Chapter 24 & 25

Industry Comes of Age

The Second Industrial Revolution –ROSERailroads; Oil; Steel; Electricity

• Henry Bessemer & William Kelly separately, yet almost simultaneously the same process of converting iron into steel (blowing hot air into iron to remove impurities). Vital to:• the expansion of railroads • constructing multistoried buildings

• Oil will also become necessary for lubrication & lighting; later used for fuel w/advent of the combustion engine -1st oil well in the US, 1859, Titusville, PA

• Ohio & Pennsylvania became steel producing centers due to pre-existing iron production & coal deposits for fuel• Also Mesabi region of Minnesota, upper Michigan & Alabama

The Science of Production

• Corporate research & development –less government funding and fears of competition led to corporate ‘labs’

• Transformation of higher education to connect theoretical research to practical outcomes

• Industrialists turned to ‘scientific management’ to further efficiency

• Henry Ford’s introduction of the assembly line in 1914 (car assembly time reduced from 12.5 hrs to 1.5 hrs)

• Taylorism –subdivision of tasks to speed up production & make workers interchangeable

• Effect was to give employers greater control over employees

Railroads

• Transcontinental Railroad (1862-1869)

• In 1865 -35,000 miles of track; by 1900 -193,000 miles

• Central Pacific Eastward building & Chinese "coolie" labor & Union Pacific (westward building with Irish and freed men's labor)

• Large federal subsidies in land and loans beginning in 1862

• RR owners earned huge contracts of land• Arguments in support of the projects were that they

would help postal delivery & military needs and the need to bind CA to rest of the Union• Will lead to the standardization of time –time zones

Rogues of the Railways

• Credit Mobilier Scandal (1872) -created shell corporations to build railroads that overcharged costs; RR companies then went to Congress for more funding• Many in Grant's administration & Congress were

implicated

• Jay Gould speculator of railroad stocks

• Cornelius “Commodore" Vanderbilt -united old NY Central with western lines and made steel upgrades

• Leland Stanford financially backed the Central Pacific and managed its progress through the Sierra-Nevadas

Titans of Capitalism

• Vertical Integration –improving inefficiency & costs by controlling all stages of production by a single company

• Andrew Carnegie

• Horizontal Integration –allying with competitors to monopolize a given market

• John D. Rockefeller

Myth of the Self-made man

• To combat criticism, capitalists sought to convince the public that the corporate economy was compatible with the ideologies of individualism & equal opportunity

• Carnegie, Vanderbilt & Rockefeller came from relatively modest means, but most robber barons come from positions of wealth

• Many employed ruthlessness & corruption to succeed

• “the public be damned” –William Vanderbilt

• “What do I care about the law?” -Cornelius Vanderbilt

• Capitalism could provide every individual with the chance to succeed & attain great wealth

• 30 millionaires before 1860, 4,000 by 1890

• Wealth acquired through the Protestant virtues of hard work and thrift

• “God gave me my money” –John D. Rockefeller

• Horatio Alger stories

AP PARTS

• The price which society pays for the law of competition, like the price it pays for cheap comforts and luxuries, is great; but the advantages of this law are also greater still than its cost -- for it is to this law that we owe our wonderful material development, which brings improved conditions in its train. But, whether the law be benign or not, we must say of it: It is here; we cannot evade it; no substitutes for it have been found; and while the law may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department……

• This, then, is held to be the duty of the man of Wealth: First, to set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial result for the community-the man of wealth thus becoming the sole agent and trustee for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer-doing for them better than they would or could do for themselves

Survival of the Fittest

Social Darwinism

• Application of Charles Darwin’s theory of evolution –natural selection

• Only the fittest individuals survived & flourished in the marketplace

• Legitimized the success of businessmen while affirming American values

• Herbert Spencer –British philosopher who argued that society benefitted from the elimination of the unfit & survival of the strong & talented

Gospel of Wealth• People of great wealth had great

power with great responsibilities

• Andrew Carnegie –’a mere trustee & agent for his poorer brethren’

Conspicuous Consumption

Cornelius Vanderbilt’s Summer Home

John D. Rockefeller’s Country estate

Reactions to Capitalism• Farmers & workers saw capitalism as a threat to notions of a

republican society

• Middle class complained of corruption that big business seemed to create in politics

• Both blamed monopolies for creating artificially high prices & an unstable economy

• Animosity towards ‘conspicuous capitalism’

By 1900 1% controlled 90% of the nations wealth

• Although the standard of living rose for most Americans, the difference b/w rich and poor grew

Wabash v. Illinois -led to the Interstate Commerce act and regulation on railroads

Posted rates, ended 'pooling'

Set up the Interstate Commerce Commission (ICC) to enforce new legislation

The Struggle to Unionize• Molly Maguires –militant labor organization in the coal region of PA; accused violence & intimidation (by operating companies)

• Great Railroad Strike of 1877 –Vanderbilt’s railroad made a 10% wage cut to all employees

• strike stopped service from St. Louis to Baltimore

• Federal troops used (thousands injured)

• The Knight of Labor (skilled & unskilled labor) open to all “who toiled” including women & blacks

• Bad press over labor strikes decreased membership by 1900

• The American Federation of Labor (skilled only) did not include women or minorities b/c they drove down wages for ‘working men’; although supported equal pay -Samuel Gompers (leader)

• Desired to keep the unions out of politics, instead focus on wages & conditions directly w/ employers

• Women’s Trade Union League (WCTU) formed in 1903

Labor Conflicts• Labor made few advances b/c

• labor orgs. represented a small population of the workforce

• Immigrants saw their presence as temporary and would not commit to unions

• Most workers were unskilled and couldn’t belong to the AFL

• Haymarket Square Riot –Chicago, May 1886, McCormick Harvester employees, police and other general strikers engaged in fighting that led to a bombing

• Created a perceived threat by ‘anarchists’

• Homestead Strike –Pittsburg,1892, Amalgamated Steel workers union led a strike against wage cuts

• Henry Clay Frick hired Pinkertons to break the strike –8,000 National Guard soldiers to end violence

• Pullman Strike –Chicago, 1893; Pullman Palace Car Co. after slashing wages by 25% (but not reducing rent & food prices in the company town) workers went on strike w/ the American Railway Union

• Workers in 27 states participated, federal troops used to break the strike, leader Eugene V. Debs was arrested

Populism

Granger Movement –begun by Oliver Kelley of the Dept. of Agriculture to bring community to isolated farmers. Membership of farmers in the West and South soared after Panic of 1873successful in getting state legislators elected in the Midwest

Farmers’ Alliance –successor to Grangers who sought to build economic cooperatives, primarily in the Southsupporters of female suffrage

Ocala Platform -National Farmers’ Alliance convention decree; became Populist party platforma. Sub-Treasuries (opened in various counties which produced at least $500,000 worth of agricultural products per year and would give loans for up to 80% of the crop)b. Free Silver (coinage of silver)c. Direct Election of Senators (17th Amendment to the Constitution)d. Graduated Income Tax (16th Amendment to the Constitution)e. Lower Tariffs to Help Farmersf. Government Regulation of Railroad and Utilities

William Jennings Bryan http://www.youtube.com/watch?v=m83EKoS5FWY

Populist Symbolism in The Wizard of OZ Wizard of OZ –follow the yellow brick road http://www.youtube.com/watch?v=THbY7EL8k5w

a. Yellow Brick Road---

b. Scarecrow---

c. Cowardly Lion---

d. Tin Man---

e. Dorothy’s Slippers---

f. Dorothy---

g. Wizard---

h. Winged Monkeys---

i. Wicked Witch of the East---

j. Wicked Witch of the West---

k. Good Witch of the North---

l. Munchkins---

m. Emerald City---

n. Tornado--

Exit Ticket

What were the accomplishments/sins of the second Industrial Revolution?

What were the reactions to the power brokers of the era?