1. Ch. 24 Notes Industry Comes of Age

2. The Rise of Industry 1.After the Civil War, agriculture was still the largest economic activity of the U.S. and the U.S. imported more goods than they exported. 2.By 1900, industry made up over half of the U.S.’s economic activity and the U.S. was a major supplier of manufactured goods in the global market place. 3.The South didn’t participate in this rise, though. 4.The South remained largely rural and continued to rely on agriculture, except for the influx of new textile industries in certain areas.

3. Factors Supporting Industry 1.The U.S. had abundant natural resources to use as raw materials. 2.The U.S. was able to harness early power sources, such as water and coal. 3.The construction of roads, canals and (most importantly) railroads allowed manufactures to get their goods to various markets around the country – and abroad. 4.The U.S. had a cheap labor supply because of the large number of immigrants entering the country. 5.The U.S. went through a burst of technological innovation after the Civil War. 6.The U.S. developed new management and business techniques to aid in industry. 7.The U.S. had large amounts of investment capital, from both home and abroad.

4. The Iron Horse 1.One of the most significant early industries to develop in the U.S. was the railroad. 2.The transcontinental railroad, which was financed through loans and land grants from the federal government, united the nation into a single, integrated national market. 3.Agriculture and mining were expanded greatly (because you could get your goods to eastern markets faster and easier) and foreign trade was made easier as well.

5. The Influence of the Railroads 1.The railroad owners had a huge amount of influence over trade in the U.S. 2.They were instrumental in getting the country to adopt standard time zones. 3.They bribed judges and legislatures to enact laws favorable to them (they allowed politicians and journalists to travel free). 4.They inflated their stock prices to reap higher profits. 5.They created “pools” in order to avoid competing with each other. 6.They offered rebates and took kickbacks from larger shippers.

6. Regulating the Railroads 1.The federal government took a laissez faire approach to regulating any type of industry (hands off) so it fell to the state legislatures to try to regulate the railroads. 2.In 1877, in the case of Munn v. Illinois, the Supreme Court said that the states did have the power to regulate the railroads, but in 1886, in the case of Wabash v. Illinois, the Supreme Court reversed that decision. 3.In 1887, the federal government passed the Interstate Commerce Act, creating the Interstate Commerce Commission to regulate the railroads. 4.The ICC wasn’t effective because it didn’t have much enforcement power, but it was important because it showed the government was (slowly) moving away from the laissez faire approach to business and industry.

7. Industrialization and Women 1.As the Industrial Revolution changed the shape of America, it also influenced the role of women in the workforce. 2.In the lower classes, many women worked in the factories – out of necessity. 3.Two inventions will bring women from the middle class into the workforce as well – the typewriter and the telephone. 4.Women will face many inequalities in the workforce though and as the labor movement grows, they will often be left out of it as well.

8. The Captains of Industry 1.The Industrial Revolution created a huge gap between the upper and lower classes of our nation. 2.Men like Andrew Carnegie (steel), J.D. Rockefeller (oil), J.P. Morgan (banking) and James Duke (tobacco) will grow incredibly rich during this time, often through nefarious business practices. 3.When Carnegie decides to sell his steel mills to J.P. Morgan, U.S. Steel will be created ((1901), which was the U.S.’s first billion dollar corporation. 4.These men, through various innovations, will change the way America does business and bring about major, positive effects on U.S. society.

9. The Robber Barons 1.The same men who brought about positive change through their industries also brought much negative change. 2.Carnegie (through vertical integration) and Rockefeller (through horizontal integration) virtually eliminated competition within their fields of business – and of course the government did nothing to stop them. 3.Over time, huge monopolies formed, controlling the prices of numerous products bought and sold in America.

10. The Robber Barons

11. Industries Influence on Government

12. Social Darwinism 1.The idea of Social Darwinism was actually developed by Herbert Spencer and William Graham Sumner. 2.According to their “survival of the fittest” theory, the wealthy deserved their riches because they had demonstrated greater ability than the poor. 3.The writer Horatio Alger wrote “rags to riches” stories about men like Carnegie and the working class believed that they would be able to do that as well.

13. Carnegie and the “Gospel of Wealth” 1.According to the “Gospel of Wealth”, men like Rockefeller and Carnegie believed that they had to prove themselves morally responsible to handle their wealth. 2.Over time, their philanthropy would lead to numerous public libraries, research centers, scholarships and other items.

14. The Labor Movement 1.The working class worked 10 to 14 hour work days. 2.Working conditions were dangerous and abusive. 3.Wages were low. 4.Child labor was common. 5.The government of course will do nothing about these conditions so the labor force began forming unions to promote their interests.

15. Businesses Fight Back 1.Business leaders would use blacklists – refusing to hire a union member. 2.They would use lockouts – closing down their factories to drive the unions out. 3.They would hire scabs to work when the union went on strike. 4.They would make workers sign yellow-dog contracts promising not to join a union.

16. The National Labor Union 1.The NLU was organized in 1866. 2.The earliest national union, it aimed to unify workers around the country in all types of trades – it did exclude Chinese labors and most women and African Americans as well. 3.Their main goals were to get arbitration of industrial disputes and an eight hour work day. 4.The Panic of 1873 brought about its collapse

17. The Knights of Labor 1.Led by Terence Powderly, the Knights of Labor became a major national union in the 1880’s. 2.The Knights of Labor accepted anyone into their union, as long as they were laborers. 3.Their main goal was an eight hour work day and were actually able to get it (through strikes) in some instances. 4.The problem with the Knights of Labor was that they had too many competing interests and no “class consciousness” – they didn’t see themselves as a permanent working class. 5.In 1886, the Haymarket Square Riot will bring about the collapse of the Knights of Labor – people associate the violence occurring in strikes with the labor union.

18. The American Federation of Labor 1.The American Federation of Labor, led by Samuel Gompers, was formed for craftsmen. 2.It excluded unskilled laborers, women and African Americans. 3.They sought better wages, hours and working conditions.