An

Industrial

Society

(1860-1914)

Section 1

The

Growth

of

Industry

Section 1 Objectives

• To identify factors that nurtured the industrial revolution

• To explain how business cycles reflected rapid economic growth

• To describe the growth of the steel and electric-power industries

• To analyze how inventions changed American life

A NEW INDUSTRIAL AGE

LATE 19TH CENTURY AMERICA EXPERIENCED AN INDUSTRIAL BOOM

THE EXPANSION OF INDUSTRY• After the Civil War (1865)

the U.S. was still largely agricultural

• By 1920, the U.S. was the leading industrial power in the world

What factors helped U.S. industry grow?

• Plentiful Natural Resources• Growing Population• Improved Transportation• High Immigration• New Inventions• Investment Capital• Government Assistance

Plentiful Natural Resources

Growing Population

From 1860-1900, the U.S. population grew from 31.5 million to 76 million. This led to a growing need for goods. The demand for goods spurred the growth of industry.

Improved Transportation

Railroad building boomed after the Civil War. As shipping raw materials and finished goods to markets became even easier, industry grew.

High Immigration

Immigrant population boomed between 1860-1900 with 14 million immigrants. Many immigrants brought valuable specialized skills with them, such a metalworking. Other immigrants provided factories with the workers needed for growing industries.

New InventionsNew machines and improved processes helped

industry produce goods more efficiently.

INVENTIONS SPUR INDUSTRY

BESSEMER STEEL PROCESS

• Oil was not the only valuable natural resource

• Coal and iron were plentiful within the U.S.

• When you removed the carbon from iron, the result was a lighter, more flexible and rust resistant compound – Steel

• The Bessemer process did just that (Henry Bessemer & William Kelly)

• Bessemer’s process cut the cost of steel so much that steel output increased 500 times between 1867 and 1900 BESSEMER CONVERTOR

CIRCA 1880

NEW USES FOR STEEL• The railroads, with

thousands of miles of track, were the biggest customers for steel

• Other uses emerged: barbed wire, farm equipment, bridge construction (Brooklyn Bridge- 1883),and the first skyscrapers BROOKLYN BRIDGE

SPANS 1595 FEET IN NYC

ELECTRICITY• 1876- Thomas Alva

Edison established the world’s first research lab in New Jersey

• There Edison perfected the incandescent light bulb in 1880

• Later he invented an entire system for producing and distributing electricity

• By 1890, electricity powered numerous machines

EDISON

THE TELEPHONE

• Another important invention of the late 19th century was the telephone

• Alexander Graham Bell and Thomas Watson unveiled their invention in 1876

BELL AND HIS PHONE

How did other inventions of the 19th century change the way of life in America?

Other inventions, such as the typewriter and the sewing machine, helped open up jobs for women. They also changed how people purchased their clothing since ready-made clothing was available.

THE TYPEWRITER• Christopher Sholes

invented the typewriter in 1867

• His invention forever affected office work and paperwork

• It also opened many new jobs for women

• 1870: Women made up less than 5% of workforce

• 1910: They made up 40%

Investment Capital

When the economy was thriving, many businesses made large profits. Banks and wealthy individuals hoped to share in the profits of businesses by loaning them money to build factories and buy equipment.

Government Assistance

State and federal governments used tariffs, land grants, and subsidies to help businesses grow. Lately, government bailouts have aided industry.

The Business Cycle

• A Pattern of good times and bad times• Booms-people buy more and invest in

business, and business and industry grow• Busts-spending and investing decrease,

causing industries to lay off workers and make fewer goods. Businesses may shrink or even close. Called DEPRESSION.

• 1837,1857, 1873, 1893

Why does the economy grow during a boom?

During a boom period, people buy more consumer goods. People invest in business. As a result, industries and businesses grow.

How are economic booms and busts related?

Usually, after a period where the economy is down or in a bust time, it will be followed by a strong economic growth.

How did the panics of 1873 and 1893 affect industry and workers?

During the panics of 1873 and 1893, millions of people lost their jobs and thousands of businesses failed.

EffectAmerican industry grows During the period from 1860-1914.

CausesThe Growth of Industry

1860-1914

Read the cause and effect statements below. In the blank before each item, write T if thestatement is true and F if it is false.

________1. When customer spending and business investment decrease,

industries grow and hire more workers.

________2. The Bessemer steel process increased the cost of making iron into

steel.

_______ 3. The effect of Thomas Edison’s light bulb on America was the

widespread use of electric light instead of gas light.

________4. One of the effects of the invention of the sewing machine was that

people began to buy ready-made clothing in standard sizes.

The Growth of Industry1860-1914

Section 2

Railroads

Transform

the

Nation

Section 2 Objectives

• To analyze the funding for the first transcontinental railroad

• To identify the groups that worked on the first transcontinental railroad

• To describe the linking together of the two railroads

• To evaluate the changes brought about by the railroads

Why did Americans want to build a transcontinental railroad?

A railroad that spanned the entire continent would encourage people to settle the West and develop its economy. The economies of the East and the West would be linked through trade. (1)

Union Pacific

Central

Pacific

How was the transcontinental railroad financed?

The government lent both the Union Pacific & Central Pacific millions of dollars. It also gave them 20 square miles of public land for every mile of track they laid. The railroad companies then would sell the land to raise money. (2)

THE AGE OF THE RAILROADS• The growth and

consolidation of the railroad industry influenced many facets of American life

• However, the unchecked power of the railroad companies led to widespread abuses and then reforms

Railroads Become ScandalousCREDIT MOBILIER SCANDAL

• Stockholders of Union Pacific Railroad formed a construction company in 1864

• Stockholders then gave contracts to the company to lay track at 3 times the actual costs and pocketed the difference

• They donated shares of the stock to 20 Republican members of Congress in 1867

• The fake Credit Mobilier Company made almost $44,000,000 off the federal government

POSTER FOR BOGUS CONSTRUCTION COMPANY

INTERSTATE COMMERCE ACT• In 1887, the Federal

government re-established their control over railroad activities

• Because of railroad abuses Congress passed the Interstate Commerce Act and established a 5-member Interstate Commerce Commission (ICC) (3)

• The ICC struggled to gain power until 1906 1887 –

CONGRESS PASSED THE ICA

THE GRANGE AND THE RAILROADS• Farmers were especially

affected by corruption in the railroad industry

• Grangers (a farmers organization) protested land deals, price fixing, and charging different rates to different customers

• Granger Laws were then passed protecting farmers

• States were given regulation control of railroads by the Courts

• Grange member formed cooperatives which were owned and run by their members

• They bought grain elevators and sold crops directly to merchants (4)

GRANGERS PUT A STOP TO RAILROAD

CORRUPTION

What problem did the Central Pacific face when hiring workers?

The Central Pacific faced labor shortages because most men wanted to try and strike it rich as miners.

How did Chinese workers benefit the Central Pacific?

The Chinese were efficient, fearless and hardworking. Because they followed their own customs and drank tea instead of unboiled water, they were sick less often than other workers.

A great number of Central Pacific’s workers were from China. (5)

Where did the Union Pacific get workers?

Union Pacific workers came from a variety of backgrounds including former soldiers from the North & South and freed slaves. One of the largest groups of workers was immigrants, many from Ireland. (5)

A NATIONAL NETWORK• By 1869, tracks had

been laid across the continent (Golden Spike- Utah)

• Immigrants from China and Ireland and out-of-work Civil War vets provided most of the difficult labor

• Thousands lost their lives and tens of thousands were injured laying track IMMIGRANTS FROM

CHINA LAID TRACK

How did the Union Pacific and Central Pacific companies celebrate the completion of the

transcontinental railroad?

A big celebration was held in Promontory, Utah, on May 10,1869. Hundreds of railroad workers, managers, spectators, and journalists gathered. Millions of Americans waited to hear the news by telegraph.

The transcontinental railroad was completed in 1869. The Central Pacific and Union Pacific railroads met in Promontory Point, Utah

and laid a Golden Spike

What happened in the railroad industry after the transcontinental railroad was built?

Between 1869 and 1890, the amount of money earned by railroads carrying freight grew from $300 million to $734 million per year. (6)

Why did the country need a standard time?

It was too difficult to make train schedules when every community determined its own time, based on calculations about the sun’s travels. (7)

RAILROAD AND TIME• Before 1883, each

community still operated on its own time

• For example: Noon in Boston was 12 minutes later than noon in New York City

• Indiana had dozens of different times

• No standard time reference

PROFESSOR DOWD CREATES TIME ZONES

• In 1869, to remedy this problem, Professor C.F. Dowd proposed dividing the earth into 24 time zones

• The U.S. would be divided into 4 zones: the Eastern, Central, Mountain, and Pacific

• 1883 – Railroads synchronized their watches across U.S.

• 1884 – International Conference adopts zones

PROFESSOR DOWD EXPLAINS HIS TIME ZONES

THE WORLD IS DIVIDED INTO 24 TIME ZONES

THE UNITED STATES IS DIVIDED INTO 4 TIME ZONES

How did the railroads benefit the economy?

Railroads linked the economies of the East & West. (8)Raw materials such as lumber, grain, and livestock were carried eastward and processed in Midwestern cities such as Chicago and Cleveland. In turn, manufactured goods from eastern cities were sold to Westerners.

RAILROADS SPUR OTHER INDUSTRIES

• The rapid growth of the railroad industry influenced the iron, coal, steel, lumber, and glass businesses (9) as they tried to keep up with the railroads demand for materials

• The spread of the railroads also led to the growth of towns, new markets, and opportunity for profiteers

RAILROADS LED TO GROWTH OF CITIES

• Many of today’s major cities owe their legacy to the railroad

• Chicago, Minneapolis, Denver, and Seattle (10) all grew up thanks to the railroad

• Part of transportation network that crossed the country

“MY KIND OF TOWN”

The transcontinental railroad is completed in 1869. U.S. railroad system expands.

1. Why build it?

2. How was the railroad financed?

3. What did scandals of RR’s lead to?

4. How did the Grange help farmers?

5. Where did workers come from?

Expansion of Railroad Assessment

Fill in each box with examples of how the expansion of the railroad industry affected item.

The transcontinental railroad is completed in 1869. U.S. railroad system expands.

6. How much money was made?

7. Why did a system of time develop?

8. How did RR’s help the economy?

9. What other industries grew?

10. What other big cities grew?

Expansion of Railroad Assessment

Fill in each box with examples of how the expansion of the railroad industry affected item.

Section 3

The

Rise

of

Big

Business

The Rise of Big Business Objectives

• To analyze the growth of corporations

• To describe monopolies and trusts and evaluate their effects

• To summarize the positive and negative aspects of the Gilded Age

• To evaluate the development of the economy of the South

How did businesses change in the late 1800’s?

Until the late 1800’s, most businesses were owned directly by one person or by a few partners. New technology caused business owners to want to buy new equipment. To raise money business operators formed corporations. A corporation is a company that raises money by selling shares of stock.

When a business holds stock in many companies, often in the same industry, it’s called a trust.

What advantages do corporations have that smaller businesses do not have?

1) By selling stock, a corporation can raise large amounts of money

2) A corporation has special legal status and continues to exist after its founders die. Banks are more likely to lend corporations money

3) A corporation limits the risks to its investors, who do not have to pay off the corporations debts

BLACK GOLD• In 1859, Edwin Drake used a

steam engine to drill for oil • This breakthrough started an

oil boom in the Midwest and later Texas

• At first the process was limited to transforming the oil into kerosene and throwing out the gasoline -- a by-product of the process

• Later, the gasoline was used for cars

• John D. Rockefeller soon started his oil business in 1863

EDWIN DRAKE PICTURED WITH BARRELS OF OIL

Rockefeller Uses Ruthless Methods To Gain Control of the Oil Industry

He decided to put his competitors out of business by creating monopolies and forming trusts.

John D. Rockefeller took a $2000 investment in 1859 and turned it into one of the most profitable businesses in the United States. Rockefeller became known as a robber baron but also gave away $500,000,000 to charity.

BUSINESS GROWTH & CONSOLIDATION

• Mergers could result in a monopoly (Trust)

• A monopoly is complete control over an industry by wiping out competition

• An example of consolidation: In 1870, Rockefeller’s Standard Oil Company owned 2% of the country’s crude oil

• By 1880 – it controlled 90% of U.S. crude oil

• That’s in 10 years! CHICAGO’S STANDARD OIL BUILDING IS ONE OF THE WORLD’S TALLEST

ROBBER BARONS• Alarmed at the cut-throat

tactics of industrialists, critics began to call them “Robber Barons”

• Famous “Robber Barons” included Carnegie (steel), Rockefeller (oil), Vanderbilt (RR), Stanford (RR), J.P. Morgan (Banking), and Jay Gould (RR)

• Robber Barons got richer while many Americans got poorer

J.P MORGAN IN PHOTO AND CARTOON

Jay Gould Robber Baron

Jay Gould used illegal tactics like bribing officials and selling fake stock to amass a fortune in excess of $77 million, mostly in the railroad industry. (Sound like Bernie Madoff?)

Bernie Madoff is a present day robber baron

SHERMAN ANTI-TRUST ACT• In 1890, the Sherman Anti-

Trust Act made it illegal to form a monopoly (Trust)

• Prosecuting companies under the Act was not easy – a business would simply reorganize into single companies to avoid prosecution

• Seven of eight cases brought before the Supreme Court were thrown out

BIG BUSINESS AND LABOR• Andrew Carnegie was

one of the first industrial moguls

• He entered the steel industry in 1873

• By 1899, the Carnegie Steel Company manufactured more steel than all the factories in Great Britain combined

Carnegie’s Methods of Gaining Control of the Steel Industry Differ From Rockefeller’s

Andrew Carnegie believed in making the best and cheapest product. He did this by controlling all the processes related to the manufacture of the steel. By doing this, he was able to gain control over the steel industry.

• The term "gilded age" was coined by Mark Twain and Charles Dudley Warner to describe the concentration of wealth in late nineteenth-century American society. 

• During this period, industrial kingpins such as Andrew Carnegie, J.P. Morgan, and John D. Rockefeller amassed unprecedented fortunes.  Meanwhile, the drive to accumulate wealth translated into miserable working conditions in factories, coal mines, and oil fields.

• Violent strikes broke out throughout the country.  Of the thousands of strikes that erupted during the 1880's and 1890's, some of the most furious were the Great Railroad Strike of 1877, the Haymarket Riot of 1886, and the Pullman strike of 1894.

The Guilded Age

Characteristics of the “Gilded Age”

Many wealthy people had gained their wealth through inheritance and not working to obtain it. Few actually got rich through hard work. The number of wealthy people in America disguised society’s problems, such as corrupt politics and widespread poverty.

Why is its name appropriate for the era?

To gild means to coat an object with gold. It appears that America was a nation of wealth; however, many Americans lived in horrible poverty.

ROBBER BARONS WERE GENEROUS, TOO

• Despite being labeled as greedy barons, rich industrialists did have a generous side

• When very rich people give away lots of money it is called “Philanthropy”

• Carnegie built libraries, Rockefeller, Leland Stanford, and Cornelius Vanderbilt built schools ROCKEFELLER CHAPEL –

UNIVERSITY OF CHICAGO

The Economy of the South Grows Slowly

The South had been left in ruins following the Civil War. It remained mostly an agricultural region with little industry. Also, the price of cotton, the South’s main crop, was very low.

Sharecropping is a system of agriculture in which a landowner allows a tenant to use the land in return for a share of the crops produced on the land.

The Sharecropping System Affect Workers

Landowners rented their land to sharecroppers who paid a large portion of their crops as rent. Often they had to buy their seed and tools on credit. Sharecroppers made little money from the sale of cotton because of low prices. Merchants often cheated them, increasing their debt.

Sharecropping kept poorAmericans in constant poverty.Many never even learned to reador write.

Match the term in the second column with the description in the first column. Write the letter of your answer in the blank.

______ 1. A person who gives away a great deal

of his or her money to charity.

______ 2. A company that raises money by selling

shares of stock.

______ 3. A business leader who became wealthy

by using dishonest methods.

______ 4. A company that wipes out it competitors

and controls an industry.

______ 5. A wealthy businessman who controlled the

oil industry.

______ 6. A legal body created to hold stock in many

companies, often in the same industry.

______ 7. A wealthy businessman who controlled the

steel industry.

______ 8. The era of the late 1800’s, which was a time

of fabulous wealth for a few Americans.

______ 9. People who got richer while most Americans got poorer

______10. Land owners gave farm workers land, seed, and tools in

return for a part of the crops they raised.

a. Jay Gould

b. robber baron

c. corporation

d. John D. Rockefeller

e. sharecropping

f. Andrew Carnegie

g. monopoly

h. trust

i. philanthropist

j. Guilded Age

The Rise of BigBusiness Assessment

Section 4

Workers

Organize

Section 4 Objectives

• To describe working conditions in the late 1800's

• To trace the beginnings of the labor movement

• To evaluate union setbacks and significant strikes

• To describe the founding of the American Federation of Labor

1. Why were workers discontented with working conditions in the late 1800’s?

Business owners tried to run businesses as cheaply as possible and sacrificed workers’ safety or didn’t provide workers with the necessary equipment they needed. Workers were often paid very low wages. Many workers toiled in Sweatshops, which were places where workers labored long hours under poor conditions.

WORKERS HAD POOR CONDITIONS

• Workers routinely worked 6 or 7 days a week, had no vacations, no sick leave, and no compensation for injuries

• Injuries were common – In 1882, an average of 675 workers were killed PER WEEK on the job

How did workers try to improve working conditions?

Discontented workers joined together to improve their lives by forming labor unions-groups of workers that negotiated with business owners to obtain better wages and working conditions.

LABOR UNIONS EMERGE• As conditions for

laborers worsened, workers realized they needed to organize

• The first large-scale national organization of workers was the National Labor Union in 1866

• The Colored National Labor Union followed

CRAFT UNIONS • Craft Unions were unions of

workers in a skilled trade• Samuel Gompers led the Cigar

Makers’ International Union to join with other craft unions in 1886

• Gompers became president of the American Federation of Labor (AFL)

• He focused on collective bargaining to improve conditions, wages and hours

2. What was the Knights of labor?

The Knights of Labor allowed women and African Americans to join their union.

The Knights of Labor was a Loose federation of workersfrom many different trades. Even women were allowed to join. They inspired many people to join their cause.

What were the affects of the depression of 1873 for workers?

Millions of workers took pay cuts, and about 1/5 lost their jobs.

During the Panic of1873 hundreds of banksclosed.

3. What caused the Railroad Strike of 1877?

Two railroad strikes, one in 1877 and one in

1884-5, showed how angry workers could become. In 1877, The B & O Railroad declared a 10% wage cut for workers. Workers refused to run the trains. This was the first labor union strike in the U.S.

4. How did the Railroad Strike of 1877 end?

As the news spread of the strike, workers in many cities and in other industries joined in. This threw the country into turmoil. In several cities, state militia battled angry mobs. President Rutherford B. Hayes called out federal troops to end the strike. Dozens of people were killed.

STRIKES TURN VIOLENT

• Several strikes turned deadly in the late 19th century as workers and owners clashed

• The Great Strike of 1877: Workers for the Baltimore and Ohio Railroad struck to protest wage cuts

• Other rail workers across the country struck in sympathy

• Federal troops were called in to end the strike

Why did business and government leaders fear labor unions?

Business leaders feared that labor unions would spread about socialism and anarchism.

5. What were the causes and affects of the Haymarket Affair?

In Chicago in 1886, the McCormick Harvester Company locked out striking union members and hired strikebreakers (scabs). On May 3, union members, strikebreakers, and police clashed. One union member was killed. Violence erupted as police moved in to end a protest held the next day. Police arrested hundreds of union leaders, socialists, and anarchists. Opposition to unions increased and the Knights of Labor lost power.

THE HAYMARKET AFFAIR• Labor leaders continued to

push for change – and on May 4, 1886, 3,000 people gathered at Chicago’s Haymarket Square to protest police treatment of striking workers

• A bomb exploded near the police line – killing 7 cops and several workers

• Radicals were rounded up and executed for the crime

The Haymarket Affair in Chicago

6. What caused the Homestead Strike of 1892?7. What was the outcome?

Andrew Carnegie reduced wages at his steel mills in Homestead, PA, but the union refused to accept the cut. (6) The company locked out union workers and hired replacement workers or scabs. The company also hired 300 armed guards. The locked out workers gathered weapons, and a battle broke out and left 12 people dead. The Pennsylvania state militia began to escort the nonunion workers to the mills. After 4 months, the strike collapsed, breaking the union. (7)

THE HOMESTEAD STRIKE• Even Andrew Carnegie could

not escape a workers strike• Conditions and wages were not

satisfactory in his Steel plant in Pennsylvania and workers struck in 1892

• Carnegie hired Pinkerton Detectives to guard the plant and allowed scabs to work

• Detectives and strikers clashed – 3 detectives and 9 strikers died

• The National guard restored order – workers returned to work

PULLMAN: A FACTORY & TOWN

• In 1880, George Pullman built a factory for manufacturing sleepers and other railroad cars in Illinois

• The nearby town Pullman built for his employees was modeled after early industrial European towns

• Pullman workers felt his puritanical town was too strict

• When he lowered wages but not rent – it led to a violent strike in 1894

THE TOWN

GEORGE PULLMAN

8. What caused The Pullman Strike?9. What was the outcome?

• After the Pullman Company laid off thousands of workers and cut wages by 25%, the workers went on strike in the spring of 1894. Pullman also did not lower rent on company housing. (8)

• Eugene Debs (American Railroad Union) tried to settle dispute which turned violent

• Pullman hired scabs and fired the strikers – Federal troops were brought in by President Grover Cleveland to end the strike (9)

• Debs was jailed

The Pullman Company built luxury rail cars like the one that carried President Lincoln’s body backto Illinois.

10. What methods did the American Federation of Labor use to win benefits?

It was a national organization of labor unions from many different trades. They focused on improving working conditions for workers by using strikes, boycotts, and negotiation.

EMPLOYERS FIGHT UNIONS

• The more powerful the unions became, the more employers came to fear them

• Employers often forbade union meetings and refused to recognize unions

• Employers forced new workers to sign “Yellow Dog Contracts,” swearing that they would never join a union

• Despite those efforts, the AFL had over 2 million members by 1914

WOMEN ORGANIZE• Although women were

barred from most unions, they did organize behind powerful leaders such as Mary Harris Jones

• She organized the United Mine Workers of America

• Mine workers gave her the nickname, “Mother Jones”

• Pauline Newman organized the International Ladies Garment Workers Union at the age of 16