Transcript Ch 24 Rise of Industry

Ch 24 Rise of Industry
RRs, Industrialization, Immigration,
Labor Unions
Post Civil War RR expansion
• Some RR production from 1840-65
• Post CW RR production skyrocketed.
– Congress encouraged w/ land grants totaling over
155million acres.
– Cos were allowed 10 mile wide strips of land,
mapped in alternating 1 mi square sections some
to keep & some to sell
• Cleveland stopped practice 1887
– Towns where RR came through became sprawling
cities; those skipped by RRs bcm ghost towns
Transcontinental RR
• When south seceded congress commissioned
Union Pacific RR for the northern route
– Omaha, NE to CA 1862
– Co received huge $$ grants to build but Credit
Mobilier netted 23 mill in profits
• Central Pacific RR in CA built eastbound route
– Irish hired to lay westward route; Chinese hired to lay
eastern route.
• RR workers defended tracks from Indian attacks
• Averaged 7-10 miles of track per day
• Central Pac backed by ‘Big 4’: (with)
– Leland Stanford (ex gov CA)& Collis P. Huntington (lobbyist)
RRs (3)
• Central Pac also had to drill through Sierra
Nevadas
• First Transcontinental route completed at Ogden,
UT in 1869
• By 1900, 4 other Transcontinental routes built
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Northern Pacific RR (Lake Superior Puget Sound)
Atchison, Topeka & Santa Fe crossed SW deserts
Southern Pacific from Orleans to SF, CA
Great Northern (Duluth to Seattle)
• James J. Hill project- greatest RR builder
RRs consolidate
• Many pioneers over invested in land & banks that
supported them often failed when land value turned
out to be low
• Cornelius Vanderbilt (NY Central RR) financed many
western RRs
• RR advances:
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Steel rails (stronger than iron)
Westinghouse Air Brake
Pullman Palace Cars
Telegraphs
Double racking & block signals
• Train accidents still common, many fatalities
Effects of RRs
• Tied nation together, created huge market &
many jobs
– Helped industrialize US
– Stimulated mining, agriculture by bringing people,
supplies
– Creation of 4 time zones: Nov 18, 1883
• Stopped independent times/ scheduling nightmare
– Created millionaire class
RR wrong doings
• Credit Mobilier
• Jay Gould made millions watering stock
– Embezzled from Erie, KS Pacific, Union Pacific, TX
Pacific etc
• Inflated worth of stocks; sold over value
• Owners abused public
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Bribed judges, legislatures, hired lobbyists
Elected their own to office
Used free passes as bribes w/ press
Formed defensive alliances, Trusts, then called Pools
Government’s first attempts to
regulate business
• Gov position had always been pro business
– Adam Smith: the market will regulate itself
• The People attempted to regulate RRs to stop
injustices through the Grange
– Several state cases allowed States to intervene, as in
the Wabash case
– Each time, the Supreme Ct overturned; only Congress
can reg. interstate commerce
– Interstate Commerce Act 87- banned rebates, pools,
req’d RRs to publish rates openly, banned charging
more for short hauls
• Set up ICC to enforce
Mechanization
• 1860- US: 4th largest mfctr in world
– 1894: #1
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Abundant liquid capital
Exploited natural resources: coal, iron, oil
Abundant cheap labor: immigration
American ingenuity (inventions)
– Mass production
– Cash register, stock ticker, typewriter, refrigerator car, electric
dynamo, electric railway
– Bell’s telephone
– Thomas Edison (wizard of Menlo Park): light bulb, phonograph
& dozens more
Trust Titans & Robber Barons
• Andrew Carnegie (steel)
– Vertical integration
• Controlled all aspects of industry (from ground up)
• John D. Rockefeller (oil)
– Horizontal integration
• Controlled certain parts of process, ie: all mining or all
shipping
– Standard Oil forced all weaker competitors to the wall
• Trusts: giant monopolistic corporations
– Rockefeller also put his own men on boards of
directors of other rival companies
• “interlocking directories”
Supremacy of Steel
• 1860: scarce, expensive
• 1900, US produced more than England &
Germany together
– Due to Bessemer process (though American, Wm
Kelly discovered it first)
• Cold air blown over molten steel allows iron burned
carbon impurities to rise up and be skimmed off
– Purifies iron into steel
– US had abundant iron, coal (heating)
Carnegie
• Began as poor clerk for RR co
– Acted quickly to resolve company crisis
• Rewarded w/ opportunity to buy stock.. Quickly bought up as
much as he could
• Eventually owned RR
• On to Steel.
• Pittsburgh area- produced ¼ nation’s Bessemer Steel
– J.P. Morgan (banker) attempted to move into Steel tubing
• Carnegie threatened to ruin him
• Negotiated settlement: Morgan bought out Carnegie for $400
million
– Carnegie gave away $350 mill to charity, pensions, libraries
• Added other steel holdings, formed: US steel 1901: first billion $$
corp in world
Rockefeller
• 1859 Drake first mined oil in Titusville PA
– By 1870s used to light kerosene lamps all over nation
(whale oil – obsolete)
– By 1885 1/4mill Edison Electric light bulbs in use- made
kerosene obsolete
– Industry shifts to gas burning internal combustion engine
• Rockefeller already owned 95% oil production in US
when he org’d Standard Oil of Ohio 1882
– Crushed weaker competitors
– American Beauty Rose theory of competition
• Trusts: built superior product at cheaper price,
Gustavus Swift & Philip Armour: meat barons
Gospel of Wealth
• Many rags to riches stories (Horatio Alger) in real
life
– Newly rich feel some are destined to become rich
(predestination.. Calvinist) AND help society w/ $$
– Rev. Russell Conwell (Phila) bcm rich on his lecture:
“Acres of Diamonds” preached poor people made
themselves poor, rich made themselves rich..
Everything was based only on your actions
– Corporate lawyers used 14th amendment to defend
trusts as living entities (big people) entitled to their
property
• Plutocracy ruled
Gov attacks trusts
• 1890: Sherman Anti-trust Act
– Forbade combinations in restraint of trade
• No distinction between good & bad trusts
• Could not be enforced
• 1914- enforced, violators first punished
South in Age of Industry
• Agrarian
– James Buchanan Duke: cigarette industry:
• American Tobacco Company
• Donations to Duke University
– Henry Grady (Ed. Atlanta Constitution) urged S. to
industrialize
– No. companies set rates to keep S from gaining
competitive edge
• Textile mills developed in S
• Cheap labor led to creation of many jobs, (low wages) still
welcomed in S
Impact of Industrial Age
• Standard of Living rose
• Immigrants poured in for opportunities
• Jeffersonian ideas of dominance of agriculture
faded
• Women swarmed to factories, found new
opportunities
– Gibson Girl (Charles Dana Gibson): romantic ideal of
the age
• Pressures of foreign trade developed
• Overproduction will drive us to develop more foreign
markets
– Leads to Imperialism
In Unions There Is Strength
• National Labor Union
– 1866- 600,000 members- lasted only 6 yrs
• Excluded Chinese
• Never recruited blacks; women
• Worked for arbitration of industrial disputes
– & 8 hr day
• Won 8 hr day for Gov workers- till Depression 1873
Unions (2)
• Knights of Labor
– 1869 – 1881 (in secret)
• Barred only liquor dealers, prof. gamblers, lawyers,
bankers, stockbrokers
– Campaigned for economic & social reform
– Led by Terence V. Powderly
• Won many strikes for 8 hr day
• After strike against Jay Gould’s Wabash RR 1885,
membership went up to ¾ million
End of Knights of Labor
• Involved in several May Day strikes; half failed
– Chicago: (80K knights & hundreds anarchists)
• May 4, 1886- Police advancing on meeting called to
protest brutality by authorities (Haymarket Sq)
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Bomb thrown, killing & injuring many
8 anarchists rounded up; no proof
Jury sentenced 5 to death for conspiracy
Other 3 long prison terms
• 1892 John P. Altgeld, Dem Gov IL pardoned 3 survivors
after studying case
– Defeated in re-election bid
– Forever assoc w/ anarchists- KOL membership dropped
A F of L
• 1886- Samuel Gompers founded Am Fed of
Labor
– Assoc of self gov’d unions, all indep
– Demanded ‘fairer share for labor’
• Better hours, wages
– Skilled workers only (labor trust)
– 1881-1900 over 23,000 strikes; w/ 6.6 mill workers
• Still less than 3% of all workers unionized.
• 1894 Labor Day became legal holiday
• Most owners fought unions still