Industrialization and Reform

America’s Rise to Industrial Supremacy and the Societal Change that Resulted

1865-1917

From Agricultural to Industrial1. Why did farmers

go into debt?

2. How did farming change?

3. What were other problems farmers faced?

From Agricultural to Industrial

• Farming transitioned from independent farmer to commercial farmer– Post- Civil War farmers transition from self-

sufficient to one crop farms – 1865-1900 agriculture becomes

international business– Dependent on banks, railroads, foreign

markets, and world supply and demand

Industrial Technology• A time of innovation in U.S.

– Up to Civil War- 36,000 patents– Next 30 years-440,000 patents

• Essential business inventions– 1866 transatlantic cable created– Alexander Graham Bell creates commercially

useful telephone• AT&T installed nearly half a million telephones by 1890s

– 1868-Christopher Sholes invents the typewriter– 1870- cash register– 1891- Calculating adding machine

Inventions that Change Society

• 1870s- Electricity as a source of light and power

• Thomas Edison– Incandescent light bulb– Generators and power plants

• Steel– Created simultaneously by Henry

Bessemer and William Kelly

Industrialization Begins

1. What 2 factors converge to help America industrialize?

2. How did the railroad help industrialization flourish?

3. Name the part of the economy that each of the following headed:– J.P. Morgan– John D. Rockefeller– Andrew Carnegie

The Science of Production

• Frederick Taylor- created principles of “scientific management”– Subdividing tasks in production process

• Speed up work• Less training• Workers more interchangeable

• Moving assembly line– Perfected by Henry Ford– Cut time to create product

Railroad Expansion

• Key to industrial development– Promoted economic growth– Principal method of transportation– Opened distant markets and suppliers

• Became corporate model for other industries– Sell stock to raise capital ($)– Use cutthroat competition

Railroad Expansion• How many miles of track

was there in 1900?• How many

transcontinental railroads were there in 1900?

• How long did it take to cross the country prior to the transcontinental R.R.?

• How long did it take to go coast to coast on the Transcontinental R.R.?

Railroads in the 19th Century

• Miles of track in the U.S.– 1860- 30,000 (primarily in the East)

• 1869- First transcontinental railroad completed

– 1870- 52,000– 1880- 93,000– 1890- 163,000– 1900- 193,000

• Roads created by subsidies from local, state and federal government

The Corporation

• Existed since colonial times• Allows the public to invest in a business

– Businesses like the railroads too big for 1 person to finance

– Investors given limited liability• Risked only amount of investment• Not liable for debts of corporation beyond

investment

– Large amounts of money could be raised

Corporations in the Late 1800s

• First adapted by railroads, especially the Pennsylvania

• Used by businesses like Andrew Carnegie in the steel industry and John D. Rockefeller in the Oil Industry– Created through his own profits and sale of

stock– Used vertical and horizontal integration to

dominate

Vertical IntegrationVertical Integration

• Taking over all of the different Taking over all of the different businesses on which a company relies businesses on which a company relies for its primary functionfor its primary function– Carnegie Steel- controlled mines, railroads, Carnegie Steel- controlled mines, railroads,

steel mills, finishing shops, etc.steel mills, finishing shops, etc.

Vertical Integration

Carnegie Steel

1. In 1859, what process developed to produce steel?

2. Who was the predominant steel baron of his time?

3. What factors led to Pittsburgh being the center of the steel world?

4. How much did Carnegie get for the sale of his company in 1901?

Horizontal IntegrationHorizontal Integration

• Combining a number of businesses Combining a number of businesses engaged in the same type of business engaged in the same type of business into a single corporationinto a single corporation

• John D. Rockefeller’s Standard OilJohn D. Rockefeller’s Standard Oil– Started as a small refining companyStarted as a small refining company– Eliminated competitionEliminated competition

• Bought out other refineriesBought out other refineries• Those that wouldn’t sell were driven out of Those that wouldn’t sell were driven out of

businessbusiness• Also started to integrate verticallyAlso started to integrate vertically

Horizontal Integration

John D. Rockefeller1. How much of the oil

business did Rockefeller control?

2. How did Rockefeller expand his oil empire?

3. What act broke the Standard Oil Company into separate companies?

4. What are some institutions that Rockefeller established?

5. How much did Rockefeller give away?

Responses to Capitalist Theories

Criticism of Unrestrained Industrialism

Social Darwinism

• Based on Charles Darwin’s laws of evolution and natural selection

• In society only the fittest individuals survived and flourished in the marketplace

• Appealed to corporate leaders– Justified their tactics– Pushed competition and Laissez faire government policies

The Gospel of Wealth• Advanced by Andrew Carnegie and

other wealthy people• Stated people of great wealth should set

aside any money in excess of their needs for the good of the community– This allowed the wealthy to give as they

see fit– It also toned down any feelings of guilt in

acquiring such large fortunes

The Problems of Monopoly

• Monopoly-when one or a limited number of businesses control an industry

• Many groups critical of the concentration of wealth– laborers, farmers, consumers, small

manufacturers, radicals, etc.– Blamed monopolies for artificially high prices and

an unstable economy– Flagrant display of wealth also angered people

Wages and Working Conditions

1. What was the most disturbing aspect of industrialization?

2. What happened to puddlers in the steel industry?

3. Outside the steel industry, how many hours did most men work?

Wages and Working Conditions

• Standard of living rising since Civil War• Laborers’ Hardships

– Average income below minimum needed for reasonable comfort

– No job security– Wages cut in hard times– Routine, repetitive tasks requiring little skill– Ten hour days, six days a week– Frequent industrial accidents with no compensation

Women and Children

• Filled need for unskilled workers• Paid less than adult males• Women by 1900

– 20% manufacturing workers– 20% of all women were wage earners– Textile industry largest employer of women

• Children– 1.7 million under age 16 employed– Most employed in agriculture (60%)

Emerging Unionization

• Unions were often viewed as radical– Blamed for much of the violence that

occurred

• Railroad Strike of 1877– America’s first major national labor conflict– Hurt the reputation of labor organizations

The Knights of Labor 1/2

• First real national labor organization founded in 1869

• Included all who toiled (business and professional people)– Included virtually all women– Excluded lawyers, bankers, liquor dealers,

and professional gamblers

The Knights of Labor 2/2

• Did not have much central direction• Wanted to replace wage system with

a cooperative system– Workers control large part of economy

• Started as secret organization• 1870 moved in open under leadership

of Terence Powderly• 1890s- organization started to

disappear

The AFLAmerican Federation of Labor 1/2

• Started in 1886

• Association of unions representing skilled workers

• Led by Samuel Gompers

• Believed in basic premises of capitalism– Wanted greater share for workers

• Use strikes in necessary

The Homestead Strike• Homestead plant of Andrew Carnegie

produced steel– Wages were repeatedly cut by Henry Clay Frick

(Carnegie’s assistant)– 1892, after wage cut announced, the union called

for a strike– Frick shut down plant and hired nonunion workers– Fighting broke up between workers and

strikebreakers– PA National Guard sent in to protect

strikebreakers– This helped to break the steel workers’ union

The Pullman Strike 1/2

• Pullman Palace Car Company– Manufactured sleeping and parlor cars for

railroads– Created a model town for workers

• Depression of 1893– Pullman slashed wages– Did not cut rents for workers– Workers went on strike– Eugene Debs, head of railroad union, supports

strikers

The Pullman Strike 2/2

• Presidential Involvement– Cleveland order 2,000 troops to

Chicago– Federal order forbids the strike– Strike collapses

Citations• The Unfinished Nation• Machine Power: Increasing Productivity. Goldhil. 2003.

Discovery Education. 8 October 2008<http://streaming.discoveryeducation.com/>

• Wages & Working Conditions. Intelecom. 2004.Discovery Education. 7 October 2008<http://streaming.discoveryeducation.com/>

• Railroads: Connecting the Coasts. Goldhil. 2003.Discovery Education. 8 October 2008<http://streaming.discoveryeducation.com/>

• The Industrial Revolution. Intelecom. 2004.Discovery Education. 8 October 2008<http://streaming.discoveryeducation.com/>

• John D. Rockefeller. Discovery Channel School. 2005.Discovery Education. 13 October 2008<http://streaming.discoveryeducation.com/>

• Steel Industry. United Learning. 1997.Discovery Education. 13 October 2008<http://streaming.discoveryeducation.com/>

Homestead Strike 1892. Aims Multimedia. 1986.Discovery Education. 27 October 2008<http://streaming.discoveryeducation.com/>