How did industry change through late 19th century?

The Rise of Corporations

Standard 5.1

Standard 5.1• The factory system spread

throughout the northeastern U.S.

• Industry rose to prominence

• More jobs were available for people in the cities.

• New technology improved transportation, trade, and the manufacturing of goods.

Beginnings

• Corporation: a group of businesses recognized as an entity separate from its parts. (ex. Family)

• Origins in America as early as Jamestown (joint-stock companies)

• Began during 1st industrial rev. to raise capital

Becoming Powerful

• Rapid growth through monopolies (one company controls all of a particular industry)

• vertical integration: taking over all aspects of production

• horizontal integration: taking over all competitors

• growth occurs after the Civil War (Gilded Age)

The Steam Engine

• Created thousands of jobs

• Stimulated steel and lumber industries

• Helped the US expand

• Cities grew• New businesses• Transportation and

Trade

Railroads

• companies offered compensation from govt to build

• transcontinental RR completed 1869 in Utah

• RR built by Irish & Chinese immigrants• open up trade routes, communication, &

markets nationwide

Government Policies

• Immigration restrictions protected workers from competition

• Chinese Exclusion Act: 1882; cut off immigrants from China for 10 years (law kept active until 1943)

• Protective tariff protected industry from competition

• Gov’t regulated interstate commerce, labor unions

JOHN D. ROCKEFELLER

John D. Rockefeller

• ran Standard Oil; controlled 90% of nation’s oil production by 1880

• created a monopoly by creating a trust (buying out competitor’s stock)

• Sherman Anti-Trust Act: passed 1890 as a reaction to the rapid rise of big business; made it illegal to form a trust that interfered with trade

• Oil (Standard Oil Co.)• Slashed oil prices to drive out

competition• RR gave him rebates• Created Trusts & monopoly

(Standard Oil Co.)• Bought out struggling businesses• Horizontal Integration: owning all

businesses in a certain field• Considered a great Philanthropist

(contributed over $550 million)

Andrew Carnegie

• Scottish immigrant• pioneered vertical integration• owned US Steel; based in PA• offered stock to his employees;

encouraged competition among employees to get more/better products

• Undersold competitors & drove them out of business

• Produced ¼ of the nations steel

• Paid workers low wages• Forced the RR to ship steel

cheaply• Vertical Integration:

owning the business in each step of the manufacturing process

Beliefs & Reaction• Social Darwinism: there will always be rich

& poor; don’t punish the rich for their hard work

• Laissez-faire policies: restricted gov’t involvement in business & allowed large corporations to thrive

• Gospel of Wealth: rich have a moral obligation to help the less fortunate

• inventions & jobs should have improved standard of living, but didn’t

Standard 5.2• Keys to economic growth

– Land– Labor– Capital– Technology– Entrepreneurship

****Gov’t is key in all of this

Westward Expansion

• opened up vast amounts of natural resources; settlers given free land

• required further control of Natives; restricted to reservations; hostile tribes combined; many wars/massacres/treaties not honored

• Indian wars ended 1890; frontier closed• led to transcontinental RR

• For ex. Gov’t influenced westward expansion

• Native American protection• Broke up strikes when

unions formed• Tariffs were raised to protect

from foreign competition. • Promoted expansion of

international trade

Standard 5 Quiz1. Who did the U.S. get many of their ideas about

industrialization from?2. What is a monopoly?3. How did the railroad help economy during this

time period?4. What is an entrepreneur? Give an example of

one entrepreneur we talked about in class.5. What are the factors of economic growth?

What is one way government helped with economic growth?

PopulismStandard 5.3

Farmers’ Problems

• mechanization led to overproduction• greater supply drove prices down• farmers couldn’t pay bills

The Grange

• social organization for farmers; eased the lonlieness of life on the plains

• also educated farmers on efficient farming techniques

• became a political voice for farmers

The Railroads

• farmers blamed it for hardships; charged high prices to ship goods

• state legislatures passed “Granger laws” to regulate prices for transport & storage; upheld by Munn vs. Illinois for intrastate trade only

• Interstate Commerce Act: set federal govt as regulator of trade between the states

Money Problems

• money lost value (deflation); couldn’t buy as much or pay off bills

• less money in circulation• farmers wanted to expand money supply

(free silver); would inflate prices and allow farmers to make more money; banks opposed this

• many farmers foreclosed; moved east to factory jobs

Populist Party

• grew out of Farmers’ Alliances; segregated to prevent blacks & whites cooperating

• platform: regulation of RR, free coinage of silver, direct election of Senators, secret ballot, graduated income tax, 8-hour workday, immigration restrictions

• no national office-holders; many state-level officials (Senators, governors, state legislators); nation not ready for reforms

Election of 1896

• Will govt protect bankers & businessmen OR farmers & workers?

• William Jennings Bryan: Dem. & Pop. nominee from NE; famous for “Cross of Gold” speech regarding bimetallism

• William McKinley: Rep. nominee from OH; campaigned from his front porch

• McKinley won b/c workers feared food prices would rise under Bryan

Move from Agrarian to industrial economyo Effects of mechanized farming

--produced abundance of crops…drove down prices because supply higher than demand.

--caused economic problems for farmers.o Role of American farmers facing economic problems

--so formed Grange (political group to help struggling farmers)--Granger Laws helped regulate prices from railroad to ship goods. --Deflation (value of dollar decreases) hurt farmers, less money available to spend. --they would lose equipment, etc. and move to cities for jobs.

Move from Agrarian to industrial economyo Rise of Populist movement (movement of the people,

supported farmers) --1890s support of regulation of railroads and the free and unlimited coinage of silver. --for things like election of Senators, federal farm loans.--elected Senators to help with ideas. --1896 election—Big Business vs. Farmers/Laborers- Republicans voted for McKinley b/c of fear of losing job. Jennings Bryan was running against him. People feared inflation too b/c it would drive up prices of food. --election ended the populism movement.

o Populist helped Jim Crow Laws pass. Conservative southerners feared the united political movement of southern whites/blacks.

Came about b/c of race/ethnicity issues, that included prejudices against labor organizations. (that included race and immigration prejudices)

Working conditions and breakdown of work force brought this labor union movement.

Supply of unskilled workers was higher than demand. Hurt effectiveness of labor union.

Pursuit of profit made a skilled craftsmen not a big deal anymore.

Working conditions were unsafe and men, women and children all had to work.

Labor unions didn’t have a lot of success b/c of supply of people who needed work…and gov’t made people not strike, would arrest them.

Unskilled workers brought about problems because of background differences on issues like gender and race.

AFL (American Federation of Labor) was one effective union b/c it was made up of skilled workers.

Public view of labor unions at end of 19th century was that they were violent so that hurt their ability to be successful.

• In this picture we can see many children at work and we see they worked in very dangerous conditions because they carried heavy stones and they didn't wear shoes because families were too poor to buy them. Children worked in very sad conditions when they were in rags.The building could collapse because at that times, streets were very poor

Children working in mines, cheap labor.

Cities were first trade centers, then transportation hubs, then industrial production.

Where economy boomed, cities emerged.As cotton/farming went down, African Americans

moved to cities for jobs.Still most people lived outside cities prior to

1920sWomen’s suffrage (vote) intensified. Wyoming

first state to allow. Movement west had greater impact on this.

19th amendment- women’s right to vote passed in 1920

Came for job opportunities but many times they were too poor to leave port cities.

Immigrants voted for those politically who helped them find jobs even if they were corrupt. (Political machines)

For ex. Boss Tweed in New York-corrupt politician Nativism-favoring native born over foreign born. After Civil War, Westerners hated Chinese workers (railroad

builders) so Chinese immigration was restricted. Unskilled laborers didn’t like Europeans coming to take jobs. Union members didn’t like it b/c many immigrants were hired

as scabs (strike breakers) Jane Addams helped with immigrants through settlement

houses- taught classes and helped them culturally.