Post Civil War Inventions Raw materials Growing population New sources of power Government policies Improved transportation and
communication Effects of the Civil War
Introduction of machinery and a factory system
New inventions and inventors◦ 1790- 1860 US Patent Office – 36,000
patents◦ 1860-1890 – U.S. Patent Office – 500,000
patents
High birth rate Immigration
1800s – pop. doubled every 25 years1800 – 5 million1900 – 76 million
Provided sufficient labor and demand for consumer goods
Granted land and cash subsidies to rail road builders
Levied high tariffs to protect manufacturing
Laissez-faire policies
Industry prosperedEmergence of a millionaire class
Liquid capital –people had money to invest and spend
Increased mechanizationGovernment now in the hands of the Republican Party with pro-business policies
Key to industrial growthCreated a national marketAllowed people to settle the Great Plains
Maker of millionairesDemand for steel – spurred iron and steel industries
Creation of 4 time zones
Railroad production grewDeadlock over route for transcontinental railroad broken◦Union Pacific Railroad – west from Omaha
◦Central Pacific RR from California◦1869 – met at Odgen, Utah
Northern Pacific RR – L. Superior Puget Sound
Atchison, Topeka, and Santa Fe – through southwest
Southern Pacific – New Orleans San Francisco
Great Northern – Duluth Seattle
Westinghouse air brakeSteel railsUniform signaling system along track lines
Standard gauge = 4’8”Pullman Palace CarsTime zones
Subsidies Loans Land grants
◦155,504,994 acres◦along routes – alternate one-mile sq. sections
◦choicest sections closest to the rail lines
Railroads expensive to build West was thinly populated – risky
investment Military and postal needs Encourage population to move into
Great Plains Tie nation together economically
Nation united physically Raw materials from the West
transported East Manufactured goods from the East
transported West Stimulated mining and agriculture in
the West Stimulated growth of cities Stimulated immigration
Corruption – Credit Mobilier Scandal “Stock watering” Bribed judges and legislatures – free
passes Natural monopoly Pools Rebates Charge higher rates for short haul than
long
Being “railroaded” Farmers particularly at the mercy of railroads
Midwestern legislatures tried to regulate railroads – unconstitutional (Wabash case) – states can not regulate interstate commerce
Prohibited rebates Required the railroads to publish rates
openly Outlawed charging more for short haul Forbade discrimination against
shippers Established the Interstate Commerce
Commission to enforce law 1st attempt by Washington to regulate
big business in the public interest
Competition was wastefulVertical integration – Carnegie Steel
Horizontal integration – trusts – Rockefeller and Standard Oil Company
Interlocking directorates – J.P. Morgan and banking
Heavy industry – capital goods
Foundation for tall buildings railroad industry
Bessemer process made cheap steel possible
By 1900 U.S. producing as much as Great Britain and Germany combined
Carnegie Steel “Watch the costs
– profits will take care of themselves”
Vertical consolidation
1900 - $40 million profit
Philanthropist
Carnegie’s philosophy The wealthy are entrusted with the
public wealth and must use is wisely Gave away the bulk of his fortune -
$350 million ◦ Libraries◦ Church organs◦ Schools
“Banker’s Banker”
Wall Street banker – financed railroads, insurance cos., and banks
Bought Carnegie Steel for $0.5 billion
Created U.S. Steel – 1st $1 billion company
1870 – organized Standard Oil Company
1877 controlled 95% of nation’s oil
Forced competitors out of business –
Survival of the fittestThe wealthy are rich because they worked hard and are the product of natural selection
The poor need to work harder – pull themselves up by the “bootstraps”
Employed thousands of workers
Increased availability of goodsRaised the standard of livingBuilt factories, raised productivity, expanded markets
Philanthropists
Built fortunes stealing from the public Drained the country of natural
resources Corrupted public officials to interpret
laws in their favor Drove competition out of business Paid meager wages and forced workers
to work under dangerous and unhealthy conditions
Concern – monopolies could hurt the consumer and worker
Sherman Anti – Trust Act of 1890◦Outlawed trusts and other combinations in restraint of trade
◦Vague and not well enforced◦Supreme Court usually favored big business
1900 produced smaller % of nation’s manufactured goods than before C.W.
RR gave favorable rates to northern industry in competition with southern
Textile mills◦ Close to the source of raw materials◦ Cheap labor
Economy dominated by a few large companies – Standard Oil, U.S. Steel, General Electric, Swift and Armour, AT&T, Westinghouse, and DuPont
Strains on the economy pressure for foreign trade search for markets imperialism
1900 1/10 of the population owned 9/10 of the wealth
Custom made/small workshop unskilled/impersonal factory work
Controlled own situation/set hours, pace, output impersonal, routine work on a set schedule
12 hrs/day 6 days/week Child labor Unsafe conditions – accidents were a
normal risk in working Management fought safety and health
standards
1890 – Richest 9% owned 75% of the nation’s wealth
Average working family only earned a few hundred dollars/ year
In working class family, it was necessary for most members to work for survival
Wealthy lived ostentatiously
A political and economic theory of collective government ownership of factories and property
Goal – fair distribution of wealth◦ Equality
Never a strong movement in US
Karl Marx ◦ Criticized capitalist economic system and
predicted its eventual overthrow by the working class
Contrary to American ideals of free enterprise and private property
Most Americans did not support socialism However, growing discontent among the
workers fueled socialist rhetoric Union movement was an alternative
Organized by trade Helped members during hard times Became a voice for worker demands
◦ Shorter workdays◦ Higher wages◦ Better conditions
◦ Weak in the beginning
Immigration – cheap laborEthnic and racial divisionsReligious divisionsSkilled vs. unskilledDivided by craftsMiddle class fears of radicalism
Organized all wage earners Goals:
◦Equal pay for equal work◦Graduated income tax◦End to child labor◦Cooperative ownership of factories
Strategies – restrict immigration and strikes
Success: ◦Won strike against Jay Gould’s Wabash RR
◦600,000 joined Failure:
◦Too big and diverse◦Political goals◦Later strikes unsuccessful
Leadership: Terence Powderly
Loose federation of skilled trades Goals:
◦ Bread and butter issues – wages, hours, safety
◦ Union recognition and closed shop◦ Collective bargaining
Leadership: Samuel Gompers Success: Steady – conservative – still
exists today
Great Railroad Strike of 1877◦Baltimore and Ohio RR◦RR wages cut 10% and workers cut◦Riot in Pittsburgh state militia called in 10 people killed Strikers fought back
◦President Hayes sent in federal troops to put down the strike
◦Set precedent – govt represses labor unrest
Haymarket Square -1886◦ Workers wanted 8 hour day◦ Strike breakers were brought in and a fight ensued◦ Police broke up fight and several were injured◦ Anarchists held protest rally where a bomb was thrown
Police were killed/wounded and fired into crowd Dozens of deaths
Homestead Strike – 1892◦ Union negotiated a new labor contract with Carnegie
Steel, Carnegie went to Europe.◦ Carnegie’s partner (Frick) cut wages and a strike ensued◦ Frick called in Pinkertons, strikers fired on them◦ Governor called in troops to end violence◦ Union acknowledges loss
Pullman Strike – 1894◦ Pullman built a company town (owned everything)◦ During Depression, Pullman cut wages but did not reduce
living costs◦ Workers protested and were then fired◦ Workers went on strike◦ Pullman shut down plant, RR union refused to haul any
Pullman cars and strike spread (interrupted mail) ◦ Govt sends in troops (cites Anti-Trust law – restraint of
trade) Middle class Americans saw violence,
radicalism, unions and immigration as all related.