Chapter 6

After the Civil War, US was still an agricultural nation

Wealth of natural resources

Oil- Black Gold- 1859- Edwin L. Drake used steam engine to drill for oil Petroleum refining for

kerosene huge business in Cleveland

Automobile engines drove demand for gasoline

Coal and Iron Ore- Henry Bessemer, British -

Bessemer Process – inject cool air into molten iron ore removes carbon to create steel More railroads, bridges,

buildings,

Thomas Alva Edison create research laboratory in Menlo Park, New Jersey

Light bulb 1880 and entire system of producing and distributing electricity

Power ran machines – electric street cars and light

Telegraph 1844- Samuel Morse 1866 transatlantic cable Can locate factories any place

not just near rivers Alexander Graham Bell -1876-

invent telephone Work moved from homes to

large factories including clothing

More garment workers- Prices drop

Skyscrapers Invention of steel frame- support floors and walls Invention of elevators

Transit Subways or street cars transport people

Printing 1890 higher literacy rate, paper mass produced=cheap,

printing on both sides of page, faster production brought down newspapers prices= higher demand

Airplanes – Orville and Wilber Wright Glider with an engine- 1903 Kitty Hawk N.C. 12 seconds and

120 ft. (2 yrs= flew 24 miles) Photography- George Eastman

developed convenient camera with flexible film

1. How did Railroads unify the country

2. What were the reasons of the demand of railroad reform?

Made travel reliable and westward expansion possible

Nation’s first “big business” Federal govt. provided huge

subsidies and land grants 80 companies receive 17 million acres

of public land Transcontinental Railroad- During Civil War, Congress

authorized land grants and loans for a transcontinental railroadCentral Pacific (From West)

and Union Pacific (from east) used army veterans and Immigrants for labor

Railroads met at Promontory Utah May 10, 1869 “Golden Spike”

By 1900 four other transcontinental railroads are completed

Growth of railroads led to growth in towns and established new markets

Promotes trade and interdependence towns begin to specialize in specific products (Pittsburgh- Steel, New York-Clothing, Massachusetts-Textiles, Chicago- Meatpacking

Time Zones 1869 Professor C.F. Dowd

proposed the earth be divided into 24 time zones

1884 international conference set world wide time zone

Farmers upset over railroad corruption Railroad companies sold land to

other businesses rather than individual settlers

Railroad companies agree to fix prices charge different customers different rates.

Grange farmers organization 1867 demand government control over

railroad industry Sponsored state and local

candidates and pressed for laws to protect interests (Set rates) (Granger Laws)

Laissez Faire? Railroad companies fight back

Munn v. Illinois 1877 - Supreme Court upheld granger laws and government won right to regulate railroads for benefit of farmers and consumers Establish right of government to

regulate private industry to serve public interest.

1887 U.S. Congress passes Interstate Commerce Act to regulate railroad rates Only Federal govt. can regulate

interstate trade

Bessemer Process creates new demand for steel.

Great Lakes region emerges as leading steel region due to abundant coal and iron resources

More jobs = Expanding Middle Class

What is Social Darwinism?

How did Big Business leaders use Vertical Integration and Horizontal Integration to build monopolies?

Grew out of Charles Darwin’s belief of evolution- to pass successful traits to a new generation Natural selection would weed out less suited

individuals Economist justified doctrine of laissez faire

“leave alone” Economy should not be regulated for success

or failure of business Individual responsibility of success or failure Riches were a sign of success while poor must be lazy

or inferior people who deserved their lot in life Violates Munn v. Illinois 1877

Companies form monopolies- complete control over an industry production, wages and prices (Violate Adam Smith’s Markets)

To avoid monopolies Rockefeller sold trusts Friends sat on boards of other competing

companies -individual businesses but ran as one large business

Large quantities of natural resources and cheap labor is the key to businesses

Andrew Carnegie enters steel business in 1873 in Pittsburgh

Search for new machines and techniques to make better products more cheaply.

Attracted talented chemists and organizers by offering stock in the company

Maintained Vertical integration- bought our suppliers (coal fields)Transportation (ships and railroads)

Maintain Horizontal integration- buying out competitors

Controls most of the steel industry 1899 he manufactured more steel than all the factories in Great Britain

Resources Mines Mines Mines

Factories factories factories factories

Transportation Trains/ Ships Trains/ Ships Trains/ Ships

Markets Stores Stores Stores

Edwin Drake’s oil drill in Pennsylvania John D. Rockefeller Standard Oil Company of

Ohio processed 90% of American oil reaped huge profits by paying his employees

extremely low wages and driving competition out of business sold oil at a lower price than the cost to produce it. Then raised prices far above original levels

Did not pass profits to workers or prices for consumers

Industrialists got the name Robber Barons Philanthropists- Rockefeller gave away $500

million for good works such as research Carnegie donated over $325 million Rich had a moral duty to spread their wealth

George Pullman (Horizontal integration) Manufactured sleepers

and railroad cars Also built town which

provided all basic needs (Company Town) Clean brick homes, one

window in every room Doctors, shops, athletic

fields Under company control Residents not allowed to

loiter on front porches or drink alcohol

Ensure a stable workforce

Industrial Revolution-Raised Standard of living but Middle class consumers fear the power of monopolies

Sherman Antitrust Act 1890 - illegal to form a trust that would interfere with free market trade between states or countries Trust wasn’t easy to define trustees would own and

make decisions for the companies Large trusts would quickly divide into a single

corporationHard to prosecute

Effects of Industrialization Change- from self employed Farmer became the

factory worker Standard of living increases Workers life miserable US looks overseas for new markets to sell goods

Social Darwinism and Working Conditions Steel mills demanded 7 day workweek Most factory workers worked 12 or more hours per

day 6 days per week Employees were not entitled to vacation, sick leave,

unemployment compensation, or reimbursement for injuries that occurred on the job.

Dirty, poor ventilated factories, workers performed repetitive mind dulling tasks with dangerous equipment 1882- average 675 laborers were killed per week in

accidents Wages were so low families could not survive unless

everyone held a job $.27 / day child 14 hour day, women earned $267/ year men- $498/ year Carnegie made $23 Million no income tax

Organize to be recognized- Tactics used Strikes, Picketing, Boycotts, Slowdowns

Employers fight back Large supply of labor

Fire striking workers Lock outs- close factory if labor organizes Blacklist -union leaders names Yellow Dog Contracts- force employers to sign

agreement not to join union

National Labor Union formed 1866 Skilled and unskilled workers Craft Union based on each industry Convinced congress to grant 8 hour work day

for government employees

 Great Strike of 1877 1873 depression- railroads cut worker wages 1877 –B.&O. R&R in Maryland workers

stopped working Next day W. Virginia workers stopped

working (500,000 workers join strike) Federal troops restore services but strike

spread to other railroad lines Pittsburgh militia refused to stop strike,

Philadelphia militia shot 26 people Sympathizers attacked militia support for strikers spread across the

Midwest Federal and local troops broke up strikes but

hundreds lost lives Violence cause many people to not support

striking

1869 Knights of Labor- “An injury to one is a concern to all”

Great Strike indicated that workers would unit to support others

Included all workers Abolish Child Labor Support 8hr work day, Equal pay for equal work Saw strikes as a last resort,

Haymarket Square Riot May 4 1886, members held meeting in Haymarket Square Police attempt to break up- someone threw a bomb kill 7

police officers Americans again fear organized labor too radical and

violent 

American Federation of Labor (AFL) Samuel Gompers Most successful led by Samuel Gompers

Focused on Collective Bargaining or negotiations between leaders of labor and management to reach written agreement on wages, hours, and working conditions.

Organized only skilled workers AFL used strikes as a major tactic American Railway Union - Eugene V. Debs -

included both skilled and unskilled workers Unskilled workers easily replaced.

Many strikes turned violent, Unions still ineffective because of the stream of

Immigrants who would work for low wages= scabs