1. HVS11QUS/HES11QUS US History and Government Regents Prep Mr. Oberhaus
Unit 3 - Industrialization of the United States Lesson 3.2 – The Rise of American Business, Industry, and Labor
HVS11QUS/HES11QUS
US History and Government Regents Prep
Mr. Oberhaus

2. Economic Developments in the North
The industrialization that started before the war accelerated in the north as factories worked around the clock to keep up with the demands of the Union Army for guns, ammunition, uniforms, and other supplies.
Railroads helped to move troops around and the farms became mechanized as most farmers joined the army.
Very little fighting took place in the North so it was spared major damage.

3. Economic Developments in the South
The Civil War ruined the economy of the South. The Plantation system ended as slavery was abolished and many plantations were destroyed by the fighting, as were railroads, and factories.
After the war, farmers had to start over. Many Southern leaders believed that the economy should not rest with agriculture and they began building new railroads and factories.
The economy in the south primarily rested with agriculture. Most former slaves continued working on the farms.

4. Economic Issues in the Post Civil War Era
North
South
Industries
Continued rapid development financed by wartime growth; new interest in overseas markets
Began slowly after the war, especially in textile and steel production; urban areas needed major reconstruction
Railroads
Crucial to economy; new transcontinental routes allowed the development of western markets
Destroyed during the war; needed to be rebuilt, along with roads and bridges
Land use and
agriculture
Farms began to mechanize and to increase production, providing food for the growing urban areas
Plantation economy based on slavery ended; land destroyed by fighting; former slaves competed with destitute whites in search of land; tenant farming and sharecropping began

5. Growth of Corporations
A corporation is a business in which many investors own shares or stocks in the business. Each stockholder receives dividends or shares of the profits.
Investors in a corporation can only lose their initial investment.
Amongst the fastest growing corporations was transportation, building materials, energy, and communication.

6. Other Forms of Business
Monopoly – A company or small group of companies that has complete control over a particular field.
Conglomerate – A corporation that owns a group of unrelated companies.
Pool – When competing companies enter into agreements to fix prices. Currently illegal.
Trust – A group of corporations in the same field that comes together under one board of trustees. Trusts are currently illegal.
Holding Company – Used to get around the laws banning pools and trusts. Holding companies bought controlling amounts of stock in different companies.

7. Innovations and Business Developments Timeline 1868 - 1913
1868 – Sholes improves the typewriter
1876 – Bell invents the telephone
1882 – Standard Oil Trust is formed
1892 – Carnegie Steel is formed
1894 – Pullman Strike
1900 – ILGWU union is formed
1913 – Ford introduces the assembly line

8. Innovation
Businesses began to expand quickly. In urban areas, the Department Store offered customers a wide range of goods and products.
Many retailers developed mail order catalogs.
The vacuum cleaner, telephone, electric light bulb, electric iron, and safety razor were all developed.

9. Entrepreneurs
Andrew Carnegie – Owner of the largest steel making company. In 1901, he sold Carnegie steel for 250 million dollars. He gave most of it away to charity including established free public libraries across the United States
John D. Rockefeller – Started an oil refining business. He believed competition was bad and used ruthless means to eliminate the competition. Standard Oil Company controlled 90% of the oil refining in the country. He donated millions to charity
J. Pierpont Morgan – Founder of JP Morgan company which made money by giving loans to corporations. Morgan purchased Carnegie Steel
Henry Ford – In 1913, he introduced the moving assembly line to allow for mass production of automobiles. He paid his workers very well.

10. Attitudes toward Business
Laissez-Faire – Non governmental interference in business. Economist Adam Smith supported this type of system in which 1776 book “The Wealth of Nations”.
Social Darwinism – Naturalist Charles Darwin believed that life was a struggle and only the strong will survive. Economists used this theory for businesses as well.
Robber Barons or Philanthropists – Wealthy businessmen were known as Robber Barons by the poor because of their lavish lifestyles when in reality many of the wealthy businessmen gave millions to charity.

11. Government Policies toward Business
The US Government generally followed the laissez faire belief. Government passed laws to aid the growth of business.
Steps toward Government Regulations:
Periodic downturns in the national economy
Growing criticism of practices that saw big business profit at the expense of the poor and the working class
Increasing grassroots political pressure for change
Although government intervention at this time had limited impact it set the stage for federal action in the years to come.

12. Supreme Court Decisions
Munn vs. Illinois (1877) – The Supreme Court upheld an Illinois law controlling grain elevator rates. The court ruled that a state has the right to “police power” that allowed for regulation of private property.
Wabash, St. Louis & Pacific Railway Co. vs Illinois – The court ruled that states could not regulate railroad rates on portions of interstate routes that lay within their borders. Only the federal government can regulate interstate trade.

13. Interstate Commerce Commission
In 1887, the Interstate Commerce Commission was created by Congress to regulate the railroad industry.
The Commission was charged with ending railroad abuses such as pools and rebates which were discounts available to special customers.
Court decisions kept the commission weak but opened the door for government regulations.

14. Sherman Antitrust Act
The Sherman Antitrust Act of 1890 prohibited monopolies by declaring illegal any business combination or trust “in restraint of trade or commerce”
However, the Supreme Court ruled that many businesses were exempt from the Sherman Antitrust Act in the case of the United States vs. E.C. Knight Company in 1895.

15. Labor Organizations
Business growth in the late 1800’s brought higher wages for workers but unemployment and poor working conditions remained a fact of life for workers. Employers also held a lot of power over their workers. They could lower wages and fire workers at will.
Labor unions became a popular way to protect workers. Union leaders used collective bargaining to gain better conditions for workers.

16. Knights of Labor – Formed in 1869 by Terence Powderly had both skilled and unskilled workers as well as women and blacks. They fought for 8 hour work days, an end to child labor, and equal wages. Due to a series of unsuccessful strikes the Knights of Labor declined.
American Federation of Labor – The AFL was formed in 1886 by Samuel Gompers. The AFL specifically focused on skilled workers and their membership reached 1 million by 1900.
International Ladies Garment Workers Union – The ILGWU was formed in In 1910, they were accepted by the AFL after a successful strike. In March of 1911, a fire at the Triangle Shirtwaist Factory took the lives of 150 people due to locked exits and inadequate fire escapes. The ILGWU and AFL fought for better conditions.

17. Labor Conflict
Great Railway Strike – In 1877 a series of pay cuts for railroad workers led to this strike across multiple states. President Rutherford B. Hayes sent federal troops to end the strike. The strike failed to gain improvements for the workers.
Haymarket Riot – In 1886 a labor rally in Chicago led by anarchists ended with a bomb blast and riot that left multiple people dead including 7 police officers.
Homestead Strike – In 1892 workers at the Carnegie Steel Company in Pennsylvania went on strike. Security guards clashed with the strikers and 16 people were killed. The national guard ended the strike. Only 25%.

18. Pullman Strike – In 1894 a strike by railway car makers in Illinois spread and tied up the major rail lines. President Grover Cleveland sent in federal troops. Union Leader Eugene V. Debs was thrown in jail. The Supreme Court ruled In re Debs in 1895 that President Cleveland has the authority to use federal troops.
Lawrence Textile Strike – The Industrial Workers of the World (IWW) a union of both skilled and unskilled workers led a huge strike against the textile mills in Lawrence Massachusetts in The strike was a success and the workers won most of their demands.