Chapter 18 THE INDUSTRIAL SOCIETY America Past and Present Eighth Edition Divine  Breen  Fredrickson  Williams  Gross  Brand Copyright 2007, Pearson Education, Inc., publishing as Longman

Industrial Development  Late nineteenth-century U.S. offers ideal conditions for rapid industrial growth  Abundance of cheap natural resources  Large pools of labor  Largest free trade market in the world  Capital, government support without regulation  Rapid growth 1865–1914

An Empire on Rails

 U.S. industrial economy based on expansion of the railroads  Steamships made Atlantic crossings twice as fast  The telegraph and telephone transformed communications

"Emblem of Motion and Power"  Railroads transform American life End rural isolation End rural isolation Allow regional economic specialization Allow regional economic specialization Make mass production, consumption possible Make mass production, consumption possible Lead to organization of modern corporation Lead to organization of modern corporation Stimulate other industries Stimulate other industries  Railroads capture the imagination of the American people

Building the Empire  1865–1916: U.S. lays over 200,000 miles of track costing billions of dollars  Expenses met by government at all levels  Federal railroad grants prompt corruption  1850–1945: Railroads save government $1 billion in freight costs

Federal Land Grants to Railroads as of 1871

Railroad Construction, 1830–1920

Linking the Nation via Trunk Lines  No integrated rail system before Civil War  After 1860 construction and consolidation of trunk lines proceeds rapidly  East linked directly with Great Lakes, West  Southern railroad system integrated in 1880s  Rail transportation becomes safe, fast, reliable

Rails Across the Continent  1862: Congress authorizes the transcontinental railroad  Union Pacific works westward from Nebraska using Irish laborers  Central Pacific works eastward using Chinese immigrants  May 10, 1869: Tracks meet in Utah  By 1900, four more lines to Pacific

Transcontinental Railroad “ Driving of the Golden Spike”

Railroads, 1870 and 1890

Significance of Railroads  Faster, cheaper way to move people and products  Connects isolated markets  Encourages other industry to develop  50% of steel and 20% of coal produced went to the RR’s

Problems of Growth  Intense competition among railroads  Efforts to share freight in an orderly way fail  After Panic of 1893, bankers gain control of railroad corporations  Bankers impose order by consolidating to eliminate competition, increase efficiency  In 1900, seven giant rail systems dominate

An Industrial Empire Based on Steel  Bessemer process of refining steel permits mass production  Use of steel changes agriculture, manufacturing, transportation, architecture

Brooklyn Bridge

Andrew Carnegie

 Born in Scotland  Immigrated to U.S. when 12  Worked as a bobbin boy in a textile mill  Created Carnegie Steel  Became wealthiest man in U.S.  “Gospel of Wealth” philosophy

Carnegie and Steel  Large-scale steel production requires Access to iron ore deposits in Minnesota Access to iron ore deposits in Minnesota Extensive transportation network Extensive transportation network  Requirements lead to “vertical integration” Definition: A type of organization in which a single company owns and controls the entire process from obtaining raw materials to manufacture and sale of the finished product Definition: A type of organization in which a single company owns and controls the entire process from obtaining raw materials to manufacture and sale of the finished product

Vertical Consolidation  When a company owns all the businesses that make up the phases of a product’s manufacture  Example: Carnegie’s steel empire – He owned the iron ore mines, the coal mines, the steel mills, the ships and railroads – EVERYTHING involved in making and shipping steel (from the ground up)

Vertical Consolidation Carnegie’s business structure

Carnegie and Steel  1872: Andrew Carnegie enters steel business  By 1901, Carnegie employs 20,000 and produces more steel than Great Britain  Eventually sells out to J. P. Morgan for 475 million dollars  Morgan heads incorporation of the United States Steel Company

Gospel of Wealth Carnegie’s premise that in a free market economy (capitalism), people should be free to make as much money as possible, but then they should give most of it away to improve society as a whole

International Steel Production, 1880–1914

Petroleum and Industry Who was the first American to drill for oil? When and where?

Edwin L. Drake Titusville, Pennsylvania 1859 Produced 10 barrels per day

But who will emerge as the leader of the oil industry, eventually controlling 90% of the world’s oil production by 1900 and amassing a fortune of over 700 million dollars

John D. Rockefeller

Rockefeller and Oil  Son of a poor street peddler in NYC  1859: First oil well drilled in Pennsylvania  Petroleum profitable as kerosene for lighting  1863 – Rockefeller joined with other businessmen to form the Standard Oil Company of Ohio

Rockefeller and Oil  Rockefeller lowers costs, improves quality, establishes efficient marketing operation  1882 – joined Standard Oil stock with 40 other oil companies to form Standard Oil Trust  Standard Oil Trust centralizes Rockefeller control of member companies outside Ohio

John D. Rockefeller & John D. Jr. 1921

Horizontal Consolidation Rockefeller’s business structure

The Business of Invention  Late nineteenth-century industry leads to new American technology  An Age of Invention Telegraph, camera, processed foods, telephone, phonograph, incandescent lamp Telegraph, camera, processed foods, telephone, phonograph, incandescent lamp  Electricity in growing use by 1900

Patents Issued, by Decade, 1850–1899

Young Thomas Edison Edison received over 1090 U.S. patents in his lifetime His favorite invention, 1878

Edison and his most famous “improvement” Electric Lamp Patented in 1880

The Sellers  Marketing becomes a science in late 1800s  Advertising becomes common  New ways of selling include chain store, department store, brand name, mail-order  Americans become a community of consumers

Montgomery Ward Building Chicago, Illinois Montgomery Ward & Co. Founded in 1872 The early leader in catalog sales to rural customers

Sears, Roebuck, and Company takes the lead in catalog sales by 1900

Working Men, Working Women, Working Children  Chronically low wages Average wages: $ per year Average wages: $ per year Salary required for decent living: $600 per year Salary required for decent living: $600 per year  Dangerous working conditions Railroad injury rate: 1 in 26, death rate 1 in 399 Railroad injury rate: 1 in 26, death rate 1 in 399 Factory workers suffer chronic illness from pollutants Factory workers suffer chronic illness from pollutants

Working Men, Working Women, Working Children  Dangerous working conditions 500,000 workers were completely disabled each year 35,000 killed each year No corporate accountability for worker safety. No workers’ compensation laws or insurance. Injured workers were fired.

Working Men, Working Women, Working Children  Composition of the labor force by % women 20% women Women represented in 296 of 303 occupations Women represented in 296 of 303 occupations  Working children “Child labor” means under 14 “Child labor” means under 14 10% of girls employed, 20% of boys All children poorly paid 10% of girls employed, 20% of boys All children poorly paid Girls receive much lower wage than boys Girls receive much lower wage than boys

Child Labor Children as young as 6 could work in factories

Working Men, Working Women, Working Children  Working women’s characteristics Most young and single Most young and single 25% of married African American women work in % of married African American women work in 1900  Working women’s jobs Many move into clerical positions Many move into clerical positions A few occupy professional positions A few occupy professional positions  Working women’s earnings unequal to men’s

Working Men, Working Women, Working Children  Discriminatory wage structure Adults earn more than children Adults earn more than children Men earn nearly twice as much as women Men earn nearly twice as much as women Whites earn more than blacks or Asians Whites earn more than blacks or Asians Protestants earn more than Catholics or Jews Protestants earn more than Catholics or Jews Black workers earn less at every level and skill Black workers earn less at every level and skill  Chinese suffer periodic discrimination 1879: California constitution forbids corporations to hire Chinese 1879: California constitution forbids corporations to hire Chinese 1882: Federal Chinese Exclusion Act prohibits Chinese immigration for 10 years 1882: Federal Chinese Exclusion Act prohibits Chinese immigration for 10 years

Labor Unrest

Formation of Labor Unions Groups of workers with similar jobs that join together to work for  better working conditions  higher pay  benefits (such as vacation and insurance) Early labor unions were like secretive fraternal orders.

Knights of Labor   Formed in 1869 by Terrence Powderly   Joined all workers together (men, women, all races, and all trades)   Used education and political action to achieve these goals:   Equal pay for equal work   8-hour work day   End to child labor

Knights of Labor Charter

Knights of Labor print featuring founder Terrence Powderly

In the beginning, God ordained that man should labor, not as a curse, but as a blessing; not as a punishment, but as means of development, physically, mentally, morally, and has set thereunto his seal of approval in the rich increase and reward. By labor is brought forward the kindly fruits of the earth in rich abundance for our sustenance and comfort; by labor (not exhaustive) is promoted health of the body and strength of mind, labor garners the priceless stores of wisdom and knowledge. It is the “Philosopher’s Stone,” everything it touches turns to wealth. “Labor is noble and holy.” To glorify God in its exercise, to defend it from degradation, to divest it of the evils to body, mind, and estate, which ignorance and greed have imposed; to rescue the toiler from the grasp of the selfish is a work worthy of the noblest and best of our race. You have been selected from among your associates for that exalted purpose. Are you willing to accept the responsibility, and, trusting in the support of pledged true Knights, labor, with what ability you possess, for the triumph of these principles among men? Knights of Labor Creed

American Federation of Labor (AFL)   Formed in 1886 by Samuel Gompers   Used strikes and boycotts to achieve their goals   Only skilled workers included   Women and blacks excluded   Focused on wages, hours, and working conditions

American Federation of Labor Emblem Samuel Gompers, Founder

Collective Bargaining   Workers negotiate as a group with employers   One or two are chosen as spokesmen for the group

Strikes   Workers refuse to work until their demands are met by management, thus shutting down factory production.   Strikers form “picket lines” refusing to allow workers to enter the workplace   Management often hires “scabs” to replace striking workers so that factory production does not stop.

An Era of Strikes  An era of strikes 1870– – ,000 strikes 23,000 strikes  Crossed purposes Employees seek to humanize the factory Employees seek to humanize the factory Employers try to apply strict laws of the market Employers try to apply strict laws of the market  Courts come down on side of owners with injunctions against strikes

Labor Strikes, 1870–1890

Labor Unrest Leads to Violent Confrontations Between Management and Labor Four Great Strikes

#1 - Great Railroad Strike of 1877   Baltimore and Ohio RR announced a 10% wage cut.   Train lengths were doubled, increasing the chance of accidents.   RR workers in Pittsburg, PA struck.   The strike turned into a violent riot.   Soldiers fired on rioters who responded by burning RR property.   Hundreds died.

Railroad Strike of 1877

#2 - Haymarket Riot (1886)   Workers struck for an 8-hour workday at the McCormick Harvester Co. in Chicago.   Two workers were shot by policemen on May 3.   May 4 - Over 3000 attended a rally in Haymarket Square. Anarchists joined the strikers.   Someone threw a bomb into the group of 170 armed police guards, killing 7   Dozens killed in gunfight that followed.   8 anarchists were arrested; 4 hanged; 4 were pardoned.

Poster advertising the rally to be held in Haymarket Square May 4, 1886

Haymarket Riot (1886)

7 officers killed in Haymarket Riot

Gallows for the Haymarket Anarchists, Nov. 11, 1887

#3 - Homestead Strike (1892)   William Frick tried to cut wages 20 % at Homestead Steel Works in PA while Carnegie was in Scotland.   Union workers struck.   Frick called in the Pinkertons who opened fire on the strikers.   Several killed.   State militia called in to quell the strike.   After an assassination attempt on Frick’s life, by an anarchist, the union surrendered.

Pinkertons   A police force for hire   Founded by Samuel Pinkerton   The first “secret service” agency protecting Lincoln   Known for their ruthless tactics in breaking up strikes

Pinkerton’s National Detective Agency

Carnegie’s Homestead Steel Works

Pinkertons Arriving by Barge

Militia Called In

#4 - Pullman Strike (1894)   George Pullman built the first luxury “sleeper” rail cars   His Chicago workers lived in the “company town” used “company script” as money at the “company store”   During the economic depression of 1893, Pullman cut wages and laid-off workers but did not cut rent.   When workers protested, he fired them, causing a strike.

Pullman Strike (1894)   Other RR unions in 23 states joined in   More than a 1000 rail cars were destroyed   13 workers killed   RR service to the western half of the country is disrupted, including mail service.   Owners banded together and sought court orders to halt any union activity that interfered with the delivery of the mail.   Union leader Eugene V. Debs was imprisoned

George Pullman

Pullman Strike (1894)

Industrialization’s Benefits and Costs  Benefits of rapid industrialization Rise in national power and wealth Rise in national power and wealth Improving standard of living Improving standard of living  Human cost of industrialization Exploitation Exploitation Social unrest Social unrest Growing disparity between rich and poor Growing disparity between rich and poor Increasing power of giant corporations Increasing power of giant corporations