The modern United States was created by social changes associated with the growth ofbig business and advances in technologies. After Reconstruction, railroad companies and the steel and oil industries expanded and major inventions changed how people lived.

Factors Contributing to the Second Factors Contributing to the Second Industrial Revolution (SIR)Industrial Revolution (SIR)

1. wealthy Europeans & Americans eager to 1. wealthy Europeans & Americans eager to investinvest

2. Government maintained 2. Government maintained high tariffs high tariffs (taxes) to (taxes) to

protect US industries against foreign competition protect US industries against foreign competition

3. 3. Laissez-Faire Policy Laissez-Faire Policy (not interfering with the (not interfering with the

economy) to promote business expansion; providing economy) to promote business expansion; providing

companies with land grants & loans.companies with land grants & loans.

4. Growing Population of 4. Growing Population of laborers & consumerslaborers & consumers; ;

5. 5. technology & inventions; improved transportation & technology & inventions; improved transportation & communicationscommunications

Growth of Big BusinessGrowth of Big Business• Small; privately owned enterprises lacked Small; privately owned enterprises lacked

the financial resources to build huge the financial resources to build huge factories.factories.

• To enable companies to raise large amounts To enable companies to raise large amounts of working capital (cash) the corporate form of working capital (cash) the corporate form of business came into use.of business came into use.

• Corporation is a company usually owned by Corporation is a company usually owned by many people; each of whom becomes a part many people; each of whom becomes a part owner by purchasing shares owner by purchasing shares of stock in the company of stock in the company. .

Growth & ConsolidationGrowth & Consolidation

• A firm that bought A firm that bought out all its out all its competitors could competitors could achieve monopoly.achieve monopoly.

• MonopolyMonopoly is the is the complete control complete control over its industry’s over its industry’s production; wages; production; wages; and pricesand prices..

What is the goal of the game?

Growth & ConsolidationGrowth & ConsolidationNew Forms of business combination & New Forms of business combination &

practices emergedpractices emerged• Trust-Trust- was a was a

giant business giant business combination combination consisting of a consisting of a number of number of corporations corporations engaged in the engaged in the same field or in same field or in related field.related field.

• Holding Company-Holding Company- did did not engage in the not engage in the production & distribution production & distribution of goods & of goods & services.services.

• It controlled stock It controlled stock interest in a number of interest in a number of related enterprises called related enterprises called subsidiaries & devoted subsidiaries & devoted itself to directing their itself to directing their operationsoperations

Growth & ConsolidationGrowth & ConsolidationNew Forms of business combination & New Forms of business combination &

practices emergedpractices emergedVertical IntegrationVertical Integration

• A single company A single company owns & controls the owns & controls the entire process of entire process of product’s product’s developmentdevelopment..

• From the raw From the raw materials to materials to manufacturing & manufacturing & sale of the finished sale of the finished product.product.

• Ex: Carnegie Steel Ex: Carnegie Steel CompanyCompany

Horizontal IntegrationHorizontal Integration• Bringing together the Bringing together the

many firms in the same many firms in the same business. business.

• Ex: Rockefeller’s Ex: Rockefeller’s Standard Oil--- UNFAIR Standard Oil--- UNFAIR MONOPOLIES giant MONOPOLIES giant company bought up all company bought up all competition.competition.

Pros & Cons of Big Pros & Cons of Big BusinessBusiness

AdvantageAdvantage1.1. Build modern Build modern

efficient plantsefficient plants

2.2. Up to date Up to date machinerymachinery

3.3. Purchase of raw Purchase of raw materials in large materials in large quantityquantity

4.4. A nationwide or A nationwide or worldwide worldwide distribution networkdistribution network

5.5. Increase sales Increase sales through advertisingthrough advertising

DisadvantageDisadvantage1.1. Can become Can become

monopolisticmonopolistic

2.2. Destroy competitionDestroy competition

3.3. Drive out small Drive out small businessbusiness

4.4. Enormous wealth & Enormous wealth & power in hands of fewpower in hands of few

5.5. Excessive control Excessive control power over government power over government officialsofficials

Results of Industrial GrowthResults of Industrial Growth

• AssemblAssembly Liney Line--manufactured goods assembled on a conveyor belt; each worker assigned to doing one particular thing. When product reaches the end of the line; it is complete and ready to use. This was popularized by Henry Ford (Model T automobile).

• Labor Saving Machinery- machine operator could do a job that previously required the work of many workers.

• Division of Labor- each worker performed only one operation; making the process cheaper; efficient but also more repetitive.

Mass ProductionMass Production: More efficient Production Methods: More efficient Production Methods

Assembly Line

Results of Industrial GrowthResults of Industrial GrowthNew Marketing TechniquesNew Marketing Techniques

Department StoresDepartment Stores• Goods of every Goods of every

description were description were sold under one sold under one roof and featured roof and featured in separate in separate departments.departments.

• Pioneered by two Pioneered by two companies: Montgomery companies: Montgomery Ward (1872) & Sears (1895)Ward (1872) & Sears (1895)

• Illustrated catalogs listing Illustrated catalogs listing variety of merchandise and variety of merchandise and customers chose what they customers chose what they wanted and sent their order wanted and sent their order by mail.by mail.

Catalog SalesCatalog Sales

Robber Barons or Captains of IndustryRobber Barons or Captains of Industry

• Robber barons: business leaders who Robber barons: business leaders who built fortunes from unfair trade practices built fortunes from unfair trade practices or overcharging the publicor overcharging the public..

• Captains of Industry: business leaders Captains of Industry: business leaders served their nation in a positive way.served their nation in a positive way.

Emergence of Captains of Emergence of Captains of IndustryIndustry

Cornelius VanderbiltCornelius Vanderbilt

• Became famous Became famous for consolidating a for consolidating a number of short number of short railroad lines railroad lines between NYC & between NYC & Buffalo to the Buffalo to the country’s first great country’s first great railroad systemrailroad system; ; the NY Central the NY Central StationStation

J. Pierpont MorganJ. Pierpont Morgan

• Owner of the Owner of the largest private largest private banking & securities house of banking & securities house of America. America. He reorganized many He reorganized many bankrupt railroadsbankrupt railroads

• In 1901; Morgan & his In 1901; Morgan & his associates purchased the associates purchased the Carnegie Steel Co & merged it Carnegie Steel Co & merged it with other steel producers to with other steel producers to form form enormous monopoly enormous monopoly known as US Steel Corp known as US Steel Corp (nation’s first billion-dollar Co.)(nation’s first billion-dollar Co.)

Emergence of Captains of Emergence of Captains of IndustryIndustry

Philip D. Armour; Philip D. Armour; Nelson Morris & Nelson Morris & Gustavus SwiftGustavus Swift• Pioneers in the Pioneers in the

development of development of meat meat packing industry.packing industry.

• Great numbers of pigs & Great numbers of pigs & cows were slaughtered & cows were slaughtered & prepared for market.prepared for market.

• The waste part of the The waste part of the animals were converted animals were converted into by products such as into by products such as glue; soap & fertilizer.glue; soap & fertilizer.

James DukeJames Duke

• Formed the American Formed the American Tobacco Company.Tobacco Company.

• They absorbed their They absorbed their competitors by competitors by threatening to ruin threatening to ruin them through price them through price warswars

Andrew CarnegieAndrew CarnegieAndrew CarnegieAndrew Carnegie

Andrew Carnegie

Andrew Carnegie

$ Scottish businessmanScottish businessman$ One of the first One of the first

industrial moguls to industrial moguls to make his own fortune.make his own fortune.

$ Owned the Carnegie Owned the Carnegie Steel CompanySteel Company

$ Passion for supporting Passion for supporting charitiescharities$ 80% of fortune went 80% of fortune went

to education.to education.$ At time of death, he At time of death, he

had given away – 350 had given away – 350 millionmillion..

$ Scottish businessmanScottish businessman$ One of the first One of the first

industrial moguls to industrial moguls to make his own fortune.make his own fortune.

$ Owned the Carnegie Owned the Carnegie Steel CompanySteel Company

$ Passion for supporting Passion for supporting charitiescharities$ 80% of fortune went 80% of fortune went

to education.to education.$ At time of death, he At time of death, he

had given away – 350 had given away – 350 millionmillion..

John D. RockefellerJohn D. RockefellerJohn D. RockefellerJohn D. Rockefeller

John D. Rockefeller

John D. Rockefeller

$ Standard Oil Co.Standard Oil Co.$ Eventually owned all Eventually owned all

oil companies in US.oil companies in US.$ He bought out He bought out

competitors or drove competitors or drove them out of them out of business.business.

$ He hated He hated competition (he saw competition (he saw it wasteful)it wasteful)

$ Standard Oil Co.Standard Oil Co.$ Eventually owned all Eventually owned all

oil companies in US.oil companies in US.$ He bought out He bought out

competitors or drove competitors or drove them out of them out of business.business.

$ He hated He hated competition (he saw competition (he saw it wasteful)it wasteful)

Standard Oil Co.Standard Oil Co.Standard Oil Co.Standard Oil Co.

So what happens?So what happens?So what happens?So what happens?

Workers who keep industry afloat while big business rests and reaps the rewards of the work completed.

Inventors: Notable African-Inventors: Notable African-American & WomenAmerican & Women

• Elijah McCoyElijah McCoy- An African-American - An African-American who developed an automatic who developed an automatic lubricator for steam engines.lubricator for steam engines.

• Others tried to copy but it didn’t work.Others tried to copy but it didn’t work.

• Customers would ask for (the real Customers would ask for (the real McCoy) that’s where the famous McCoy) that’s where the famous expression comes from.expression comes from.

Inventors: Notable African-Inventors: Notable African-American & WomenAmerican & Women

• Madam Madam C.J.Walker-C.J.Walker- An An African-American African-American woman who woman who invented a hair invented a hair growing lotion for growing lotion for black women to black women to use to relax hair.use to relax hair.

• She became the She became the first female first female African-American African-American millionairemillionaire

• Sarah Goods-Sarah Goods-invented invented cabinet bedcabinet bed

• First African-American First African-American woman to receive a woman to receive a patentpatent

• Patent-a document that Patent-a document that certifies that invention & certifies that invention & has been registered has been registered with the government to with the government to protect rights of the protect rights of the inventioninvention

Labor UnrestLabor UnrestMajor Strikes of the Late 1800sMajor Strikes of the Late 1800s

Strike Year/City Industry or Company

Causes Effects

Great Railroad Strike

1877 at Martinsburg West VA

Baltimore & Ohio RR

Wages cut by the RR

Workers destroyed rails; train stations and train cars.Federal troops were called in to end strike.

Haymarket Riot

1886 at Chicago IL

Factory workers across Chicago

Workers protested police actions

7 police were killed by a bomb.The Knights of labor were blamed

Labor UnrestLabor UnrestMajor Strikes of the Late 1800sMajor Strikes of the Late 1800sStrike Year/City Industry or

CompanyCauses Effects

Homestead Strike

1892 at Homestead PA

Carnegie Steel Company

Wage Cuts and a 70-hour work week.

Workers & private guards were killed.State militia broke up the strike.Union broke up

Pullman Strike

1894 at Pullman IL

Pullman Company

Wages cut without cutting cost of employee housing

Chicago had no trains for 2 months; 27 states had partial or no train services

Government RegulationsGovernment RegulationsThese big businesses acquired enormous

financial wealth. They often used this wealth to

dominate and control many aspects of

American cultural and political life, and as a

consequence of these practices, by the

beginning of the 20th century big business

became the target of government reform

movements at the state and national levels.

Why The Labor Movement/ Unions?Why The Labor Movement/ Unions?

Factory workers worked 12 or more hours a day; six days a Factory workers worked 12 or more hours a day; six days a week week (long workdays)(long workdays)

Employees were not entitled to vacation; sick leave; Employees were not entitled to vacation; sick leave; unemployment compensation; or reimbursement for unemployment compensation; or reimbursement for injuries suffered on the job injuries suffered on the job (no benefits)(no benefits)

They worked in dirty; poorly ventilated factories; workers They worked in dirty; poorly ventilated factories; workers had to perform repetitive mind dulling tasks; sometimes had to perform repetitive mind dulling tasks; sometimes with dangerous or faulty equipment with dangerous or faulty equipment (no safety)(no safety)

Wages were so low that most families could not survive Wages were so low that most families could not survive unless everyone held a job unless everyone held a job (low pay)(low pay)

In sweatshops or workshops rather than in In sweatshops or workshops rather than in factories; workers had little choice but to put up factories; workers had little choice but to put up with the conditions.with the conditions.

Sweatshop employment required few skills; it Sweatshop employment required few skills; it was often open to women and children.was often open to women and children.

Sweatshop paid the lowest wages: 27 cents for a Sweatshop paid the lowest wages: 27 cents for a child’s 14 hour day. Women earned an average child’s 14 hour day. Women earned an average of $267 a year; nearly half of men’s average pay of $267 a year; nearly half of men’s average pay of $498of $498

Child LaborChild Labor• Many of the child laborers were orphans that had no other Many of the child laborers were orphans that had no other

way of getting food. way of getting food. These children were especially These children were especially subject to slave-like laborsubject to slave-like labor. Most of the time, they were . Most of the time, they were not paid. Employers justified this by saying that they not paid. Employers justified this by saying that they were already providing the children with food, clothing, were already providing the children with food, clothing, and shelter.and shelter.

• Children suffered freezing temperatures, breathed bad air Children suffered freezing temperatures, breathed bad air quality (in the mines), and worked around dangerous quality (in the mines), and worked around dangerous machinery. machinery. They had to work long hours, sometimes up They had to work long hours, sometimes up to 19 hours a day. to 19 hours a day.

• Children were subject to harsh forms of punishment, Children were subject to harsh forms of punishment, especially for being late or for not meeting their quota. especially for being late or for not meeting their quota. One type of punishment was to be “weighted.” One type of punishment was to be “weighted.” The The overseer would tie a heavy weight to a worker's neck, overseer would tie a heavy weight to a worker's neck, and have them walk up and down the factory aisles in and have them walk up and down the factory aisles in front of the other children as an example.front of the other children as an example.

• With little time or energy left for school; child With little time or energy left for school; child laborers laborers gave up their futures gave up their futures to help their families to help their families make ends meet.make ends meet.

Though some saw child labor as an advantage, Though some saw child labor as an advantage, LewisLewisHine’s photos of thousands of children awakened societyHine’s photos of thousands of children awakened societyto the cruelties of child labor. The children’s to the cruelties of child labor. The children’s circumstances slowly started changing as the governmentcircumstances slowly started changing as the governmentbegan making new laws. began making new laws.

Child LaborChild Labor

Where does most child labor occur?

1904

The National Child Labor Committee forms. It is not until 1938 that federal law preventing the labor of children under the age of 14 goes into effect. (One Hundred Years Toward Suffrage: An Overview)

(The History Place: Child Labor in America 1908-1912 )

“Galley Labor”“Galley Labor”

The Knights of The Knights of LaborLabor

The first successful labor organizationThe first successful labor organization

A secret organization made up ofA secret organization made up of

skilled craft workersskilled craft workers

Accepted African-Americans, women Accepted African-Americans, women

and immigrants and immigrants

Goals of the Knights of Labor

Goals of the Knights of Labor

ù Eight-hour workday.Eight-hour workday.

ù Abolition of child and prison Abolition of child and prison labor.labor.

ù Equal pay for men and Equal pay for men and women.women.

ù Safety codes in the workplace.Safety codes in the workplace.

ù Prohibition of contract foreign Prohibition of contract foreign laborlabor..

The American Federation

of Labor (AFL): 1886

The American Federation

of Labor (AFL): 1886

Samuel Gompers-President of AFLSamuel Gompers-President of AFL

The AFL was not one union but groups of crafts and trade unions.

Only skilled workers as members

Samuel Gompers favored collective bargaining over strike. It was attempt to negotiate contracts between workers and employers.

How the AF of L Would Help the

Workers

How the AF of L Would Help the

Workersù Catered to the skilled worker.Catered to the skilled worker.

ù Eight hours workdayEight hours workday

ù Maintained a national strike fund.Maintained a national strike fund.

ù Higher wagesHigher wages

ù Safer working conditions and benefits Safer working conditions and benefits for injured workersfor injured workers

ù Mediated disputes between Mediated disputes between management and labor.management and labor.

ù Pushed for Pushed for closed shopsclosed shops..