versatile inventor
  invented the lightbulb

10
The Trust Titan Emerges

• Andrew Carnegie steel king
• Vertical integration combining into one
  organization all phases of manufacturing from
  mining to marketing
• In his case, he mined the iron, transported it,
  refined it, and turned it into steel... Only his
  employees had touched the iron
• Carnegies goal was to improve the efficiency of
  the product by controlling the quality and
  eliminating the middle man
• John D. Rockefeller oil baron
• Horizontal integration allied with or bought
  out all competitors to monopolize the market
• The word trust came to be used to describe any
  large-scale business combination
• He used this method to form Standard Oil and
  control the oil industry by forcing weaker
  competitors to go bankrupt
• J.P. Morgan bankers bankerInterlocking
  directories placed his men into the board of
  directors of his rival competitors to gain
  influence there and reduce the competition

11
Supremacy of Steel

• By 1900 America produced as much as England and
  Germany put together
• Because of the Bessemer-Kelly processAmerica had
  lots of coal for fuel, iron for smelting, and
  other things for steel making thats why it
  became 1

12
Carnegie and Other Sultans of Steel

• By 1900 he was producing 1/4 of the nations
  steel and taking 25 million home every year. 
• J. Pierpont Morgan financed the reorganization of
  railroads, insurance companies, and banks. 
• Morgan bought Carnegies entire business at 400
  million
• Morgan took Carnegies business, added others and
  launched the United States Steel Corporation in
  1901
• Worlds 1st billion-dollar company (worth more
  than the nations total wealth in 1800)

13
Rockefeller Grows an American Beauty Rose

• Kerosene was better than whale oil and burned
  brighter whale oil became obsolete
• By the 1870s kerosene was Americas 4th most
  valuable export
• By 1885 Edisons light bulbs were in use
  kerosene became obsolete
• Gasoline-burning internal combustion engines
  depended on oil, so the oil market was still open
• John D. Rockefeller organized the Standard Oil
  Company of Ohio in 1870 by 1877 he controlled
  95 of all the oil refineries in the country
  greatest trust formed in 1882
• His goal was to eliminate the middleman and ruin
  his competitors
• His company did produce better oil at a cheaper
  priceOther trusts started making better products
  at cheaper prices too (sugar, tobacco, leather
  and harvester trusts)
• Meat industry, lead by Gustavus F. Swift and
  Philip Armour, arose

14
The Gospel of Wealth

• Social Darwinism concept of survival-of-the-fitt
  est was applied to business. Only the best could
  run an industry.
• Reverend Russell Conwell of Philadelphia became
  rich by giving his Acres of Diamonds lecture
  rich people made themselves rich, poor people
  made themselves poor
• Corporate lawyers used the 14th Amendment
  (designed to protect slaves) to defend trusts
  corporations were legally people and entitled to
  their property
• Plutocracy ruled (government ruled by the
  wealthy)

15
Government Tackles the Trust Evil

• In 1890 the Sherman Anti-Trust Act was signed
  into law.
• Any combinations in restraints of trade was
  forbade (trusts, pools, interlocking directories,
  and holding companies)
• Prosecutions for violating the act were
  unsuccessful 
• Not until 1914 was the Sherman Act given its
  place

16
The South in the Age of Industry

• The South was still behind the North in
  manufactured goods despite all the inventions
• In the 1880s machine made cigarettes were
  introduced boosted tobacco consumption
• In 1890, James Buchanan Duke absorbed his main
  competitors into the American Tobacco Company
• Industrialists urged the South into factories
• The South had many obstacles when it came to
  industrialization
• Railroads gave preferential rates to manufactured
  goods moving southward from the North, but in the
  opposite direction they discriminated in favor of
  southern raw materials
• The North kept the South in servitude to it by
  suppling the Northeast with raw materials unable
  to develop its own industries
• Beginning in the 1880s, northern capitals began
  building cotton mills in the South because of tax
  benefits and the prospect of cheap non-unionized
  labor
• Southerners had menial jobs, paid half the rate
  of a northernEven though working conditions were
  bad, southerners were happy to be employed

17
The Impact of the New Industrial Revolution on
America

• Because of the Industrial Revolution, the
  standard of living rose
• Jeffersonian ideals about the dominance of
  agriculture and free enterprise without
  government interference changed
• Telephones, typewriters, and stenographs gave
  women social and economical opportunities
• Careers for women meant delays in marriage and
  smaller families
• Women worked for money, not independence or
  glamourHad the same working conditions as men
  yet earned less
• Gibson Girl 1890s created by Charles Dana
  Gibson became the ideal woman she was athletic
  attractive, and outdoorsy
•  In the 1860s 1/2 the country was self employed
  by the end of the century 2/3 of people depended
  on wages

18
In Union There is Strength

• With the inflow of immigrants providing cheap
  labor that would work in poor conditions, the
  workers who wanted to improve their conditions
  couldnt bosses could easily replace them
• Individual workers were forced to organize and
  fight for basic rights
• Corporations would hire strikebreakers, have
  courts to stop the strikes, bring in troops, lock
  their doors against rebellious workers and make
  them submit
• Workers then had to sign contracts which banned
  them from joining unions
• Workers would be blacklisted put on a list and
  denied special privileges

19
Labor Limps Along

• The rising cost of living was an incentive to
  unionize 
• By 1872, there were 32 national unions and
  thousands of organized workers
• National Labor Union was organized in 1866Lasted
  6 years
• About 600,000 membersIncluded skilled, unskilled
  workers and farmers
• Excluded Chinese didnt really try to get women
  and blacks to join
• Blacks organized their own union Colored
  National Labor Union. Due to racism, the two
  unions couldnt work together 
• It worked for the arbitration of industrial
  disputes and the eight-hour workday, and won the
  latter for government workers, but the depression
  of 1873 knocked it out.

20
Knights of Labor

• Similar to the National Labor Union, the Knights
  of Labor began secretly in 1869 until 1881
• Sought to include ALL workers (even women and
  blacks)
• Excluded liquor dealers, professional gamblers,
  lawyers, bankers, and stockbrokers
  (non-producers)
• Won strikes for 8 hr days 
• Won strike against Jay Goulds Wabash Railroad in
  1885 membership went up to 75 million
• Terence V. Powderly lead the Knights

21
Unhorsing the Knights of Labor

• Knights became involved with May Day strikes in
  1886 1/2 of them failed
• In Chicago, on May 4, 1886, Chicago police were
  advancing on a meeting that had been called to
  protest brutalities by authorities when a
  dynamite bomb was thrown, killing or injuring
  several dozen people. This was the Haymarket
  case.
• 8 anarchists were rounded by without any proof of
  being involved with the bombing but because they
  preached incendiary doctrines, they were charged
  with conspiracy5 were sentenced to death the
  other 3 were given stiff prison terms
• When John P. Altgeld, was elected governor of
  Illinois in 1892, he pardoned the 3 survivors
• Because of the bombing, the public associated the
  Knights of Labor with anarchists
• Popularity and effectiveness lowered, membership
  declined, and remaining members joined other
  unions as well

22
The AF of L to the Fore

• American Federation of Labor, created in 1886 by
  Samuel Gompers
• Consisted of an association of self-governing
  national unions each kept its independence the
  AF of L unified overall strategy 
• Sought better wages, hours, and working
  conditions 
• Strategies walkouts and boycotts
• It was made up of skilled workers and let
  unskilled workers fend for themselves (women and
  esp. blacks)
• From 1881 to 1900, there were over 23,000 strikes
  involving 6,610,000 workers with a total loss to
  both employers and employees of about 450
  million
• Public acknowledged the right of workers to
  organize, bargain collectively, and strike
• In 1894, Labor Day became a legal holiday