Towards a Modern America

1
Towards a Modern America

• Industrialization to 1900

2
The United States Industries

• The Industrial Revolution began in the United
  States in the early 1800s
• Out of 30 million Americans only 1.3 worked in
  industry in 1860
• By 1900 Americans had transformed the USA into
  the leading industrial nation
• In 1914 the gross national product, the total
  value of all goods and services produced by a
  country, was growing rapidly

3
Natural Resources

• The USA has water, timber, iron, copper and coal
  available for industry
• Many resources were located in the West and
  railroads helped people in the east to access
  these resources over time
• At this time petroleum was also being tested
• Petroleum was really important mostly because it
  could be turned into Kerosene
• The American oil company began thanks to Kerosene

4
Kerosene

• Kerosene was used in lamps and stoves
• Kerosene, therefore, became a necessity
• This began in Pennsylvania, as residents there
  saw oil coming to the surface
• Edwin Drake drilled the first oil well near
  Titusville, PA in 1859.
• Oil was also found in many other places such as
  Texas.
• Oil production led to economic expansion.
• It is fair to say that currently, Americans are
  addicted to oil.

5
Addicted to Oil

• Addicted to Oil part 1

6
Human Resources

• There were many human resources available in
  America as well. Between 1860 and 1910 the
  population in America almost tripled
• This was because people were having very large
  families and because of immigration
• Between 1870 and 1910 about 20 million immigrants
  came to the United States looking for a better
  life

7
Lassiez-Faire and Free Enterprise

• In the late 1800s people began to believe in
  what was called lassiez faire which means let
  do
• For economics this means that the government
  would not be involved in the economy other than
  to protect rights
• Lassiez faire focuses on supply and demand

• Lassiez Faire supporters believe that competing
  companies leads to better profit, more efficiency
  and more money for everyone
• It also focuses on lower taxes
• Also that government debt should be limited
  because money borrowed by the government takes
  away from the individual

8
Entrepreneurs

• American Entrepreneurs are people who risk their
  monetary gain to run a business
• These people like building a business and gaining
  their own money
• In the late 1800s this idea helped to fuel the
  many industries especially in New England

9
Government and Industrialization

• The problems between the North and South
  continued into the late 1800s
• The North wanted high tariffs on imports
• Why?
• They also wanted federal subsidies for companies
  building railroads, canals, etc to the West
• The South opposed internal improvements

• They wanted low tariffs to promote trade with
  other countries and to keep the cost of imported
  goods low
• The Morrill Tariff which helped to heighten
  tariffs

10
Success!!!

• By the end of the Civil War tariffs had tripled
• The government had given out loans of 65 million
  to construct railroads
• They also sold land with minerals on it for far
  less than their actual value
• This led to rapid industrialization

• The USA became one of the largest free trade
  areas in the world
• The entire USA was open to trade
• The Constitution forbade states from banning
  trade.
• There were also very few restrictions on
  immigrations allowing for such a large workforce
• Immigration

11
The bad part.

• High tariffs do hurt lassiez-faire ideals
• For one other countries raised their tariffs
  against the United States
• This hurt American companies who were trying to
  sell goods overseas
• In particular, this affected farmers
• The good side was that the hurt towards farmers
  allowed others to focus on industry people
  decided to leave farms and go to factories.

12
New Inventions

• In 1874, Alexander Graham Bell thought of the
  idea of a telephone.
• He said this to his assistant Thomas Watson.
• He worked on this until 1876.
• At that time he had succeeded in transmitting his
  voice.

• This invention changed everything for business
  and personal communications
• How?
• In 1877 the Bell Telephone Company began.
• It eventually became known as The American
  Telephone and Telegraphy (ATT)
• The invention of the telephone

13
More inventions.

• One of the most important inventors of the time
  was Thomas Alva Edison
• Edison had one of the first modern laboratories
  in Menlo Park, New Jersey
• In 1877 he invented the phonograph
• In 1879 he invented the light bulb and the
  electric generator

14
Continued

• He continued to invent other things the battery,
  the Dictaphone, the mimeograph, and the motion
  picture
• In 1882, Edison Electric Illuminating Electric
  Company began to supply electric power to the
  people of NYC.

• In 1889 Edisons companies merged and became the
  Edison General Electric Company, known today as GE

15
Other Inventions and Inventors

• Thaddeus Love the ice machine (basis for the
  refrigerator)
• Gustavus Swift the refrigerated railroad car
• Northrop automatic loom helped cloth be made at
  a faster rate
• Standard sizes made the production of clothing
  much easier

• Power driven sewing machines and cloth cutters
  allowed clothing to be made in factories
• The same occurred for shoes
• All of this allowed prices to dropwhy would that
  be?

16
Railroads

• By 1900 there would be 200,000 miles of railroad
  track in the United States
• This began in 1862 when Lincoln signed the
  Pacific Railway Act that states there would be
  construction of a transcontinental railroad by 2
  corporations the Union and Central Pacific
  railroad companies

• Under Grenville Dodge the Union began pushing
  westward from Omaha, Nebraska in 1865
• Many people worked on the railroads Civil War
  veterans, immigrants from Ireland, miners,
  farmers, cooks, adventurers, and ex-cons.
• There were about 10,000 employees

17
Railroads

• Life was not easy on the track. There was hard
  work and little rest
• The Central Pacific Railroad began with Theodore
  Dehone Judah
• He sold stock to 4 Sacramento merchants Lelan
  Stanford, Charley Crocker, Mark Hopkins and
  Collis P. Huntington

• They became called the Big Four
• They all became rich
• This company hired about 10,000 workers from
  China

18
Railroads

• The Transcontinental Railroad part 1
• part 2
• part 3
• part 4
• part 5
• The railroad also helped to open up new markets
• People could now send goods across the country

• After much of the railroad was completed it was
  up to the companies to then connect all the
  railroads
• Eventually 7 large companies with terminals in
  major cities and many different branches
  controlled rail traffic

19
Railroads

• One of the most famous consolidators was
  Cornelius Vanderbilt
• He merged three short New York railroads to build
  the New York Central which ran from New York to
  Buffalo
• Eventually he also had a rail to Chicago

• In 1871 Vanderbilt began construction on Grand
  Central Station in New York
• There were some problems that did arise with
  railroads

20
Problems

• Before 1880 people set their watches based on the
  position of the sun in the sky.
• This caused problems with train scheduling and
  passenger safety
• Why?
• Collisions could occur because of time differences

• In 1883 the country was divided into time zones
  Pacific, Mountain, Central and Eastern
• Refer to page 445 in your book
• Railroads were successful at uniting people in
  different locations

21
The Land Grant System

• The federal government gave land grants to
  railroad companies to encourage construction
• Railroads then sold the land to settlers, real
  estate companies and businesses as a way of
  making money to build the railroads
• During the 1850s and 60s the government gave
  railroad companies over 120 million acres

22
Robberbarons

• Many people believed that the great wealth of the
  entrepreneurs of railroads came from tricking
  investors and taxpayers, bribing the government
  and cheating on contracts and debt
• One of the most renowned was Jay Gould who used
  insider trading to benefit his stocks.

• Bribery did happen a lot mostly because railroad
  investors knew they could make more money by
  taking government land grants than by actually
  operating the railroad
• Many investors bribed members of Congress and
  State legislatures to vote for more land grants

23
The Credit Mobilier Scandal

• Credit Mobilier was a construction company set up
  by stock holders including Oakes Ames who was a
  Congressmen
• Credit Mobilier overcharged Union Pacific for the
  work it did but Union Pacific paid the inflated
  bills because the same investors were in charge
  of both the Credit Mobilier and the Union Pacific
  company.

24
More

• By the time the Union Pacific railroad was done
  the investors had made millions
• The railroad however was almost bankrupt
• To convince Congress to give the Union Pacific
  more grants he offered stock to more members of
  Congress at a lower rate
• During the election of 1872, a list of names that
  had accepted this bribe were given to the New
  York Sun
• Many were investigated and found guilty including
  James Garfield who would become the President of
  the USA

25
The Great Northern

• The Credit Mobilier scandal made people think
  that all railroad owners were robberbarons
  (people who loot the system and give nothing
  back)
• This wasnt true of James Hill
• He built the routes from St. Paul, Minnesota to
  Everett, Washington on good land using no land
  grants
• He wanted his route to pass by towns in his region

26
More

• He offered low rates to those who wanted to move
  along his routes
• He then looked to American products that were in
  demand in China and hauled those goods to
  Washington for shipment to Asia (cotton,
  textiles, flour)
• This allowed his railroad to haul things east to
  west
• The Great Northern became the most successful
  railroad and the only one not to go bankrupt.

27
Big Business

• By 1900 the USA was booming with big businesses.
• Big business was dominating the economy and
  included warehouses, factories, offices and
  distribution facilities
• This was mostly made possible by corporations an
  organization owned by many people but treated by
  law as though it were a single person

28
Corporations and Beyond

• People who own corporations are called
  stockholders
• They own a share in the corporation.
• The share is called stock
• With the money from stock corporations invested
  in technology, hired people, and got many new
  machines

• This allowed for economies of sale, meaning that
  goods were produced more cheaply because they
  could produce good so much more quickly
• Corporations also have two kinds of costs fixed
  costs and operating costs

29
More.

• Fixed costs are costs a company has to pay even
  if that company is not operating
• Operating costs are costs that companies pay only
  when a company is actually working (like wages)
• For big businesses fixed costs were high so they
  very rarely shut down which is not the case for
  small businesses

• This allowed big businesses to operate in poor
  economic times by cutting prices to increase
  sales because their goods were so much cheaper to
  make
• Small businesses that have high operating costs
  find it difficult to compete with big businesses

30
Industry itself.

• Many people believed that big businesses were
  being unethical
• They felt that big businesses were using their
  wealth to get rid of smaller companies
• Many leaders didnt like the falling prices of
  goods because it cut into their own profit
• Thus something had to be done

• Pools were created which were agreements to
  maintain prices at a certain level
• However, there were legal issues because they
  seemed to be taking away from competition.
• Also, most of the time pools didnt last long as
  one member would slash prices to try to steel the
  market

31
Carnegie and Steel

• Carnegie and Steel
• Andrew Carnegie was a Scotland native who had
  worked in a textile factory and who eventually
  became a railroad supervisor
• He knew that he could make a lot of money if he
  bought shares in iron mills and factories that
  made sleeping car and locomotives

• He invested in a company that built railroad
  bridges and in his early 30s he was already
  making 50,000 per year
• He eventually quit the railroad to focus on his
  own life prospects.

32
Industry against Unions

• Industries were often forced to recognize union
  because the people involved in them were workers
  that they needed
• Owners of large corporations often got angry with
  industrial unions because they united the workers
  in a particular trade.
• Companies did all they could to stop unions.

• They required workers to take oaths or sign
  contracts promising to not join a union
• Detectives were hired to identify union
  workers/organizers
• Workers who tried to organize a union were
  blacklisted placed on a list where no one would
  hire them
• The rise of Industry

33
More

• If workers formed a union a company would use a
  lockout, they refused to pay workers and locked
  workers out of the property
• If there was a strike the company would hire
  strikebreakers to do the work necessary
• It was very very ugly

• There were other problems for workers trying to
  form a union because there were no laws allowing
  them to organize
• Courts ruled that strikes were conspiracies
• Often times union organizers were threatened to
  be called Marxist, a group that wanted to
  overthrow the owners

34
More.

• In many cases when unions tried to strike or form
  the outcome was violence and bloodshed
• In 1873 a panic and recession started which
  forced many companies to cut wages
• In 1877, railroad companies announced more wage
  cuts

• This began the first nationwide labor protest
• Workers in West Virginia walked off their jobs
• Eventually workers across the country walked off
  the job
• 80,000 workers were involved in 11 states
• Angry workers tore up tracks, blocked service and
  smashed equipment

35
The end.

• The governors of some of the states had to call
  the militia to stop the violence
• In some cases guns were used to stop some of the
  workers
• President Hayes forced the army to open the
  railroad between Philadelphia and Pittsburgh
• Troops were sent to Chicago where the city was at
  a stand still from the strike
• The troops stopped the violence but 100 people
  had been killed

36
The Knights of Labor

• The Great Railroad Strike was deemed a failure
  and pushed others around the nation to better
  organize
• The Knights of Labor became the first national
  industrial organization
• The Knights asked for an 8 hour work day, equal
  pay for women, abolition of child labor, and
  worker-owned factories

• The Knights that boycotts could work better than
  strikes and arbitration as well, when a impartial
  3rd party helps to work out disagreements
• When the Knights used strikes they were
  successful
• However, the Haymarket Riot led to their demise

37
The Haymarket Riots

• Haymarket Riots
• The workers wanted an 8 hour work day and decided
  to strike on May 1st to get on. One person was
  shot in Chicago as a result
• May 3rd people gathered at Haymarket square to
  protest the death and policemen showed up
• One man threw a bomb at the time
• Police shot and so did strikers
• At the end 7 police and 4 workers were dead
• Later 4 were executed.

38
The Pullman Strike

• Americans eventually created the American Railway
  Union
• The Pullman Car Company was based in Illinois
• It required workers to live in town and to buy
  goods from the company stores.
• A 1893 depression struck and the Pullman company
  slashed wages

• This made is hard for the workers to pay rent and
  to pay for the goods at the company stores
• In May the company fired three employees who
  complained a strike went into affect
• The ARU stopped handing Pullman Cars across the
  USA

39
The result

• Pullman attached mail cars to their cars stating
  that if they refused mail cars they were creating
  a federal offense
• President Grover Cleveland sent in troops because
  it was his responsibility to keep the mail
  running
• Thus, the strike collapsed

40
The American Federation of Labor

• The American Federation of Labor (AFL) was
  organized by over 20 trade unions
• The first leader was Samuel Gompers
• He really helped labor unions to be accepted into
  society
• He didnt want unions involved in politics
• He focused on making small gains, like higher
  wages and better working conditions
• He pushed for three goals
• Recognition of unions and collective bargaining
• Closed shops companies would hire only union
  members
• The eight hour work day

41
AFL

• By 1900 the AFL had 500,000 members
• However, that was only 15 of the work force
• All unions including the railroad only had about
  18 of the force

• At the beginning of the new century Unions were
  still unorganized and weak.

42
Working Women

• By 1900 women made up more than 18 of the
  workforce
• 1/3rd of the women worked as domestic servants
• Another 1/3rd worked as teachers, nurses, sales
  clerks and secretaries
• The remaining 1/3rd were Industrial workers

• No matter what they did, women were paid less
  than men
• It was assumed that a women had a man to support
  her, her dad or husband, and thus men needed more
  money to provide for their families
• Most unions including the AFL excluded women

43
A Change!!!

• In 1903 two women labor organizers Mary
  OSullivan and Leonora OReilly decided to make a
  union for women
• The Womens Trade Union League (WTUL) was the
  first national association dedicated to promoting
  womens labor issues.
• The WTUL wanted an 8 hour day, minimum wage, an
  end to evening work for women and the end of
  child labor
• Child Labor