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MR. LIPMAN

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LIPMAN S APUS POWERPOINT CHAPTER 24 ... railway The telephone Invented by ... by Rockefeller and oil trusts Interlocking directorate Devised by J.P ... – PowerPoint PPT presentation

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Title: MR. LIPMAN


1
MR. LIPMANS APUS POWERPOINT CHAPTER 24
  • Industry Comes of Age
  • 1865-1900

2
Keys to the Chapter
  • Growth of Railroads
  • The Grange Movement
  • Massive Immigration
  • Rise of the Robber Barons Industry Giants
  • Shift to wage dependence from land dependence
  • Unions struggle for a foot hold

3
Railroads
  • 1865 1900
  • Government gave railroad subsides in land to help
    offset the risk (both state and federal
    governments did this) land used as collateral
    for loans to build the railroads
  • Railroads used land as collateral for loans or
    sold it for money (average of 3 per acre)

4
  • Justifying the giveaway of the land
  • Government got lower rates for postal services
    and military traffic
  • Cheap way to subsidize railroads, without passing
    new taxes or cash
  • R.R. increased value of governments land
  • Railroads brought civilization to the West

5
  • Two Major R.R. build transcontinental R.R.
  • Union Pacific starts in Nebraska with mostly
    Irish immigrants doing the work goes West
  • Central Pacific starts in California and used
    mostly Chinese immigrants to do the work
  • They meet on 5/10/1869 at Promontory Point, Utah
    and the Golden Spike is put in the ground

6
Promontory Point, UtahMay 10, 1869
7
  • Organizing the railroad lines
  • Vanderbilt organized and expanded the New York
    Central line which is very profitable
  • Distance between the 2 tracks (gauge)
    standardized
  • Westinghouse air brake and Pullman Palace cars
  • Safety devices
  • Telegraph for communication
  • Double-tracking (so railroads werent going
    opposite directions on same tracks)?
  • Block signal ( prevent 2 trains going opposite
    directions from being on same track at same
    time)?
  • Standardized time zones (1883- 4 zones)

8
  • Railroads bring the following
  • Unity between the states
  • Industrialization and huge demand for steel
  • Boom in mining and agriculture
  • Increased population in West
  • Increased immigration from Europe and Asia
  • --------------------------------------------------
    --------
  • But also bring destruction to land and Indian way
    of life and the end of the open range
  • Also bring stock speculation, rip off artists,
    and land speculators

9
  • Stock watering Jay Gould
  • Selling stock far beyond what it was worth
  • R.R. forced to charge high rates and fight
    competitive battles with rival railroads to make
    railroad worth high stock price
  • Fierce Competition would require lower prices
    thus preventing actual profit from occurring
  • Bribery of politicians and journalists

10
  • Railroads began working together rather than
    competing to reward investors at the expense of
    railroad users
  • Pools
  • Agreement to divide the business of a certain
    area and share the profits
  • Rebates or kickbacks
  • Given to large shippers to gain steady traffic
  • Lower profit made up by charging higher prices
    for short hauls or on small shippers

11
History Repeats Itself Middle Ages and Today
12
  • Farmers in Midwest hurt by railroad abuses
  • Depression in 1870s finally moved farmers to
    protest railroad abuses
  • Farmers (led by organized farmers groups like
    the Grange) worked at state level to regulate
    railroads
  • BUT most Americans believed in Lazzie-Faire which
    requires government to stay out of business issues

13
  • Farmers use state legislatures to pass laws
    regulating railroad abuses.
  • Railroads turn to FED court for help
  • 1886 Wabash v. Illinois
  • Supreme Court ruled that states could not
    regulate interstate (between states) commerce
  • Only federal government could regulate interstate
    commerce so pressure put on Feds

14
  • 1887 Interstate Commerce Act (ICC) passed
  • Prohibited rebates and pools
  • Stopped unfair discrimination against shippers
  • Require same for short hauls long hauls
  • (ICC) set up to enforce the law
  • This helped RRs because now avoid costly wars
    and instead begin to control regulatory process
  • First large-scale attempt by federal government
    to regulate business in interests of society

15
Post Civil War Industrialization
  • Liquid Capital () becomes available (Europe)
  • Natural Resources are plentiful (coal, oil, iron)
  • Immigration provides supply of cheap labor
  • Inventions enable mass production
  • Urbanization speeded by refrigerator car,
    electricity and electric railway

16
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17
  • The telephone
  • Invented by Alexander Graham Bell in 1876
  • Brought nationwide communication to U.S.
  • Brought women to work on switchboard
  • Electricity developed by Thomas Edison
  • Invented many things like phonograph, moving
    picture, and (most famously) the light bulb

18
  • Vertical integration
  • Combining into 1 organization all phases of
    manufacturing and production thus being able to
    control quality, quantity and costs
  • Best exemplified by Andrew Carnegies steel
    corporation, in which every part of making steel
    was integrated into 1 company

19
Vertical Integrationas developed by Andrew
Carnegie in steel manufacturing
20
  • Horizontal integration
  • Uniting with competitors to monopolize
  • Rockefeller trusts are an example of this
  • Stockholders in smaller oil companies gave
    control of their stock to the board of Standard
    Oil Company
  • The board then controlled all competing
    companies in the industry
  • Smaller companies left out of the trust
    eliminated with ruthless competition
  • Businesses in other industries begin to copy this
    approach

21
Horizontal Integration made famous by Rockefeller
and oil trusts
22
  • Interlocking directorate
  • Devised by J.P. Morgan during depression in 1890s
    to control financial institutions
  • Hurting companies were bought out by Morgans
    banks who then put officers from his banks on
    boards of various competing companies to
    eliminate wasteful competition
  • He will use his vast sums of to buyout Andrew
    Carnegie and create US Steel

23
Steel Production 18801914Reduces importance of
Europe
24
  • Bessemer process
  • Cold air on very hot iron ignited carbon in the
    ore and burned out the impurities
  • Made cheap production of high-quality steel
  • America had important natural resources close
    together
  • Coal (for fuel), iron ore, other important
    ingredients

25
Andrew Carnegie was king of steel Scottish
immigrant who rose from poverty to wealth and
then gave almost all away
26
  • 1900 Morgan buys out Carnegie and Carnegie
    believes he will die disgraced if he dies with
    all his wealth
  • Spends rest of his life giving away 350 million
    (50m left)
  • Money given to libraries and universities to help
    people improve themselves
  • The leader of the Gospel of Wealth theory

27
  • Emergence of the oil industry
  • 1859 first oil well in Pennsylvania drilled
  • Kerosene became first important derivative of oil
    better than whale oil
  • Late 1800s invention of light bulb by Edison
    made burning kerosene obsolete
  • Mid 1890s automobile invented, burning gasoline
    for power
  • Internal combustion engine gave oil industry a
    huge, profitable boost

28
John D. RockefellerOrganizes Standard Oil
Company to dominate the oil industry
29
  • Positives of Rockefellers Standard Oil
  • Produced superior product at lower price
  • Achieved economies of scale because his business
    was so big
  • Producing a lot of oil by 1 company much more
    efficient than using many smaller companies
    (think Microsoft)
  • Negatives of Rockefellers approach was that
    business became more powerful than the government

30
What a Puny Little Government
31
  • Domination of trusts begins
  • sugar, tobacco, leather, harvester, meat
  • New rich eclipsing old rich who had inherited
    their money
  • Old rich were the leaders of the groups who
    attacked the new industrialists out of fear of
    being replaced

32
The Gospel of Wealth argues Darwinism...Survival
of the fittest
  • Blame the poor justification
  • New rich had become rich through hard work
  • Poor are lazy and can only blame themselves
  • Law also used (Constitutional arguments) to
    prevent break-up of Corporations because would be
    unlawful taking of property without
    compensation 14th protects corps)

33
Who is strong and who is weak?
34
  • Public starts to oppose trusts and newspapers
    rally against trusts
  • Federal regulation then passed to regulate and
    control trusts
  • Sherman Anti-Trust Act of 1890

35
  • Sherman Anti-Trust Act of 1890
  • Forbade combinations in restraint of trade
  • No distinction made between good and bad
    trusts
  • At first was ineffective
  • Little power given to government
  • Most cases decided in favor of corporations
  • Used to control unions (labor combinations)
  • Eventually strengthened in 1914 to stop trusts

36
  • South lacks growth of industry
  • Sharecropping and tenant system controlled by
    absentee landlords
  • 1880s rise of pre-rolled cigarettes and in 1890
    American Tobacco Company formed
  • 1880s North put more cotton mills in South
  • Lower taxes and cheap labor in South
  • Mills located in poorest regions because labor
    was cheapest (same today for car companies)

37
  • Women Join Workforce
  • Worked as secretaries, telephone operators, and
    in factories with men
  • Middle class women put off marriage and had
    smaller families
  • Poor women worked out of economic necessity
  • Womens wages stayed lower than mens

38
  • Foreign trade is expanded
  • US manufacturers trade with foreign countries
    when US could not absorb enough of their products
  • US military used to protect US business abroad,
    and to build a US empire
  • Wage earners did not share profits
    proportionately with business owners
  • 1900 1/10 of the people owned 9/10 of the
    wealth in the US

39
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40
  • Workers begin to organize together to fight for
    basic rights
  • Found many obstacles to a successful fight
    against employers
  • Oversupply of labor drives down wages
  • New Machines increase productivity which means
    less workers needed
  • Employment is no longer personal (small shops)
    but instead is large and impersonal

41
  • Corporations import strike-breakers (scabs) and
    pay thugs to beat up strike organizers
  • Corporations get conservative judges to issue
    injunctions against strikes (forcing them to
    stop)
  • If workers did not end strike, state or federal
    troops could be called out to forcibly put down
    the strike

42
  • Corporations use lockouts (lock factory doors
    against workers) to starve them into submission
  • Corporations force workers to sign ironclad
    oaths or yellow-dog contracts which were
    agreements not to join a union
  • Corporations put agitators names on black
    list, give lists to other employers so that
    these people could not find work

43
  • Some corporations used company town where
    company owned housing, stores and provided credit
    to workers, putting them in continuous debt
  • Middle class had little sympathy for workers
  • Low wages were still highest in the world
  • Believed poor could work hard to improve their
    condition, as others had done before
  • Strike seen as socialistic, un-American import
    from Europe
  • God would take care of poor and weak with
    charities

44
  • National Labor Union
  • Organized in 1866 lasted 6 years
  • Represented 600,000 workers at peak (skilled,
    unskilled, farmers)
  • Did not accept Chinese, women, or blacks
  • Destroyed by depression in early 1870s
  • Knights of Labor
  • Organized in 1869
  • Began as a secret society to prevent retaliation
  • Represented 750,000 workers at peak
  • Called for organizing all workers
  • Skilled, unskilled, women, blacks,
  • Called for producers cooperatives, codes for
    safety and health of workers, 8-hour day

45
  • Haymarket Square
  • May 4, 1886 police attacked a peaceful meeting
    protesting police brutalities
  • Dynamite bomb thrown, killing several dozen
    people (including some police)
  • 8 people (the Chicago 8) rounded up
  • No proof they had anything to do with the bombing
  • Judge ruled that since they had made speeches
    that incited violence, they were responsible for
    the bomb
  • 5 sentenced to death, 3 given long prison terms
  • Later those still alive are pardoned by Governor

46
  • Haymarket Square destroyed the Knights
  • Became associated with anarchists and violence
  • Knights other fatal weakness was bringing
    together unskilled and skilled workers
  • Unskilled workers easily replaced, nullifying
    effectiveness of strikes
  • Skilled workers got tired of being held back by
    unskilled workers so left Knights

47
  • American Federation of Labor (AFL) formed 1886
  • Led by Samuel Gompers, skilled cigar maker
  • Association of self-governing national unions
  • Each union kept its independence, while AFL made
    overall strategy
  • Gained 500,000 skilled members
  • In reality, only represented skilled workers
  • Used walkouts and boycotts to combat business
    abuses

48
  • Gompers
  • Hated socialism, rejected politics in favor of
    concrete economic goals for workers
  • Better wages, fewer hours, better conditions
  • Unlike Knights of Labor, concerned with more
    practical (and realistic) goals
  • trade agreement authorizing the closed shop
  • Gompers got some businesses to only hire union
    members
  • AFL was non-political except for supporting
    friends of the union and voting against enemies

49
  • Public attitudes toward workers began to change
    in the late 1880s and 1890s
  • Public acknowledged workers right to join unions
    and strike
  • Businesses work with unions to avoid strikes
  • Most businesses were still opposed to unions
  • 30 years of strikes and violence would be needed
    before labor finally gained recognition and power
    to stand up to business in the 1930s
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