The Expansion of American Industry

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The Expansion of American Industry

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Title: The Expansion of American Industry

1
The Expansion of American Industry
2
Daily Life in 1865

Indoor and electric lighting did not exist in
1865 instead the rising and setting of the sun
dictated the rhythm of work and play
Communications were also slow. In 1860 most mail
from the East Coast took 10 days to reach the
Midwest

3
Daily Life Transformed

By 1900, daily life had dramatically changed.
The post-Civil War years saw new growth in ideas
and inventions.
European investors and American business leaders
used the profits from the Civil War to invest in
these new inventions.
By 1900, industrial productivity and overall
standard of living in the US was envied by the
rest of the world.

4
Thomas Edison

He also experimented with electrical lighting and
his goal was to develop affordable, practical,
in-home lighting to replace oil lamps.
A key was to find a material that would glow
without burning up when charged with an
electrical current. After experimenting with
many filaments, the team finally found a workable
substance and when placed in a glass bulb it
glowed

5
George Westinghouse

Edison at first used a form of electricity called
direct current to transmit power from his
stations.
Direct current was expensive and could only
travel a few miles.
In the 1880s, George Westinghouse began to
experiment with an alternating current, which
could travel over long distances more cheaply.
Westinghouse also used a device called a
transformer to produce voltage levels that made
electricity more practical for use in the home.
By the early 1890s, financiers built on Edisons
and Westinghouses ideas and created General
Electric and Westinghouse Electric companies.

6
How Electricity Changed Daily and Work Life

Electricity revolutionized daily life. One
example is that electricity made it possible to
refrigerate foods, which reduced food spoilage.
Electricity also transformed work life. Many of
the countrys new immigrants, especially women
and children found work making clothing in
factories powered by electricity.
However, electricitys benefits were not evenly
distributed.
Many rural areas went without it for decades and
other people could not afford it.

7
Transcontinental Railroad

The project had first begun in 1862, when absent
of southern legislators enabled Congress to agree
on a route.
Government backing was important because with the
governments funds the project would have a hard
time getting completed.
The government granted loans and land grants to
two companies. One the Union Pacific started in
Omaha, Nebraska and built towards the west.
The other Central Pacific started out of
Sacramento, California and headed east
On May 10, 1869 Leland Stanford completed the
first transcontinental railroad.

8
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9
Railway Travel

Even after improvements rail travel was still
unpredictable and inconvenient. There were also
many fears about traveling the railroads.
The railroad continued to growth despite these
concerns and in 1883, the railroads helped
introduce standardized time zones to improve
scheduling.
Railroads also took time to introduce other
safety measures.
George Westinghouse developed more effective air
brakes.
Granville Woods invented a telegraph system for
communications to and from moving trains.
Rail travel made things easier for businesses.
It helped reduce the shipping costs.

10
Telegraph

Samuel Morses invention of the telegraph
signaled the start of the communication
revolution.
Using a code of short and long electrical
impulses to represent letters, people were able
to communicate.
The first message was sent in 1844. By 1900,
Western Union owned 933,000 miles of wire and
sent 63 million messages

11
Telephone

In 1876, Scottish immigrant Alexander Graham Bell
achieved a talking telegraph. In 1884, Bell
and a group of partners set up the American
Telephone and Telegraph Company.
At first a telephone line could only connect two
places, a home and a business.
However, soon central switchboards with operators
linked homes and businesses in an entire city.
By 1900 1.5 million telephones were in use.

12
Steel

Throughout the mid-1800s the nation relied on
iron for railroads and buildings.
However, in the 1850s, Henry Bessemer in England
developed a new process for making steel, a metal
that is lighter and stronger than iron.
People knew of steel, but it was expansive to
make.
With the Bessemer converter, steel became more
plentiful and more affordable.

13
Brooklyn Bridge

A new age of building was developing and an
example of this would be the Brooklyn Bridge. As
NYCs status as a business center grew, so did
its population.
Many people settled in Brooklyn, but the only way
to get to Manhattan was by Ferry.
Engineer John A. Roebling envisioned a suspension
bridge with thick steel cables suspended by high
towers. At 1,595 feet long it would be the
longest bridge yet built.

14
The Growth of Big Business

The period of invention of discovery would not
have been the same without people willing to
invest their money in these new inventions.
Without money people could not build factories,
market their product, or create profitable
businesses.
To succeed business leaders had to pool funds
together and this started the age of big
business.

15
Robber Barons?

The term robber barons, imply that business
leaders built their fortunes by stealing from the
public.
According to this view, they drained the country
of its natural resources and corrupted public
officials to interpret laws in their favor.
At the same time, these industrialists drove
their competition to ruins and paid meager wages,
while forcing their workers to work in dangerous
and unhealthy conditions.

16
Captains of Industry?

Captains of industry suggest that the business
leaders served their nation in a positive way.
This view credits them with increasing the
availability of goods by building factories,
raising productivity, and expanding markets.
By creating more jobs, the giant industrialists
enabled many Americans to buy new goods.
They also funded and founded many of the nations
greatest universities, museums, and libraries.

17
Andrew Carnegie

His first job was at a cotton factory making
1.20 a week. He wanted to improve himself and
this became an urgent matter when his dad died in
1855, making him the familys chief earner.
At age 18 Carnegie won the post of secretary to
the superintendent in the Pennsylvania Railroad
company.
When his boss went to the Civil War, Carnegie
took over. He then started to invest his money
wisely.

18
Andrew Carnegie cont

He believed that steel would replace iron. He
first invested in two furnaces that would make
pig iron, which was a material needed to make
steel.
Despite an economic depression in 1873, he cut
steel prices, which drove his competitors from
the market.
With a partner Henry Clay Frick, Carnegie took
control of the steel industry. He had control of
the mines, the ovens and the steel. Eventually
he took control of the shipping and rail lines
necessary for transporting his goods.

19
A Gospel of Wealth

His message was simple People should be as free
to make as much money as they can. As they make
it, however, they should give it away.
The man who dies rich dies in disgrace.
Never leave wealth to heirs, he warned because
they will fail to learn how to survive o their
own.
Never leave wealth it to others to administer,
for they will never follow your instructions.
Give it away yourself he advised, not as
charity, but as philanthropy, gifts to
institutions or to the public to help mankind.

20
Social Darwinism

In the late 1800s people applied Charles Darwins
theory of evolution to society. Charles Darwin
believed the strongest and fittest would survive.
Applying this idea between workers and employers,
social Darwinism held that society should do as
little as possible to interfere with the process
by which people succeed or fail.
If government stayed out of business affairs,
those who were the most fit would survive.

21
Laissez-Faire

Many Americans agreed with that philosophy and
thought that the nations prosperity depended on
laissez-faire, or hands off approach to the
economy. As a result, government neither taxed
the profits of businesses not regulated their
relations with the workers.

22
Monopolies

In order to create a monopoly, a business bought
out its competitors and all its patents. Thus
the business would eliminate any competition for
its product.
Toward the end of the 1800s, federal and state
governments passed laws to prevent certain
monopolistic practices.
However, these laws did not prevent nor destroy
all monopolies, in part because government
leaders were fearful in taking on big business
leaders.

23
Cartels

Cartels are loose associations of businesses
making the same product, usually formed in
secret.
The goal of a cartel is to reduce the harmful
side effects of competition on the businesses
involved. Members agree to limit the supply of
their product because when the supply is low the
price tends to increase.
Cartels had a disadvantage and during hard times
tended to fall apart.

24
John D. Rockefeller and Standard Oil

Rockefeller became rich from a grain and meat
partnership during the Civil War. By 1870, he
had formed Standard Oil Company of Ohio.
As Rockefeller sold more oil, he was able to
undersell his competitors. In addition, he
persuaded his railroad friends to give him
illegal refunds on part of the cost of
transportation.
Because Standard oil paid less to transport goods
its prices were lower.
Rockefeller soon had enough money to buy out his
competition. However, state laws prohibited one
company from owning stock in another, since
monopolistic practices reduced competition and
restricted free trade.

25
Samuel Dodds Idea

Samuel Dodds idea of the trust got around the
ban. In 1882, 40 companies agreed to turn over
their assets to a board of nine trustees. In
return, they were promised a share of the profits
with the new conglomerate. The board of
trustees, which was controlled by Rockefeller,
managed the companies as a single unit called a
trust.
The companies were not legally merged, so no laws
were violated. Rockefellers trust controlled
all of the nations oil-refining capacity.
Trusts proved an effective means of limiting
industrial competition. Americans began
depending change.

26
Sherman Antitrust Act

In 1890, the Sherman antitrust act was passed.
The law was aimed to combat restraint of trade or
commerce caused by trusts.
The act was ineffective or about 15 years because
the federal government rarely enforced it and its
vague ruling made it hard to apply in court.

27
Horizontal Consolidation

Rockefellers approach to consolidation the
creation of one giant business from many smaller
enterprises was horizontal consolidation.
This method was involved in bringing together
many firms in the same business.

28
Vertical Consolidation

Other industrialists practiced vertical
consolidation, a method by which they gained
control of all phases of a products development.
Andrew Carnegie used this method. By controlling
all phases of steel production Carnegie could
lower his costs and drive his competitors out of
business.

29
Economy of Scale

Carnegie could charge less because of a
phenomenon called economy of scale.
As he expanded his enterprises and produced more
goods, his cost per item went down.

30
Public Reaction to Big Business

A lot of people disliked trusts and other large
business organizations. However, mergers were
the wave of the feature and big cooperations
such as GE, Westinghouse and DuPont, contributed
to the wealth and productivity of the US
Rapid industrial growth did lead to strains on
the economy. There were fluctuations in the
economy when there were a lot of goods. The
demand went down, so did the price and then
people had to be laid off from their job.
Other problems occurred when people panicked over
the fact that businesses would not be able to pay
their debt. Investors would sell their stock in
the company, stock prices would fall and
companies went bankrupt. A period of depression
would usually follow panics.

31
The Great Strikes A Turning Point in History

Industrialization bought changes and great wealth
to the US. However, these changes did not bring
prosperity to the nations working people.
The rich grew richer and workers became bitter
over their struggle for a decent standard of
living.
Men and women began to take their complaints
directly to their employers.

32
Socialism in the Industrial Age

Socialism is an economic and social philosophy
that advocates collective or government ownership
of factories and property. One goal of socialism
is to distribute the nations wealth broadly.
Most Americans disagreed with the socialist idea
and they felt that socialism threatened the
deeply rooted American ideals of private property
and free enterprise the right of people to
compete freely and succeed to whatever extent
they can.
Most wealthy people also rejected socialism.
They would not give up what they owned without a
fight. Wealthy owners also believed that the US
government would fight socialism with the
military if necessary to preserve the American
political and economic systems.

33
The Return of Labor Unions

These groups were initially designed to help in
times of need. Soon they became a way of
channeling workers demands for shorter workdays,
higher wages, and better working conditions.
The emphasis on protest led to growing opposition
to unions by employers.
Unions grew in the 1860s and 1870s. Labor
activists tried to organize national unions.
The National Labor Union was formed in Baltimore
nominated a candidate for president in 1872.
However, this union failed to survive an economic
downturn

34
The Knights of Labor

Another early national union, The Noble Order of
the Knights of Labor, was formed in Philadelphia
in 1869. The Knights hoped to organize virtually
all working men and women into a single union.
Members included farmers, factory workers, and
white-collar workers.
The reforms included equal pay for equal work, an
8 hour working day, and an end to child labor.
The leaders of the Knights did not generally
advocate the use of strikes, and they did not
emphasize higher wages as their primary goal.

35
American Federation of Labor (AFL)

A third national union, the American Federation
of Labor (AFL) followed the leadership of Samuel
Gompers.
It was formed in 1886 and was different from the
Knights because they sought to organize only
skilled workers in a network of smaller unions,
each devoted to a specific craft..
Gompers and the AFL were primarily interested in
the issues of wages, hours, and working
conditions.
They sought to force employers to participate in
collective bargaining, in which workers negotiate
as a group with employers. The Federation
believed that workers acting as a group had more
power than a worker acting as an individual.

36
Growing Friction Between Labor and Employers

Employers disliked and feared unions. The
preferred to deal with employers as individuals
instead of in powerful groups.
Employers took measures to stop unions, such as
forbidding union meetings and firing union
organizers.
They even forced employees to sign a yellow dog
contract that exacted a promise never to join a
union or strike. Some business leaders refused
to recognize unions as the workers
representatives.

37
The Railroad Strike of 1877

The strike began when the Baltimore and Ohio
railroads announced a wage cut of 10, the second
cut in 8 months
Other railroads imposed similar curs and were
ordered to run double headers, were trains
would have two engines and 2x as many cars. This
increased the risk of accidents and worker
layoffs.
Local militia in Pittsburgh refused to help, so
the employers called in troops from Philadelphia.
They fired shots on demonstrators and killed and
wounded many.
President Rutherford B. Hayes called on federal
troops to help out, but that only led to more
violence.
From that point on employers relied on federal
and state troops to repress labor unrest, which
led to more violence

38
Haymarket (1886)

On May 1, 1886 several groups demonstrated
requesting an 8 hour work day. At Chicagos
McCormick reaper factory, police broke up fights
between strikers and scabs. Scabs are
individuals hired to replace striking workers.
Police action caused several deaths
To protest the deaths anarchists, who are
political radicals who oppose all government on
the grounds that it limits individual liberty and
acts on the interest of the wealthy and ruling
class, called for a rally in Chicagos Haymarket
Square
During the event someone threw a bomb in a police
formation, which then caused a riot. Seven
policemen died from the bomb and dozens of
civilians and policemen died in the riot after.

39
Results of Haymarket Strike

They never found the bomb thrower, but 8
anarchists were tried for conspiracy to commit
murder. Four were hanged and another committed
suicide in jail.
There was a belief that the convictions were a
result of public hysteria, not evidence.
The governor of Illinois later pardoned the three
remaining anarchists.
To union officials the anarchists were heroes, to
employers they remained criminals.

40
Homestead (1892)

A union of iron and steel workers associated with
the AFL had negotiated a labor contract with
Andrew Carnegies steel company.
In the summer of 1892, while Carnegie was away
his partner Henry Frick tried to cut wages. The
union at the plant in Homestead, PA called a
strike
Frick wanted to crush the strike and on July 1,
1892 he called in the Pinkertons, a private
police force known for its abilities to break
strikes.
The Pinkertons and the strikers fought and the
result was death and injury on both sides.

41
Result of Homestead Strike

The public reaction was at first sympathetic to
the strikers. However, when an anarchist tried
to assassinate Frick, the public again blamed the
strikers for the violence.
The strikers acknowledged defeat and Frick stated
he would never recognize any unions. Carnegie
Steel and its predecessor US Steel remained
nonunionized until the mid 1930s. Carnegie
always stated he supported unions, but remained
silent.

42
Pullman (1894)

The Pullman Strike of 1894 involved the railroad
industry and completed the turning point in the
federal governments involvement with
labor-employer relations.
Sleeping car maker George Pullman always
considered himself to be a kind industry owner.
He built a town for his workers near Chicago that
had a school, bank, water and gas systems and
affordable homes.
Conditions got worse during the Depression of
1893 and he had to lay off workers and cut wages
by 25-40. However, he also kept rent and food
prices at the same level.

43
Pullman cont

In 1894 a group of workers went to him to
protest. He responded by firing all three and
when the American Railway Union called a strike
he refused to negotiate and shut down his plant.
The founder of the American Railway Union was
Eugene Debs and by June of 1894 he encouraged
120,000 workers to join the Pullman strike.
Debs had instructed the strikers not to interfere
with the mail, but the strike led to complete
disruption of western mail traffic, including the
delivery of the mail.

44
Pullman Results

Railroad owners turned to the federal government
for help. Citing the Sherman Antitrust Act
Attorney General Richard Olney won court orders
forbidding all union activity.
President Grover Cleveland sent in troops to
ensure that strikers obeyed the court orders,
which resulted in 12 deaths and numerous arrests.
Debs refused court orders and was jailed for 6
months. The American Railway Union fell apart
with no leadership
The Pullman strike and its outcome set an
important pattern. In the years ahead factory
owners appealed frequently for court orders
against unions.
The federal government regularly responded to
these appeals and denied unions recognition as
legally protected organizations. This helped
limit union gains for over 30 years.