Industrialization and Big BusinessIn the years after the Civil War, new

technology changed American life.

European and American business leaders began to invest heavily in new inventions.

Thanks to the growing industry - by 1900 American standard of living was among the highest in the world.

Industrialization and Big BusinessDuring the end of the 19th century, the U.S.

economy changed from agrarian to industrial.

There was an abundance of natural resources to help this movement – oil, coal, timber, iron ore.

There was also an abundance of human resources to help - investors to provide money, and scientists to invent new products.

Industrialization and Big BusinessIn 1859 Edwin L. Drake invented the oil

drilling process – produced kerosene and eventually gasoline for automobiles.

In 1880 Thomas Edison invented the light bulb using electricity to light it.

Later central power stations were developed using transformers to send out electricity long distances.

Industrialization and Big BusinessElectricity led to electric sewing machines to

boost the clothing industry – opened thousands of jobs.

Also led to home improvements like the refrigerator to make food last longer.

Samuel F.B. Morse developed the telegraph – led to communication over very long distances.

Industrialization and Big BusinessAlexander Graham Bell improved the telegraph into

the telephone to “talk live”.

The completion of the transcontinental railroad helped advance industrialization and big business.

U.S. Government awarded loans and grants to private companies to build it.

1850’s – Henry Bessemer in England developed a new process for making steel – lighter, stronger, and more flexible than iron.

Industrialization and Big BusinessSuccesses of industry relied on the four

factors of production:

LandLaborCapitalEntrepreneurship

Industrialization and Big BusinessThe growth of industry led to a new group of

super wealthy entrepreneurs.

Entrepreneurs created business empires in the oil, steel, meatpacking, and railroad business.

The idea of Social Darwinism became popular – survival of the fittest in the business world.

Government should practice “laissez-faire” – do not interfere in business and let competition determine the success and failure.

Industrialization and Big BusinessCauses of the growth of “big business”

Technology boomFinancial investmentExpanding railroadsSocial Darwinism

Industrialization and Big BusinessEffects of the growth of big business

Increased standard of living in U.S.New jobs for failed farmers and new

immigrantsBusiness cycles created of booms and

downturnsU.S. emerges as a world power

Captains and RobbersBig business created wealth for the owners and the

nation but critics complained over how it was done.

Historians have used the terms “robber barons” and “captains of industry” to describe the powerful industrialists.

Robber Baron implies that your fortune was built by stealing from the public.

Captain of Industry suggest that you made your fortune by serving the nation in a positive way.

Captains and RobbersRobber Barons:

Drained the country of its natural resources.Persuaded law makers to make laws in your

favor.Ruthlessly drove your competitors to ruin.Paid workers meager wages and forced them

to work in dangerous conditions.

Captains and RobbersCaptains of Industry:

Increasing the supply of goods.Created jobs.Increased America’s standard of living.Established museums, libraries, and

universities.

Captains and RobbersThe growing scale of business led to the use of the

corporation which was a form of ownership.

A corporation could raise large sums of money quickly by selling “stock” or ownership shares of its business.

Corporations had limited liability – owners were no longer responsible for corporate debts.

Professional managers now operated complex businesses because owners were no longer responsible for day-to-day management of the company.

Captains and RobbersSome corporations or companies set out to

gain a complete control of a product or a service – called a monopoly.

To do this, a business bought out its competitors or drove them out of business.

Once consumers have no other place to go for that product the company can then raise prices.

Captains and RobbersOne way to drive your competition out of

business was to practice vertical consolidation.

This is done by buying the companies that performed all the phases of production of your product.

By taking control of the entire supply chain for your product you are able to have complete control over your competitors.

Captains and RobbersAnother method to ruin competition was to

practice horizontal consolidation.

This is when you buy out competing businesses to gain more control over your industry.

Use the money you save from using vertical consolidation to buy out all the other competition.

Captains and RobbersAmericans who feared monopolies trying to limit

competition began to demand government take action.

Government was hesitant to do this because big business was making the nation wealthy.

In 1890 the Sherman Anti-Trust Act was passed to put a limit on monopolies.

However, the law was vague and courts rarely forced monopolies to break up.

Captains and RobbersAs national wealth increased, people began

to save and invest more of their money.

The New York Stock Exchange linked eager investors with money hungry companies.

By the end of the 19th century the stock market had established itself as the basic means of making money available to companies.

Captains and RobbersDefenders of big business echoed what Andrew

Carnegie (steel) preached.

Carnegie called big business a “gospel of wealth”.

People should be free to make as much money as they can – and after they make it they should give it away.

Idea was wealth is there for everyone and anyone to make – big business and industrialization made this a reality.

Captains and RobbersCritics of big business:

Average workweek 59 hours – 7 days a week.Poor health and safety conditions – injuries.1913 – 25,000 factory deaths and 700,000

injuries.Owners got wealthy by robbing from their

employees and consumers who bought their products.

Big Business and the Gilded AgeMark Twain coined the term the Gilded Age.

The Gilded Age was the time period in the U.S. after the Civil War.

Twain said it had a thin layer of gold that covered poverty.

Meaning all the success of the nation was experienced by a few rich business men while the most Americans suffered.

Big Business and the Gilded AgeRecall Social Darwinism – “survival of the fittest in

society” – government should not be involved in your success and failures of the business world.

Recall Laissez-Faire – “leave it alone” – government’s policy towards big business – laws and regulations favored business owners.

Both of these components led to hardships for most American workers during the Gilded Age and eventually government started to change things.

Big Business and the Gilded AgeRecall the Sherman Anti-Trust Act to try to

prevent monopolies that would hurt consumers.

Nearly all of the wealth from big business was concentrated in the hands of a few industrialists.

There was a severe uneven distribution of wealth.

Industrialists like Rockefeller and Carnegie did not practice fair industrial competition.

Big Business and the Gilded AgeThey received railroad rebates – money was paid

to them for using certain railroads.

Corporations and monopolies destroyed competitors or new business men trying to start.

Abused natural resources – no environmental laws yet.

Corrupted politicians by using their power to make sure laws passed benefited them.

Big Business and the Gilded AgeHowever, maybe the most damaging aspect was

their treatment towards labor – their workers.

In 1860 (before the Civil War) there was 900,000 factory workers.

By 1890 (post Civil War) there were 3.2 million.

By 1900 – 20 million.

Big Business and the Gilded AgeWorking conditions in these factories were bad –

and kept getting worse.

Factory conditions were unhealthy and dangerous.

Children were also regularly employed – they had small hands and fingers that made them useful with machines. (1 in 5 children between 10-16) – especially girls.

Because of this the family structure was changed dramatically.

Big Business and the Gilded AgeMore and more women entered the work force –

but in menial jobs – not requiring much skill.

Workers faced constant threats of layoffs and pay cuts – fines for being late, talking, or refusing to do a task.

Dangerous places also – bad lighting, bad ventilation, heavy and dangerous machines.

Combine this with low amounts of sleep and rest equals accidents.

Big Business and the Gilded AgeAs a result of these conditions labor unions were

formed in an attempt to improve these conditions by banding workers together for protection.

Knights of Labor was one of the first – accepted skilled and unskilled workers – nearly everyone including black workers.

Wanted an 8 hour work day, equal pay for equal work (no piecemeal), and end child labor.

Big Business and the Gilded AgeA series of strikes broke out around the country.

One of the largest was the Pullman Strike in Ilinois – company that made passenger cars for trains.

Workers walked out in a strike – became a national story.

U.S. Government sent in federal troops to control the workers on strike and arrested numerous anarchists who promoted the strike.

Big Business and the Gilded AgeThe Knights of Labor did not promote strikes but

some of their members led strikes anyways – many turned violent – and started Labor Day as a holiday.

American Federation of Labor (AFL) also formed.

This union accepted only skilled workers and fought for safer working conditions, shorter work days, and overall better wages.

Big Business and the Gilded AgeThis was the first time that workers bonded

together to change their conditions.

Today labor unions are much more powerful – throughout history they have helped establish unemployment insurance, sick pay, and workers compensation for getting hurt on the job.

However, they have been losing membership recently thanks to the changing job market - (Service industry).

ImmigrationIndustrialization also attracted a new surge

of immigrants from foreign countries.

Asians came in the late 1800’s to work on the railroads.

There was also a dramatic shift from Northern and Eastern Europe immigrants to Southern and Eastern Europe like Italians, Poles, Hungarians, Russian Jews, and Czechs.

ImmigrationThere customs, languages, and lifestyles all

clashed with native-born or earlier and established immigrants.

Most immigrants arrived to the U.S. by going through New York City.

Often names were changed because they couldn’t be pronounced – changed to be more “American”.

ImmigrationOnce here, many immigrants lived in ghettos

– a community of one culture or ethnic group.

In the ghettos these new immigrants spoke their native language instead of English.

Also celebrated holidays with foods and customs from their old country.

Being their “own people” made adjusting to life in America easier.

ImmigrationThe new immigrants needed jobs.

Many of them lived off the land and became farmers.

Most of them also took low paying jobs.

American natives looked at them as threats to their jobs.

Workers were afraid the immigrants would take all of their jobs.

ImmigrationEventually immigrants had to learn English

to assimilate.

Children in school were the ones who learned it the quickest.

Workers also were able to learn quickly because success on the job required it.

Children wanted to be seen as Americans – and they helped their family learn English.

ImmigrationPolitical machines saw the new immigrants

as an opportunity to earn the support of new voters.

Political “bosses” – leaders of political parties – acted like their friends and often found them work, food, and housing.

In return for the favor, immigrants supported them with their votes.

ImmigrationThere was help that was established for

immigrants.

The Social Gospel movement wanted to help improve living conditions for the poor.

Prohibitionists wanted to improve personal behaviors of the immigrants – getting rid of the alcohol.

However, many anti-immigrant feelings remained from many Americans.

ImmigrationThese people felt immigrants would never fully

assimilate into their lifestyle.

The fear of them stealing work – mentioned earlier.

People on the west coast tried to end immigration from China.

Chinese immigrants worked on the railroads – after this they tried finding other jobs but struggled – many Americans did not understand the Chinese culture.

ImmigrationBecause of this Congress passed the Chinese

Exclusion Act in 1882.

Barred Chinese workers for 10 years.

Renewed several times – and finally repealed in 1943.

UrbanizationQuick vocabulary:

Urban = relating to a city, or being located in a city.

Opposite to urban is rural.

Suburbs = areas just outside an urban area, or areas just outside a city.

UrbanizationImmigrants and increased productivity of

factory jobs caused urbanization - millions of people to move into the cities creating new growth and new challenges.

Most immigrants lived in cramped and overcrowded one room apartments.

One space for living room, kitchen and bedroom.

UrbanizationImmigrants made up a large part of this

urbanization, but they were not the only group of people moving to the cities.

White farmers were also moving – 72% of Americans were farmers or held farming jobs before Industrialization – 54% after.

Farmers moved to the cities for jobs after technology made farming more machine dependent and less people dependent.

UrbanizationAfrican-Americans moved also – escaping

segregation and racism in the south.

Cities expanded and grew in order to handle the increased population.

Tenements were built to provide cheap housing.

Multi-floor buildings, dirty, run down – created slums in cities.

UrbanizationNeighborhoods in cities declined as a result

of poverty and neglect.

Trees and grass disappeared – as coal fired engines and boilers darkened the air and caused foul smelling air.

Overcrowding and poor living conditions created hazards.

UrbanizationTenements and factories were fire traps with

shortage of easy accessible escape routes.

Tenements also had poor ventilation – led to outbreak and easy spreading of diseases.

Summer heat waves were deadly – common to see many deaths in the summer.

UrbanizationUpper-middle and upper-class moved to

suburbs to escape declining conditions of the city.

Some cities designated “rich” areas with upper-class housing so citizens could remain in cities.

Huge gaps were developed between rich and poor – “good” parts of town, and “bad” parts of town.

UrbanizationAs the cities grew rapidly, politicians and

government struggled to keep up in terms of making laws and regulations to keep society safe.

New forms of transportation emerged and allowed cities to grow outward and cover many miles.

The center of the city became industrial hubs – factories and shipping.

UrbanizationSummary