Industrialization1865-1920

The U.S. Industrializes• Industrial Revolution began in the U.S. in the early 1800’s• At the beginning of the Civil War, the nation was still largely agrarian

– 1.3 out of 30 million worked in industry

• At the end of the Civil War, industry rapidly expanded• Millions left the farm to work in mines and factories

• By the 1900’s the U.S. was the world’s leading industrial nation

• By 1914 the GNP was 8 times greater than pre-Civil War

1) Natural Resources• Abundance of raw materials was a necessity for

industrial success– Water, timber, oil, coal, iron, copper– Companies didn’t have to import the resources

• Transcontinental railroad brought resources from western settlements to eastern factories

• Petroleum– Could be converted into kerosene (lamps and stoves)– By 1900’s, oil fields had been opened from Penn to

Texas

2) Workforce• Between 1860 and 1910 U.S. population tripled,

providing a large workforce– Why?– PUSH/PULL factor:

1870-1910: 20 million immigrants arrived

3) Free EnterpriseHow the government encouraged business to flourish…• Laissez-faire- French phrase meaning “let people do as

they choose” (hands-off)• Supply/demand instead of government regulation

•Low taxes created a profit motive•Attracted people of high ability and ambition into business.

Entrepreneurs- People who risk their money in business

4) New Inventions (Innovation)

• Important inventions increased the nation’s productive capacity

• Transportation and communication

Alexander Graham Bell– 1876 Bell “invented” the

telephone– Really Antonio Meucci– Revolutionized business

and personal communication

Thomas Edison– Invented the phonograph, battery, motion picture– Also stole other peoples’ ideas– Companies merged in 1889 to form the Edison General

Electric Company- now GE

• Impact of Technology (other significant inventions)– Thaddeus Lowe- Ice Machine– Gustavus Swift- refrigerated railroad car 1870’s– Power driven sewing machine– Mass production of shoes– Cyrus Field laid telegraph cable across Atlantic Ocean

Railroads• 1865- 35,000 miles of track• 1900- 200,000 miles of track• Pacific Railway Act-

– 1862 signed by Lincoln– Construction of a transcontinental RR by two

corporations(Union Pacific & Central Pacific)

Land Grant System• Land grants given to many railroad companies

to encourage RR.• RR companies would then sell the land to

settlers

Robber Barons• What is a robber

baron?• Where did railroad

barons get their wealth?– Swindling investors

and taxpayers– Bribing gov. officials– Cheating on their

contracts and debts

• Jay Gould- – Practiced “insider trading”– He used information he received as a railroad owner to

manipulate stock prices for his benefit

• James J. Hill– Entrepreneur who was not a robber baron– He built and operated the Great Northern Railroad from

MN to WA.– Used no federal grants or subsidies

14. 3 Big Business

Businesses: Pre- Civil War vs. Early 1900s

What changed?

Role of Corporations• Corporation

– an organization owned by many people but treated by law as though it were a single person

– Can own property, pay taxes, make contracts, sue and be sued

– Owned by stockholders

• Stockholder: they own shares of ownership called stock

– Before 1830s, entrepreneurs had to acquire a charter from the state

– After, states began passing general incorporation laws (allowing companies to issue stock)

With the money raised from stock sales, corporations could :– invest in new technology– hire a large workforce– purchase machinery (+ efficiency)

Economies of sale– When corporations make goods more cheaply because

they produce so much so quickly using large manufacturing facilities

– What happens to ‘mom and pop’ stores?

Fixed costs vs. Operating costs

Andrew Carnegie– Born in Scotland– Immigrated in 1848– Rags to Riches story

• Vertical integration-

• Horizontal integration-

Andrew Carnegie, know for Carnegie Steel Company

• Monopoly- when a single company achieves control of an entire market

TrustsIn 1882 Standard Oil

formed the first trust- • a new way of merging

business that did not violate the laws against owing other companies

http://www.library.gsu.edu/spcoll/spcollimages/labor/19clabor/Labor%20Prints/79-40_21.jpg

14.4 UNIONS14.4 UNIONS

The Assembly LineThe Assembly Line

Life of a WorkerLife of a Worker• Life for industrial workers was difficult:

– Assembly line= BORING!– Health issues

• Rise in the standard of living• Deflation-

- companies want to pay less $$, workers organize in union

TYPES OF UNIONS • Differences between trade workers and common laborers: Trade Common

• 1830s: craft workers began to form trade unions– For workers with specific skills– Trade unions are different from industrial unions– Industrial unions:

Management vs. LaborManagement vs. Labor

““Tools” of Tools” of ManagementManagement

““Tools” of Tools” of LaborLabor

lockoutlockout

blacklistingblacklisting

open shopopen shop

boycottsboycotts

sympathy sympathy demonstratiodemonstrations andns andpicketingpicketing

closed shopsclosed shops

organized organized strikesstrikes

MARXIST Theory

• Karl Marx and his ideas on capitalism– Class struggle between workers & owners– Revolt by workers will overthrow government– New government will redistribute property evenly

• Some extreme ideas included anarchism

The Great Railroad Strike of 1877:

- wages were cut, 80,000 workers walk off job!

- 100 people dead, millions in property damage

The Great Railroad Strike of 1877:

- wages were cut, 80,000 workers walk off job!

- 100 people dead, millions in property damage

Goals of the Knights of Labor

Goals of the Knights of Labor8 hr workday.8 hr workday.

No child and labor.No child and labor.

= pay for men and women.= pay for men and women.

Safety codes.Safety codes.

No contract foreign labor.No contract foreign labor.

Support Support arbitrationarbitration

Injury to one is the concern of us all!!

Anarchists: Haymarket Riot (1886)

Union leaders called for a nationwide for 8 hour work day

Police entered the square, someone threw a bomb

Anarchists: Haymarket Riot (1886)

Union leaders called for a nationwide for 8 hour work day

Police entered the square, someone threw a bomb

The Pullman Strike The Pullman Strike • American Railway Union led by Eugene Debs was

formed against Pullman Palace Car Company.• Workers needed to live in the town of Pullman and

buy goods from the company store• Pullman slashed wages• President Grover Cleveland issues injunction

American Federation of Labor (AFL)

American Federation of Labor (AFL)

““plain and simple” unionplain and simple” union

Wants higher wages/better Wants higher wages/better conditionsconditions

Mediated disputes between Mediated disputes between management and labor management and labor rather than strike.rather than strike.

Pushed for Pushed for closed shopsclosed shops..

Samuel GompersSamuel Gompers

Labor Union MembershipLabor Union Membership

WOMEN IN THE WORKFORCEWOMEN IN THE WORKFORCE -More women after CW-Paid less $-Excluded from joining unions except:1/3: domestic servants1/3: teacher, nurses, secretaries1/3: industrial workers

Right-to-Work States Today

Right-to-Work States Today