CHAPTER 18

Wonder and Woe The Rise of Industrial America 1865-1900

World’s Fair Chicago 1892

Results of American industrial, culture, and commerce dominance.

AC/DC debate Chicago World’s Fair: display of

US industrial and racial superiority (campaigned by Armour, Swift,

McCormick, Field, and Pullman) *Fredrick Douglas called it,

“civilization ” and “savagery”

The Emergence of Big Business Sources of the Industrial

Revolution Enormous quantities of two

essential items for industrialization 1. Raw Materials

2. Cheap labor

New Technology/Inventions

Government policy-Laissez-faire From1870-1900 Govt. did very little

domestically

Main Duties: *Deliver the Mail

*Maintain a national military

*Collect taxes and tariffs

*Conduct foreign policy

EXCEPTION: administer/distribute the annual Civil War veterans pension

The Emergence of Big Business

The Railroads The “original” big business

Modern Business Practices Advantage of incorporating &

issuing stock- raise huge amounts of capital

Other businesses will borrow ideas from RR industries

Development of modern management Standardization to be more

efficient Time Zones

Equipment

Standard gauge

Complex hierarchies to run business

Which view was correct?

Demonizing the Monopoly

Americans grew increasingly worried about the rising power of

railroads, the largest of which were often criticized as monopolies that

strangled their competition.

The railroad was “modern emblem

of motion and power- the pulse of the continent”.

OR

The Emergence of Big Business

Rising Concern over Corporate Power Monopoly-control of an

industry or market by one corporation Fears

Too much power in the hands of a few?

Conflict of nation’s republican values?

Corruption of officials?

Price fixing on farmers?

Credit Moblier Scandal

HAPPINESS VS. PROPERTY Increasingly, concern grew

about the accumulation of wealth in the hands of the few at the expense of the US worker

Jefferson wrote about the pursuit of HAPPINESS…not the pursuit of property!

THE ARGUMENT against: 1. Industrial growth moved us farther

and farther away from Jefferson’s ideal ‘agrarian ’nation…

the average American struggled to adjust to the new forms of economic organization brought about by the corporation revolution

2. Corporations were simply legal agreements between legislators and businessmen (charters). Americans (then and now)tend to distrust these groups…especially when they ‘team up’

3. Corporations threatened to destroy free trade and healthy competition…the very core of capitalism. The benefits of economic opportunity and lower costs were destroyed by rampant consolidation and monopolistic behaviors

The Emergence of Big Business Andrew Carnegie:

Steel: most important for growth

AC Rags to riches story

Carnegie Steel 1870-1900 Reduce production costs to lowest

possible level Hire only the best Technology/reduce skilled labor Vertical integration &

horizontal integration Cutthroat practices to out

maneuver competition Carnegie Steel becomes

world’s largest industrial corporation

Eventually sold to JP Morgan for $400 million…became US Steel

The Emergence of Big Business

Rockefeller & Standard Oil Trust Vertical & horizontal integration of

petroleum industry Controlled all from production to retail

AND controlled by merger all companies into one giant system: the TRUST (Standard Oil controlled 90% of oil industry)

US Government moves away from laissez faire: 1887: Interstate Commerce

Commission to curb power No Power/15 out of 16 cases in

favor of BB!!!!!

1890: Sherman Anti-Trust Act Prohibits monopolistic behavior

ANYTHING IN ‘RESTRAINT OF TRADE’

IRONY: COURTS USED IT USUALLY TO RULE THAT LABOR STRIKES/WORK STOPPAGES WERE IN RESTRAINT OF TRADE

Only 14 cases prosecuted 1890-1914

Rock created holding companies to counter anti-trust laws

The World of Work Transformed

The Impact of New Technology

Machinery transformed skilled labor into unskilled

Workers easily fired & replaced

Low wages & long hours

***Employers enjoyed more power over their employee due to workers being expendable*****

The World of Work Transformed

Hard Times for Industrial Workers Long hours & low pay

2 hrs/6 days a week Avg. $400-500 a year but

$600-800 decent living Make up difference/work at

home with family

Economic Depressions (1873-1877 & 1893-97) Contraction of growth High rates of unemployment

(14%) Business failure

Monotonous work Dangerous workplace

35,000 killed on avg. a year (1880-1900)

Child labor 180,000 to 1.7 million (1880-

1900)

“The Protectors of Our Industries”

The World of Work Transformed

Intimidation & Conflict National Labor Union founded

in 1866 Formed to create an 8 hour

day/Dept. of Labor (300,000 members

Depression wiped out union

Employers response to unions Blacklist

Scabs

Strike breakers

36,757 strikes between 1881-1905/ 6 million workers

Great Railroad Strike of 1877

Division among unions Chinese Exclusion Act of 1882

Halted Chinese immigration, limited civil rights of Chinese, forbade naturalization of Chinese

Anti-black

“Captains of Industry” Or “Robber Barons” Beneficial Or Corrupt

Offered an ever-growing

number of new products and services

Jobs

Prosperous economy

Greedy capitalist who grew rich by devious business practices

Exploitation of workers

Political manipulation

Conflicting Visions of Industrial Capitalism

Capitalism Championed New cheap consumer goods to

phonographs Increased life expectancy (38.3 in

1850 to 50 in 1910) Transportation & communication Wages rose 50 % between 1860-

1900 Andrew Carnegie

Gospel of Wealth- importance of philanthropy

Social Darwinism Business men invoked the high-jacked

theories of Charles Darwin…what became known as Social Darwinism

“Survival of the Fittest”-Herbert Spencer

Capitalism Criticized Growing gap between Haves and

Have-nots

“Millionaires are

the bees that make the most

honey and contribute most to the hive even after they have

gorged themselves full.”

Andrew Carnegie

Conflicting Visions of Industrial Capitalism

“Millionaires are the bees that make the most honey and contribute most to the hive even after they have gorged themselves full.”

Andrew Carnegie

“Law! What do I care about the law? Hain’t I got the

power! Vanderbilt

“I can hire one half of the working class to kill the other half.”

Gould Chicago, would you

like a University???

“If you have to ask how much it costs, you

can't afford.” J.P. Morgan

Conflicting Visions of Industrial Capitalism

Power in Numbers: Organized Labor Knights of Labor founded in 1869

formed in attempted to completely reformed wage labor system/UTOPIAN agenda

Led by Terrence Powderly, Uriah Stephens

All inclusive union that worked to abolish child and convict labor, equal pay for women, progressive income tax, and cooperative ownership of mines/factories

10% black & 10% women Lost support after the Haymarket Riot Lost many members to a new

organization AFL

American Federation of Labor (AFL) 1886: Led by Samuel Gompers

Organized only for SKILLED workers

Did not seek labor reform as much as basic economic goals

“Bread and Butter Issues”

Conflicting Visions of Industrial Capitalism

The Great Upheaval

Haymarket Strike- 1866 Thousands gathered in Chicago during

a general strike

Bomb! Police and strikers were killed and injured

Trial! Conviction! Execution!

Consequence: labor unions were radical and violent!!! Membership/support for labor issues began to diminish

Homestead Strike-1892

Pullman Strike-1894 Led by Eugene Debs Pullman 1894: wage cuts and firing of

union employees Union boycott meant the RR industry

was crippled across the nation! Supreme Court and President used

court injunctions and military to force workers back to work on the grounds that their strike impeded the delivery of the US mail.