C 14 Rise of Industry

C 14 Rise of Industry


At the end of this lesson students will be able to explain, and cite with examples, the 6 causes of industrialization in the United States.  

At the end of this lesson students will be able to explain and use new vocabulary such as GNP, Laissez-faire, and Supply and Demand accurately in sentences. 

Students should read Chapter 14 section 1.  When they are done they can use the other resources provided here to make sure they have mastered the objectives listed above.  When you come to class we will be working with the material you have covered and I will answer any questions  you have about the material. Students should take notes as they watch videos and/or read through the resources.   

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Outline notes

The Rise of Industrial America 1865-1900


What combination of factors resulted in rapid US industrial growth in the late 1800’s?

·              In the late 1800’s the US overtook Great Britain as the world’s largest source of manufactured goods

·              Abundant natural resources

o             The US was its own source of the raw materials necessary for industrialization

o             Coal, iron ore, copper, lead, timber, and oil

·              Abundant labor supply

o             High immigration between 1865 & 1900

o             Increased supply of laborers and high demand for industrial jobs made labor cheap

·              Capital (wealth or money) for investing in American businesses

·              Laborsaving technological advances

o             440,000 new patents were submitted by the US government from 1860 to 1890

·              Pro-Business government policies

o             Protection of private property

o             Federal subsidies, loans, and land grants for railroads

o             Protective tariffs

o             Very little federal regulation of business

o             Very low taxes on corporate profits


How did railroads impact American industrialization in late 1800’s?

·              Railroads were the nation’s first “big business”

o             Resources needed to build the nationwide network of railroads led to growth in other industries (especially coal and steel)

o             Led to the development of the modern stock-holder corporation

·              Cornelius Vanderbilt

o             Put millions from his steamboat business into the NY Central Railroad in 1867

o             Merged and “consolidated” local railroads into a trunk line connecting NY to Chicago

o             Trunk lines major routes between large cities (Baltimore RR, Ohio RR, and Pennsylvania RR)

·              Promoted settlement on the Great Plains

·              Created one large national market by linking east and west



How did the federal government aid railroad expansion?

·              In order to promote western expansion the federal government provided railroad companies with huge subsidies in the form of loans and land grants

o             80 companies received over 170 million acres of public land

o             Railroad companies received more than three times the land given away by the homestead act

·              The Transcontinental Railroad

o             During the Civil War Congress authorized land grants and loans for a transcontinental railroad connecting California to the rest of the Union

o             The Union Pacific company built from east to west across the Great Plains from Omaha, Nebraska

·              Construction directed by General Greenville Dodge

·              Used thousands of war veterans and Irish immigrants for labor

o             Central Pacific company built from west to east over the mountains from Sacramento

·              Construction directed by Charles Crocker

·              Used 6,000 Chinese immigrants as labor

o             The two companies met at Promontory Pont Utah on May 10, 1869

o             A golden spike was driven into the ground to mark the linking of the Atlantic and Pacific states

·              By 1900 four other transcontinental railroads were completed

o             The Southern Pacific: connected New Orleans with Los Angeles

o             The Atchison, Topeka, & Santa Fe: connected Kansas City and Los Angeles

o             The Northern Pacific: connected Duluth, Minnesota with Seattle, Washington

o             The Great Northern Railroad: connected St. Paul, Minnesota to Seattle

·              Built by James Hill

·              Built without federal subsidies

·              A financial Panic in 1893 forced ¼ of all railroad companies into bankruptcy

o             Bankers like JP Morgan took control of the bankrupt railroad companies and consolidated them into larger companies

o             The same groups of bankers sat on the board of directors for competing railroad companies

o             Essentially eliminated competition in the railroad industry


What industries made up what is referred to as the “Second Industrial Revolution?”

·              Railroads

·              The Steel Industry

o             The Bessemer System

§               New process for producing high-quality steel, quickly and cheaply

§               Developed by both Henry Bessemer (England) and William Kelly (USA) in the 1850’s

§               Involved blasting air through molten iron

§               Launched the rise of the steel industry

o             The Great Lakes region of the US emerged as the nation’s leading steel producing region due to abundant coal and iron resources

o             Andrew Carnegie

§               In the 1870’s began steel manufacturing in Pittsburgh

§               Used vertical integration: a company controls every stage of the industrial process, from mining to transporting the finished product

§               By 1900 Carnegie Steel was the nations top steel producing company

o             US Steel Corporation

§               Andrew Carnegie sold his company in 1900 for over $400 million to a new steel corporation headed by JP Morgan

§               US Steel was the first billion dollar company and at that time the largest company in the world

§               Controlled over 3/5 of the nation’s steel business

·              The Oil Industry

o             The first oil well in the US was drilled in Pennsylvania by Edwin Drake in 1859

o             In 1863 John D Rockefeller started the Standard Oil Company

§               Later controlled nearly all of the nation’s oil production by eliminating competition

§               Horizontal integration: former competitors were brought under a single corporate umbrella

§               The Standard Oil Trust consisted of separate companies all managed by a board of trustees that Rockefeller controlled

§               Standard Oil controlled supply and prices of oil products

§               Rockefeller was worth $900 million when he retired

§               Inspired the organization of trusts in other industries: sugar, meat, tobacco, leather


How did the anti-trust movement come about as a reaction to big business?

·              Middle class consumers feared the power of trusts to control supply and prices

·              In 1890 Congress passed the Sherman Anti-Trust Act

o             Prohibited any “contract, combination in the form of trust or otherwise conspiracy in restraint of commerce

o             In reality the law was too vague to have much of an impact

o             United States vs. E. C. Knight Co. (1895): ruled the Sherman Anti-Trust Act could be applied only to commerce and not manufacturing

o             The law was later strengthened in the 1920’s


How did economic ideas contributed to the rapid industrialization of the late 1800’s?

·              Laissez-faire capitalism

o             The Wealth of Nations: 1776 book by Adam Smith

§               Seen as the beginnings of laissez-faire capitalism

§               Argued that business should not be regulated by government

§               Business should be regulated by supply and demand

§               Businesses would offer quality goods at low prices out of their own self-interest

o             In the 1880’s trusts and monopolies undercut the natural regulation of the market proposed by Adam Smith

·              Social Darwinism

o             Based on Darwin’s theory of natural selection

o             The English social philosopher Herbert Spencer applied the ideas of natural selection and survival of the fittest to the business world

o             Used to justify a small minority of the population controlling a large majority of the nation’s wealth

o             Professor William Graham Sumner of Yale University went so far as to argue that help for the poor was wrong because it interfered with survival of the fittest and would weaken the evolution of the human species by allowing the unfit to survive

·              The Gospel of Wealth

o             Used religion to justify the wealth of industrialists and bankers

o             Protestant work ethic: hard work and material success are signs of God’s favor

o             “Acres of Diamonds”: popular lecture by Reverend Russell Conwell that preached everyone had a duty to become rich

o             “Wealth”: essay by Andrew Carnegie

§               Argued the wealthy had a god-given responsibility to carry out civic philanthropy (charity) for the benefit of society

§               Carnegie put over $350 million into support for libraries, universities, and other public institutions


What type of technological innovations contributed to rapid industrialization in the late 1800’s?

·              Railroads: rapid transportation

·              Telegraph: invented by Samuel Morse in 1844

o             Cyrus W. Field’s transatlantic cable improved overseas communication in 1866

o             By 1900 telegraph lines linked all continents in a global network of cables

·              Telephone: invented by Alexander Graham Bell in 1876

·              Other inventions that improved business: typewriter (1867), cash register (1879), calculating machine (1887), adding machine (18880

·              Consumer use inventions: George Eastman’s Kodak Camera (1888), Lewis Waterman’s fountain pen (1884), King Gillette’s safety razor (1895)

·              Thomas Edison

o             Developed the world’s first modern research laboratory in Menlo Park, NJ

o             Edison’s lab produced over 1,000 patent inventions

o             Phonograph, the light bulb, mimeograph machine, motion picture camera

·              George Westinghouse

o             Inventor who produced 400 patents

o             Air-brakes for railroads (1869)

o             Transformer for producing high voltage alternating current (1885) allowing for the later lighting of cities, electric street cars, subways and household appliances


How did industrialization impact the marketing of consumer goods?

·              Increased production created the need for businesses to find new ways of selling their goods to the public

·              Department stores (Macys, started by RH Macy in NY) became the place to shop in urban areas

·              Woolworth’s Five & Ten Cent store: started by Frank Woolworth began a nationwide chain of stores

·              Mail-order companies:

o             Sears & Roebuck

o             Montgomery Ward

o             Used railroads to ship goods to rural customers

o             Consumers ordered everything from hats to houses from catalogs (wish books)

·              Advertising helped create a consumer culture that encouraged spending over saving


What impact did industrialization have on American society?

·              Raised the overall standard of living for most people

·              Created sharper economic divisions between the rich, the middle class, and the poor

·              By the 1890’s 10% of the US population controlled 9/10’s of the nation’s wealth

·              Horatio Alger:

o             Wrote novels that popularized the myth of the rags-to-riches “self-made man”

o             Alger novels portrayed young men who became rich through hard work and a little luck

·              The expanding middle class

o             Large corporations required white-collar workers: salaried employees whose jobs did not involve manual labor

o             Middle management, accountants, clerical workers and sales people

o             Increases in the number of “good-paying” jobs increased the income of the middle class and consumer consumption

·              Wage earners or working-class families

o             By 1900 2/3 of Americans worked for hourly wages at jobs that required 10 hour days, six days a week

o             Wages were determined by the demand for workers and the available supply of workers

o             High immigration in the late 1800’s helped keep factory wages low

o             David Ricardo’s “iron law of wages”

·              Used to justify low factory wages

·              Arbitrarily raising wages would attract more workers, increasing the supply of workers

·              An increased in the supply of workers would cause wages to fall even lower creating a cycle of misery and starvation

o             Most working-class families could not survive on one income leading to women taking factory jobs and child labor

o             Women in the workforce

·              Most women who worked in factories were young and unmarried

·              Only 5% of married women worked outside the home

·              Women’s factory jobs were usually restricted to industries that were seen as extensions of the home: textile, garment and food-processing industries

·              As the demand for clerical work increased women moved into roles as secretaries, book-keepers, typists, and telephone operators

·              Occupations that became feminized usually lost status and received lower wages

·              Labor discontent

o             Before industrialization artisans (skilled craftsmen) typically worked for themselves and created a product from start to finish

o             Factory work used unskilled labor were workers performed just one repetitive step in the manufacturing of a good

o             Workers received low pay, worked long hours, and worked in dangerous conditions

o             High turnover rate: workers generally changed jobs every three years


How did labor discontent lead to labor unions?

·              Unions worked to organize laborers to achieve recognition from management and collective bargaining

·              Goals of unions:

o             Better pay

o             Shorter hours

o             More safe working conditions

·              Tactics used by unions to force management to meet their demands

o             Strikes: stopping production by refusing to work

o             Picketing

o             Boycotts

o             Slowdowns


Why were early unions unsuccessful?

·              The high supply of potential laborers made early unions unsuccessful

·              Employers could easily fire striking workers and bring in strike breakers, or scabs

·              Other tactics used by management to defeat unions:

o             Lockouts: close the factory to break a union before it became organized

o             Blacklists: circulating names of union leaders to other employers

o             Yellow-dog contracts: forcing workers to sign an agreement not to join a union as a condition of employment

o             Calling in private guards (pinkertons) and state militias to put down strikes

o             Obtaining court injunctions against strikes

·              Management promoted the image of unions as anarchistic and un-American

·              Any labor violence was used to support the anarchistic view of labor unions

·              The Great Railroad Strike of 1877

o             During an economic depression in 1877, railroad companies cut wages to reduce costs

o             Railroad workers went on a strike that shut down 2/3 of the countries railroad tracks

o             500,000 workers from other industries joined the strike

o             President Rutherford B Hayes used federal troops to put down the strike

o             More than 100 people were killed

o             Management used public fear of mob violence to reduce the power of labor

o             Public opinion turned against labor unions


How did labor unions become national organizations?

·              Unions began as local associations of workers in individual trades before the 1860’s

·              After the 1860’s national labor unions began to form

·              National Labor Union

o             First attempt at a national labor union

o             Tried to organize skilled and unskilled workers in all states

o             Founded in 1866

o             640,000 members by 1868

o             Worked for higher wages and the eight-hour day

o             Achieved eight hour workday for employees of the federal government

o             Also had social objectives:

§               Equal rights for women and African Americans

§               Monetary reforms

§               Worker owned cooperatives

o             Began to loose support after 1877 strikes

·              Knights of Labor

o             Second national labor union

o             Began in 1869 as a secret society in order to avoid detection by employers

o             Went public under the leadership of Terrence V Powderly in 1881

o             Opened membership to all workers including African Americans and women

o             Powderly and the Knights of Labor advocated:

§               Worker cooperatives

§               Abolition of child labor

§               Abolition of trusts and monopolies

§               Favored arbitration over strikes

o             Membership peaked at 730,000 members in 1886

o             The Haymarket Square Riot and Bombing

§               In Chicago in 1886 Knights of Labor members participated in the first May Day labor movement (calling for a general strike to achieve an eight-hour workday)

§               On May 4, workers held a public meeting in Haymarket Square

§               When police attempted to break up the meeting, someone threw a bomb, which killed seven police officers

§               Eight anarchist leaders were tried and sentenced to death

§               Led Americans to conclude that the union movement was radical and violent

o             The Knights of Labor lost support and declined after the Haymarket riot

·              The American Federation of Labor (AFL)

o             Most successful of early national labor unions

o             Founded 1886 and led by Samuel Gompers from 1886 to 1924

o             Concentrated on realistic goals

§               Did not advocate social reforms (equal rights, ending child labor, etc.)

§               Worked for higher wages and better working conditions

§               Organized only skilled workers

o             By 1901, the AFL was the nations largest Union with over 1 million members

·              Labor unions did not achieve major successes until the early decades of the 1900s


What two major strikes demonstrated the growing discontent of labor and the power of management to win in labor disputes?

·              The Homestead Strike

o             Henry Frick, the manager of Andrew Carnegie’s Homestead Steel plant near Pittsburgh, cut wages by nearly 20%

o             When workers went on strike Frick used lockouts, pinkertons, and strikebreakers (scabs) to defeat the walkout

o             The defeat of the strike set back the union movement in the steel industry until the New Deal in the 1930s

·              The Pullman Strike

o             The Pullman Company manufactured railroad sleeping cars in a company town near Chicago

o             In 1894 Pullman cut wages and fired leaders of the workers’ delegation that came to negotiate with him over the cuts

o             Pullman workers went on strike and appealed to the American Railroad Union for help

o             Eugene V Debs, the leader of the American Railroad Union, directed union members not to handle trains with Pullman cars

o             Railroad owners helped Pullman by linking Pullman cars to mail trains and then appealing to President Cleveland

o             Railroad owners persuaded Cleveland to use the military to keep trains running

o             A federal court ordered an injunction forbidding interference with the mail and ordering workers to stop striking

o             Debs and other Union leaders were arrested and jailed for refusing to obey the injunction, effectively ending the strike

o             In the case of In re Debs (1895) the Supreme Court approved the use of court injunctions against strikes

o             After serving six months in jail Debs helped to found the American Socialist Party as a more radical way to deal with the nation’s labor problems


Source: found on: teacherpages.nhcs

How Inventions in the late 1800s fueled industry in American (youtube)

Students should watch 10 minute video. This is a student created video about the rise of industry in the US. He mentions the 6 causes of industrialization in the US and cites several examples.

Source: created by Bandanaman, found on Youtube

Quiz C 14 Rise of Industry Section 1

Write your answers on your own paper.  Please label your paper with quiz, chapter and section.

1.  If you believe the government should not interfere in the economy, you are a believer in _________ economics________.

2.  ______ is the total amount of goods and services produced in a nation in a given year.  It is used to measure a nations economy.

3.  Name the 6 causes of Industrialization in the United States.  Be specific.

4.  In a capitalistic economy ____________ is what determines prices.

5.  Name 4 new inventions that spurred  industrial growth in the late 1800s.

Source: created by Patrice OD

America Then and Now

Student created video explaining Carnegie and Rockefeller's role in industrialization.

Source: YOutube, Yeatboy92

America Then and Now

Student created video explaining Carnegie and Rockefeller's role in industrialization.

Source: YOutube, Yeatboy92