A.P.
U.S. History Notes
Chapter 25: “Industry Comes of Age”
~
1865 – 1900 ~
I.
The
Iron Colt Becomes an Iron Horse
1.
After
the Civil War, railroad production grew enormously, from 35,000 mi. of track
laid in 1865 to a whopping 192,556 mi. of track laid in 1900.
i.
Congress
gave land to railroad companies totally 155,504,994 acres.
ii.
For
railroad routes, companies were allowed alternate mile-square sections in
checkerboard fashion, but until companies determined which part of the land was
the best to use for railroad building, all of the land was withheld from
all other users.
a.
Grover
Cleveland stopped this in 1887.
2.
Railroads
gave land their value; towns where railroads ran became sprawling cities while
those skipped by RR’s sank into ghost towns, so obviously, towns wanted
railroads in them.
II.
Spanning
the Continent with Rails
1.
Deadlock
over where to build a transcontinental railroad was broken after the South
seceded, and in 1862, Congress commissioned the Union Pacific Railroad to
begin westward from Omaha, Nebraska, to gold-rich California.
i.
The
company received huge sums of money and land to build its tracks, but
corruption also plagued it, as the insiders of the Credit Mobilier
reaped $23 million in profits.
ii.
Many
Irishmen, who might lay as much as 10 miles a day, laid the railroads.
iii.
When
Indians attacked, trying to save their land, the Irish dropped their picks and
seized their rifles, and scores of workers and Indians died during
construction.
2.
Over
in California, the Central Pacific Railroad was in charge of extending
the railroad westward, an it was backed by the Big Four: including Leland
Stanford, the ex-governor of California who had useful political
connections, and Collis P. Huntington, a adept lobbyist.
i.
The
Central Pacific used Chinese workers, and received the same incentives as the
Union Pacific, but it had to drill through the hard rock of the Sierra Nevada.
3.
In
1869, the transcontinental rail line was completed near Ogden, Utah; in all,
the Union Pacific built 1086 mi. of track, compared to 689 mi. by the Central
Pacific.
III.
Binding
the Country with Railroad Ties
1.
Before
1900, four other transcontinental railroads were built:
i.
The
Northern Pacific Railroad stretched from Lake Superior to the Puget
Sound and was finished in 1883.
ii.
The
Atchison, Topeka, and Santa Fe stretched through the Southwest deserts
and was completed the following year, in 1884.
iii.
The
Southern Pacific (completed in 1884) went from New Orleans to San
Francisco.
iv.
The
Great Northern ran from Duluth to Seattle and was the creation of James
J. Hill, probably the greatest railroad builder of all.
2.
However,
many pioneers over-invested on land, and the banks that supported them often
failed and went bankrupt when the land wasn’t worth as much as initially
thought.
IV.
Railroad
Consolidation and Mechanization
1.
Older
eastern railroads, like the New York Central, headed by Cornelius
Vanderbilt, often financed the successful western railroads.
2.
Advancement
in railroad building included the steel rail, which was stronger and more
enduring than the iron rail, the Westinghouse air brake, which increased
safety, the Pullman Palace Cars, which were luxurious, and telegraphs,
double-racking, and block signals.
i.
Nevertheless,
train accidents were common, as well as death.
V.
Revolution
by Railways
1.
Railroads
stitched the nation together, generated a huge market and lots of jobs, helped
the rapid industrialization of America, and stimulated mining and agriculture
in the West by bringing people and supplies to and from the areas were such work
occurred.
2.
Railroads
helped people settle in the previously harsh Great Plains.
3.
Due
to railroads, the creation of four national time zones occurred on
November 18, 1883, instead of each city having its own time zone (that was
confusing to railroad operators).
4.
Railroads
were also the makers of millionaires and the millionaire class.
VI.
Wrongdoing
in Railroading
1.
Railroads
were not without corruption, as shown by the Credit Mobilier.
2.
Jay Gould made millions embezzling stocks from the Erie, Kansas
Pacific, the Union Pacific, and the Texas and Pacific railroad
companies.
3.
One
method of cheap moneymaking was called “stock watering,” in which
railroad companies grossly over-inflated the worth of their stock and sold them
at huge profits.
4.
Railroad
owners abused the public, bribed judges and legislatures, employed arm-twisting
lobbyists, elected their own to political office, and used free passes to gain
favor in the press.
5.
As
time passed, though, railroad giants entered into defensive alliances to show
profits, and began the first of what would be called trusts, although at that
time they were called “pools.”
VII.
Government
Bridles the Iron Horse
1.
People
were aware of such injustice, but were slow to combat it.
2.
The
Grange was formed by farmers to combat such corruption, and many state
efforts to stop the railroad monopoly occurred, but they were stopped when the
Supreme Court issued its ruling in the Wabash case, in which it
ruled that states could not regulate interstate commerce.
3.
The
Interstate Commerce Act, passed in 1887, banned rebates and pools and
required the railroads to publish their rates openly (so as not to cheat
customers), and also forbade unfair discrimination against shippers and banned
charging more for a short haul than for a long one.
i.
It
also set up the Interstate Commerce Commission (ICC) to enforce this.
4.
The
act was not a victory against corporate wealth, as people like Richard Olney,
a shrewd corporate lawyer, noted that they could use the act to their
advantage, but it did represent the first attempt by Congress to regulate
businesses for society’s interest.
VIII.
Miracles
of Mechanization
1.
In
1860, the U.S. was the 4th largest manufacturer in the world, but by
1894, it was #1, why?
i.
Now-abundant
liquid capital.
ii.
Fully
exploited natural resources (like coal, oil, and iron, the iron from the
Minnesota-Lake Superior region which yielded the rich iron deposits of the Mesabi
Range).
iii.
Massive
immigration made labor cheap.
iv.
American
ingenuity played a vital role, as such inventions like mass production (from Eli
Whitney) were being refined and perfected.
a.
Popular
inventions included the cash register, the stock ticker, the typewriter,
the refrigerator car, the electric dynamo, and the electric
railway, which displaced animal-drawn cars.
2.
In
1876, Alexander Graham Bell invented the telephone and a new age was
launched.
3.
Thomas Edison, the “Wizard of Menlo Park,” was the most versatile inventor, who,
while best known for his electric light bulb, also cranked out scores of other
inventions.
IX.
The
Trust Titan Emerges
1.
Industry
giants used various ways to eliminate competition and maximize profits.
i.
Andrew Carnegie used a method called “vertical integration,” which meant that
he controlled all aspects of an industry (in his case, he mined the
iron, transported it, refined it, and turned it into steel, controlling all
parts of the process).
ii.
John D. Rockefeller, master of “horizontal integration,” and a giant among bankers,
simply allied with competitors to monopolize a given market.
a.
He
used this method to form Standard Oil and control the oil industry by
forcing weaker competitors to go bankrupt.
2.
These
men became known for their trusts, giant, monopolistic corporations.
3.
Rockefeller
also placed his own men on the boards of directors of other rival competitors,
a process called “interlocking directorates.”
X.
The
Supremacy of Steel
1.
In
Lincoln’s day, steel was very scarce and expensive, but by 1900, Americans
produced as much steel as England and Germany combined.
2.
This
was due to an invention that made steel-making cheaper and much more effective:
the Bessemer process, which was named after an English inventor even
though an American, William Kelly, had discovered it first:
i.
Cold
air blown on red-hot iron burned carbon deposits and purified it.
ii.
America
was one of the few nations that had a lot of coal for fuel, iron for smelting,
and other essential ingredients for steel making, and thus, quickly became #1.
XI.
Carnegie
and Other Sultans of Steel
1.
Andrew
Carnegie started off as a poor boy in a bad job, but by working hard, assuming
responsibility, and charming influential people, he worked his way up to
wealth.
2.
He
started in the Pittsburgh area, but he was not a man who like trusts; still,
but 1900, he was producing ¼ of the nation’s Bessemer steel, and getting $25
million a year.
3.
J.
Pierpont Morgan, having already made a fortune in the banking industry and in
Wall Street, was ready to step into the steel tubing industry, but Carnegie
threatened to ruin him, so after some tense negotiation, Morgan bought
Carnegie’s entire business of $400 million (this was before income tax), but
Carnegie, fearing ridicule for possessing so much money, spent the rest of his
life donating $350 million of it to charity, pensions, and libraries.
i.
Meanwhile,
Morgan took Carnegie’s holdings, added others, and launched the United
States Steel Corporation in 1901, a company that became the first
billion-dollar corporation (it was capitalized at $1.4 billion) in the world.
XII.
Rockefeller
Grows an American Beauty Rose
1.
In
1859, a man named Drake first used oil to get money, and by the 1870s, kerosene,
a type of oil, was used to light lamps all over the nation.
2.
However,
by 1885, 250,000 of Edison’s electric light bulbs were in use, and the electric
industry soon rendered kerosene obsolete, just as kerosene had made whale
oil obsolete.
3.
Oil,
however, had its profits from the gasoline-burning internal combustion
engine.
4.
John
D. Rockefeller, ruthless and merciless, organized the Standard Oil Company of
Ohio in 1882 (five years earlier, he had already controlled 95% of all the oil
refineries in the country).
5.
Rockefeller
crushed weaker competitors—part of the natural process according to him—but his
company did produce superior oil at a cheaper price.
6.
Other
trusts, which also generally made better products at cheaper prices, emerged,
such as the meat industry of Gustavus F. Swift and Philip Armour.
XIII.
The
Gospel of Wealth
1.
Many
of the newly rich had worked from poverty to wealth, and thus felt that some
people in the world were destined to become rich and then help society with
their money.
2.
The
Reverend Russell Conwell of Philadelphia became rich by delivering his
lecture, “Acres of Diamonds” thousands of times, and in it he preached
that poor people made themselves poor and rich people made themselves rich;
everything was because of one’s actions only.
3.
Corporate
lawyers used the 14th Amendment to defend trusts, the judges agreed,
saying that corporations were “big people” entitled to their property, and plutocracy
ruled.
XIV.
Government
Tackles the Trust Evil
1.
In
1890, the Sherman Anti-Trust Act was signed into law; it forbade
combinations in restraint of trade, without any distinction between “good” and
“bad” trusts.
i.
It
proved effective because it couldn’t be enforced.
ii.
Not
until 1914 was it properly enforced and those prosecuted for violating the law
were actually punished.
XV.
The
South in the Age of Industry
1.
The
South remained agrarian despite all the industrial advances, though James
Buchanan Duke developed a huge cigarette industry in the form of the American
Tobacco Company and made many donations to what is now Duke University.
2.
Men
like Henry W. Grady, editor of the Atlanta Constitution urged the
South to industrialize.
3.
However,
many northern companies set rates to keep the South from gaining any
competitive edge whatsoever, with examples including the rich deposits and iron
and coal near Birmingham, Alabama, and the textile mills of the South.
4.
However,
cheap labor led to the creation of many jobs, and despite poor wages, many white
Southerners saw employment as a blessing.
XVI.
The
Impact of the New Industrial Revolution on America
1.
As
the Industrial Revolution spread in American, the standard of living rose,
immigrant swarmed to the U.S., and early Jeffersonian ideals about the dominance
of agriculture fell.
2.
Women,
who had swarmed to factories and had been encouraged by recent inventions,
found new opportunities, and the “Gibson Girl,” created by Charles
Dana Gibson, became the romantic ideal of the age.
i.
However,
many women never achieved this, and instead toiled in hard work because they
had to do so in order to earn money.
3.
A
nation of farmers was becoming a nation of wage earners, but the fear of
unemployment was never far, and the illness of a breadwinner (main wage owner)
in a family was disastrous.
4.
Strong
pressures in foreign trade developed as the tireless industrial machine
threatened to flood the domestic market.
XVII.
In
Unions There Is Strength
1.
With
the inflow of immigrants providing a labor force that could work for low wages
and in poor environments, the workers who wanted to improve their conditions
found that they could not, since their bosses could easily hire the unemployed
to take their places.
2.
Corporations
had many weapons against strikers, such as hiring strikebreakers or asking the
courts to order strikers to stop striking, and if they continued, to bring in
troops; other methods included “lockouts” to starve strikers into submission,
and often, workers had to sign “ironclad oaths” or “yellow dog contracts” which
banned them from joining unions.
i.
Workers
could be “blacklisted,” or put on a list and denied privileges elsewhere.
3.
The
middle-class, annoyed by the recurrent strikes, grow deaf to the worker’s
outcry.
4.
The
view was that people like Carnegie and Rockefeller had battled and worked hard
to get to the top, and workers could do the same if they “really” wanted to
improve their situations.
XVIII. Labor Limps Along
1.
The
Civil War had put a premium on labor, which helped labor unions grow.
2.
The
National Labor Union, formed in 1866, represented a giant boot stride by
workers and attracted an impressive total of 600,000 members but it only lasted
six years.
i.
However,
it excluded Chinese and didn’t really try to get Blacks and women to join.
ii.
It
worked for the arbitration of industrial disputes and the eight-hour workday,
and won the latter for government workers, but the depression of 1873
knocked it out.
3.
A
new organization, the Knights of Labor, was begun in 1869 and continued
secretly until 1881, and this organization was similar to the National Labor
Union.
i.
It
only barred liquor dealers, professional gamblers, lawyers, bankers, and
stockbrokers, and they only campaigned for economic and social reform.
ii.
Led
by Terence V. Powderly, the Knights won a number of strikes for the
eight-hour day, and when they staged a successful strike against Jay Gould’s
Wabash Railroad in 1885, membership mushroomed to ¾ of a million workers.
XIX.
Unhorsing
the Knights of Labor
1.
However,
the Knights became involved in a number of May Day strikes of which half
failed.
2.
In
Chicago, home to about 80,000 Knights and a few hundred anarchists that
advocated a violent overthrow of the American government, tensions had been
building, and on May 4, 1886, Chicago police were advancing on a meeting that
had been called to protest brutalities by authorities when a dynamite bomb was
thrown, killing or injuring several dozen people.
i.
Eight
anarchists were rounded up, but no one could prove that they had any
association with the bombing, but since they had preached incendiary doctrines,
the jury sentenced five of them to death on account of conspiracy and gave the
other three stiff prison terms.
3.
In
1892, John P. Altgeld, a German-born Democrat was elected governor of
Illinois and pardoned the three survivors after studying the case extensively.
i.
He
received violent verbal abuse for that and was defeated during re-election.
4.
The
Haymarket Square Bomb forever associated the Knights of Labor with
anarchists and lowered their popularity and effectiveness; membership declined,
and those that remained fused with other labor unions.
XX.
The
AF of L to the Fore
1.
In
1886, Samuel Gompers founded the American Federation of Labor.
i.
It
consisted of an association of self-governing national unions, each of which
kept its independence, with the AF of L unifying overall strategy.
2.
Gompers
demanded a fairer share for labor.
i.
All
he wanted was “more,” and he sought better wages, hours, and working
conditions, but he was not concerned with sweet by-and-by.
3.
The
AF of L established itself on solid but narrow foundations, since it tried to
speak for all workers but fell far short of that.
i.
Composed
of skilled laborers, it was willing to let unskilled laborers fend for
themselves, but critic called it “the labor trust.”
4.
From
1881 to 1900, there were over 23,000 strikes involving 6,610,000 workers with a
total loss to both employers and employees of about $450 million.
i.
Perhaps
the greatest weakness of labor unions was that they only embraced a small
minority—3%—of all workers.
5.
However,
by 1900, the public was starting to concede the rights of workers and beginning
to give them some or most of what they wanted.
i.
In
1894, Labor Day was made a legal holiday.
6.
A
few owners were beginning to realize that losing money to fight labor strikes
was useless, though most owners still dogmatically fought labor unions.
7.
If
the age of big business had dawned, the age of big labor was still some
distance over the horizon.
