Rise of Big Business 1860-1900

A shift in focus….

American Cultures I: America focuses internally

on itself

American Cultures II: America focuses internally

and to the outside world.

How and Why does this happen

From 1860-1900 the US becomes an economic super power. Vast raw materials (coal, iron, oil) Booming population (immigration) Pro-business government American ingenuity

Share of World Manufacturing Output

  1750  1800  1860  1900  1928  1938 

Great Britain  1.9  4.3  19.9  18.5  9.9  10.7 

United States  0.1  0.8  7.2  23.6  39.3  31.4 

Germany  2.9  3.5  4.9  13.2  11.6  12.7 

Russia  5.0  5.6  7.0  8.8  5.3  9.0 

American ingenuity 1860-1890 Explosion of American genius

1860-1890 - 500,000 patents 1790-1860 – only 36,000 patents Patents – federal licenses to make, use or

sell an invention American productivity booms

Productivity – amount of goods and services created in a given period of time.

Fewer people can do more work. Gross Domestic Product – total value of

good and services produced by a nation.

GDP of the earth in millions    World 54,347,038

1     United States 13,811,200—     Eurozone 12,179,250a

2     Japan 4,376,7053     Germany 3,297,233

4     China (PRC) 3,280,0535     United Kingdom 2,727,806

6     France 2,562,288b

7     Italy 2,107,4818     Spain 1,429,226

9     Canada 1,326,37610     Brazil 1,314,170

11     Russia 1,291,01112     India 1,170,968

13     South Korea 969,79514     Mexico 893,364

15     Australia 821,71616     Netherlands 754,203

17     Turkey 657,091

18     Belgium 448,56019     Sweden 444,443

20     Indonesia 432,817

21     Poland 420,32122     Switzerland 415,516

23     Norway 381,95124     Saudi Arabia 381,683

25     Austria 377,02826     Greece 360,031

27     Denmark 308,093

28     South Africa 277,58129     Iran 270,937

30     Argentina 262,331

Times they are a changing!

Life in 1900Electric lightsRefrigerationTelephoneCross country rail

SteelTractorSkyscrapers

Life in 1865Candle lighting

No refrigeration

TelegraphShort line rail

Iron, wood, brick

Horse, oxTen story buildings

How railroads changed!

Railroads of 1865 No standard

track width Unreliable

brakes No system of

signals Collisions

frequent No time zones –

trains never on time

Railroads of 1900 Standard track Air-brakes Telegraph

between trains Time zones

The new God - Progress Transcontinental Railroad - 1869

Federal government wanted to connect east coast to west coast.

Contracted Union Pacific and Central Pacific railroads

Paid $16,000 a mile level land ($300,000)

$32,000 a mile for foothills ($600,000)

$48,000 per mile for mountains. ($900,000)

Built mostly by Chinese laborers

Prior took six months to travel to California.

Now a week. Promontory Point, Utah

1869 - Golden spike ceremony – first mass media event – telegraph.

Chinese Trans movie!

Chinese Trans movie

Manifest Destiny Railroads

Age of Invention Alexander

Graham Bell– 1876 invented the telephone. In 1887 - 21

customers. By 1900 -1.5

million customers

I’d like two small mediums with

large pepperoni please..

Check out our matching

mustachios!

Watson…come here I need you!

Invention When Where Notes

Safety Lift 1852 USA  by Elisha Otis - also called an elavator

Airship 1852 France  by Henri Giffard

Pasteurization 1856 France  by Louis Pasteur

Internal Combustion Engine 1859 Belgium  by Jean-Joseph-Étienne Lenoir

Bicycle 1861 France  by Pierre Michaux

Plastic 1862 England  by Alexander Parkes

Yale Lock 1865 USA  by Linus Yale - also called cylinder locks

Dynamite 1866 Sweden  by Alfred Nobel

Typewriter 1867 USA  by Christopher Latham Sholes

Traffic Lights 1868 England  by J P Knight in London

Air Brake 1868 USA  by George Westinghouse

Telephone 1876 USA  by Alexander Bell from Scotland

Four Stroke Engine 1876 Germany  by Nikolaus August Otto

Carpet Sweeper 1876 USA  by Melville Bissell

Phonograph 1877 USA  by Thomas Edison - cylindrical

Moving Pictures 1877 USA  by Eadweard Muybridge from England

Light Bulb 1879 EnglandUSA  by Joseph Swan and Thomas Edison

Metal Detector 1881 USA  by Alexander Bell

Steam Turbine 1884 England  by Charles A Parsons

Cash Register 1884 USA  by James Ritty

Motor Car 1885 Germany  by Karl Benz - also called an automobile

Motorcycle 1885 Germany  by Gotlieb Daimler

Transformer 1885 USA  by William Stanley - changes voltage

Coca Cola 1886 USA  by John Pemberton

Contact Lenses 1887 Germany  by F E Muller

Drinking Straws 1888 USA  by Marvin Stone

Jukebox 1890 USA  in San Fransisco

Tractor 1892 USA  by John Froehlich

Shredded Wheat 1892 USA  first breakfast cerial

Radio 1895 EnglandRussia  by G Marconi (of Italy) and A S Popov

Safety Razor 1895 USA  by King Camp Gillette

Diesel Engine 1897 Germany  by Rudolf Diesel - used for heavy vehicles

Oscilliscope -TV 1897 Germany  by Karl Braun - ancestor of the television

Paper Clip 1899 Norway  by Johan Vaaler

Thomas Edison

*Motion picture studio – first movie cameras

• Edison effect – electrons transmit through the air. Radio, TV, modern electronics

• Rubber – goldenrod• Electric battery - duracell

The Wizard of Menlo Park

Annie Oakley on film

Improvements in Building Materials Bessemer

process – Henry Bessemer. Easier, cheaper remove impurities of iron. mass production

of steel now possible. Lighter, more flexible than iron.

Age of Steel

Age of Steel

Age of Steel

Brooklyn Bridge – designed by German immigrants John & Washington Roebling. Steel cabled suspension bridge.

Longest in world at time in

1883. Age of skyscrapers

Building the bridge 3 minutes

Skyscrapers 7 minutes

The Industrial Titans

Robber Barons or Captains of Industry

Is this a good thing?

America land of opportunity!

Age of Invention sparks business genius which will make the US an industrial giant.

Entrepreneurs will thrive in American free markets. Some acquire obscene fortunes. Capitalism – economic system of

private control of production and consumption.

Laissez-faire –governmental non-interference with trade and business. (free markets)

Robber Baron or Captains of Industry?

Were massive fortunes by individuals good or bad for society?

Were they…Captains of Industry – personal fortunes contribute to the greater good! Factories, jobs,

philanthropy, overall benevolence.

Social Darwinism – rich are more “fit.”

I am Captain Industry

Notice huge wedgie

Robber Baron or Captains of Industry?

Or were they…Robber Baron – business leaders used unscrupulous means and bribery of public officials.

Barons destroyed competitors and crushed workers to create profits.

Breaking the law! Whether good or bad,

businessmen fight economic warfare… Monopoly: complete control

over a product by one company.

Monopolies are illegal, then and now, but laws are ignored.

Cartels – companies making the same product cooperate to limit supply. ILLEGAL!!!!

Monopolies, and Cartels, and Trusts oh my

Illegal for one company to own stock in another company…

John Rockefeller found a way around the law.

Trust: a group of separate companies are managed by a single board…the trustees. Legal monopoly

Rockefeller’s Standard Oil was 40 different companies combined in a trust.

Rockefeller controlled 90% of the US oil industry - Titusville, PA!

Trust me…heh, heh!

Slay the dragon! Kill the beast!

Sherman Antitrust Act – (1890) outlaws any combination of companies that restrain interstate trade. Not enforced for 15 years. Used by business against labor

unions.

Robber Baron Tricks of the Trade:

Horizontal Consolidation: bringing together different firms in the same business to form one larger company. (Rockefeller’s strategy – bought forty refineries.) Advantage -

STANDARD OIL

Power of horizontal consolidation

Your refinery

Rockefeller & Standard Oil

Robber Baron Tricks of the Trade:

Vertical Consolidation: gaining control of the many different phases of a product’s development. (Carnegie’s plan with Steel)

Advantage? -

Carnegie Steel CompanyIron mines

Railroads

Ships

Schools

Mass production is good! Economies of Scale: as production

increases, the cost to produce each item often lowers. Cheaper prices!Chevy Volt

$48,000

Horizontal consolidation

Rockefeller & Standard Oil

Ida Tarbell Ida Tarbell – History of Standard Oil

Business cycle Carnegie Steel and

Standard Oil one of many industrial giants born in late 1800s…General Electric, Dupont, Westinghouse, Ford

As giant companies went so did US economy.

Business cycle – cycle of boom and bust in economy.

GDP continues upward erratically!

Feed me!!

Industrialization and Workers

Expanding business desperate for workers! Nine million Americans

moved to cities Contract Labor Act

(1864) – employers pay immigrants passage to America if agree to work for a year.

14 million immigrate 1860-1900

0

10

20

30

40

50

60

1860 1870 1880 1890 1900

AgricultureIndustry

Land of opportunity! Money! Hooray

“He that shall not work, shall not eat”

“I regard my people as I regard my machinery. So long as they can do my work for what I choose to pay them, I keep them. I keep them, getting out of them all I can.”-Factory Owner - 1883

Late 1800s factory working conditions children worked at 12 no insurance or assistance 12 hr. days, 6 days a week unsafe working conditions

675 workers killed a week in US piecework – paid fixed amount

per finished piece division of labor – workers perform

one small task over and over.

Timmy doesn’t look happy

Neither do his buddies

I’d rather be in Cultures II than

shelling oysters.

The American Dream? What is it?

Achieving the Dream Education 3 Perseverance 3 Financial expertise 1 Self-confidence 0 Hope 2 Luck Innate intelligence Positive people skills 2 Physical appearance

Chicago - 1860

Chicago - 1900

“He that shall not work, shall not eat”

“I regard my people as I regard my machinery. So long as they can do my work for what I choose to pay them, I keep them. I keep them, getting out of them all I can.”-Factory Owner - 1883

Late 1800s factory working conditions children worked at 12 no insurance or assistance 12 hr. days, 6 days a week unsafe working conditions

675 workers killed a week in US piecework – paid fixed amount

per finished piece division of labor – workers perform

one small task over and over.o Monotony!

Women in the Workforce

Women no chance of advancement in factories.

Given easy, repetitive jobs like stitching or chicken plucking.

Yesterday’s Misery 1800s you were literally on your own if

something happened to you. No unemployment benefits, no social security,

no health insurance, no pensions, no medicare…

If you lost your job you were lazy or weak. Meanwhile, the richest 9% held nearly 75%

of the nation’s wealth.

The Great Strikes

The Socialist Challenge Workers strike back first

with ideas! Socialism: philosophy

that favors public control of property and income, not private control. (Upton Sinclair was this) As a society we decide

how wealth is distributed.

Many socialists say equally.

People should cooperate, not compete.

Upton Sinclair – “I wrote the Jungle”

Karl Marx Karl Marx – 1848, wrote

Communist Manifesto. Predicted a violent

working man revolution Capitalism would

collapse leading to a socialist society.

Revolutionary socialism called Communism.

Karl Marx

Anarchists – radicals who oppose all government. Hello, my name is

Jurgis Rudkus!Have you seen Phil Conner?

Workers had 2 Choices Some workers embraced these ideas.

The vast majority did not. Labor unions – workers organize,

elect leaders and coordinate efforts for better working conditions.

Unions called strikes, boycotts and sometimes violence to force… Collective Bargaining: Process

where workers negotiate as a group with employers.

Employers feared unions Fired union organizers “Yellow dog” contracts –

Want a job? Sign here promising never to join a union.

Refuse to negotiate Scabs – replacements for

striking workers (new immigrants, blacks)

Results of the strikes… Americans associate unions and

especially Socialism with violence! Gradual improvement of working

conditions

Haymarket Riot On May 3, 1886 a fight

broke out between workers and scabs. Workers who are called

by employers to replace striking workers.

The next day at a rally, anarchists, radicals who oppose all government, joined the workers and threw bombs at police and violence erupted.

Results of Haymarket Riot

Many Americans associated Unions with violence because of the actions of the anarchists.

The violence at Haymarket gave Unions a black eye that would take years to erase.

Pullman Strike

In June 1894, 120,000 railway workers struck to protest 25% pay cuts and layoffs.

Eugene Debs, union leader, told strikers not to interfere with mail delivery, which was mostly done by train.

Things did get out of hand however and Uncle Sam sent in troops.

The Results of the Pullman Strike The Courts agreed with

business owners and they prohibited all union activity that disrupted railroad activity.

This official government opposition limited unions for the next 30 years, but unions did make gains to help workers.

Chapter 14 Vocabulary

Transcontinental railroad

Bessemer process Mass production Monopoly Trust Cartel Sherman antitrust Act Horizontal/vertical

consolidation

Piece work Division of labor Socialism Collective bargaining Scabs Anarchists

Triangle Shirtwaist Company

Not Good

Doors locked from the outside, fire exits blocked, working with flammable fabrics and on the 8th floor of a building….

Guess what happens…you’ll have to wait and see until chapter 16. Ha Ha Ha