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Industry Comes of Age 1865-1900 “The wealthy class is becoming more wealthy; but the poorer class is becoming more dependent. The Gulf between the employed.

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Presentation on theme: "Industry Comes of Age 1865-1900 “The wealthy class is becoming more wealthy; but the poorer class is becoming more dependent. The Gulf between the employed."— Presentation transcript:

1 Industry Comes of Age 1865-1900 “The wealthy class is becoming more wealthy; but the poorer class is becoming more dependent. The Gulf between the employed and the employer is growing wider; social contrasts are becoming sharper; as liveried carriages appear; so do barefooted children”. Henry George, 1879

2 Life in the 1860s No indoor electric lights No indoor electric lights No refrigeration No refrigeration No indoor plumbing No indoor plumbing Kerosene or wood to heat Kerosene or wood to heat Wood stoves to cook with Wood stoves to cook with Horse and buggy Horse and buggy In 1860, most mail from the East Coast took ten days to reach the Midwest and three weeks to get to the West Coast. In 1860, most mail from the East Coast took ten days to reach the Midwest and three weeks to get to the West Coast. A letter from Europe to a person on the frontier could take several months to reach its destination. A letter from Europe to a person on the frontier could take several months to reach its destination. Life in the 1900s US Govt issued 500,000 patents—electricity US Govt issued 500,000 patents—electricity Refrigerated railroad cars Refrigerated railroad cars Sewer systems and sanitation Sewer systems and sanitation Increased productivity made live easier and comfortable. Increased productivity made live easier and comfortable. Power stations, electricity for lamps, fans, printing presses, appliances, typewriters, etc. Power stations, electricity for lamps, fans, printing presses, appliances, typewriters, etc. New York to San Francisco to 10 days using railroad. New York to San Francisco to 10 days using railroad. 1.5 million telephones in use all over the country 1.5 million telephones in use all over the country Western Union Telegraph was sending thousands of messages daily throughout the country. Western Union Telegraph was sending thousands of messages daily throughout the country.

3 The Post Civil War Economy At the end of the 19 th talented men were entering business & not necessarily government. * RR’s more than any other factor spurred 2 nd Industrial Revolution! The Railroads & Iron Pacific Railway Act (1862)- provided money to build a transcontinental railroad. required government subsidies & land grants be given to railroad companies. Loans- $16,000 for flat; $48,000 for mountainous Congress awarded RR companies 155,504,994 acres & western states awarded them 49 million acres. Rail companies- could use the land (sq. mile blocks) for collateral or sell it for huge profits. rail roads withheld all land from other users until 1887 (Pres. Grover Cleveland-opened still unclaimed public portions to settlement)

4 Railroad Construction Promontory, Utah

5 Government funding of internal improvements Why did government finally spend money on internal improvements? Postal Service- preferable rates Military Traffic – preferable rates connect western states to east populate middle US- “safety valve” Trade with Asia

6 *The Homestead Act (1862) allowed a settler to acquire up to 160 acres by living on it for 5 years & paying a fee of $30. allowed a settler to acquire up to 160 acres by living on it for 5 years & paying a fee of $30.

7 Companies that built the FIRST Transcontinental RR 1. The Union Pacific- built westward from Omaha, Nebraska; built 1086 miles of track Owned by Grenville Dodge; Credit Mobilier Scandal Owned by Grenville Dodge; Credit Mobilier Scandal Government had to subsidize Received 20 sq. miles of land for each mile of track laid. Received 20 sq. miles of land for each mile of track laid. $ 16,000 per mile (prairie)- $48,000 per mile (mountain) $ 16,000 per mile (prairie)- $48,000 per mile (mountain)

8 Union Pacific employed mainly *Irish immigrants & Union veterans who had fought for the Union workers faced blizzards & hostile Indian attacks. workers lived in “tented towns” or “hells on wheels” populated mostly by men & some prostitutes. 2. The Central Pacific Railroad- built eastward from Sacramento, California to meet up with the Union Pacific. Owned by the “Big Four”- including Leland Stanford & Collis P. Huntington. Used mostly Chinese laborers * Greatest accomplishment of peacetime USA & AMAZING ENGINEERING FEAT. ** Both Rail companies met & completed the Transcontinental RR at Promontory Point, Utah in 1869.

9 Transcontinental RR Complete Promontory Point, Utah 1869

10 May 10, 1869 at Promontory, Utah “The Wedding of the Rails” Central Pacific and Union Pacific May 10, 1869 at Promontory, Utah “The Wedding of the Rails” Central Pacific and Union Pacific

11 Other Transcontinental RR Projects 4 other RR projects completed by the end of the 19 th century none received monetary loans from the government but all but one (Great Northern) did get land grants 1. Northern Pacific Railroad- Lake Superior to Puget Sound (1883) 2. Atchison, Topeka, & Santa Fe- went through SW deserts of California (1884) 3. Southern Pacific- New Orleans to San Francisco 4.Great Northern RR- Duluth to Seattle; owned by James J. Hill

12 Robber Barons & Railroads Robber Baron’s or Captain's of Industry?? Robber Baron- name given to men who made their wealth off Railroads; seen as greedy or corrupt. James J. Hill- exception to the Robber Baron; had values & character- received no subsidies! ran agricultural demonstration trains, gave reduced rates to settlers, brought “blooded bulls” from Britain to distribute to framers, ran a financially sound organization. * Many railroad builders overbuilt & over speculated= lost the money of investors.

13 Railroad Consolidation & Mechanization 1. “Commodore” Cornelius Vanderbilt- owned the NY Central RR line; NY to Chicago (4,500 miles of track)-- $ 100 million fortune (today $143 Billion) consolidated smaller lines superior service at low rates (affordable & safe) founder of Vanderbilt University Grandfather of G. Vanderbilt, who built Biltmore House (NC) Advancements in RR 1.Use of Steel rails- Vanderbilt popularized; safer & more economical 2. Air Brake- (1870’s) – trains could haul heavier loads. 3. Pullman Cars (1860’s)- Safety devices- telegraph, double-tracking, block signal – standardized gauge of track

14 Impact of RR on the USA 1.United the nation physically= LARGEST INTEGRATED MARKET IN WORLD (American system on steroids) 2.New Markets- raw materials & finished goods Orders for steel Agriculture spread (settlement) moved people to cities Moved food to cities immigration “safety valve” Time Zones (1883 Railway Act) maker of millionaires 3. Ecological Impacts Prairies plowed under cattle introduced forests cut down buffalo herds decimated

15 Expansion of Railroads 1869, 30,000 miles of track 1900, 200,000 miles of track Distribution System to the marketplace Symbol of growth

16 4. Corruption Credit Mobilier Scandal (1860’s) “Stock watering”- inflated claims about a RR line’s profitability = sold stocks & bonds higher than actual value. Abusing the Public- RR Rates! Monopolies – “pools” Public’s Response to Corruption Free Enterprise/American dream vs. Economic Injustice 1.States attempted to pass laws to regulate RR rates (Economic panic 1870’s= The Grange (farmers demand regulation.) Munn v. Illinois (1877)- upheld state law that regulated private companies for the PUBLIC GOOD. Wabash v. Ill. (1886) – Supreme Court ruled that states could not regulate interstate commerce- only the federal government could.

17 REACTION OF CONGRESS 2. Interstate Commerce Act (1887): prohibited rebates & pools. Required RR to publish their rates openly. Interstate Commerce Commission (ICC): set up to regulate RR rates. 1 st attempt by Federal government to regulate business- for society’s interests. Initially very weak- hardly enforced; RR fought it (using the 14 th Amendment). Along with Sherman Antitrust Act (1890) foreshadow the end of laissez-faire policy towards business in Gilded Age.

18 2 nd Industrial Revolution (Post Civil War-1920) 1860- US 4 th in world industrial output 1894- #1 --- WHY?? 1.Liquid Capital- money made during the Civil War; foreign investors. 2. Natural Resources- coal, iron ore, oil etc. 3. Immigrants – provided cheap unskilled labor 4. American Ingenuity- mass production 440,000 patents (1860-1890) cash register, stock ticket, type writer (Christopher Sholes)= drew women to industry. Refrigerated Freight car- Gustavus Swift Telephone- Alexander Graham Bell (1876) Thomas Edison (1847-1931)- phonograph, mimeograph, Dictaphone, motion picture Electricity= light bulb (24 hour workday) “Genius is 1% inspiration and 99% perspiration”

19 Thomas Alva Edison “Wizard of Menlo Park”

20 Edison Inventions helped to shape modern society More than 1,000 inventions patented Light bulb Phonograph Incandescent electric lamp Starter for automobiles that eliminated hand crank Batteries Perfected stock ticker New York City first city to powered by electricity The motion picture camera and projector First used “hello” as phone greeting Helped Alexander G. Bell with the telephone Edison Inventions helped to shape modern society More than 1,000 inventions patented Light bulb Phonograph Incandescent electric lamp Starter for automobiles that eliminated hand crank Batteries Perfected stock ticker New York City first city to powered by electricity The motion picture camera and projector First used “hello” as phone greeting Helped Alexander G. Bell with the telephone “Wizard of Menlo Park”

21 The Light Bulb

22 The Phonograph (1877)

23 The Ediphone or Dictaphone

24 The Motion Picture Camera

25  1790s  276 patents issued.  1990s  1,119,220 patents issued.  Gave an inventor the right to make and sell an invention.  1790s  276 patents issued.  1990s  1,119,220 patents issued.  Gave an inventor the right to make and sell an invention.

26 Alexander Graham Bell Telephone (1876)

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29 The Airplane Wilbur Wright Orville Wright Wilbur Wright Orville Wright

30 Model T Automobile Henry Ford

31 Monopolies & Robber Barons 1.Andrew Carnegie- made his millions mainly in the steel industry. used vertical integration to reduce competition & lower costs Brought the Bessemer Process to America for steel making. By 1900- he was producing ¼ of the world’s steel Carnegie became a philanthropist (Gospel of Wealth) building libraries, pensions for professors & other things

32 Coke fields purchased by Carnegie Coke fields Iron ore deposits purchased by Carnegie Coke fields Iron ore deposits Steel mills purchased by Carnegie Coke fields Iron ore deposits Steel mills Ships purchased by Carnegie Coke fields Iron ore deposits Steel mills Ships Railroads purchased by Carnegie Vertical Integration Vertical Integration You control all phases of production from the raw material to the finished product Horizontal Integration Horizontal Integration Buy out your competition until you have control of a single area of industry

33  In 1856 Henry Bessemer devised a way of converting iron into steel on a large scale.  His invention involved blowing air through molten iron in a converter, or furnace, in order to burn off the excess carbon.  Result: Strong, Cheap Steel New Uses for Steel  Steel used in railroads, barbed wire, farm machines  Changes construction: Brooklyn Bridge; steel-framed skyscrapers  In 1856 Henry Bessemer devised a way of converting iron into steel on a large scale.  His invention involved blowing air through molten iron in a converter, or furnace, in order to burn off the excess carbon.  Result: Strong, Cheap Steel New Uses for Steel  Steel used in railroads, barbed wire, farm machines  Changes construction: Brooklyn Bridge; steel-framed skyscrapers

34  With the Bessemer Process and Carnegie steel, Skyscrapers revolutionized the building industry…..  Major city skylines would be dotted with this new type of building as the 1900’s begin.

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37 2. John D. Rockefeller – made millions in the oil (Kerosene) business. used Horizontal Integration used “trusts”- stockholders in smaller oil companies assigned their stock to the Board of Directors of Standard Oil Co. (1870) “Let us prey”- motto controlled the world’s oil supply 3. J.P. Morgan- made his millions in banking ; consolidated rival enterprises & infiltrate boards with his men= “interlocking directorates”.

38 Conglomerate A group of unrelated business owned by a single corporation. Still used today by companies that merge. Pool Competing companies that agree to fix prices and divide regions among members so that only one company operates in each area. Outlawed today. Trust(Monopoly) Companies in related fields agree to combine under the direction of a single board of trustees, which meant that shareholders had no say. Outlawed today. Holding Company A company that buys controlling amounts of stock in related companies, thus becoming the majority shareholder, and holding considerable say over each company's business operations. Outlawed today.

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40 Rockefeller & Standard Oil 1859- Edwin Drake pumped oil in Titusville, Penn. (“Drake’s Folly”) helped make kerosene (1 st major oil product) 1870’s kerosene is 4 th most valuable export 1885- 250,000 electric light bulbs in use= decreased demand for kerosene. 1900- the car caused increased demand for oil 1877- Standard Oil controlled 95% of US oil market & eventually world market. (Horizontal Integration)

41 **Social Darwinism belief among the rich in the Gilded Age based on “survival of the fittest”; Darwin’s theory applied to society. belief among the rich in the Gilded Age based on “survival of the fittest”; Darwin’s theory applied to society. Led some of the wealthy to resist special efforts to help the poor. Led some of the wealthy to resist special efforts to help the poor. Rev. Russell Conwell- “Acres of Diamonds” sermon.= poor are poor due to shortcomings. Rev. Russell Conwell- “Acres of Diamonds” sermon.= poor are poor due to shortcomings.

42 Government Takes on Big Business US Industrialists used the 14 th Amendment as justification for their monopolistic actions. courts interpreted the provisions designed to protect ex- slaves as labeling corporations “individuals”. Corporations migrated to states (NJ) who were less regulatory. ** 1890 Sherman Antitrust Act- forbade combinations that restrained trade- largely ineffective (loopholes) law was used to claim that labor unions were unlawful combinations Attorney-General lost 7 of the 1 st 8 cases under the law 1914- made more effective

43 One of Carnegie’s mansions Vanderbilt mansion

44 Life of the worker & tenement dweller

45 The “New” South 1900- the South was mostly unaffected by industrial by industrial growth. By 1900, the South was producing a smaller % of industrial goods that it had BEFORE the War. Black & white sharecroppers remained by debt bondage to landlords- mostly rural. Henry Grady- editor of Atlanta Constitution- urged southerners to be “Georgia Yankees”. * James Buchanan Duke 1880’s- machine made cigarettes replaced hand rolled Duke mass produced cigarettes (American Tobacco Co.) gave money to Trinity College= Duke University.

46 Barriers to Southern Industrial Growth Regional rate setting (by Northern RR) “Pittsburgh Plus” rate system for steel industry in Alabama= stunted Southern economy 1880’s- Textile Mills move to the South Northern capitalists built textile mills in the South Cheap labor (mostly white “lint heads”) & tax benefits located in Piedmont of southern Appalachia provided an industrial base in the South “mill towns” sprang up– salaries = credit at company store= debt to mill workers. 1 st steady jobs/wages---no farming involved.

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48 Impact of the Second Industrial Revolution on America 1. Standard of living rose sharply 2. More physical comforts at home? 3. Cities grew 4. Concept of time- Time clock vs. natural time 5. ** Women- affected more than any single group (new jobs- typewriter, telephone operators delayed marriage for careers smaller families most women worked because of necessity & earned less than men until 1970’s-1980’s.

49 “ Stepped On” Charles Gibson late 1800’s- Gibson Girl

50 6. Class Division- in 1900, 1/10th of the population owned 9/10ths of the wealth. Immigrants (socialists & anarchists) complained 1860= 2/3 Self employed By 1900- 2 of 3 Americans depended on wages 7. No Safety Nets- no Unemployment Insurance, Social Security, Disability Bankrupt businesses = unemployment Hurt = unemployed 8. Globalization- American products increasingly sold overseas (“the flag follows trade”)

51 Unions in American History Problem: Workers were exploited, work was impersonal, machines required unskilled workers (replaced workers) Problem: Workers were exploited, work was impersonal, machines required unskilled workers (replaced workers) laws, courts, public opinion favored business laws, courts, public opinion favored business troops used against workers troops used against workers

52 Tactics Used Against Unions Lockouts “Yellow Dog” Contracts Blacklists hired thugs/ detectives to keep unions out What should workers do? * Commonwealth v. Hunt (1842) workers have a right to organize (Mass.) Before 1861- few unions or strikes After Civil War- workers began to organize (1872= 32 national unions).

53 Major Labor Unions of the Gilded Age 1. National Labor Union (NLU; 1866) Lasted 6 years; 600,000 members Members included: skilled, unskilled, farmers Excluded: Asians, blacks, women (blacks formed Colored NLU) Demands: 8 hour work day, Arbitration (Government workers won 8 hour day) Why they failed: Depression in 1870’s, wage reductions (National Railway Strike) 2. Knights of Labor (1869-1895) Members: All workers (no Asians) Led By Terrence Powderly 1,000,000 members

54 wanted – economic & social reform, cooperatives, safety & health codes, 8 hour day. won some strikes in 1880’s Why Failed? Haymarket Square Riot (Chicago 1886)= associated with anarchists, inclusion of skilled & unskilled labor By 1890= only 100,000 members 3. American Federation of Labor (AFL): LED by Samuel Gompers an association of self governing national unions (different trades & skills) Wanted: “more”– wages, jobs, hours, working conditions & CLOSED SHOPS Methods: Boycotts, strikes, walkouts (kept a ‘war chest” of $ to help during strikes.

55 did not allow: unskilled workers or blacks 1900= 500,000 members Labor 1881- 1900 23,000 strikes, over 6.6 million workers= cost $450 million labor unions won about half the strikes (only 30% of workers) Labor Day- legal holiday 1894 Later laws will be enacted to protect workers


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