INDUSTRIALIZATION AND THE “GILDED AGE”

THE BIG QUESTIONS What factors encouraged American economic growth in the decades after the Civil War? How did workers fare in the new industrial America? Could workers have improved their working conditions without organizing labor unions? How did industrialization bring both positive and negative changes?

BACKGROUND You learned about the Industrial Revolution in World History last year, its beginnings in Great Britain, and the results of industrialization on society American industrialization proceeded at a rapid pace in the decades following the Civil War. Some people consider this period America’s “Second Industrial Revolution.” The United States soon became a world leader in industry

TECHNOLOGICAL INNOVATIONS Steam and electricity replaced human and animal strength Iron replaced wood, and steel replaced iron (The Bessemer process made steel production more economical) Steam power drove textile mills and depended on coal Petroleum products were used in lighting and machine lubrication The internal combustion engine used gasoline from oil to run cars and the first airplanes

THE COMMERCIAL USE OF ELECTRICITY First used as a means of communication along telegraph wires In 1876, Alexander Graham Bell (1847-1922) invented the telephone In 1879,Thomas Edison produced the first effective electric light bulb Electricity ran motors to drive machinery in factories By 1900, it was powering streetcars and subway trains By 1920s, it was used for appliances

THE GROWTH OF RAILROADS After the Civil War, work began on the Transcontinental Railroad Many workers on the California side were Chinese immigrants Finally connected in 1869 at Promontory Point, Utah Trunk lines were soon built to connect to the main transcontinental line, and additional new tracks were laid throughout North America

DEVELOPMENT OF A NATIONAL MARKET Railroads, canals, telegraphs and telephones linked together different parts of the country Shipping was less expensive (improved transportation) Goods were cheaper (less expensive and quicker to produce) New methods of selling were developed (department stores, chain stores, mail-order) Manufacturers advertised in magazines and newspapers in order to sell goods throughout the country

POPULATION GROWTH Between 1850 and 1900 the population more than tripled Fueled by high birthrate and a constant stream of European immigrants Created favorable conditions for business expansion Placed increasing demands on the natural environment and resources

NEW TYPES OF BUSINESS ORGANIZATIONS Corporations became common Corporations issue shares to investors (stocks) Shareholders are partial owners More stock = larger share = more dividends ($) By people pooling money, companies could raise vast sums of money needed to fund industries Corporations made industrial production possible

ENTREPRENEURSHIP AND PHILANTHROPY An entrepreneur is a person who starts a business in the hope of making a profit They were able to reap huge profits and create great personal wealth Many became known as “Captains of Industry” as they forged the modern industrial economy Critics called the “robber barons” because many used ruthless tactics to destroy competition and keep worker’s wages low

BIG BUSINESS CONSOLIDATION In 1873, America experienced a depression. Larger corporations began driving smaller companies out of business, hoping to establish monopolies. At first government did little to regulate big business Believed in laissez-faire (gov’t. should not interfere in the free market) Even under laissez-faire, gov’t. protects property, enforces contracts, issues patents, and enacts tariffs Reformers called for legislation to remedy some of the anti-competitive practices of big business

LAWS AGAINST ANTI-COMPETITIVE PRACTICES Interstate Commerce Act (1887) – prohibited unfair practices by railroads, such as charging higher rates for shorter routes. Provided for the Interstate Commerce Commission to enforce the act. This was the first time Congress stepped in to regulate business in America. Sherman Anti-Trust Act (1890) – stopped monopolies engaging in unfair practices that prevented fair competition. Showed a significant change in the attitude of Congress toward abuses of big business

CONDITIONS OF LABOR Long hours & low wages (10-14 hr. days; 6 days a week; $3-12 weekly; immigrants, women, and children lowest paid) Poor conditions, boring and repetitive tasks Work became less skilled, repetitive, monotonous, and boring Hazardous conditions (inadequate safety – thousands killed or injured in accidents each year) Child labor (1/5 of children under 15 worked in 1910) No job security or benefits

THE RISE OF UNIONS Groups of workers organized to improve working conditions and wages Strikes Collective bargaining The Knights of Labor – formed in 1869 seeking to create a single national union by joining skilled and unskilled workers. Wanted 8 hr. days, higher wages, safety codes, opposed child labor, supported equal pay for women, supported restrictions on immigration. Disorganization led to it falling apart in the 1890s The American Federation of Labor (AFL) – founded in 1881 by joining separate unions of skilled workers into a single federation. Limited membership to skilled workers (carpenters, cigar makers, etc.). Sought closed shops (union members only). Emerged as the main voice of organized labor.

GOVERNMENT ATTITUDE TOWARD UNIONS Early on, government was critical of the labor movement Business leaders contributed heavily to political campaigns and politicians saw business as being responsible for American prosperity and worker demands as greedy Feared disruptive effects of strikes would hurt the economy (sometimes used troops to put down strikes) Public opinion also supported laissez-faire and thought wage demands would increase prices and violence and radical ideas would increase