Industrialization

Why did industrialization occur in the U.S. during the late 1800s and early 1900s?

Natural resources- iron, coal, lumber Huge workforce- including large number

of immigrants Transportation routes- railroads, rivers Power source- water, oil, electricity

What types of industry existed?

1. Steel- iron that has been strengthened by heating it and combining it with other metals

Steel was used in the growth of railroads and cities (skyscrapers and bridges)

Andrew Carnegie Carnegie started a steel business in 1873 By 1899 he was manufacturing more

steel than all of Britain He encouraged competition within his

company He used innovative techniques

(Bessemer process)

The Bessemer Process

Henry Bessemer discovered that blasting hot air through the iron would create

stronger steel. This also proved to be a cheaper method to strengthen the steel.

(1850s)

Carnegie used both horizontal consolidation and vertical integration to gain monopolies

on the products he manufactured.

Raw materials (coal and iron)

Mines Mines

Manufacturing (steel)

Steel Mills Steel Mills

Transportation (taking items to and from the mill)

Railroads Railroads

HORIZONTAL INTEGRATION(CONSOLIDATION)

Combining many companies (that produce a similar

product) into one company

Vertical Integration

One company owns all elements of production required to create a product

J.P. Morgan

Morgan formed U.S. Steel in 1901 and bought out Carnegie Steel

Morgan was considered the wealthiest man in the U.S. and made his money on the railroads

Morgan made the steel industry a billion dollar industry

What types of industry existed?

2. Iron/Coal Industry Alabama was a leader in both the coal

and iron industries but investors were from the North and wanted to maintain Northern power

Alabama had a large labor force Alabama laborers were often paid in

“scrip” which could only be used at the company store

• Birmingham iron was cheaper but to keep areas like Pittsburg competitive, the “Birmingham differential” was created

• This was similar to a tax and it was added to iron produced in Birmingham

What types of industry existed?

3. Oil John D. Rockefeller, Standard Oil Company Rockefeller used/created the “trust” method Because monopolies were “illegal” a trust

enabled stockholders to give control of their stock to the trust (trustees est. a board of directors that supervise stock movement)

By the early 1880s he controlled about 90% of the nation’s oil

What types of industry existed?

4. Railroads This became a big industry after the Civil

War The federal government and businesses

saw the advantages a country could experience if it were linked by railroads

Steel production allowed RR growth The U.S. gov’t gave land grants to RRs to

encourage construction in the West

Railroads led to the creation of towns and a more unified nation

Because RR stops needed to be scheduled, RRs adopted time zones

George Pullman- developed luxury cars in the 1880s and built a “company” town

Corruption/Problems with Railroads

Credit Mobilier Scandal-1864-72; this involved graft and overpayment for services; the eventually investigation implicated members of Congress and increased public distrust of business

Railroad Strike-1877; workers went on strike to protest wage cut but Pres. Hayes sent in the army to end the strike (80,000 walked off jobs in 11 states)

Interstate Commerce Commission

Est. 1886-87 to investigate/regulate RR activity but it had no real power until the 1900s

However, this was a break from typical “laissez-faire” view of the government

Unions and Strikes

Factory work was unhealthy and dangerous

Workers were paid poorly with no rights Unions were created by workers to help

workers Owners were typically against unions

Blacklisted-employers would list “problem” employees and they would not be hired anywhere

Strikebreakers-(scabs) would work for less during a strike

Knights of Labor

1st nationwide industrial union This union effectively used strikes Terence Powderly (leader) Allowed anyone to be a member Wanted

An 8 hour workday Equal pay for women To end child labor Government to play a role in helping workers

Haymarket Affair/Riot

May 1886, Chicago Gathered to protest police violence

against strikers Bomb went off and 9 people (7 police)

were killed; about 100 injured 8 anarchists were convicted; no

association with labor but The Riot caused public support to be

against strikers/laborers

American Federation of Labor

Est. 1886 Samuel Gompers, lead organizer Organization of skilled workers only Opposed immigrant labor Organized based on trade rather than

industry Wanted

Higher wages Better working conditions Collective bargaining

Robber Barons

Term used as a negative way to refer to wealthy industrial leaders

They controlled all aspects of trade in a specific area

Very wealthy Increased the line between wealthy and

poor Carnegie and Rockefeller (examples)

Inventions

Improved communication and helped the economy grow

Made life easier

Thomas Edison

Light bulb, electricity, phonograph Menlo Park, NJ-first research lab Allowed scientist to experiment, learn,

and create Founded Edison General Electric (GE)

Alexander Graham Bell

Telephone, 1876 Organized Bell Telephone Company that

became AT & T

Additional Inventions

Radio, 1899; inventor- Marconi Telegraph, 1856; inventor-Morse Transatlantic Cable, 1866; inventor- Field

Has been replaced but idea used until 1960s when replaced by satellites