AMERICAS INDUSTRIAL

SUPREMACY
Chapter 17
1870-1900: Unprecedented Progress
in Industry Marked by Unequal
Prosperity

Causes & Sources of Industrial

Growth

Advantages of U.S. Industry

Huge supply of raw materials
Large (and growing) labor force
Technological innovations allowed production
to be more efficient and quicker
Generation of Entrepreneursa group (of
mostly men) who were energetic, and willing
to take risks to make it big

What type of risks were they taking?

Expanding Domestic Market (which will soon

turn to a world market)

Industrial Technologies

Communications

TelegraphTransatlantic Telegraph completed

in 1866
Connected the U.S. to Europe with instantaneous

intercontinental communication
Later would be used to transmit telephone
signals, then television, then data.

Industrial Technologies

Communications

Commercial
telephone
technology
Alexander Graham
Bell, 1876
Telephone turned

communication from
graphic, to auditory

Industrial Technologies

Communications

Early Radio
First time instantaneous mass communication

was possible
What are radios main benefits?

Typewriter
Cash Register
Adding Machinecalculator

Industrial Technologies

Electricity (1870s)light and power

Thomas Edison invents the incandescent light

bulb in 1879
How does this invention change life as

Americans knew it?

Power plants begin to be built bringing

electricity to businesses and homes
Where did electricity go to first?
Who was the first to use electricity?
How did electricity effect the American

Economy?

Steam technology also becomes more

efficient which helped lower rail shipping

Iron and Steel

Steel

Steel first developed and produced in Pennsylvania

and Ohio
Made from iron ore being shipped to factories in
steam engine trains.
Steel is a metal alloy stronger, lighter, more
durable metal than iron
More things can be made from it
It is easier to work
Bessemer/Kelly Processcreates stronger steel by
blowing air threw molten metal to get out the
impurities.
Allowed the steel industry to develop because people

wanted steel over iron.

The Railroads

Railroads contribute to economic growth by:

Providing mass transportation cheaply

Increasing access to distant sources of raw materials
Provides access to previously inaccessible markets (the West)
Promotes the construction business.

Governments subsidized the building of railroads after

the Civil War. Why?
Concentration of power among the very few James J.
Hill, and Cornelius Vanderbilt.
Stockholders become rich and powerful
Limited Liability of the railroads protect themselves
from labor issues, safety regulations, etc., through
political lobbying.

The Corporation

Corporations become the main element

and cause of industrial development.
WHY?
TAYLORISMnew method of business
management that stressed a focus on
using math to develop and plan the
production process.

Led to:
The assembly line, scientific management, mass

production, and the subdivision of labor.

The Corporation

Managerial Techniques
developed
Corporate

hierarchylevels of

employees
Division of responsibilities among
the labor force
Cost accountingthe investment of
capital and the beginning of companies
making money off of money
Middle managers within the
corporate structure change the way

The Corporation

CONSOLIDATIONThe creation of massive

corporations

HORIZONTAL INTEGRATION Combining many firms in the

same business into a single corporation
Example: McDonalds, Burger King, Hardees, and Wendys consolidate
into one company.

VERTICAL INTEGRATIONTaking over all facets of

production: Supply, production, transportation, sales, etc.
Example: U.S. Steelbuys mines, railroads, and steel production
facilities to control their own operating costs
Standard OilJohn D. Rockefeller, starts by buying small oil firms, then
buys companies that produce and build oil drilling and refining
equipment, then branches out to other resources.

The Erie War 1868 Erie Railroad built with public funds
then was taken over by private citizen, stock manipulated by
railroad tycoons to buy out the Erie to create a monopoly

Monopolies

MONOPOLIESwhen consolidation completely

eliminates competition.
People disliked monopolies because they:

eliminated jobs
drove up prices
and consolidated power to the very few

Three kinds of Monopolies

TRUSTSstocks

transferred to a holding group that

combines investments
Trustees (people who own the stocks) use wealth to consolidate businesses

example: Standard Oil

Results of trusts and holding companieseconomic power held by the few
(trustees)

HOLDING

COMPANIES

where one company owns the majority of

another company by buying their stocks.

POOLS when large sums of money from multiple investors are used to
control an industry through one trustee

Capitalism and its Critics

Many people dont like the new industrial age

Industrialists counter with Survival of the
Fittest
Individuals given opportunity to succeed and gain
wealth in the industrial system
Self-made men
Tycoons
This idea was called SOCIAL DARWINISM

In human society only the most fit individuals survive in

the market place

Celebrates competition and the open market
Created by Herbert SpencerSociety benefits from the
elimination of the unfit.

The Gospel of Wealth

The idea that a rich person should be

a trustee of wealth and should use
those funds for public benefit.
(Carnegie)

people with great wealth are responsible for

the progress of society

The Ordeals of the Worker

Era marked by progress in standard of livingyet,

danger, less control, less power for regular individuals
Southern Blacks, foreign immigrants, eastern farmers,
and young rural woman migrated to the industrial city
after the Civil War.

The Immigrant Work Force

influx greater than any other era25 million (Civil War to WWI)
Usually became unskilled workers
Created close-knit ethnic communities (China Town, Little Italy,
etc.)
Germans and Jews were the most successful immigrants. Why?

Harsh

working conditions

routine, strict schedule, monotony, impersonality, long hours

women and children tapped for laborunskilled
child labor laws in responseoften ignored

The Ordeals of the Worker

Emerging Unionization
Generally

unsuccessful during the erabut small steps taken

public hostility and recession years undermine the movement

Railroad

Strike of 1877U.S.s first major national labor conflict

RR announces 10% pay cutrioting, looting, sabotage in response

State militias and fed troops put down widespread rioting
Scores of RR workers killedpotential strength for unions?
Who does the government/courts support?

The Knights of Labor

The

first effort to create a truly national labor organization

Uriah S. Stephens as founderopen to all, inc. women and African-Americans

Focus:

workday, child labor, but also economic reform and wage

restructure
Initial success (700 k in 1886)repression and violence
undermine organizing the union

The Ordeals of the Worker

The American Federation of Labor (AFL)

National

labor union formed in 1886 whose goal was to

organize skilled labor by craft to affect change in
management, pay, and working conditions.
Rivaled Knightscollection of autonomous craft unions
skilled workers
Haymarket Square Bombing (May, 1886) radicals
protest death of strikers
ordered to disperse, unknown throws bomb police

killed/wounded
police fire into crowd, kill several protesters

trial of anarchists who organized protestseven sentenced to

death
becomes symbol of social chaos and radicalismanarchism
decried

The Ordeals of the Worker

The Homestead Strike (1892)

Amalgamated Association of Iron and Steel Workers

Most powerful trade unionskilled, high demandsignificant power

Henry Clay Frickchief lieutenant of Andrew Carnegie

Amalgamated Association had to gowages cut, union ignored

Strike called for (actually a lockout of unionists)

Strikebreakers (scabs) called in, protected by security
specialistsPinkertons
Pitched battle occurs, several killedPinkerton
Detectives flee
National Guard intervention and attempt on Fricks life
sway public opinion

The Ordeals of the Worker

The Pullman Strike (1894)

Pullman

Palace Car Company (Chicago)company

town for workers
George M. Pullman envisions town as solution to labor conflicts
marked by regimentation and high rent

citing

depression, wages slashed by 25%--rent remains

high
American Railway Movement (Eugene V. Debs) organize strikes
Thousands strike across 27 statesChicago to Pacific paralyzed
State

refuses militiafederal troops move in (mail)

injunction ordered
Arrests of union leaders and federal protection help to
collapse strike

The Ordeals of the Worker

Sources of Labor Weakness

Few

gains for labor despite organizing efforts

Perhaps less political power and less control of workplace?

Reasons

for weaknessadvantages lie with capital

Main labor organizations represent only a small % of workers

Divisions within workforcetensions among ethnic groups
fluid nature no long term plans for most workersmigration
corporate organization of vast wealth and power
determined to crush resistance
support of authorities to preserve order

public opinion bristles at militants and radicals

rugged individualism, bravery, courage not compatible with

unions?