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Chapter 18: The Rise of Industrial America I. Introduction A. World's Fair/Columbian Exposition Chicago 1.

1892 Grover Cleveland introduce 2. Corporations display products 3.Americans unsettled and exhilarated 4. US produce more goods than Eng, France, and Germany combined II. The Rise of Corporate America A. The Character of Industrial Change -- 6 Key Features -1. coal 2. transportation, communication, factories 3. need 4 workers 4. pressure 2 cut costs, create monopolies 5. drop in price levels 6. money supply fails keep pace with productivity --wages near subsistence level, demand 4 consumer goods, capital goods boost output B. Railroad Innovations 1. Railroads: more than all in Europe, intense competition 2. Pioneer corporate enterprise a. issue stock b. separate ownership from management c. national distribution & marketing systems d. new organizational structure 3. Railroad Entrepreneurs

a. Collis P. Huntington--Central Pacific b. Jay Gould--Union Pacific c. James J. Hill--Northern Pacific 4. Railroad $$$ trouble; appeal federal grants/loans, sell stocks, bonds 5. Rails use magnetic telegraph, hierarchical organization, geographical units a. accounting systems allow predicting profits; model 4 other businesses C. Consolidating the Railroad Industry 1. 1870s rails replace canals; chaos--originally no standardization 2. Major lines: Union Pacific, Northern Pacific, Atchison Topeka and Santa Fe, Southern Pacific, Great Northern 3. Industrialists diverse group; some villains, others upstanding 4. standardization--4'8 1/2" gauge, cooperative billing, free politician passes 5. Interstate Commerce Act (Shelby Cullom) a. banned monopolistic activity, pooling, rebates, short-distance rates b. Hepburn Act--empowers ICC to set rates 6. 7 large rail networks control 2/3 of nation's rails by 1906 D. Applying Lessons of Railroads to Steel 1. Andrew Carnegie a. Past: Pittsburgh textile mill, telegraph operator, secretary for Tom Scott b. cost-analysis technique and Bessemer process; 1st know production cost c. vertical integration--control all aspects, raw materials to finished goods d. purposeful philanthropy: 300 million to libraries, universities, peace e. 1900 Carnegie Steel world's largest industrial corporation f. Tells public anyone can rise; not entirely true, immigrants believe --Morgan creates United States Steel Corporation; 1st funded over 1 billion

E. The Trust: Creating New Forms of Corporate Organization 1. Oil, salt, sugar, tobacco, meatpacking industries competitive too a. Philip Armour & Gustavus Swift efficient with every part of animal 2. Edwin L. Drake 1st petroleum well Titusville Pennsylvania, kerosene, oil spills 3. John D. Rockefeller started Standard Oil Company a. Purchased own tanker cars, railroad rebate, own pipeline network b. pool--agreement among companies over fixed price and quotas c. Standard Oil Trust oligopoly, merge oil companies into 1 4. Public Outcry, starts in New York a. Sherman Anti-Trust Act -- outlawed trusts & monopolies, didn't define trust, restraint of trade 5. Supreme court sympathetic 2 big business a. United States v. E. C. Knight Company (sugar refining) III. Stimulating Economic Growth --Small enterprises, inventions, specialty production, & marketing help as much as corporate A. Triumph of Technology 1. New inventions encourage consumer demand; ex. electricity 2. Public unaware of most developments a. Bessemer, refrigerated railcars, Bonsack's cigarette machine 3. Public saw ones that changed everyday life a. Singer's sewing machine, Bell's telephone, Edison's light bulb b. more personal wardrobes, undermine polite behavior, no need daylight 4. Thomas Edison a. 1% inspiration, 99% perspiration b. 1st major invention: stock-quotation printer

c. Invention factory Newark NJ, then Menlo Park; NY power plant d. knew needed complete system, easy installation, cheaper e. sue competition, merge to form General Electric Company f. mimeograph, microphone, camera and film, storage battery g. Best Achievement: Menlo Park laboratory, model industrial research B. Custom-Made Products 1. Tailored to individual buyers; machinery, jewelry, furniture, clothing 2. Baldwin Locomotive Works; no standardization 3. Seamstresses and milliners create women clothing (unlike sweatshops for men) C. Advertising & Marketing 1. Output often exceed market demand 2. Flour industry, continuous process a. new product lines advertise, ex Quaker Oats 3. brand names, slogans, endorsements, guarantees, prizes 4. George Eastman create Kodak, paper-based, democratic D. Economic Growth: Costs and Benefits 1. 1900 US most productive economy, on world stage 2. Benefits: labor-saving products, lower prices, transport and communication 3. Costs: subsistence wages, easily fired, environment harmed IV. The New South --1900 Southern industry lags; effects of CW, few cities, less $, illiteracy, less tech, "lost cause" A. Obstacles to Economic Development 1. Lack $; 2% banks left; Repub gov. require $50,000 to start bank a. merchants new bankers; farmers tied 2 land, no labor 4 industry b. cotton & tobacco vulnerable economic fluctuations

2. Victim of northern policies; high tariff, freight rates, devalued silver 3. Lower school attendance, refuse tax property 4. $ given 2 war veteran pensions B. New South Creed & Southern Industrialization 1. New South Creed--south natural site 4 industry; coal, timber, labor a. Henry Grady (Constitution), Henry Watterson (Courier Journal) support 2. 1880's industrial movement gains a. tax exemptions, expositions, leased convicts, land 2 rails, sell mineral b. Birmingham Alabama largest pig-iron shipper in nation c. blacks migrate 2 urban cities; 20%; no advancement -Steel blacks more $ than white textile workers C. Southern Mill Economy 1. Textile mills bring new towns a. Piedmont cotton mills; south leading textile mill center 1920 b. Augusta GA, Lowell of South 2. Entrepreneurs typically upper/middle class a. R.R. Haynes forms Henrietta Mills b. exploit workers, pay less than NE; argue escape poverty, virtue c. own housing, company store, school d. pay in scrip--certificate to store; cycle of debt e. hired whole families; strong worker ties 3. Workers cling cooperative country ethic a. own gardens, chicken, cows, pigs D. Southern Industrial Lag 1. Depend more on outside $, tech, & experts

2. U.S. Steel price Birmingham based on Pittsburgh; high steel prices in south V. Factories & The Work Force --Industrialization uneven; most Americans work in small shops A. From Workshop to Factory 1. Transition 2 factory economy series of small jolts, emphasis discipline 2. Distinct working-class, ethnic culture 3. Even prior 1850, skilled labor eroded; shoe industry single function teams 4. Can't drink on job, less group solidarity 5. 1890 35% workers women, some children; 6. Artisans no longer in production (except carpentry, bricklaying) B. Hardships of Industrial Labor 1. Factories create unskilled labor demand 2. Companies hire subcontractors, foremen "push" work gangs, seasonal 3. Unskilled transient; low pay ($1.3) 4. Dangerous conditions; 12 hour shifts; high accident rate 5. Child labor (8-9 yrs), coal slate pickers, black/brown lung disease, ride belts 6. Railroad most dangerous to adults a. Disabled + widows minimal $ aid ; family depend on relatives C. Immigrant Labor 1. After 1890s, New Immigrants--southern and eastern Europe a. Chinese in west, French Canadians NE b. Despite conditions, earn more than homeland c. Difficult adjust factory schedule, proper values instilled 2. Tactics enforce discipline a. temperance societies, Sunday schools, cut wages, piecework, housing

b. treat dark skinned southern Europeans & Irish, Greek, Italian worse D. Women & Work in Industrial America 1. Shaped by marital status, social class, race a. rich stay home or hire, poor sew or make buttons b. urbanization leads cigar and clothing to exploit 2. Young working-class women view factory as opportunity a. 1870-1900 women working outside home triple 3. Motivation a. agriculture changes, supply family income (temporary wages) b. wanted to earn own income; clerical and secretarial safe work, pay more E. Hard Work and Gospel of Success 1. Preach that anyone can have success a. Horatio Alger's Ragged Dick details rags to riches b. Mark Twain disagrees; only liars and cheaters; McGuire think only rich c. 95% industry leaders upper/middle class d. poor could rise in small companies 2. Different fates immigrant workers a. Irish successful Union Iron Works b. Chinese discrimination; Crocker spite fence around Yung c. truth = rags to respectability; top 10% have $, wide gap d. Increase in real wages & buying power offset unemployment, injury VI. Labor Unions & Industrial Conflict --Unionization slow, ethnic divisions -- American Federation of Labor success after National Labor Union & Knights of Labor A. Organizing the Workforce

1. William H. Sylvis forms National Labor Union a. 8-hour day, no convict labor, banking reform, restrict immigration, federal department of labor, woman officers, urge separate black b. After strike, Sylvis' death marked decline 2. Uriah H. Stephens found Holy Order of the Knights of Labor (PA) a. modeled on freemasons, demand = women pay, end child and convict labor, want earnings tax, cooperative employee-employer ownership b. excluded bankers, doctors, lawyers, stockbrokers, gamblers, liquor c. Powderly oppose strikes, organize cooperatives, women membership d. most members disagree Powderly's antistrike belief 3. Wabash victory vs. Jay Gould a. membership soars; mayor and judge campaigns, ban convict labor b. Haymarket riot = decline 4. Chinese Exclusion Act--10 year immigration moratorium, permanent 1902 5. American Federation of Labor a. Samuel Gompers; practical wages, no utopian goals; skilled support b. Group of trade unions, each control own members, executive council c. 8 hr. wrkday, safety liability, mine-safety B. Strikes and Labor Violence 1. 1st wave: 1873 Wall Street stock market depression a. 1877, lower wages causes deadly wildcat railroad strike, Hayes ends b. "yellow dog" contracts-- workers promise no strike or join union 2. Haymarket Square a. Bomb hits police, open fire crowd b. intensifies hatred 4 labor unions, convinced foreign conspiracy 3. Violent Coeur d'Alene revolt in Idaho in West

4. Violence in Carnegie Steel Company, Homestead PA, in East 5. Strike Against Pullman Palace Car Company a. most systematic use of troops 2 crush union b. low wage, high rent; form American Railway Union, Eugene Debs c. refuse switch Pullman cars, paralyze rail traffic d. General Managers' Association, Richard Olney injunction vs. ARU e. In re Debs--legalize injunction vs. labor unions, upheld Deb's sentence 6. US officials generally side with manufacturers (unlike GB & Germany) C. Social Thinkers Probe Alternatives 1. Defenders of laissez-faire capitalism a. Adam Smith, Wealth of Nations, invisible hand b. Andrew Carnegie, "The Gospel of Wealth," survival fittest c. William Sumner, What Social Classes Owe to Each Other, natural laws 2. Criticizers a. Lester Ward. Dynamic Sociology, regulate business & protect weak b. Henry George, Progress & Poverty, tax speculators, socialism benefits c. Edward Bellamy, Looking Backward, Nationalist clubs, no conflict 3. Karl Marx a. Das Kapital, labor 2 produce product = its value, bourgeoisie vs prols b. Friedrich Engels, state eventually wither away, Socialist Labor Party c. minor appeal 2 US; mainly German immigrants 4. US fears anarchists more than communism a. Alexander Berkman tried kill Henry Frick b. anarchists reject capitalism and Marxism