Transcript Slide 1
1865 - 1901
• Learning Targets
Students will be able to explain the factors
that helped America industrialize
Students will be able to explain the factors
contributing to the expansion of the railroads
in America
Students will understand the factors in the rise
of big business
Students will be able to explain the causes in
the development of labor unions
• Although the US
began to
industrialize in the
early 1800’s, it was
only after the Civil
War that it
expanded rapidly
• What are the
factors that
allowed this to
happen?
• Factor 1 – Natural
Resources
The US has abundant
natural resources - can
be obtained more
cheaply than through
importation
Mountains in West
source of many
resources – construction
of the Transcontinental
Railroad allowed
movement of
settlers/miners and
shipment of material
east
New resource
exploited – petroleum
(oil)
Oil used to produce
kerosene used to light
lanterns, stoves, etc
What was used before
kerosene?
First oil strike in
Pennsylvania – drilled
by Edwin Drake in
1859
I hate
kids
• Factor 2 – Large
Workforce
US population tripled
between 1860 – 1910
High population provided
workers and consumers
Population growth caused
by large families and
immigration
What are some push & pull
factors?
• Factor 3 – free
Enterprise System
Policy of Laissez-faire
Supply and demand
Competition causes
lower prices and
greater efficiency
Entrepreneurs –
people who risk capital
seeking profits
Foreign investment
• Factor 4 – Role of
Government
Government kept
taxes and spending
low
Did not impose costly
regulations
Imposed high tariffs.
Good idea?
• Factor 5 – New
Inventions
1876 Telephone –
Alexander Graham
Bell
1877 Bell Telephone
(AT&T)
Revolutionized
business and personal
communication
Electricity – Thomas
Edison
• 1877 – Phonograph
• 1879 – Light bulb,
electric generator
• Dictaphone,
mimeograph, and
motion picture
• Launched electric
power company to
supply electricity to
cities (GE)
• Other Inventions
Ice machine
Refrigerated railroad
car
Automatic loom
Ready-made clothing
Sewing machine
Shoe-making
machines
Canned food
Breakfast Cereal
• Factor 6 – Railroads
Boom began with Pacific
Railway Act 1862 – Union
Pacific & Central Pacific
Union Pacific employed
mainly Irish / Central
Pacific imported Chinese
labor
Transcontinental Railroad
completed 1869
Miles of track dramatically
expanded after Civil War
Railroads created markets
and were a market unto
themselves
After construction of major
lines, smaller connecting
lines were built
(consolidation)
The most successful
railroad consolidator was
Cornelius Vanderbilt
Consolidation = time zones
New technology such as air
brakes allowed heavier
locomotives
Rail systems so efficient
cost for freight dropped
• The Land Grant
System
Land grants given to
railroads to encourage
construction
Railroads sold or
mortgaged land to
cover construction
costs
• Robber Barons
Big businessmen
who people believed
had gained their
wealth through
scams, bribes, and
cheating
Credit Mobilier
Scandal – corrupt
construction
company owned by
railroad investors
• Great Northern
Railroad
Only transcontinental
railroad to NOT take
land grants
Wise business tactics
brought profits on both
east and west runs
Only railroad to NOT
go bankrupt
• Corporation – an
organization owned by
many people but
treated by law as
though it were a single
person
• Stockholders – people
that own shares of the
corporation
• Stock – shares of
ownership
• America initially
distrusted corporations
• Economies of Scale
Corporations raise money by selling
stocks
They use the money to invest in new
technology, large labor force, lots of
machines which greatly increases
efficiency
They make more goods more cheaply
• All businesses have two types of costs
Fixed Costs – costs a company has to
pay regardless if it is operating or not
Operating Costs – costs that occur
when a company is running
What advantages does a corporation
have in bad times?
• The Steel Industry
The nature of steel
Andrew Carnegie –
invested in companies
supplying railroads
Bessemer Process –
process by which steel
could be made
cheaply and efficiently
• Vertical Integration - a company owns all the different businesses on
which it depends for its operation
• Horizontal Integration – combination of many companies of the
same type into one large corporation
• Monopoly – when a single company achieves control over an entire
market
• Why would some Americans fear a monopoly? Why would others
feel a monopoly was good?
• Trusts
Fear of monopolies drove
some states to make them
illegal
To get around the law,
businesses were merged
by having stockholders
place their stock under
control of a manager
(trustee)
Trusts could control
companies as if they were
merged into a corporation
Standard Oil – John D.
Rockefeller
• Holding Companies
Does not produce anything
It owns the stock of companies that do
produce goods – thus controlling them
as if they were one large corporation
• Selling the Product
New ways of advertising –
bold display ads
Department stores
• Wanamaker, Macy’s
Chain stores – emphasized
low prices
• Woolworth 5 & 10 (dime)
Mail-order catalogs
• Sears-Roebuck,
Montgomery Ward
• Urban Workers
Unskilled labor – long
hours, monotonous,
unhealthy or
dangerous work
environment
Increased living
standards – products
cheaper
Deflation – prices fell
but wages cut
Workers beginning to
organize unions
Two types of workers: craft
workers and common
laborers = skilled and
unskilled
Trade Unions – unions
limited to people with
specific skills
Corporations generally
opposed unions
Tactics to fight organization
of unions included
blacklists, lockouts, and
strikebreakers
• Why did the government and the American
people oppose Unions?
No laws protecting the right to unionize –
some courts saw unions as interfering in
business
Marxism and Anarchism - European ideas
arriving with immigrants –both espoused
radicalism
Americans equated unionism with radicalism
– led government to use police and army to
crush strikes and break-up unions
• The organizing of Labor Unions
Great Railroad Strike of 1877
• Economic recession forced railroads to cut
wages
• Workers walked off job and blocked tracks
• Other states joined the strike – workers
destroyed equipment and tracks
• State governments called out militia –
President Hayes called out army
• Violence took >100 lives
• The Knights of Labor
First national industrial union
Wanted 8 hour workday, equal pay for
women, abolition of child labor
Allowed women and minority members
Supported arbitration instead of strikes
Strikes were used to good effect causing
union to grow in membership
Haymarket Riot hurt union’s reputation with
America – membership declined
• The Haymarket Riot
Anarchist rally at
Haymarket Square,
Chicago
Police hit by bomb /
shots fired
7 police / 4 workers
killed
Among arrested
anarchists was
member of Knights of
Labor
• The Pullman Strike
1893 American Railway
Union founded by Eugene
V. Debs
Pullman workers lived in
company town
1893 Depression caused
Pullman to cut wages – but
not lower rents and prices
Union workers boycotted
Pullman cars
Railroads attached US Mail
cars to Pullman cars
US government called in
troops to break boycott
• American Federation of Labor 1886
Led by Samuel Gompers
“Plain and simple” approach to labor relations
Rejected socialism and Marxism
Three goals:
• Collective bargaining
• Closed shops
• 8 hour workday
• Working Women
Women working outside the home increased after the
Civil War
Jobs generally restricted to “women’s work” – 1/3
domestic servants 1/3 teachers, nurses, clerks,
salesgirls, secretaries 1/3 industrial workers
Women paid less. Why?
Women excluded from unions including AFL
1903 Women’s Trade Union League established –
sought 8 hour workday, minimum wage, end to
evening work, and abolition of child labor