APUSH Lecture Ch. 17

1. The
Machine
Age
1877-­‐1920
-­‐
Chapter
17

2. CTQs
for
Ch.
17
Why
did
the
United
States
become
an
industrial
power
in
the
period
1865
to
1900?
How
does
the
concept
of
liberty
and/or
freedom
connect
with
the
growth
of
capitalism
at
the
end
of
the
19
c.
?
How
did
it
conKlict?
How
did
proponents
justify
the
extremes
of
wealth
and
poverty
in
the
United
States
in
the
late
19th
and
early
20th
centuries?

3. Causes
of
Rapid
Industrialization
1.
Abundant
supply
of
raw
materials
2.
Abundant
labor
supply
3.
New
Technologies
(US
patents
prior
to
1860
=
36k;
440k
from
1860-­‐1900)
4.
Abundant
Capital
5.
Talented
Businessmen
6.
New
Types
of
Business
Organization
7.
Growing
Markets
(cities
and
the
West)
8.
Business-­‐friendly
governments
(laissez-­‐faire,
subsidies
and
tariffs)
9.
The
beneKits
of
the
Steam
Revolution
of
1830s-­‐50s
(railroads)

4. Science
of
Production
The Science of Production
• Principles of “scientific management” or “Taylorism” was employed-
developed by Frederick Taylor who argued employers subdivide tasks to
decrease need for highly skilled workers, increase efficiency by doing simple
tasks w/ machines. Taylor’s theory was influenced by availability of cheap,
unskilled labor.
• Emphasis on industrial research. (Bessemer process, Edison and Tesla) For
corporations, maximizing efficiency meant higher profit margins. Corporate
investment increased over 300%
• Henry Ford and the moving assembly line. First used by Henry Ford in
automobile plant 1914- dramatically cut production time from 12.5 hrs to
1.5 hrs. Average Model T price dropped to $290 in 1929 (from $950 in
1914)

5. Expansion
of
Railroads
• Railroad Expansion
• First major industry in the U.S.
• RR growth led to growth of other industries; Key to opening the West
• new
markets
+
raw
materials,
in
particular
to
the
West
• Liquid
capital
of
Cornelius
Vanderbilt,
Jay
Gould,
James
Hill,
Collis
Huntington
post
Civil
War,
plus
effective
legislation
encouraged
growth
westward.
• The
Homestead
Act
of
1862
-­‐
gave
settlers
160
acres
of
free
land
• 600,000
families
settled
in
the
west
as
a
result
• The
Paci4ic
Railway
Act
of
1862
-­‐
was
a
land
grant
system
designed
to
encourage
Kinancial
investment
from
the
railroads
•From
1870
to
1900
-­‐
400
million
acres
of
land
was
settled

6. CorneliusVanderbilt’s Net Worth
1845 250,000
1850 3,500,000
1855 1,500,000
1875 75,000,000
1877 105,000,000

7. Myth
of
the
Self-­‐Made
Man
The “Self-Made Man”
• Defenders argued capitalist economy expanding
opportunities for individual advancement, and that
“robber barons” were self-made men.
• Horatio Alger - self-made man or “rags to riches” stories
appealed to the industrial worker and fit into an age based
on social darwinism
Russell Conwell - “Acres of Diamonds” - wealth was
abundant
Significant immigrant population in the 1870s through 1920s
• Self-made man myth become synonymous with America
as the land of opportunity.
• Ingenuity, business savvy and corporate management
were encouraged
!

8. Social
Darwinism
• “Survival
of
the
Fittest”
-­‐
concept
developed
by
Herbert
Spencer
• Assumptions that wealth was earned from hard work and thrift and that those who failed
earned their failure (Protestant work ethic) Darwinism theory was essentially applied as
theory for a free market/self-regulating system. That the market will shape to those who
earn it
• “The growth of a large business is merely the survival of the fittest” - John D.
Rockefeller
• William
Graham
Sumner
• Appealed
to
businessmen
-­‐
justiKied
brutish
tactics
and
further
expanded
the
idea
of
the
“invisible
hand”
of
market
economics
against
gov’t
or
union
sponsored
versions.
• Ironically,
many
business
tycoons
attempted
to
eliminate
market
competition
by
consolidating
industries
• Carnegie
-­‐
vertical
and
horizontal
business
strategies.

9. Vertical
and
Horizontal
Integration

10. Coke fields
Iron ore deposits
Ships
Railroads
purchased
by Carnegie
purchased
by Carnegie
purchased
by Carnegie
purchased
by Carnegie
Steel mills
purchased
by Carnegie
Rise to Industrial Supremacy
Percent of World Industrial Output
International
Steel
Production,
1880 & 1914

11. The Gospel of Wealth - Worship of the Elites
Gospel of Wealth (1901) by Andrew Carnegie advocated idea that w/ great wealth
came great responsibility to use riches to advance social progress
• “guardians
of
society”
-­‐
the
wealthy
elite
as
heroes
of
society
Criticisms of Industrial Capitalism
Lester Ward in Dynamic Sociology (1883) argued natural selection could not apply
to human society and that it was the role of gov’t to intervene on behalf of those
less fortunate. Beginnings of socialist movement in America coincides with peak of
industrial power.
Socialist Labor Party founded 1870s by Daniel De Leon
Edward Bellamy and his Looking Backward (1888) spoke of “fraternal
cooperation” and of future society where govt distributed wealth equally.
Henry George, Progress and Poverty. Argued the value of the land should be
shared equally by the public, not owned by individuals.

12. Growing
Unrest
• Few
Americans
questioned
the
merits
and
values
of
capitalism.
Yet
increasingly
the
wealth
gap
grew
to
unsustainable
levels.
• Monopolies
were
challenged
by
a
growth
of
unions
formed
by
laborers,
farmers,
consumers
and
manufacturers,
among
others.
• Monopolies
were
also
blamed
for
artiKicially
high
prices,
which
slowed
consumption
and
led
to
market
Kluctuations
every
several
years
including
in
1893.
• The
extravagance
of
the
new
wealthy
class
was
reminiscence
of
an
American
feudal
class
• 1%
of
American
families
controlled
nearly
88%
of
the
wealth
• 4/5ths
lived
modestly
and
10
million
lived
at
the
poverty
line.
• Wages
averaged
in
the
$400-­‐$500
range;
$600
considered
comfortable
• Women
averaged
$314
to
$597
for
men
and
1.7
million
children
worked
by
1900
• The
standard
of
living
had
improved
for
all
and
yet,
the
increasing
wealth
gap
frustrated
those
barely
surviving.

14. Industrial
Workers
in
the
New
Economy
• Workers
look
to
the
courts
for
legal
assistance
in
improving
their
status,
conditions,
and
wages.
• Work
in
general
had
been
devalued
as
machines
made
most
factory
work
unskilled
and
a
labor
surplus
tilted
the
advantage
in
favor
of
companies/
tycoons
• Supreme
court
in
general
ruled
vaguely
and
in
favor
of
the
tycoons
• Lochner
v.
New
York
1905
and
Muller
v.
Oregon
1908
-­‐
ultimately
hurt
women’s
ability
in
the
work
place
to
Kind
and
maintain
work.
• 1890
Sherman
Anti-­‐Trust
-­‐
while
a
pro-­‐labor/anti-­‐trust
ruling
was
too
vague
and
generally
unenforced
by
the
executive
cabinet
• Furthermore,
labor
unions
were
hurt
by
violent
tactics
-­‐
Molly
Maguires
used
violence
and
terrorism
to
intimidate
corporate
ownership.
Added
to
the
perception
of
unions
as
vehicles
of
anarchy
and
chaos.

15. Key
Strikes
**ConKlicts:
1880-­‐1900
close
to
25,000
strikes
involving
~
6
million
workers,
1⁄2
ended
in
failure**
1.
Railroad
Strike,
1877
•B
&
O
RR,
wage
cut,
President
Hayes
sent
in
troops
to
stop
2.
Haymarket
Strike,
1886
Chicago
•Mass
meeting
organized
by
anarchists
to
protest
police
tactics
against
strikers
at
McCormick
Harvester
Co.
•Police
tried
to
disperse
crowd,
bomb
thrown
at
police
•8
anarchists
charged,
4
executed
•Knights
of
Labor
blamed
and
disbanded
3.
Homestead
Strike,
1892
•Protesting
a
reduction
in
wages
but
not
in
rent
or
company
store
•Frick
wanted
to
destroy
union,
hired
Pinkerton
Detectives
to
protect
strike
breakers
•Strikers
Kired
&
killed
Pinkertons
•State
Militia
called
in,
strike
called
off
4.
Pullman
Strike,
1894:
Panic
of
1893
&
Depression
•Reduction
of
wages,
let
go
workers
of
Pullman
workers
•American
Railway
Union
tried
to
help
strikers
by
refusing
to
handle
Pullman
cars
(boycott)
•Railroad
Managers
Association
got
Fed.
court
injunction
under
Sherman
Anti-­‐Trust
Act
to
prevent
strikes
from
interfering
with
carrying
US
mail
and
interstate
commerce
•Pres.
Cleveland
sent
in
troops
•Eugene
V
Debs
(pres.
of
ARU)
held
in
contempt
and
sentenced
to
jail

16. Key
Labor
organizations
• Knights
of
Labor
founded
1869
• Wanted
an
8-­‐hour
day,
prohibition,
inKlation
(silver),
no
child
labor,
long-­‐range
goals.
• Allowed
all
workers
(skilled
or
unskilled)
• Did
not
allow
Chinese,
lawyers,
bankers,
or
gamblers
• Disbanded
after
1886
Haymarket
Riot
in
Chicago.
• AFL
or
American
Federation
of
Labor
-­‐
founded
by
Samuel
Gompers.
• Focused
less
on
utopian
ideology
and
more
on
“bread
and
butter
issues”
for
workers
including:
a
worker’s
bill
of
rights,
better
wages,
shorter
hours,
better
work
conditions.
• Excluded
minorities,
women
and
most
recent
immigrants
who
were
considered
“unskilled”
• Behind
Steel
strike
of
1892
and
Pullman
Strike
of
1894
• IWW
or
Industrial
Workers
of
the
World
-­‐
focus
more
on
a
globally
connected
social
movement.
• Marxist
ideology
and
members
formed
the
American
Communist
Party
• Accepted
all
workers,
especially
unskilled.
• Too
violent
to
ever
gain
much
traction

17. The
Corporation
•Modern corp. emerged after Civil War when industrialists realized no
person or group of limited partners able to finance great ventures
(reversing the trend of Jackson’s Maysville Road Veto)
•Businesses began to sell stock, which was appealing to investors b/c
“limited liability” meant lost only amt of investment + not liable for
company debts- allowed vast capital to be raised
•Began in RR industry, spread to others- in steel industry Andrew
Carnegie struck deals with RRs, bought out rivals, purchased coal mines
w/ partner Henry Clay Frick controlled steel process from mine to market
(vertical integration)
•Financed undertaking by selling stock. Bought out in 1901 by JP Morgan
who formed United States Steel- controlled 2/3 of nation’s steel
production

18. Consolidating
Corporate
America
•Consolidation
occurred
through:
•“horizontal
integration”
(merging
competing
companies
into
a
single
corporation)
•“vertical
integration”
(control
production
from
raw
materials
to
distribution).
•pool
arrangements
(agreement
upon
selling
price)
•Largest
corp
empire
John
D
Rockefeller’s
Standard
Oil-­‐
through
horizontal
&
vertical
integration
came
to
control
90%
of
reKined
oil
in
US
at
its
peak.
•Consolidation
was
used
to
cope
w/
“cutthroat
competition”-­‐
feared
too
much
competition
lead
to
instability
and
overproduction;
best
was
to
eliminate/absorb
competition

19. The
Trust
and
the
Holding
Company
•Failure
of
pools
(informal
agreements
to
stabilize
rates,
divide
markets)
led
to
less
cooperation
and
more
centralized
control-­‐
“trusts”
emerged
(stock
transferred
to
group
of
trustees
who
made
all
decisions
but
shared
proKits)
•Beginning
w/
NJ
1889
states
changed
laws
to
allow
companies
to
buy
other
companies,
making
trusts
unnecessary—(a
trust
would
at
least
allow
companies
to
share
proKits;
this
no
longer
occurs)
•“holding
companies”
emerged
as
a
corporate
body
that
bought
up
stock
to
establish
formal
ownership
of
a
company
(that
way
you
could
avoid
being
labelled
a
‘monopoly’
•By
the
end
of
19th
c.
1%
of
corps
controlled
33%
of
manufacturing
and
wealth.
It
created
a
system
where
power
was
in
the
hands
of
a
few
men-­‐
NY
bankers
(JP
Morgan),
industrialists
(Rockefeller),
etc.
•Despite
a
loss
in
competition,
substantial
economic
growth
came
from
this
arrangement-­‐
costs
were
cut,
industrial
infrastructure
formed,
new
markets
stimulated,
new
unskilled
jobs

24. Inventions
change
lifestyles
•1879
Edison
invents
the
light
bulb
and
later
a
system
to
distribute
electrical
power.
•Electricity
allowed
factories
to
operate
without
having
to
be
located
on
a
river
bank
or
other
natural
source
of
power.
•Factories
also
run
all
night
increasing
per
factory
productivity.
•1876
-­‐
Graham
Bell
invents
the
telephone
•Other
inventions
of
the
age
included:
the
phonograph,
the
motion
picture
camera,
the
Ediphone,
and
the
Model
T

25. Railroads
Link
the
Country
•1869
-­‐
transcontinental
railroad
was
completed
linking
the
East
and
West
coasts
of
the
U.S.
•To
make
sure
all
railroads
ran
on
time
the
concept
of
“time
zones”
was
adopted
worldwide
in
1884