THE RISE OF INDUSTRY AND THE GROWTH OF UNIONS IN THE GILDED AGE

Industrialization

Reasons for rapid spread of industry after the Civil War

ResourcesExpanding populationFavorable government policiesCapitalNew technologyTransportation and communication

improvements

New types of business combinations

Methods of combining companies? Pool: competing businesses combine to eliminate

competition Trust: one large group holds in interest of another Holding company: owns controlling interests in other

companies Merger: combines 2 or more organization

Emergence of new combinations Horizontal Corporation: buy all competition Vertical Corporation (Carnegie Steel)

Impacts industry has on American life?

National wealth increasesLonger life expectancyStandard of living improvesWidening gap between upper and lower classNew leisure timeEducational advancesAgricultural RevolutionUnionization beginsImmigration spurredUrbanization

Railroads: The First Big Business

End of Civil War: less than 35,000 miles of track. 1900: 193,000 miles of track.

1867 Cornelius Vanderbilt, NY Central; Thomas A. Scott, PA RR; Jay Gould, Kansas Pacific in SW; Henry Villard, Northern Pacific, etc. Standardization for travel = time zones, 1883

Iron, Oil, and Electricity

Bessemer Process: cheaply made steel. Pittsburgh, Cleveland

Petroleum refineries growCompetition and Monopoly: RR

Competition cut into RR profits: rebates for bulk shipping, road suffered (especially during Panic of 1893)

Financiers: J. P. Morgan, controlled many RR companies

Bell and Edison

Competition and Monopoly

Carnegie Steel: Pittsburgh Standard Oil: Cleveland

and John D. Rockefeller (controlled 90% of nation’s oil by 1879!), cut prices locally to force small businesses to close. Stake in RR, bribery. “Meticulous attention to detail.”

Retailing and Utilities: Electric companies

Americans are AMBIVILENT…

Laissez-faire attitudesRising materialismCarnegie’s defense: Gospel of WealthReformers: George 1879 Progress and

Poverty, Bellamy’s Looking Backward, 2000-1887, H. D. Lloyd’s “Wealth Against Commonwealth” attacks Standard Oil

Labor Movement

Reasons unions form?Major Early Unions

Knights of Labor, AFL, CIO (Gompers, Debs)

Types of peaceful settlements Collective bargaining, mediation, arbitration

Weapons used by Labor if negotiations break down Picketing, boycott, strikes

Unions, cont’d

Types of strikes Sitdown Wildcat: union members walk off job despite union

leaders Slowdown Sympathy General

Tactics used to gain strength Closed/union shop, checkoff (automatic payroll

deduction), union label (fight to place label in manufactured product)

Unions, cont’d

Weapons used by management if negotiations break down Lockouts, strikebreakers, injunctions

Tactics used by management to weaken unions Open shop, blacklist, “yellow-dog” contracts, company

unions, labor spies (Pinkertons)Laws that have aided Labor

Chinese Exclusion Act 1882, Contracts Labor Law 1885, Bureau of Labor 1884: Department of Labor 1913

Major Labor Strife Railroad Strike 1877, Haymarket Affair 1886,

Homestead Strike 1892, Pullman Strike 1894

Anti-Chinese Cartoons, Thomas Nast

Court Cases

Munn v. Illinois, 1877: Any business that served a public interest was subject to state control

Wabash v. Illinois, 1886: led to creation of Interstate Commerce Act all charges by RR “shall be reasonable and just” and ICC supervises RR Not particularly effective

Sherman Antitrust Act 1890: any trust in restraint of trade or commerce among states or with foreign nations ILLEGAL Rarely followed: U.S. vs. E.C. Knight Company (1895)

98% of sugar refining NOT a monopoly?!?!