{The Growth of Industry 1865 - 1914

Chapter 19

{

Railroads Lead the Way

Chapter 19 – Section 1

By the 1890s, five railway lines crossed the country Hundreds of smaller lines branched off from them The railroad system grew rapidly Workers sang work songs such as “I’ve Been

Working on the Railroad” Expansion accompanied consolidation This is the practice of combining separate

companies It also created railroad barons who controlled the

nation’s rail traffic

Railroad Expansion

{• Cornelius Vanderbilt – gained control of the NY Central line and then made a fortune by consolidating several companies that stretched form NYC to the Great Lakes

• James J. Hill – built the Great Northern line between Minnesota and Washington State

• Collis P. Huntington & Leland Stanford – founded the Central Pacific which connected California & Utah

Railroad Barons

Railroad systems carried raw materials such as iron ore, coal, and timber to factories

There was a demand for iron tracks and locomotives

But in 1880: companies asked the tracks to be made of steel; this increased the steal industry

Railroads Stimulate the Economy

{• Different railroad lines used different

gauges (widths)• One line could not use another line’s tracks• As companies consolidated, they adopted a

standard gauge of 4 feet, 8.4 inches as the width of the track

• This made shipment and transport a lot easierImproving the

Railroads

4 developments of new technology arose AIR BRAKES CAR COUPLERS REFRIGERATED CARS PULLMAN SLEEPING CAR

Railroad Technology

{• These were developed by George Westinghouse

• They improved the system for stopping trains

• They made train travel safer

Air Brakes

{• These were invented by Eli H. Janney• They made it easier for railroad workers to

link cars

Car Couplers

{• These were developed by Gustavus Swift• They allowed the railroads to ship meat and

other perishable goods over long distances

Refrigerated Cars

{• This was developed by George M. Pullman• It provided a luxury railway car• The seat converted into beds for overnight

journeys• Dining was also improved and raised train travel

to a new level of comfort

Pullman Sleeping Car

Networks expanded and companies competed for customers

Large companies offered secret rebates (discounts) to their biggest customers

Smaller companies couldn’t afford to offer rebates so they were forced out of business

Competing for Customers – Rebates

Barons also made secret agreements among themselves known as pools

They divided the railway business among their companies

They set rates for each region No one competition in the region meant

that a railroad could charge higher rates and earn greater profits

Competing for Customers – Pools

Now American industry was expanding into the west

Flour milling industry moved from Ohio to Minneapolis and then Kansas City

Trains redistributed the population as they carried homesteaders into the Great Plains

They made it easier for people to move from rural areas to the cities

Railroads Change America

Now Americans are looking at time in a different way

People began measuring distances by how many hours the trip would take rather than by the number of miles traveled

Time Zones

{Inventions

Chapter 19 – Section 2

1910: Americans drove cars through lit up streets

They went to department stores Shopping was even done through mail or

telephone The automobile, electric light, and

telephone were invented after 1870 And they became part of everyday life for

millions of people

Communication Changes

{• 1844: it was introduced by Samuel Morse• 1860: thousands of miles of lines were

controlled by the Western Union Tel. Co.• Telegraph offices trained operators to

transmit messages in Morse Code

Telegraph

{• Cyrus Field was determined to link the US & Europe by the use of this telegraph

• After several attempts he was finally able to lay this cable across the Atlantic Ocean

• It brought the US & Europe closer together

Telegraph

{• It was invented by Alexander Graham Bell and it, too, revolutionized communications further

• Bell was born & educated in Scotland but moved to the US and studied ways of teaching hearing-impaired people to speak

• 1876: he developed a device that transmitted speech – the telephone

Telephone

{

• One day while Bell was preparing to test this new device of his, he accidentally spilled some battery acid on his clothes

• He called out to his assistant in the other room and said: “Mr. Watson, come here. I want you!”

• Watson heard Bell’s voice coming through the telephone

• This is how the device was invented and it became a success

Telephone

1800s saw a burst of inventions in the US

1860 – 1890: the government granted more than 400,000 patents for new inventions

Christopher Sholes invented the typewriter

William Burroughs invented the adding machine

George Eastman invents a small box camera (the Kodak)

John Thurman developed a vacuum cleaner

Genius of Invention

{• Thomas Edison was called “dull” by his

teachers because of his poor hearing which gave him trouble in school

• So his mother started to homeschool him and found out that he loved anything related to science

• She allowed Thomas to set up a chemistry lab in the family basement

• When he was 12, he got a job working for the railroad where he set up his new lab in a freight carThe Wizard of Menlo

Park

{

• One day, Edison saved the life of a child who fell onto the tracks of an oncoming train

• The child’s father took an interest in Edison and taught him to use the telegraph

• Edison’s first invention was a gadget that sent automatic telegraph signals

• He pretty much invented this so he could sleep on the jobThe Wizard of Menlo

Park

The Wizard of Menlo Park

In his 20’s Edison decided to go into the “invention business”

1876: he sets up a workshop in Menlo Park, NJ

From his laboratory, he invented the phonograph, the motion picture projector, the telephone transmitter, and the storage battery

However, his most important invention was the electric light bulb

The first workable light bulb was developed and then he designed power plants that could produce electric power and distribute it to light bulbs

The Wizard of Menlo Park

1880: on Christmas, Edison used 40 bulbs to light up Menlo Park

People flocked to see the “light of the future”

He built to the first central electric power plant in NYC, illuminating 85 buildings

Christmas Day

George Westinghouse took Edison’s ideas further

1885: he developed and built transformers that could send electric power more cheaply over longer distances

They were used to power factories, trolleys, streetlights, and lamps

George Westinghouse

Lewis Howard Latimer: developed and improved filament for the light bulb

Granville Woods: patented dozens of inventions such as an electric incubator and made railroad improvements such as an electromagnetic brake and an automatic circuit breaker

Elijah McCoy: invented a mechanism for oiling machinery

Jan E. Matzeliger: developed a shoe-making machine that which revolutionized the shoe industry

African American Inventors

{ {Lewis Howard Latimer Granville Woods

African American Inventors

{ {Elijah McCoy Jan E. Matzeliger

African American Inventors

Ford wanted to build an inexpensive car that would last a lifetime

He worked as an engineer in Detroit, Michigan

1903: he established an automaking company and began designing cars

Henry Ford’s Automobile

He worked with Charles Sorenson on the Model T

They built the car and tested it on rough roads

1908: the Model T was introduced to the public

Sorenson described it as, “a car which anyone could afford to buy, which anyone could drive anywhere, and which almost anyone could keep in repair”

Model T

Ford Model T

The Assembly Line

After selling 15 million Model T’s, Ford went on to invent a less expensive way to manufacture cars

It was the assembly line and on it each worker performed an assigned task again and again at a certain stage in the production of the automobile

The assembly line enabled manufacturers to produce large quantities of goods more quickly

This was known as mass production and it decreased manufacturing costs, so products could be sold more cheaply

Mass Production

Selling Goods

Merchants also sold good by mail whereas before service was only to post offices

1890s: the US Post Office had expanded its delivery service in rural areas

This allowed companies like Sears to publish catalogs that offered goods from shoes to farm equipment

Catalogs introduced rural families to a variety of goods not found in country stores

{• Chain stores grew rapidly – stores with identical branches in many places

• F.W. Woolworth’s “five-and-ten-cent stores”

• By 1911: there were more than a thousand Woolworth’s in operation

• The Woolworth Building, erected in 1913, stood at 794 feet tall

• It was the tallest building in the world at the time

Selling Goods

{

An Age of Big Business

Chapter 19 – Section 3

Hills of Western Pennsylvania: people find this stick black substance called petroleum

At first they sell it as medicine Then they figure out that by burning it, you can

produce heat and smoke-free light, lubricate machinery, and other things

Suddenly this oil becomes very valuable Edwin L. Drake believes that by digging, you can

find this petroleum; they call him crazy Boy were they wrong; pools of oil did exist

underground

Foundations of Growth

The end of the Civil War to 1900: new methods in technology & business

The US had the resources to go from an agricultural to industrial economy

Factors of Production: land, labor, and capital – these were the most important resources

Factors of Production

{• Not just the land itself• Also all of the natural resources• Variety of natural resources in the US were

useful for industrial production

Land

{• Larger numbers of workers to turn raw materials into goods

• Rapid growth of population

Labor

{• This includes the machinery, buildings,

and tools used in production• Land & labor are needed to produce

capital goods• These goods are essential for the

production of consumer goods• Capital also means “money for

investment”• One source was selling of stock by

corporations• Also by investing a portion of the

earnings in better equipmentCapital

After the Civil War, businesses looked for ways to expand

They needed to raise capital and the way to do this was to buy raw materials and equipment, to pay workers, and to cover shipping and advertising costs

Raising Capital

Becoming a corporation – a company that sells shares (stock) of its business to the public

The people who invest in the corporation by buying stock are its shareholders

Or partial owners

Ways to Raise Capital

{• Good times: shareholders earn dividends – cash payments from the corporation’s profits

• Late 1800s: hundreds of thousands of people shared in corporate profits by buying and selling stocks in special markets called the stock exchange

Ways to Raise Capital

Railroads formed the first corporations It helped fuel America’s industrial

expansion Banks played a major role, too Businesses borrowed money from them

to start or expand their operations Banks made profit on the loans they gave

out

Growth of Corporations

Because of Edwin Drake, prospectors and investors rushed to western Pennsylvania

Oil towns sprang overnight: Oil City & Petroleum Center

It expanded as oil was also struck in Ohio & West Virginia

The Oil Business

1839: born in Richford, NY who made a fortune from oil

At 26 years old, along with 4 partners, he set up an oil refinery in Cleveland, Ohio

1870: he organized the Standard Oil Company of Ohio

Most of the oil he acquired were in Cleveland

John D. Rockefeller

One of his methods to build his oil empire was horizontal integration

It meant combining competing firms into one corporation

They produced their own tank cars, pipelines, and even its own wooden barrels

Horizontal Integration

Rockefeller lowered his prices to drive his competitors out of business

He also pressured customers not to deal with rival oil companies

Then he persuaded the railroads to grant him rebates in exchange for his business

Being Competitive

1882: he forms a trust – a group of companies managed by the same board of directors

1st: he acquires stock in many different oil companies

2nd: the shareholders traded their stock for Standard Oil stock, which paid high dividends

This gave the BOD ownership of the other companies’ stock

Rockefeller created a monopoly – total control by a single producer

Standard Oil Trust

It also became big because it was strong and long-lasting

Previously it wasn’t used because it was so expensive

However with the development of new manufacturing techniques, the problem was solved

Steel Business

2 methods of making steel Bessemer Process Open-hearth Process

These helped mills produce steel at an affordable price and in large quantities

Pittsburgh, PA became the steel capital of the US because of its large sources of iron ore

Steel Industry Grows

He was a leading figure in the steel industry

He started as a telegraph operator and soon made his way up to manager of the Pennsylvania Railroad

After learning about the Bessemer Process, he builds a steel plant near Pittsburgh

The plant was named the J. Edgar Thompson Steel Works

This was his biggest customer in the PA Railroad

Andrew Carnegie

Carnegie became powerful through vertical integration

This means to acquire companies that provided the equipment and services needed for yours

He bought iron and coal mines, warehouses, ore ships, and railroads

1900: all of these were combined into the Carnegie Steel Company

It produced 1/3 of the country’s steel

Vertical Integration

1901: Morgan bought Carnegie Steel He was a banker who combined the

Carnegie company with other businesses to form the US Steel Corporation

It was the world’s first billion-dollar corporation

J. Pierpont Morgan

Rockefeller, Carnegie, and other millionaires grew interested in philanthropy – the use of money to benefit the community

They founded schools, universities, and other institutions across the US

Philanthropists

Carnegie: donated $350 million to organizations

He built Carnegie Hall in NYC, which is one of the world’s most famous concert halls

He also founded the Carnegie Foundation for the Advancement of Teaching

Finally he also built more than 2,000 libraries worldwide

Philanthropists

Rockefeller: established the University of Chicago

He also established New York’s Rockefeller Institute for Medical Research

Philanthropists

1889: NJ encourages monopolies by allowing holding companies to obtain charters

This was banned in some states Holding companies would buy

controlling interests in the stock of other companies instead of purchasing the companies outright

Other states passed laws to make mergers easier – the combination of companies

Corporations Grow Larger

1880s: several states passed laws restricting business combinations

The public pressured for a federal law to prohibit trusts and monopolies

1890: Congress passes the Sherman Antitrust Act

It sought to “protect trade and commerce against unlawful restraint and monopoly”

But it did not clearly define “trusts” or “monopolies”

Government Regulation

{Industrial Workers

Chapter 19 – Section 4

Industrial growth also brought a growth in the standard of living

Luxuries and necessities were more available and affordable

Factories had been small workplaces where the workers knew one another

Now they became larger and less personal

Working Conditions

{• Workers worked 10 – 12 hours a day, 6 days a week

• They could be fired for any reason and many lost their jobs during downturns

• Or were replaced by immigrants who worked for lower pay

Working Conditions

Accidents were common Steel workers: burns from hot steel Coal miners: died in cave-ins, effects of

gas and coal dust Textile workers: damaged lungs by

airborne lint Garment workers: ruined eyesight form

sewing in poor light Sweatshops – crowded urban factories

Working Conditions

Steel Workers

Coal Miners

Textile Workers

Sweatshops

{• The majority worked as domestic servants but they also worked in the industries

• Textile was very popular for women workers• Now laws regulated workers’ salaries so

women were receiving about ½ of what men earned

Women Workers

{• Hundreds of children under 16 worked in

factories• However social groups brought this to the

attention of their state legislature• Laws were passed which stated that children

had to be at least 12 years old and should not work more than 10 hours a day

• Companies still ignored these laws• The laws didn’t even apply to agriculture which

employed about 1 million children

Child Labor

Angry workers organized into groups to demand better pay and working conditions

These were called labor unions Unfortunately trade unions had little

influence because each one represented only one trade

Labor Unions Form

Knights of Labor

1869: these garment cutters in Philadelphia founded the Noble and Holy Order of the Knights of Labor

Workers were fired if they joined these unions so the Knights met secretly and used special handshakes to identify each other

They were led by Terrence V. Powderly and they even recruited women, African Americans, immigrants, and unskilled workers

AFL

1881: group of national trade unions formed a federation that later one became known as the American Federation of Labor

They represented skilled workers in various crafts and they were led by Samuel Gompers

They asked for higher wages, shorter hours, better working conditions, and the right to bargain collectively with employers

In this system, unions represent workers in bargaining with management

Collective Bargaining

Women & the Unions

Many unions would not admit women workers so some of them founded their own unions

Marry Harris Jones (Mother Mary) – spent 50 years fighting for workers’ rights

Triangle Shirtwaist Co.

1911: a fire broke out in a sweatshop in NYC

The workers were mostly young women and they could not escape from the building because the company had locked the doors to prevent workers from leaving early

Nearly 150 workers died in the fire

1870s/1880s depression led companies to fire workers and lower wages

They also forced workers to take pay cuts

Angry union workers staged strikes which sometimes turned violent

Union Acts

{• July 1877: angry strikers burned rail yards, ripped up track, and destroyed railroad property

• These companies hired strikebreakers who were responsible to replace these strikers

Union Acts

Haymarket Riot

May 1886: Haymarket Square, Chicago

4 strikers had been killed The next day, other strikers

gather around to protest Police arrive at the scene to

break up the protest An unidentified person

throws a bomb which kills 1 officer

After this day many Americans associated labor movement with terrorism & disorder

1892: strike occurs in Andrew Carnegie’s steel plant in Homestead, Pennsylvania

Managers had cut workers’ wages in a way to weaken the steelworker’s union

The union called for a strike and the managers hired nonunion workers and brought in 300 armed guards to protect them

A fight broke out killing 10 people After it was reopened the nonunion

workers returned under the protection of the armed guards; the union failed

Homestead Strike

Pullman Strike

May 1894: workers from George Pullman’s railway-car plant went on strike near Chicago

Pullman responded by closing the plant and 1 month later workers in the American Railway Union supported the strikers

They refused to handle Pullman cars which paralyzed (brought a stop) to rail traffic

Pullman and railroad owners fought back and they persuaded the US Attorney General to obtain an injunction – court order – to stop the union

The workers were led by Eugene V. Debs who refused to end the strike and was sent to jail

Pullman’s Strike

{• President Grover Cleveland sent federal troops to Chicago

• The strike was soon over• This dealt another blow to the union

movement but despite these setbacks workers continued to organize to work for better wages and working conditions

Pullman’s Strike