Vocabulary: protective tariff laissez faire capitalism mass production corporation monopoly trust social darwinism Insterate Commerce Act

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1 Lesson 4: Industrialization Time Period: Late 1800s (Chapter 4 in Textbook) Late 1800s = Late 19 th Century Vocabulary: protective tariff laissez faire capitalism mass production corporation monopoly trust social darwinism Insterate Commerce Act The first Industrial Revolution had occurred in Europe. The U.S lagged behind in industrial output. Around the time of the Civil War, the U.S. begins to see an increase in innovation and technology. -innovation = finding a better way of doing something -technology = using knowledge to design, produce, and use tools to help civilization be more efficient Innovation and technology allow industry to mass produce products efficiently while creating jobs. -Inventors and industrialists/businessmen/bankers turned the U.S. into an industrial powerhouse. The Second Industrial Revolution challenged American industries to make products more quickly and efficiently. -Factories had to step up production by using new tools and improved processes. -Railroads had to be expanded. -More efficient methods of creating power had to be developed. -The number of workers in factories had to be increased. If you own a factory, what do you HAVE to have in order to produce? -Capital(money and property) -Labor(Workers) -Natural Resources After the Civil War, American industries needed large amounts of unskilled workers to work in factories and mines. Where would this increase of workers come from? Immigration! Push Factors -Reasons for Leaving a Certain Location Pull Factors -Reasons for Moving to a Certain Location In the late 1800s and early 1900s the American government ENCOURAGED immigration to meet the increasing demand for labor in factories. The increase in labor would help businesses and the economy grow. Immigrants were willing to work for low wages and were prepared to move frequently to find work. -They settled mainly in the cities, close to workplace, and in ethnic neighborhoods for safety and convenience. The United States is under a Capitalist System, or free enterprise. This means individuals own most businesses. -Entrepreneur are people who invest money in a product or enterprise in order to make a profit. -These people are the ones who create jobs. Government policies initiated by Congress encouraged the growth and success of businesses in the late 1800s. -Protective Tariffs -Laissez Faire -Loose Immigration Policies Protective Tariffs are taxes on imports that make foreign goods cost more than locally made goods. These tariffs decrease competition from foreign companies and protect American industries and companies. Laissez faire policies allowed businesses to operate under minimal government regulation. The government encouraged immigrants to come to the United States from Europe and Asia to work. Businessmen invested heavily in new innovations, hoping to create new industries and expand old ones.

2 Important Contributions From The Second Industrial Revolution Oil(Petroleum) Drilled oil was relatively cheap to produce and easy to transport. -Oil by-products = lubricating oil(engine and motor oil), kerosene, and gasoline *Remember: John D. Rockefeller and Standard Oil Company Thomas Edison -Financed by wealthy industrialist, J. P. Morgan; Received more than 1,000 patents -He and his lab invented the light bul attempting to develop affordable lighting for homes. -Developed plans for central power plants to light entire sections of cities. -Increased the use and spread of electricity *Remember: J.P. Morgan- He financed Edison's lab and made money on his inventions. Electricity Electricity -lit city streets -powered homes and factories -powered urban transportation that took rich to suburbs and back to work -extended the number of hours Americans could work and play Communication -Samuel Morse perfected the telegraph to send messages over wire. -Alexander Graham Bell patented the telephone while attempting to improve the telegraph. -Guglielmo Marconi invented the wireless telegraph which led to the modern radio. -Communication devices took time to catch on. Construction Transportation Railroads -Industries quickly adopted the Bessemer process as a cheaper way of making steel. -The U.S. became the leading manufacturer of steel...causing a construction boom. -They built skyscrapers in major cities...expand upward when the city has no more space. -They built suspension bridges in which the roadway is suspended by steel cables. *Remember: Andrew Carnegie and United States Steel Company -Meatpacker Gustavus Swift developed refrigerated cars for transporting food. -The Transcontinental Railroad was completed in Electric streetcars and trolleys, commuter trains, and subways appeared in major cities. -Factory production of automobiles with gas-powered engines began in Henry Ford produces the Model T in The first successful airplane flight in 1903 was by brothers Orville and Wilbur Wright. Why are railroads important? -could transport large amounts of goods quickly, cheaply, and efficiently. -stimulated innovation in many other industries...mainly steel. Industrialization- the organized action of making goods and services for sale The American people demanded new goods and services. -Factory owners used mass production for turning out large numbers of products quickly and inexpensively. -New innovation and technology made mass production possible. Industrialization resulted in -Easy access to consumer products -Higher costs of living because workers had to work more to buy the goods they wanted and needed. Industrialization increased international involvement through exports. This expanded trade and the economy. BUT...Industrialization caused negative environmental problems. -Industrial waste had risen dramatically -Mining had begun to destroy the land -Increasing agricultural production had led to soil erosion and dust storms in the Midwest. -People began to raise concerns about protecting natural resources.

3 Section 2 How do you make money in business? Increase profit by decreasing cost The rise of big business/industry turned the U.S. into one of the most economically powerful countries. Investors developed a form of group ownership known as a corporation. -a number of people share the ownership of a business AND the financial responsibility Some corporations tried to create a monopoly, when a company has complete control of a product or service. -Monopoly eliminates competition. This allows them to raise prices without conflict. This is bad for consumers. Methods Used By Late 19 th and Early 20 th Century Businessmen to Create A Monopoly horizontal integration(consolidation) -consolidating many firms in the same business -Oil businessman Rockefeller was one of the first businessmen to use this method -He created a trust, or company that assigns their stock to a board of trustees vertical integration(consolidation) -gaining control of the many different businesses that make up all phases of a product s development. -Steel industrialist Andrew Carnegie and Oil businessman Rockefeller used this. -allowed companies to reduce costs and charge higher prices Smaller companies and consumers began to question goals and tactics of industrialists. -They argued that bankers and businessmen had too much influence over the government. -They complained about laissez faire. J.P. Morgan was the owner of the private banking company, J.P. Morgan and Co. -He became the leading financier in the country. -He created giant industrial corporations that became monopolies and bought stock in other monopolies. -The American government asked for his advice/help during financial crises...he bailed them out. -He made huge profits from working the U.S. economic system as if it was his own bank. How did the American people view industrialists like Carnegie, Rockefeller, Vanderbilt, and Morgan? Negative View of Industrialists... robber barons -Trusts and monopolies gave powerful businessmen an unfair advantage. -Small businesses were bought up or squeezed out of competition. -Consumers were harmed by the unfair high prices that monopolies set. -Small groups of industrialists got rich while the majority of the American public was poor. -The unfair practices of Industrialists harmed workers and widened the income gap or income disparity. Positive View of Industrialists... captains of industry -Factories, steel mills, and railroads created by industrialists provided jobs -Industrialists support for developing technology benefited the nation s economy Industrialists were philanthropists. -Wealthy industrialists that gave back to the people. -Built universities, museums, libraries because it helped the disadvantaged improve their lives. Carnegie's Gospel of Wealth -Carnegie believed the wealthy should not die wealth. He believed they should use the money to help society. -Carnegie believed that the wealthy were important because they created the jobs and improved the economy.

4 How did the wealthy industrialists and bankers justify their wealth and power? -They believed Social Darwinism was the reason that they deserved to be wealthy and powerful. Biologist Charles Darwin published his book, the Origin of Species, arguing that animals evolved by a process of natural selection... Survival of the Fittest Darwin's theory was applied to the business world as Social Darwinism. -They wealthy believed that wealth is a measure of a person's value. Those that are rich are the most fit. -The wealthy used SD to justify laissez faire because government interference could disrupt natural selection. -The wealthy believed that the nation grew stronger by allowing the best to rise to the top -The wealthy did not believe in the government helping the poor...poverty meant they were weak. Government Begins to Regulate Business...a little. Industrialists methods worried common Americans and small business owners. -Farmers demanded that the government regulate railroads. -Small businesses demanded that the government regulate big business and prevent monopolies/trusts. The federal government slowly began to regulate business. -This was a break from laissez faire policy. Why does the government have to regulate industry during the late 1800s and early 1900s? The government has to regulate industry to maintain fairness and competition among businesses. The government has to regulate industry to protect consumers. What actions do the federal government take in the late 1800s to regulate industry? In 1887, the United States Senate passed the Interstate Commerce Act that created the Interstate Commerce Commission (ICC) to oversee railroad operations. This was the first federal body ever set up to monitor American business operations. The railroad industry became the first industry to be regulated by the federal government. -The government would set up many other federal bodies to regulate American businesses later. In 1890, the Senate passed the Sherman Antitrust Act. -outlawed any trust that operated in restraint of trade or commerce among the several states. -was designed to protect consumers and small businesses -was designed to reduce the influence of industry over government Big business argued against the Sherman Antitrust Act. -Corporations argued that it was a bad law because bigger businesses were more efficient than smaller ones. The Interstate Commerce Act, Interstate Commerce Commission(ICC), and the Sherman Antitrust Act began a trend of the federal government limiting corporations power. Section 3 Industrial growth and laissez faire capitalism produced great wealth for the owners of factories, mines, railroads, and large farms. It also brought general improvements to American society in the form of higher standards of living, wider availability of cheap goods, and access to public institutions like museums and schools. However, the people who actually performed the work in factories and industries struggled to survive. -How did the workers fight for their rights?

5 Who did factory owners want to hire for jobs? -Unskilled, low wage earners Working Conditions for Factory Workers -Low wages(pay) -12 hours a day/6 days a week -Dangerous/Unsafe Working conditions(poorly lit, little ventilation, loud machinery) -Many accidents because of faulty equipment, faulty wiring, dim lighting, or poor training Why were people willing to work under dangerous conditions? Job Competition Women and children worked in the factories to earn money that the family needed for survival. Negative effects? Workers had to live close to their workplace. Company Town and Company Store The Labor Movement of the Late 1800s Goals Strategies of Labor to Gain Leverage/Power Better Pay(Wages) Better Working Conditions(Hours, Safety, Etc.) Form Labor Unions -Group of workers demanding the same thing Collective bargaining -negotiations between employers and workers to determine wages, hours, conditions Arbitration -process where employers and workers allow an unbiased third party to settle their dispute Strikes -workers refuse to work until demands are met Strategies of Employer/Businessman/Industrialist -Employers opposed the labor movement, which they saw as a threat to their businesses and profits. -Employers refused to allow unions, collective bargaining, or arbitration. -Employers brought in replacement workers during strikes. Employers asked the government to help break strikes. Role of Federal Government -Sided with business owners and industrialists -Denied union recognition -Court orders ruled in favor of business with injunctions -Limited the power of labor unions Some workers blamed capitalism for their problems and began to embrace the ideas of socialism. Socialism is a philosophy that favors public control of property/income...equal distribution of wealth. -In 1848, Germans Karl Marx/Friedrich Engels, in the Communist Manifesto, predicted worker revolutions. -Americans rejected socialism/communism because it threatened free enterprise and individual liberty. Workers' frustration led to the formation of labor union. -Labor unions grew because workers desired better wages and better working conditions. -The arrival of more immigrants into the labor force also helped increase union membership.

6 Labor Union Membership Goals/Impact Knights of Labor -Founded by Terrence Powderly American Federation of Labor -Founded by Samuel Gompers Industrial Workers of the World Wobblies -Founded by Eugene Debs Skilled, Unskilled, Women, and African Americans Skilled, White, Male Skilled, Unskilled, Women, Children, White, African Americans, Immigrants -Involved in Violent Strikes -Diverse membership = no common goals -Does not last into 20 th Century -Becomes powerful in the 20 th Century Radical and Violent Strikes Americans reject the IWW and Socialism Debs stays in legal trouble Major Weapon of Unions? The Strike The Major Strikes Haymarket Riot in Chicago, Illinois Homestead Strike in Homestead, Pennsylvania Pullman Strike - Nationwide Workers refuse to work until demands are met. Haymarket, Homestead, and Pullman -May 1886, the Knights of Labor in Chicago went on strike for an 8 hour workday. -An anarchist at the rally threw a bomb into a crowd of police, killing 7 officers. -Had a very negative impact on the labor movement. -July 1892, The Amalgamated Association of Iron and Steel Workers went on strike to protest wage cuts at Carnegie Steel -Henry Frick, Carnegies partner, locked out workers. -Strikers seized control of the mill. -Frick brought in armed guards...pinkertons. -Seven Pinkertons and three workers died in the fight. -National guard called in to keep order. The union was forced to back down. -Begins May 1894, Pullman had cut wages without lowering rents in his company town or prices in his company store. -American Railway Union, led by Debs, went on strike and encouraged all railway workers to strike, too. -By July, fifty thousand RR workers had walked off the job. -Brought rail traffic to a complete stop and prevent deliveries. -Railroad owners obtained an injunction declaring the strike illegal. -The strikers became violent. -Federal government(pres. Cleveland) sent troops to break the strike. The outcome of the Great Strikes set an important trend in government/labor relations. -Employers asked courts to issue injunctions against unions, citing legislation like the Sherman Antitrust Act. -The federal government denied unions recognition as legally protected organizations...limiting union's power. -Contract negotiations, strikes, and legislation would become the way of life for American industry. What was the federal government's role in Labor during the late 1800s? -Courts issue injunctions to end strikes and hurt labor unions. -When it got too bad...the President would send troops to stop the strike and keep industry working. They helped