Chapter 14 A New Industrial Age

Natural Resources Fuel Industrialization

Edwin L. Drake

Henry Bessemer 

Thomas Alva Edison

Christopher Sholes

Alexander Graham Bell

Railroads  Span time and space  Created a network of tracks  Romance  Time zones  Opened the door for corruption

Promontory Point, Utah

Golden spike of Promontory Point

Time zones around the world Professor C.F. Dowd

Pacific Mountain Central Easter

Opportunities and Opportunists With the railroad came those individuals who took advantage of a new development for their own personal gain

George M. Pullman

Credit Mobilier  Towns were created to service the railroad that were owned by the railroad  The stock holders of the RR also owned the Companies that laid the rail for the RR  The RR companies owned by the stockholders sold the rights to lay the track to themselves for twice the amount it would cost and pocketed the profits

Granger Laws  Farmers and passengers were being discriminated against and charged outrageous prices for travel and usage  Illinois and other states passed a series of laws that allowed the state to regulate the fees for train travel – The Granger Laws  Munn vs. Illinois – Supreme court ruled that the granger laws were constitutional

Interstate Commerce Act  1877 Congress passed this law  Said that railroad travel was a form of interstate travel and therefore regulated by the federal government  Establish a five man board designed to monitor interstate commerce (ICC)

Consolidation  ICC failed to do what it was commissioned to do  Overbuilding and abuses led to the panic of 1893  600 banks and 15,000 people were out of business or work  ,000,000 had lost their jobs  Investment firms like J.P. Morgan bought out all the railroad companies

Andrew Carnegie Became one the brightest and most successful financial investors of the time

Carnegie Steel  Carnegie tried to control as much of the steel industry as the law would allow  He adopted two business practices that are in use today Vertical integration Horizontal integration

Vertical Integration Finished Product Transportation Warehouse Refinery Resource production

Horizontal Integration Similar product company Alleviating Competition Drive out all the competition (Monopoly)

Businesses begin to adopt the Social Darwinistic approach to business – Survival of the fittest and only the strong survive

John D Rockefeller Another of the financial giants of the time

Standard Oil  Mergers through trust  Not horizontal Integration  Controlling interest owned by a board of trustees  Gives the trustees total control over a products production and sell.  He controlled 90% of the oil refining in the US

Sherman Anti-Trust Act Made it illegal to form a trust that interferes with free trade agreements among business

Workers begin to protect themselves in the labor community – The formation of labor Unions become common place

Life in the Factory  12 hour work days  No vacation  No sick leave  No reimbursement for injuries  675 work related deaths a week  8,000,000 women working in factories  20% of boys and girls under the age of 15 held full time jobs

Little or no pay!!!!!!!  Child – $.27 cents a day (14 hour work Day)  Women - $267/Year  Men - $498/year  Andrew Carnegie – $23,000,000/ year with no income taxes

Labor Unions Emerge  Craft Unions  Samuel Gompers –American Federation of Labor (AFL)  Eugene V. Debs –American Railway Union  William Haywood –Industrial Workers of the World (IWW)

Labor Unions Lead to strikes  The great strike of 1877 –(RR Workers)  The Haymarket strike –Police brutality  The Homestead strike –Steel industry  The Pullman Car strike –RR Car Company