Railroads and Rise of Corporations

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Railroads and Rise of Corporations
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• Corporations
• 1.Only mass production and large corporations
  could fill the demand, not crafts.
• 2. Industrial combination production and
  distribution, and mergers of competitors.
• New Inventions
• 1. Thomas Edison
• a. stock ticker, light bulb
• b. Edison Electrical light company
• 2. Henry Ford (worked as engineer for in the
  Detroit Edison Company)
• a. internal combustion engine
• b. 4,000 automobiles produced by 1900.
• 3. Wright Brothers invented the airplane in 1903.

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• Growth fueled by transcontinental railroads.
• 1865--2 billion. 1900--13 billion. 1/3 of
  worlds production
• Mechanization
• 1. industrialization depended on new machines.
• 2. Burned anthracite coal to make steam, which
  replaced water power.
• 3. Mass Production
• a. meat packersone of the first.
• b. Cigarette machine--produced 7,000
  cigarettes per hour. 15 machines could meet the
  demand of the entire country.
• Getting products to consumers
• 1. Mail order
• a. Sears and Roebuck and Montgomery Ward
• Shoes, buggies, gas stoves, cream
  separators, Aunt Jemimas Pancake Flour.

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• 2. Chain store
• 3. Department store in urban areas.
• Integration, Combination, Merger
• 1. Recession of 1873 and 1893 eliminated weaker
  competitors.
• Larger corporations grew, bought smaller
  ones, etc.
• 2. Vertical integration control process from
  top to bottom. Raw
• materials to processing, transportation,
  merchandising.
• 3. Horizontal combination buy competitors,
  control market.
• 4. Sherman Anti-trust Act 1890.
• Leaders
• 1. Andrew Carnegie
• a. rags to riches. Poor immigrant from
  Scotland. Worked in
• factories, studied bookkeeping at
  night.

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• b. invested in Bessemer
  steelbetter and cheaper
• c. bought competitorsvertical integration.
• d. not a technical expert good at
  promoting and selling.
• e. preached innovation.
• f. Gospel of Wealth1889.
• - race between laborer and millionaire
  good survival of
• the fittest.
• - law of competition
• - philanthropy. Wealthy should give
  people means to improve themselves universities,
  libraries, hospitals, etc. Shouldnt hand out
  cash.
• 2. John D. Rockefeller
• a. oil refining kerosene

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• b. less risk than drilling
• c. Standard Oil
• d. formed a trustcentralized control
  of business
• e. 1892, trusts dissolved by Supreme
  Court. Formed a holding
• companyheld majority of stock.
• f. Controlled over 90 of the market by
  1879.
• g. Efficiency
• h. Controversial actions
• -south improvement company railroad
  rebates
• -bought competitors, removed
  competition
• -trust

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• 3. J.P. Morgan
• a. Investment bankerbought and sold
  stocks, etc.
• b. Railroadsbought and reorganized.
• c. Consolidated the steel industry
• d. Bought Carnegies holdings and
  formed U.S. Steel. First billion dollar
  corporation.

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• Labor and Unions
• Labor
• 1. Wage workers by 1870s
• 2. Most were immigrants
• a. 2/3 from southern and eastern Europe
• 10 million immigrants between 1860 and
  1890
• 1910 report 53 wage workers in 21
  industries surveyed
• Effects of Mechanization
• 1. Employer, employee relationship more distant
• 2. Employees lost autonomy
• 3. More women in the workforce clerks, sales at
  retail stores.
• Discrimination
• 1. Black men denied jobs, which given to
  Europeans

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• 2. Chinese Exclusionary Act of 1882limited
  civil rights, suspended immigration, forbade
  naturalization. Chinese immigrants who worked on
  Transcontinental Railroad were viewed as
  competitors once work on the railroad was
  finished.
• Workplace Conditions
• 1. noise and poor ventilation
• 2. Accidents from poor training and fatigue
• 3. strictfired for being late, talking, etc.
• 4. bored by repetitiondivision of labor
• 5. paid by piece rate
• 6. some employers didnt mark high voltage wires
• 7. miners had it worse poisonous air in the
  mine shafts, cave ins.
• 8. Some states established a 10 hr. day in 1860.
  Not followed.
• 9. Govt established 8hr. day 1868, but not
  followed.

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• Unions
• 1. Most people were better off, but a large gap
  in wealth. Top 9 owned ¾ of national wealth.
• 2. working and living conditions were bad
• 3. Socialism
• a. gap between rich and poor
• b. Public (govt)ownership instead of
  private.
• 4. CommunismKarl Marx/Communist Manifesto
• a. more radical than socialism
• b. poor should massacre the rich to take
  over factories.
• c. from each according to his ability to
  each according to his needs.
• d. equal ownership, no classes
• e. rejected by most Americans

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• 5. Early Unions
• a. scattered craft unionsconstruction,
  textile workers, etc.
• b. Disorganization
• -random protests turned violent, no
  leadership
• -poor public opinion at first
• Knights of Labor
• 1. organize workers into a single union
• 2. Goals
• a. equal pay for equal work
• b. 8 hr. day
• c. end child labor
• 3. members used the strike anywayfailed strikes
  reduced
• membership in 1890s.
• American Federation of Labor
• 1. 1886craft unions, did not try to organize
  everybody
• 2. Samuel Gompers was the first
  presidenteffective

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• 3. applied economic pressuree.g. strikes,
  boycotts, instead of
• political activity.
• 4. Issues wages, hours, conditions
• 5. Collective bargainingworkers negotiate as a
  group. Closed
• shopworkplace with only union workers.
• Industrial Workers of the WorldWobblies
• 1. socialists, and more radical than the AFL
• violent strikes
• Reaction of employers
• 1. Higher wageshigher costs
• 2. Methods to stop unions
• a. forbade union meetings
• b. fired union organizers
• c. Yellow Dog contractswould not join a
  union
• d. refused to recognize collective
  bargaining

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• Great Strikes
• 1. Railroad Strike of 1877
• a. first major interstate strike.
• b. started over wage cuts and double
  headers
• wage cuts after the Panic of 1873, then
  an additional 10.
• double headerstwo engines, twice as
  many cars.
• Dangerous and more layoffs.
• c. Started in Martinsville, West Virginia.
  Spread to Pittsburgh, Chicago, St. Louis, and
  other cities.
• d. Wasnt organized, deteriorated to mob
  violence. Federal troops sent. In Pittsburgh,
  soldiers fired on rioters, 20,000 people
  destroyed 5 million in property.
• e. No bargaining power, had to return to
  work.
• f. Need for tighter organization. Eugene
  Debs, a socialist.

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• 2. Haymarket Affair1896
• a. Chicago. Demonstrated for an 8 hr. day
• b. Violence erupted over scabsreplacement
  workers at the
• International Harvester Plat. One
  striker was killed.
• c. Anarchist/Anarchyno government.
  Government a tool for the rich. Scheduled a
  rally for May 4. Someone threw a bomb in the
  police formation.
• d. Anarchists blamed, one hanged.
• e. Crippled Knights of labor.
• 3. Homestead Strike1892.
• a. Carnegies partner tried to cut wages
  while Carnegie was in Europe. Henry Frick.
• b. Violence between strike busters and
  workers. Fired on strikers from barges on the
  Monongahela.
• c. Union called it off, but anarchists
  tried to assassinate Frick.
• These strikes set back railroads for 40 years.

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• 4. Pullman Strike1894
• a. most famous
• George Pullman invented the luxury
  railroad sleeping car.
• Created a town for his workers in Illinois.
• b. Hurt by Panic of 1893. Laid of 3,000
  workers, cut wages 25.
• Fired three workers who went to him in
  protest.
• c. Workers went on strike and called Eugene
  Debs.
• d. Other workers (260,000) went on strike.
  Tied up railroads and paralyzed economies of 27
  states. Disrupted the mail.
• e. Courts ruled in favor of Pullman, which
  protected employers for 30 years.

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• Railroads
• 1. First big businessbureaucracy.
• 2. Transportation for farmers and business.
• 3. 30,600 miles in 1862, 199,000 by 1900.
• 4. Transcontinental Railroad
• a. Union Pacific built westward from
  Omaha, Central Pacific built eastward from
  Sacramento.
• b. government subsidies 20 sections of
  land per square mile, 16,000 to 48,000 per
  square mile depending on difficulty of the
  terrain.
• c. C.P. used Chinese immigrants
• d. completed at Promontory, Utah. U.P.
  built 1,086 miles, C.P. 689 miles. Golden stake.
• 5. Financing
• a. unethical practices robber barons.
• b. overcharged, particularly on the
  transcontinental.

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• c. Credit Mobilierholding company
• -paid of Congressman
• -Union Pacific charged 94 million when
  real costs were 44 million.
• d. Credit and Finance Corporation
• -controlled by four owners of the
  Central Pacific
• -charged 79 million, 36 million
  profit
• e. Jay Gould
• -Prince of Robber Barons
• -buy railroads, make phony
  improvements. Pay dividends out of capital,
  instead of profit.
• -sell for a profit
• -ruined everything he touched
• 6. Cornelius Vanderbilt consolidated eastern
  railroads

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• 7. Four time zones introduced in 1883 eastern,
  central, mountain, pacific.
• 8. Standard gauge (width) introduced during the
  Civil War
• 9. Government made profits because of value of
  land increased.