An Industrial Giant

"I have been insane on the subject of moneymaking all my life."

-- Cornelius Vanderbilt, quoted in the New York Daily Tribune,

March 23, 1878.

Read The Gospel of Wealth - Carnegie

How was the first transcontinental railroad constructed?

May 10, 1869, Promontory Point, Utah

Transcontinental RailroadPacific Railway Act: Cash and Land grants – “checkerboard”Central Pacific – The Big FourUnion Pacific – Congressman Oakes Ames & Credit Mobilier

Crocker’s challenge through the High SierrasCost $280,000 per mile, Paid $48,000

Credit Mobilier Scandal: UNCLE SAM'S EYES OPEN AT LAST. (1873)SMILER — : “I am an honest man. If Nesbitt were here, he'd say so. I never took anything that wasn't given to me.”   UNCLE SAM: “Jes' so! jes' so! You took all you could git; but you perjured yourself by saying you got nothing. Commit hari-kari.”   SCHURZ: “The old man has found them out; but he wouldn't believe us, when we told him, last Summer.”

The WestBoomtowns and Bonanzas

Comstock Lode 1859 Territories NV, AZ, ID,

MT Boomtowns US Finances

Homesteads Corporate farming

RR : Competition Cut into Profits

Selective Rebates Then drawbacks

Increased prices on short hauls By 1879 65 smaller RRs bankrupt

1880s – Larger RRs buy and expand 1893 – Depression damages most RRs

Big Banks to the rescue: Morganizations

Tweed Ring Graft

Boss William Tweed 1877: Est. $25-200

million theft from NYC $1-8 billion today Captured

due to Nast

images

Competition and Monopoly

Expansion went hand in hand with concentration. Economies of scale Expensive machinery Deflation: economy outpaces money supply after

1873, when silver is demonetized.

Love of Competition: Carnegie

Andrew Carnegie J Edgar Thomson Steel Works 1875

1890 dominated 25% of all 1901 sold everything to JP Morgan

About $500 million - half of which went to Carnie Steel war abated Morgan’s consolidation US Steel

67% of all steel production “Gospel of Wealth”

Eliminating Competition: Oil

Col. Edwin Drake 1859 – Titusville, PA Standard Oil Co founded 1870 in Cleveland John D Rockefeller

1879 – controlled 70% of oil refining, later 90+% Built by vertical combination

And horizontal combination The Trust formed secretly 1882 Died with $1 billion value

That’s about $190 billion value today Carlos Slim: $73 bill Bill Gates’ : $56 bill

Hated Competition: JPMorgan Inherited wealth and father’s bank

European connections Physically imposing

Nose Morganizations

Morganizations made Wall Street Other corps. moved to NYC to be near finance

RRs, Steel…his influence was wide Senator Beveridge called Morgan "the greatest

constructive financier" in the history of mankind. Not everybody agreed Would help end Panic in 1894, prevent Panic in 1907

Ambivalence toward the Gilded Age?

Who were the reformers and what did they want?

Seeking to Regulate/Reform

Reformers: Henry George – property tax = property value rise Edward Bellamy – Looking Backward Henry Demarast Lloyd – Wealth Against

Commonwealth The Marxists

Social Labor Party 1877 Marx’s ideas published widely in US 1880s Daniel De Leon – editor of The People

“The Optical Delusion”

Henry George

A Utopian Novel Julian West goes to sleep in

1887 and awakes in 2000, with the world a socialist paradise

"no man any more has any care for the morrow, either for himself or his children, for the nation guarantees the nurture, education, and comfortable maintenance of every citizen from the cradle to the grave" (59).

The transition had occurred without revolution.

Them Western Farmers Git Their Gander Up

National Grange 1867 Fought for state regulations

Transporting crops to market Munn v. Illinois ’77 – grain elevator case Wabash v. Illinois ’86

“the long-and-short-haul evil” may be evil but this state law can’t regulate!, sayeth the court

Commerce clause says federals must do it

A First: Interstate Commerce Commission

Congress : ICA creates ICC 1887 Cleveland signs it A prototype Bans “personal discrimination”

Rebates, drawbacks,” long and short-haul evil” But commission could not set rates or enforce much Court cases drag on

Later acts in Progressive Era strengthen it Elkins Act (1903) RR must publish standard rates

Labor Union Movement Post Civil War national craft unions grew

Objectives were local and trade specific National Labor Union – ’66-72

CW and RR spur this Sought a more unified effort, but disorganized.

Knights of Labor 1869 – founded in Philadelphia Initially a social club

Uriah Stephens: deal with underlying social realities Terrence Powderly Mix of disconnected political objectives Social reform, 8 hour workday, blacks, women, unskilled Initially disliked strikes, would embrace in 80s

The Great Upheaval 1877

A response to bad times of 1870s as RR strikes enflamed nation

Hayes sends troops to quell things Spurs growth of Knights

Revolution?

Occupy Haymarket SquareKnights of Labor

Success against Jay Gould’s Missouri Pacific Haymarket Strike 1886 – 80,000 workers

“8 hour” agitation Chicago - McCormick Reaper Factory Anarchists get involved

Demands for societal reform Bomb thrown into ranks of policemen

7 police die, 4 anarchists executed

AFL: “Let’s Get Practical”advance the working class

Avoid politics and pipe dreams

Use strikes Improve wages 8 hour day Employers’ liability Mine safety laws

Solid growth: by 1901 over 1 million

Washington DC monument There was also a USS Samuel Gompers!

Samuel Gompers AFL ‘86-1924 Gompers was born in London, England, on January 26, 1850.

Parents were poor immigrant Jews from Holland. Became a cigar maker, a trade he brought with him to New York in 1863.

Most work was done in a thousand or more sweatshops, crowded apartments Thousands of little children labored with parents Elected him as president of Cigar Makers Union Local 144

Reconstituted in 1886 as the American Federation of Labor. His office was not much more than an 8x10 room in a shed. His son was the office

boy. There was $160 in the treasury. It was "much work, little pay, and very little honor."

Four years later, the AFL represented 250,000 workers. By 1892, the number had grown to over one million. Concentrate on collective bargaining with employers, and on legislative issues directly

affecting the job. Broad social goals and political entanglements were left to others. 1919 went to Paris, negotiated International Labor Organization (ILO) under the

League of Nations

“Samuel Gompers.” Illinois Labor History Society. 8 January 2006. http://www.kentlaw.edu/ilhs/gompers

Analyze this…

Owners saw labor as a commodity

Referred to law of supply and demand as excuse for cutting wages

There were many changes going on Confusion and fear were real What to do? Fight radical change

What was the First Federal Anti-Trust Law?

Sherman Anti-Trust Act ,1890

Was it effective? Why?/Why not?

“It is said that this bill will interfere with lawful trade, with the customary business of life. I deny it. It aims only at unlawful combinations. It does not in the least affect combinations in aid of production where there is free and fair competition. It is the right of every man to work, labor and produce in any lawful vocation and to transport his production on equal terms and conditions and under like circumstances.”

- John Sherman, Speech in Senate on his bill , 1890

How was it undermined?

United States v. EC Knight

1895: The Supreme Court emasculated Sherman! Sugar trust operating in FL Manufacturing ≠ commerce, i.e. trade Whooppee!; Late 1890s : a spate of mergers Carnegie: “Nobody ever mentioned the Sherman Act

to me.”

Homestead Strike:Clash between Capital &Labor

1892: Near Pittsburgh: Homestead a mill town 7/300 Guards killed by strikers/Guards pushed out Carnegie and Frick decided to stop union at all costs

Pinkerton Security Guards brought in Lasted 5 months Strikers damaged by an anarchist’s assassination attempt

on Henry Frick

Major setback for AFL and 24,000 union of Amalgamated Association of Iron and Steel Workers

"Homestead: Patrol Guard, Company "D," 15th Penn., Passing the Railroad Station to Disperse Groups of Strikers. Pennsylvania Gazette, 1892. 

Pullman Factory Strike 1894

Depression begun 1893 Pullman reduced wages but keeps rents up

in Pullman factory town near Chicago American Railway Union – Eugene Debs

Union votes to not handle trains with Pullman cars

Mail cars in dispute Cleveland steps in: injunction from court Debs jailed when he refuses to end strike

Debs: 5X candidate for pres…

Jacob Riis

Tenement Life

What was the Hull House?

Addams in 1934Addams in 1885

Intellectual Critics

Henry Demarast Lloyd Wealth Against the Commonwealth, 1894

Thorstein Veblen Theory of the Leisure Class, 1899

Conspicuous Consumption

Social life

Immigration’s impact…?

How were streetcars changing cities?

Why was there new opportunities for leisure time?