EXPANSION OF INDUSTRY Chapter 6

Fuel industrialization OIL— 1859 Edwin drake successfully drills for oil in Pennsylvania  Starts Oil Boom  Popularity of automobile contributes to production of gasoline STEEL —1850 Bessemer Process-injection of air into molten iron to remove carbon Railroad tracks, barbed-wire, farm machines, construction

Inventions, worldwide communication network Expanding urban population, vast potential market Thomas Edison, 1876 Incandescent Light Bulb Electricity Electric streetcar 1867, Thomas Sholes Typewriter 1876, Alexander Graham Bell Telephone

Age of the Railroad: created nationwide network of supplies and markets: linked isolated cities & towns: towns pop up on railroad lines May 10, 1869 Transcontinental Railroad, central Pacific and Union Pacific meet at Promontory Point Creation of Time Zones November 18, 1883, synchronized across U.S. Officially adopted as U.S. standard in 1918

Railroad Abuses Created nationwide network of supplies and markets  Linked isolated cities and towns  Towns developed on railroad lines  George Pullman—provided self-made “town” for workers believed it would provide a stable workforce Controlling, cut worker pay, didn’t lower rent or prices led to strike in 1894  Credit Mobilier—highest corruption involving Republican V.P. and future President $23 million in stocks, bonds, cash to Union Pacific officers

Railroad abuses in land grants, fixed prices, different rates Grange pushes for political action Granger laws = regulatory laws Munn v. Illinois of Supreme court upheld Granger laws said federal govt. has right to regulate private industry to serve public interest Interstate Commerce Act of federal govt. to supervise railroad Established ICC-5 man commission assigned to regulate railroad — ineffective until Theodore Roosevelt becomes president

Social Darwinism! Idea of Social Darwinism applied to big business Natural selection in business, survival of the fittest “laissez-faire” – government hands off policy  Business “allowed to do” whatever is needed to be a successful Meaning the marketplace should not be regulated Success or failure in business is a part of natural law

Big Business/Andrew Carnegie rags to riches story Worked for Pennsylvania RR- allowed to buy stock and makes millions 1873-enters steel business  Wanted to make better products cheaper  Attracted talented people by allowing them to purchase stock  Encouraged competition  Vertical Integration- buys out suppliers to control materials and transportation Horizontal Integration- buy out competitors merging companies making similar products

Can’t beat ‘em, join ‘em, continued Holding company-a corporation that did nothing but buy out the stock of other companies J.P. Morgan, wealthiest holding company  1894-runs ¼ of railroad  1901-U.S. Steel buys Carnegie Steel creating world’s largest business Trust -collection of different companies who turn stock over to one large corporation, trustees John D Rockefeller, Standard Oil Company- used trust to gain 90% of refining business Ruthless-Robber Barons

Philanthropy Carnegie donated 90% of wealth accumulated during life Rockefeller-gave over $500 million to charity J.P. Morgan -Metropolitan Museum of Modern Art

Labor Unions-workers joining together to achieve better working conditions, wages, hours … 1886, American Federation of Labor combined craft ( skilled workers from various trades) unions, very successful, 2+million members by 1945 Eugene V. Debs, reformer, socialist Strikes turn violent with “scabs” Employers feared powerful unions  Wouldn’t hire union members  Made workers sign contracts not to join  Tragedy would lead to reform 