Industrial Revolution

Industrial Revolution

1890s America A Gilded Age The Gilded Age
Just like an object covered or ‘gilded’ with gold, it often is has flaws and impurities on the inside. The U.S. Industrial Revolution was a Gilded Age for the same reasons; shiny and impressive on the outside, but issues underneath the surface.

Capitalism vs. Communism
Adam Smith was the foremost economic philosopher of the 1700s. He introduced many concepts that lay the foundation for capitalism. In his book published in 1776, An Inquiry into the Nature and Causes of the Wealth of Nations, Smith explained that economies thrive under a free market. He suggested that people are motivated to make profits, and will compete to make better and better products as a result. This drive Smith called the invisible hand of economics. Smith

German philosopher Karl Marx is easily the most recognized name in the history of economics. His ideas were so revolutionary (literally) that his ideas have left the world in perpetual instability since his death in the 1880s. Even before the half-century long Cold War, which was largely a struggle between Marxist supporters and opponents, Marxist revolutionaries were at work in the ranks of virtually every European country. Marx 1700AD AD AD AD AD

Marx was a materialist, meaning he believed matter was all that existed (as opposed to God or anything metaphysical). He was also greatly influenced by Hegel’s concept of cyclical history. From Marx’s perspective, history demonstrated a struggle between classes. He called the working class proletariat and the rich (e.g. owners) bourgeoisie. He saw a “dictatorship of the bourgeoisie” who owned the “means of production” (factories, equipment and so on). Marx 1700AD AD AD AD AD

Marx predicted an inevitable collapse of the capitalist system, to be replaced by a “dictatorship of the proletariat”, also known as socialism. He actively fought for the overthrow of capitalism and the implementation of socialism. He said a communist society would later emerge as a classless and stateless utopia. Critics of Marxism tend to point to examples of failed or highly oppressive communist regimes in recent history. capitalism socialism communism Marx 1700AD AD AD AD AD

CAPITALISM WORKS!!!!!!! patents Light-bulbs Steel & sky-scrapers
Capitalism (free market): an economic system where anyone can invest money in a business to gain wealth CAPITALISM WORKS!!!!!!! planes cameras cars telephones Industrialization

Capitalism vs. Communism an economic system based on: an economic system based on:
Adam Smith Emphasis on economic FREEDOM Private citizens run economy All business owned by free people Some become richer, most stay poor Laissez Faire (government’s hands OFF) ‘Invisible hand’ motivates competition People can advance in wealth People can move up social classes Individuals invest $ to profit & make more money Karl Marx Emphasis on economic EQUALITY Government (state) runs economy All business owned by state All equal since there’s no ownership of business States hands ON the economy Competition is non-existent No advancement in wealth There are no social classes The ‘state’ invests $ in industry to benefit everyone

The Expansion of Industry
Country was changing from a farming nation to an industrial power Boom was due to: Wealth of natural resources Government support for business Growing urban population (cheap labor and market for products)

Daily Life by the 1900s Daily Life in 1865
-no indoor lighting or lighting at night -rise & setting of the sun set the days work -no refrigeration, food cannot last without salt or other preservatives -slow long distance communication - Artificial lighting was available everywhere -work can take place at any time; day or night -refrigeration for train cars and then home kitchens -Instant information over long distances (telegraph, telephone, film) Industrialization

1890s America Industrialization Industrialization – The process of growing industry and all of its corollaries (urbanization, concentration of wealth, expansion of business, innovation, etc.) Advancements in STEEL, OIL-REFINING, RAILROADS, ELECTRICITY, and COMMUNICATION helped the United States grow into a major industrial country. COMMUNICATION OIL-REFINING RAILROADS STEEL ELECTRICITY

1890s America STEEL Industrialization HENRY BESSEMER
BESSEMER PROCESS (1890): A process for making steel (lighter, stronger, easier to make) Limestone + coke + iron ore = slag & steel Made mass production of steel possible Led to new age of American buildings and growth

What are some things built with steel at this time?
1890s America Golden Gate Bridge (1936) STEEL Empire State Building (1931) What are some things built with steel at this time? Brooklyn Bridge (1883) RR tracks (mid 1800s)

1890s America OIL-REFINING
Kerosene had long been a useful byproduct of oil. Kerosene was used to provide indoor and outdoor lighting in most major U.S. cities. In order to power many of the machines used in factories during the Industrial Revolution, oil was in high demand. As companies like Ford started to mass-produce automobiles at affordable prices, demand for oil skyrocketed.

OIL-REFINING Kerosene had long been a useful byproduct of oil. Kerosene was used to provide indoor and outdoor lighting in most major U.S. cities. In order to power many of the machines used in factories during the Industrial Revolution, oil was in high demand. As companies like Ford started to mass-produce automobiles at affordable prices, demand for oil skyrocketed.

OIL-REFINING The most successful name in the oil industry was John D. Rockefeller. His wealth would have easily surpassed the richest modern men in today’s dollars. Rockefeller’s Standard Oil Company had a monopoly on the competition for a time, as seen in the cartoon below. The company has since broken into several smaller companies, including Exxon-Mobile. Industrialization

RAILROADS Prior to the development of railroads, land travel in the United States was slow, inefficient and sometimes dangerous. To move people or materials, options included wagons or trailers towed by horses, oxen or other livestock. The advent of railroads meant safer, faster and cheaper travel for passengers. But more importantly, it allowed for faster and cheaper transportation of large quantities of goods to almost anywhere in the country.

RAILROADS Central Pacific R.R. West  East
Transcontinental Railroad: a section of railway completed in spanning the North American continent. This was only 20 years after the Gold Rush which brought people across the country in wagons. - Shipping, postal and transportation costs dropped significantly. Why? Central Pacific R.R. West  East West  East Union Pacific R.R Industrialization

Union Pacific Irish immigrants Out of work Civil War veterans
Lay track across bad terrain while dealing with attacks by Native Americans Railroads influenced us to divide the Earth into 24 time zones- US would have 4: Eastern, Central, Mountain, Pacific Railroads promoted trade and interdependence Caused towns to start to specialize Chicago- stockyards Minneapolis- grain industry

Pullman George M. Pullman Factory for manufacturing sleepers and other cars Created a town Housing All basic needs Doctors, shops Pullman kept rent high and cut pay- had a violent strike

ELECTRICITY Thomas Edison is famous as the inventor of the light bulb and many other devices. He was also a pioneer of the broad use of electricity. The expansion of electricity led to new jobs, not only in the field of electricity (installing power lines, power plants, producing light bulbs, etc.), but for all industries who could now provide lighting indoors and have workers continue working after sunset. Industrialization

(By 1900 1.5 million phones in use)
COMMUNICATIONS Samuel Morse (1844)  Morse Code  Telegraph boom Alexander Graham Bell  First telephone (1876)  (By million phones in use) Now Then Industrialization

Morse Code & the Telegraph
COMMUNICATIONS Morse Code & the Telegraph Industrialization

One of the 1st movies made: The Great Train Robbery
COMMUNICATIONS Edison Studios (NY) is also credited with creating one of the earliest and most innovative motion pictures in history. Director Edwin S. Porter shot his 11-minute film called The Great Train Robbery in 1903 using never-before-seen techniques like moving cameras and on-location scenes. This gave birth to a decade of popular 5-cent admission motion pictures called ‘Nickelodeons’. One of the 1st movies made: The Great Train Robbery

Inventions Promote Change and Impact the Environment
Farms- became smokestacks and refineries Pollution- fires on the river, oil in water What are some environmental problems affecting the city of region? Causes of the problems? What should be done? Electricity- run machines, fans, printing press, stress car Typewriter (Christopher Sholes)

1890s America Industrialization Horizontal Consolidation: Buying companies that are in competition with your own (Aliases: acquisition, takeover, merger) Here is a modern example… La Boulange (acquired for $100 million in 2012) Starbucks Seattle’s Best (acquired for $72 million in 2003) Teavana (acquired for $620 million in 2012) horizontal

Microsoft (software company)
1890s America Industrialization Vertical Consolidation: Buying businesses that produce, compile, deliver or sell the materials needed to make a product Here is a modern example… aQuantative – online advertising ($6.3 billion in 2007) vertical Yammer - social networking ($1.2 billion in 2012) Microsoft (software company) Nokia - hardware ($7.2 billion in 2013) Rare – gaming company ($375 million in 2002)

1890s America Horizontal Consolidation or Vertical Consolidation?
Carnegie Steel Company bought the steel mills, the coal mines, the iron mines, the ships and the railroads that transported supplies

Starbucks bought Seattle’s Best Coffee in 2003 for $83 million
Horizontal Consolidation or Vertical Consolidation? Starbucks bought Seattle’s Best Coffee in 2003 for $83 million

Horizontal Consolidation – Buying companies that are in competition with your own (Aliases: acquisition, takeover, merger) Examples: Starbucks bought Seattle’s Best Coffee in 2003 for $83 million Sony bought MGM in 2005 for $5 billion Google bought YouTube in 2006 for $1.6 billion Subway bought Taco Del Mar in 2010 for $3.3 million Intel bought Infineon in 2011 for $1.4 billion Google bought Waze in 2013 for $1 billion Vertical Consolidation – Buying businesses that produce, compile, deliver or sell the materials needed to make a product Carnegie Steel Company bought the steel mills, the coal mines, the iron mines, the ships and the railroads that transported supplies Google bought Motorola in 2005 for $13 billion Microsoft bought Nokia in 2013 for $7.2 billion Costco bought Hain Celestial (health food maker) in 2011 for $230 million Industrialization

Growth of Cities & Urban trends
1890s America Industrialization Another aspect of Industrialization is Urban Migration, or ‘URBANIZATION’. Urbanization refers to population shift from rural to urban (cities) * Not only did immigrants move to large cities, but established Americans began to move as well. Pull factors revolved around economic opportunity. America saw a huge shift from rural to urban living and an increase in immigration from other countries Where did the most immigrants to the U.S. come from? How did they get here? Where did they settle? What did they do? How did they live? Growth of Cities & Urban trends Year % urban % % % % %

Based on this political cartoon, what is a ‘robber baron’?
Industrialization

Robber Barons & Captains of Industry: Wealthy owners & industrialists with bad or good reputations
Name comes from German nobles who charged illegal tolls in the s drained the country of natural resources Only concerned about personal interests Paid low wages, workers were in dangerous conditions CAPTAINS OF INDUSTRY Living examples of good ownership Served the country in a positive way Created new jobs so Americans could buy new goods Gave money back through charity Mixed Reputation: Rockefeller Negative Reputation: Vanderbilt Morgan Positive Reputation: Carnegie Ford

Constantly the subject of political sattire
1890s America Robber Barons John Pierpont Morgan I ( ) was a financier and banker, who at the turn of the century was one of the wealthiest men in America. It was often said that Morgan’s political influence was an even greater asset than his wealth (est. $42 Billion in today’s dollars). He profited from all sorts of industrial ventures, including electricity, steel, iron and railroads. ROBBER BARON Constantly the subject of political sattire Good-Boss-O-Meter

Consider this political cartoon and discuss with a neighbor…

Industrialization

Consider these political cartoons and discuss with a neighbor
Industrialization

Leland Stanford ( ) was a successful west-coast railroad tycoon. Migrating from New York to California during the Gold Rush, he started building his empire as a merchant. He served one two-year term as governor of California after his election in 1861, and later eight years as senator from the state. As president of both Southern Pacific and Central Pacific, he had tremendous influence over transportation in the West, accumulating a fortune of $1.3 billion in today’s dollars. MIXED REPUTATION Charitable efforts and a political career mixed with a robber baron reputation Good-Boss-O-Meter Industrialization

Monopolized industries, but gave away fortunes
James Buchanan Duke ( ) was a tobacco and electric power industrialist and paid $40 million ($450 million in today’s dollars) to name Duke University after himself. His company “American Tobacco Co” had a longtime monopoly on the American cigarette industry. His net worth at the time of his death was roughly $60 billion in today’s dollars. MIXED REPUTATION Monopolized industries, but gave away fortunes Good-Boss-O-Meter Industrialization

Often seen as a villain, and as an archetypal
1890s America Robber Barons Jay Gould ( ) was an American financier and railroad entrepreneur. He has long been vilified in the media of his day as well as by modern historians. His business ventures made him the ninth richest American in history. He was known to manipulate politicians, bribe news editors and even evade certain taxes. Recently, Gould was ranked as the 8th worst American CEO of all time (Condé Nast Portfolio). He was once quoted during a labor strike as saying, “I can hire one-half of the working class to kill the other half.” His wealth is estimated at $71 billion in today’s dollars. Often seen as a villain, and as an archetypal ROBBER BARON Good-Boss-O-Meter

Industrialization

Railroads controlled by Vanderbilt:
Cornelius Vanderbilt ( ) was an entrepreneur who built his wealth in shipping and railroads. In later life he was known as Commodore Vanderbilt. Vanderbilt had a reputation as a ruthless capitalist who used questionable tactics to increase and maintain control of industries. His estimated value in today’s dollars is $185 billion. Railroads controlled by Vanderbilt: New York and Harlem RR (1863) Hudson River RR (1864) New York Central RR (1868) Canada Southern Railway (1873) Lake Shore and Michigan Southern Railway (1873) Michigan Central RR (1877) New York, Chicago & St. Louis RR (1882) West Shore Railroad (1885) Rome, Watertown and Ogdensburg RR Dunkirk, Allegheny Valley and Pittsburgh RR Cleveland, Cincinnati, Chicago & St. Louis RR Lake Erie and Western RR Pittsburgh and Lake Erie RR ROBBER BARON One of the worst! Good-Boss-O-Meter

Railroads controlled by Vanderbilt…

1890s America Captains of Industry
Andrew Carnegie ( ) was a well-known Steel industrialist who at one point was considered the world’s richest man. He is also famous for selling Carnegie Steel Co. and focusing on philanthropy (giving to charitable & humanitarian causes). Carnegie wrote an article called “The Gospel of Wealth” which was advice on how the rich should give back to society and is still read by wealthy people today. His donations have funded countless libraries and universities throughout North America and the United Kingdom. ($310 billion today) Captains of Industry CAPTAIN OF INDUSTRY One of the Best! Good-Boss-O-Meter

Carnegie Immigrant from Scotland 12 years old when he arrived
By 18 years old he was secretary to the superintendent of the local Pennsylvania Railroad Bought stock- which then led to dividends Went into the steel business- made more steel than all of the factories in Great Britain

Carnegie was constantly searching for ways to make better products, and at a lower cost
New machines? Accounting- tracking costs Offered stock to employees

Henry Frick was the longtime business partner of Andrew Carnegie
Henry Frick was the longtime business partner of Andrew Carnegie. Frick was recently voted the 11th worst CEO in American history by Condé Nast Portfolio. A father of the modern steel industry, Frick was anti-union and was once voted the most hated man in America. He hired mercenaries to respond to a worker strike at one of Carnegie’s steel mills, resulting in 16 deaths. It is considered one of the worst labor disputes in history. There was an attempted assassination on Frick shortly after the strike. He was shot three times and stabbed twice, but he survived to make a full recovery. ROBBER BARON One of the worst! Good-Boss-O-Meter attempted assassination of Henry Frick

John D. Rockefeller ( ) played a large role in the early oil industry with the founding of Standard Oil (ExxonMobil is the largest of its descendants). Over a forty-year period, Rockefeller built Standard Oil into the largest company in the world, and was for a time the richest man in the world. Net worth: $340 billion MIXED REPUTATION Good-Boss-O-Meter

Rockefeller Would sell oil at a lower price than it cost to produce it
Once he controlled the market, the competition was out of business (then he could do anything he wanted about the price)

Industrialization

Henry Ford ( ) was the founder of the Ford Motor Company and father of the modern assembly line used in mass production. His introduction of the Model T automobile revolutionized transportation and American industry. As owner of the Ford Company he became one of two or three richest and best-known people in the world (est. $199 billion in today’s dollars). Because of Ford’s cost-cutting production efficiencies, his vehicles could be purchased by average working Americans for the first time. CAPTAIN OF INDUSTRY One of the Best! Good-Boss-O-Meter

Ford’s Influence on America…
1908: Ford develops the Model T 1908: Cadillac begins to compete (General Motors) 1911: Chevrolet begins to compete (General Motors) 1918: Half of the cars in America were Ford Model Ts 1920: 9 million cars in the United States 1920: New York has more cars than any other state 1925: Buick and Chrysler begin to compete 1926: European companies like Mercedes hit the U.S. market 1926: Mercedes sells car models for $15,000-$50,000 1927: Cadillac sold luxury cars for $3000 1928: Chevrolet began to target women, advertising a $585 vehicle 1928: Stretch limousines are made 1930: 1 in every 5 Americans owned an automobile

Top-10 richest people of the Gilded Age (in today’s dollars):
1890s America Wealth Gap Top-10 richest people of the Gilded Age (in today’s dollars): (Name) (Date) (Industry) (wealth then) (wealth now) 1. John D. Rockefeller, , oil $900 million, $340 billion. 2. Andrew Carnegie, , steel $250 million, $310 billion. 3. Henry Ford, , automobiles $180 million $199 billion. 4. Cornelius Vanderbilt, , shipping, railroads $105 million, $185 billion. 5. John Jacob Astor, , real estate, fur trade $20 million, $121 billion. 6. A.T. Stewart, , retail, real estate $50 million, $90 billion. 7. Frederick Weyerhaeuser, , lumber $200 million, $80 billion. 8. Jay Gould, , railroads $72 million, $71 billion. 9. Marshall Field, , department stores $140 million, $66 billion J.P. Morgan , finance, steel, $70 million, $42 billion.

MONOPOLY Today, it's the world’s best-selling board game, sold in 80 countries and in 26 languages. But where did the MONOPOLY game come from? It was 1934, the height of the Depression, when Charles B. Darrow of Germantown, Pennsylvania, showed what he called the MONOPOLY game to the executives at Parker Brothers. Can you believe it, they rejected the game due to "52 design errors"! But Mr. Darrow wasn't daunted. Like many other Americans, he was unemployed at the time, and the game's exciting promise of fame and fortune inspired him to produce it on his own. With help from a friend who was a printer, Mr. Darrow sold 5,000 handmade sets of the game to a Philadelphia department store. People loved it! But as demand grew, he couldn't keep up with all the orders and came back to talk to Parker Brothers again. The rest, as they say, is history! In its first year, 1935, the MONOPOLY game was the best-selling game in America. And over its 65-year history, an estimated 500 million people have played! Industrialization

1890s America Wealth Gap (monos = one, polein = to sell)
Cartel, Trust, Monopoly Wealth Gap A cartel is a group of formally independent producers whose goal it is to fix prices, to limit supply and to limit competition in order to increase profits and create a collective monopoly. A trust was a group of businesses intending to monopolize an industry. They were often created when corporate leaders convinced company leaders in one industry to put their shares in the hands of a board of trustees. The board would be trusted to manage the companies and minimize competition. A monopoly is a situation where there is only one provider of a kind of product or service. A monopoly is characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. Industrialization (monos = one, polein = to sell)

= = = 1890s America Which is which? MONOPOLY TRUST CARTEL 1 Company
Wealth Gap = MONOPOLY CONSUMERS Company 2 (controlled by a board of trusties) Company 1 (controlled by a board of trusties) Company 3 (controlled by a board of trusties) = TRUST CONSUMERS Company 4 (controlled by a board of trusties) Company 1 Company 2 Company 4 = CARTEL CONSUMERS Company 3

1890s America Unionization An 8-hour work-day A 40 hour work week
Workers’ Rights Workers’ Rights Movement: a series of efforts to enhance the rights, pay and lives of workers. This included the formation of unions, efforts to shorten the work day, to set a minimum wage, to set safety standards, ensure healthcare and job protection. The workers’ rights movement revolved around the need for: Unionization An 8-hour work-day A 40 hour work week Minimum Wage Worker Safety Child Labor Laws

Labor Unions Emerge Steel mills- 7 day work week was typical
Seamstresses- 12+ hours per day was typical No vacation, no sick leave No money for injuries on the job Kids had jobs- full time Poor working conditions National Labor Union- First successful labor union

Labor Unions European immigrants worked industry
African Americans worked as laborers or household help 1900: 1 in 6 children between the ages of held a job outside the home Laborers start to organize to pressure companies for safer workplaces and better pay

KNIGHTS OF LABOR Leader – Terrence V. Powderly
Accepted unskilled workers, women, African Americans, and employers Asked for 8 hour work day, end of child labor, and equal pay for equal work Boycotts and strikes were the main tactics

Types of Unions Craft Unions- Skilled workers in a trade
Samuel Gompers- Cigar Makers’ International Union President of the American Federation of Labor Collective bargaining Negotiation between labor and management They used strikes Industrial Unions Skilled/unskilled Eugene V. Debs American Railway Union

Triangle Shirtwaist Factory Fire

Why did they start? Triangle Shirtwaist Factory Fire
New York City, 1911 146 people dead Some jumped & Fell to their deaths Victims were mostly year old women, the youngest was 14 The managers had locked the doors to the stairwells and exits – a common practice at the time to prevent theft– many of the workers who could not escape the burning building jumped from the eighth, ninth, and tenth floors to the streets below. The fire led to legislation requiring improved factory safety standards and helped spur the growth of the International Ladies’ Garment Workers’ Union, which fought for better working conditions for sweatshop workers. Why did they start?

Strikes gone BAD! Haymarket Riot
Great RR Strike 1877 – protested for cut wages Second pay cut in two months 2 workers for 2 RR blocked movement of trains Baltimore and Ohio Railroad Strikes spread Stopped freight for over a week Resulted in mobs and death Finally federal troops had to stop it Haymarket Riot 1886 – over 1500 strikes over wage cuts Chicago – Haymarket Square crowds protested police action Bomb was thrown – panic stricken – 11 dead by end Blamed foreign unionist

Great RR Strike and Haymarket Riot

Homestead Strike Carnegie’s Steel company in Homestead PA Pinkerton Detective Agency Protect the plant Hiring scabs to keep working 3 detectives, 9 workers dead People didn’t support workers for awhile after this

Pullman Company Strike
Laid off employees because of economy Cut wages by 25-50% Didn’t lower cost of housing Turned violent Federal troops were necessary

Industrial Revolution

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