Chapter 17: Capital and Labor in the Age of Enterprise I.

Railroad boom started dying down so workers strike from Pacific Coast to SF. called Great Strike of 1877 a. After strike boom by 150% b. Armories came about around 1877 which were fortresses to withstand assault by rioters II. Industrial Capitalism Triumphant a. Late 19th century=Great Deflation not enough demand for goods in England i. Industrial expansion in US went great allowing American firms to cut prices and still earn profits (increasing 50%) b. Age of Steel i. Early manufacturing was an extension of preindustrial economy ii. Railroad equip, machinery, construction materials were capital goods which helped nation produce more iii. Steel makingwrought ironnot good b/c it wasnt suitable for railroads and was very expensive iv. Bessemer made the furnace which was called the Bessemer converter that made raw pig iron into steel(more durable and cheaper and did not require hands-on labor) v. Andrew Carnegie and American Steel 1. began working for Penn Railroad and then became his own iron manufacturer 2. struck out on wartime speculation w/ network in railroad business 3. had Bessemer converter as centerpiece and had 3 steps: a. 1)blast furnaces smelt ore into pig iron b. 2)pig iron refined into metal that can be used(iron/steel) c. 3)refined metal is sold 4. continuous operation of iron oresteel rails in Western Pennsylvania 5. rich minerals from Mesabi range in northern Minn to Great Lakes; also arrived from App field 6. coal production doubled every decade after 1870 exceeding 400 million tons by 1910 7. coal started being consumed a lot like with industries going from waterpowersteam 8. urbine used rotation rather than steam engines back and forth piston motion 9. steam turbine+electric generator=complete energy revolution c. Railroad Boom i. Locomotives from Britain arrived and Americans wanted something that could be year round ii. Constructing Railroads

1. railroad=free enterprise but government still played big role so states and locals offered $ aid 2. land grants by government urged interregional rail construction 3. corporation let private capital be raised and investors had limited liability meaning that they only risked money they themselves had invested 4. corporation borrowed money by having interest-bearing bonds which was how railroads raised money 5. railroad building was done by construction companies which involved trying to get them to accept railroads bonds as payment and then trying to get cash by selling/borrowing bonds 6. Union Pacifics Credit Mobiler had half of the construction funds pocketed funds by promoters 7. John Murray Forbes-Boston merchant in China trade who developed Chicago, Burlington, and Quincy Railroad in the Midwest 8. Cornelius Vanderbilt started out with steamboat but made a railroad service between NYC and Chicago 9. James Hill made Great Northern into a great transcontinental railroad 10. Jay Gould was a stock market speculator and forced down rates and promoted integrated railroads iii. Railroad System 1. railroads became more efficient and gauges of track were too wide and railroads were not connected at terminal points(stopped shipping between Massachusetts to South Carolina) 2. freight cars had to be emptied and transferred by river 3. by end of 1880s there was a standard gauge (4x8.5) which allowed shippers to move goods w/o breaks or transfers also a standard time zone 4. George Westinghouse made the automatic coupler, air brake, and friction gare for starting/stopping cars and cost per ton-mile dropped 50% between 1840 and 1890 which made for a drop in freight rates for shippers 5. ~1/5 of bonds didnt pay interest(1889 good year) and 1/3 of industry went bankrupt 6. Wall Street investment banks tried to get investors to accept lower interest rates and by doing so more regional systems emerged+nerve system shifted to Wall Street d. Large-Scale Enterprise i. After civil war=big businesses because American market didnt block flow of goods and had a large population(1870-90 40mil60mil)

ii. Gustavus Swift+ Vertical Integration 1. Union Stock Yards opened in 1865=cattle market for country 2. livestock was auctioned off at Chicago stockyards and cattle were slaughtered at butchertowns 3. Swift saw that livestock lost weight to the East and that slaughterhouses lacked scale to use waste by products so he wanted to make beef so that it could be processed in bulk at Chicago stockyards(like Armour&Co. for pork) 4. he invested in refrigerator cars and made a packing plant then he built network of branch house and a delivery wagon to process the fertilizers, chemicals , by products which expanded to Kansas, Fort Worth, Omaha 5. vertically integrated firm capable of handling its own structure and all functions of an industry and small businesses were driven out 6. oligopoly means market dominance by the few which made small slaughterhouses and livestock dealers disappear 7. greater market control impulse to drive out competition was strongest in bonanza industries (no player had an advantage and market was chaoticpetroleum) iii. Rockefeller+Monopoly Power 1. salesmen used it for their concoctions, farmers used it to grease wagons 2. 1850 figured out how to extract kerosene 3. Titusville, Penn Drake drilled and struck oil and makeshift refineries sprung around Titusville 4. borrowed heavily and made his own firm Standard Oil of Ohio which became a leading refiner 5. railroad manufacturers offered him secret rebates that gave him an advantage on competitors and under South Improvement Company they invited him+ other refiners to take over industry 6. he offered competitors to sell out or die and then he took over Cleveland industry while his firm retained 95% of the oil 7. wanted an international market so added networks, oil pipe lines, tankers, and a big stake in oil fields iv. Consumer Marketing 1. rural customers=mail order enterprise from catalogues 2. department stores from Wanamaker in Phil which became a staple 3. social class wasnt able to be differentiated through clothes 4. people were thinking that beef couldnt stay fresh after a few weeks

5. advertising came into play over 90 million was spent for ads v. Managerial Rev 1. McCallum wanted railroads to begin making structures and system to control their activities 2. middle management which were functionally defined departments 3. middle managers directed flow of goods and info 4. machine tools Phil had small scale industries and it was called flexible specialization III. World of Work a. Industrial order included wage earners and $ change affected working people b. Labor Recruits i. Farmscities; industrial labor force but Americans rejected factory work b/c they didnt have indus. Skills so instead they had white-collar jobs that required basic skills ii. Southern Labor 1. Low wage industrial sector from people trying to get the South=to the North 2. Mill wages higher than farm earnings but not by much and had 40% lower labor costs 3. No factory recruited by individuals but rather by family (1/2 female + young) mostly whites blacks worked as janitors 4. Racially mixed southerners in Al iron industry 5. Blacks=scarce opportunities b/c industrial work wasnt open to them 6. Immigrant Workers a. Great migration started in 1840 and peasant economy started failing and most came to US b/c of new tech and higher $ b. Welsh=tin plate workers; English=miners; Germans=machinists; Belgians=glass; Scandinavians=seamen; Irish=labor workers c. Low paid labor came about d. Hunky referred to Hungarian workers also applied to Poles, Slovaks, slavs, etchunky work not for white men e. Networks determined ones position and business position f. Padrone was a boss in Italy that people labored under g. Immigrants entered mod indus order and try to find money to buy themselves prop

h. Most thought that America meant temporary but many changed their minds i. Immigrants took worse jobs +high availability iii. Working Women and Fam Econom 1. Made up of the working non farm labor 2. Only African americans worked outside of home and old women worked b/c of lost husband 3. Family wage was wanted to help wives stay at home 4. 1/3 work as domestic serv, 1/3 work has white collar jobs, 1/3 work in industry 5. Women jobs were not for men 6. Pregnancy was the hardest time (1/5 of children worked before 16) c. Autonomous Labor i. Miners were their own autonomous craft workers and they produced at their own pace ii. They abided by the stint which would let them have their own limit on how much they produce each day iii. Lowell, Mass incident caused one person to think that the system was of slavery iv. Top hatters glued fur to hats and used the terms shopped, bagged, cried off, under teach for hired, fired, quit, learning v. Youth was important to woman shaped their careers didnt do so as much for men vi. Strikes by Jewish garment workers of NY and Irish American telephone operators of Boston vii. Women workers didnt really have the craft power men had viii. Aristocracy of workers enjoyed autonomy ix. Pittsburgh foremen were known as pushers for driving their gangs very harshly d. Systems of Control i. Mass production was a new system that lent itself to mechanization which used machine tools to make things and made it easier to control people 1. machine tools became dedicated machines set up to do the same job over and over again 2. motive to get workers to work harder ii. Frederick W. Taylor came up with scientific management 1. eliminate brain work from manual labor 2. withdraw authority that workers had on the shop floor and obey people iii. Time and motion study workers would be paid at the rate of his output. iv. Essentially too expensive and workers resisted but Taylor achieved something that inspired other people to try out knew psychology to motivate their workers

v. Textile workers loss of autonomy came earlier than miners and ironworkers IV. Labor MVT a. Collective bargaining Americans began rejecting politics and using this b. Reformers+Unionists i. Thomas B. McGuire was a NY driver but realized that men like him that were ambitious were slaves in aspects of being independent American workers ii. $ crushed peoples dreams iii. Knights of Labor 1. wanted to produce a system that would let citizens become independent and like Jeffersons yeoman society but not agrarian 2. they wanted to be producers and be in a cooperative commonwealth 3. Knights of Labor were like the Masons or Odd Fellows and they wanted to give voices to men who couldnt reach their aspirations and gain labor emancipation 4. Knights became devoted through education with their leader Terence V. Powderly that made an open college to everyone except lawyers and saloonkeeprs to find more and more producers iv. Trade Unionism 1. trade union tended to everyday need 2. apprenticeship had closed shop to non competent workers and expressed crafts social identity 3. Birmingham ironworker said that a good union had good standard of morality, temperance, and good workmanship 4. International Typographical Union in 1852 which had other 30 unions and both groups had no conflicts yet 5. trade unions barred women and so did knights until 1881 where they struck and won and 50 grand women belonged to knights 6. women like Leonora M. Barry had rare opportunities for women and Powderly said that women are the best man in the Order c. AFL Emerges i. Knights had a strike against Jay Goulds SW railway system in 1885 (100 grand to 700 grand) ii. Sam Gompers + Pure and Simple Unionism 1. Sam Gompers was into craft trades and was in the Cigar Making Union and he made the pure and simple unionism a. Pure: strictly for workers by craft/occupation and no middle class reformers b. Simple: goals that only benefit worers

2. AFL was founded American Fed of Labor with Gompers as president iii. Haymarket 1. arguing over 8 hour day strike and Chicago had McCormick reaper and there was the battle 2. anarchism- stateless society and most local anarchist were German called a protest at Haymarket Square and some people shot the police (4 executions 1 suicide) 3. yellow dog contract workers pledged not to join labor organizations 4. AFL didnt welcome women and blacks and those were admitted to a separate, second class area d. Industrial War i. Homestead Strike 1. all the skilled workers in Homestead, Penn thought they were safe from threat and Carnegie wanted to get better machinery but fled and left everything to the command of Frick 2. company no longer dealt with Iron and Steel Workers from Amalgamated Asspcoatopm 3. armed guards hired by Pinkerton and then they surrendered because they were pummled by women in Homestead as they retreated to railway station 4. this marked the end of trade unions and ended any illusions about sanctity of workers community ii. Great Pullman Boycott 1. Pullman was a railroad man for the ARU American railway union but he wanted to raise rent rate without wage rate so people pulled a secondary labor boycott forcing second party railroards to bring pressure on primary target Pullman 2. theyhooked u.s. mail cars to every Pullman car and then railroades appealed to pres cleaveland to protect u.s. mail 3. Olney sided with former employers and Debs and his associates were jailed 4. it failed b/c it was crushed by naked use of gov power e. American Radicalism in the Making i. Eugene V. Debs and American Socialism 1. Debs was treasurer of the Brotherhood of Locomotive Firemen 2. devoted himself to ARU and industrial union union open to all railroad workers 3. was a populist but changed to Marxist 4. Marxism struck with German Americans and in the Socialist Labor Party in 1877 it became permanent

5. Daniel De Leon party head who thought ideological purity is more important than winning elections and De Leon launched rival Socialist Party of America in 1901 6. socialism had a powerful appeal and had a bunch of networks f. Western Radicalism i. Western fed of miners less silver copper price made pressure to cut miners wage ii. Coeur dAlene had striking miners in Idaho engaged in gun battles and they were imprisoned iii. Ed Boyce called all union members to arm themselves and said the wage system sucked iv. Big Bill Haywood and Boyce joined left wing Socialist to creat Industrial Workers of the World v. Wobblies supported Marxist class struggle but at workplace vi. General strike would bring a revolution and a new society would emerge and syndicalism describes this brand of workers radicalism Count Vay de Vaya and Luskod Pittsburg Inferno travel to way to asia Killing floor: site of Americas mass production revolution Working women wives in the mill Knights of st. crispin for shoes and draughts of st. crispin

UNIT FIVE: Terms and Concepts

Chapter 17 The Great Deflation Definition Late 19th century=Great Deflation not enough demand for goods prevalent in England Bessemer made the furnace which was called the Bessemer converter that made raw pig iron into steel began working for Penn Railroad and then became his own iron manufacturer had Bessemer converter as centerpiece and had 3 steps: 1)blast furnaces smelt ore into pig iron 2)pig iron refined into metal that can be used(iron/steel)

Bessemer Converter Andrew Carnegie

3)refined metal is sold Limited Liability corporation let priv capital be raised and investors had limited liability meaning that they only risked money they themselves had invested Swift saw that livestock lost weight to the East and that slaughterhouses lacked scale to use waste by products so he wanted to make beef so that it could be processed in bulk at Chicago stockyards oligopoly means market dominance by the few which made small slaughterhouses and livestock dealers disappear 1850 figured out how to extract kerosene Titusville, Penn Drake drilled and struck oil and makeshift refineries sprung around Titusville Hunky referred to Hungarian workers also applied to Poles, Slovaks, slavs, etchunky work not for white men Am. Lab. Union in NE Knights of St. Crispin Sep impurities in coal mine Breaker Boys Scientific Management Collective Bargaining The Knights of Labor Closed Shop Samuel Gompers American Federation of Labor Condition of employment where workers dont join labor Engineers approach applied to workers scientific management brain work must be eliminated from manual work and workers have no authority Collective bargaining Americans began rejecting politics and using this Jeffersons yeoman society but didnt want farm past but wanted producing future Apprenticeship through closed shop for joys for union members Sam Gompers +Unionism which was the Am. Fed. Of Labor Organization of labor that came about in the United States

Gustavus F. Swift

Oligopoly John D. Rockefeller

Hunky

Yellow-Dog Contracts org. Indus. Lockout betw. Strikers+agents Homestead Strike Labor union v railroad strikes The Pullman Strike Union leader that led strikes Eugene V. Debs Oldest pol party that led unions Socialist Labor Party Int union of workers of 300 grand Industrial Workers of the World