1865 - 1901

• Learning Targets Students will be able to explain the factors

that helped America industrialize Students will be able to explain the factors

contributing to the expansion of the railroads in America

Students will understand the factors in the rise of big business

Students will be able to explain the causes in the development of labor unions

• Although the US began to industrialize in the early 1800’s, it was only after the Civil War that it expanded rapidly

• What are the factors that allowed this to happen?

• Factor 1 – Natural Resources The US has abundant

natural resources - can be obtained more cheaply than through importation

Mountains in West source of many resources – construction of the Transcontinental Railroad allowed movement of settlers/miners and shipment of material east

New resource exploited – petroleum (oil)

Oil used to produce kerosene used to light lanterns, stoves, etc

What was used before kerosene?

First oil strike in Pennsylvania – drilled by Edwin Drake in 1859

• Factor 2 – Large Workforce

US population tripled between 1860 – 1910 High population provided

workers and consumers Population growth caused

by large families and immigration

What are some push & pull factors?

I hate kids

• Factor 3 – free Enterprise System Policy of Laissez-faire Supply and demand Competition causes

lower prices and greater efficiency

Entrepreneurs – people who risk capital seeking profits

Foreign investment

• Factor 4 – Role of Government Government kept

taxes and spending low

Did not impose costly regulations

Imposed high tariffs. Good idea?

• Factor 5 – New Inventions 1876 Telephone –

Alexander Graham Bell

1877 Bell Telephone (AT&T)

Revolutionized business and personal communication

Electricity – Thomas Edison

• 1877 – Phonograph• 1879 – Light bulb,

electric generator• Dictaphone,

mimeograph, and motion picture

• Launched electric power company to supply electricity to cities (GE)

• Other Inventions Ice machine Refrigerated railroad

car Automatic loom Ready-made clothing Sewing machine Shoe-making

machines Canned food Breakfast Cereal

• Factor 6 – Railroads Boom began with Pacific

Railway Act 1862 – Union Pacific & Central Pacific

Union Pacific employed mainly Irish / Central Pacific imported Chinese labor

Transcontinental Railroad completed 1869

Miles of track dramatically expanded after Civil War

Railroads created markets and were a market unto themselves

After construction of major lines, smaller connecting lines were built (consolidation)

The most successful railroad consolidator was Cornelius Vanderbilt

Consolidation = time zones New technology such as

air brakes allowed heavier locomotives

Rail systems so efficient cost for freight dropped

• The Land Grant System Land grants given to

railroads to encourage construction

Railroads sold or mortgaged land to cover construction costs

• Robber Barons Big businessmen

who people believed had gained their wealth through scams, bribes, and cheating

Credit Mobilier Scandal – corrupt construction company owned by railroad investors

• Great Northern Railroad Only transcontinental

railroad to NOT take land grants

Wise business tactics brought profits on both east and west runs

Only railroad to NOT go bankrupt

• Corporation – an organization owned by many people but treated by law as though it were a single person

• Stockholders – people that own shares of the corporation

• Stock – shares of ownership

• America initially distrusted corporations

• Economies of Scale Corporations raise money by selling

stocks They use the money to invest in new

technology, large labor force, lots of machines which greatly increases efficiency

They make more goods more cheaply

• All businesses have two types of costs Fixed Costs – costs a company has to

pay regardless if it is operating or not Operating Costs – costs that occur

when a company is running What advantages does a corporation

have in bad times?

• The Steel Industry The nature of steel Andrew Carnegie –

invested in companies supplying railroads

Bessemer Process – process by which steel could be made cheaply and efficiently

• Vertical Integration - a company owns all the different businesses on which it depends for its operation

• Horizontal Integration – combination of many companies of the same type into one large corporation

• Monopoly – when a single company achieves control over an entire market

• Why would some Americans fear a monopoly? Why would others feel a monopoly was good?

• Trusts Fear of monopolies drove

some states to make them illegal

To get around the law, businesses were merged by having stockholders place their stock under control of a manager (trustee)

Trusts could control companies as if they were merged into a corporation

Standard Oil – John D. Rockefeller

• Holding Companies Does not produce anything It owns the stock of companies that do

produce goods – thus controlling them as if they were one large corporation

• Selling the Product New ways of advertising –

bold display ads Department stores

• Wanamaker, Macy’s

Chain stores – emphasized low prices

• Woolworth 5 & 10 (dime)

Mail-order catalogs• Sears-Roebuck,

Montgomery Ward

• Urban Workers Unskilled labor – long

hours, monotonous, unhealthy or dangerous work environment

Increased living standards – products cheaper

Deflation – prices fell but wages cut

Workers beginning to organize unions

Two types of workers: craft workers and common laborers = skilled and unskilled

Trade Unions – unions limited to people with specific skills

Corporations generally opposed unions

Tactics to fight organization of unions included blacklists, lockouts, and strikebreakers

• Why did the government and the American people oppose Unions? No laws protecting the right to unionize –

some courts saw unions as interfering in business

Marxism and Anarchism - European ideas arriving with immigrants –both espoused radicalism

Americans equated unionism with radicalism – led government to use police and army to crush strikes and break-up unions

• The organizing of Labor Unions Great Railroad Strike of 1877

• Economic recession forced railroads to cut wages

• Workers walked off job and blocked tracks• Other states joined the strike – workers

destroyed equipment and tracks• State governments called out militia –

President Hayes called out army• Violence took >100 lives

• The Knights of Labor First national industrial union Wanted 8 hour workday, equal pay for

women, abolition of child labor Allowed women and minority members Supported arbitration instead of strikes Strikes were used to good effect causing

union to grow in membership Haymarket Riot hurt union’s reputation with

America – membership declined

• The Haymarket Riot Anarchist rally at

Haymarket Square, Chicago

Police hit by bomb / shots fired

7 police / 4 workers killed

Among arrested anarchists was member of Knights of Labor

• The Pullman Strike 1893 American Railway

Union founded by Eugene V. Debs

Pullman workers lived in company town

1893 Depression caused Pullman to cut wages – but not lower rents and prices

Union workers boycotted Pullman cars

Railroads attached US Mail cars to Pullman cars

US government called in troops to break boycott

• American Federation of Labor 1886 Led by Samuel Gompers “Plain and simple” approach to labor relations Rejected socialism and Marxism Three goals:

• Collective bargaining• Closed shops• 8 hour workday

• Working Women Women working outside the home increased after the

Civil War Jobs generally restricted to “women’s work” – 1/3

domestic servants 1/3 teachers, nurses, clerks, salesgirls, secretaries 1/3 industrial workers

Women paid less. Why? Women excluded from unions including AFL 1903 Women’s Trade Union League established –

sought 8 hour workday, minimum wage, end to evening work, and abolition of child labor