2.2: Industrial Age b b Introduction b b Oil Drill b b Steel Production b b Incandescent Light Bulb b b Electrical Distribution System b b Typewriter: 1867 b b Telephone: 1876 b b Social Darwinism Success b b Horatio Alger Jr. b b Monopoly b b Trust b b Horizontal Merger b b Vertical Merger b b Octopus b b Andrew Carnegie Gospel of Wealth b J.P. Morgan Holding Company b Vanderbilt b John D. Rockefeller Cut Throat Competition b Robber Barons b Sherman Anti-Trust Act 1890 b Working Conditions b Mother Jones b Unions b National Strike 1877 Yellow Dog Contracts b Knights of Labor (KoL) Arbitration b Haymarket Square Riot 1886 b American Federation of Labor (AFL) Collective Bargaining b Eugene Debs b Government & Business b Injunction b Results of Injuctions

Introduction b During the late 1800s, the United States will experience a 2 nd Industrial Revolution that will change American industry b Problems in the work place will be addressed by the creation of labor unions & the federal government

Bessemer & Drake b b Oil Drill: Invented by Edwin Drake. b b Effects: Drilling for oil becomes more practical New use for the steam engine Gasoline b b Steel Production – “The Bessemer Process”: Invented by Henry Bessemer b b Effects: Large scale building – cities b b Many new inventions Plow, windmill, skyscrapers, barbed wire Efficient & cheap b b Steel more flexible & stronger, won’t rust if made properly

New Uses for Steel b b Railroad biggest consumer Tracks & Spikes b b Barbed wire, Mechanical reaper, John Deere’s Plow b b Tin can b b Brooklyn Bridge built in 1883 Many were unsure of its safety so Barnum (the circus guy) marched elephants across it to prove its strength b b Jenney: 1 st skyscraper Home Insurance Bldg., Chicago

Incandescent Light Bulb b Invented by Thomas A. Edison Safer than the arc light b Effects: Safer form of electricity b 1,000s of inventions Phonograph Microphone Stock ticker Projecting Kinetoscope Galvanized batteries b Electrical Distribution System: Invented by George Westinghouse b Effects: Safer & cheaper way to distribute electricity long distance

Typewriter 1867 b b Invented by Chris Sholes b b Created jobs for women b b Letter arrangement was changed because workers were typing too fast!

Telephone: 1876 b b Invented by Alexander Graham Bell & Thomas Watson b b Considered toys at 1 st until its usefulness was proved b b Quicker & more efficient communication b b More jobs for women Telephone operators – –Why not men? b b 1910: Women made up 40% of the clerical workforce

Changes in Society b b Consumer becoming important part of business More products on the marker & we’re buying more stuff b b More recreational activities like the phonograph, bikes & cameras become popular b b How to balance industrialization & environmental pollution?

Social Darwinism b b Survival of the fittest in business Big business naturally takes over smaller businesses b b Darwin’s Origin of Species Process of Natural Selection b b Sumner: Success & failure in business were governed by natural law that no one (gov’t) had right to interfere. b b Favors a Laissez-Faire Gov’t where the gov’t. doesn’t control industry b b New definition of success: God gave $ to deserving & the poor were lazy

Horatio Alger Jr. “ Horatio Alger Jr. “ Pulling yourself up form the bootstraps ” b b Not everyone agreed w/Social Darwinism b b Wrote dime novels: rags to riches stories b b No shame in humble beginnings b b People looked differently at poor Fault of individual, not economy

New Business Practices b b Oligopoly: Only a few sellers provide particular product Usually result of merger b b Monopoly: 1 company dominates the market = no competition Buy out all competitors to control market (production, quality, sales) Prices go up!! b b Trust: Same as monopoly

New Business Practices: Horizontal Merger b Merging companies that make similar products Shell Gas Hess Gas Exxon Gas BP Gas

New Business Practice: Vertical Merger b 1 company takes over the suppliers, distributors, & transportation system to gain control of the entire industry Oil Drills Oil Refineries Oil Pipelines Oil Trucks Stations

Octopus r epresented trusts & monopolies in political cartoons

Big Business b Powerful industries OilOil SteelSteel RailroadRailroad b Very involved in Gov’t.

Andrew Carnegie b Made $ in steel industry b Founded US Steel Co. b 1901: Controlled 80% steel industry b Nearly monopolized steel industry b Rich had a social obligation to help the poor & the community b Gospel of Wealth: Rich had a social obligation to help the poor & the community

John D. Rockefeller b Standard Oil Company b 90% oil refining industry b Didn’t share benefits w/employees, paid low b Used Cut Throat Competition: Drive competitors out of business by lowering prices… Once the competition is weak, her buys them & raises prices again!! b Control market, then raised prices No alternative

J.P. Morgan b b Made $ from banking & bought out many railroads b b Holding Company: Buy stock of competing companies until it controls the majority b b 1900: control 50% of RxR in US

Cornelius Vanderbilt b Made money from the railroads b Charged very high prices in the West Poor farmers Poor farmers 

b b Built luxury railroad cars (Pullman Sleeper Cars) b b Creature comforts Plush chairs, temperature control etc. b b Company Town: Employees forced to live in Pullman town…keeps them in debt to the company

Titles b b Captains of Industry b b Name given to industry leaders b Robber Barons b Monopolists who used unfair/cut throat tactics

Credit Mobilier: 1864 b b Railroad scandal linked to Grant’s VP b b One of the many reasons Northerners stopped paying attention to the South

Interstate Commerce Act: 1887 b Not enforced at 1 st ; until T. Roosevelt b Federal Gov’t. can supervise railroads & regulate interstate trade Trade between states b Interstate Commerce Commission established to supervise, but difficult job Too much paper work (red tape)

Other Monopolies b Charles Pillsbury FlourFlour b RJ Reynolds TobaccoTobacco b J.B. Duke TobaccoTobacco b All southern monopolies

Monopolists who used cut throat competition Defending themselves by contributing to charity: most gave very little Carnegie gave 90% of earning (he was the exception to the rule)

Sherman Anti-Trust Act 1890 b b Fighting back against monopolies Drive prices up – many farmers, workers & poor can’t afford products b b Stated any attempt to interfere with free trade was illegal Monopolies, but later included strikes & workers’ union b b Used to break up monopolies b b Weak at 1st Supreme Court didn’t support, monopolies continued b b Used to control Unions

Working Conditions b Unsafe working conditions Low pay ($3-$12 week) Long hours (16) No Benefits/Protections: –No sick, vacation workman’s comp. –Injuries common –1882: 675 died weekly b : 200,000+ workers killed, 2 mil. injured

Triangle Shirtwaist Co b Fire spread throughout factory b Workers tried to escape, but doors were locked b No sprinkler system b Fire escape collapsed b 154 dead b Owner acquitted b Results Established Fire codes Abolished child labor Sunday off 54 hour work week

Child Labor b Cheap -.27 cents day b Could fit in machines to fix b 20% children working – no school b Chained to machines b Hunger & exhaustion lead to accidents b Overheads

Mother Jones b Called for reforms in child labor b Brought situation to public eye b Widespread publicity

Emergence of Unions b Formed to protect rights of laborers b Against immigrants because they could take American jobs (Work for less $)

National Strike 1877 b Strike against the railroads b 1 st national strike b Federal troops sent to stop strikers Interfering with free trade, stopped 50,000 miles of track b Protesting long hours, bad pay b Supported by miners (experiencing same things) b To keep their jobs, strikers were forced to sign Yellow Dog Contracts Would not join a union or strike

Knights of Labor (K.o.L.) b Focused on individuals “Injury to one, hurts us all” b Union opened to skilled & unskilled laborers; minorities b Used a rbitration: to settle disputes unbiased 3 rd party settles disagreement b Used strikes

Haymarket Riot 5/4/1886 b Chicago b Protesting the death of striker by cops b Cops show up b Bomb thrown into crowd b Leads to decline of K. o. L. Anarchists linked to Knights of Labor Public turns against them because of violence Creation of AFL

American Federation of Labor (AFL) b b Founded by Samuel Gompers b b Union open to only skilled workers b b No minorities b b Used collective bargaining to settle disputes Group negotiations Done before striking b b Raised wages, shortened work week b b Different tactics used by K.O.L & AFL

b Socialist Union leader b Dignity & solidarity b Wanted separate unions for skilled & unskilled laborers of different trades Miners union, Electricians union etc.Miners union, Electricians union etc. b Threatened wealthy, supported by poor

Pullman Strike b Laid off 3,000 workers b Cut wages by 40% Making $6 a weekMaking $6 a week b Rent high in company town b Workers on strike b Strikebreakers hired by Pullman (Pinkertons) b Violence erupted Debs jailedDebs jailed Strikers fired & BlacklistedStrikers fired & Blacklisted

Government & Business b b Gov’t. supports business b b Injunction: Court order (in this case) to prohibit strikes Results of Injunctions b b Unions began to decline early 1900s b b Lost support, strikes caused shortage of goods b b Losing members