Chapter 18 – Industry and Urban Growth (1865-1915)
Vocabulary:
Key Terms:
1. patent - license for a new invention
2. assembly line - manufacturing method to make a product at it
moves along on a conveyor belt
3. entrepreneur - someone who sets up a new business for profit
4. corporation - business owned by many investors
5. monopoly - company that controls all or nearly all business in
a particular industry
6. trust - group of corporations run by a single board of
directors
7. free enterprise - economic system in which each privately owned
business decides what to produce, how much to
produce and what prices to charge
8. collective bargaining- negotiation between company management and a
union representing a group of workers about wages, benefits, and working conditions
9. urbanization - movement of people from rural areas to cities
10. tenement - building divided into many tiny apartments
11. settlement house - center offering help to the urban poor
12. steerage - large compartments of ships that usually held
cattle
13. assimilation - process of becoming part of another culture
14. anarchist - person who opposes all forms of government
Key People:
1. Thomas Edison - scientist and inventor; invented light bult
2. Alexander Graham Bell- Inventor; invented the telephone
3. Henry Ford - manufacturer; perfected system of mass production
4. Wilbur & Orville Wright-brothers credited for the first flight in Kitty Hawk,
NC
5. Andrew Carnagie - businessman who monopolized the steel industry
6. John D. Rockefeller- businessman who monopolized the oil industry
7. Samuel Gompers - formed the AFL (American Federation of Labor)
8. Jane Addams - reformer who opened settlement house (Hull
House)
Chapter 18 – Industrial and Urban Growth (1865 – 1915)
Section 1 – A New Industrial Revolution
Obj: the spur of railroads; its impact on American industry; the power it gave to a few railroad owners; inventors, inventions and technology
· Early railroads were short lines that served local communities
· Many lines ran for no more than 50 miles, lines were rarely connected
· Northern and southern lines used different gauges
· 1886 – the South decided to adopt the northern gauge
o Changed more than 13,000 miles of track
· Once the track was standardized, American railroads formed a network
· new inventions helped make railway travel safer and faster
o air brakes
o sleeping cars
o lavatories
o dining cars
o porters, conductors and waiters
· larger companies consolidated smaller ones or forced them out of business
o The Pennsylvania Railroad, consolidated 73 companies
o Cornelius Vanderbilt bought the New York Central Railroad in the 1860s
§ He was ruthless and his tactics forced smaller owners to sell to him
§ He bought up most of the lines between Chicago and Buffalo.
§ By the time of his death in 1877, his companies controlled 4500 miles of track and linked NYS to the Great Lakes region.
· Railroad builders raced to create thousands of miles of new tracks
· Soon there were too many rail lines in some parts of the country
· In the West, too few people for the railroads to make a profit
· Competition was fierce
o rate wars broke out
o usually all companies lost money as a result
o railroads were forced to grant secret rebates to their biggest customers
§ this practice forced many small companies out of business
§ it also hurt small shippers, such as farmers who still had to pay the full price
· Railroad owners soon realized that cutthroat competition was hurting even their large lines.
o They looked for ways to end competition
o Pooling
o Fixing their prices at a high level
· Railroad rebates and pools angered small farmers in the South and West
o Shipping prices were kept high for them
o Rates were so high at times farmers burned their crops for fuel rather than ship them to market.
o Many farmers joined the Populist Party
· Laws did not end abuses
o Railroad owners sometimes bribed officials to keep the laws from being enforced
· Although there were certain problems, they also made possible the rapid growth of industry after 1865.
o Created thousand of jobs
§ Steelworkers
§ Lumberjacks
§ Miners
§ Railroad companies themselves employed thousands of workers
· They laid tracks
· built trestles across the rivers
· carved tunnels through mountains
· built countless railroad stations
· Railroads opened every corner of the country to settlement and growth
· They brought people together
· US was ready to become the greatest industrial nation the world had ever seeen
· Better communication also helped American business grow.
· The telegraph helped people stay in touch, sped up communication within the US.
· Cyrus Field – laid cable under the ocean so that telegraph messages could go back and forth between North America and Europe.
o After three weeks, cable broke, but he did not give up
o 1866 – the ship Great Eastern succeeded in laying the cable.
o Field’s transatlantic cable brought the US and Europe closer together and made him famous
· The telegraph only sent dots and dashes over the wire.
· Several inventors were looking for a new way to transmit voices.
o Alexander Graham Bell – working on his invention since 1865, in March 1876, he was ready to test his “talking machine”
o It worked – the telephone was born.
o At first people saw it as a toy
o Bell offered to sell it to Western Union Telegraph Company for $100,000.
§ The company refused, a costly mistake
§ In the end, the telephone earned Bell millions.
§ He formed the Bell Telephone Company in 1877.
§ By 1885 he sold more than 300,000 phones, mostly to businesses.
o 1876 – Thomas Alva Edison opened a research lab in Menlo Park, NJ
§ He was considered the greatest inventor of the age.
· The light bulb
· The phonograph
· Hundreds of other devices, including the first machine for showing moving pictures
· Later developed the motion picture projector
· Built the first power plant in NYC in 1882
o Factories replaced steam-powered engines with safer, quieter, electric engines at the flip of a switch
· As technology took command, businesses became more efficient, and life became easier and more pleasant.
· 1880 – Gustavus Swift – introduced refrigeration to the meatpacking industry, refrigerated railroad cars.
· 1868 – Christopher Sholes perfected the typewriter
· 1888 – George Eastman introduced the lightweight Kodak camera
· 1872 – African American Elijay McCoy created a special device that oiled engines automatically
o Granville T. Woods found a way to send telegraph messages between moving railroad trains
· 1883 – Jan Matzeliger invented a machine that could perform almost all the steps in shoemaking
· No single person invented the automobile –
· Europeans had produced motorized vehicles as early as the 1860s
· By 1890 France led the work in automaking
o Several Americans began building cars, still only the wealthy could afford them
· 1913 – Henry Ford made the auto a part of every day American life
o Introduced the moving assembly line
§ Allowed mass production
§ Could sell his cars at a lower price than other automakers
· Automobiles changed the freedoms of the people
o More people were buying cars
o First regarded as machines for men
o Soon women were drving and buying cars
· Orville and Wilbur experimenting with another new method of transportation – flying
o Dec 17, 1903 – Kitty Hawk, NC – Orville made the first flight
o 1905 – improvements
o 1908 – the US military used airplanes, which could reach an amazing speed of 40 mph.
Chapter 18 – Industrial and Urban Growth (1865 – 1915)
Section 2 –Big Business and Organized Labor
Obj: labor organizations; progress and problems affecting women in the work place; big business; why organized labor faced hard times after 1870
· Growth of railroads after Civil War spurred the growth of the steel industry
· Early trains ran on iron rails that wore out quickly
· Steel much stronger and not as likely to rust as iron
· 1850s – William Kelly of the US and Henry Bessemer of England each discovered a new way to make steel
o Bessemer’s process enabled steel makers to produce strong steel at a low cost
o Railroads began to lay steel rails
o Other industries took advantage of cheaper steel
§ Nails
§ Screws
§ Needles and other items
§ Steel girders supported the great weight of the new “skyscrapers”
· Many Americans made fortunes in the steel industry
o Andrew Carnegie – began his own steel mill, bought out his rivals, iron mines, railroad and steamship lines and warehouses.
§ he soon controlled all phases of the steel industry from mining iron ore to shipping finished steel. This is known as vertical integration
§ he believed in the “gospel of wealth” – a duty to help the poor and to improve society.
§ He gave millions of dollars to charities.
§ Sold his steel empire in 1901, and spend his time and money helping people
· Railroads distributed goods nationwide
· Demand for local goods fell and many small factories closed
· Big factories then increased their output
o Expanding factories needed capital or money for investment
o Factory owners used the capital to buy raw materials, pay workers, cover shipping and advertising costs.
o To raise capital, Americans adopted new ways of organizing their businesses.
§ Many expanded becoming corporations
· Selling stock to investors, or stockholders
§ In return for their investment, stockholders hope to receive dividends.
· By law, stockholders cannot be held responsible for a corporation’s debts, if a business goes bankrupt, the owner must pay all the debts of the business.
§ Corporations borrowed millions of dollars from banks
· These loans help American industry grow at a rapid pace
· At the same time, banks made huge profits
o J. Pierpont Morgan, most powerful banker of the late 1800s, used banking profits to gain control of major corporations (1901 head of US Steel Co.)
· 1859 – Americans discovered a valuable new resource – oil
· John D. Rockefeller – built an oil refinery.
o He knew that oil had little value until it was refined
o He used his profits from the refinery to buy up other refineries and combined the companies into the Standard Oil Company of Ohio.
o A shrewd businessman
o To get rid of the competition he:
§ Slashed prices to drive rivals out of business
§ Pressured customers not to deal with other oil companies
§ Forced railroad companies eager for his business to grant rebates to Standard Oil.
§ Lower shipping costs gave Rockefeller an important advantage over his competitors.
· 1882 – Rockefeller formed the Standard Oil Trust, to tighten his hold over the oil industry
o Stockholders of smaller oil companies turned over their stock to Standard Oil, in return, they got stock in the newly created trust.
o Stockholders received high dividends, but the board, headed by Rockefeller, managed all the companies that had previously been rivals.
o Standard Oil Trust created a monopoly of the oil industry – controlled 95%
· Other businesses followed Rockefeller’s lead, they set up trusts and tried to build monopolies
o By 1890, monopolies and trusts controlled some of the nation’s most important industries.
o Some Americans charged that the leaders of giant corporations were abusing the free enterprise system.
o Critics argued that trusts and monopolies reduced competition
§ Without competition, there was no reason for companies to keep prices low or to improve their products.
§ Hard for new companies to compete
o Political influence of trusts where some people worried that millionaires were using their wealth to buy favors from elected officials.
o Under pressure from the public, the government slowly moved toward controlling giant corporations.
· 1890 – Sherman Antitrust Act – banned the formation of trusts and monopolies, but it was too weak to be effective.
· Some states passed laws to regulate business, but corporations usually sidestepped them.
· Defenders of big business argued that the growth of giant corporations brought lower production costs, lower prices, higher wages and a better quality of life for millions of Americans.
· By 1900 – Americans enjoyed the highest standard of living in the world
· Machines were taking over what people had done in the past
· Machine-driven factories affected all workers
· By late 1800s – sense of powerlessness led workers to join together.
· Workers had to adjust to new kinds of factories
o No longer small and family run
o Relationship between worker and boss had changed.
o people worked all day tending machines in a large, crowded, noisy room
o skills were easily replaced
o many workers forced to work for low wages
o garment and other trade industries, sweatshops became common
§ most were young women or children
§ boys and girls labored in hazardous textile mills, tobacco factories and garment sweatshops
§ Coal mines – picked stones out of the coal for 12 hours a day, 6 days a week.
§ Working children had little time for schooling
§ Lack of education reduced their chance to build a better life as adults
· Factories filled with hazards
o Lung-damaging dust
o Cave-ins
o Gas explosions
o Molten metal spills
· Many workers health was destroyed, others were severely injured or killed in industrial accidents
· In one year, 195 workers died in the steel mills of Pittsburgh
· Many workers found ways to fight back
o Some slowed their work pace
o Others went on strike
o Sometimes, workers banded together to win better conditions, however most early efforts to form unions failed.