1. THE RISE OF INDUSTRIAL AMERICA: The Industrial Titans
Mr. Kilbourn
U.S. History

2. The Rise of Industrial America
By 1900, the U.S. had emerged as the leading industrial power in the world. Its manufacturing output exceeded that of its three largest rivals, Great Britain, France, and Germany

3. Era Characteristics
Strong and rapid growth of industry, mass production, mechanization, and the factory system
Consolidation of wealth and creation of an American aristocracy
Political and corporate corruption and laissez-faire/hands off approach to government involvement
Exploitation of cheap, immigrant labor
The creation of the American city and the expansion and urbanization of the West
Rapid population growth (natural and migratory)
Increased social, racial, and labor tension
The beginning of social, political, and labor reform movements

4. Vocabulary
Monopoly: Control of one one business, able to set the market price for an item
Trust: Group of owners, controlling multiple related business, able to set the market price for an item
Free Enterprise: a.k.a. “Capitalism” The idea that society benefits from free competition in the market price, yielding individual profit, a better/cheaper product, and wide availability of goods
Urbanization: The creation and construction of cities, including its infrastructure
Demographics: The study of populations--how they grow, change, move, and are characterized (by age, gender, crime, behavior, diet, customs, language, etc.)
Nativism: Expressed racism toward a group considered “un-American”

5. Big 3
RAILROADS
OIL
STEEL

6. Factors of Growth
Natural Resources: coal, iron ore, copper, lead, timber and oil
Labor supply: immigrants and population growth
Capital: money to invest in new business ventures
Technology: 440,000 patents between 1860 and 1890
Government: business friendly policies protected entrepreneurs
Transportation: railroads, steamboats

7. The Industrial Giants The Titans J.D. Rockefeller--Standard Oil
J.P. Morgan--Investment banking and financier
Andrew Carnegie--U.S. Steel
Cornelius Vanderbilt, Jay Gould, and Jay Fiske--Railroads

8. The Steel Industry
Henry Bessemer in England and William Kelly of the U.S. discovered a new process of making large quantities of steel: “The Bessemer Process”
Great Lakes Region became leading steel producer
Led by Carnegie Steel

9. Mechanization and Mass Production
The U.S. Gross National Product (measures manufacturing) grew from #4 (1860) to #1 (1894): the largest producer in of manufactured goods in the world
Full exploitation of natural resources
Use of machines, steam and electric power, for manufacturing
Encouraged by federal aid and land grants
Use of immigrants for cheap labor
Carnegie’s U.S. Steel Plant and factory town, Homestead, Pennsylvania (1890s)

10. Carnegie and U.S. Steel
Based corporate model on “vertical integration”—Company controlling all aspects of a business (mining, transportation, refining, and sale)
Symbolized the “American Dream”
Started as a poor Scottish immigrant
Worked as a telegrapher for rail road
Used creativity, genius, and charisma to problem solve
Purchased stock and aggressively bought out competition
Use of intellect, timing, and will to achieve wealth

11. In 1870s Andrew Carnegie started manufacturing steel in Pittsburgh, and soon dominates
By 1900, Carnegie Steel was producing more steel than all of Britain
Sold his company in 1901 for a quarter billion dollars
Was a great Philanthropist

12. Carnegie’s Beliefs
Believed that God’s will and his unique ability made him rich
Believed wealth should not be inherited
Believed that the rich were socially obligated to share wealth with poor
Provided money and endowments to libraries, music centers, churches, and schools
Became a model for philanthropy and charity
Believed that competition was essential for American growth (no monopolies)
Sold U.S. Steel to J.P. Morgan, who launched the first billion dollar company

13. Bessemer Steel Process, Homestead, PA

14. Homestead Steel Plant and Smokestacks, Homestead, PA

15. Williamsburg Bridge, NYC

16. Flat Iron Building, NYC (1901)
Flat Iron Building, NYC (1901). Considered to be the first modern urban skyscraper

18. The Oil Industry
1st U.S. oil well drilled by Edwin Drake in 1859 in PA

19. Philosophy of Laissez-Faire Capitalism
The government should stay out of the economy
The government should not regulate businesses

20. Rockefeller and Standard Oil
Based corporate model on “horizontal integration”--controlling one aspect of an industry (only refining)
Bought out competition to form a monopoly of refined oil
Controlled over 90% of world’s refining business by 1881
After anti-trust laws, Standard Oil was broken up into smaller pieces (including Exxon), with Rockefeller on the Board of Directors for each
Strategic control of refining forced the market price for drilling (pre-refining), and sale (post-refining), effectively controlling the market

21. Industrial Empires - Oil
Trusts: various companies run by a board of trustees (former competitors brought under a single corporate umbrella)
Disguised Monopoly

22. Rockefeller’s Beliefs
Believed that individual accomplishment resulted in success
Believed in eliminating competition
Less competition made a more efficient business
Laissez-faire increased the ability for a business to operate effectively
Abhorred charity, considering it a sign of weakness of spirit
Rockefeller’s Beliefs
Frank Norris’ cartoon, The Octupus: Standard Oil

23. Industrial Empires - Oil

24. Bosses of the Senate (1890)

27. Antitrust Movement Trusts came under attack/scrutiny in 1880s
Congress passed the Sherman Antitrust Act in 1890, which prohibited any “contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce.”
Supreme Court rules in United States v. E. C. Knight Co. (1895) that the act applies to commerce, not manufacturing

28. Laissez-Faire Capitalism
Industrialists appealed to this philosophy to justify their methods
Social Darwinism:
Gospel of Wealth: Protestant work ethic, hard work and material success are signs of God’s favor

29. Pioneer Run, Titusville, PA (1859)

30. Coal Mining, Michigan

31. Coal Mining, Michigan

32. Controlling a Business: Horizontal v. Vertical

33. The Backbone of Industry: The Steel Rails
Creating a Transcontinental Railroad
Increased miles of rails 35K (1865) to 200K (1900)
Subsidized by federal grants
Required relocation of Indian tribes
Contradicted laissez-faire policy; gov’t invested, promoted, funded, and advertised rail expansion
Spread American-ness
Brought prosperity to areas and towns through support services
Promoted growth of coal, steel, produce, leather, textiles and lumber industries
Spread population across continent

34. Canning Factory by R.R. in Green Forest
Depot in Berryville

35. Railroads Nation’s first big business
Created a market for goods and so led to mass production of those goods
Coal, lumber, textiles, produce, leather, and steel
Time zones created
Creation of modern stock-holder corporation

36. Federal Land Grants
80 RR companies received more than 170 million acres of public land
Gov’t expected them to sell land around RR routes in order to finance construction
Negative Consequences
Quick and poor construction
Corruption in government
RRs controlled half of the land in some western states
Some were unprofitable

37. Railroads
“Commodore” Cornelius Vanderbilt used his own money to merge railroads into the New York Central Railroad
Made travel by R.R. more common
Baltimore and Ohio Railroad (B & O)
Pennsylvania Railroad
Chicago becomes important RR center… BEEF

38. Transcontinental Railroad
During the Civil War, Congress authorized land grants and loans to build the transcontinental RR
Union Pacific employed thousands of Irish and war veterans
Central Pacific employed thousands of Chinese
Through Sierra Nevada’s
Finished in 1869
Promoted settlement on the Great Plains
Linked the West with the East
4 more Transcontinental Railroads by 1900

39. Transcontinental Railroad

40. A Mechanism for Manifest Destiny
Major Rail Lines: The West
Union Pacific Railroad (1862)
Nebraska to California
Built by Irish Immigrants
Central Pacific Railroad (1869)
Utah to California
Constructed by the “Big Four”: Stanford, Huntington, Crocker, and Hill
Built by Chinese
Finished at Promontory Point

41. The Steel Road Major Rail Lines
Transcontinental Railroad: Joined at Promontory Point, UT
Northern Pacific (1893)
Chicago to Seattle
Southern Pacific (1883)
New Orleans to Los Angeles
Santa Fe (1884)
New Mexico to California
Great Northern (1884)
Minnesota to Washington

42. Creating a Rail System
Used corporate model of consolidation and trusts
Combined rail lines
Forced industries to use the only available rail line and set the price for transportation
Gave rebates to “friendly” industries
Refused service to “unfriendly” industries

43. Creating a United States

44. 200, Miles of Track

46. Rail Inventions
Steel Rails: stronger standardized rail gauge making transport safer and faster
Westinghouse air brake: increased safety
Pullman cars: luxurious travel cars
Armour Cars: refrigerated meat cars (i.e. Armour hot dogs)
Time Zones: provided consistency for delivery
Telegraph: increased communication down rail lines

47. Inventions Typewriter – 1867 Telephone – 1876 Cash register – 1879
Fountain pen – 1884
Adding machine – 1888
Thomas Edison has more than a thousand patented inventions (light bulb)

48. George Eastman
In 1888 he perfects the Kodak camera, the first camera designed specifically for roll film
In 1892 he establishes the Eastman Kodak Company in Rochester, NY
Mass produces photography equipment and film
He donates over $75 million to establish the Eastman School of Music and U of R school of medicine

49. Marketing Consumer Goods
R.H. Macy in NYC
Marshall Field in Chicago
Frank Woolworth’s Five and Ten Cent Stores
Sears Roebuck and Montgomery Ward provided for catalog orders
Packaged foods: Kellogg and Post
Refrigerated railroad cars and canning changed the way Americans ate
Created a consumer culture

50. The Impact of Industrialization
By 1890s, the richest 10% of U.S. population controlled nine-tenths of the nation’s wealth
Mansions (Newport, RI), yachts, and lavish parties
Widening gap between rich and poor
“Self-made men” or rags to riches
Horatio Alger, Jr. novel portrays young man who become rich through hard work
Horatio Alger myth

51. Expanding Middle Class
Growth of large corporations
Thousands of white-collar jobs are available
Middle management
Accountants, clerical workers, and salespersons
Doctors, lawyers
To what degree and in what ways did the industrial development of the late nineteenth century accentuate class, gender, and ethnic differences?

52. Wage Earners and Working Women
By 1900 most wage earners worked 10 hour days, six days a week
Wages determined by supply and demand
1 out of 5 women worked for wages in 1900
Most were young and single
Most people still believed, if economically feasible, women belonged at home
Textiles, garments, secretaries, typists and telephone operators

53. Labor Discontent
Factory system is much different from “cottage industry”
Factory system is highly structured and regulated to inc. productivity
Assembly Line: mass production
Tyranny of the clock
Dangerous: chemicals and pollutants
Strikes and labor unions

54. The Struggle for Organized Labor
Industrial Warfare:
lockout: closing factory to break labor movement
blacklists: no hiring lists
yellow-dog contracts: to get hired you must agree not to join a union
Great railroad strike of 1877: waged cut + strike, President Hayes sends federal troops to break strike

55. Attempts to Organize National Unions
National Labor Union: 1866, skilled and unskilled workers, wanted higher wages, 8 hour work day, equal rights for minorities
Knights of Labor: 1869, Terence V. Powderly, open membership to Afr.-Ams. and women, wanted to end child labor and abolish trusts
Declines after Haymarket riot in Chicago in 1886

56. Haymarket Bombing
80,000 Knight of Labor members go on strike, plus 200 anarchists
Police attempt to break up the meeting, a bomb is thrown and seven police officers are killed
Many Americans concluded that the union movement was too radical and violent
Knights of Labor lost popularity

57. American Federation of Labor
AFL, founded in 1886
Samuel Gompers
Higher wages and better working conditions
Collective bargaining
By 1909 – one million members

58. Pullman Strike Pullman, IL
Company town manufactured railroad sleeping cars
Workers went on strike over wage cuts
President Cleveland sends federal troops to break the strike
Supreme Court rules in favor of employers
By 1900 only 3% of American workers belonged to unions

59. Lewis Hine and Child Labor
Photographer Lewis Hine documented the epidemic of child labor in the late 1800s and early 1900s
Reformers (mostly middle class) were outraged by various industrial outrages
It took decades of speeches, statistics and photos to bring change

60. Lewis Hine and Child Labor

61. Lewis Hine and Child labor

62. Lewis Hine and Child Labor

63. Impact of Industrialization
Raised the standard of living for most people
Created sharper economic and class divisions among the rich, middle class, and the poor
10% of the population controlled 90% of America’s Wealth
Expanded middle class through creating jobs for accountants, clerical workers, and salespersons

64. In Sum
Carnegie and Rockefeller differed in their approach to business: Carnegie favored competition and charity; Rockefeller favored monopoly and rugged individualism
The oil, steel, and railroad industries helped each other grow and depended on each other for success
In less than 30 years, the U.S. became the leading manufacturer, transporter, and richest country in the “civilized” world