Notes

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STUDY GUIDE: Development of the Industrial US
Main Topics
● These were the main reasons (causes) for industrial growth in the late 1800s: US population was increasing rapidly, helped by a revolution in agriculture which with new technology produced much more food for more people. As the population increased, so did the demand for products – the economy got stronger.
o Advances in transportation – first the canal system, later on the railroads and automobiles. These were especially important for easing trade.
o Advances in communication – the telegraph and, later, the telephone made communications over long distances much faster and easier.
o New sources of energy – such as oil and electricity made new kinds of factory production possible.
o The rise of corporations – huge groups of companies with lots of money; some became monopolies.
o The government’s open immigration policy, which fed industry’s need for labor.
● Two important IDEAS associated with industrialization were:
o laissez-faire capitalism – the idea that government should not interfere in business; in other words, the government shouldn’t make a lot of regulations (rules) for businesses to follow because it might interfere with growth. This idea allowed businesses to pretty much do whatever they wanted – including forming monopolies, using child labor, giving workers low pay and dangerous conditions, and selling unsafe food and medicine to the public.
o Social Darwinism – also known as “survival of the fittest.” This idea said that the rich were rich because they deserved to be rich (they were the “fittest”), while the poor were blamed for being poor (it was their own fault). Social Darwinism was used to justify large economic inequalities (big differences between rich and poor).
● One important result of laissez-faire was the growth of monopolies and trusts, headed by business leaders such as Andrew Carnegie and John D. Rockefeller. Some people called these business leaders robber barons, because of their unfair business practices. Others called them captains of industry because of their great business success and contributions to the advance of industrialization.
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● Workers who suffered during industrialization eventually formed labor unions – organizations of workers who united in order to have more power to fight the bosses. The fight for workers’ rights included huge strikes that sometimes turned violent – for example, the Railroad Strike of 1877, the Haymarket Riot, the Homestead Strike, and the Pullman Strike.
● Most industrial workers were “new immigrants” (people from Southern and Eastern Europe). They were culturally different from “old immigrants” (mostly people from Northern and Western Europe), and suffered a high amount of nativism (prejudice against immigrants). The worst example of anti-immigrant feeling was the Chinese Exclusion Act of 1882, which outlawed all immigration from China, for reasons of race.

This was not in the study guide but I think it is still an important fact to know:
● In a large corporation, secretarial work became a dead-end job, and employers began assigning it to women. By the turn of the twentieth century, 77 percent of all stenographers and typists were female; by 1920, women held half of all low-level office jobs. Thousands of young women also found work as telephone operators. By 1900, more than four million women worked for wages.
● Deskilling of Labor was when instituting tasks that requires less ‘autonomy,” or independence, of the worker.











Important Terms & People
Laissez-Faire Capitalism (Let it be)

An economic theory that suggests without government regulation, businesses would be motivated to offer improved goods and services at lower prices for their own self-interest.
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The government should not interfere with business matters
The concept originated from economist Adam Smith who in 1776 wrote "The Wealth of Nations" [book]. It was used in the late nineteenth century, however, the monopolies of the 1880s undercut the competition needed for self-regulation.
Social Darwinism
The theory that Darwin's theory of natural selection in biology also applies to economics. Herbert Spencer, an English social philosopher argued that the concentration of wealth in the hands of the "fittest" would benefit the future human race, “survival of the fittest.” Professor William Graham Sumner from Yale thought that help for the poor was misguided because it would weaken the human species as a whole if we were to preserve the poor. The theory was used to rationalize the corporate monopolies and "robber barons" of the late 19th century.
Social Darwinists like Spencer believed that this theory of evolution gave validity to the notion that government should keep its hands off the economy. Yet, the critics of Social Darwinism, including John Dewey and William James, rejected the idea that the process of social and economic change should occur unregulated, arguing that government should intervene to help out with the dilemmas that occurred during industrial development
Many times this theory was utilized to justify the growing gap between the rich and the poor.
Monopoly
This is when a company has complete control of the manufacture of a product
Rockefeller held developed a monopoly over Standard Oil in 1870. He used strategies like temporarily undercutting his competitors prices until they went out of business to take over and bought out all their companies (horizontal integration) through predatory pricing.


Robber baron
This term was coined during the Gilded Age to portray men who were cruel and ruthless business men who stopped at nothing to achieve great wealth. They were accused of exploiting workers and forcing horrible working conditions and unfair labor practices upon the laborer.
Captain of Industry
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Another view of industrialists was "captain of industry." This term refers to the men that were viewed ingenious and industrious leaders who transformed the American economy with their business skills. They were praised for their charity as well.
Sometimes referred as “Industrialist Statesmen”
YET, for both terms, Robber Baron and Captain of Industry, views often changed due to the influxation of the economy:
Economy ↑ Positive View CI Economy ↓ Negative View RB
Labor Union
Workers formed labor unions to protect their rights and to give them power to collectively bargain.
Examples:
National Labor Union: an organization founded in 1866 that was the first attempt to organize workers in all states whether skilled or unskilled, agricultural or industrial. It wanted higher wages and an eight-hour work day, along with social reform like equal rights for women and African Americans, financial reform, and worker cooperatives. It won an eight-hour workday for federal government workers, but lost support after the Panic of 1873 and the unsuccessful strikes of 1877.
Strike
When workers refuse to go to work in order to improve conditions/pay
Example:
The Great Railroad Strike of 1877 had been a group of railroad workers that were protesting against a huge cut from their wages. The strike brought rail travel and commerce to a halt. When Pennsylvania’s governor sent state militia to break the strike, Pittsburgh crowds reacted by burning railroad property and overturning locomotives. Many workers were then fired and blacklisted: prevented from being hired in the future. After that strike that left 50 dead and burned 40 million dollars in damage, the US gov’t had created the National Guard to not protect Americans from foreign invasion, but to enforce order at home.
Old/New immigrants
Old Immigrants
New Immigrants
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Mainly from Northern and Western Europe
Ireland and Germany

Mostly Protestant

Skilled Workers

Southern and Eastern Europe
Italy, Russian, Poland
Asia
Chinese

Mostly Catholic

Unskilled Workers

Nativism
The belief that native-born white Americans are superior to newcomers.
Nativist: A person who favors native-born inhabitants over immigrants, who has a negative view of immigration.
Reasons for nativism: fear of competition for jobs and housing, fear of religious and cultural differences.
Chinese Exclusion Act
As the Chinese arrived to the States during the California Gold Rush in 1849, they were confronted with death threats and violence as they were a cheap, good source of labor that threatened many natives. During the depression of the 1870s, there was huge racism in the west coast, where a majority of Chinese lived. Many had run restaurants and laundries. Yet, facing intense political pressure, Congress in 1882 passed the Chinese Exclusion Act, preventing Chinese laborers from entering the United States. Each decade thereafter, Congress renewed the law and tightened its provisions; it was not repealed until 1943. Exclusion barred almost all Chinese women, forcing husbands and wives to spend many years apart when men took jobs in the United States. Well into the twentieth century, Chinese immigrants (as opposed to native-born Chinese Americans) could not apply for citizenship. To enforce the law, Congress and the courts gave sweeping new powers to immigration officials, transforming the Chinese into America’s first illegal immigrants. Drawn, like others, by the promise of jobs in America’s expanding economy, Chinese men stowed away on ships or walked across the borders, disguised as Mexicans — who at that time could freely enter the United States. Paper sons were heavily relied on Chinese residents in the United States, who generated documents falsely claiming the
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newcomers as American- born children. The San Francisco earthquake of 1906 helped their cause by destroying all the port’s records. Thus, the flow of Asian immigrants never fully ceased.
Meanwhile, Japanese and a few Korean immigrants also began to arrive; by 1909, there were many Japanese immigrants working in agriculture, railroads, and in canneries. In 1906, the U.S. attorney general ruled that Japanese and Koreans, like Chinese immigrants, were barred from citizenship.
Andrew Carnegie
Scottish-born Andrew Carnegie was an American industrialist who amassed a fortune in the steel industry then became a major philanthropist. Carnegie worked in a Pittsburgh cotton factory as a boy before rising to the position of division superintendent of the Pennsylvania Railroad in 1859. While working for the railroad, he invested in various ventures, including iron and oil companies. In the early 1870s, he entered the steel business, and over the next two decades became a dominant force in the industry. In 1901, he sold the Carnegie Steel Company to banker JP Morgan for $480 million. Carnegie then devoted himself to philanthropy, giving away more than $350 million.
John D. Rockefeller
Founded the Standard Oil Trust in 1863 to guarantee a uniform quality of kerosene, eliminating the fear many Americans had due to the dangerous reports of accidents with oil. Rockefeller had engaged in unethical practices, such as predatory pricing, and, to gain rebates from railroad companies, had temporarily made price cuts to force competitors out of business. In 1881, his trust controlled 90% of the oil refinery businesses through horizontal integration, creating America’s first monopoly. Through this practice, it allowed him to control the supply and prices of oil products while keeping prices low. In order to further eliminate competition, Rockefeller had created a major pipeline that connected all the little oil companies and his biggest oil refinery to transport oil, instead of using railroads. When Tom Scott, another very successful businessman in railroads, controlled the only railroad between Pittsburgh and New York, Rockefeller decides to shut down all his refiners in Pennsylvania; laying off tens of thousands of workers…leading to a riot that destroyed millions of dollars of railroad cars. Letting him become the most powerful and wealthiest man during that time.
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Cornelius Vanderbilt
Shipping and railroad tycoon Cornelius Vanderbilt was a self-made multi-millionaire who became one of the wealthiest Americans of the 19th century. As a boy, he worked with his father, who operated a boat that ferried cargo between Staten Island and Manhattan. After working as a steamship captain, Vanderbilt went into business for himself in the late 1820s, and eventually became one of the country’s largest steamship operators. In the process, “the Commodore,” gained a reputation for being fiercely competitive and ruthless. In the 1860s, he shifted his focus to the railroad industry, merging local railroads with the New York Central Railroad in 1867, which ran from New York City to Chicago, creating a transportation empire. Vanderbilt was the driving force behind the construction of Manhattan’s Grand Central Depot, opened in 1871.
J.P Morgan
One of the most powerful bankers of his era, J.P. Morgan helped strengthen and finance railroads by buying out Carnegie’s Steel Company, creating 1st $1 billion company. The Connecticut native followed his wealthy father into the banking business in the late 1850s, and in 1871 formed a partnership with Philadelphia banker Anthony Drexel. In 1895, their firm was reorganized as J.P. Morgan & Company, a predecessor of the modern-day financial giant J.P Morgan Chase. Morgan used his influence to helped stabilize American financial markets during several economic crises, including the panic of 1907. However, he faced criticism that he had too much power and was accused of manipulating the nation’s financial system for his own gain.

Horizontal Integration
merging competitor companies with one’s own to gain a market advantage
Example: stomach becoming bigger due to selfishness with one’s food
Vertical Integration
company controls all aspects of production from beginning to end
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Raw materials to Distribution




Predatory pricing
When a company lowers its own prices in order to cut competition, then only to raise prices when there is no competition.

Trust
a small group of individuals that would hold stock from competitors, controlling them

Hatch Act
Passed by Congress and Grover Cleveland in 1887, this act provided federal funding for agricultural research and education, meeting farmer's demands for government aid to agriculture.

Trick to Remember: farmers need hatchets

Gustavus Swift
In the 1800s, Swift enlarged fresh meat markets through branch slaughterhouses and refrigeration. He monopolized the meat industry.
To improve productivity, Swift invented the assembly line, where each wage worker repeated the same task over and over. Swift also pioneered vertical integration, a model in which
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a company controlled all aspects of production from raw materials to finished goods. Swift & Company periodically slashed prices in certain markets to below production costs so there was no competition to their profits. With profits from its sales elsewhere, a large firm like Swift could survive temporary losses in one locality until competitors went under and they could raise their prices once again. This technique, known as predatory pricing, helped give a few firms unprecedented market control.
The most important cause of this was the deskilling of labor under a new system of mechanized manufacturing so everything from typewriters to automobiles were assembled from standardized parts, using machines that increasingly operated with little human oversight. Employers, who originally favored automatic machinery because it increased output, quickly found that it also helped them control workers and cut labor costs. They could pay unskilled workers less and replace them easily. Many small business owners, skilled immigrants or natives, had felt as if they had lost a sense of independence to their craftsmanship due to their lack of input in the mass production.
It soon became a principle of Quantity over Quality

Haymarket Square Riot
Local anarchists, many German skilled workers, held a meeting on May 4, 1866, at Haymarket Square to gain an 8 hour work day. When police tried to separate the crowd, a bomb was thrown that killed several policeman, as a result the officers responded with gunfire. Eight anarchists were found guilty of murder and convicted. The Haymarket violence profoundly damaged the American labor movement. They broke strikes with mass arrests, tied up the Knights in expensive court proceedings, and forced workers to sign contracts pledging not to join labor organizations. The Knights of Labor never recovered. Struggles between industrialists and workers had created bitter divides.

American Federation of Labor
Focused on pure-and-simple unionism, “bread and butter” issues. The ideology of Pure- Membership is workers are organized by ONLY American skilled workers. Some goals were for higher wages, shorter hours and better working conditions.

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Knights of Labor
The Knights of Labor was a union, founded in 1869, that served as delegates to the Greenbackers. Although excluding Chinese immigrants, the Knight believed ordinary people, regardless of race, gender or level of employment, should have control over the enterprise in which they worked (This ideal is called OPEN MEMBERSHIP, women and black people, immigrants/ skilled and unskilled were welcomed) Their goals were to eliminate child labor, implement workplace safety laws, increase income tax for wealthy, promote public ownership for railroads. Yet, as quickly as they rose, they fell. Due to the violent Haymarket incident, the violence had ended the Knights and many other organizations as they never recovered.












Additional Vocab to Look at: (not 100% sure if we need to know these terms, but good to review for additional clarity)
White Collar Workers: professional positions
Example: principal
Blue Collar Workers: manual labor
Example: teacher
Middle Men: oversaw productivity
Scientific Management (Taylorism): a theory of management that used strict rules to govern worker behavior (i.e clocking in and out of)
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Study Questions
1. What were the main positive and negative results of industrial growth in the mid- to late-1800s?
● Plentiful natural resources. America had immense forests and large supplies of water. It also had vast mineral wealth, including coal, iron, copper, silver, and gold. Industry used these resources to manufacture a variety of goods.
● Growing population. From 1860 to 1900, the U.S. population grew from 31.5 million to 76 million. This led to a growing need for goods. The demand for goods spurred the growth of industry, development of Department stores (a national consumer culture). There was a growth of industry.
● Improved transportation. In the early 1800s, steamboats, canals, and railroads made it possible to ship items long distances more quickly. Railroad building boomed after the Civil War. As shipping raw materials and finished goods became easier, industry grew.
● High immigration. Between 1860 and 1900, about 14 million people immigrated to the United States. Many of them knew specialized trades, such as metalworking. In addition, unskilled immigrants supplied the labor that growing industry needed.
● New inventions. New machines and practices helped industry produce goods more efficiently: mass production, vertical and horizontal integration.
● Investment capital. When the economy was thriving, many businesses made large profits. Hoping to share in those profits, banks and wealthy people lent businesses money. The businesses used this capital to build factories and buy equipment.
● Government assistance. Between 1860 and 1900 the United States imposed several tariffs on imported goods. State and federal governments also used land grants and subsidies to help businesses grow.


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2. What sorts of social, political, and economic problems were caused by the policy of laissez-faire capitalism?
Laissez-faire was a political as well as an economic ideology. The theory of the 19th century was that the individual, pursuing his own desired ends, would thereby achieve the best results for the society he was a part of. The function of the state was to maintain order and security and to avoid interference with the individual in pursuit of his own desired goals. Laissez-faire advocates, however, had argued that the government had an essential role in enforcing contracts as well as ensuring civil order. The theory reached its peak around 1870. In the late 19th century the acute changes caused by industrial growth and the adoption of mass-production techniques proved the laissez-faire idea insufficient as a guiding philosophy.
3. How did the philosophy of Social Darwinism justify economic inequalities?
Social Darwinism draws from the biological theory of “natural selection” and “survival for the fittest” in a society. Supporters of this theory agree that fortunes of the strong should continue to increase while those of the weak should decrease. In essence, the strong should be allowed to take from the weak to further their individual interests.
4. Were the business leaders in the Industrial Age robber barons or captains of industry?
Due to the influxation of the economy, if the economy was doing good, then there was a positive outlook, "captain of industry." This term refers to the men that were viewed ingenious and industrious leaders who transformed the American economy with their business skills. They were praised for their skills as well as for their charity. Yet, if the economy was down, there was a negative view, “robber barons.” This term was coined during the Gilded Age to portray men who were cruel and ruthless business men who stopped at nothing to achieve great wealth. They were accused of exploiting workers and forcing horrible working conditions and unfair labor practices upon the laborer.
5. What were the problems that labor unions were most concerned with fixing? What strategies did unions use to try to achieve their goals?
Disputes about these questions, the conflict within labor, shaped labor history almost as much as the conflict between workers and employers. Faced with the horrendous working conditions and starvation wages that the Industrial Revolution imposed on some, many early
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union members felt that the whole system was flawed. Working for wages wasn't the way to go. The workplace needed to be reformed from top to bottom, with workers calling the shots.

The Greenback-Labor Party was group of labor advocates and small working farmers that sought an 8 hour work day and better working conditions. The gov't had to give more green (money) back to the laborers, the people that gave the nation its wealth, through an ideal called producerism.
The Granger laws were state laws that regulated railroads, many were later overturned
Trick to Remember: Rangers regulate as do the Granger laws
The Knights of Labor was a union, founded in 1869, that served as delegates to the Greenbackers. Although excluding Chinese immigrants, the Knight believed ordinary people, regardless of race, gender or level of employment, should have control over the enterprise in which they worked (This ideal is called OPEN MEMBERSHIP, even women and black people were welcomed) Their goals were to eliminate child labor, workplace safety laws, income tax for wealthy, public ownership for railroads. Yet, due to the violent Haymarket Square Riot, the violence had ended the Knights and many other organizations as they never recovered.
The Farmer’s Alliance sought out to establish cooperative stores, eliminating the middleman. Due to the major underfunding and lack of credit with the Farmers Alliance, the Texas Farmers' Alliance proposed a federal price-support system for farm products, forming the Populist Party. Additionally, under the pressure of farmers in 1887, the Hatch Act was passed by Congress to federally fund agricultural research and education (farmers need hatchets). The Interstate Commerce Act succeeded in supervising railroads (interstate...intersection of rails).
American Federation Labor focused on pure-and-simple unionism, “bread and butter” issues. The ideology of Pure- Membership is workers are organized by ONLY skilled workers. Some goals were for higher wages, shorter hours and better working conditions.
6. What was the difference between “old” and “new” immigrants?
Starting in the 1840s, Europe had rapidly became 'commercialized' and as a result, millions of rural people were displaced due to the failing economy. Additionally, many Irish were forced to fled due to the huge famine crisis. Many immigrants believed America was the country to become rich, but it was a much worse fate as the journey was crowded with limited