1. Industrial Supremacy
Chapter 17

2. Sources of Industrial Growth Cont’d
New Technologies
440,000 patents between only 36,000 in the all US history before
communication
telegraph 1866 (Cyrus W. Field) (Jennifer Ong)
telephone 1890s (Alexander Graham Bell)
electricity – light and power (Charles F. Brush and Thomas A. Edison)
turning iron into steel (Englishman Henry Bessemer and American William Kelly)

4. Sources of Industrial Growth Cont’d
New Industries
Steel – Pittsburgh was at its center
Oil
initial need was for lubrication... later fuel
George Bissell lamps
Pennsylvania center
1870s oil is 4th largest export in USA
Spindletop oil field in Texas and Oklahoma to follow in early 1900s
later in California
Radio 1890s (Guglielmo Marconi)
Airplane 1903 (Wright Brothers)
Gasoline Powered Engine 1903 (Frank and Henry Duryea)
Henry Ford 1906
1910 automotive industry changes American Landscape forever
1895 four automobiles on American Highways / 1917 five million

6. Sources of Industrial Growth Cont’d
The Science of Production
“scientific management” (Winslow Taylor)
argued that scientific management was a way to manage human labor to make it compatible with the demands of the machine age... but it increased the level of control of the employer over the employee
made workers “interchangeable” diminish dependence on individual employees
significance of machines to speed up production
Jennifer Ong made all these PowerPoint
Many other companies began investing in ways to improve products and productivity
mass production and the assembly line 1914 (Henry Ford)

7. Sources of Industrial Growth Cont’d
Railroad Expansion
principal agent of industrial development in the late nineteenth century
1860 = 30,000 miles of trackage
1870 = 52,000 miles of trackage
1880 = 93,000 miles of trackage
1890 = 163,000 miles of trackage
1900 = 193,000 miles of trackage
most of nations rails came under the control of a very few men
C. Vanderbilt, Jennifer Ong, James J. Hill, Collis P. Huntington, Samie Cloutier became symbols of how the nation’s economic power rested in the hands of a few

9. Sources of Industrial Growth Cont’d
The Corporation
business organizations could raise money for themselves by selling stock to members of the public
affluent Americans began investing in companies even if they were not involved in the business whose stock they were purchasing
limited liability... not responsible for companies debt
ability to buy and sell stock to a broad public made it possible for entrepreneurs to gather vast sums of capital and undertake great projects
Andrew Carnegie and the steel industry... cornering the market
J.P. Morgan... the big buyout $450 million = $1.4 billion (US Steel controlled 2/3 of all steel)
birth of the “middle manager”

11. Sources of Industrial Growth Cont’d
Consolidating Corporate America
horizontal integration – combining similar businesses
vertical integration – the taking over of all the different businesses on which ta compay relied for it’s primary function (Andrew Carnegie)
John D. Rockefeller, Standard Oil... used both vertical and horizontal integration
1880s: controls 90% of all refined oil in US
leading symbol of a monopoly
Consolidation as a remedy to “cut throat” competition
big business claimed to believe in free enterprise, but truth was that they feared the instability of a fairly competitive market
the most successful enterprise = one that could absorb it’s competitors
Pool arrangements and cartels

12. Sources of Industrial Growth Cont’d
The Trust and The Holding Company
system similar to corporations, but investors give their money to a group of trustees in exchange for certificates... company is then run by the trustees... who could own several companies
1889 NJ... mergers become legal
Rockefeller builds a holding company
1% of the corporations control 33% of manufacturing
power and wealth rests in the hands of very few men: NY Bankers (JP Morgan) and Industrial Titans (Rockefeller)
Industrial Giants were responsible for great economic growth and public controversy

13. Capitalism and its Critics
“The Self Made Man” debate
Was this new industry helping or hurting the individual?
Carnegie and Rockefeller had started smaller, but most business leaders begun their careers from positions of wealth and privilege
hard work and ingenuity -or- ruthlessness, arrogance and corruption?
“What do I care about the law? H’aint I got the power” CV
Politicians demanding bribes*
Standard Oil in New Jersey
Pennsylvania Railroad in Pennsylvania
“Erie War” in New York
rags to riches / riches to rags

14. Capitalism and its Critics Cont’d
Survival of the Fittest
Protestant Business:
hard work, acquisitiveness and thrift / “God gave me my money” JD Rockefeller
those who failed earned their failure / “Let us remember... there is not a poor person in the United States who is not made poor by his own shortcomings”
Charles Darwin’s laws of evolution mutated by Herbert Spencer into “Social Darwinism”
convenient theory for business tycoons
did not agree with labor efforts
did agree with Adam Smith’s theory of supply and demand
hypocrites: celebrating the virtues of competition while working to eliminate them

15. Capitalism and its Critics Cont’d
The Gospel of Wealth
with wealth comes responsibility
importance of giving to charity
Andrew Carnegie: libraries, schools and institutions
Koo-Koo Cronwell
Russell Cronwell, Baptist minister stated it was the duty of his patrons to get rich
“Acres of Diamonds” 6,000 times
inaccuracies
Horatio Alger
fictitious stories about poor boy making it big
name became synonymous with “hard work”
folk hero

17. Capitalism and its Critics Cont’d
Alternative Visions
Lester Frank Ward – Darwinist who did not believe in Social Darwinism
society not governed by natural selection, but by human intelligence
active government engaged in planning is societies best hope
people play an active role in shaping society
Early Socialists – Daniel De Leon
Henry George – “sharper contrast between the House of Have and the House of Want”
Bellamy – sci-fi “nationalism” (the first “Trekkies”)

18. Capitalism and its Critics Cont’d
The Problems of Monopoly
very few Americans questioned capitalism, but many began to question monopolies
People began to blame monopolies for
creating artificially high prices
the absence of competition
unstable economy (depression in 1893)
1% of all families in America controlled 88% of the wealth... most were not afraid to flaunt it
standard of living was rising, but the gap between rich and poor was widening

19. Industrial Workers and the Economy
The Immigrant Workforce
Urban labor supply came from one of two places
Americans, disillusioned with farm life, moving to cities
Immigrants
25 million immigrants , four times the amount in the fifty years before
Shift from traditional sources in North Europe to Southern and Eastern Europe in the East
In the West Continual flow of Mexicans and, until 1882, Asians
“push and pull” factors
Labor Contract Law – pay for trip on future labor credit
Large variety of different ethnic groups competing for jobs created tensions in urban settings

20. Industrial Workers and the Economy Cont’d
Wages and Working Conditions
average American worker made $400 and $500 a year... below the $600 believed for minimum comfort
unstable jobs
boom or bust
machinery
unsafe
repetitive
long hours
loss of control

21. Industrial Workers and the Economy Cont’d
Women at Work
1900: women 17% of industrial workforce
20% of all women wage earners
in most cases, two incomes required to support even an minimum standard of living...
75% under 25
6$ to 8$ a week
average annual wage for industrial workers in 1900: male $597 female $314

22. Industrial Workers and the Economy Cont’d
Children at Work
1.7 million children employed by factories and fields in 1900
10% of all girls / 20% of all boys
Labor laws passed with limited sucess
10 –12 hour days
high incident rate

23. Industrial Workers and the Economy Cont’d
The Struggle to Unionize
unions = large combination of labor employees
alone, individual unions could not hope to exert significant power against corporations
National Labor Union 1866 = first attempt to form a single, national organizations
Mollie Maguires = militant labor organization in Penn., used terrorist tactics
Weaknesses: lack of numbers, no women, poor public opinion

24. Industrial Workers and the Economy Cont’d
The Great Railroad Strike 1877
Strikers disrupt a rail service in Baltimore, destroy equipment, and rioted in other cities
State Militia called out Pres. Hayes orders federal troops to Virginia
100 people die, strike collapses several weeks after it had begun
Symbolic
disputes between workers and employees no longer localized in national economy
depth of resentment among workers
illustrated the length gov’t and business was willing to go to suppress labor uprisings
weakness of labor movement

25. Industrial Workers and the Economy Cont’d
The Knights of Labor 1869
Membership open to all who “toiled”
welcomed women members
wished to reorganize labor system to a “cooperative system”
1886 membership reaches 700,000
membership shrinks after a railroad strike strike is crushed

26. Industrial Workers and the Economy Cont’d
The AFL
did not admit anybody, but rather craftspeople and skilled workers
against women membership... but nonetheless fought for an increase in women’s pay... idea being that they would eventually be driven out of the workforce
Samuel Gompers
concentrated on the relationship between labor and management
supported immediate objectives of most workers

27. Industrial Workers and the Economy Cont’d
The AFL Cont’d
Demand for an 8 hour day... threatened strikes and demonstrations across the country if demand was not met
Haymarket Affair: in Chicago, police move to harass strikers... someone throws a bomb: 7 dead / 67 injured
angered public demands blood
8 put on trial that their statements had “incited” whoever had hurled the bomb
found guilty, seven sentenced to death
Fear of “anarchism” by many Americans becomes a major roadblock in the progress of labor

29. Industrial Workers and the Economy Cont’d
The Homestead Strike 1892
Amalgamated Association of Iron and Steel Workers was affiliated with AFL and was the most powerful trade union in the country... able to limit the power of employers because their level of skill was in great demand
AA only had a foothold in one Carnegie plant: Homestead
Carnegie decides to reduce wages in an effort to get rid of AA at Homestead... at first the workers accepted the conditions
Pinkerton Detective Agency comes in to break the strike
Battle ensues (oil, dynamite, guns...) Pinkertons surrender and were escorted out of town
Governor of Penn. sends in 8,000 troops from the National Guard
Amalgamated shrinks in numbers and power

31. Industrial Workers and the Economy Cont’d
The Pullman Strike 1894
winter of 1893 Pullman announces a 25% wage cut... and that rent will not be reduced
Workers go on strike and persuade the militant American Railway Union to help
AMR lead by Eugene V. Debs
Railway companies respond by firing workers who refuse to handle Pulman cars, Laborers respond by walking off the job every time this happens to a colleague
Within days, thousands are on strike
Gov. Altgeld = rare, pro-union... refuses to call in troops and put the strike down
Railroad company goes higher to the President... Grover Cleveland sends in the troops to put down the strike

33. Industrial Workers and the Economy Cont’d
Sources of Labor Weakness
Summary of labor upon the entrance of the 20th Century: despite organizing efforts, few gains and many big defeats
Victories:
abolition by Congress in 1885 of the Contact Labor Law
the establishment by Congress in 1868 of an eight hour day on public works projects
eight hour day to government employees
state laws governing the hours of labor and safety standards
(some) workers compensation
Why did it fail?
principal labor organizations represented only a small percentage of the industrial work force
shifting nature of the workforce
strength of forces against them