Chapter 24: Industry Comes of Age (1865-1900)

The Growth of the Railroad

Significance:

1. Opened up market (manufactored and raw materials)
2. Stimulated mining and agriculture, mainly in west
3. CONNECTED THE CONTINENT!
4. Stimulated immigration
5. Created time zones
6. Made first millionaires
7. Created monopolies.
8. Transported more people across the U.S.

Railroad Consolidation and Mechanization

Vanderbilt:

• made millions in steamboating and used money to expand railroads
• offered lower rail rates and popularized steel rails
• founded Vanderbilt University in Tennessee
• Made $100 million and his grandson, George, used this fortune to
  build the biggest house in America - The Biltmore Estate
  http://cache.eb.com/eb/image%3Fid%3D43071%26rendTypeId%3D4&imgrefurl=http://www.britannica.com/eb/art-35642/Cornelius-Vanderbilt&h=450&w=323&sz=24&hl=en&start=15&tbnid=dNXdAy2hCOyNmM:&tbnh=127&tbnw=91&prev=/images%3Fq%3DVanderbilt%2BRailroad%26gbv%3D2%26hl%3Den%26safe%3Dactive">Cornelius Vanderbilt

Revolution by Railways

Railroad Corruption

• stock watering-RR stoock promoters gave false info to promote a given lines assets and sold stocks or more than they were worth.
• pool- agreement of buisnesses in an area to divide buisness and share profit
• trust- companys trust each other not to raise prices
• Americans overpowered by money power but hesitant to stop it becuase of their idea of capitalism.

Jay Gould:

Controlling the RR Monopoly

The Grange(Patrons of Husbandry): farmers protesting for the protection of crop prices

1886 Wabash:

• decreed individual states had no power to regulate interstate commerce

1887 Interstate Commerce Act:

• Railroads had to regulate and publish their rates openly.
• Set up the ICC which is still around today, which administerd and enforced the new legislation
• 1st law to regulate buisness in the interest of society

Miracles of Mechanization

Why did US go from #4 to #1 in world manufacturing?

1. Liquid capital

2. Natural resources exploited

3. Immigration

4. American inventions

The Tycoons: Vertical vs. Horizontal Integration

Vertical: Forming of one group in all phases of manufacturing from mining to marketing.

• Good example: Carnegie mined ore, his ships carried it, and his railroad brought it to steel furnaces in Pittsburg.

Horizontal: Partner up with your competitors in order to form a monopoly.

• Example: Rockefeller and his Standard Oil Company.

Supremacy of Steel

• Steel was a scarce commodity in the America of Abraham Lincoln
• Steel was expensive and was used largely for products like cutlery
• In the 1870's Vanderbilt of the New York Central began using steel rails, but was forced to import them from Britain
• Within 20 years, the U.S. was pouring out more than one-third of the world's supply of steel
• By 1900 America was producing as much as Britain and Germany combined

Rockefeller & Standard Oil

• Automobiles need for gas caused oil industry to boom.
• Rockefeller - Standard Oil Co., 1882.
• 1887 - Controlled 95% of all oil refineries in the country.

Gospel of Wealth

• book written by andrew carnagie in 1889
• wealthy proclaimed the poor were poor because they were lazy.
• allowed large sums of money to be passed into the hands of persons or organizations ill-equipped mentally or emotionally to cope with them.

Social Darwinists:

Sherman Anti-Trust Act of 1890

• forbide combinations in restraint of treade, without any distinction between good trusts and bad trusts
• "bigness" was the sin
• failed because of the loopholes
• helped break up the labor union
  set precedent on how to control buisnesses

The South in the Age of Industry

• still lagging behind
• rate-setting system by railroad, better for North
• machine for cigs helped them along; started producing more tobacco
• economic discrimination against them (Brigham steel industry)
• North tried to get them to industrialize, but it didn't work

Impact of New Industrial Revolution in America

1. standard of living went up
2. job oppurtunitites
3. women working more
4. hard to teach the "industry life"
5. now millionaires
6. foreign trade went up
7. owners weren't as personalized w/ employees
8. made unions stronger
9. Jeffersonian ideals gone
10. accentuated class division

In Unions There is Strength

National Labor Union:

• 1866 only lasted 6yrs.
• didn't include blacks nor women

Knights of Labor:

• campaigned for economic reform, 8 hour day
• included all workers
• didn't want to interfere with politics

known as Noble and Holy Order of the Knights of Labor

began in 1869

at first was a secret society with private ritual, passwords, and a special handshake.

wanted "one big union"

Haymarket Square Riots (1886):

• took place in chicago
• someone threw a bomb into a group of policemen while they were trying to disperse a public meeting in support of striking workers
• blamed Knights of labor; this is what the Knights are known for
• John Alltegold studied this case and freed 35 accused who would have been executed

The AFL:(American Federation of Labor)

• Wanted social reform, shunned politics
• Sought better wages, hours, and conditions
• used walk-out and boycott

Started in 1886

consistd of self-governing national unions

referred to as the "labor trust"

Samuel Gompers:

Founder and President of AFL for all but one year from 1886 to his death in 1924

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Interstate Commerce Act

-Made railroads publsih their rates publicy.

Prohibited large pools from developing.

Helped to create the Interstate Commerce Comission, which helped large monopolies from  developing.