Terms
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Industrialization
captains of industry robber barons capitalism Alexander Graham Bell Thomas Edison Nikola Tesla George Westinghouse Railroads Urban Transcontinental Railroad |
corporations
capital John D. Rockefeller Standard Oil Company horizontal integration monopoly vertical integration Andrew Carnegie J. P. Morgan Laissaz-Faire Gilded Age |
Jane Addams
Child Labor unions labor strike Mother Jones anarchism Haymarket Riot Samuel Gompers Pullman Strike |
1860 - 1900
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While the South's economy was devastated after the Civil War, the North's economy boomed because it produced shoes, boots, uniforms, wagons, cannons, and many other supplies needed to fight the Civil War. This led to the rise of industrial development like never before. Industrialization is the development of factories (also known as industries) that produce goods within a particular region (in this case the North).
Between the end of the Civil War and 1900, America went through explosive growth. The country's population grew by three times what it had been at the start of the Civil War, agricultural production grew, and industrial growth grew even more. In 1865, there was not a single corporation, by 1900, there were dozens of them that employed hundreds of thousands. From 1860 to 1900 no other country in the world grew as much as the U.S.
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Northern factory
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Factories often operated under unsafe conditions.
This time of economic growth was not limited by the government, when the government has little or no involvement in business, it is known as laissaz-faire. This type of little government involvement is associated with capitalism, or an economic system in which businesses are owned by private citizens for profit, and NOT owned by the state or government. If you were a business owner at this time you would have been a capitalist. Capitalism is a system that is known for positive and negative things. It is positive because it offers a chance for anyone to begin a business and through hard work and smart decisions, it could mean that a person goes from "rags to riches." The down side is that those who were often successful, made huge profits, but did not pass that wealth down to their workers. In many cases, capitalist business owners were only interested in making products at the lowest price possible which meant that workers were paid very little and often worked in bad and unsafe working conditions. Some viewed rich business owners as similar to slave drivers and they became known as "robber barons," because they controlled almost all of the money. Others viewed those SAME business owners as the reason the post Civil War boom occurred and they created thousands of jobs, some of which paid well, people that saw rich business owners in such a positive light called them "captains of industry."
Industrial capitalism is basically privately owned factories that were allowed to grow as big as their profits allowed them to grow. They took advantage of every possible economic opportunity, tried to grow as big as possible, often paid politicians so that no laws would be made that would regulate how they did business, and tried to destroy competition. In short, they wanted to dominate whatever industry they were in, no matter if their workers had to suffer in the process.
Technological Advancements
Alexander Graham Bell
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One area that helped big business grow after the Civil War was technological advancements. Advancements such as barbed wire, mechanical harvesters, refrigerated railcars, air brakes for trains, steam turbines, typewriters, sewing machines, and electric motors. Probably one of the most important inventions was the invention of the telephone in 1875. Alexander Graham Bell, experimented with "talking" wires or telegraphs. He created an electric telephone that allowed him to call his assistant in another room. He patented the device, called the telephone, and started a company called the American Telephone and Telegraph Company, or AT&T. Five years later he perfected the long distance telephone and by 1895 there were more than 300,000 telephones in use.
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Bell using his newly invented telephone.
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Electricity
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No one had more impact on industrialization or new inventions than Thomas A. Edison. Edison was a self taught inventor that began spending all of his time trying to invent new things at the age of twenty-one. He moved to New York City in order to be closer to the countries richest institutions (he planned to have other people invest in research with the idea that he would split profits with them when he was successful). His first successful invention was the Wall Street ticker that reported transactions made on Wall Street as they happened. In 1876, he finished building his "science village" at Menlo Park, New Jersey, which became the nation's first industrial research laboratory.
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Thomas A. Edison
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By the time Edison was thirty he was the most well known inventor in America. Up until the 1880s, city streets and buildings were lit by kerosene or gas lamps. Edison developed a way to create direct current electricity which he used to supply electrical light to street lamps and buildings. Using his newly created invention he started a company called General Electric (or GE for short), which supplied electricity to eighty-five customers in New York City. Edison's lightbulb made a huge impact on industry. With the invention of the lightbulb, factories could now stay open twenty-four hours a day.
Nikola Tesla
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Edison's Direct Current (DC) electric could only power things within two miles of his electric generator station. During this time, his assistant, Nikola Tesla, urged Edison to use the newly invented alternating current electricity (AC), which could power things much further away than DC power. Eventually Tesla and Edison parted ways over their disagreements over electricity and Tesla began working for George Westinghouse, the man who originally developed the first alternating current electrical system in 1886. He started Westinghouse Electric Company. Tesla created a way to use alternating current to power an electric motor in 1887, called a dynamo.
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Railroads
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Railroads played a huge role in America's industrial growth after the Civil War. It allowed industries to spread through the U.S. and still remain connected. They made travel of people and materials easier and quicker at further distances. Towns that had railroads come through them thrived and grew. Most of the communities that you are aware of Stoddard County were created by railroad companies, such as Gray Ridge, Hunterville, Essex, Dexter, Dudley, Advance, Bernie, and Bell City. In an effort to try and entice the Frisco railroad to come through it's newly created community, the town of Frisco was named after the railroad believing it would build a line through the town, but they were wrong. Railroads became the U.S.'s first big business. It was the first industry to have operations in several states and first to develop the large scale use of a labor management system (an example would be that every railroad has workers, there were managers for workers, there were managers that managed the managers, and managers that were in charge of railroad lines, and managers in charge of entire railroad companies). Without railroads, there is no way America would have experienced the industrial growth that it did.
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Railroads built in 1870 compared to those built in 1890.
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From the beginning of the railroad boom, the goal of many builders was to build a railroad that stretched across the Untied States, linking the urban (cities with a high population) areas of the East Coast and that of the West Coast. Called the transcontinental railroad, it was finished on May 10, 1869 when the western half of the railroad met the eastern half of the railroad at Promontory Summit in present day Utah. Other transcontinental railroads would soon follow.
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Rise of Big Business
Prior to the Civil War, most business was done locally or out of the home. With the large scale industrialization during the Civil War, the completion of the Transcontinental Railroad, and the host of inventions in communication and electricity, big businesses began to grow to never before seen proportions. As businesses grew, they needed more capital, or operating money, to continue growth. One method business owners used was the creation of corporations. Corporations consist of a shares or essentially "pieces" of the business. For example, if a new railroad company formed it might print 100 shares, the original owner might retain ownership of 51 shares and allow the remaining 49 to be sold to investors. This will allow the owner to be the President of the company and have the most power, but he will also have a board of advisors that represent the owners of the other 49 shares. If the company is successful the values of the share will increase, if it is not, they will decrease. Being a corporation allows for the sharing of the profits, but also sharing of the losses if it fails so that no one person has to absorb the entire loss.
This political cartoon illustrates the size and power of big business compared to that of politicians, many of whom were bought off by business owners.
Capitalism - Capitalism is the economic system that was adopted by the U.S. from the beginning of its existence as an independent nation. Capitalistic system is one with little government intrusion or impact (they pretty much stay out of business affairs) that is centered on private citizens owning businesses. This is also known as a free market system. This freedom allows for nearly anyone that can come up with an idea and money to start a business, but it also means if the business does not successfully make money, there is no safety net to keep the owner from losing everything. Competition is one of the greatest virtues or elements of capitalism. It became the goals of big business owners to find ways in order to eliminate the competition and control all of the market they were involved in. For example, Andrew Carnegie became a successful business man with his U.S. Steel Company, he sought and was usually successful, in buying out smaller steel mills thus making him the primary steel producer in the U.S. When this happens, capitalism is threatened because there is no longer any competition to keep prices competitive. If one owns every steel mill in the U.S. that person can control the prices of their steel and the buyer will have to pay it because there is no where else to get it. This became a major problem during this time. Companies that do this earned the name of "robber barons" because they believed it was unfair.
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John D. Rockefeller came from a modest background and grew with a desire to organize and make money. In 1870, he teamed up with his brother and two other men to form Standard Oil Company of Ohio, which became the largest oil company in the U.S. He believed that he could run a successful business better than competitors because he believed they were inefficient and distracting. As Rockefeller became more successful he began to practice horizontal integration, or a business that buys out the competition and either makes them part of the business or closes them down all together. If done successfully, it can lead to a monopoly, a business so large that it controls the entire industry. A monopoly was Rockefeller's goal. Rockefeller also practiced what became known as vertical integration, which is a process in which a business buys up all the products or services needed to produce, refine, or deliver the product. Rockefeller bought out railroads, pipe factories, and etc. He believed that if you cut the middle man out, you made more money. Another method that Rockefeller used was to have his corporation buy the stocks of other companies, thereby owning shares in competing companies. He would then take all of the competing companies that he owned stock in and create a trust. In return the shareholders would receive annual payments from the trust's earnings. This was done to hide his monopoly.
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John D. Rockefeller
Standard Oil Company Stock
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Andrew Carnegie eventually gave much of his wealth away for libraries and museums.
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Andrew Carnegie created the largest steel company in the world. He was born in poverty and his family emigrated from Scotland to the U.S. when he was a boy. He went to work at age 13 in a textile mill and worked his way up to being a secretary for the owner of the mill, then district superintendent, and eventually president of the company. As he rose through the company he began getting involved in building railroads and bridges and eventually got involved in the manufacturing of iron and steel. Along the way he became a very rich person and was known to not treat his workers very well. In the 1850s, an Englishman, Sir Henry Bessemer, invented the Bessemer converter, a process that took what had been a long and expensive process of creating steel from iron, into a much quicker and cheaper way to do the same thing. In the 1870s, using this process Carnegie began making steel. Steel was more desirable than iron because steel is just as strong, but it can handle more stress from movement and weight without breaking. Carnegie used vertical integration to buy up everything he needed to produce and transport his steel which gave him a monopoly on steel. His Carnegie Steel Company had 20,000 employees and was the largest industrial company in the world. His workers worked 12 hour shifts and his steel factories never stopped producing.
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J. P. Morgan, unlike Carnegie and Rockefeller, was born rich. Morgan worked for his father in banking and investments. They made an enormous fortune by financing (loaning) money to growing corporations and by buying massive amounts of stocks from new companies and then selling the stocks once the companies became successful at huge profits. J. P. Morgan was one of the first to invest in Edison's electric industry, bought struggling companies and turned them into profitable companies, bought up 1/6 of all of America's railroads, and in 1901 purchased Andrew Carnegie's steel company creating the United States Steel Corporation, America's first billion dollar corporation.
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J. P. Morgan
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This period of industrial growth after the Civil War became known by a name called the Gilded Age. If something is Gilded, that means that it is plated in something, like gold, so from the outside it looks like it is solid gold, when in reality it isn't. Applied to the time period after the Civil War, the Gilded Age means that from the outside, America looked liked the most wealthy nation in the world which makes someone think that American citizens themselves enjoyed that wealth, when in reality, they did not. Things were not as they appeared, workers worked long hours for little pay, children had to often work in order for the family to make enough money to pay rent and be able to eat.
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The Middle Class - With industrialization and the growing economy, big businesses needed more than just unskilled labor, it needed managers, engineers, clerks, consultants, and etc. This new line of work was above unskilled labor but certainly not enough to make one rich, thus a middle class emerged. Middle class Americans fall between the wealthy and those that do unskilled labor. They might be college educated or worked their way up the ranks in a factory to become a manager. Middle Americans were closer to the laboring class and thus often times had sympathy with their conditions. Many middle class women decided to attempt to make the lives others better. Jane Addams was a social worker that created the Hull House in Chicago, were social workers helped immigrants adapt to American life and also wanted to help women become more independent.
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Jane Addams
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Labor
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The Working Class - Unskilled laborers that worked on railroads, factories, mills, mines, slaughterhouses, and sweatshops. They could also be migrant farm workers that moved onto farms during a picking season and then left to find work else where, always temporary. Most immigrants fell into this category as they had little support upon arriving in America. In many cases, however, even though the working conditions were not very good, it was usually better than where they came from . Unskilled laborers generally worked 10 or more hours a day and were among the highest in workplace accidents and deaths. Between 1888-1894, there were 16,000 railroad workers killed and 170,000 maimed in on the job accidents. The U.S. at that time was the only industrial nation in the world that had no insurance program to cover medical expenses for on the job injuries.
Child Labor - Child labor became more common when parents struggled to make enough money to feed their families, in 1880, one in every six children under the age fourteen worked full time. By 1890 there were over 2 million child laborers. A child working in a southern textile mill was only half as likely to reach the age of twenty as a child who did not work in a mill. |
Labor Unions - also known as Organized Labor
Organized Labor - As time went on and working conditions did not improve in the workplace, workers looked to unite in order to be able to make business owners aware of their problems and achieve change. When talking about labor, organizing means to form a labor union. Labor unions use the group in order to get their voices heard. If a factory owner had only one person demand safer working conditions, they would just fire them, no big deal, but if the entire work force banded together and demanded safer working conditions, that would be a major problem for the factory owner because his factory would have to stop manufacturing. The most common tool used by labor unions in order to protest what they want, is through strikes. Labor Strikes, also known as collective bargaining, are when members of an industry and sometimes more decide to no longer work, but instead, will usually hold signs up at the factory gate that protest their problems. The factory owner is now forced to either negotiate with the strikers or find a way to get rid or replace
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One of the most well known and well respected labor leaders during the Gilded Age was Mary Harris Jones, who workers and labor organizers called Mother Jones. Mother Jones moved to America from Ireland with her parents and four siblings before the Civil War. In 1861, she married and had four children and was living in Memphis when in 1867, a Yellow Fever epidemic hit Memphis that killed her husband and all four of her children. Grief stricken, she moved to Chicago where she opened a dress making business that became very successful until 1871 when a fire burned down much of Chicago including her business. Having lost her family and means of making a living, she began to put all of her attention to the labor movement (which her husband had been involved in before his death).
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Mother Jones was well known to all workers in the U.S.
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Mother Jones led a march to end child labor.
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Mother Jones traveled the country speaking out against the injustices and bad working conditions that workers had to live and work in. She became a big supporter of labor unions and soon made speeches throughout the U.S. wherever labor problems erupted. In the 1880s Mother Jones became the main speaker and promoter of the United Mine Workers Union and worked for better working conditions and the right to organize unions in places like West Virginia and Southern Illinois. She was often threatened by mine owners and was jailed more than once by local police who were under the employ of rich business owners. One mine owner called her the "most dangerous woman in America." Workers loved her wherever she went and because of her age, she was often viewed as "mother" to them, hence her nickname. She was not afraid of anything and her speeches were often brutal and to the point which workers respected. She was known for her famous saying, "Pray for the dead and fight like hell for the living." She died in 1930 in her home in Illinois.
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Many citizens in the U.S. that did not understand the movement of labor unions to obtain better working conditions believed that labor organizers were radicals that were anarchists. Anarchists and the idea of anarchism believed that any government was a device used by powerful capitalists to oppress (means to keep down or below) and take advantage of the working poor. They wanted government to be eliminated or not to exist at all and some were willing to use bombs and bullets to achieve their goal. It was mostly newspapers controlled by business owners that pushed the idea that labor organizers and supporters of unions were anarchists, which 99% were not. Some labor conflicts between union members and business owners became violent, thus some newspapers said that the union members must be anarchists which was not true.
In 1886 40,000 Chicago workers went on strike to support an eight hour work day. On May 3, violent protests broke out between union strikers and "scabs," or people hired by companies that were not members of a union. At the McCormick Harvesting Machine Company, violence broke out when police shot two strikers. Anarchists in Chicago became angry and threatened to get revenge. On May 4 police began breaking up a crowd that had gathered to hear speakers in Haymarket Square talk about the demands of workers, someone threw a bomb in the middle of several policemen which killed and wounded half a dozen officers, who then began to fire into the crowd. When the smoke cleared seven policemen were dead and sixty were wounded. Many call this America's first terrorist bombing. The next day Chicago's mayor banned any gatherings in the city related to labor, seven anarchists (all but one only spoke German) were arrested and sentenced to death, even though there was no evidence they had been the ones that used the bomb. This became known as the Haymarket Riot.
Labor leader Samuel Gompers of the American Federation of Labor traveled to Chicago in order to see that the men arrested and others receive a fair trial which was unlikely. On November 10, 1887, two of the arrested were given life sentences, four were hanged, and one committed suicide in his cell. Gompers served as president of the AFL and dedicated his life to organized labor and better working conditions. Under his leadership many gains were made in with organizing skilled labor unions.
Labor leader Samuel Gompers of the American Federation of Labor traveled to Chicago in order to see that the men arrested and others receive a fair trial which was unlikely. On November 10, 1887, two of the arrested were given life sentences, four were hanged, and one committed suicide in his cell. Gompers served as president of the AFL and dedicated his life to organized labor and better working conditions. Under his leadership many gains were made in with organizing skilled labor unions.
Two strikes in the 1890s became violent labor conflicts and represented a test of strength for the organized labor movement. The first one was the Homestead Strike which occurred in 1892 in Homestead, Pennsylvania. Carnegie's chief executive, Henry Frick, hired private detectives of the Pinkerton Detective Agency to put down a steel workers strike. Union workers armed themselves for a fight they knew was coming with the armed private detectives. A fourteen hour battle left seven workers dead and three Pinkerton agents dead. Many more were wounded. Eventually the state guard was brought in and broke up the strike.
The Pullman Strike of 1894 was more notable than the Homestead Steel strike because it impacted the economies of twenty-seven states in the western half of the U.S. The Pullman Palace Car Company made passenger train cars outside of Chicago. Employee's were required to live in the companies town it had created with 1,400 small houses. With 12,000 residents, it had a library, a theater, a school, parks, playgrounds, a shopping mall, ALL owned by the company. There were no privately owned saloons, newspapers, or private property, and political activities were forbidden. Known as a company town, the companies owner, George Pullman, controlled every aspect of the workers' lives, which they became tired of.
During the economic depression of 1893, Pullman laid off 3,000 of his nearly 6,000 workforce, and cut wages by nearly half for those who remained to work. He DID NOT lower rent for housing or the prices of food sold in company stores. In the spring of 1894, the remaining workers joined the American Railway Union led by Eugene V. Debs. On May 11, 1894, the workers went on strike. Two months later, the strike had shut down most of the railroads in the Midwest. Pullman hired strikebreakers (scabs) to work the trains and the U.S. attorney general swore in 3,400 deputies to protect the strikebreakers. Workers assaulted the trains and broke equipment to keep the trains from moving. Eventually President Grover Cleveland sent 2,000 federal troops to Chicago to ensure the trains got moving, he said he had the authority to do so because the strike had halted mail that was carried on the trains, which was a responsibility of the government to be delivered. On July 13, the strike was broken.
During the economic depression of 1893, Pullman laid off 3,000 of his nearly 6,000 workforce, and cut wages by nearly half for those who remained to work. He DID NOT lower rent for housing or the prices of food sold in company stores. In the spring of 1894, the remaining workers joined the American Railway Union led by Eugene V. Debs. On May 11, 1894, the workers went on strike. Two months later, the strike had shut down most of the railroads in the Midwest. Pullman hired strikebreakers (scabs) to work the trains and the U.S. attorney general swore in 3,400 deputies to protect the strikebreakers. Workers assaulted the trains and broke equipment to keep the trains from moving. Eventually President Grover Cleveland sent 2,000 federal troops to Chicago to ensure the trains got moving, he said he had the authority to do so because the strike had halted mail that was carried on the trains, which was a responsibility of the government to be delivered. On July 13, the strike was broken.