Chapter 14: Industrial AgeChapter 14: Industrial Age1870 - 19001870 - 1900

Introduction Edwin Drake Henry Bessemer

Thomas A. Edison George Westinghouse Chris Sholes: 1867 Telephone: 1876 Transcontinental Railroad: 1869 Immigrants Regulation George Pullman Credit Mobilier: 1864 Interstate Commerce Act: 1887

• Intrastate Trade Social Darwinism

• Success Horatio Alger Jr. Monopoly Trust Octopus Andrew Carnegie

• Gospel of Wealth

J.P. Morgan• Holding Company

Vanderbilt John D. Rockefeller

• Cut Throat Competition Robber Barons Sherman Anti-Trust Act 1890 Working Conditions Mother Jones Unions National Strike 1877

• Yellow Dog Contracts Knights of Labor (KoL)

• Arbitration Haymarket Square Riot 1886 American Federation of Labor

(AFL)• Collective Bargaining

Eugene Debs Government & Business Injunction Results of Injuctions

IntroductionIntroduction

During the late 1800s, the United States will During the late 1800s, the United States will experience a 2experience a 2ndnd Industrial Revolution Industrial Revolution that will change that will change American industryAmerican industry

Problems in the work place will be addressed by Problems in the work place will be addressed by the creation of labor unions & the federal governmentthe creation of labor unions & the federal government

Bessemer & DrakeBessemer & Drake

Edwin Drake: Used the steam engine to drill oil from beneath earth’s surface• Drilling became practical

Oil Boom

Gasoline

Henry Bessemer: Puffed air into iron creating steel• Efficient & cheap

Steel more flexible & stronger, won’t rust if made properly

New Uses for SteelNew Uses for Steel

Railroad biggest consumer• Tracks & Spikes

Barbed wire, Mechanical reaper, John Deere’s Plow Tin can Brooklyn Bridge built in 1883

• Many were unsure of its safety so Barnum (the circus guy) marched elephants across it to prove its strength

Jenney: 1st skyscraper• Home Insurance Bldg., Chicago

Thomas Alva EdisonThomas Alva Edison Invented the

incandescent light bulb • Safer than the arc light

System for producing & distributing electricity

1,000s of inventions• Phonograph• Microphone• Stock ticker• Projecting Kinetoscope• Galvanized batteries

George Westinghouse: Created safer & cheaper electricity

Chris SholesChris Sholes18671867

Invented typewriter Created jobs for women Letter arrangement was changed because workers were typing too fast!

Telephone: 1876Telephone: 1876 Invented by Alexander

Graham Bell & Thomas Watson

Considered toys at 1st until its usefulness was proved

More jobs for women• Telephone operators

– Why not men?

1910: Women made up 40% of the clerical workforce

Changes in SocietyChanges in Society

Consumer becoming important part of business• More products on the

marker & we’re buying more stuff

More recreational activities like the phonograph, bikes & cameras become popular

How to balance industrialization & environmental pollution?

Transcontinental Railroad: Transcontinental Railroad: 18691869

Central Pacific & Union Pacific connected in Promontory, UT 5/10/1869

Expanded markets• Able to ship

products West (new consumers)

More travel across America

ImmigrantsImmigrants

Irish (Union Pacific) & Chinese (Central Pacific) , left over from the gold rush, immigrants built transcontinental railroad

Hard life, 2,000 dead yearly, 20,000 hurt on job Paid poorly 1,000s of Chinese buried in avalanche

Impact of RailroadsImpact of Railroads C.F. Dowd: created time

zones used today• Before, way to many time

zones – 20 zones in US alone! Only 24 worldwide today

Promoted trade• Getting items West

Opened ways for abuses & social & economical unrest• No price controls (can

charge whatever they want) Regulation: Railroads were

the 1st major industry to be regulated by the Federal Gov’t.

Built luxury railroad cars (Pullman Sleeper Cars)

Creature comforts• Plush chairs,

temperature control etc.

Company town to keep eye on employees• Not a very nice

employer!

Credit Mobilier: 1864Credit Mobilier: 1864

Railroad scandal linked to Grant’s VP One of the many reasons Northerners stopped

paying attention to the South

Interstate Commerce Act: Interstate Commerce Act: 18871887

Not enforced at 1st; until T. Roosevelt

Federal Gov’t. can supervise railroads & regulate interstate trade• Trade between states

Interstate Commerce Commission established to supervise, but difficult job• Too much paper work (red

tape)

Social DarwinismSocial Darwinism Survival of the fittest in

business• Big business naturally

takes over smaller businesses

Darwin’s Origin of Species• Process of Natural

Selection Sumner: Success & failure

in business were governed by natural law that no one (gov’t) had right to interfere.

New definition of success: God gave $ to deserving & the poor were lazy

Horatio Alger Jr.Horatio Alger Jr.““Pulling yourself up form the

bootstraps”

Not everyone agreed w/Social DarwinismWrote dime novels: rags to riches storiesNo shame in humble beginningsPeople looked differently at poor

•Fault of individual, not economy

New Business PracticesNew Business Practices

Oligopoly: Only a few sellers provide particular product• Usually result of merger

Monopoly: Buy out all competitors to control market (production, quality, sales)

Trust: Same as monopoly

Octopus represented

trusts & monopolies in

political cartoons

Industrial MogulsIndustrial Moguls

Examples of Industrialists / Examples of Industrialists / Monopolists / Tycoons or Monopolists / Tycoons or

““Captains of IndustryCaptains of Industry””

(1) Andrew Carnegie (1) Andrew Carnegie

(2) John D. Rockefeller(2) John D. Rockefeller

(3) J.P. Morgan(3) J.P. Morgan

(4) Cornelius Vanderbilt(4) Cornelius Vanderbilt

** ** Vertical IntegrationVertical Integration ** **** ** Horizontal IntegrationHorizontal Integration****

Practiced by Practiced by Andrew CarnegieAndrew Carnegie

Vertical IntegrationVertical Integration: process in which Carnegie : process in which Carnegie “bought out his suppliers” (iron mines, railroad “bought out his suppliers” (iron mines, railroad systems)systems)

Horizontal Integration:Horizontal Integration: process in which Carnegie process in which Carnegie “bought out OTHER companies”“bought out OTHER companies”

smaller companies merge into Carnegie Steel smaller companies merge into Carnegie Steel CompanyCompany

Made $ in steel industry Made $ in steel industry Founded US Steel Co.Founded US Steel Co. 1901: Controlled 80% 1901: Controlled 80%

steel industrysteel industry Nearly monopolized Nearly monopolized

steel industrysteel industry Gospel of Wealth:

Rich had obligation to Rich had obligation to the poorthe poor

Vertical Integration: Vertical Integration: Bought out suppliersBought out suppliers

Horizontal Horizontal Consolidation: Bought Consolidation: Bought out competitorsout competitors

J.P. MorganJ.P. Morgan

Made $ from banking & bought out many railroads

Holding Company: Buy stock of competing companies, don’t produce goods• Hold stock until they own

majority

1900: control 50% of RxR in US

Vanderbilt made $ from railroads

John D. RockefellerJohn D. Rockefeller

Standard Oil Company

90% oil refining industry

Didn’t share benefits w/employees, paid low

Used Cut Throat Competition: Buy out competitors by running them out of business

Control market, then raised prices• No alternative

Other MonopoliesOther Monopolies

Charles PillsburyCharles Pillsbury• FlourFlour

RJ ReynoldsRJ Reynolds• TobaccoTobacco

J.B. DukeJ.B. Duke• TobaccoTobacco

All southern monopoliesAll southern monopolies

Monopolists who used cut throat competition

Defending themselves by contributing to charity: most gave very little

Carnegie gave 90% of earning (he was the exception to the rule)

Sherman Anti-Trust ActSherman Anti-Trust Act18901890

Fighting back against monopolies• Drive prices up – many farmers, workers & poor can’t

afford products

Stated any attempt to interfere with free trade was illegal• Monopolies, but later included strikes & workers’ union

Used to break up monopolies

Weak at 1st• Supreme Court didn’t support, monopolies continued

Used to control Unions

Working ConditionsWorking Conditions UnsafeUnsafe working working

conditionsconditions• Low pay ($3-$12 Low pay ($3-$12

week)week)• Long hours (16)Long hours (16)• No sick, vacation No sick, vacation

workman’s comp.workman’s comp.– Injuries commonInjuries common

– 1882: 675 died 1882: 675 died weeklyweekly

1890-1917: 1890-1917: 200,000+ workers 200,000+ workers killed, 2 mil. injuredkilled, 2 mil. injured

Triangle Shirtwaist Co. Triangle Shirtwaist Co. 19111911

Fire spread throughout Fire spread throughout factoryfactory

Workers tried to escape, Workers tried to escape, but doors were lockedbut doors were locked

No sprinkler systemNo sprinkler system Fire escape collapsedFire escape collapsed 154 dead154 dead Owner acquittedOwner acquitted ResultsResults

• Established Fire codesEstablished Fire codes• Abolished child laborAbolished child labor• Sunday offSunday off• 54 hour work week54 hour work week

Child LaborChild Labor Cheap - .27 cents Cheap - .27 cents

dayday Could fit in machines Could fit in machines

to fixto fix 20% children 20% children

working – no schoolworking – no school Chained to machinesChained to machines Hunger & exhaustion Hunger & exhaustion

lead to accidentslead to accidents OverheadsOverheads

Mother JonesMother Jones

Called for reforms Called for reforms in child laborin child labor

Brought situation Brought situation to public eyeto public eye

Widespread Widespread publicitypublicity

Emergence of UnionsEmergence of Unions

Formed to protect rights of laborersFormed to protect rights of laborers

Against immigrants because they could take Against immigrants because they could take American jobs (Work for less $)American jobs (Work for less $)

National StrikeNational Strike18771877 Strike against the railroads

1st national strike

Federal troops sent to stop strikers• Interfering with free trade,

stopped 50,000 miles of track

Protesting long hours, bad pay

Supported by miners (experiencing same things)

To keep their jobs, strikers were forced to sign Yellow Dog Contracts• Would not join a union or

strike

Knights of Labor (K.o.L.)Knights of Labor (K.o.L.)

Focused on individuals “Injury to one, hurts us all” Union opened to skilled & unskilled laborers; minorities Used arbitration: to settle disputes

• unbiased 3rd party settles disagreement Used strikes

Haymarket RiotHaymarket Riot5/4/18865/4/1886 Chicago

Protesting the death of striker by cops

Cops show up Bomb thrown into

crowd Leads to decline of K. o.

L.• Anarchists linked to

Knights of Labor• Public turns against them

because of violence• Creation of AFL

Homestead StrikeHomestead Strike

Carnegie Steel Company Carnegie Steel Company (Homestead Plant in PA) – cut (Homestead Plant in PA) – cut wages – a strike occurs!wages – a strike occurs!

Henry FrickHenry Frick, Homestead Plant , Homestead Plant manager hired ,manager hired ,SCABSSCABS, or , or strikebreakers, that continued to strikebreakers, that continued to work, despite the strike to keep work, despite the strike to keep the company goingthe company going

American Federation of Labor American Federation of Labor (AFL)(AFL)

Founded by Samuel Gompers

Union open to only skilled workers

No minorities

Used collective bargaining to settle disputes• Group negotiations • Done before striking

Raised wages, shortened work week

Different tactics used by K.O.L & AFL

Socialist Union leaderSocialist Union leader

Dignity & solidarityDignity & solidarity

Wanted separate Wanted separate unions for skilled & unions for skilled & unskilled laborers of unskilled laborers of different tradesdifferent trades• Miners union, Miners union,

Electricians union etc.Electricians union etc.

Threatened wealthy, Threatened wealthy, supported by poorsupported by poor

Pullman StrikePullman Strike Laid off 3,000 workersLaid off 3,000 workers Cut wages by 40% Cut wages by 40%

• Making $6 a weekMaking $6 a week Rent high in company Rent high in company

towntown Workers on strikeWorkers on strike Strikebreakers hired by Strikebreakers hired by

Pullman (Pinkertons)Pullman (Pinkertons) Violence eruptedViolence erupted

• Debs jailedDebs jailed• Strikers fired & Strikers fired &

BlacklistedBlacklisted

Government & BusinessGovernment & Business

Gov’t. supports businessInjunction: Court order (in this case) to prohibit strikes

Results of InjunctionsUnions began to decline early 1900sLost support, strikes caused shortage of goodsLosing members

Factors that LIMIT the success Factors that LIMIT the success of Labor Unions / Employers of Labor Unions / Employers CONTROLCONTROL

Yellow Dog ContractsYellow Dog Contracts – swearing / oath they will – swearing / oath they will NOT join a UnionNOT join a Union

BlacklistBlacklist – if you are part of or leader of a union – if you are part of or leader of a union against the productivity of a business, you are against the productivity of a business, you are placed on this list / difficult for you to get a jobplaced on this list / difficult for you to get a job

LockoutLockout: : owner tells the employees not to bother owner tells the employees not to bother showing up until they agree to a pay cutshowing up until they agree to a pay cut

ScabsScabs: Strikebreakers (hired to continue : Strikebreakers (hired to continue economy of business while strikers are not economy of business while strikers are not working)working)

Interstate CommerceInterstate Commerce: a company claims : a company claims strikers are affecting interstate commerce and strikers are affecting interstate commerce and the federal government comes running!the federal government comes running!