Chapter 6 A New Industrial Age

1
Chapter 6A New Industrial Age

• 1850-1900

2
Labor Unions Emerge in America

• Problems for Factory Workers
• 7 day work week
• 12 hours per day
• No sick leave, vacations, injury insurance in
  1882, avg. 675 workers killed each week
• Low wages required all members of a family to
  work no time for schools

3
Sweatshops and Sweaters

• Workshops is housing tenements
• Required few skills
• 14 hour work days
• 27 cents/hour
• Women and children were most often employed

4
Early Union Movement in U.S.

• 1866- National Labor Union est. by steel workers
• 1868- NLU presses Congress for 8 hr. workday
• NLU refused to allow African American workers
  into Union

5
Expansion of Industry

• Main Idea- at the end of the 19th Century,
  natural resources, creative ideas, and growing
  markets fueled an Industrial Boom in the United
  States.

6
Black Gold

• Edwin Drake discovers oil in 1859 in Titusville,
  PA
• Oil is transformed into Kerosene for home use
• Gasoline, the byproduct was originally thrown
  away

7
Iron and the Bessemer Process

• Henry Bessemer (1850)
• Injected air into molten iron is remove carbon
  and other impurities
• Steel was the result

8
New Uses for Steel

• Railroad Tracks
• Farm Equipment- McCormick-Deere
• Brooklyn Bridge (NY) over the East River
• Skyscrapers first built in Chicago

9
New Inventions and Change

• Thomas Alva Edison
• Wizard of Menlo Park
• Light Bulb (1880)
• Created 1st Research Laboratory

10
Electricity Changes Lifestyles

• George Westinghouse makes electricity safe
  affordable
• Changes the nature of business
• Spurs the explosion of home appliances

11
Inventions Change Lifestyles

• Typewriter (1867) by Chris Sholes
• Telephone (1876) by Alexander Bell
• Sewing Machine (1846) by John Singer
• Internal Combustion Engine (1860)
• Electric Motor (1873) by Westinghouse
• Phonograph (1877) by Edison
• Radio (1895) by Joseph Marconi

12
Age of the Railroads

• Transcontinental RR completed in 1869
• 20,000 workers to complete
• Thousands of Chinese immigrants are hired to work

13
Railroad Time Zones

• 1869- C.F. Dowd divides the earth into 24 time
  zones
• Nov. 18, 1883- Railroad crews synchronize their
  watches
• Congress adopts it in 1918

14
Railroads Create Opportunities

• RR Promote trade throughout the nation
• Connected Regions
• Dozens of new cities are created along the
  railroad lines

15
Pullman, Illinois (1880)

• Created by George Pullman
• Factory made sleeper cars Tightly controlled
  community
• No Alcohol allowed
• Residents rioted in 1894

16
Railroad Abuses

• Credit Mobilier Scandal(1867)- Union Pacific
  Railroad created a construction company that
  charged 3 times the actual cost of laying track
• 23 Million in false building expenses
• Several U.S. Congressmen received money
• Republican Party is tarnished by the scandal

17
Granger Laws and the Railroads

• Farmers Issues with the Railroads
• Misuse of Land Grants
• Fixing of Shipping Rates (Short vs. Long Haul)

Munn vs. Illinois (1877) Supreme Court case that
allowed the states to regulate the railroad
companies for the benefit of farmer and consumers
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Interstate Commerce Act (1887)

• Congress passes a law that gives the Federal
  Government the power to regulate the railroad
  companies over the states
• Establishes the Interstate Commerce Commission
  (ICC)
• 1897 Supreme Court ruling limits the ICC from
  setting shipping rates of railroad companies

19
Panic of 1893

• Railroad financial issues lead to nationwide
  depression
• In 1894, many of the nations railroads are taken
  over by investment companies
• J.P. Morgan reorganizes the railroads into 7
  powerful companies that will control 70 of all
  railroad lines in America

20
Big Business in America

• Andrew Carnegie
• 1873-establishes Carnegie Steel Company
• 1899- Carnegie Steel is the largest producer of
  steel in the world

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Carnegies Business Strategies

• Accounting Systems that allowed for the precise
  tracking of costs
• Offered stock options in his company to attract
  the most talented people to his company

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Carnegies Business Innovations
Vertical Integration 1) Bought the companies
that supplied services to control costs 2) Coal
fields, Iron ore fields 3) Railroad cars 4)
Railroad Lines

• Horizontal Integration
• Attempted to limit competition
• Bought out rival companies
• Merged with rival companies

23
Social Darwinism and Business

• Process of natural selection weeds out the less
  productive
• Philosophy that grew out of Charles Darwins book
  (1859)
• Success and Failure in business were governed by
  natural laws, laissez faire

24
New Definition of Success

• 1867-1880 4,000 new millionaires emerge in
  America
• Notion that hard work results in success
  appealed to the Protestant work ethic of many
  Americans
• According to Social Darwinism, riches were a sign
  of favor with God
• The poor were therefore lazy and deserved their
  lot in life

25
Growth and Consolidation of Americas Businesses
After the Panic of 1893, many industrialists
followed the lead of Carnegie and J.P.
Morgan Mergers of companies became common with
one company buying a majority of the stock of
another company Monopolies emerge as companies
gained complete control of an industries
production, wages, and prices
26
U.S. Steel (1901)

• Banker J.P. Morgan buy Carnegie Steel for 1
  Billion
• Creates the largest corporation in the world