The Expansion of Industry

19th Century America

• US became industrialized

• Industrialism– A change in production from hand

craftsmanship to machine manufacturing– More goods are produced from machines

Technological developments

• Bring about major change• Bessemer process (1855)

– Make steel from iron– Take out the carbon– Stronger, more flexible, rust

resistant

• Industrial age not possible with out the invention of steel

Black Gold

• Edwin F. Drake• Used steam engine to drill

for oil• This method became

practical• Started the oil boom• Transform oil into kerosene • Gasoline (a byproduct) later

becomes important

Electricity

• Edison– Came up with a way to produce/distribute

electrical power– Changed businesses

• Ran machine– Factories can locate where ever they want

• Contributed to electrical run inventions– Electric street car

» Leads to growth of cities

• Westinghouse made home use available

Telephone

• Alexander Bell– Communication

possible– Invention of the

telephone– New jobs for

women– Easier to do

business

Typewriter

• Christopher Sholes

• Helps to get women in the work force by created new jobs for women

Key factors needed for growth

• Abundant supple of natural resources– Discovery of coal, oil, and iron ore

• Improved transportation – Railroad made with steel– Transcontinental railroad built in 1869

• Labor force– Population shifted from rural to urban centers– Immigration

• Government support – Minimal regulations– No taxes on personal income– Tariff was high– No environmental control

• Explosion of inventions

Skyscraper

• First one built in New York City in 1901

• First one in Chicago– The Home Insurance

Building• No single innovation

affected change more than the development of steel

• Steel becomes king!• Easy and cost effective• Replaces iron

Entrepreneur

• John D. Rockefeller– Oil baron

• Andrew Carnegie– Steel

• J. Pierpont Morgan– Banker took over Carnegie Steel– First billion dollar company

• Cornelius Vanderbelt– Railroad giant

Significance• Helped to industrialize the United States• Used their genius to gain advantage over their

competition• Helped to make big business what it is today• Used new management techniques to improve

quality and cut cost• One of the new strategies was to create a

monopoly• Supported the idea of Social Darwinism

– Wealthy was a measurement of ones worth– Supported laissez – faire economic system– Only way to grow strong is to allow talent members to

rise to the top – No public aid or assistance to the poor

Vertical integration

• Bought out all suppliers• Controlled all levels of production• Example = Carnegie Steel

– His miners got the ore from the earth– His ships floated it across the Great Lakes– His railroads delivered it to the factories in Pittsburgh– His employees poured in into the mold

Goal: to improve efficiency by making the supplies more reliable and controlling the production at all stages

Horizontal Consolidation

• all the same companies

• Consolidate with the competitors to monopolies market

Rockefeller developed a trust• A business combination in which management

and control of the member corporations are in a single board of trustees– You do not own the companies BUT you control them

because you have a majority of their stocks– Not a merger because companies are run as separate

companies– Convinced stockholders in various smaller companies

to give their stocks to the board of Directors

Government Answer

• Sherman anti-Trust Act in 1890– To protect free competition– Outlawed combinations which would restrain free

trade– Not effective not enforced– No teeth– No resources to enforce it– Government was pro business at the

time– Created “holding companies”

• Holds companies in either parts or whole• May or may not be related• Buy out the stocks of competing companies

Bosses of the Senate

• From Puck Magazine

• Senate of the Monopolies, by the Monopolies for the Monopolies

Industrialization benefited the Middle Class

• National wealth and income grew• Middle class Americans experience greater

comfort and conveniences in daily life– Talk on the phone– Drive cars – later on– Buy ready made clothes

• Department stores grew which created new types of jobs– Marshall Field’s – Sears catalog starts in 1907

Captains of Industry

or

Robber Barons

Life for the average American

• Jobs moved from home to factory

• Majority still used candlepower

• Had no indoor plumbing or heating

• Cooked on wood-fed stove

• Could not afford telephones

• Unequal distribution of wealth

Laboring in a factory

• 10-12 hours a day• Unhealthy conditions

– Poorly lit, overheated and badly ventilated, noisty

• $5 a week / 8cents a day• Constant threat of being fired/replaced

– Lots of immigrant easily replaces• Well below poverty line• Lived in dumbbell tenement in crowed urban centers• Child labor 1/5 were working and not in school• Injured on job = fired

– Accidents were common from bad equipment and no training

• Treated with lack of respect

Strikes

Joined Labor Unions to demand better working condition and an 8 hour day!

Result of discontent among workers

The Great Strike of 1877The Haymarket StrikeThe Homestead Strike

The Pullman Strike

The Great Strike

• Railroad workers went on strike to protest wage cut

• Lasted about a week• Gov steps in because

lack of rail transportation was interfering with interstate trade

The Haymarket Strike• Wanted changes in labor

– 8 hours work day• Many strikes took place

throughout country• Police called in – brutally

put strike down• 3,000 gather in Chicago• Protesting police brutality

that took place earlier• Police arrive• Crowds begins to leave• Bomb went off• Police fired = several

deaths• We will never know• Public opinion turns against

labor movements

The Homestead Strike

• Carnegie Steel Company• Guards from Pinkerton Detective

Agency– Hire to protect plant when they hired

the scabs• Violence breaks out• Nine dead workers• Forced Pinkerton Agencies out• Closed plant• National guard put down the

strike• Steel workers and miners across

nation strike– Each time troops and local militia

call in to put the strike down

The Pullman Strike

• Pullman Town• Company lays off workers• Cut wages w/out cutting rest

and costs at the general store

• Workers were getting about 2 cents a day = 40 cents today

• Pullman refused arbitration• Strike breaks out due to his

mis-treatment of the workers• Hired strike-breakers• Strike turns violence• President sends in troops

(12,000 sent in – 30 deaths)• Strike over

– Strikers fired/blacklisted

ImpactStrikes are associated with violence

Employers began to rely on the government for protection against strikes

Employers use the courts to get order against unions citing the Sherman Anti-Trust Act

Labor movement becomes fractionalized