The Rise of Industry
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
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
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.
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
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
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
Bessemer Process
• Process of making steel easier to work
with.
• Used in building suspension bridges.
• Inventions: • Elevator Brake • Rail sleeping car • Ice Machine
• Electric streetcar • Telephone
• Phonograph • Light bulb • Cash register
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
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
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
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
Social Darwinism
• Survival of the fittest.
• In business = those that are weak
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)
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
Vertical
Integration
• Vertical: a
company
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.
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”
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
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.
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”
• 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
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.
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.
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.
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
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
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
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.
• 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
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
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