American History – A Survey
By Alan Brinkley
Chapter 17
· Industrial Supremacy
o Sources of Industrial Growth
§ Many factors contributed to the growth of American industry
· Abundant raw materials, a large and growing labor supply, a surge in technological innovation, the emergence of a talented, ambitious, and often ruthless group of entrepreneurs, a federal government eager to assist the growth of business, a great and expanding domestic market for the products of manufacturing
§ New Technologies
· Some of the most important innovations came in communications
o Cyrus W. Field – transatlantic telegraph cable to Europe
o Alexander Graham Bell – telephone
· 1868 – Christopher Sholes – typewriter
· 1879 – James Ritty – cash register
· 1891 – William Burroughs – Calculating or adding machine
· One of the most revolutionary innovations
o Electricity as a source of light and power
§ Charles Brush, arc lamp for street illumination
§ Thomas Edison
· Light bulb
o A process by which iron could be transformed into steel – Henry Bessemer and William Kelly – 1850s
§ New Industries
· Steel industry
o Pennsylvania and Ohio
o Pittsburgh became the center of the steel world
· Oil industry
o Need for lubrication for its machines
o Pennsylvania
o By the 1870s oil had advanced to fourth place among the nation’s exports
· “Wildcatters” – those in search of oil wells
· New oil companies in Texas, Oklahoma, and California
· 1890s – Guglielmo Marconi was taking the first steps toward the development of radio
· 1903 – Wright Brothers launched the first airplane flight at Kitty Hawk, NC
· 1870s – internal combustion engine – first automobiles
· 1903 – Charles and Frank Duryea built the first gasoline-driven motor vehicle in America
§ The Science of Production
· Scientific management
o Taylorism
o Scientific management was a way to mage human labor to make it compatible with the demands of the machine age
o A way to increase the employer’s control of the workplace, to make working people less independent
· Manufacturers began placing greater emphasis on industrial research
· The most important change in production technology
o Emergence of mass production
o The moving assembly line
§ Railroad Expansion
· The principal agent of industrial development was the expansion of the railroads
o Promoted economic growth
o Nation’s main method of transportation
o Gave industrialists access to distant markets and distant sources of raw materials
o America’s biggest investors
· Equally important was the emergence of great railroad combinations that brought most of the nation’s rails under the control of a very few men
o Cornelius Vanderbilt, James J. Hill, Collis P. Huntington
§ The Corporation
· Under the laws of incorporation passed in many states in the 1830s and 1840s, business organizations could raise money by selling stock to members of the public
· The ability to sell stock to a broad public made it possible for entrepreneurs to gather vast sums of capital and undertake great projects
· Andrew Carnegie
o Dominated the steel business
o 1901 – sold out to J. P. Morgan
· Gustavus Swift developed a relatively small meatpacking company into a great national corporation
· Isaac Singer patented a sewing machine in 1851 and created I. M. Singer and Company
· A new breed of business executive was born
o The middle manager
§ Consolidating Corporate America
· Businessmen created large, consolidated organizations primarily through two methods
o Horizontal integration – the combing of a number of firms engaged in the same enterprise into a single corporation
o Vertical integration – the taking over of all the different businesses on which a company relied for its primary function
· John D. Rockefeller
o Controlled access to 90% of the refined oil in the United States
· Consolidation was a way to cope with what they believed was the greatest curse of the modern economy
o Cutthroat competition
· Pool arrangements
o Informal agreements among various companies to stabilize rates and divide markets
§ The Trust and the Holding Company
· The failure of the pools led to new techniques of consolidation
· The creation of the trust
o A term for any great economic combination
o Under a trust agreement, stockholders in individual corporations transferred their stocks to a small group of trustees in exchange for shares in the trust itself
· Laws changed in 1889 to permit companies to actually buy up other companies
· A system of economic organization was emerging that lodged enormous power in the hands of a very few men
o Capitalism and Its Critics
§ The “Self-Made Man”
· Defenders of the new industrial economy said that it was providing every individual with a chance to succeed and attain great wealth
· Most of the new business tycoons had begun their careers from positions of wealth and privilege
· Industrialists gave large financial contributions to politicians, political parties, and government officials
· Erie War of 1868 – Jay Gould and Jim Fisk battled for control of the Erie Railroad
· The average industrialist of the late nineteenth century was a more modest entrepreneur engaged in highly risky ventures in an unstable economy
§ Survival of the Fittest
· Social Darwinism
o Those who succeeded deserved their success – riches were a reward for worthiness
o Those who failed had earned their failure – through their own laziness, stupidity, or carelessness
o Just as only the fittest survived in the process of evolution, so in human society only the fittest individuals survived and flourished in the marketplace
· Herbert Spencer
o Society benefited from the elimination of the unfit and the survival of the strong and talented
· William Graham Sumner – Folkways
· Social Darwinism appealed to businessmen because it seemed to legitimize their success and confirm their virtues
· Social Darwinists insisted that all attempts by labor to raise wages by forming unions and all endeavors by government to regulate economic activities would fail, because economic life was controlled by a natural law, the law of competition
· Social Darwinism coincided with another law
o The law of supply and demand
§ Supply and demand worked because human beings were essentially economic creatures who understood and pursued their own interests, and because they operated in a great market regulated only by competition
§ The Gospel of Wealth
· Some businessmen attempted to temper the harsh philosophy of Social Darwinism with a more gentle self-serving idea
o The “gospel of wealth”
· People of great wealth had not only great power but great responsibilities
· The notion of private wealth as a public blessing existed alongside another popular concept
o The notion of great wealth as something available to all
· Russell Conwell – Acres of Diamonds
· Horatio Agler
o Ragged Dick
o Rags to riches stories
§ Alternative Visions
· Lester Frank Ward
o Dynamic Sociology
· Civilization was not governed by natural selection but by human intelligence, which was capable of shaping society as it wished
o The people, through their government, could intervene in the economy and adjust it to serve their needs
· Henry George
o Progress and Poverty
o Tried to explain why poverty existed amidst the wealth created by modern industry
o A single tax to replace all other taxes
· Edward Bellamy
o Looking Backward
§ The Problems of Monopoly
· A growing number of people were becoming concerned with monopolies
· They blamed monopolies for creating artificially high prices and for producing a highly unstable economy
· The standard of living was increasing
· The gap between rich and poor was increasing
o Industrial Workers in the New Economy
§ The Immigrant Work Force
· Immigration into cities came in two forms
o The continuing flow of rural Americans into factory towns and cities
o The great wave of immigration from Mexico, Asia, and Canada, and above all Europe
§ The new immigrants were coming to America in art to escape poverty and oppression in their homelands
§ Lured to the United States by the expectation of new opportunities
· Labor Contract Law – 1885 – permitted employers to pay for the passage of workers in advance and deduct the amount later from their wages
§ Wages and Working Conditions
· All workers were vulnerable tot eh boom-and-bust cycle of the industrial economy
· Few workers were ever very far from poverty
· To skilled artisans whose once valued takes were now performed by machines, the new system was impersonal and demeaning
· Ten hour days, six days a week
· Unsafe and unhealthy factories
· As the corporate form of organization spread, employers set out to make the factory more efficient
§ Women and Children at Work
· Children and women were paid less then men
· Women industrial workers were overwhelmingly white and mostly young
o The vast majority were immigrants or daughters of immigrants
· Thirty-eight states passed child labor laws in the late nineteenth century
o Minimum age of twelve
o Ten hour working day
§ The Struggle to Unionize
· Labor attempted to fight against the bad conditions
· Creating large combinations, or unions
· 1866 – William Sylvis – National Labor Union
· Excluded women
· During the recession years unions faced special difficulties
· Widespread unemployment
· Widespread middleclass hostility toward the unions
§ The Great Railroad Strike
· Railroad strike of 1877
o Railroads announced a 10% wage cut
o Strikers disrupted rail service, destroyed equipment, rioted in the streets
o State militias were called out
o Strike finally collapsed
· The great railroad strike was America’s first major, national labor conflict
· Illustrated how disputes between workers and employers could no longer be localized in the increasingly national economy
· The failure of strike greatly damaged the railroad unions
§ The Knights of Labor
· 1869 – the Noble Order of the Knights of Labor
o Uriah S. Stephens
· All were welcome
o Except lawyers, bankers, professional gamblers, liquor dealers
· They hoped to replace the “wage system” with a new “cooperative system”
§ The AFL
· The American Federation of Labor
o Became the most important and enduring labor group in the country
o Hostile ideas about unskilled workers and women workers
o Supported the immediate objectives of most workers
§ Better wages, ours, and working conditions
o Demanded a national eight-hour work day and called for a general strike if workers did not achieve the goal by May 1, 1886
§ Many strikes took place
· McCormick Harvester Company
o Strike
o Police called in
o Someone threw a bomb that killed seven officers and injury sixty-seven strikers
· The Haymarket bombing was an alarming symbol of social chaos and radicalism
§ The Homestead Strike
· The Amalgamated Association of Iron and Steel Workers
o Most powerful trade union in the country
· Companies began reducing dependence on skilled labor
o Called for a strike because of cut wages
§ Owner, Frick, shut down the plant and called in guards to enable the company to hire nonunion workers
§ Heated battle between guards and strikers
· Strikers win
§ Army called in
· Strike over
· The AFL unions were often powerless in the face of these changes
§ The Pullman Strike
· 1894
· Cut wages led to a strike
· Eugene V. Debs
· Leaders opposing the strikers called in the federal army on the pretext that the strike was preventing the movement of mail on the trains
· Army troops sent in
· A federal court issued an injunction forbidding the union to continue the strike
· Strikers defied it
· Debs put in jail
· The strike quickly ended
§ Sources of Labor Weakness
· Labor made few real gains and suffered many important losses
· Won a few legislative victories
o Abolition by Congress in 1885 of the Contract Labor Law
o The establishment by Congress in 1868 of an eight-hour work day on public works and projects
o And in 1892 of an eight-hour day for government employees
· Workers failed to make gains for many reasons
o The principal labor organizations represented only a small percentage of the industrial work force
§ 1903 – Women’s Trade Union League
o Tensions between different ethnic and racial groups kept laborers divided
o The shifting nature of the work force
o Other workers were in constant motion
o Workers who stayed put often did not remain in the same job for long
o Strength of the forces against them
· In the battle for power within the emerging industrial economy, almost all the advantages seemed to be with capital