Unregulated IndustrializationUnplanned UrbanizationRapid ImmigrationEconomic Instability and Crisis

Widespread Poverty

1900 - 1910

•1900-1901: –US Population: 75.9 million–NY population: 3.4 million–100 immigrants per hour coming through Ellis Island

(8.8 million migrants 1900-1910)–There were 8000 cars, 10 million bicycles, and 18

million working horses.–First major oil well at Spindletop produces 80-

100,000 barrels per day.

Industrialization

•By 1900, the United States was the largest industrialized nation in the world. •With rapid industrialization, and a lack of regulation on business, monopolies quickly developed in various industries.

•Carnegie, Vanderbilt, J.P. Morgan and Rockefeller were some of the big names in business.

Industrialization and the Work Force

How do you think Industrialization affected the work force?

What problems did it cause for cities?

What problems did it cause for farmers?

The Paradox of Progress

Industrialization meant that productivity per worker was greatly increased. On farms, it meant that one person on a tractor could do the work that used to take 40 people. In factories, goods could be produced cheaply and with far less labor.

Instead of leading to a society in which workers could trade their increased productivity for increased leisure, this process led to an increasingly disparate society and an impoverished working class.

Why?

Monopolies

•By the 1890s, after buying out over 100 other oil companies, Standard Oil owned 4/5 of the US oil industry.

–This led to a political push to start regulating business and breaking up trusts.

•In 1900, Andrew Carnegie’s steel company made a $40 million profit. He took a salary of $25 million•Vanderbilt owned a large portion of the railroads in the Northeast, and controlled almost all of the passenger ships on the East Coast. With his control of passenger ships, he was also very interested in connecting the East Coast to the West Coast, and owned a ferry service going through Nicaragua.

Unregulated Market There were no personal or corporate income taxes until 1913, and with few government regulations, the country's burgeoning industrial empires enjoyed a period of rapid growth throughout the "Gilded Age." 

There were few regulations on industry such as: safety, minimum wage, child labor laws, environmental protection, pensions, worker’s compensation…

ConsolidationBetween 1897 and 1904, 4,227 firms merged to form 257 corporations, with the largest merger consolidating nine steel companies to create the U.S. Steel Corp. controlled by Andrew Carnegie. By 1900, Carnegie controlled ¼ of US steel production.

By 1904, 318 companies controlled about 40 percent of the nation's manufacturing output. 

An unregulated (free) market let to both the incredible success of large business and to extreme inequalities in society.

Philanthropy or Misanthropy?

Carnegie and Rockefeller were two of the richest men in America. Each donated large sums of money to philanthropic causes: some $332 million in gifts from Carnegie and $175 million from Rockefeller.Carnegie funded the establishment of public libraries across the country and Rockefeller established foundations to support medical research and education. 

However, their wealth came at the cost of, in the case of Carnegie, over 170,000 impoverished workers. In 1892, his steel workers went on strike, refusing to accept lower wages. The company called in security and police and killed four workers. Eventually strikers returned to work, accepting their pay cut.

That these men were able to give such great amounts of money to good causes seems like a symbol of the great success of the American economy. How does our perception of their philanthropy change when we learn that the people who worked for the companies that made these men rich were kept in poverty?

Solutions Needed!

•With an economic crash in the 1890s, and the problems of Unregulated Industrialization, Unplanned Urbanization, Rapid Immigration and Widespread Poverty, what sorts of policies is the public going to demand?

What is Progressivism?3 principles:

1. A fear of concentrated power, often in the form of monopolies. Anti-Monopoly.

2. Science, expertise and efficiency. Reformers will use their education, professional skills, or scientific understanding and apply it to society. Society can be scientifically managed.

3. Social bonds: Society is an inter-connected whole. Emphasized the Christian ethic of service and charity to the poor

What Progressivism Rejects

Social Darwinism – Based on Protestant work ethic that professes that if you work hard, you will get rich.

Social classes do not owe each other anything.

Social programs, because they take from people who have earned something and give to people who have not earned it.

Individualism: The idea that people earn their place in society on their own merits and abilities.

free markets (laissez faire)– If left alone, the economy will balance itself out.– Keep government interference in the economy to a minimum

What the Progressive Party Rejects (cont'd)

The individual is the primary agent in the economy; the economy is made up of individual players rather than social classes.

Right of Contract – the most important right. – Ability for two parties to enter into an agreement without any outside intervention. (If the government passes a law saying you can only work 8 hours a day, it infringes on the rights of someone who wants to work for 14 hours. May also infringe upon child labor – what if a 7 year old wants to work in the mines all day?). “A society of contract is a society of free and independent men who form ties without favor or obligation.”

Progressivism and Imperialism

Many factors pushed the United States to become an increasingly imperialistic power in the decades before WWI.

-- need for marketsAmerican industry was producing more goods than consumers could

consume. Solution: dump American products on consumers in other countries.

-- need for laborThe American economy was both dependent on exploiting immigrant

labor at home, and on finding cheap sources of labor to produce products for import. One labor-intensive product was sugar, largely supplied by Cuba.

-- Competition with Europe for global powerThe United States did not have colonies in 1890, and feared falling

behind Europe in global influence. Africa was thoroughly colonized by European powers in 1890, and supplied Europe with raw materials and cheap labor for its industrial revolution. China was also an un-colonized market, and many saw it as key to America’s economic expansion and competition with Europe.

Uncle Sam

Philippines

Spain

End

Nicaragua Canal?

•Supported by the US government and justified with manifest destiny, the Vanderbilts were making plans by the 1850s to build a canal through Nicaragua. Meanwhile, they would carry people by boat, and transfer them over land and they could get on a second boat to California.

Willaim Walker

•1853: Republic of Baja California•1856: President of Nicaragua•1860: Death by firing squad

Jacob Riis

Homework

•Read pages 703 to 724•1 pg reaction. Describe five characteristics of the Progressive Era.