Effects of Industrialization

A Different View of the Brooklyn Bridge

Panic of 1873: Economic crash touched off on when the Philadelphia banking firm Jay Cooke and Co. went bankrupt after financing of a Northern Pacific Railway collapsed. The New York Stock Market closed for 10 days. Of the country's 364 railroads, 89 went out of business. 18,000 businesses failed; unemployment reached 14% by 1876. The Panic caused farm prices to crash. Thus, as with the Panic of 1819 and others, indebted farmers faced foreclosure of their property. This was just the first of the economic shocks that plagued the U.S. during each decade between 1873 and 1908.

Economic Crises and the Growth of Labor

Group of radical Irish workers that terrorized businesses in the coal region of Pennsylvania in the 1860s and 1870s. In an era of widespread anti-Irish discrimination, when employment ads commonly included the rider “Irish need not apply,” the Mollies asserted the rights of Irish workers. They burned company property, intimidated workers and managers, and committed several murders—usually warning their target with a “coffin notice” first. Their reign of violence ended in 1876, after Pinkerton Detective agents infiltrated the group. Pinkertons became an important force used by businesses to put down labor disputes. The Mollies represent an extremism in the labor movement that often turned public opinion against worker protests.

Molly Maguires:

Great Railroad Strike of 1877: First interstate labor strike in U.S. history. As a result of the depression, 27% or workers were unemployed in 1877. The Pennsylvania Railroad laid off workers, cut wages, and then announced it would increase rail traffic without hiring more crew, causing furious workers to strike. The Baltimore and Ohio (B&O) Railroad followed suit. Word traveled through Virginia, where strikes erupted. President Hayes called up troops to stop the strike, killing ten strikers. Meanwhile, Philadelphia militiamen killed 26 strikers putting down protests in Pittsburgh. The Workingmen's Party, part of the 1st Communist International, rallied, demanding nationalization of railroads. Police broke up the protests. Then the U.S. military got involved, killing 18. Similar events occurred in St Louis and San Francisco. In all, some 100,000 workers struck and when order was restored over 100 people were dead and 1,000 in jail. The public, originally supportive of the strike, blamed workers for the violence. The strikes failed because workers lacked coordination, but scared big business and government, which sought to stop labor unions

American Federation of Labor: Founded in 1886 by Samuel Gompers, it is a coalition of unions created to expand trade unionism and improve working conditions and pay for skilled laborers. The AFL competed with another union organization, the Knights of Labor headed by Terence V. Powderly, but superseded the Knights after the violence of the Haymarket Riot. In 1920, membership in the AFL peaked, at 4 million. In the 1950s, it merged with the Congress of Industrial Organizations to form the AFL-CIO.

Samuel Gompers Terence Powderly

Knights of Labor American Federation of Labor

Membership:•skilled workers•unskilled workers•men & women•whites & racial minorities•Protestants and Catholics

Membership:•skilled craftworkers•men•whites

Leaders:•Uriah Stephens•Terence Powderly•Mother Jones

Leaders:•Samuel Gompers

Goals:•power of collective bargaining•immigration restrictions•ban on convict labor•better working conditions – stop pay cuts - stop production speedups

Goals:•power of collective bargaining•higher wages•8-hour workday•employers liability (limited workmen’s compensation)•mine-safety laws

Some people say a man is made out of mudA poor man's made out of muscle and bloodMuscle and blood, skin and bones...A mind that's weak and a back that's strong 

Chorus:You load sixteen tons, and what do you get?another day older and deeper in debtSt. Peter, don't you call me, 'cause I can't goI owe my soul to the company store 

I was born one mornin' and the sun didn't shine I picked up my shovel and I walked to the mineI loaded sixteen tons of number nine coal and the straw boss said, "well bless my soul!" .....you loaded...

Chorus:I was born one mornin' it was drizzlin' rain fightin' and trouble are my middle name I was raised in a cane-brake by an old mama lion can't no high-toned woman make me walk no line

Chorus: 

If you see me comin', better step asideA lot of men didn't, a lot of men diedOne fist of iron, the other of steelIf the right one don't get you, then the left one will 

Chorus:

“Sixteen Tons”by Merle Travis as

sung byTennessee Ernie Ford

Haymarket Riot: In May 1886, a group of anarchists met to protest after police killed a striker protesting at the International Harvester Co. (McCormack Reaper) in Chicago. During the speeches, calling for socialism and anarchism, someone threw a bomb at the police, killing one and wounding another. Police responded, firing into the crowd. Seven anarchists were convicted of the bombing and sentenced to death, despite no evidence linking them to the bombing. The violence turned public opinion against the strikers and the Knights of Labor.

Homestead Steel Strife of 1892: One of the largest violent labor disputes: it occurred at Andrew Carnegie’s Homestead Steel Works when management (Henry Clay Frick) locked out union activists. Violence broke out between Pinkerton security and workers, nine workers were killed. The violence ended the steelworkers’ attempt to form a union. Steelworkers would not successfully organize until the 1930s.

Panic of 1893: The most serious of the 19th-century economic crises and statistically the worst depression in U.S. history. It arose out of two failing economic policies: the Sherman Silver Purchase Act and repeal of the McKinley Tariff. During the 1892 campaign, Cleveland had promised to reduce tariffs. Once Cleveland was elected, many business leaders worried that they would face stiff competition from English imports. Businesses cut their order for materials, such as steel, causing an over-supply of such materials. Major steel makers declared bankruptcy. In May, the stock market crashed, causing a panic through the economy. Before it ended, 15,000 companies had declared bankruptcy; 500 banks had failed; and unemployment reached 18%. J.P. Morgan was able to prop up the gold reserves to slow the bleeding, but the depression did not end until the discovery of gold in Alaska and the Yukon (Klondike) in 1897.

Pullman Strike: 1894 labor dispute at the Pullman Palace Car Co. in Pullman, Illinois. What began as a model of industrial reform became just another factory town with the Panic of 1893. To maintain profits, George Pullman cut wages and raised rents on the company-owned houses. The workers struck. They blocked the railroads, causing President Cleveland to step in claiming that he had to keep the mail running. He sent in troops despite Illinois Governor John Peter Altgeld’s opposition. Cleveland’s action broke the strike and the Supreme Court upheld Cleveland’s position, ruling in In re Debs (1895) that the government could use force to ensure “the freedom of interstate commerce or the transportation of the mails.”

Eugene V. Debs (1855-1926): American Railway Union leader (on the more radical end of the labor spectrum) during the Pullman Strike. He remained in the political spotlight well into the 1900s. A Socialist, he called for the nationalization of railroads and other industries to take power out of the hands of the wealthy corporate elite and put in the hands of the workers.

The Farmer’s Revolt

EVENTS•Farmers overproduce crops•Shipping prices increase•Farmers borrow more money from banks

CAUSES•New inventions and more efficient techniques are introduced•A lack of competition exists among railroads•Machines are needed•Money is in short supply (Government tight-money policy)

EFFECTS•Prices of farm products decline•Farmers earnings decrease•Farmers are unable to pay back loans•Banks lend money to fewer farmers

“The Grange” (“Patrons of Husbandry”): Founded in 1867, it began as a USDA outreach program to unite and educate farmers to improve crop science and production techniques, and to modernize. It soon became a movement to unite farmers into cooperatives to raise crop prices and compete for cheaper railroad rates for crop transport. As a result, farm states enacted “Granger Laws,” regulating railroads and warehousing. Business fought the regulations, but in Munn v. Illinois (1877) the U.S. Supreme Court declared that states could use their “police power” to regulate private property if that property affected the public good. Later courts backed away from Munn, severely restricting state regulatory power over railroads in Wabash v. Illinois (1886).

Greenback Party: Third Party growing out of the Grange movement, officially the Independent National Party. Farmers wanted the federal government to print more greenbacks to inflate the economy, believing this would raise crop and farm prices to make it easier for farmers to pay off their debts. The party showed well in the 1878 Congressional elections (polling a million votes), but dwindled as the country pulled out of the depression and disintegrated in 1884.

Farmers’ Alliances: The farmers’ movement did not end with the death of the Greenback Party. It broke up into regional and racial alliances. The Southern Alliance started in Texas in 1877, and by 1879 became the National Alliance. By 1890, it boasted 1.5 million members from New York to California. Because blacks were excluded from the white alliances in most states, they formed their own Colored Farmers’ Alliance, claiming more than a million members. In the 1890s, the alliances again ventured into politics. Initially, the Southern Alliance remained loyal to the Democratic Party. But as Democrats were slow to pick up their demands, the farmers formed the Populist Party.

Populism, the Peoples’ Party: Political movement uniting Farmers and Labor. Meeting in Nebraska, in 1892, it created “the Omaha Platform,” calling for legal protection for industrial workers [legalizing strikes and banning companies from hiring replacement workers (scabs)]; nationalization of railroads to set prices; unlimited coinage of silver to inflate the economy (bimetalism); more direct democracy; and government control of telephone and telegraph industries. Populists nominated James B. Weaver for president in 1892. Weaver 15 percent of the vote and carried Colorado, Kansas, Nevada, and Idaho, and nearly Alabama. Democrat Grover Cleveland won the election. Bimetalism: Economic theory proposed by Populists and Democrats (Silverites) who wished to expand the amount of money in the economy: to inflate the economy. It called for basing the currency on gold and silver reserves held by the U.S. government not just gold which was the standard of the day. It was opposed by the “Gold Bugs.”

The Rise and Fall of Populism

Pitchfork Ben Tillman: In the

South Populists split over the race issue and its strengths were adopted by the Democratic Party by 1896. Ben Tillman embodies this transition. He led the South Carolina Farmers Alliance in the 1880s, then as the Populist Party was founded, he directed the State Democratic Party to incorporate it. As Governor, he then led the state to expand the Jim Crow laws and to disenfranchise blacks.

Interstate Commerce Commission: Created by the Interstate Commerce Act of 1887 as a federal government agency to regulate interstate trade, commerce, railroad rates, etc. Its powers were enlarged during the Progressive era by the Hepburn Act.

Sherman Silver Purchase Act of 1890: In return for a higher protective tariff law (McKinley Tariff Act), Democrats and Populists (Silverites) won a major concession on bimetalism. The law required government to purchase 4.5 million ounces of silver every month (at market rates) and to issue greenbacks (banks notes) redeemable in either gold or silver. But as silver production increased, the price fell and so people preferred trading notes for gold, draining gold reserves. To stabilize currency markets, President Grover Cleveland called a special session of Congress to repeal the law. The law played a significant role in causing the depression of 1893.

Sherman Anti-Trust Act of 1890: Law banning monopolies in interstate or foreign commerce. Supreme Court rulings, such as in U.S. v. E.C. Knight & Co. (1895), the Sugar Trust case, weakened the law; so it was not actively enforced until the early 1900s (after the Northern Securities case) and enlarged by the Clayton Anti-Trust Act of 1914.

Leading Democrat of the 1890s and early 1900s. Bryan represented Nebraska in Congress. At the 1896 Democratic Convention, he gave the famous “Cross of Gold” Speech, calling for bimetalism. He was nominated for President by the Democrats and the Populists. He carried the South, the farm states, and the mountain states, winning 6.5 million votes, but lost to William McKinley. He was Democratic candidate two more times.

"You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold."

William Jennings Bryan:

Coxey's Army: The Depression of the 1890s devastated the whole country, but farmers and unskilled workers, in particular; millions were unemployed. In 1894, Jacob S. Coxey led a march of unemployed people to Washington to demand bimetalism and other relief in the Populist platform. When they arrived in Washington, Coxey was arrested.

The march may have been the inspiration for the children's book The Wizard of Oz.

Communism

Government controls all

aspects of the economy – “Command Economy”

No Private Property

Soviet UnionRed China

CubaNorth Korea

Socialism

Governments owns major industries

Private Property

Exists

Sweden and most of Western Europe

Venezuela

Mixed Economy

Government regulates

industries for the protection of workers and

consumers

Private Property Exists

United StatesCanadaJapanChile

Laissez-faire

Economy

The market controls the economy, following

Adam Smith’s idea of the “Invisible Hand” of

supply and demand

Private Property

Exists

No countries currently

operate as purely laissez-

faire economies

Summary of Economic Systems

Years Republican Democrat 1865-1869 Andrew Johnson

1869-1877 U.S. Grant

1877-1881 Rutherford B. Hayes

1881 James Garfield

1881-1885 Chester A. Arthur

1885-1889 Grover Cleveland

1889-1893 Benjamin Harrison

1893-1897 Grover Cleveland

1897-1901 William McKinley

U.S. Presidents from the Civil War to 1900