The Industrial Society 1 © 2011, The McGraw-Hill Companies, Inc. All Rights Reserved.

 1. This man created a steel monopoly in the United States.  2. Founder of the Standard Oil Company  3. This is a board of directors/stockholders that coordinates companies within an industry to avoid competition  4. Alexander Graham Bell invented the ______________.  5. This man invented the light bulb and the phonograph. 2

 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 3

 U.S. industrial economy based on expansion of the railroads  Steamships made Atlantic crossings twice as fast  The telegraph and telephone transformed communications 4

 Railroads transform American life End rural isolation Allow regional economic specialization Make mass production, consumption possible Lead to organization of modern corporation Stimulate other industries  Railroads capture the imagination of the American people 5

 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 Credit Mobilier Scandal  What was this? Who was famously “involved” with this scandal?  1850–1945: Railroads save government $1 billion in freight costs 6

 Federal Land Grants to Railroads as of By 1865, the US had as many mile of RR track as the rest of the world!

 Railroad Construction 1830–1920 8

 No integrated rail system before Civil War  After 1860 construction and consolidation of trunk lines proceeds rapidly  East linked directly with Great Lakes, West Union Pacific and Central Pacific Railroads  Southern railroad system integrated in 1880s  Rail transportation becomes safe, fast, reliable 9

 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 10

 Union Pacific (East to West) construction begins during Civil War  Central Pacific (West to East) begins after  Golden Spike driven in Ogden, Utah 1869  Promontory Point 11 Effect: Unites East and West; Opens trade with Asia Who wasn’t included in this picture? Why not?

 Railroads 1870 and 1890 © 2011, The McGraw-Hill Companies, Inc. All Rights Reserved. 12

 Historian Stephen Ambrose discusses the Transcontinental Railroad:  VIDEO VIDEO 13

 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 14

15  Builds financial empire through railroads, banks, and holding companies  Buys out Carnegie and enters steel business  Forms US Steel Corporation – 1 st ever corporation worth more than $1 billion!

16 1. Profiteering from the Civil War gives rise to millionaire class 2. Millionaires capitalize on Transcontinental railroad, mechanization, industrialization, & expansion of markets 3. Surplus of raw materials, cheap labor, foreign investment ENCOURAGE CAPITALISM 4. Inventions  Industrialization  More Inventions  More Industrialization ALL OF THIS GIVES RISE TO TYCOONS

17 The Manufacture of Iron Manufacturing iron was a hot and strenuous process, requiring workers to spend longs hours stoking hot blast furnaces. (Library of Congress) Copyright © Houghton Mifflin Company. All rights reserved. Bessemer Process = process to convert iron to steel

18  Steel is King : US pouring out 1/3 of world’s steel by 1890’s  “bootstrap” story: poor immigrant to tycoon  Carnegie uses vertical integration to make more profit Controls all means of production, eliminates middle man  Also uses horizontal consolidation to eliminate competition.  Sells to JP Morgan for 400 million  Becomes a philanthropist How do horizontal consolidation and vertical integration help business??

19  Kerosene and then Automobiles drive up US oil consumption  Rockefeller ruthlessly uses horizontal consolidation to create largest monopoly  1877 controls 95% of US’s oil refineries  Robber Baron’s Baron

Term used to describe industrialist of the late 1800’s Robber - referring to criminal or immoral behavior Baron – referring to the illegitimate claim to power of medieval lords of the manor. Anti-American

21 Standard Oil Monopoly Believing that Rockefeller's Standard Oil monopoly was exercising dangerous power, this political cartoonist depicts the trust as a greedy octopus whose sprawling tentacles already ensnare Congress, state legislatures, and the taxpayer, and are reaching for the White House. (Library of Congress) Copyright © Houghton Mifflin Company. All rights reserved.

Wealthiest people in the World Bill Gates - $56 BILLION COMPARE:

23  Monopoly = a firm that completely controls an industry  Vertical integration = combining all phases of manufacturing in to one organization (Carnegie)  Horizontal consolidation = allying with competitors to monopolize a market (Rockefeller)  Trust = a board of directors/stockholders that coordinates companies within an industry to avoid competition  Holding company = a corporation composed of various competing enterprises within one industry (JP Morgan’s US Steel)

25 Compare the lives and beliefs of Carnegie and Rockefeller using a Venn Diagram

26  Old Rich displaced by rule of the “new rich”  Gospel of Wealth – discourages helping the poor by state  Laissez faire = “let it be”  Justified by Social Darwinism – survival of the fittest  Poor are poor due to lack of initiative

27 The truth is that the social order is fixed by laws of nature precisely analogous to those of the physical order. The most that man can do is by, ignorance and self-conceit to mar the operation of social laws. The evils of society are to a great extent the result of the dogmatism and self-interest of statesmen, philosophers, and ecclesiastics who in past time have done just what the socialists now want to do. Instead of studying the natural laws of the social order, they assumed that they could organize society as they chose, they, made up their minds what kind of a society they wanted to make, and they planned their little measures for the ends they had resolved upon. … let us not imagine that the task will ever reach a final solution or that any race of men on this earth can ever be emancipated from the necessity of industry, prudence, continence, and temperance if they are to pass their lives prosperously.

"Bosses of the Senate," Puck, January 23, 1889, by Joseph Kepplerby Joseph Keppler This frequently reproduced cartoon, long a staple of textbooks and studies of Congress, depicts corporate interests– from steel, copper, oil, iron, sugar, tin, and coal to paper bags, envelopes, and salt–as giant money bags looming over the tiny senators at their desks in the Chamber. Joseph Keppler drew the cartoon, which appeared in Puck on January 23, 1889, showing a door to the gallery, the "people’s entrance," bolted and barred. The galleries stand empty while the special interests have floor privileges, operating below the motto: "This is the Senate of the Monopolists by the Monopolists and for the Monopolists!" Keppler’s cartoon reflected the phenomenal growth of American industry in the 1880s, but also the disturbing trend toward concentration of industry to the point of monopoly, and its undue influence on politics. This popular perception contributed to Congress’s passage of the Sherman Anti-Trust Act in 1890.

"What a Funny Little Government," The Verdict, August 25, 1899, by Herbert Taylorby Herbert Taylor The Trust Giant's Point of View. "What a funny little government" is a political cartoon drawn by Horace Taylor and originally published in Verdict on January 22. This source depicts the corruption in the United States congress occurring because of vast amounts of money held by monopolies. This cartoon, originally released to the public, and for the public, meant to increase awareness of political corruption resulting from monopolies.

 Late nineteenth-century industry leads to new American technology  An Age of Invention Telegraph, camera, processed foods, telephone, phonograph, incandescent lamp  How did each of these change society at the time?  Electricity in growing use by

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32  Urbanization  Long Work Hours and Dangerous Jobs  Children work too  Women’s roles change Delayed marriages Smaller families  Accentuated class division 1900: 1/10 of US owns 9/10 of US’s wealth 1900: 2/3 of Americans are “wage slaves”  Workers’ lives increasingly precarious

 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  The labor of millions of men and women built the new industrial society  1875–1900 real wages rose, working conditions improved, and workers’ national influence increased  Health and educational services expanded benefiting workers 33

34  Factories took the skill out of many positions  VERY dangerous 1882 – 675 laborers killed RRs – 1 in 300  Many women and children worked to make ends meet What jobs did women work?  Children sacrificed their education  1899 – women earned $269 a year/men earned $498 That same year Carnegie made $23 million!!

35 PREAMBLE AND DECLARATION OF PRINCIPLES OF THE KNIGHTS OF LABOR TO THE PUBLIC: The alarming development and aggressiveness of great capitalists and corporations, unless checked, will inevitably lead to the pauperization and hopeless degradation of the toiling masses. It is imperative, if we desire to enjoy the full blessings of life, that a check be placed upon unjust accumulation, and the power for evil of aggregated wealth. This much-desired object can be accomplished only by the united efforts of those who obey the divine injunction, "In the sweat of they face shalt thou eat bread." Therefore we have formed the Order of Knights of Labor, for the purpose of organizing and directing the power of the industrial masses, not as a political party, for it is more - … But no one shall, however, be compelled to vote with the majority, and calling upon all who believe in securing "the greatest good to the greatest number," to join and assist us, we declare to the world that are our aims are:

36 NBC Learn VIDEO “Rise of Labor Unions”  What did the Knights of Labor do that was different from other groups?  What did the AFL focus on?

37  Collective effort needed to counter trusts  “An injury to one is an injury to all”  Founded as a secret society in Why?  Inclusive and Diverse: men and women white and black skilled and unskilled  Broad (utopian? Socialist?) goals  HURT by Haymarket Square riot, 1886, Chicago Knights of Labor Black delegate Frank J. Farrell introduces Terence V. Powderly, head of the Knights of Labor, at the organization's 1886 convention. The Knights were unusual in accepting both black and female workers. (Library of Congress)

38 1. The Knights of Labor were weakened by a. Its refusal to endorse social reform and the 8 hour day b. Stiff competition from the National Labor Union c. Its association in the public mind with the Haymarket riot d. Its inclusion of both skilled and unskilled workers

39  Skilled workers split from Knights of Labor 1886  AF of L was elitist, narrow in goals – not utopian  Led by Samuel Gompers used collective bargaining  Avoided politics and focused on union goals: Better wages Eight-hour day Better working conditions  AF of L successful in many of its strikes and in meeting many of its goals

40 HOMESTEAD STRIKE 1892 STEEL STRIKE Protest work & living conditions Pinkerton Detectives protect scabs, Several deaths US troops end it WEAKENS LABOR HAYMARKET AFFAIR 1886 Labor march Bomb thrown Several deaths 8 Anarchists arrested 4 hanged, 1 suicide PUBLIC TURNS AGAINST LABOR PULLMAN STRIKE 1893 Pullman Comp. cuts wages during Panic of 1893 Does not raise after ends Workers strike US troops end it Debs arrested Workers Blacklisted LABOR WEAK GREAT STRIKE OF 1877 Railroad strike Paralyzed rail & commerce Pres. Hayes Sent US troops to end it CHINESE EXCLUSION ACT **Pullman Strike – NBC Learn video