Transcript Chapter 17 Lecture PowerPoint

Chapter 17: Industrial Supremacy
Doffers at the Bibb Mill No. 1, Macon, Georgia, 1909. Photograph by Lewis Hine.
When bobbins of thread became full, doffers would replace them with empty ones.
Chapter Seventeen:
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
Rapid Industrialization between 1870-1900
– Industrial Manufacturing: It had begun in the U.S. as early
as the 1790s, but the last three decades of the 19th century
saw explosive industrial growth.
– Growth of Wealth Inequality: The new industrial economy
produced enormous wealth, but distributed it more unequally
than the older American economy.
– Winners and Losers: Owners and big investors in industrial
enterprises, professionals who served their needs (lawyers,
insurance brokers, bankers, etc.), and a growing middle class
experienced prosperity; industrial workers, and farmers
generally did not.
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
Sources of Industrial Growth:
Industrial Technologies
 Key Inventions
• Cyrus Field’s transatlantic
telegraph cable (1866)
• Christopher L. Sholes’s typewriter (1868)
• Alexander Graham Bell’s telephone (1876): 1.35
million phones by 1900; 13.3 million by 1920.
• James Ritty’s cash register (1879)
• William S. Burrough’s adding machine (1891)
• Guglielmo Marconi’s radio telegraph (1895)
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
Sources of Industrial Growth
– Industrial Technologies: Impact of Electric Power
• Generators: English scientist Michael Faraday invents the first
device that converts rotary mechanical power into electricity
(1831), starting the race to make electricity a commercially viable
source of power.
• Thomas A. Edison (1847-1931): Perfects the incandescent light
bulb (1879); opens the Pearl Street generating station in Lower
Manhattan (1882) to provide electricity to 59 customers; switch
from direct current to alternating current improves transmission;
large power plants begin providing enough current for public
lighting, street railways, skyscraper elevators, factories, etc.
• High-Efficiency Steam Engines: Improvements in steam engines
not only made large generators possible, but also high-speed ships
that by the 1890s could cross the Atlantic in less than six days.
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
Sources of Industrial Growth
– Industrial Technologies: The Technology and Steel
Production
 Key Industry: The new American economy relied on railroads and
urban construction, which required iron and steel. The iron and steel
industry grew slowly until the 1870s, and then took off.
 Bessemer Process: In the 1850s, the English engineer Henry
Bessemer and American William Kelly separately arrived at the
same process for converting iron into steel by blowing air through
molten iron, burning off the impurities.
 New Blast Furnaces: Industrialist Abram S. Hewitt imported the
European “open hearth” steel-making method in the late 1860s that
could produce 500 tons a week, a big leap in productivity. (Hewitt
would later become mayor of New York City and one of the the
major forces behind the construction of the NYC subway.)
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Nineteenth-century schematic of
a Bessemer converter
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Open-hearth furnace in operation ca. 1900
Chapter Seventeen:
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
Sources of Industrial Growth
– Industrial Technologies: The Technology of Iron and
Steel Production
 New Transportation Systems: Steel-making expanded into the Great
Lakes regions because of the development of large steam freighters
that could carry ore. Steel and the railroads became intertwined;
Andrew Carnegie started working for the Pennsylvania Railroad, but
then moved to steel production initially financed by the railroad.
 Rise of the Petroleum Industry: New York businessman George
Bissell decided to market refined “rock oil” as an illuminant for lamps
and lubricant for machines; his company drilled the first oil well in
1859 in Titusville, Pennsylvania.
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The Titusville, PA, oil
well (1859)
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
Sources of Industrial Growth
– The Automobile
 Automobile Invented: German engineer
Henry Ford in 1919
Gottlieb Daimler builds the first auto that
contains an internal combustion engine and is not affixed to a horse
carriage in 1889. Used gasoline, a byproduct of oil refinement, as fuel.
 Duryea Brothers: Charles and Frank Duryea of Springfield, Mass.,
built the first American-made gas-powered car, which resembled a
“horseless buggy,” and began commercial production.
 Henry Ford (1863-1947): Produced the “Ford Quadricycle,” a gaspowered auto, while working for Thomas Edison in 1896. In 1901, he
founded the Henry Ford Company, which was reincorporated as the
Ford Motorcar Company in Detroit in 1903. He introduced the Ford
“Model T” in 1908, which sold for $825. He was able to lower
production costs by introducing assembly-line techniques in Dec. 1913.
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A Ford Model T in 1912
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
Sources of Industrial Growth
– The Airplane
 Wright Brothers: Orville (1871-1948) and Wilbur (1867-1912),
who had a bicycle shop in Dayton, Ohio, began experimenting
with a glider in 1899-1900, which led to the first heavier-thanair, powered, human-controlled flight for 12 seconds over the
beach dunes in Kitty Hawk, North Carolina, on Dec. 17, 1903.
 Slow Development of Aeronautics in the U.S.: European
governments, like in France, were faster to sponsor research than
in U.S. federal government. It did create a National Advisory
Committee on Aeronautics in 1915, and development was
accelerated by World Way One. The first U.S. airmail service
began in 1918.
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First Flight of the Wright Flyer, Dec. 17, 1903
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
Sources of Industrial Growth
– Research and Development
 Menlo Park: Thomas Edison founded the first industrial
research laboratory at Menlo Park, New Jersey, in 1876,
and there developed products like the incandescent light
bulb, early phonographic and film technologies, etc.
 General Electric: In 1900, this corporation based in
Schenectady, New York, created one of the first corporate
research labs, at a time when government support for
scientific research was dwindling.
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Recreation of Edison’s
Menlo Park laboratory
at the Henry Ford
Museum in Dearborn,
Michigan.
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
Sources of Industrial Growth
– The Science of Production
 “Taylorism”: Frederick Winslow Taylor
(1856-1915), an American mechanical engineer, developed the
principles of “scientific management” and served as one of the first
management consultants. He advocated developing work tasks into
smaller, simpler, tasks that could be standardized, done quickly and
without much special skill.
 Assembly Line: The moving assembly line was introduced into
Ford’s automobile plants in late 1913; it sped up productivity while
making workers interchangeable. Other manufacturers quickly
imitated this innovation, as well as the use of electricity for lighting,
ventilation, etc. The Model T dropped from $950 in 1914 to $290 in
1929, and enabled the raising of wages and shortening of hours.
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Model T Assembly Line
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
Sources of Industrial Growth
– Railroad Expansion and the Corporation
 Significance of Railroads: Gave industrialists improved access to
distant markets as well as raw materials, developed new and more
complex forms of corporate organization, and stimulated the
American economy through money spent on construction and
equipment. Total trackage expanded from 30,000 miles in 1860 to
193,000 miles in 1900.
 Importance of Government Subsidies: Federal, state, and local
government subsidies were critical for railroad expansion.
 The Rise of the Tycoon: Mergers of railroads under tycoons like
Cornelius Vanderbilt (1794-1877) of the New York Central, James J.
Hill (1838-1916) of the Great Northern, and Collis P. Huntington
(1821-1900) of the Central Pacific generated massive wealth.
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Railroads, 1870-1890
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
Sources of Industrial Growth
– Railroad Expansion and the Corporation
 “Limited Liability” and Public Sales of Stock: Corporations
existed in the early nineteenth century, but had to perform a public
good to obtain a charter. State laws in the 1840s and 1850s loosened
this idea and allowed corporations to sell stock directly to the public,
and offer “limited liability” to investors (legal liability for only the
amount invested). Public sales of stock greatly increased the amount
of capital and overall scale of enterprises.
 U.S. Steel Created: In 1901, Andrew Carnegie (1839-1919) sold his
massive steel holdings to banker J. P. Morgan (1837-1913) for $450
million, who merged them with other steel companies to create the
U.S. Steel Corporation, a gigantic $14 billion corporation controlling
2/3rds of the country’s steel production.
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Andrew Carnegie
J.P. Morgan
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
Sources of Industrial Growth
– Railroad Expansion and the Corporation
 National Corporations: Isaac M. Singer (1811-1875) created one of
the first modern manufacturing corporations around his invention, the
sewing machine. With the advent of the refrigerated boxcar, Gustavus
Swift (1839-1903) was able to build a massive meatpacking empire
centered on Chicago.
 “Horizontal Integration” and “Vertical Integration”: The former
means the control of companies that do the same thing; the latter
means the control of companies that do different aspects of a process;
Carnegie Steel, for instance, integrated vertically by not only owning
steel mills, but also the ore mines and the railroad and steamship lines
that carried the ore.
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
Sources of Industrial Growth
– Railroad Expansion and the
Corporation
 Standard Oil: John D. Rockefeller (1839-1937)
founded the Standard Oil Company with several
partners in 1870, in Cleveland, one of the
nation’s main refining centers. Over the
financially tumultuous 1870s, the company
bought up 22 of its 26 Cleveland competitors,
and by 1880, Standard refined 90 percent of the
nation’s oil. Then it began to expand vertically
by buying its own pipelines, tank cars, barrel
factories, and delivery networks. It was the
largest corporation in the world by this time.
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1904 Political Cartoon depicting Standard Oil as an octopus with
tentacles in all facets of business and government
Chapter Seventeen:
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
Sources of Industrial Growth
– Railroad Expansion and the Corporation
 “Cuttthroat Competition”: Gilded Age business tycoons, despite
public endorsement of free market competition, sought to eliminate it
because they saw it as destructive. To do so, they created cooperative
arrangements like railroad pools—informal agreements to keep rates
stable—and later, “trusts,” in which competitors would come together
in “trusts” to share profits. Standard Oil became a trust. These new
corporate forms inspired the Sherman Anti-Trust Act of 1890.
 “Holding Company”: An 1889 incorporation law in New Jersey
allowed corporation to buy up competitors. Standard Oil relocated
there and began buying up the stock of trust members, becoming a
“holding company,” establishing direct control of the trust’s
companies. By 1900, one percent of corporations in the U.S.
controlled a third of all manufacturing.
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
Capitalism and Its Critics
– Survival of the Fittest
 Ideology of Individualism: New economic forms were not
taking away opportunities for advancement, but giving
everyone a chance to become wealthy.
 Social Darwinism: English philosopher Herbert Spencer
(1820-1903) took Darwin’s ideas on evolution of species and
applied it to human society, coining the phrase “survival of the
fittest” in the sense of market competition.
 Corporate Wealth Legitimized: Spencer’s ideas about
competition were used by industrialists to legitimize their
wealth, but in fact most were trying to avoid competition.
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
Capitalism and Its Critics: Gilded Age Literature
 “Gospel of Wealth”: Andrew Carnegie first publishes a version of
this essay in 1889, emphasizing the social responsibility of wealthy
self-made men to ensure that their money is distributed through
philanthropy in socially useful ways, and not frivolously through
heirs or organizations ill-equipped to handle these great sums.
 Horatio Alger, Jr. (1832-1899): Wrote a series of wildly popular
juvenile novels that were formulaic “rags-to-riches” stories in which
an impoverished boy “made good” through a combination of hard
work, but also a great stroke of luck. These books were nominally
critical of the new economy, but later came to represent only “byyour-own-bootstraps” success.
 Louisa May Alcott (1832-1888): Publishes Little Women in 1869;
features an independent and ambitious young heroine, Jo March, who
challenges the passive, sentimental female characters of most novels
of the era.
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“This, then, is held to be the duty of the man of Wealth: First, to set an
example of modest, unostentatious living, shunning display or extravagance;
to provide moderately for the legitimate wants of those dependent upon him;
and after doing so to consider all surplus revenues which come to him
simply as trust funds, which he is called upon to administer, and strictly
bound as a matter of duty to administer in the manner which, in his
judgment, is best calculated to produce the most beneficial result for the
community-the man of wealth thus becoming the sole agent and trustee for
his poorer brethren, bringing to their service his superior wisdom,
experience, and ability to administer--doing for them better than they would
or could do for themselves.”
--From The Gospel of Wealth
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Horatio Alger Jr.
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
Capitalism and Its Critics: Alternative Visions
 Socialist Labor Party: Founded in the 1870s, the party became
obtained a modest following under the leadership of Daniel De Leon
(1852-1914), an intellectual who had emigrated from the Caribbean.
It sought to gain control of the state through elections, but never
polled more than 82,000 votes. A faction broke off in 1899, ultimately
joining the more influential American Socialist Party.
 Henry George’s “Single Tax”: Henry George (1839-1897), a
California writer and activist, published the bestseller Poverty and
Progress (1879) that proposed a land tax to solve social problems. He
believed increased value of land was produced by society at large,
and not the owner, so a tax could be used to redistribute that wealth.
 Edward Bellamy’s Looking Backward (1888): This science-fiction
bestseller envisioned a future in which all destructive competition and
class conflict had been eliminated through the evolution of a single
great trust controlled by the government by the year 2000.
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
Capitalism and Its Critics
– The Problems of Monopoly
 Economic Concentration Challenged: Critics argued that
monopolies—like railroads—could charge whatever they want
due to lack of competition, fostering economic instability.
 Economic Instability: Beginning with the Panic of 1873, the
American economy passed into a cycle of severe recessions
every five or six years, leading people to believe the new
business consolidation was at least partly to blame. Bank
panics happened in 1873, 1884, 1890, and 1893.
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
The Ordeal of the Worker
– The Immigrant Workforce
 Rapidly Expanding Working Class: Domestic migration into
industrial areas from rural ones, as well as foreign migration:
25 million arrivals between 1865 and 1915, mostly from
Europe but also from Asia, Mexico, Canada, the Caribbean,
etc.
 “New” Immigration: In the 1860s and 1870s, most Europeans
came from Northern Europe, but after 1880 the flow came
increasingly from South and Eastern Europe (Italians, Jews,
Poles, Russians, Greeks, Hungarians, etc.).
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Immigrants landing at the Castle Garden Emigrant Depot in Battery Park in 1880.
Chapter Seventeen:
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
The Ordeal of the Worker
– The Immigrant Workforce
 Labor Contract Law: Industrial recruiters could pay the passage of
workers and deduct the cost from later wages, recreating a form of
indentured servitude that had long since disappeared. This practice
had been set up during the Civil War, but was outlawed in 1885. It
continued illegally under the Italian padrone system, where an
informal “boss” would recruit and the control labor of immigrants.
 Growing Ethnic Tensions: Newcomers like Poles, Greeks, and
French Canadians accepted lower wages than Irish and English
workers in New England textile factories. Italians, Slavs, and Poles
became prominent in mining industries. Chinese and Mexicans
competed against other migrant groups for low-wage work in the Far
West.
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
The Ordeal of the Worker
– Wages and Working Conditions
 Wages: The average American laborer made between $400 and $500
a year, below the $600 that was considered minimally comfortable.
 Harsh Work Conditions: Many newcomers from agricultural areas
were not used to the harsh time discipline and repetitiveness of
factory work. Most worked ten hour days six days a week.
 Women Workers: Since women and children could be paid lower
wages, hiring them became common practice. By 1900, 20 percent of
the manufacturing workforce were women, with many concentrated
in the textile industries.
 Child Labor: During this period, roughly 1.7 million children work
in factories and in agricultural work. By the 1890s, thirty-eight states
had passed child labor regulations, but they were weak and not well
enforced. Furthermore, they did not apply to agricultural work.
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
The Ordeal of the Worker
– Emerging Unionization
 “Molly Maguires”: Secret labor organization in Pennsylvania’s
northeastern anthracite coal region of largely Irish workers who used
violence and intimidation in their struggle for better wages and
conditions, but often after being instigated by provocateurs. Mine
operators, who received death threats called “coffin notices,” used
private detectives to arrest and prosecute them. Several “Molly”
leaders were tried and executed in 1876-1877, ending the movement.
 The Great Railroad Strike of 1877: In July, Eastern railroads
announced a 10 percent wage cut due to the depression, which
triggered a massive strike that brought the nation’s transportation
network to its knees. Workers blocked rails, destroyed equipment, and
rioted. State militias and even federal troops were called out to
impose order. Troops often opened fire, and roughly 100 people were
dead by the time the strike collapsed after forty-five days.
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Molly Maguire “Coffin Notice”
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Police beating back railroad strikers in Philadelphia in 1877
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
The Ordeal of the Worker
– The Knights of Labor
Seal of the
Knights of
Labor
 First National Labor Organization: Founded in 1869, it was the
first attempt to create a genuinely national labor organization, and
was opened to anyone who “toiled”—almost any worker except
bankers, lawyers, liquor dealers, and gamblers—and even included
African Americans and women in their efforts. The Knights fought
for an eight-hour day and and end to child labor, and ultimately
wanted cooperative worker ownership of businesses.
 Terence V. Powderly (1849-1924): This son of Irish immigrants led
the the Knights from 1879 to 1893 and transformed it from a secret
organization to one that was out in the open. He embraced a
“producerist” ideology that included small business owners rather
than socialism. He was a nationally prominent spokesperson,
although the Knights were not very effective due to disorganization.
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
The Ordeal of the Worker
– The American Federation of Labor (AFL)
 Rival to the Knights: In 1881, the Federation of Organized Trade
and Labor Unions was formed, and was renamed the American
Federation of Labor in 1886. It rejected the Knights’ idea of one big
union for everyone, and embraced the idea of many semi-autonomous
unions under a larger umbrella organization.
 Samuel Gompers (1850-1924): This English-born cigar maker
became leader of the AFL from 1886 to 1924 (with onsmall break).
He focused on immediate concerns: better wages and working
conditions, and a shorter work day. The AFL organized a national
“general strike” for May 1, 1886 to demand an eight-hour day.
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
The Ordeal of the Worker
 Haymarket Bombing: In Chicago, a hotbed of labor agitation, a
strike at the McCormick Harvester Company was already in progress
when the May Day strike of 1886 started. On May 4, a protest was
organized since police had been harassing strikers, having killed four
protesters the previous day. As police ordered the crowd to disperse,
someone threw a bomb, killing seven policemen and injuring 67
others, leading police to shoot into the crowd, killing four more.
 Haymarket Trial: Eight anarchists—who did not throw the bomb—
were put on trial for having incited the bombing. Seven were
sentenced to death, four were hanged, one committed suicide in jail,
and two had their sentences commuted to life in prison.
 Labor Discredited: After the Haymarket Affair, many middle-class
Americans had little sympathy for the labor movement, associating it
with “anarchism.”
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Mainstream press depiction of the Haymarket bombing
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
The Ordeal of the Worker
– The Homestead Strike
 Amalgamated Association of Iron and Steel Workers: This
was one of the most powerful trade unions in the country, but
new technologies had replaced many specialized skills, so by
the mid-1880s Carnegie Steel got rid of the union in all but the
oldest of the company’s three major plants: Homestead, near
Pittsburgh.
 Henry Clay Frick (1849-1919): Carnegie’s chief lieutenant
decided to get rid of the union at Homestead, so he began
lowering wages in 1890, to which the union acquiesced. In
1892, he did so without even consulting with the union.
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
The Ordeal of the Worker
– The Homestead Strike
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 Strike: The union struck on June 30, setting up twenty-four hour
pickets and even a patrol boat on the Monongahela River. On July 6,
Frick sent in 300 strikebreakers from the Pinkerton Agency armed
with rifles by boat. In the ensuing battle, three Pinkertons and ten
strikers were killed, but the Pinkertons were forced to surrender and
driven out.
 Government Intervention: At the Carnegie Company’s request on
July 7, the Pennsylvania governor, Robert Pattison, sent almost all the
state miltia, on July 12. That morning, 4,000 troops surrounded the
plant and removed the picketers, and the company quickly brought in
“scab” workers to replace the union workers. The town was placed
under martial law, and popular opinion was behind the union, yet this
sentiment was lost when an anarchist shot Frick in his office on July
23 (Frick survived the attack).
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Engraving depicting the Battle at Homestead, July 6, 1892
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
The Ordeal of the Worker
– The Pullman Strike
 Pullman Car Company: This firm built sleeping and parlor railroad
cars, and was lucrative but ran into trouble with the depression of the
1890s. It had created the town of Pullman for its workers, renting
them small but orderly houses.
 American Railway Union: In the winter of 1893-94, the Pullman
Company slashed wages by 25 percent, but refused to lower rents.
Workers went on strike, and convinced the leader of the American
Railway Union, Eugene V. Debs, to not allow his members handle
Pullman cars, which shut down the nation’s rail system from Chicago
to the West Coast. The Illinois governor refused to send out the state
militia to break up the strike, so the company convinced President
Grover Cleveland to send federal troops instead.
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
The Ordeal of the Worker
– Sources of Labor Weakness
 Few Gains for Labor: A few minor gains were made, like
some compensation for on-the-job injuries, but for the most
part were not enforced.
 Sources of Labor Weakness: It was hard to unite both skilled
and unskilled workers who often had different agendas; unions
were often poorly run; immigrant workers were often reluctant
to organize; and laborers often moved around.
 Capital’s Strength: Big corporations had vast wealth and
power, and could count on the state and federal governments to
protect their interests against striking workers.
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