Reality in Room 813… …Life as a Robber Baron… …and Laborers Response Chapter 6 Notes

 When Lincoln was elected to office in 1860, what do you think the U.S. ranked in manufacturing?  Right (at least I hope you get this right), it’s 4 th  By 1894, what do you think the U.S. ranked in manufacturing?  Of course it’s 1 st …why else would I be asking all you unintelligent, replaceable workers?…  How did it happen?  Natural resources were fully exploited, with coal, oil, and iron acquired from the land to make stuff  Massive immigration also allowed the industrialists to hire low-cost labor, often working in two 12-hour shifts, 7 days a week  For you laborers out there, that means the factory was always open—and we’re always making products & money

 Mass production methods also allowed factories to produce goods more efficiently  Ingenuity also reigned supreme, as 440,000 patents were issued between 1860 and 1890  Inventions included the cash register, stock ticker, typewriter, refrigerator car, electric dynamo, electric railway, and the telephone  Women especially worked the typewriter and telephone in newly created employment  Edison is likely the most famous inventor and his light bulb transformed society in and out of the mill, as humans slept about 2 hours less each night on average

 Andrew Carnegie = U.S. Steel  John D. Rockefeller = Standard Oil  J.P. Morgan = Banking and General Electric  The goal of these Robber Barons was to eliminate competition and grow profits  This is great! We make more money!  So what if the worker makes less money, and struggles to feed their family; it’s not like they know what Maslow’s Hierarchy of Needs are…

 Carnegie was not concerned with the laborers though  He pioneered the idea of Vertical Integration  This combines all phases of manufacturing into one organization, from mining to marketing  Carnegie’s goal was to improve efficiency by:  making supplies more reliable  controlling the quality of the product at all stages of production  eliminating middlemen’s fees  Carnegie also used Horizontal Integration  This meant bringing competitors together to monopolize a given market  He perfected the strategy of controlling rivals through a trust

 Rockefeller’s Standard Oil Company was formed in 1870  Other smaller oil companies assigned their stock to the Board of Directors of Standard Oil  By 1877, Standard Oil 95% of the world petroleum market— how’d this happen?  Then Rockefeller consolidated the operations of those companies into Standard Oil, using horizontal integration first, and as successfully than anyone else  Weaker companies not in the trust couldn’t compete  By 1882, the nucleus of the great trust had been formed  This led to “trusts” being referred to as any large-scale business combination  JP Morgan also consolidated banking competition, especially after the depression of 1890s  Economic downturns meant smaller businesses struggled to survive; this allowed robber barons to gain a greater percentage of the market

 Steel was king, hence Carnegie was in power  During Lincoln’s days, steel was an expensive, scarce commodity reserved for cutlery and similar products  However, by 1900 America was producing as much steel as Britain and Germany combined, and one-third of the world’s supply  This was due to the Bessemer process—injecting air into molten iron to blow out carbon and other impurities  Also, coal was abundant, yielding much fuel  The fuel and many sources of labor allowed steel factories to thrive  Make sure you know some biographical info on Carnegie and Morgan and understand how their industrial empires grew, but I’ve talked about them enough