Rise of Industry

(1865 – 1900)

Topics

• Immigration• Leading industrialists: - “Captains of Industry” or “Robber Baron”• Working conditions and life for individual

workers• By 1900 the United States was a major

industrial world power, but at what cost?• Was it worth it?

Immigration Patterns

• 1840 – 1860: 4 million entered the United States

• 1860 – 1890: 10 million entered the United States

• 1890 – 1920: 18 million entered the United States

“New Immigrants” from Eastern Southern Europe and South East Asia

Immigrations Patterns(1861 – 1890)

Growth of Cities (1870 – 1900)

• Boston: 123.88% increase• Chicago: 468.12% increase• Seattle: 21,326.73% increase• New Orleans: 49.98% increase• New York: 132.54% increase

Living Conditions

• Majority of immigrants lived in Tenement housing near large factories

• Families lived under cramped conditions and even strung clotheslines between buildings

• VERY little space between buildings

Tenement Housing

The Centennial Exhibition of 1876(Philadelphia)

• Inventions - Corliss Steam Engine- The Telephone- Portable Bathtub- Mechanical Calculator

- weighed 2,000 pounds- Root Beer- Bananas- Popcorn- Lady Liberty’s Arm and Torch

The Forgotten Presidents

• Rutherford B. Hayes• James A. Garfield• Grover Cleveland• Benjamin Harrison• William McKinley

Election of 1880

• Winner: James Garfield• Ohio Republican• Could right Latin with one hand and Greek with the other

simultaneously• Believed strongly that the North and South must tie loose

ends and become one again; not just in name • 200 days into his term he is shot by Charles Guiteau.• Guiteau believed he should be the King of England• Garfield will die months later due to Gangrene• Vice President Chester Arthur new President of the United

States

Chester Arthur • Not been a congressman • Not been a senator• Very poor resume • The American people believed he would either be a very corrupt, easily

manipulated president, or simply an ineffective one.• Arthur wanted to destroy the White House and build a new one;

Congress denied plan• However:- New plumbing- 1st elevator• Brought in Louis Comfort Tiffany to give White House “style”• ALL Arthur wanted to do during his term was hunt, fish, and eat at fancy

dinners

Andrew Carnegie(1835 – 1919)

• Rags to riches• Emigrated to the United States from Scotland

at age 12• Started as “bobbin boy” in textile mill for

$1.20 per week; Pennsylvania Railroad• In 1853 Tom Scott, offered Carnegie a job as

his secretary and personal telegrapher at the age of 17.

Andrew Carnegie(1835 – 1919)

• In 1859, Carnegie became superintendent of the western division of Penn RR. • Carnegie would work with the Pennsylvania RR for 12 years. - Left company in 1865• Reorganized two iron companies into the Union Iron Mills, and organized the

Keystone Bridge Co.• In 1867, Carnegie merged the Pacific & Atlantic Telegraph Co. - also went into the telegraph line construction business, and eventually sold his telegraph holding to Western Union• gained a monopoly of the telegraph industry. • Invested and helped construct Eads Bridge - 1st steel arch bridge over the Mississippi River - It was Capt. James Eads, engineer, idea to use steel in certain high-stress elements of the superstructure. - completed in 1874.

Andrew Carnegie(1835 – 1919)

• Made millions in steel• He knew that the common denominator for much of the Industrial

expansion in America was steel - Skyscrapers, Factories, Railroad• In 1889 Carnegie wrote, “The Gospel of Wealth” - explains that it is the duty of the rich to use their resources to benefit society• Carnegie Hall (1892)• Carnegie Institution (1902) – for research into American colleges and

universities • Carnegie Hero Fund Commission (1904)• Carnegie Endowment for the Advancement of Teaching (1905)

Steel Industry(Meadville, Pennsylvania)

Steel Industry(Donora, Pennsylvania)

Andrew Carnegie(Philosophy)

• “Watch the costs and the profits will take care of themselves”

• Vertical Integration:- control all portions of manufacturing process from raw materials to distribution

• Known for philanthropy- Gave away 90% of his fortune

John D. Rockefeller( 1839 – 1937)

• Completed high school; quickly started as a bookkeeper at the age of 16

• At the age of 18 he purchases a small partnership with Maurice Clark; another young merchant

• Both are visited by Sam Andrews - Tells both men to go into the oil business - Both put in an investment of $4,000• Andrews quickly puts Rockefeller in charge of business• Clark’s family becomes envious and attempts to take over the

company• Rockefeller buys them out for $72,000 - At the end of the year their business, Excelsior Oil, profits $1.2 million

John D. Rockefeller

• 1856 – Rockefeller buys out his partners and creates Rockefeller & Andrews; Cleveland's largest oil refinery

• Formed Standard Oil in 1870; also cut costs• Scandal and rumor of collusion amongst business owners

are everywhere; Rockefeller uses this to tell owners of Cleveland to sell to him

- effect: He now owns all refineries in Cleveland • Stock Market Crash of 1873 - Rockefeller uses the depression to his advantage to buy out refineries in Pittsburg, Philadelphia, and New York1877: Now owns 90% of oil in U.S.

John D. Rockefeller

• 1882: Standard Oil Trust is formed - allowed Standard Oil to control refining, distribution, and marketing for oil. - Now with the trust, Rockefeller fully controls the entire process; especially prices• By 1896, electricity is beginning to replace kerosene as the source of

light - Rockefeller will then turn to Henry Ford • Success:- Vertical Integration: Controlled production and transportation of oil to

markets- Horizontal Integration: Controlled about 90% of U.S. oil refining

capacity by 1879

Thomas Edison(1847 – 1931)

• Invented phonograph, motion picture camera; perfected the light bulb

• Had patens to 100 of inventions

• Established “invention factory” at Menlo Park, New Jersey

- Became leading research facility for the nation

Thomas Edison(1847 – 1931)

• Came to symbolize inventive impulse of Americans

• Lock yourself in a room, research, and find a solution

J.P. Morgan

• Business man, banker• Unlike the other industrial superpowers of the

Gilded Age, Morgan was born wealthy and worked well with all the big Captains of Industry

• At a young age Morgan was sent away to a Swiss boarding school

• Later sent by his father to New York to work with Duncan, Sherman & Company

J.P. Morgan

• Morgan’s 1st deal - without consent from anyone Morgan buys stock and invests in coffee beans while on a trip to New Orleans• Makes double the profit• At 24, he founded his own firm; however in

1864 J.S. Morgan founds J.S. Morgan & Co. • J.P. Morgan dissolves his firm and went to work

for his father

Costs of Industrialization

• United States became a major industrial power by 1900

• Environmental degradation- Earth was ripped open to mine coal, iron, etc..• Factory life wasn’t always an improvement

over life on a farm

Management and Labor

• The majority of the times management and labors did not get along

• “Old vs. “New” perspective- Old: Laborers worked in small shops, took pride in their

work and worked at their own pace- New: Large factories were the norm; tasks were repetitive

and pace was set by the “clock and whistle”• Average work week: 55 – 66 hours• Dangerous Conditions - in 1889 over 2,000 railroad workers died and 20,000 were injured on the job

Skilled vs. Unskilled Wages(mid to late 1870s)

• Bricklayer (Skilled): - $3.00/day• General Laborer (Unskilled):- $1.30/day• Southern Mill Worker (Unskilled):- $0.84/day

Steel Workers(Example of Difficult Working Conditions)

• Shifts: 7 days/week; 12 hours/day• Furnaces had to be kept running• Shift change: one day off per month• 2 working groups - Day and Night• Every two weeks they would shift

U.S. Labor Force

• Child Laborers- 1900: almost 2 million children worked for

wages- Easy to fit into small spaces at a factory that a

normal size adult could not- Could pay them very low wages• Very little supervision which led to accidents

Child Labor

Child Labor

Child Labor

U.S. Labor Force

• Business owners believed that they could pay females less than their male counterpart

• By 1890s with the invention of the telephone and typewriter women with a high school education could work in safer conditions

• By 1900: 17% of workforce was female

Knights of Labor

• Founded in 1869; expanded under Terrence Powderly• Open to ALL laborers; by 1880s over 700,000• Goals- Equal pay for women; end child labor, limit Chinese

immigration• Could not be a member if labor was Chinese• KoL saw Chinese laborers as competitors • 8 hour work day• Graduated Income Tax

Chinese Discrimination

Chinese Discrimination

Knights of Labor

• Lost support when the union associated themselves with violence

• Haymarket Square Riot (May 4, 1886): - Background: Laborers in Chicago held a General Strike in support of an 8 hour day and strikers fought with police- Strike sympathizers held a rally near Chicago at

Haymarket Square- A bomb exploded; 7 police officers were killed; 4

demonstrators were killed

America Federation of Labor(AFL)

• Formed in 1884; Samuel Gompers was its head

• Union of skilled (not unskilled) workers• Goals• 8 hour day• Employer liability for injuries on the job

• 1.6 million members by 1904

Labor: Overall

• Origins of modern unions are set in late 1800s• However, only about 5% of all workforce was

unionized by late 1800s• Many employers, like Carnegie, fought to

break unions

Advertising

• Advertising – New Industry• Encouraged people to buy their products• Quaker Oats; Ivory Soap got their start• Kodak: “You press the button, we do the rest”

Advertising

Advertising

Coxey’s Army

• Jacob Coxey demanded a system of government sponsored public works to help with unemployment

• Marched to Washington D.C.• He and others would soon be arrested • Worst economic depression until 1930s• Policies needed to be CHANGED

President Grover Cleveland

• Many Americans (newspapers) targeted their anger at President Cleveland who took a “laissez-fare” or hands-off approach to resolving the depression

• Cleveland HATED the press; considered them lowlifes

• Laissez-fare economics: a policy or attitude of letting things take their own course, without interfering.

• No government control of the economy

President Grover Cleveland

• President Cleveland was the 1st Democrat to be elected since the Civil War

• His own party controlled Congress• Still did NOTHING• Did not like spending money• Vetoed pension bills, vetoed high spending bills to

provide seed for farmers in the west• His wife, Francis Cleveland, gave birth to Ruth

Cleveland.• “Baby Ruth” candy bar.

Election of 1888

• Grover Cleveland (Republican)• Benjamin Harrison (Democrat) - grandson of former President William Henry Harrison• Harrison won the election, but Cleveland will

win the next election• Harrison would clock out at around noon,

sneak out, and go hunting in the backwoods

Sherman Antitrust Act

• Passed in 1890• Named after John Sherman Senator of Ohio"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal". The Act also provides: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony. ”

Economics: Panic of 1893

• Up to 1890s railroad industry had grown tremendously; railroad growth then slowed

• By end of 1893: 74 railroads, 600 banks and 15,000 businesses had failed

• Unemployment was between 20 – 25% • Cleveland has no response to the depression. • He does not believe in government assistance

At the End of the Day

• In 1901, J.P. Morgan purchases Carnegie Steel for $480 million. - founds U.S. Steel• 1907-U.S. Government beings to sue Standard Oil - direct violation of Sherman Antitrust Act

- the company restrained trade through its deals with railroads, its control of pipelines, and by engaging in unfair practices like price-cutting to drive smaller competitors out of business then buying them out. • In 1911: U.S. Supreme Court rules to dismantle Standard Oil - split into 34 independent companies; many no longer exist - companies today: ExxonMobil, Chevron, ConocoPhillips

At the End of the Day

• Bill Gates - $136 billion• Warren Buffet - $63 billion• Sam Walton - $65 billion

• Andrew Carnegie - $309 billion• John Rockefeller - $336 billion

Conclusion

• US became an industrial power and was led by people like Carnegie, Rockefeller and Edison

• However, it was often on the backs of individual laborers who worked under difficult conditions

• The nation industrialized very quickly, but was it worth the cost?