industry comes of age 1865 - 1900. an empire of rails at the end of the civil war the u.s. had...

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Industry Comes of Age 1865 - 1900

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Industry Comes of Age

1865 - 1900

An Empire of RailsAn Empire of RailsAt the end of the Civil

War the U.S. had 35,000 miles of railroad east of the Mississippi River

Mostly localized & built to protect local commerce

By 1900: 192,256 miles of track – more than all of Europe combined

Much of the new construction was west of the Mississippi

1841 - 1850

1851 - 1860

1861 - 1870

1871 - 1880

1881 - 1890

1891 - 1900

1901 - 1910

1911 - 1920

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Railroad Construction 1830 - 1920

Expansion of Railroads•1869, 30,000 miles of track•1900, 200,000 miles of track•Distribution System to the marketplace•Symbol of growth

Civil War showed the value of long distance transportationEnded the debate between North & South over construction

Pacific Railway Act (1862)Congress authorizes the construction of the first transcontinental railway

The Union Pacific will build west from Omaha, Nebraska & the Central Pacific will build east from Sacramento, California

1863: Construction beginsMeet at Promontory Point, Utah, May 10, 1869

Significance:Linked continentStimulated western growth & Far East trade

Monumental achievement

“Wedding of the Rails”“Wedding of the Rails”

Federal government, citing military & postal needs, funds the railroads through Land Grants & subsidies

Land is granted to Railroads at 20 square miles (640 acres) either side of rails in alternate sections (checkerboard)155,000,000 acres given to railroads

Millions of dollars received in loans from federal & state gov’t

Funding gives rise to Credit Mobilier Scandal

The “Big Four”Leland Stanford, Collis Huntington, Charles Crocker, & Mark Hopkins

Built the Central Pacific railroad were never shown to be involved in scandal

Union Pacific built by many Irish immigrants (“paddies”)

Central Pacific built by many Chinese immigrants (“coolies”)

Four other Transcontinental Railroads built in 1800's

1883: Northern Pacific - Duluth, MN to Tacoma, WA

1884: Atchison, Topeka & Santa Fe = Kansas - San Francisco

1884: Southern Pacific - New Orleans to Los Angeles

1893: Great Northern - Duluth to Seattle by James G. Hill (best)

New TechnologiesNew TechnologiesBessemer steel

railsSafer & more

economicalCornelius

Vanderbilt replaces NY Central's iron rails

                                  

Cornelius VanderbiltCornelius Vanderbilt

“Law! What do I care about the

Law? Hain’t I got the

power?”

“Law! What do I care about the

Law? Hain’t I got the

power?”

Standard gauge of 4' 8½" rail increases efficiency

Air brakes & couplers increased safety

Refrigerator cars increased profits

Pullman Palace cars made traveling more comfortable

Telegraph, double tracking, block signals, & switches increase safety

Passengers have to change their clocks some 20 times in making a transcontinental tripGeneral Time Convention created in 1883, creating four standard time zones

Mandated by the federal Standard Time Act of 1918

The “Robber Barons”The “Robber Barons”Enormous profits lead to

corruption & greed Jay Gould, financier

Stock watering & other shady financial practices to inflate the value of stock to cheat out greater profits

Rate wars & control of routesCharge more for shorter routes

Offer special rates to big shippers

Use rebates = secret reductions for certain customers

Inability of competitors to cooperate & results of huge debts led to the formation of “Pools”Agreements to share profits in areas

Many railroads collapsed in the Panic of 1893Led to takeover by bankersJ.P. Morgan & a few others took over the railroad industry Eliminated "wasteful competition"

Government RegulationsGovernment RegulationsSome state legislatures,

under pressure from farm groups such as the Grange, began to try to regulate the railroad monopolies

Wabash v. Illinois (1886)Supreme Court decided that a state has no power to control interstate commerce within its own bordersOverturned Munn v. Illinois (“Granger Laws”)

Interstate Commerce Act (1887)Interstate Commerce Act (1887)Prohibited rebates &

pools, & forces railroads to publish all rates

Created the 5 man Interstate Commerce Commission

Does not act to give strong government control over business, but does set a precedent of government regulation

How and why did How and why did transportation transportation developments spark developments spark economic growth during economic growth during the period of 1860-1900 in the period of 1860-1900 in the United States?the United States?

Quickwrite

Post-War Industrialization

At the start of the Civil War the US lagged behind the European industrial nations Germany, France, Great Britain

By 1900, US had vaulted into the lead, with a manufacturing output that exceeded the combined output of its three European rivals

Reasons for Expansion:1. Abundant natural

resources coal, oil, iron, timber,

water power

2. Government supported transportation network

3. Abundant source of cheap labor - native & immigrant

4. Massive internal market - largest free-trade market in the world

5. Government stability & the use of power to protect business through tariffs, but not to regulate

Encouraged foreign & domestic investors

6. Technological progress & invention

1876: Alexander Graham Bell developed telephone

Thomas Edison developed electric light, phonograph, moving pictures, etc.

1790s 276 patents issued. 1990s 1,119,220 patents issued.

Gave an inventor the right to make and sell an invention.

1790s 276 patents issued. 1990s 1,119,220 patents issued.

Gave an inventor the right to make and sell an invention.

Rise of the Industrialists “nouveau riche”Social Darwinism

Herbert Spencer’s idea“Millionaires a product of natural selection.”

Divine Providence“Acres of Diamonds”

lectures

Robber Barons?or

Captains of Industry?

Andrew Carnegie (1835 - 1919)

Sold railroad bonds to build Bessemer process steel plant in Pittsburgh in 1872

1878: won steel contract for Brooklyn Bridge

1880's converted the Homestead Steel plant to making steel beams for "Sullivan" skyscrapers

Making $40 million a year by 1900 - largest industrial company in the world

Big Corporate Profits!Big Corporate Profits!

Vertical integration Control all stages of development in production process

Improve efficiencyEliminate middleman fees

1901: sold the company to J.P. Morgan for $460,000,000

The Gospel of WealthHis wealth was given to him in "trust“

Through his superior administrative abilities he should wisely give back to the community & "help those who would help themselves"

Gave away $350 million before his death to libraries & other philanthropic endeavors

J. Pierpont Morgan (1837-1913)Born into

wealthy banking family

Involved in government financing during Civil War

1880's involved in financing railroads

1880-1900: bought out & reorganized failing railroads

1895: formed a syndicate to bail out the U.S. Treasury during gold depletion crisis after "Crash of 1893"

Created "interlocking directorates" out of failed companies in the '90sHeld controlling stock interests in companies instead of buying them outright

1901: bought Carnegie Steel

Enlarged his steel holdings to create United States Steel - the first billion dollar corporation

Morgan had controlling interests in railroads, marine operations, steel, International Harvester, General Electric, American Telephone & Telegraph72 different directorships

John D. Rockefeller (1839 - 1937)

1859: Edwin Drake drills oil well near Titusville, Pennsylvania ("Drakes Folly“)Uses soon found for petroleum

1862: Rockefeller sent by investors to investigate the uses of oil found in OhioHe reports "no use" & invests heavily

1863: at 24 he begins oil business in Cleveland, Ohio

1870: incorporates the Standard Oil Company of Ohio

Standard Oil used vertical integration to be more efficient

Began process of Horizontal Integration to destroy or control all competition

Coke fields

purchased by

Carnegie

Coke fields

Iron ore deposits

purchased by

Carnegie

purchased by

Carnegie

Coke fields

Iron ore deposits

Steel mills

purchased by

Carnegie

purchased by

Carnegie

purchased by

Carnegie

Coke fields

Iron ore deposits

Steel mills

Ships

purchased by

Carnegie

purchased by

Carnegie

purchased by

Carnegie

purchased by

Carnegie

Coke fields

Iron ore deposits

Steel mills

Ships

Railroads

purchased by

Carnegie

purchased by

Carnegie

purchased by

Carnegie

purchased by

Carnegie

purchased by

Carnegie

Vertical IntegrationVertical Integration You control all phases of production from the raw material to the finished

product

Horizontal IntegrationHorizontal Integration Buy out your competition until you have control of a

single area of industry

1877: Standard Oil controls 95% of the country's oil refining capacity

Standard Oil Co.Standard Oil Co.

1882: created the Standard Oil Trust9 trustees given power "to hold, control, & manage" all of Standard Oils vast holdings

Rockefeller/Control Govt

Led to trusts by tobacco, sugar, whiskey, lead, etc.

Also led to movement of "trust busting" & anti-trust legislation

The ‘Bosses’ of the SenateThe ‘Bosses’ of the SenateThe ‘Bosses’ of the SenateThe ‘Bosses’ of the Senate

1897: Rockefeller retires with personal fortune of $900 millionGives away $540 million by his death

““Robber Barons”Robber Barons” Business leaders built

their fortunes by stealing from the public.

They drained the country of its natural resources.

They persuaded public officials to interpret laws in their favor.

They ruthlessly drove their competitors to ruin.

They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions.

““Captains of Industry”Captains of Industry” The business leaders served

their nation in a positive way. They increased the supply of

goods by building factories. They raised productivity and

expanded markets. They created jobs that

enabled many Americans to buy new goods and raise their standard of living.

They also created museums, libraries, and universities, many of which still serve the public today.

Anti-Trust LegislationSherman Anti-Trust Act

(1890)Outlawed any organization that acted “in restraint of trade”

Federal government move to regulate interlocking directorates, pools, & trusts

Law lacked teeth, but ironically used to attack labor unions

The Impact of Industrialization

The New SouthSouth remained mostly

agrarianTextile plants were built

to take advantage of cheap labor

Steel production was checked by preferential rates for northern goods

Effects of IndustryWomen found new jobs

as stenographers & “hello girls” while leaving the factories

Wealthy displayed conspicuous consumption leading to class struggle

vs.

By 1900, 90% of the wealth in the U.S. was controlled by 10%

of population.

Weakness of LaborUnskilled labor had little

power & wages were lowEmployers had the power

to break labor unionsYellow dog contracts, iron-clad oaths, black lists, scabs, lockouts, company stores, troop, starvation...

American people grew tired of strikes & blamed the unionsSocialistic, thus unpatriotic

Rise of Labor Unions1866: The National

Labor Union is formed 600,000 members both skilled & unskilled

Called for social reform

Won the 8 hour day for government workers but no means of enforcing

Killed by the depression of the 1870’s

Molly Maguires (1875)Irish coal minersUsed violence to protest1877: became martyrs for labor movement

Great Railroad Strike1877: 1st nationwide strikeHayes sent federal troops

The Great Railroad Strike of 1877The Great Railroad Strike of 1877

The Knights of Labor (1869)Led by Terence PowderlyAll workers in one big unionEconomic & social reform

without politics

Knights of LaborKnights of Labor

Terence V. PowderlyTerence V. Powderly

An injury An injury to one is to one is

the the concern concern of all!of all!

Goals of the Knights of LaborGoals of the Knights of Labor Eight-hour workday.Eight-hour workday.

Workers’ cooperatives.Workers’ cooperatives.

Worker-owned factories.Worker-owned factories.

Abolition of child and prison labor.Abolition of child and prison labor.

Increased circulation of greenbacks.Increased circulation of greenbacks.

Equal pay for men and women.Equal pay for men and women.

Safety codes in the workplace.Safety codes in the workplace.

Prohibition of contract foreign labor.Prohibition of contract foreign labor.

Abolition of the National Bank.Abolition of the National Bank.

Haymarket Square (1886)Bloody explosion in Chicago led to conviction of 8 Anarchists

Governor Altgeld later pardoned all survivors

Bad feelings led to the weakening of the Knights

American Federation of Labor (1886)

AFL founded & led by Samuel Gompers

Anti-socialist & simply wanted more for labor (“bread & butter” issues)

Excluded unskilled workers

Wanted the “Closed Shop”

Avoiding politics & staying united helped the AFL grow to the largest labor organization

How the AFL Would Help WorkersHow the AFL Would Help Workers Catered to the skilled worker.Catered to the skilled worker.

Represented workers in matters of national Represented workers in matters of national legislation.legislation.

Maintained a national strike fund.Maintained a national strike fund.

Evangelized the cause of unionism.Evangelized the cause of unionism.

Prevented disputes among the many craft Prevented disputes among the many craft unions.unions.

Mediated disputes between management Mediated disputes between management and labor.and labor.

Pushed for Pushed for closed shopsclosed shops..

The Rise & Decline of Organized LaborThe Rise & Decline of Organized Labor

“The Tournament of Today: A Set-to Between Labor and Monopoly”

“The Tournament of Today: A Set-to Between Labor and Monopoly”

Major StrikesHomestead Strike (1892)

Stronger employer (Carnegie) could break a union with private police force & gov’t help

Homestead Strike (1892)Homestead Strike (1892)

The Amalgamated The Amalgamated Association of Association of

Iron & Steel WorkersIron & Steel Workers

Homestead Steel WorksHomestead Steel Works

Pullman Strike (1894)Wage cut causes strike & violence in company town

Pullman CarsPullman Cars

A Pullman A Pullman porterporter

Eugene V. Debs & American Railway Union

Federal troops sent in with Cleveland’s approval to put down strike

The Pullman Strike of 1894The Pullman Strike of 1894

The Pullman Strike of 1894The Pullman Strike of 1894

Government by injunction!Government by injunction!

President Grover ClevelandPresident Grover Cleveland

If it takes the entire army and navy to If it takes the entire army and navy to deliver a postal card in Chicago, that card deliver a postal card in Chicago, that card

will be delivered!will be delivered!

The SocialistsThe Socialists

Eugene V. DebsEugene V. Debs

1881-1900: 23,000 strikes occurred involving 6.6 million workers

Labor Unrest: 1870-1900Labor Unrest: 1870-1900

Impacts of the 2nd IRStandard of living roseUrban centers grewIndustry eclipsed

agricultureMonopoly over free-

enterprise

The The Changing Changing American American

Labor Labor ForceForce

The The Changing Changing American American

Labor Labor ForceForce

Work-place regimented & impersonal

Economic & social independence for women

Pronounced social stratification

Foreign trade increase