1. Kelly-Bessemer process:
- Turned iron into steel.
- Steel could now be readily produced for locomotives, steel
rails, and the
heavy girders used in building construction.
2. Beginnings of oil Industry:
- First well in PA in 1859 started U.S. petroleum industry overnight.
- Oil would dwarf the wealth generated by all the gold extracted
- Oil used in lubrication of machines.
- George Bissell discovers use of oil in lamps, and begins movement
- Oil demand increases as oil is discovered as fuel; new sources
for oil are
sought in other areas.
* Black gold is found in Texas and Oklahoma; leading
producers of oil in the
i. New discoveries of oil break Standard oils monopoly.
3. Marconi and the radio
4. Wright brothers and flight
- Airplane at Kitty Hawk North Carolina
5. Duryea brothers and Ford and the automobile:
-Duryea brothers First gasoline motor vehicle in America
- Ford Industrial Line, Manufacture Automobiles
6. Assembly Line
- Changes in techniques of production support growth in production.
- Principles of Scientific Management/ taylorism:
Way to manage human labor
compaitably in the machine age; increases employers control
of the workplace,
working people are less independent.
- Subdivide tasks to speed production, and make employees interchangeable,
dependence on skilled workers.
- Manufacturerers emphasize industrial research.
- Fords moving assembly line leads to mass production,
the most important
change in production.
7. Expansion of Railroad
- Principle agent of industrial development in late 1800s is
expansion of RR.
- RR promote economic growth: Main source of transportation,
open new markets
and new resources, largest businesses that create new forms
organization, and greatest investors.
- RR increase significantly every decade of 1800s.
- Government and private investment allows great expansion of
- RR combinations emerge that bring most RR under control of
a few men.
- Contributes to the development of the modern corporation.
8. Limited Liability
- Laws of incorporation passed by states in 1830s and 1840s
organizations to raise money by selling stock to members of
the public; wealthy
Americans purchase stock in industries they do not participate
- Investments are made appealing by limited liability,:
Investors risk only
the amount they invest; not liable for any debts.
- Ability to sell stock to public allowed entrepreneurs to gather
large sums of
capital to pay for projects.
9. Carnegie and steel
- Andrew Carnegie
*Leader in the Steel Industry
- Carnegie exercised direct control over his company, allowing
friends to be stock holders, using a system of partnerships
to integrate a
production line, which combined coal and ore mines, limestone
ovens, ore-carrying ships and railroads.
- 1901 - Carnegie sold his holdings to a J.P. Morgan (1837-1913)
created US Steel , the first billion dollar corporation.
- Carnegie followed the "Stewardship of Wealth", turning
*"Gospel of Wealth" -- a concentration of wealth was
needed if humanity were to
progress, but the rich were obligated to use their wealth for
*He disposed of $350 of $400 million before his death, endowing
building public buildings and establishing foundations.
- Henry Clay Frick -- his general manager and partner
- Pioneered Vertical integration" -- controlling every
aspect of the production
10. Rockefeller and Standard Oil
-In 1870, organized the Standard Oil Co. of Ohio; By 1877, controlled
95% of oil
refineries in U.S.
-Pursued a policy of rule or ruin; ruthless in his business
-Standard Oil produced a quality product at a cheap price which
economies home and abroad
*Large-scale methods of production and distribution
*Consolidation proved more profitable than ruinous price wars.
- Standard Oil is formed by both horizontal and vertical integration.
- Rockefeller saw consolidation as a way to cope with the curse
competition; successful enterprise can eliminate or absorb
fears too much competition.
11. J.P. Morgan and banking
- Owned a Wall Street banking house which financed the reorganization
railroads, insurance companies, and banks.
- In 1901, he launched the enlarged United States Steel Corporation
*Combination of Carnegies holdings and others, and stock
*Corporation capitalized at $1.4 billion making it Americas
billion dollar corporation.
- Elbert H. Gary, a co-leader of USX
- Perfected the trust form of consolidation by centralized
*Stockholder transfer stocks to small group of trustees in
exchange for shares in the trust; owners of certificates have
over trustee decisions; receive part of businesss profits.
12. Vanderbilt and railroads and shipping
- Popularized the steel rail; replaced the old iron tracks of
the NY Central RR;
Steel safer and more economical since it could carry a heavier
- Amassed a fortune of $100 million dollars
- Jay Gould and Russell Sage by 1880 controlled much of railroad
*Gutted their railroads by stock watering and pocketing profits
- Significant improvements in railroad building
a. Steel, standard gauge of track width
b. Pullman Palace Cars afforded luxurious travel.
- He built no new lines, but acquired controlling interest in
combining and selling them as a package.
13. Social Darwinism
- Charles Darwin -- Origin of the Species ("survival of
the fittest" theory);
used his theory as the foundation for promoting the virtues
- Herbert Spencer -- advocated idea of Social Darwinism
*Applied Darwins theory of natural selection to human
*"Millionaires a product of natural selection": William
- Some argued that Divine Providence was responsible for winners
and losers in
- Identify of interest idea held that existing hierarchy was
just and decreed by
- Those who stayed poor must be lazy and lacking in enterprise.
- Many of the new rich had succeeded from modest beginnings
- Rev. Russell Conwell: "Acres of Diamonds" lectures
made him rich.
14. The Gospel of Wealth
- Justified uneven distribution of wealth by industrialists
- Andrew Carnegie: The Gospel of Wealth synthesized prevailing
wealth and survival of the fittest.
*Wealth was Gods will
*Stated money should be give away for the public good but not
*Believed in the long run extreme disparities of wealth were
good for the "race," because
the wealthy added to civilization.
*Believed alternative to inequities of wealth was universal
15. Socialism as an alternative
- Lester Frank Ward; Darwinist
*Rejected application of Darwinism to human society.
*Believed civilization was governed by human intelligence.
* Believed active government involved in positive planning was
societys best hope;
people could intervene in the economy through their government
to suit their
- Socialist Labor Party
* Lead by Daniel De Leon.
* Attracted following in industrial cities; did not become a
major political force.
- Henry George; Progress and Poverty
*Social problems are resulting of the ability of a few
monopolists to grow wealth through rising land values; an increase
not caused by
the owner but by the growth of society around the land.
* Unearned Increment of increasing land values is
single tax replace all taxes, and return the gain
to the people to eliminate
- Edward Bellamy Looking Backward
*Utopian socialist society.
16. Immigration Increase
- The rise of American industry attracted immigrants from a
economically depressed areas of the world (especially Russia
and Italy), which
provided Big Business with a cheap labor force of unskilled
- New Immigration: a reference to immigrants coming from less
countries, Eastern and Southeastern Europe, Greek Orthodox,
*"Native" Americans feared that this influx of immigrants
would alter the face
culture of America.
- Reaction by older native-born Americans
*Nativism - Reaction of "native" Americans to the
influx of immigrants from
Southeastern Europe and Asia
*Increased immigration led to friction with "older"
*White Anglo Saxon Protestants saw their institutions ethnically,
legally linked with Britain.
*Other kinds of immigrants were seen as inferior, a threat to
the "American" way
17. Life of Workers
- Conditions for workers in the 2nd industrial revolution were
*Low-skilled jobs make workers expendable as number of workers
*Mechanization created short-term losses of jobs; better in
- Working conditions often dismal and impersonal
- Recourse minimal to face of the vast power of industrialists
*Strikes often nullified by the use of "scab" workers
*Conservative federal courts often ruled in favor of
*Corporations could also ask states to call in troops.
*Employers could lock-out rebellious workers & starve them
- Corporations sometimes owned a "company town" where
high priced grocery
stores, easy credit, and sometimes rent deductions created a
- Public grew tired of frequent strikes; often unsympathetic
to the workers
plight; Strike seemed to many foreign and socialistic and thus,
- Labors goals of curency reform, greenback currency,
and opposition to
national banks alarmed conservatives for the rest of the century.
18. Molly Maguires
- Formed in 1875 by Irish anthracite-coal miners in Pennsylvania
- Members were part of an Irish American secret fraternal organization.
- Mollies used intimidation, arson, and violence to protest
owners denial of
their right to unionize.
- President of Reading Railroad called in Pinkerton detective
agency for help.
*Mollies destroyed and twenty of its members hanged in 1877.
- The Mollies became martyrs for labor and a symbol for violence
19. Strikes (Railroad Strike of 1877; Homestead Strike of 1892;
- Great Railroad Strike (1877)
*Several railroads informed workers wages to be cut by 10% for
2nd time since
*First nationwide strike; paralyzed railroads throughout the
East and Midwest
some 100,000 workers; 14 states and 10 RR
i. Later, farmers, coal miners, craft workers,
and the unemployed joined in.
*President Hayes sanctioned use of federal troops in PA; set
precedent for future federal
*The strike inspired support for the Greenback-Labor party in
parties in the 1880s.
- Homestead Strike
* In Carnegies steel plant near Pittsburgh; Frick &
Carnegie announced 20% pay
slash for steelworkers.
*Demonstrated a strong employer could break a union if it hired
police force and gained govt and court protection.
*Amalgamated Association of Iron, Steel, and Tin Workers went
strike and Frick
then locked them out.
i. Led to worker uprising factory surrounded; scabs not
allowed through lines
*Frick called in 300 Pinkerton detectives.
i. Armed strikers forced their assailants to surrender after
Pinkertons and 7 workers
were killed and about 150 wounded.
*PA governor brought in 8,000 state militia and scabs replaced
*Union was effectively broken.
- Pullman Strike, 1894
*Pullman Co. responded to the Great Railroad Strike of 1877
building a model
company town for his workers near the factory in Chicago.
*Pullman Palace Car Company hit hard by the depression &
wages by 1/3 but
maintained rent prices in the company town.
*Eugene V. Debs helped to organize the American Railway Union
i. Workers went on strike; Railway traffic from
Chicago to Pacific Coast
*Attorney General Richard Olney sent federal troops stating
with transit of U.S. mail.
*President Cleveland supports conservatives.
*Troops sent in over Governor Altgelds objections and
violence spread to
i. Strike crushed and 150,000 ARU destroyed.
*First time govt used an injunction to break a strike
i. The govt made striking, an activity not previously
defined as illegal, a
ii. Populists & other debtors concerned as Pullman episode
proof of an
alliance between big business and the courts.
20. Haymarket Square bombing 1866
- May 4, 1886, Chicago police advanced on a meeting called to
brutalities by the authorities in May Day strikes.
*Alleged German anarchists present who advocated a violent overthrow
*A dynamite bomb was thrown in the crowd that killed 8 police;
injured by police fire; 7 or 8 civilians killed; 30-40 wounded
*Resulted in the first full-blown red scare in Chicago for 2
i. Five anarchists sentenced to death and three others given
although nobody could prove they had anything to do with the
ii. In 1892, Gov. John P. Altgeld, a German-born Democrat pardoned
survivors after exhaustive study of the Haymarket case.
21. Knights of Labor; American Federation of Labor/attitudes
- Knights of Labor seized the torch of the National Labor Union.
i. Led by Terence Powderly a moderate; not a radical
ii. Founded in 1869 as a secret society (like the Masons and
iii. Used republican imagry associated with Lincoln that each
man should have a
say in the political and economic issues that affected him.
iv. Much of leadership and membership was Irish.
*Sought to include all workers in "one big union"
including blacks & women.
i. Industrial unionism idea was ahead of its time
*Campaigned for economic and social reform
i. Producers cooperatives and codes for safety and health;
to child labor.
ii. Fought for an 8-hr workday through winning a number of strikes;
and equal pay for women.
iii. Government regulation of railroads; postal savings banks,
iv. Sought arbitration rather than industrial warfare;
Discouraged strikes and
violence as a means for change
v. Won major strike in 1885 against Goulds struggling
- Victory increased Knights membership to more than 700,000
*Demise due to the Great Upheaval (1886) 1,400 strikes
involving 500k workers.
i. Knights of Labor became mistakenly associated
-- 8-hr movement suffered and subsequent strikes met with many
ii. Inclusion of both skilled and unskilled workers proved a
- Unskilled labor could easily be replaced with "scabs,
craft unionists enjoyed a superior bargaining position; irritated
up their bargaining advantage due to the failure of unskilled
- American Federation of Labor (AFL)
*Formed in 1886 under the leadership of Samuel Gompers
*Consisted of an association of self-governing national unions
with the AFL unifying
*Gompers path fairly conservative; bitter foe of socialism;
i. Accepted existence of two conflicting classes: workers and
ii. Only wanted labor to win its fair share; better wages and
hours, and improved
working conditions ("bread and butter" issues)
c. Did, however, attempt to persuade members to vote for favorable
*Closed shop -- all workers in a unionized industry had to belong
to the union.
i. Provided necessary funds to ride out prolonged strikes.
*Chief strategies of AFL: walk-out and boycott
ii. Shortcomings: did not represent unskilled labor esp. women