Chapter 18Chapter 18THE INDUSTRIAL THE INDUSTRIAL

SOCIETYSOCIETY

America Past and PresentAmerica Past and PresentEighth EditionEighth Edition

Divine Divine Breen Breen Fredrickson Fredrickson Williams Williams Gross Gross Brand Brand

Copyright 2007, Pearson Education, Inc., publishing as Longman

Industrial DevelopmentIndustrial Development

Late nineteenth-century U.S. offers ideal Late nineteenth-century U.S. offers ideal conditions for rapid industrial growth conditions for rapid industrial growth

Abundance of cheap natural resourcesAbundance of cheap natural resources Large pools of laborLarge pools of labor Largest free trade market in the worldLargest free trade market in the world Capital, government support without Capital, government support without

regulationregulation Rapid growth 1865–1914Rapid growth 1865–1914

An Empire on RailsAn Empire on Rails

An Empire on RailsAn Empire on Rails

U.S. industrial economy based on U.S. industrial economy based on expansion of the railroadsexpansion of the railroads

Steamships made Atlantic crossings twice Steamships made Atlantic crossings twice as fastas fast

The telegraph and telephone transformed The telegraph and telephone transformed communicationscommunications

"Emblem of Motion and Power""Emblem of Motion and Power"

Railroads transform American lifeRailroads transform American life End rural isolationEnd rural isolation Allow regional economic specializationAllow regional economic specialization Make mass production, consumption Make mass production, consumption

possiblepossible Lead to organization of modern corporation Lead to organization of modern corporation Stimulate other industriesStimulate other industries

Railroads capture the imagination of the Railroads capture the imagination of the American peopleAmerican people

Building the EmpireBuilding the Empire

1865–1916: U.S. lays over 200,000 miles 1865–1916: U.S. lays over 200,000 miles of track costing billions of dollarsof track costing billions of dollars

Expenses met by government at all levelsExpenses met by government at all levels Federal railroad grants prompt corruptionFederal railroad grants prompt corruption 1850–1945: Railroads save government 1850–1945: Railroads save government

$1 billion in freight costs$1 billion in freight costs

Federal Land Grants to Railroads Federal Land Grants to Railroads as of 1871as of 1871

Railroad Construction, 1830–1920Railroad Construction, 1830–1920

Linking the Nation Linking the Nation via Trunk Linesvia Trunk Lines

No integrated rail system before Civil War No integrated rail system before Civil War After 1860 construction and consolidation of After 1860 construction and consolidation of

trunk lines proceeds rapidly trunk lines proceeds rapidly East linked directly with Great Lakes, WestEast linked directly with Great Lakes, West Southern railroad system integrated in 1880s Southern railroad system integrated in 1880s Rail transportation becomes safe, fast, Rail transportation becomes safe, fast,

reliablereliable

Rails Across the ContinentRails Across the Continent

1862: Congress authorizes the 1862: Congress authorizes the transcontinental railroad transcontinental railroad

Union Pacific works westward from Union Pacific works westward from Nebraska using Irish laborersNebraska using Irish laborers

Central Pacific works eastward using Central Pacific works eastward using Chinese immigrantsChinese immigrants

May 10, 1869: Tracks meet in UtahMay 10, 1869: Tracks meet in Utah By 1900, four more lines to PacificBy 1900, four more lines to Pacific

Transcontinental RailroadTranscontinental Railroad““Driving of the Golden Spike”Driving of the Golden Spike”

Railroads, 1870 and 1890Railroads, 1870 and 1890

Significance of RailroadsSignificance of Railroads

Faster, cheaper way to move people and productsConnects isolated marketsEncourages other industry to develop 50% of steel and 20% of coal produced went to the RR’s

Problems of GrowthProblems of Growth Intense competition among railroadsIntense competition among railroads Efforts to share freight in an orderly way Efforts to share freight in an orderly way

fail fail After Panic of 1893, bankers gain control After Panic of 1893, bankers gain control

of railroad corporationsof railroad corporations Bankers impose order by consolidating to Bankers impose order by consolidating to

eliminate competition, increase efficiencyeliminate competition, increase efficiency In 1900, seven giant rail systems In 1900, seven giant rail systems

dominatedominate

An Industrial Empire An Industrial Empire Based on SteelBased on Steel

Bessemer process of refining steel permits Bessemer process of refining steel permits mass production mass production

Use of steel changes agriculture, Use of steel changes agriculture, manufacturing, transportation, architecturemanufacturing, transportation, architecture

Brooklyn BridgeBrooklyn Bridge

Andrew Andrew CarnegieCarnegie

Andrew CarnegieAndrew Carnegie

Born in ScotlandBorn in Scotland Immigrated to U.S. when 12Immigrated to U.S. when 12 Worked as a bobbin boy in a textile millWorked as a bobbin boy in a textile mill Created Carnegie SteelCreated Carnegie Steel Became wealthiest man in U.S.Became wealthiest man in U.S. “ “Gospel of Wealth” philosophyGospel of Wealth” philosophy

Carnegie and SteelCarnegie and Steel Large-scale steel production requiresLarge-scale steel production requires

Access to iron ore deposits in Minnesota Access to iron ore deposits in Minnesota Extensive transportation networkExtensive transportation network

Requirements lead to “vertical integration”Requirements lead to “vertical integration” Definition: A type of organization in which a Definition: A type of organization in which a

single company owns and controls the entire single company owns and controls the entire process from obtaining raw materials to process from obtaining raw materials to manufacture and sale of the finished productmanufacture and sale of the finished product

Vertical ConsolidationVertical Consolidation

When a company owns all the businesses When a company owns all the businesses that make up the phases of a product’s that make up the phases of a product’s manufacturemanufacture

Example: Carnegie’s steel empire – He Example: Carnegie’s steel empire – He owned the iron ore mines, the coal mines, owned the iron ore mines, the coal mines, the steel mills, the ships and railroads – the steel mills, the ships and railroads – EVERYTHING involved in making and EVERYTHING involved in making and shipping steel (from the ground up)shipping steel (from the ground up)

Vertical Vertical ConsolidatioConsolidatio

nn

Carnegie’s business structure

Carnegie and SteelCarnegie and Steel 1872: Andrew Carnegie enters steel 1872: Andrew Carnegie enters steel

businessbusiness By 1901, Carnegie employs 20,000 and By 1901, Carnegie employs 20,000 and

produces more steel than Great Britainproduces more steel than Great Britain Eventually sells out to J. P. Morgan for Eventually sells out to J. P. Morgan for

475 million dollars475 million dollars Morgan heads incorporation of the United Morgan heads incorporation of the United

States Steel CompanyStates Steel Company

Gospel of Wealth

Carnegie’s premise that in a free market Carnegie’s premise that in a free market economy (capitalism), people should be economy (capitalism), people should be free to make as much money as possible, free to make as much money as possible, but then they should give most of it away but then they should give most of it away to improve society as a wholeto improve society as a whole

International Steel Production, International Steel Production, 1880–19141880–1914

Petroleum and IndustryPetroleum and IndustryWho was the first American to drill for Who was the first American to drill for

oil? When and where?oil? When and where?

Edwin L. DrakeEdwin L. DrakeTitusville,Titusville,

PennsylvaniaPennsylvania18591859

Produced 10 barrels Produced 10 barrels per dayper day

But who will emerge as the But who will emerge as the leader of the oil industry, leader of the oil industry,

eventually controlling 90% of eventually controlling 90% of the world’s oil production by the world’s oil production by

1900 and amassing a fortune of 1900 and amassing a fortune of over 700 million dollarsover 700 million dollars

John D. John D. RockefellerRockefeller

Rockefeller and OilRockefeller and Oil Son of a poor street peddler in NYCSon of a poor street peddler in NYC 1859: First oil well drilled in Pennsylvania 1859: First oil well drilled in Pennsylvania Petroleum profitable as kerosene for Petroleum profitable as kerosene for

lightinglighting 1863 – Rockefeller joined with other 1863 – Rockefeller joined with other

businessmen to form the Standard Oil businessmen to form the Standard Oil Company of OhioCompany of Ohio

Rockefeller and OilRockefeller and Oil Rockefeller lowers costs, improves quality, Rockefeller lowers costs, improves quality,

establishes efficient marketing operationestablishes efficient marketing operation 1882 – joined Standard Oil stock with 40 other oil 1882 – joined Standard Oil stock with 40 other oil

companies to form Standard Oil Trustcompanies to form Standard Oil Trust Standard Oil Trust centralizes Rockefeller control Standard Oil Trust centralizes Rockefeller control

of member companies outside Ohioof member companies outside Ohio

John D. Rockefeller &

John D. Jr. 1921

Horizontal Consolidation

Rockefeller’s business structure

The Business of InventionThe Business of Invention

Late nineteenth-century industry leads to Late nineteenth-century industry leads to new American technologynew American technology

An Age of InventionAn Age of Invention Telegraph, camera, processed foods, Telegraph, camera, processed foods,

telephone, phonograph, incandescent lamptelephone, phonograph, incandescent lamp Electricity in growing use by 1900Electricity in growing use by 1900

Patents Issued, by Decade, Patents Issued, by Decade, 1850–18991850–1899

Young Thomas Edison

Edison received over 1090 U.S. patents in his lifetime

His favorite invention, 1878

Edison and his most famous “improvement”

Electric Lamp Patented in 1880

The SellersThe Sellers Marketing becomes a science in late Marketing becomes a science in late

1800s1800s Advertising becomes commonAdvertising becomes common New ways of selling include chain store, New ways of selling include chain store,

department store, brand name, mail-order department store, brand name, mail-order Americans become a community of Americans become a community of

consumersconsumers

Montgomery Ward Building Chicago, Illinois

Montgomery Ward & Co.

Founded in 1872

The early leader in catalog sales to rural customers

Sears, Roebuck, and Company takes the lead in catalog sales

by 1900

Working Men, Working Women, Working Men, Working Women, Working ChildrenWorking Children

Chronically low wagesChronically low wages Average wages: $400-500 per yearAverage wages: $400-500 per year Salary required for decent living: $600 per Salary required for decent living: $600 per

yearyear Dangerous working conditionsDangerous working conditions

Railroad injury rate: 1 in 26, death rate 1 in Railroad injury rate: 1 in 26, death rate 1 in 399399

Factory workers suffer chronic illness from Factory workers suffer chronic illness from pollutantspollutants

Working Men, Working Working Men, Working Women, Working ChildrenWomen, Working Children

Dangerous working conditionsDangerous working conditions 500,000 workers were completely disabled

each year 35,000 killed each year No corporate accountability for worker safety.

No workers’ compensation laws or insurance. Injured workers were fired.

Working Men, Working Women, Working Men, Working Women, Working ChildrenWorking Children

Composition of the labor force by 1900Composition of the labor force by 1900 20% women 20% women Women represented in 296 of 303 occupationsWomen represented in 296 of 303 occupations

Working childrenWorking children ““Child labor” means under 14Child labor” means under 14 10% of girls employed, 20% of boys All children 10% of girls employed, 20% of boys All children

poorly paidpoorly paid Girls receive much lower wage than boysGirls receive much lower wage than boys

Child Labor

Children as young as 6 could work in factories

Working Men, Working Women, Working Men, Working Women, Working ChildrenWorking Children

Working women’s characteristicsWorking women’s characteristics Most young and singleMost young and single 25% of married African American women work in 25% of married African American women work in

19001900

Working women’s jobsWorking women’s jobs Many move into clerical positionsMany move into clerical positions A few occupy professional positionsA few occupy professional positions

Working women’s earnings unequal to men’sWorking women’s earnings unequal to men’s

Working Men, Working Women, Working Men, Working Women, Working ChildrenWorking Children

Discriminatory wage structureDiscriminatory wage structure Adults earn more than childrenAdults earn more than children Men earn nearly twice as much as womenMen earn nearly twice as much as women Whites earn more than blacks or AsiansWhites earn more than blacks or Asians Protestants earn more than Catholics or JewsProtestants earn more than Catholics or Jews Black workers earn less at every level and skillBlack workers earn less at every level and skill

Chinese suffer periodic discriminationChinese suffer periodic discrimination 1879: California constitution forbids corporations to 1879: California constitution forbids corporations to

hire Chinesehire Chinese 1882: Federal Chinese Exclusion Act prohibits 1882: Federal Chinese Exclusion Act prohibits

Chinese immigration for 10 yearsChinese immigration for 10 years

Labor Unrest

Formation of Labor Unions

Groups of workers with similar jobs that join together to work for

better working conditions

higher pay

benefits (such as vacation and insurance)

Early labor unions were like secretive fraternal orders.

Knights of Labor

Formed in 1869 by Terrence Powderly Joined all workers together (men, women,

all races, and all trades) Used education and political action to

achieve these goals: Equal pay for equal work 8-hour work day End to child labor

Knights of Labor

Charter

Knights of Labor

print featuring founder

Terrence Powderly

In the beginning, God ordained that man should labor, not as a curse, but as a blessing; not as a punishment, but as means of development, physically, mentally, morally, and has set thereunto his seal of approval in the rich increase and reward. By labor is brought forward the kindly fruits of the earth in rich abundance for our sustenance and comfort; by labor (not exhaustive) is promoted health of the body and strength of mind, labor garners the priceless stores of wisdom and knowledge. It is the “Philosopher’s Stone,” everything it touches turns to wealth. “Labor is noble and holy.” To glorify God in its exercise, to defend it from degradation, to divest it of the evils to body, mind, and estate, which ignorance and greed have imposed; to rescue the toiler from the grasp of the selfish is a work worthy of the noblest and best of our race.You have been selected from among your associates for that exalted purpose. Are you willing to accept the responsibility, and, trusting in the support of pledged true Knights, labor, with what ability you possess, for the triumph of these principles among men?

Knights of Labor Creed

American Federation of Labor (AFL)

Formed in 1886 by Samuel Gompers Used strikes and boycotts to achieve their

goals Only skilled workers included Women and blacks excluded Focused on wages, hours, and working

conditions

American Federation of Labor Emblem

Samuel Gompers, Founder

Collective Bargaining

Workers negotiate as a group with employers

One or two are chosen as spokesmen for the group

Strikes Workers refuse to work until their demands

are met by management, thus shutting down factory production.

Strikers form “picket lines” refusing to allow workers to enter the workplace

Management often hires “scabs” to replace striking workers so that factory production does not stop.

An Era of StrikesAn Era of Strikes An era of strikesAn era of strikes

1870–1900 1870–1900 23,000 strikes23,000 strikes

Crossed purposesCrossed purposes Employees seek to humanize the factory Employees seek to humanize the factory Employers try to apply strict laws of the Employers try to apply strict laws of the

market market Courts come down on side of owners Courts come down on side of owners

with injunctions against strikeswith injunctions against strikes

Labor Strikes, 1870–1890Labor Strikes, 1870–1890

Labor Unrest Leads to Violent Confrontations Between Management and Labor

Four Great Strikes

#1 - Great Railroad Strike of 1877

Baltimore and Ohio RR announced a 10% wage cut.

Train lengths were doubled, increasing the chance of accidents.

RR workers in Pittsburg, PA struck. The strike turned into a violent riot. Soldiers fired on rioters who responded by

burning RR property. Hundreds died.

Railroad Strike of 1877

Railroad Strike of 1877

Railroad Strike of 1877

Railroad Strike of 1877

#2 - Haymarket Riot (1886) Workers struck for an 8-hour workday at the

McCormick Harvester Co. in Chicago. Two workers were shot by policemen on May 3. May 4 - Over 3000 attended a rally in Haymarket

Square. Anarchists joined the strikers. Someone threw a bomb into the group of 170

armed police guards, killing 7 Dozens killed in gunfight that followed. 8 anarchists were arrested; 4 hanged; 4 were

pardoned.

Poster advertising the rally to be held

in Haymarket Square

May 4, 1886

Haymarket Riot (1886)

7 officers killed in Haymarket Riot

Gallows for the

Haymarket Anarchists,

Nov. 11, 1887

#3 - Homestead Strike (1892) William Frick tried to cut wages 20 % at

Homestead Steel Works in PA while Carnegie was in Scotland.

Union workers struck. Frick called in the Pinkertons who opened fire

on the strikers. Several killed. State militia called in to quell the strike. After an assassination attempt on Frick’s life,

by an anarchist, the union surrendered.

Pinkertons

A police force for hire Founded by Samuel Pinkerton The first “secret service” agency

protecting Lincoln Known for their ruthless tactics in

breaking up strikes

Pinkerton’s National Detective Agency

Carnegie’s Homestead Steel Works

Pinkertons Arriving by Barge

Militia Called In

#4 - Pullman Strike (1894) George Pullman built the first luxury “sleeper” rail

cars His Chicago workers lived in the “company town”

used “company script” as money at the “company store”

During the economic depression of 1893, Pullman cut wages and laid-off workers but did not cut rent.

When workers protested, he fired them, causing a strike.

Pullman Strike (1894) Other RR unions in 23 states joined in

More than a 1000 rail cars were destroyed 13 workers killed

RR service to the western half of the country is disrupted, including mail service.

Owners banded together and sought court orders to halt any union activity that interfered with the delivery of the mail.

Union leader Eugene V. Debs was imprisoned

George Pullman

Pullman Strike (1894)

Pullman Strike (1894)

Pullman Strike (1894)

Industrialization’sIndustrialization’sBenefits and CostsBenefits and Costs

Benefits of rapid industrializationBenefits of rapid industrialization Rise in national power and wealth Rise in national power and wealth Improving standard of livingImproving standard of living

Human cost of industrializationHuman cost of industrialization ExploitationExploitation Social unrestSocial unrest Growing disparity between rich and poorGrowing disparity between rich and poor Increasing power of giant corporationsIncreasing power of giant corporations