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