Presentation on theme: "What were the factors that spurred America’s industrial growth?"— Presentation transcript:
1 What were the factors that spurred America’s industrial growth? 14.3 Big Business EmergesWhat were the factors that spurred America’s industrial growth?
2 Context The Age of Monopolies, Trusts, and Big Labor America accomplished heavy industrialization in the post-Civil War era. Spurred by the transcontinental rail network, business grew and consolidated into giant corporate trusts, especially in the oil and steel industries.
5 Experience When was the last time you felt that the “game was rigged”? Have you experienced the power of a monopoly?Do you trust “big business”?
6 OverviewEfficient use of expensive machinery called for “bigness” and consolidation proved more profitable than ruinous price wars
7 The Corporation Basically an “artificial legal person” Advantages Secure capital, Limits on liability, Transferability of shares, perpetual lifeDisadvantagesPublic records, double tax, lack of personal connection between workers and employer
8 Monopolistic practices Monopoly = a firm that completely controls an industryVertical integration = combining all phases of manufacturing in to one organization (Carnegie)Horizontal consolidation = allying with competitors to monopolize a market (Rockefeller)
9 Other “Combinations”Pools = secret agreement to fixes prices and output (Railroad)Trust = More permanent than a pool. Stockholders of competing Companies turn over stock to a Board that coordinates companies within an industry to avoid competition (Standard Oil)Holding company = a corporation composed of various competing enterprises within one industry (JP Morgan’s US Steel)
10 ALL OF THIS GIVES RISE TO TYCOONS Profiteering from the Civil War gives rise to millionaire class (4000)Millionaires capitalize on Transcontinental railroad, mechanization, industrialization, & expansion of marketsSurplus of raw materials, cheap labor, foreign investment ENCOURAGE CAPITALISMInventions Industrialization More Inventions More IndustrializationALL OF THIS GIVES RISE TO TYCOONS
11 Key Inventors and Inventions Alexander Graham Bell = telephone (1876)Thomas A. Edison = electric lights, phonograph (c. 1890)Bessemer Process/William Kelley = process to convert iron to steel (1850)Typewriter 1867 (Christopher Sholes)Automobile / Assembly line (Ford)
13 Andrew Carnegie = Steel Kingpin Steel is King : US pouring out 1/3 of world’s steel by 1890’s“bootstrap” story: poor immigrant to tycoonControls all means of production, eliminates middle manSells to JP Morgan for 400 millionBecomes a philanthropist
14 J P Morgan – Banker’s Banker Builds financial empire through railroads, banks, and holding companiesBuys out Carnegie and enters steel businessUses trusts and holding companies to consolidate wealth and powerForms US Steel Corporation – 1st ever corporation worth more than one billion $
15 Rockefeller – Standard Oil Corp. Kerosene and then Automobiles drive up US oil consumptionRockefeller ruthlessly uses horizontal consolidation to create largest monopolySee “The Octopus,” Cartoon1877 controls 95% of US’s oil refineriesRobber Baron’s Baron
18 Compare the lives and beliefs of Carnegie and Rockefeller using a Venn Diagram
19 Justifications for Big Business Old Rich displaced by rule of the“new rich”Gospel of Wealth – discourages helping the poor by stateLaissez faire = “let it be”Justified by Social Darwinism – survival of the fittestPoor are poor due to lack of initiative
20 William Graham Sumner (1840-1910): The Challenge of Facts http://www The truth is that the social order is fixed by laws of nature precisely analogous to those of the physical order. The most that man can do is by, ignorance and self-conceit to mar the operation of social laws. The evils of society are to a great extent the result of the dogmatism and self-interest of statesmen, philosophers, and ecclesiastics who in past time have done just what the socialists now want to do. Instead of studying the natural laws of the social order, they assumed that they could organize society as they chose, they, made up their minds what kind of a society they wanted to make, and they planned their little measures for the ends they had resolved upon. … let us not imagine that the task will ever reach a final solution or that any race of men on this earth can ever be emancipated from the necessity of industry, prudence, continence, and temperance if they are to pass their lives prosperously.
21 Taking on the TrustsTrusts and robber barons defended by 14th amendment’s due process clauseConstitution’s “interstate commerce” clause inhibits states from controlling trustsSherman Anti-Trust Act of 1890Largely ineffective (wording: Unreasonable restraint of Trade) and lack of enforcement, new forms of consolidation (holding Co.)IRONY: Used effectively against unions
22 Industry and the South 1900: less manufacturing than before Civil War South acts primarily as source of raw materialsNortherners control stock in Southern industry (especially the RR), discouraged industrialization due to lack of capitalShift in cotton mills from NE to S in 1880’sCheap labor (virtually sharecropping) brings rural white southerners to mill towns, and then traps them there
23 Context The Age of Monopolies, Trusts, and Big Labor Industrialization radically transformed the condition of American working people, but workers failed to develop effective labor organizations to match the corporate forms of business.
24 14.4 Workers of the Nation Unite Part 2 – Impact of Industrialization
25 Experience What do you think of unions? Have you ever signed a petition?Do you work now?Do you think you are treated fairly?Do you want to change your working conditions?How would your boss/employer respond?
26 Impact of Industrialization UrbanizationErosion of Jeffersonian idealsWomen’s roles changeDelayed marriagesSmaller familiesAccentuated class division1900: 1/10 of US owns 9/10 of US’s wealth1900: 2/3 of Americans are “wage slaves”Workers’ lives increasingly precarious
31 Rise of Big LaborIncreasing economic change social & economic disruption in workers’ livesLabor strengthened by Civil War, then declines. Why?Big Business doesn’t fight fairPools wealth to hire lawyers & scabs“lockouts,” “yellow dog contracts,” blacklists”“company towns”National Labor Union – 1866
32 Knights of Labor Collective effort needed to counter trusts Founded as a secret society in Why?Led by Terence Powderly, Irish, utopianInclusive and Diverse:men and womenwhite and blackskilled and unskilledBroad (utopian? Socialist?) goalsHURT by Haymarket Square riot, 1886,ChicagoAssociated with anarchists, falls into decline
35 American Federation of Labor Skilled workers split from Knights of Labor 1886AF of L was elitist in membership, narrow in goalsLed by Samuel Gompers, Jewish cigar makerFoe of socialism and “utopian” policiesAvoided politics and focused on union goals:Better wagesEight-hour dayBetter working conditionsAF of L successful in many of its strikes and in meeting many of its goals
40 Key Players in the Labor Movement Mother Jones and Pres. Calvin Coolidge-helped reform Child LaborEugene V. Debs- Socialist, leader of Pullman Strike, later leads IWW (Intl. Workers of the World)
41 Big Business v. Big Labor Who was the winner?Why? ( look on page 433)
42 QUESTIONS TO CONSIDERCompare and Contrast Carnegie, Rockefeller, MorganCompare and Contrast the Labor Movement and the Populist Movement.What were the Populists’ goals and why did they fail?What were the causes and effects of industrialization?