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Chapter 24 - Industry Comes of Age 1865-1900


Major Themes

  • America accomplished heavy industrialization after the Civil War, marked by the growth of the transcontinental railroad and large-scale industrial consolidation
  • Industrialization transformed American labor, but workers failed to develop effective labor organizations that could match the corporate organization of business

Major Questions

  • A third of this chapter (9 of 28 pages) is devoted to the railroad industry. Why?

Because the industrial advances were blooming and the building of railroads were increasing (transcontinental), railroads at this time was a main source of transportation not only for goods but people too. 

  • What were the costs and benefits of the post Civil War industrial transformation? (see The Impact of the New Industrial Revolution on America for overview)
  • Why did American workers have such trouble responding to the new industrial condition of labor? Why were business and the middle-class public generally hostile to unionization?



The Iron Colt Becomes an Iron Horse

  • after 1865, the establishment of railroads began to increase as business and Industrialization in the west increased. Transcontinental building was very risky in it required government subsidies. Congress, impressed by arguments pleading military and postal needs, began to advance liberal money loans to two favored cross continent companies in 1862.
  • land grants were made in broad belts along the proposed route within these belts the railroads were aloud to choose alternate mile square sections in checker board fashion. the railroads withheld all the land from other users. 1887 Grover Cleveland put and end to this and threw open to settlement the still unclaimed public portions of the land grant areas.
  • In 1865 there were only 35,000 miles of steam railways in the US, by 1900 it increased to 192,556 miles.
  • Granting land was a "cheap" way to subsidize a much-desired transportation system, because it avoided new taxes for direct cash grants.

Railroad Consolidation and Mechanization

  • Cornelious Vanderbuild promised lower prices for railroad costs and thus secured himself 100 million dollars to invest into the industry.
  • He was one of the first ones to replace the iron rails with steel rails which was a sound economic investment because steal rails could carry more weight and were safer. A standard gauge of track also came into use which eliminated the cost and inconvenience of numerous changes from one track to another.
  • The Westinghouse air brake was also a major contribution to the safety and efficiency of railroads.
  • The Pullman Palace car was described as a luxury hotel on wheels, although the safety was questionable because of swaying kerosene lamps.
  • Accidents continued to be almost daily tragedies, despite safety devices like the telegraph, double-tracking, and the block signal

Revolution by Railways

  • Railroads opened up fresh markets for manufactured goods after the civil war and sped raw materials to factories. the building of the railroads themselves made up most of the steel industry. railroads stimulated mining and agriculture, especially in the West.
  • Railroads were the boon for cities and completely encourage business and they are considered the main spark for industrialization.

Wrongdoing in Railroading

  • In order to increase the weight of cows, "stock watering" was employed. It entailed forcing a cow to bloat itself with water before it was weighed for sale. This technique enabled railroad stock promoters to inflate their claims about a given line's assets and profitability and sell stocks and bonds in excess of the railroad's actual value.
  • Railroaders, feeling they were above the law, abused the public by bribing judges and legislatures.
  • Railroad kings were manipulators of a huge natural monopoly and exercised too much direct control over the lives of people.
  • Many rail barons granted bribed powerful shippers in return for steady traffic.
  • The earliest form of combination was the “pools”--an agreement to divide the business in a given area and share the profits.

Government Bridles the Iron Horse

  • The depression of the 1870s caused farmers to protest against being "railroaded" into bankruptcy. Under pressure from organized agrarian groups, many midwestern legislatures tried to regulate the railroad monopoly.
  • In 1886 the Supreme Court decreed that individual states had no power to regulate interstate commerce.
  • The Interstate Commerce Act prohibited rebates and pools and required the railroads to publish their rates openly. Most important, it set up the Interstate Commerce Commission to administer and enforce the new legislation.
  • The new legislation provided an orderly forum where competing business interests could resolve their conflicts with peace. Avoiding rate wars.

Miracles of Mechanization

  • Republic became number one in manufacturing nations of the world by 1894
  • Liquid capital was now abundant, Civil War created immense fortunes, customary borrowings from foreign capitalists
  • Natural resources of the nation now fully exploited-->coal, oil, iron
  • Massive immigration helped make unskilled labor cheap and plentiful (eastern and southern europe)
  • American ingenuity played a vital role-->techniques of mass production being perfected, tons of patents issued
  • Business operations facilitated by cash register, stock ticker, typewriter
  • Urbanization speeded by refrigerator car, electric dynamo, electric railway
  • Telephone=major by Alexander Graham Bell in 1876
  • Thomas Alva Edison=most versatile inventor: phonograph, mimeograph, dictaphone, moving picture, perfection of electric light bulb

Carnegie and Other Sultans of Steel

  • After accumulating some capital, Carnegie entered the steel business. He was not a monopolist and disliked monopolistic trusts.
  • By 1900 he was producing one-fourth of the nation's Bessemer steel.
  • J. Pierpont Morgan had made a legendary reputation for himself by financing the reorganization of railroads, insurance companies, and banks.
  • Carnegie and Morgan crossed pathes. Carnegie, looking to sell his business bartered with Morgan until they finally came to the agreement of 400 million dollars.
  • Carnegie spent 350 million of the 400 million on libraries and charity means.
  • Morgan went on to buy other businesses and develop the first 1.4 billion dollar business.

Government Tackles the Trust Evil

  • After prolonged pulling and hauling, the Sherman Anti-Trust Act of 1890 was finally signed into law. The Sherman Act forbade combinations in restraint of trade, without any distinction between "good" trusts and "bad" trusts. It contained legal loopholes through which clever corporation lawyers could wriggle. Contrary to original attempt, It was used to curb labor unions or labor combinations that were deemed to be restraining trade.
  • More new trusts were formed in the 1890s under President McKinley than during any other like period.
  • Not until 1914 were the jaws of the Act tightened and monopolies were seriously threatened for the benefit of the public good.

The South in the Age of Industry

  • 1880's Southern agriculture received a welcome boost when machine made cigarettes replaced the roll your own variety and tobacco consumption shot up James Buchanan duke took full advantage of the new technology to mass produce the dainty coffin nails in the 1890 by creating the American Tobacco Company. In what was becoming a familiar pattern he absorbed his main competitors into the American Tobacco Company.

The Impact of the New Industrial Revolution on America

  • During the decades after the Civil War, economic miracles increased the standard of living in the United States. The industry of agriculture declined to manufacturing.
  • The only group that was affected by the new industrial age was woman.
  • Women found jobs as inventions arose; the typewriter and the telephone switchboard gave women, “hello girls”, new economic and social opportunities. One woman, Charles Dana Gibson, created the “Gibson Girl” which is a magazine image of an independent and athletic “new women”.
  • The nation of farmers and independent producers was becoming a nation of wage earners. By the beginning of the 1900s, the vast majority of the nation's population earned wages.

In Unions There is Strength

  • Factories became less centered around workers since, their jobs became simple such as pulling a lever. Bosses stopped showing interest in individuals, less value placed on manual skills than ever before
  • New machines provided many new jobs but hurt the manual worker in the short run. Railroads came in handy to ship new employees to factories. Immigration increased
  • Employers power over workers was high, they could bring in strikebreakers (scabs), or employ thugs to beat up labor organizers. They could also take workers to court, call in police, make workers sign "yellow dog" contracts that they wont join a labor union, employers could lock their doors against rebellious workers "lockout", the starve them into submission, put names of agitators on a "black list" and circulate it to fellow employers
  • Middle-class public annoyed by strikes, became deaf to outcry of the worker-->Carnegie and Rockefeller battled to the top, the laborer could do the same
  • Strike seemed like a foregin importation-->unpatriotic

Labor Limps Along

  • Labor Unions given strong boost by Civil War-->more of a premium on labor, mounting cost of living provided an urgent incentive to unionization
  • The National Labor Union-organized in 1866, represented several workers, lasted six years and attracted some 600,000 members--> skilled, unskilled, farmers, but not chinese, small efforts to include women and blacks
  • Blacks organized their own Colored National Labor Union, the two labor unions unable to work together due to racism
  • National Labor Union wanted 8 hour workday, eventually got it for government workers
  • depression of 1870s hurt labor, but never completely toppled
  • Wage reductions in 1877 caused disruptive strikes on railroads that nothing short of federal troops could restore order
  • Knights of Labor was created in 1869 as a secret society, secrecy continued until 1881-->sought to include all workers, barred only "nonproducers":liquor dealers, professional gamblers, lawyers, bankers, stockbrokers-->broad goals:economic and social reform-producers' cooperatives, codes for safety and health, frowned upon industrial warfare, wanted an 8 hour work day
  • Leader of Knights of Labor=Terence V. Powderly, Knights won a number of strikes for the 8hour day
  • Staged a successful strike against Jay Gould's Wabash Railroad in 1885, membership mushroomed

The AF of L to the Fore

  • The elitist American Federation of Labor, born in 1886, was largely the brainchild of squat, square jawed Samuel Gompers. this colorful Jewish cigar maker born in a London tenement and removed from school at age ten was brought to America when thirteen. Taking his turn at reading informative literature to fellow cigar makers in New York, he was pressed into overtime service because of his strong voice.

  • Significantly. the American Federation of Labor was just what it called itself, a federation. It consisted of an association of self governing national unions each of which kept its independence with the AF of L unifying overall strategy. No individual laborer as such could join the central organization.

  • It's purpose was to gain better wages, hours, and working conditions.

Varying Viewpoints:Industrialization: Boon or Blight

  • While the nation began to industrialize, more people who became successful were usually self made and had connections with transportation and were involved in lots of companies and businesses. little changes occurred in peoples lives that would effect there overall economic status whether it was inflation or deflation. never the less, people still strive to earn a living whether or not the American class system was completely equal when involving the economy.


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