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(1)

The Rise of Industry

(2)

The US Industrializes

• Natural Resources

– Abundance of raw materials: water, coal, iron, and copper.

– Railroads brought people to the region, and carried resources back to factories in the east

– Petroleum – could be turned into Kerosene

– Edwin Drake drilled the first oil well in Titusville, Penn • Large Workforce

– Between 1860 – 1910 the population of the US almost tripled.

– Two reasons for population growth

• Large families and a flood of immigrants

(3)

Free Enterprise

• Laissez-faire economics – translated means “let the people do as they choose” Gov. should not interfere • If the government gets involved costs go up.

• Relies on supply and demand

• Leads to greater competition and efficiency

• Entrepreneurs: people who risk their (money) capital in organizing and running a business

(4)

Governments role in Industrialism

• State and federal keep taxes low and did not

impost regulations

• Struggle between north and south

• Laissez-faire favored free trade and opposed

subsidies.

(5)

Edison and Electricity

– His lab was in Menlo Park New Jersey – Invented the phonograph.

– Light bulb and electric generator battery, Dictaphone, mimeograph (early copy machine) and the motion

picture.

– Edison Electric Company started in 1882 electricity to customers

(6)

New Inventions

• Samuel Morse – telegraph= sending messages

over a wire.

• Alexander Graham Bell

– Intended to make an electrical current of varying

intensity transmitted sounds

– 1876 was the first telephone transmission

– The telephone revolutionized both business and

personal communications

(7)

Technology Impact

• Thaddeus Lowe invented the ice machine • Gustavus Swift refrigerated railroad car

– You could now ship fresh meat across the country

• Textile Industry.

– Automatic loom allowed clothes to be made even faster . Bobbins were now hanged automatically without stopping the loom.

• Standard sizes developed from measurements taken of Union Soldiers and used in the manufacture of ready-made-clothes

(8)

Bessemer Process

• Process of making steel easier to work

with.

• Used in building suspension bridges.

(9)

• Inventions: • Elevator Brake • Rail sleeping car • Ice Machine

• Electric streetcar • Telephone

• Phonograph • Light bulb • Cash register

(10)

The Railroads

• Linking the nation

– In 1865 we had 35,000 miles of railroad, By

1900 there was over 200,000 miles

– Union Pacific and Central Pacific got right of

way land and public money

(11)

Railroads Spur Growth

• Transcontinental line promoted markets for many

products that would be transported across the

nation

• Railroad consolidation began 1865 – 1900

– Large railroads took over 400 small railroads – We ended up with 7 major railroad companies

(12)

Benefits of a National System

• American Railway Association divided the country

into four time zones . The gov. ratified this change

in 1918

– Eastern Standard Time

– Central Standard Time

– Mountain Standard Time

– Pacific Coast Standard Time

(13)

Robber Barons

• entrepreneurs who make their money

coning investors, taxpayers, bribing

officials, cheating on contract etc.

• The worst was Jay Gould who practiced

insider trading (using information to

(14)

Social Darwinism

• Survival of the fittest.

• In business = those that are weak

(15)

Economies of Scale

• Economies of scale – corporations make goods

more cheaply because they produce so much so

quickly using large manufacturing facilities.

• Fixed Costs – costs a company has to pay

whether or not it is operation. (loans or taxes)

(16)

Big company vs Small Company

• Big Business

– Had low operating costs,

– Wages and transportation costs were small

– They could produce goods more cheaply and

efficiently and could continue to operate by

cutting prices to increase sales

• Small Business

– Found it difficult to compete

(17)

Vertical

Integration

• Vertical: a

company

(18)

Horizontal integration

• Combining many firms engaged in the same

type of business into one large corporation

• When a single company has control of an entire

market it becomes a monopoly.

(19)

ICC and Sherman Antitrust Act

• ICC = Interstate Commerce Commission • Oversee railroad operations

• Sherman Antitrust Act – outlawed any trust “that operated in restraint of trade or commerce among the several states”

(20)

The Consolidation of Industry

• Andrew Carnegie and Steel

– Worked his way up the ladder from bobbin boy to multi millionaire.

– He invested in companies that served the railroad industry

– While traveling in Europe he met Sir Henry Bessemer who had invented a new way to make high quality steel

(21)

Factory Workers Sections 3 Unions

• Factory owners looked for people who work for low wages. • Immigrants made up the large percentage of the workforce. • Work days were 12 hours, 6 days a week

• Sweatshops employed thousands of people mainly women making clothing.

(22)

Company towns

• laborers were forced to live in isolated communities built by and run by the business

– You paid rent, bought groceries and goods through a company store.

– Interest rates were extremely high

– If you left your job before paying off the loans or debts you could be arrested.

– This became known as “wage slavery”

(23)

• Early Unions : Two basic types of industrial

workers – craft workers and common laborers

• Craft workers

– Special skills and training – machinists, iron molders stonecutters glassblowers etc.

– Received higher wages and more control over how they organized their time

(24)

Early Unions cont.

• Common Workers

– Had few skills and received lower wages

• Industry opposes Unions

– Employers were forced to recognize and negotiate with trade unions.

(25)

Political and Social Opposition

• Courts frequently ruled against workers trying to

organize unions

• Unions were compared to Marxism

– The workers would revolt and seize control of the factories and then overthrow the gov.

– Society would become communist

– Anarchists believed that society does not need any gov. – Nativism: anti-immigrant feelings.

(26)

Techniques to prevent unions from forming

– Required workers to take oaths or sign contracts promising not to join a union.

– Workers who tried to organize a union were “blacklisted” or fired.

– If a union formed the company would use a “lockout” to break the union – lockout the employees and not pay them until they dissolved the union.

(27)

The Knights of Labor - the first nationwide industrial union • They wanted a 8 hour day.

• Gov bureau of labor statistics

• Equal pay for women, abolition of child labor • Creation of worker-owned factories.

• Boycotts instead of strikes

• Arbitration- impartial third party to hear complaints and help reach an agreement with management

(28)

American Federation of Labor

• Led by Samuel Gompers- helped unions

become accepted in American society he

believed that unions should stay out of politics.

• Rejected socialist an communist ideas

(29)

Three main goals of AFL

• First: Convince companies to recognize unions

and to agree to collective bargaining

• Second: closed shops – meaning that

companies could only hire union members

• Third – promoted an 8 hour workday

(30)

The Great Railroad Strike of 1877

• The Panic of 1873 American economy forced companies to cut wages.

• Railroads had another round of wage cuts - This started the first nationwide labor protest

• Railroad workers in Martinsburg, West Virginia walked of the job and blocked the tracks

• As word spread railroad workers across the country walked off the job.

(31)

• Workers smashed equip. tore up tracks,

blocked rail service

• Governors called out the militia to stop the

violence

• President Hayes sent the Army to restore order

• 100 people died and millions of dollars of

(32)

The Haymarket Riot

• May 1, 1886 workers call for a nationwide strike to support the call for an 8 hour day

• May 3rd police crash with Chicago workers leaving one dead

• 3,000 people gathered to hear speeches

• Polices entered the square – someone threw a bomb, Police opened fire, workers shot back

• Seven police and four workers were killed

(33)

The Pullman Strike

• 1893 the railroad workers created the American Railway Union

• The Pullman Company built a town next to the factory and employees were required to live there and buy goods from company stores.

• Wage cuts prevented people from paying rent or getting food

• When the company fired 3 workers for complaining the rest went on strike

• The company attached mail cars to the trains knowing that if they stopped the cars they would be in federal violation

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