Chapter 6 A new Industrial Age. Section 1 The Expansion of Industry.

Chapter 6A new Industrial Age

Section 1

The Expansion of Industry

The United States Industrializes The Industrial Revolution began in the United States in the early 1800’s but the

majority of the country was still communities until the early 1900’s

Bythe early 1900’s America had transformed into the leader in Industrialization world wide

By 1914 the GNP (Gross National Product) was 8 times greater than it was at the end of the Civil War

The United States Industrializes One of the reasons the Industrial Revolution was so successful in the United

States was due to it’s vast amount of natural resources. These resources include: water, timber, coal, iron, copper, and petroleum

These resources were very important but human resources were equally as important because that is what takes these resources and makes them useable and allowed America to Industrialize

Edwin Drake drilled the 1st oil well near Titusville, Pennsalvania in 1859 eventually leading to the oil industry taking off in America

Free Enterprise / Government Role Laissez Faire beliefs “let it be” were very instrumental in allowing the

Industrialization Revolution to boom in America

There were some very instrumental people during this time period: Thomas Edison – perfected and produced electricity, invented the light bulb, the

phonograph, the battery, the motion picture. He also started Edison electric which later became GE (General Electric)

Alexander Graham Bell- invented the telephone in 1876. In 1877, he and a few others formed Bell Telephone Company which later becamee AT&T (American Telephone and Telegraph Company)

Thadeus Lowe- invented the ice machine and was known as the Father of Aerial Reconnaissance in the United States and was famous for his balloon building.

Cyrus Field- laid a cable across the Atlantic Ocean in 1866 providing instant connection between the United States and Europe.

Charles Sholes- Invented the type writer in 1867.

Bessemer Steel Process Oil, Coal, and Iron were very plentiful natural resources in America

1870 – America’s coal production was at 33 million tons

1900 – America’s coal production was at 250 million tons

Steel became a metal produced when you take the carbon out of Iron it is rust free, lighter, and more flexible

Henry Bessemer- Developed the Bessemer Process to mass produce steel

Railroads were the biggest consumers of steel

Steel changed the face of the country in that it allowed large innovative structures to be built (bridges, buildings, etc.)

William Le Baron Jenny developed the 1st sky scraper in Chicago (Home Insurance Building)

Inventors

Free Enterprise / Government Role Another advantage that America had in the Industrial Revolution was the boom in

population from 1860 – 1910 leading to a much greater work force

This large population allowed for large factories to develop in which people could produce items at a lower cost and at a higher quantity than individual peddlers

The clothing industry took off and improved leading to more ready made clothes to be bought

Finally a major invention that changed America was radio which became very common in all American homes by the 1920’s

Section 2

The Age of the Railroads

Linking the Nation The railroads were the first entity that truly linked America coast to coast

In 1865 America had 30,000 miles of railroad track (mostly all east of the Mississippi.) By 1900 (35 years later) there was over 200,000 miles of railroad track nationwide

This boom took off when President Abraham Lincoln signed the Pacific Railway Act in 1862

This act basically provided the opportunity for the construction of the transcontinental railroad by 2 companies (Union Pacific Railroad and Central Pacific Railroad)

Linking the Nation Union Pacific Railroad was led by engineer Grenville Dodge.

Dodge began pushing westward with Union Pacific in 1865 starting in Omaha, Nebraska

Union Pacific employed many ex Civil War soldiers, Irish immigrants, frustrated miners, farmers, cooks, and ex-convicts. At the peak of it’s operation it ran at about 10,000 employees.

Linking the Nation Central Pacific Railroad began as a dream of Theodore Dehone Judah

He convinced the California legislature to support his idea. He then sold stock to 4 big investors from the Sacramento area:

1. Grocer – Leland Stanford

2. Shop Owner – Charley Crocker

3. Hardware Store owner – Mark Hopkins

4. Hardware Store owner – Collis P. Huntington

These 4 men made huge fortunes off of their investments

There was a shortage in labor in California so the Central Pacific railroad hired about 10,000 workers from China and all of the equipment used was shipped from out east by boat

Railroads Spur Growth The railroads spurred growth throughout America by linking America and increasing the

amount of products that could be produced and shipped

At first there were many unattached railroad lines so there was a need for railroad consolidation or the connecting of railroad lines nationwide

The most famous and most successful railroad consolidator was Cornelius Vanderbilt

With the country uniting it meant more uniformity on many issues including time

Prior 1883 each town set their clocks by when the sun was at high noon.

In 1883 they formed time zone meaning that certain areas would all be on the same time and they called these areas time zones

The Land Grant System Since the land going across the country cost more than most could afford

the US Government set up the Land Grant system selling the land to railroad companies at cheap prices who would then turn around and sale the land to real estate companies, private business, and private owners in order to raise money.

This system awarded the railroads over 120 million acres of land in the 1850’s and 60’s

Robber Barons People considered railroad tycoons to be corrupt robbers

The main one was Jay Gould who often practiced “insider trading” or trading stocks with insider knowledge not known to the public.

He did this in order to manipulate the price of stock to his benefit

In 1872 the Credit Mobilier scandal took place where the railroads controlled the construction company and the railroads and agreed to inflatable prices and made a fortune off of the public.

This scheme was so big it spread all the way to the white house and as high as the vice president

The Great Northern James J. Hill (clearly not a robber and a very prosperous business man) built

the Great Northern Railroad without the use of any government subsidies, land grants or assistance by the Government in any way.

Hill’s company (Great Northern Railroad) is the only railroad company not forced into bankruptcy and remained very prosperous throught the times

Section 3

Big Business and Labor

The Rise of Big Business During the Civil War there was not many big business there were a few

people with a lot of wealth

Laws allowed corporations to be formed starting in the 1830’s. Corporations remained very small until the early 1900’s

Corporations allowed big business to take off. A corporation is an organization that is owned by many people but treated like an individual.

Andrew Carnegie Andrew Carnegie was a progressive big business guy that spent his lifetime

investing in railroad industries.

He sold Railroad bonds and traveled between the US and Europe in his business dealings

He later met a man named Henry Bessemer and then began investing his money in the Steel Industry. He built a steel plant in Pittsburgh in 1875 utilizing Bessemer’s techniques

Andrew Carnegie Carnegie at 1 time produced more steel from his plants than the entire

country of England

He was successful for the following reasons He continually searched for better ways to make product cheaper

He hired talented people by offering them stock in his company

He also used vertical and horizontal integration:

Vertical- he bought out all his suppliers

Horizontal- companies with similar products merged

Social Darwinism Social Darwinism is basically survival of the fittest

This means there is no regulation of the market and those that produce reap the benefits and those that don’t produce fall to the waste side

Fewer Control More An example of buyouts forming a monopoly on a particular market is John

D. Rockefeller and the Standard Oil Company

By 1880, Rockefeller had gained 90% of the oil refining market.

Standard oil formed trusts in 1882 or a legal way for a person to manage another person’s property.

Consolidation of Industry Another business law put into play was a holding company where basically a

company does not produce anything itself but it instead owns the stock of companies that do produce the goods.

Due to this the Sherman Antitrust Act was put into play which made it illegal to form a trust that interfered with trade between states or other countries

Working in the United States Life in industrial times for the average worker was very difficult.

Working conditions were generally unhealthy and very dangerous with the new big machinery

The gap in wealth from the common man and the wealthy man grew by a large margin.

By 1900 the average worker made 22 cents and hour and worked 59 hours a week

Early Unions Because of this growth in industry the country experienced deflation (a rise

in the value of money)

Deflation caused prices to drop and gave workers more buying power.

Workers wages continued to drop throughout deflation causing workers to want to form unions in order to protect them with the companies

Trade Unions (unions limiting people to specific skills) were also formed giving them more specificity in their fight for equality

Early Unions Owners despised Industrial Unions because they united all craft workers and

common laborers in a particular industry to better their working conditions.

Companies would try several methods to prevent unions from forming:1. They would have them sign oaths or contracts promising not to join unions

2. Hire detectives to go undercover and find out who ran or was in unions

3. Would fire and black list workers who were found to start up unions

4. They would use lockouts to break unions (lock the gates and refuse to pay the workers until they broke up the union)

The Struggle to Organize Workers tried repeatedly to form unions but generally failed

There was lots of confrontations and violence with Industry leaders and the Government

William Sylvis leader of the Iron Molders Union wrote to Karl Marx in 1868 asking for help with the workers unions

The Marxist stated that if a workers revolution took place the Government would take control of all private property and create socialism and divide wealth evenly amongst everyone.

The Struggle to Organize In July of 1877 the Railroad announced another round of wage cuts which

triggered the first nationwide labor protest or strike.

Railroad workers nationwide walked off the job, eventually leading to 80,000 railroad workers not working

The strike got violent and governors eventually had to call out their militias to keep peace with the strikers

The Knights of Labor formed after the railroad strike becoming the first nationwide Industrial Union

They were big supporters of Arbitration (or having an impartial 3rd party listen to both sides of the story and deciding the best path possible)

The Struggle to Organize The Haymarket Riot in Chicago badly hurt the reputation of the Knights of

Labor

A riot broke out between the police and strikers leaving 1 man dead then an anarchist group organized in Chicago’s Haymarket Square to protest the riot and when police entered someone threw a bomb and the police opened fire.

7 police officers and 4 workers were killed. 8 men were arrested and 1 was tied back to the Knights of Labor causing them to rapidly lose members

American Federation of Labor In 1886 over 20 of the trade unions organized American Federation of Labor

(AFL)

Samuel Gompers was the 1st leader of this organization

He believed Unions should stay plain and simple and stay out of politics

Working Women Women’s Trade Union League (WTUL) was the 1st organization dedicated to

promoting women's labor issues.

They pushed for an 8 hour work day, a minimum wage, an end to evening work for women, and the end of child labor