1. US History
Chapter 9 Notes

2. The Rise of Industry
Following the Civil War, the United States had been
primarily a rural (farming-based) country, by the 1920s it
becomes one of the worlds leading industrial centers.
What things allowed this to happen?
Natural Resources
New Inventions
Urban Labor Source (Factory Workers)
Free Enterprise (AKA “Laissez Faire Economics”)

3. “Black Gold” or petroleum –
Natural Resources
“Black Gold” or petroleum –
Edwin Drake (1859) invents a steam engine drill that could remove oil from beneath the Earth’s surface. Once tapped, crude oil could be manufactured into kerosene, and later gas.
Coal – Powers Steam Engines
Iron – Used to Produce Steel through the Bessemer Process (Air is injected into molten iron, which causes carbon to be removed, therefore creating a product that was stronger, lighter, and less resistant to rusting than ordinary iron). Huge Deposits are found in the Mesabi Range (Minnesota)
Edwin Drake

4. New Inventions
Bessmer Process - Steel which leads to large scale railroad production, barbed wire, and farm machinery (McCormick and John Deere).
Transcontinental (Coast to Coast) RR is established in 1869
Edwin Drake – Oil Drill
George Westinghouse – Railroad air brake
Orville and Wilbur Wright – Airplane
Samuel Morse – Telegraph
Alexander Graham Bell – Telephone
Thomas Edison - Developer of;
The light bulb and municipal lighting
Electrical based tools and appliances IE Presses, and Streetcars
Factories with machines and equipment ran by electricity. This allows factories to be built nearly anywhere (Had been a water source).

5. Urban Labor Source
As people move to the
cities to find jobs in
factories, they begin to
purchase mass produced
good. As a result, the
US becomes a
“CONSUMER” SOCIETY.

6. Free Enterprise (AKA Laissez Faire Economics)
In a free enterprise system,
business is governed by the
laws of supply and demand,
and not restrained by
government interference or
regulation.
Free enterprise is attractive
because it allows for social
mobility and the
accumulation of wealth. To
become wealthy, however,
one must be willing to risk
losing as well.

7. Robber Barons
Due to the success of American businesses, a limited number of
highly successful entrepreneurs became known as “Robber Barons.”
Andrew Carnegie
J.P. Morgan
John D. Rockefeller
George Westinghouse
Cornelius Vanderbilt
George Pullman

8. Robber Barons (Continued)

9. Business Tactics and Strategies
The goal of any robber baron was to create a monopoly
over a particular industry. Once a monopoly was created,
a company did not have to compete with any other
companies and could set prices. Two strategies important
to monopoly building were;
Vertical Integration – Carnegie bought out all of his
suppliers (Coal and Iron Ore Mines, and Means of
Transportation). As a result of owning every stage of the
production process, he had total control over the quality
and cost of his product.
Horizontal Integration – Buy out companies that produce
similar products. Used by Rockefeller

10. Key Business Terms
Corporation – Companies that raise money by selling shares
of pieces of the company in the free market. These
stockholders then receive dividends or a percentage of the
company’s profit.
Social Darwinism – Application of Darwin’s theory that
attempted to justify free market economics and explain why
the wealthy were superior to the poor.
Holding Companies – Corporation that buys out stocks of
other companies IE US Steel owned by JP Morgan
Trust – Several companies agree to be ran by a group of
trustees as one central company IE Standard Oil owned by
John D. Rockefeller

11. Gospel of Wealth Movement
Entrepreneurs and Robber
Barons defend their fortunes and
wealth by pointing to their acts of
philanthropy (giving). This is
called the Gospel of Wealth
Movement. Examples include;
Rockefeller and Education
Carnegie and Public Libraries
Carnegie Library at
Syracuse University

12. Factory Life
12 or more hours a day, 6 days a week
No vacations, sick leaves, unemployment compensation, or reimbursement for injuries suffered on the job
Extremely dangerous – In the US in 1882 an average of 675 workers were killed on the job each week
Full of Women and Children – No Work Permit Laws
Wages are so low, everyone in a family needs to work

13. Labor Unions National Labor Union (1866), and Knights of Labor (1868)
are the first examples of national, wide based labor unions.
American Federation of Labor (AFL), founded by Samuel
Gompers, unites skilled workers from several different
industries. AFL develops a strong reputation through its
use of ;
Collective Bargaining – Workers negotiate as a group rather than as individuals
2. Strikes – Workers refuse to work until they are given what they want (IE Wage Increases, or Benefits)

14. Labor Unions and Socialism
Due to the lack of faith in
capitalism, many labor
union leaders promoted
Marxism, an economic and
political system that calls for
governmental ownership of
all property and an equal
distribution of wealth.

15. Important Strikes
The Great Strike of 1877 – B & O Railroad workers strike and
shut down train traffic. After prodding from B & O, President
Hayes orders US troops to put down the striking workers
Haymarket Affair (Chicago, IL) – 1886 Striking workers at
International Harvester are involved in a riot that kills 7 police
officers and several workers. Important in that this type of
violence begins to turn people against the labor movement, and
leads to the imprisonment of several high ranking labor leaders.
Homestead Strike – 1892 Strike at Carnegie Steel plant in
Homestead, PA. Pinkertons, hired to protect scabs, fight with
striking workers leading to the deaths of 3 detectives and 6
workers.
Pullman Strike 1894 As a result of the violence involved between
Pinkertons and striking workers, Pres. Cleveland send in troops.
Workers are fired and Blacklisted.

16. The Power of Labor Unions is Limited Through
Lock Outs, forbidding union meetings, firing union employees, and “Yellow Dog Contracts”, in which a new employee promised not to join the union.
Sherman Antitrust Act – The Sherman Anti-Trust Act was originally designed to fight monopolies. After its passage, however, corporate lawyers found a loophole within the Sherman Anti-Trust Act that said it was illegal for any organization or business to stop infringe on interstate commerce. As strikes stopped factories from producing goods, they also stopped interstate commerce. As a result, when a strike broke out businesses often went to the US government for assistance. The US government could then force the workers to go back to work.