modern money and its discontents

Modern Money and Its Discontents

Big Business and Labor, 1865-1914

Rise of an Industrial Economy

• Second Industrial Revolution—integrated transportation and communication; electric power; scientifically-based research and development

• Laborers were increasingly a proletariat—only their labor to sell in the marketplace.

Railroads

• First Transcontinental Railroad completed in 1869

• Financed by private capital and government land grants (129 million acres of public lands between 1850 and 1870 alone)

• Much corruption—Credit Mobilier Scandal; “Robber Barons”

Transcontinental Railroad

Robber Barons: Gould and Vanderbilt

Inventions Change Lifeways

• Alexander Graham Bell—Telephone—1876• Thomas Alva Edison—Light bulb in 1879;

the phonograph in 1877• George Westinghouse—airbrake for trains

and Alternating Current (beginning of power grid) in 1886.

• J. W. McGaffey—vacuum cleaner 1869• These inventions relied on electricity

Electric Generator

Edison and Westinghouse

New Corporate Models

• John David Rockefeller and the Standard Oil Trust• Corporation: “hasn’t a body to be damned or a

soul to be kicked”• Vertical Integration: from raw material to market

—Andrew Carnegie and Carnegie Steel• Horizontal Integration—control the bottlenecks:

John David Rockefeller and the Standard Oil Trust (refining monopoly)

Carnegie and Rockefeller

Oil wells in Titusville, Pa.

The Business of Money

• J. P. Morgan and Investment Banking

• Interlocking boards of directors

• Assumed control over 1/6 of all U. S. railroading

• United States Steel (1901) controlled about 90% of U. S. steel production

James Pierpont Morgan

Richard Sears & Alvah Roebuck

• Wide range of low priced consumer goods

• You could even buy a mail order church—just not the pretty girl on page 614

• Rural Free Delivery plus the railroad made this mail order business possible

• 6 million catalogs per year by 1900

New Economy Produced Harm for Many

• Concentration of wealth

• Alienation of labor

• Child labor

• Low wages

• Industrial accidents

Workers Try to Organize

• Contrary to “individualism”

• Strife between skilled and unskilled labor

• Race/Ethnicity—Dennis Kearney’s Workingmen’s Party

• Pinkerton’s as Strikebreakers

• Government Prosecution (Sherman Anti-Trust Act)

Knights of Labor

• Growth under Terrence V. Powderly

• Success in early railroad strikes led membership to swell to 700,000 by 1886

• Lost favor as a result of Haymarket Affair in 1886

American Federation of Labor

• Samuel Gompers and Unionism pure and simple

• 500,000 members by 1890 and 2 million by 1914

1890s Strikes Illustrate Challenges faced by Unions

• Homestead Strike—1892

• Pullman Strike--1894

Eugene Victor Debs, 1855-1926—“While there is a lower class, I am in it; while there is a criminal element, I am of it; and

while there is a soul in prison, I am not free.”

Mary Harris “Mother Jones” (1837-1930)

Socialism and Labor

• Socialist Party—polled 900,672 votes in 1912

• IWW

• Western Federation of Miners and Big Bill Haywood

William D. Haywood—Leader of WFM