Learning Targets  Students will be able to explain the factors that helped America industrialize  Students will be able to explain the factors contributing to the expansion of the railroads in America  Students will understand the factors in the rise of big business  Students will be able to explain the causes in the development of labor unions

Although the US began to industrialize in the early 1800’s, it was only after the Civil War that it expanded rapidly What are the factors that allowed this to happen?

Factor 1 – Natural Resources  The US has abundant natural resources - can be obtained more cheaply than through importation  Mountains in West source of many resources – construction of the Transcontinental Railroad allowed movement of settlers/miners and shipment of material east

 New resource exploited – petroleum (oil)  Oil used to produce kerosene used to light lanterns, stoves, etc  What was used before kerosene?  First oil strike in Pennsylvania – drilled by Edwin Drake in 1859

Factor 2 – Large Workforce  US population tripled between 1860 – 1910  High population provided workers and consumers  Population growth caused by large families and immigration  What are some push & pull factors? I hate kids

Factor 3 – Free Enterprise System  Policy of Laissez-faire  Supply and demand  Competition causes lower prices and greater efficiency  Entrepreneurs – people who risk capital seeking profits  Foreign investment

Factor 4 – Role of Government  Government kept taxes and spending low  Did not impose costly regulations  Imposed high tariffs. Good idea?

Factor 5 – New Inventions  1876 Telephone – Alexander Graham Bell  1877 Bell Telephone (AT&T)  Revolutionized business and personal communication A large pizza with pepperoni

 Electricity – Thomas Edison 1877 – Phonograph 1879 – Light bulb, electric generator Dictaphone, mimeograph, and motion picture Launched electric power company to supply electricity to cities (GE)

Other Inventions  Ice machine  Refrigerated railroad car  Automatic loom  Ready-made clothing  Sewing machine  Shoe-making machines  Canned food  Breakfast Cereal

Factor 6 – Railroads  Boom began with Pacific Railway Act 1862 – Union Pacific & Central Pacific  Union Pacific employed mainly Irish / Central Pacific imported Chinese labor  Transcontinental Railroad completed 1869  Miles of track dramatically expanded after Civil War  Railroads created markets and were a market unto themselves

 After construction of major lines, smaller connecting lines were built (consolidation)  The most successful railroad consolidator was Cornelius Vanderbilt  Consolidation = time zones  New technology such as air brakes allowed heavier locomotives  Rail systems so efficient cost for freight dropped

The Land Grant System  Land grants given to railroads to encourage construction  Railroads sold or mortgaged land to cover construction costs

Robber Barons  Big businessmen who people believed had gained their wealth through scams, bribes, and cheating  Credit Mobilier Scandal – corrupt construction company owned by railroad investors

Great Northern Railroad  Only transcontinental railroad to NOT take land grants  Wise business tactics brought profits on both east and west runs  Only railroad to NOT go bankrupt

Learning Target Students will be able to explain the factors that helped America industrialize  Natural Resources  Large Workforce  Free Enterprise System  Role of Government  New Innovations  Railroads

Learning Target Students will be able to explain the factors contributing to the expansion of the railroads in America  Consolidation – integration of rail lines  Land Grants  New Technology  Time Zones

Corporation – an organization owned by many people but treated by law as though it were a single person Stockholders – people that own shares of the corporation Stock – shares of ownership America initially distrusted corporations

Economies of Scale  Corporations raise money by selling stocks  They use the money to invest in new technology, large labor force, lots of machines which greatly increases efficiency  They make more goods more cheaply

All businesses have two types of costs  Fixed Costs – costs a company has to pay regardless if it is operating or not  Operating Costs – costs that occur when a company is running  What advantages does a corporation have in bad times?

The Steel Industry  The nature of steel  Andrew Carnegie – invested in companies supplying railroads  Bessemer Process – process by which steel could be made cheaply and efficiently

Vertical Integration - a company owns all the different businesses on which it depends for its operation Horizontal Integration – combination of many companies of the same type into one large corporation Monopoly – when a single company achieves control over an entire market Why would some Americans fear a monopoly? Why would others feel a monopoly was good?

Trusts  Fear of monopolies drove some states to make them illegal  To get around the law, businesses were merged by having stockholders place their stock under control of a manager (trustee)  Trusts could control companies as if they were merged into a corporation  Standard Oil – John D. Rockefeller I’m rich and you’re not

Holding Companies  Does not produce anything  It owns the stock of companies that do produce goods – thus controlling them as if they were one large corporation

Selling the Product  New ways of advertising – bold display ads  Department stores Wanamaker, Macy’s  Chain stores – emphasized low prices Woolworth 5 & 10 (dime)  Mail-order catalogs Sears-Roebuck, Montgomery Ward

Learning Targets Students will understand the factors in the rise of big business  Incorporation – limiting liability  Stocks and Stockholders  Bessemer Process  Vertical and Horizontal Integration  Trusts and Holding Companies  Advertising  Changes in Marketing

Urban Workers  Unskilled labor – long hours, monotonous, unhealthy or dangerous work environment  Increased living standards – products cheaper  Deflation – prices fell but wages cut  Workers beginning to organize unio ns

 Two types of workers: craft workers and common laborers = skilled and unskilled  Trade Unions – unions limited to people with specific skills  Corporations generally opposed unions  Tactics to fight organization of unions included blacklists, lockouts, and strikebreakers We’re going to kill you, you stinking SCAB!

Why did the government and the American people oppose Unions?  No laws protecting the right to unionize – some courts saw unions as interfering in business  Marxism and Anarchism - European ideas arriving with immigrants –both espoused radicalism  Americans equated unionism with radicalism – led government to use police and army to crush strikes and break-up unions

The organizing of Labor Unions  Great Railroad Strike of 1877 Economic recession forced railroads to cut wages Workers walked off job and blocked tracks Other states joined the strike – workers destroyed equipment and tracks State governments called out militia – President Hayes called out army Violence took >100 lives

The Knights of Labor  First national industrial union  Wanted 8 hour workday, equal pay for women, abolition of child labor  Allowed women and minority members  Supported arbitration instead of strikes  Strikes were used to good effect causing union to grow in membership  Haymarket Riot hurt union’s reputation with America – membership declined

The Haymarket Riot  Anarchist rally at Haymarket Square, Chicago  Police hit by bomb / shots fired  7 police / 4 workers killed  Among arrested anarchists was member of Knights of Labor

The Pullman Strike  1893 American Railway Union founded by Eugene V. Debs  Pullman workers lived in company town  1893 Depression caused Pullman to cut wages – but not lower rents and prices  Union workers boycotted Pullman cars  Railroads attached US Mail cars to Pullman cars  US government called in troops to break boycott

American Federation of Labor 1886  Led by Samuel Gompers  “Plain and simple” approach to labor relations  Rejected socialism and Marxism  Three goals: Collective bargaining Closed shops 8 hour workday

Working Women  Women working outside the home increased after the Civil War  Jobs generally restricted to “women’s work” – 1/3 domestic servants 1/3 teachers, nurses, clerks, salesgirls, secretaries 1/3 industrial workers  Women paid less. Why?  Women excluded from unions including AFL  1903 Women’s Trade Union League established – sought 8 hour workday, minimum wage, end to evening work, and abolition of child labor

Learning Target Students will be able to explain the causes in the development of labor unions  More Machines = Unskilled Labor  Exploitation of labor  Workers Organize – tactics against business  First unions  Businesses React – anti-union tactics  More unions  Business versus Unions - events