Chapter 16 Wonder and Woe The Rise of Industrial America 1865-1900
The Emergence of Big Business Sources of the Industrial Revolution Enormous quantities of two essential items for industrialization 1. Raw Materials 2. Cheap labor New Technology/Inventions Government policy-laissez-faire From1870-1900 Govt. did very little domestically Main Duties: *Deliver the Mail *Maintain a national military *Collect taxes and tariffs *Conduct foreign policy EXCEPTION: administer/distribute the annual Civil War veterans pension
The Railroads The original big business Modern Business Practices Advantage of incorporating & issuing stock- raise huge amounts of capital Other businesses will borrow ideas from RR industries Development of modern management Standardization to be more efficient Time Zones Equipment Standard gauge Complex hierarchies to run business The Emergence of Big Business
The Emergence of Big Business Rising Concern over Corporate Power Monopoly-control of an industry or market by one corporation Fears Too much power in the hands of a few? Conflict of nation s republican values? Corruption of officials? Price fixing on farmers? Credit Moblier Scandal
The Emergence of Big Business Andrew Carnegie: Steel: most important for growth AC Rags to riches story Carnegie Steel 1870-1900 Reduce production costs to lowest possible level Hire only the best Technology/reduce skilled labor Vertical integration & horizontal integration Cutthroat practices to out maneuver competition Carnegie Steel becomes world s largest industrial corporation Eventually sold to JP Morgan for $400 million became US Steel
Rockefeller & Standard Oil Trust Vertical & horizontal integration of petroleum industry Controlled all from production to retail AND controlled by merger all companies into one giant system: the TRUST (Standard Oil controlled 90% of oil industry) US Government moves away from laissez faire: 1887: Interstate Commerce Commission to curb power No Power/15 out of 16 cases in favor of BB!!!!! 1890: Sherman Anti-Trust Act Prohibits monopolistic behavior ANYTHING IN RESTRAINT OF TRADE IRONY: COURTS USED IT USUALLY TO RULE THAT LABOR STRIKES/WORK STOPPAGES WERE IN RESTRAINT OF TRADE Only 14 cases prosecuted 1890-1914 Rock created holding companies to counter anti-trust laws The Emergence of Big Business
The Impact of New Technology Machinery transformed skilled labor into unskilled Workers easily fired & replaced Low wages & long hours ***Employers enjoyed more power over their employee due to workers being expendable***** The World of Work Transformed
Hard Times for Industrial Workers Long hours & low pay 2 hrs/6 days a week Avg. $400-500 a year but $600-800 decent living Make up difference/work at home with family Economic Depressions (1873-1877 & 1893-97) Contraction of growth High rates of unemployment (14%) Business failure Monotonous work Dangerous workplace 35,000 killed on avg. a year (1880-1900) Child labor 180,000 to 1.7 million (1880-1900) The World of Work Transformed
Intimidation & Conflict National Labor Union founded in 1866 Formed to create an 8 hour day/dept. of Labor (300,000 members Depression wiped out union Employers response to unions Blacklist Scabs Strike breakers 36,757 strikes between 1881-1905/ 6 million workers Great Railroad Strike of 1877 Division among unions Chinese Exclusion Act of 1882 Halted Chinese immigration, limited civil rights of Chinese, forbade naturalization of Chinese Anti-black The World of Work Transformed
Conflicting Visions of Industrial Capitalism Capitalism Championed New cheap consumer goods to phonographs Increased life expectancy (38.3 in 1850 to 50 in 1910) Transportation & communication Wages rose 50 % between 1860-1900 Andrew Carnegie Gospel of Wealth- importance of philanthropy Social Darwinism Business men invoked the high-jacked theories of Charles Darwin what became known as Social Darwinism Survival of the Fittest -Herbert Spencer Capitalism Criticized Growing gap between Haves and Have-nots
Power in Numbers: Organized Labor Knights of Labor founded in 1869 formed in attempted to completely reformed wage labor system/utopian agenda Led by Terrence Powderly, Uriah Stephens All inclusive union that worked to abolish child and convict labor, equal pay for women, progressive income tax, and cooperative ownership of mines/factories 10% black & 10% women Lost support after the Haymarket Riot Lost many members to a new organization AFL American Federation of Labor (AFL) 1886: Led by Samuel Gompers Organized only for SKILLED workers Did not seek labor reform as much as basic economic goals Bread and Butter Issues Conflicting Visions of Industrial Capitalism
Conflicting Visions of Industrial Capitalism The Great Upheaval Haymarket Strike- 1886 Thousands gathered in Chicago during a general strike Bomb! Police and strikers were killed and injured Trial! Conviction! Execution! Consequence: labor unions were radical and violent!!! Membership/support for labor issues began to diminish Homestead Strike-1892 Pullman Strike-1894 Led by Eugene Debs Pullman 1894: wage cuts and firing of union employees Union boycott meant the RR industry was crippled across the nation! Supreme Court and President used court injunctions and military to force workers back to work on the grounds that their strike impeded the delivery of the US mail.