GOAL 5 Becoming an Industrial Society

Goal 5 Becoming an Industrial Society (1877-1900) - The learner will describe innovations in technology and business practices and assess their impact on economic, political, and social life in America. Objectives 5.01 Evaluate the influence of immigration and rapid industrialization on urban life. 5.02 Explain how business and industrial leaders accumulated wealth and wielded political and economic power. 5.03 Assess the impact of labor unions on industry and the lives of workers. 5.04 Describe the changing role of government in economic and political affairs.

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Industrialization

Once Reconstruction ended in 1877, the focus of America shifted to the growing industries in the U.S. Industrialization is the growth of large, successful companies and factories. The growth of industry allowed America to become one of the most powerful countries in the world. The growth of factories took place in cities. The growth of cities is known as urbanization. The combination of industrialization and urbanization is how major American cities we know of today developed. Industrialization and urbanization will create both new benefits and hardships. Exciting new inventions and technology will make people’s lives easier and offer them more opportunities. For some, however, life will be made more difficult. Industrialization would not have been possible without new inventions and advances in technology. We

have already learned about the importance of the Transcontinental Railroad and the telegraph. Communication was greatly improved by the telephone, invented by Alexander Graham Bell. It allowed people to communicate long distances in an instant, which was important to the growth of companies across the country. Another improvement to communication was the typewriter. The typewriter made it possible for more documents to be produced and exchanged. Women began to join the workforce because men thought

it was too girly to answer phones and type. This allowed women to become more independent and free-thinking, which meant that they starting thinking they were equals to men. Watch out men because women will want suffrage rights (voting) soon!

Thomas Edison’s light bulb had a great impact on factory work. The light bulb allowed work to continue after the sun went down. The more people could work, the more they could produce, and the more money the business could make. Another important invention that led to the growth of the textile industry was the Singer sewing machine. This invention allowed all types of clothing and materials to be produced faster and cheaper.

With Industrialization came new opportunities to make great amounts of money. During the Industrial period a few men became extremely wealthy and powerful. These men would use their power to influence the role of the government in the economy. One of the methods the industrialists used to gain their power was the monopoly. In a monopoly, one business controls the supply of a product with no competition. This is good for the owner because they can set whatever price they want and buyers have to pay. Can you think of any company that has a monopoly today? ____________________________ Another method industrialists used to gain wealth and power was the trust . A trust is when multiple companies unite to form one company. This allows the trust to get rid of competition and form a monopoly. These business methods led to the creation of captains of industry or robber barons. Captains of Industry is the title given to the men who created great companies and great wealth. Is this a positive or negative term for these men? Some people believed the captains of industry were really robber barons because of the unfair ways they gained their wealth and power. Is this a positive or negative term for these men?

Andrew Carnegie

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Captains of Industry Andrew Carnegie, a Scottish immigrant, became the leader of the steel industry. He used an invention known as the Bessemer process. The Bessemer process was a method of making steel faster and cheaper. Steel was very important to the growth of the nation. Steel was used to build the Transcontinental Railroad, other factories, and new buildings called skyscrapers. Skyscrapers were important because it used the least amount of land to build a building, but maximized that land’s use. Instead of having a four story building, as before, you could not have a 100 story building. Skyscrapers would dominate urban (city) areas skylines. Carnegie became the leader of the steel industry through the use of vertical integration. This means he owned every part of the production process. He owned coal and iron mines, steel mills, railroads and ships to transport all of the steel he made. His use of vertical integration allowed Carnegie to have a steel monopoly. This made him the world’s first billionaire.

John D. Rockefeller was another captain of industry. He was one of the richest, most powerful men in America. He became the leader of the oil industry. He created the Standard Oil Company, the first trust . Rockefeller used horizontal integration to become the leading oil refiner in the nation. Horizontal integration is when one company owns all of one aspect of production. In order for Rockefeller to own the oil industry, he drove out all his competitors by lowing his prices so low that everyone brought from him. His competitors who were small time guys could not compete against this monster company, so they went out of business. Rockefeller would then

buy their stores or companies and absorb them into his trust. So, Rockefeller owned all the refinery plants that turned raw oil into usable fuel. He was able to set the price for all refined oil being sold in the U.S. Many saw Rockefeller as a robber baron.

If you wanted to create a vertical integration of a t-shirt company, what would you have to own and control? There are six steps: 1. _________________ 2. ________ ___________

3. ________________ _ 4. ________ ___________ 5. ___________ ______ 6. ________ ___________

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The railroad industry was also controlled by another “captain of industry”. Cornelius Vanderbilt controlled the Central Railroad Company. He connected New York City to Chicago, IL. Two important cities in the industrial period. His family would later build the Biltmore Estate in Asheville, NC and found Vanderbilt University in Nashville, TN. He was known for his cutthroat business practices and ability to make a lot of money. One of the reasons companies or corporations were able to grow so big and powerful was the selling of stocks and bonds. Stocks are a way a person can invest in a company with little risk. It is a great way for a company to raise money, and if a company is successful, a good way for an investor to make money. As more and more corporations were created a new industry was formed, the financial industry.

The financial industry includes the stock market, insurance companies and banking. A leader of the financial industry was J.P. Morgan. He was able to gain control over $22 billion in assets by 1913. He was known as a finance capitalist. He became so wealthy that he was able to buy Carnegie Steel and turn it into US Steel. This guy actually loans money to the U.S. government! That’s more money than even Oprah has!

George Westinghouse was also an industrialist. He invented a method to transmit electricity on alternating currents. This allowed electricity to travel farther and power more things. He created the Westinghouse Electric Company. Cities would now have electricity! Many people criticized the industrialists for the ways they gained their wealth and power. It was said they were cheaters, scammers, thieves, and robbers. However, the industrialists and their supporters believed they were just the best men for the job. They believed in Social Darwinism. This was the idea that these men were “fittest” for success and that others were just weaker. It was influenced by Charles Darwin’s “survival of the fittest” theory of evolution. These guys said that if you were smart and a hard worker, then you would succeed in life. What do you think these guys thought of their factory workers? However, not all industrialists believed in just taking and not giving. Andrew Carnegie believed rich people should give back to society. He believed the rich had a responsibility to put their money to good use. Carnegie called this idea his Gospel of Wealth. He wanted all of his friends to support the country by helping others. This idea led Carnegie to give lots and lots of money to universities, libraries and the building of art museums and music halls. Do you think this makes their methods of gaining wealth okay? Why or why not? Are there any wealthy people today that has the same ideas and actions? _________________________ INDUSTRIALIST MATCH-UP: Match the correct man to their industry. 1. Carnegie A. Oil 2. Morgan B. Railroads 3. Rockefeller C. Electricity 4. Vanderbilt D. Steel 5. Westinghouse E. Finance

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Much to the dismay of the wealthy industrialists, there were those who thought their business practices were unfair. Monopolies and trusts were seen as unfair and harmful to the public. One important group of people who did not appreciate the industrialists were the Mugwumps. These were reform minded Republicans. They wanted to end corruption. They helped pass the Sherman Anti-trust Act of 1890, which made trusts and monopolies illegal.

Urbanization

Industry depends upon factories. Factories are large buildings where many types of things are produced quickly and cheaply. Many cities are going to become factory cities. Factories need a lot of workers. These workers need places to live. So as more factories are built, more housing is built and cities grow. This is known as urbanization, or the growth of cities. In these factories, owners depended upon new people coming to this country, immigrants, to work. As the immigrants arrive in America they are going to find jobs in factories, but also face many difficulties, including discrimination.

“New” Immigration People who came to North America looking for freedom and opportunity founded the U.S. During 17th and 18th Centuries most immigrants came from Northern and Western Europe. This includes people from places like England, France, Germany, and Norway. These people are known as the “old immigrants. ” They are usually white, Protestant, and can speak English. In contrast, “new immigrants” came from Southern and Eastern Europe or Asia. “New” European immigrants came from places like Italy, Greece, Russia and Poland. They were either Catholic or Jewish, did not speak English and looked different than the old immigrants. Also there were “new” immigrants from China and Japan. The Asian immigrants did not speak English and were not Protestants. However, all of the groups came seeking freedom and a better way of life.

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“New” European immigrants arrived at Ellis Island. This was the immigrant processing center on the East Coast. Remember… Europeans at Ellis

“New” Asian immigrants were processed at Angel Island in San Francisco on the West Coast. Remember… Asians at Angel

Are we a “melting pot”? As more and more people came to the United States in the 19th Century, our population became very diverse.

Some have said the U.S. is a melting pot, where all of the cultures have come together to make a whole new “American culture.” Not everyone believes the U.S. is a melting pot. They believe we are more like a “mixed salad.” That means we are group of cultures that keep our traditions and lived around each other, but have not assimilated into a “new” culture. This is called cultural pluralism . (meaning different cultures in one society). Unfortunately, “new immigrants” did not have an easy life when they reached America. One of the things they encountered was discrimination. A group of people called nativists disliked the new immigrants. They believed they were inferior and were taking away jobs from native born Americans (not to be confused with Native Americans, they don’t have any rights at this time). Nativists were anti-immigrant. They formed a political party called the Know-Nothings. They will be successful at having the Chinese Exclusion Act of 1890 passed. This stopped any immigration from China.

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Another issue immigrants had to deal with was where they were going to live. Housing was limited. There were few places to live. So new buildings were built called tenements. These were overcrowded apartment-like buildings. Little air moved through the buildings. Multiple families were stuffed into one apartment. Multiple families have to share one bathroom, which leads to the easy spread of disease. Jacob Riis, a journalist, documented these living conditions in a book called “How the Other Half Lives”. He would be a leading member of the Progressive movement later in the beginning of the 20th century.

Nativist Political Cartoon

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Unionization Another major issue immigrants had to face was their working conditions. Work in the factories was not pleasant. Workers had to work very long days, sometimes 14 to 16 hours. The environment inside the factory was unsafe and unclean. Factory working conditions were awful. Wages were low and it was almost impossible for workers to save any money or to improve their way of life. Plus, there were so many immigrants arriving in America that it was easy to find replacement workers, so workers were always afraid of losing their jobs. There was also regular use of child labor. Children as young as five were sent to work in the factories. Owners like child labor because they could pay them less, but the children were not treated well and missed out on an education.

Unions Labor unions were created to help the factory workers. Unions wanted to fix the problems workers faced in the factories. Their goals were to get the 3 betters: BETTER WAGES, BETTER CONDITIONS, and BETTER HOURS. There were two types of unions; craft and trade unions. A craft union only allowed workers with a specific skill, or craft to join. Trade unions were for less skilled workers and open to more members. Why would unions divide themselves by skills? The Knights of Labor formed in 1869. By the mid 1880’s it had over 700,000 members. This was a major trade union. It was open to men, women, and minorities. The Knights of Labor tried to use political activity and pressure to achieve their reforms. They wanted the following:

• equal pay for equal work • eight hour workday • end of child labor

The Knights of Labor declines after the Haymarket Riot, May 4, 1886. The union was blamed for a pipe

bomb thrown by anarchists that killed seven policemen and wounded spectators in Chicago. Sadly, the union was not responsible for the violence, but people began to fear unions and the tragedy of the Haymarket Riot caused the Knights to fade away. It gave unions a bad name and weakened support for the labor movement. Unions would not recover from this until the Progressive Era.

A more successful union was the American Federation of Labor (AFL). The AFL was a craft union, meaning they only included skilled workers. Skilled workers were harder for a business owner to replace because they had a special “skill”. This gives them more power to make demands. The AFL formed in 1886 and was led by Samuel Gompers. The AFL wanted the same things as other unions:

• better pay • better hours • better working conditions

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The AFL used different methods than the Knights of Labor. They preferred to use economic pressure. These are the tactics used by the AFL: * strikes – employees refused to work and picketed (protest) outside the factory * boycotts – people refuse to buy the products * collective bargaining – employees negotiate as a united group * mediation – allows a neutral party to settle the dispute * closed shop – the AFL wanted owners to ONLY hire union members What was the AFL trying to accomplish with these tactics?

Business Reacts to Unions Business owners were not happy about unions, they actually hated them. For business owners unions meant paying more to the workers, which meant less money for profit. Plus, the business owners had the government on their side. After all, who was making the big contributions to political campaigns?!? This is how business owners tried to stop the unions:

• yellow-dog contracts - an employee signs a contract that says they won’t join a union • blacklists- putting a union members name on a list given to other owners so they can’t get a job • lockouts – not letting workers in to work • scabs – non-union workers hired during a strike to replace striking workers • injunctions – court orders that made strikes illegal • violence and intimidation – if nothing else worked

STRIKES!!!!

There were several very important strikes at the end of the 19th century. The two most important that we must know are the Homestead Strike and the Pullman Strike. Here are the particulars of each strike: HOMESTEAD STRIKE

When: five months in 1892 Who: steel worker vs. Carnegie Steel Where: Homestead, Pennsylvania What: battle between strikers and private police, Pinkertons WHY: Governor of Pennsylvania sent the National Guard to stop the strike and end the violence. VICTORY for Carnegie LOSS for the unions.

PULLMAN STRIKE

When: May – July 1894 Who: Pullman workers, the American Railway Union (ARU) vs. Pullman Car Company Where: starts in Chicago, IL then goes nationwide What: strike over better wages for Pullman workers WHY: federal government passes an injunction to stop the strike. ARU refuses. Debs arrested. President sent troops to break up Strike

The American Railways Union (ARU) was led by Eugene V. Debs. It was formed in 1893. It was the most influential labor union and Debs was the most influential labor leader of the time. He will later become the leader of the American Socialist Party and be a repetitive presidential candidate.

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Gilded Age Politics Gilded means to cover something of little value with gold to make it appear more valuable than it is. For the end of the 19th Century the prosperity of the industrial period was thinly covering the deep levels of poverty and corruption that existed in society. In other words, on the outside our nation looked bright and shiny, but underneath it all there were serious problems. This is why the period from 1877-1900 is known as the Gilded Age.

Political Corruption and Scandals One of the major areas that experienced corruption during the Gilded Age was the world of politics. The wealthy industrialists easily bought politicians. Immigrants were manipulated and exploited by local government officials. As we have already learned, workers and unions were being unfairly treated by owners and the government. Let’s look at corruption on a presidential scale.

Whiskey Ring Scandal President Ulysses S. Grant used the spoils system to appoint many officials in his government. Unfortunately, the men he appointed were not the best choices. They used their positions in the federal government to make themselves wealthy. After the Civil War, the tax on whiskey was increased. In order to avoid paying the tax, whiskey distillers paid bribes to Treasury officials. Grant was never blamed, but this was bad for his administration.

Credit Mobilier Scandal Once again scandal strikes Grant’s presidency. In 1872, it was discovered that the Union Pacific Railroad Company had been overcharging the U.S. government to build the transcontinental railroad. The government and the people of the U.S. had been cheated out of $20 million. This was highly illegal. People were upset because when the government spends money they are spending tax money and this tax money comes from you and me. Because of these scandals many people were asking for political reform. THEY wanted to end the spoils system. Success comes with the passage of the Pendleton Act in 1881. This law created the Civil Service Commission, which created an exam for anyone who wanted a government job. This ensured that people were qualified for a job before receiving it.

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Local Political Corruption Political machines were the most effective method for controlling and corrupting local or state politics. Political machines were created to keep a certain political party or group in power. A boss, who may not be a political official, led them and was a very powerful man. Graft was used by politicians to gain personal wealth and power. Graft is when you use your job to make more money, but its done illegally. Example: At the movie theater, the ticket taker sells a half of the ticket you just handed him to his friend for $5. That $5 goes directly into his pocket. This is illegal because he is already being paid by the theater. This is graft; using your job to make extra money on the side. One of the most notorious and powerful cases of political corruption took place in New York City. Tammany Hall was the political machine that controlled NYC politics in the mid 1860’s – 1877. It was led by William “Boss” Tweed. The Tammany Hall political machine was able to steal over $100 million from NYC. One of the ways the political machines gained power was by exploiting the needs of immigrants and the poor. Both the poor and immigrants were provided jobs and housing in exchange for their vote at election time. Because voting was not secret, you had to vote the way you were told. If you didn’t there were be trouble. The political machine would take away the job or tenement they got you. You see political machines were tolerated by people because they provided services that cities during this time did not. They would provide trash collection, police, and firemen. In order to make local and state politicians more democratic many new ideas develop during the end of the 19th Century. It was suggested that the everyday citizen and voter have more power in creating and approving laws. These ideas were promoted by the Populists (yes, those farmer guys from goal 4). POLITICAL REFORM

What it did: Why it changed things:

Secret ballot Allowed voters to vote secretly Eliminated power of the political machine

Initiative Allows citizens to petition for a law with enough support from voters

Put power in the hands of the people and a voice in the political agenda

Referendum Asked for President to be elected by popular vote instead of Electoral College and direct election of Senators

Led to 17th Amendment – direct election of senators

Recall Allowed voters to “vote out” an office holder

Corrupt officials can be removed before term expires.

Let’s Review: Why did people want political reform? What is graft? How did political machines gain control of an area? Why did people tolerate the political corruption?

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Positive Effects of Industrialization and Urbanization

Community Improvement

Social reformers began to provide services for immigrants and new city dwellers, making them less susceptible to the influence of political machines.

Cultural Opportunities

Museums, libraries, schools, parks, zoos, and other cultural centers were built in cities. These facilities provided urban citizens with cultural and educational opportunities that were unavailable in rural areas.

Technological Advancement

Technology made urban living more practical and comfortable. Elevators and the use of steel girders allowed cities to grow into the sky. Mass transit was being provided by trolleys, street cars, and eventually subways. Public lighting made areas safer, while water and sewage systems improved the overall health of cities.

Negative Effects of Industrialization and Urbanization

Political Machines

Corrupt political machines such as Tammany Hall in NYC took advantage of their positions in order to receive graft. These organizations also provided much needed services for immigrants and new city-dwellers in exchange for their vote.

Unsanitary Conditions

The massive wave of population entering cities helped to spread diseases. To make matters worse, clean water and proper sanitation were virtually unheard of, making disease even more common.

Poor Housing

Housing was constructed quickly and cheaply to provided for the great numbers of people entering cities. Many tenements were unhealthy due to lack of light or sanitation. Neighborhoods of tenement housing became slums where crime flourished.

NEXT UP: What are we going to do about all the problems created by our industrial period?? Just wait… those Progressives have a few ideas. What would you do?