Chapter 9

The Triumph of Industry

1865-1914Innovation Drives the NationPatentsA grant by the government to the inventor giving the right to develop and sell inventions without competitionElectricityCreated by Thomas Jefferson brought lighting to homes and businesses, as well as other things.Steel IndustryBessemer Process purified iron making it stronger.Bridges, skyscrapers, rail lines.

RailroadsTime zones were created to maintain schedules.AutomobileFirst began in 1902

The Rise of Big BusinessThe CorporationMore than one person owns the companyRaises money by selling stockLayered people structureFor profit or non-profit

Gaining Competitive Edge in BusinessMonopoliesWhen a corporation tries to gain complete control over a market.CartelsBusinesses come together and agree to limit production to control prices.TrustsCompanies assign their stock to a board of trustees who combine them into a new corporation and take out the profits.

Vertical IntegrationCompanies that own the complete line of production.Enables then to control costs and prices.

Oil companies, both multinational (such as ExxonMobil, Royal Dutch Shell, ConocoPhillips or BP) and national (e.g. Petronas) often adopt a vertically integrated structure. This means that they are active along the entire supply chain from locating crude oil deposits, drilling and extracting crude, transporting it around the world, refining it into petroleum products such as petrol/gasoline, to distributing the fuel to company-owned retail stations, for sale to consumers.Vertical IntegrationHorizontal IntegrationConsolidation of many like businesses to form one business.Purpose is to increase profits and remove competition.

Expansion via acquisition of a competitor or by adding outlets to a chain. For example, a book publisher might acquire another publishing house to increase its stable of editors and authors or to otherwise enhance its competitiveness. Horizontal Integration

The government Imposes RegulationsInterstate Commerce Act (1877)First used to oversee railroadsRegulated tradeSherman Antitrust Act (1890)Outlawed any trust that restrained trade or commerce.Clayton Antitrust Act (1914)Strengthened the Sherman Antitrust Act

The Organized Labor MovementFactory WorkSweatshops Working conditions 12 hour days, 6 days a week.Often dangerous places to work.Children worked (1 in 5, ages 10-16, by 1900)Factory TownsHad housing, stores and other amenities to keep worker in debt.

Labor UnionsCollective bargainingEmployees or representatives negotiating better working conditionsStrikesFirst formed union- National Trades Union (1834)Knights of Labor (1869)Was for all workersMission was to replace capitalism waysFolded after growing to 700,000 workers

AFL (American Federation of Labor)Founded by Samuel GompersAFL was a craft union for skilled workers.Women not allowed.Charges dues and focused on benefits for workers, such as wages, hours, and conditions.

StrikesStrikeCauseEffectRailroad Strikes (1877)Response to cut in workers wagesSet the scene for violent strikes to come.Haymarket Square (1886)Part of a campaign to achieve an 8 hour work dayAmericans became weary of labor unions; the Knight of Labor were blamed for the riot and membership declinedHomestead Strike (1892)Economic depression led to cuts in steelworkers wagesAfter losing the standoff, steelworkers unions lost power throughout the countryPullman Strike (1893)Wags cut without a decrease in the cost of living in the company townEmployers used the courts to limit the influence of unions.Lasting EffectsStrikes and discontent set the tone for the formation of labor unions in the US.Government becomes more involved in big business.New laws and regulations are passed.ProgressivismBelieve that new ideas and honest and efficient government could be social justice.Came from all groups of people.Women wanted the vote.Wanted to see the end of corruption and ineffective government.Others wanted government to regulate big business, bust trusts, and create more opportunities for small business.Close the gap between rich and poor.

MuckrackersPeople who wrote about the social, government, and big business issues.Jacob Riis- photographerLincoln Steffens- editor known for uncovering social problemsUpton Sinclair-wrote The Jungle

Society ReformsJane Adams-Settlement House Florence KellyMovement to ban child labor1912 U.S. Childrens Bureau createdKeating-Owens Act also to ban child labor, repealed until 1938.National American Women Suffrage AssociationHeaded by Carrie Catt pushed for the voteImprove educationImprove working conditions

Reforming governmentMany cities went to city commissioners to run things and improve city governmentPolitical bosses were being arrested or removed from office.Elections rules are changedDirect primaries-the people elect candidatesInitiative-people could put laws on ballotsReferendum- people could approve or reject laws passed by legislatorsRecall- could remove politicians from officeTheodore Roosevelt (1901-1909)Becomes president after President McKinely is assassinated.Known as the Square Deal president.Started to regulate industry and bust trusts

Laws that were passedHepburn Act (1906)Reinforced the ICC and regulated prices for shipping.Meat Inspection Act (1906)Processing plants to be inspectedFood and Drug Act (1906)Correct labelling or productsNational Reclamation Act (1902)Controlled water rights

William H. Taft (1909-1913)Relaxed the rules for corporations and used the rule of reason which allowed big business monopoliesUndid many of the regulations that Roosevelt had put into place.Defeats Roosevelt in presidential election and TR doesnt make a third term.

Wilsons presidency (1913-1921)The New FreedomPlaced strict controls over governmentLowered tariffs on imports to promote lower pricesThe Federal Reserve Act (1913) Placed national banks under the federal governmentSets interest ratesFederal Trade CommissionWatched business and its practices

Amendments passed 16th Amendment (1913) Passes to create a federal income tax ( Underwood Tariff Act)18th Amendment (1919)Banned the sale of alcohol19th Amendment (1920)Gave women the right to vote

Progressivism Leaves a Legacy

Expanded the role of government with regulation.A time for massive new legislationMore protections were offered to its citizens.Although not a perfect solution it at least paved the way for today.