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| Why did the U.S. economy grow? | Because of a large amount of natural resources/raw materials, a large labor supply (due to immigration), an increasing population with more advanced transportation networks, an already "strong" economy, the creation of laborsaving technologies (which increased productivity), friendly governmental policies, and talented entrepreneurs who developed many/large businesses |
| Why was the railroad system so important | (Was the nations first big business) They created a market for goods that were national in scale which encouraged mass production, mass consumption, and economic specialization= The resources used in railroad-building promoted the growth of other industries (especially coal and steel)= They also affected the routines of daily life (EX: After the American Railroad Association divided the country into 4 zones in 1883, railroad time became standard time for all Americans)= Resulted in the creation of the modern stockholder corporation and the development of complex structures in finance, business management, and the regulation of competition |
| How did the Civil War impact the railroad system? | Initially (1830-1860), the building of many separate local lines resulted in different Guages (=distance between tracks) and incompatible equipment= The Civil War, through the consolidation of competing railroads, solved this problem by integrated them into Trunk Lines (=major route between large cities= smaller branch lines connected the trunk line with outlying towns) |
| Commodore Cornelius Vanderbilt | Used his millions (earned from a steamboat business) to merge local railroads into the New York Central Railroad (1867) which ran from New York City to Chicago |
| How were railroads important in the trans-Mississippi West? | Promoted settlement on the Great Plains and linked the West with the East (and thus created one great national market) |
| Why did the federal government provide railroad companies with federal land grants? | Because they recognized that the western railroads would lead the way to settlement= The government expected that the railroad companies would try to sell the land to new settlers to finance construction= They also hoped that the completed railroad would both increase the value of government lands and provide preferred rates for carrying the mails and transporting troops |
| How did the federal government distribute land? | Land was given in alternate mile-square sections in a checkerboard pattern along the proposed route of the railroad |
| What were the negative results of federal land grants? | The land grants and cash loans promoted hasty and poor construction and led to widespread corruption in all levels of government= Insiders used construction companies (EX: Credit Mobilier) to pocket huge profits while bribing government officials and legislators= Protests against the land grants mounted when citizens discovered that the railroads controlled 1/2 of the land in some western states |
| What was the first transcontinental railroad and how was it built? | Was built to tie California to the rest of the Union= The task was divided between 2 newly incorporated railroad companies (Union Pacific and Central Pacific)= The 2 tracks came together on May 10, 1869 where a golden spike was driven into the ground to mark the linking of the Atlantic and Pacific states |
| Union Pacific | Was to build westward (on the transcontinental railroad) across the Great Plains starting from Omaha, Nebraska= General Grenville Dodge directed construction by using many war veterans and Irish immigrants |
| Central Pacific | Was to lay the track (of the 1st transcontinental railroad) across mountain passes in the Sierras by pushing eastward from Sacramento, California= Charles Crocker recruited many Chinese immigrants to dangerously blast tunnels through the Sierras |
| Why were so many railroads, built in the 1870s and 1880s unprofitable? | Because they were overbuilt, they frequently suffered from mismanagement and fraud (EX: Jay Gould went into the railroad business for quick profits and made millions by selling off assets and watering stock |
| What was the result of so many railroads being unprofitable? | Many railroads competed by offering rebates (discounts) and kickbacks to favored shippers while charging large freight rates to smaller customers such as farmers= They also attempted to increase profits by forming pools (where competing companies agreed secretly and informally to fix rates and share traffic) |
| What was the result of the financial panic in 1893? | 1/4 of all railroads were forced into bankruptcy= Bankers (EX: J. Pierpont Morgan) moved to take control of the bankrupt railroads and consolidate them (this eliminated competition which allowed them to stabilize rates and reduce debts) |
| What were the results of the banks taking over the railroads? | By 1900, 7 giant systems controlled almost 2/3 of the nation's railroads |
| What were the positive results of the banks taking over the banks (which resulted in the formation of 7 giant railroad systems)? | The railroad system was more efficient |
| What were the negative results of the banks taking over the banks (which resulted in the formation of 7 giant railroad systems)? | The railroad system was controlled by a few powerful men (like Morgan) who dominated the boards of competing railroad corporations through interlocking directorates (same directors ran competing companies= created regional railroad monopolies) |
| How did the railroad companies treat the citizens? | They were harsh towards small investors and= Laws (such as the Granger Laws passed by midwestern states and the federal Interstate Commerce Act of 1886) were ineffective in controlling the railroad companies/systems |
| What types of businesses/industries grew during the "Second Industrial Revolution"? | Heavy industries and the production of steel, petroleum, electric power, and the industrial machinery to produce other goods |
| Henry Bessemer and William Kelley | Discovered that blasting air through molten iron produced high-quality steel |
| What was the result of the perfection of making high-quality steel? | The Great Lakes region emerged as the leading steel producer (because of its abundance of coal reserves and access to iron ore)= It also launched the rise of heavy industry |
| Andrew Carnegie | In the 1870s, he started manufacturing steel in Pittsburgh and soon outdistanced his competitors by a combination of salesmanship and the use new technology= He employed a business strategy known as Vertical Integration= By 1900, Carnegie Steel was biggest in the steel industry (and produced more steel than Britain) |
| Vertical Integration | Where a company would control every stage of the industrial process from mining the raw materials to transporting the finished product |
| United States Steel Corporation | Was created when Carnegie sold his company to a new steel combination headed by J. P. Morgan= It was the 1st billion-dollar company and also the largest business in the world (it controlled over 3/5 of the nation's steel business) |
| John D. Rockefeller | Founded Standard Oil and took control of the oil refinery business by using the newest inventions and efficient practices= As his company grew, he was able to get rebates from railroad companies and temporarily cut prices for Standard Oil kerosene to force rival companies to sell out= By 1881, his company (now known as the Standard Oil Trust) controlled 90% of the oil refinery business and consisted of the various companies that he had bought, which were all managed by a board of trustees that Rockefeller and his company (this combination represented a horizontal integration of an industry in which former competitors were bought under a single corporate umbrella) |
| What was the result Standard Oil eliminating waste in the production of kerosene and buying out of of it's competitors? | The Standard Oil monopoly was able to keep prices low for consumers and got VERY rich= Rockefeller's success inspired others to set up trusts |
| Why did many dislike trusts in the 1880s? | Middle-class citizens feared the trusts' unchecked power, and urban elites (old wealth) resented the increasing influence of the new rich |
| Sherman Antitrust Act in 1890 | Prohibited any contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce (was passed after people failed to stop trusts at the state level)= It barely stopped the development of trusts in the 1890s |
| United States versus E. C. Knight Co. (1895) | Supreme Court ruled that the Sherman Antitrust Act could be applied only to commerce, not to manufacturing= This resulted in the U.S. Department of Justice being unable to secure convictions until the law was strengthened in the Progressive Era |
| Laissez-Faire | Was an economic expression that summed up the idea of government regulation of business |
| The Wealth of Nations | (Written by Adam Smith) Argued that business should be regulated not by government but by the "invisible hand" (impersonal economic forces) of the law of supply and demand (Was the origin of the concept of Laissez-faire)= Meant that if government kept hands off, businesses would be motivated by their own self-interest to offer improved goods and services at low prices |
| What was the result of the Laissez-Faire theory? | American industrialists accepted it and used it to justify their methods of doing business (even while they readily accepted the protection of high tariffs and federal subsidies)= The rise of monopolistic trusts seemed to undercut the very competition needed for natural regulation and the laissez-faire theory was constantly used in legislative halls and lobbies to ward off any threat of government regulation |
| Herbert Spencer | Most influential of the the social Darwinists who thought that Darwin's ideas of natural selection and survival of the fittest should be applied to the marketplace= He concluded that the concentration of wealth in the hands of the "fit" was a benefit to the future of the human race |
| William Graham Sumner | (Professor of Yale University) Argued that help for the poor was misguided because it interfered with the laws of nature and would only weaken the evolution of the species by preserving the unfit (was a Social Darwinist) |
| John D. Rockefeller | Because he applied the Protestant "work ethic" (=hard work and material success are signs of God's favor) to both his business and personal life, he concluded that "God gave me my riches" (was Religious justification of big business) |
| Acres of Diamonds | (Lecture by Reverend Russell Conwell) Preached that everyone had a duty to become rich |
| Andrew Carnegie | Wrote "Wealth" which argued that the wealthy had a God-given responsibility to carry out projects of civic philanthropy for the benefit of society (he donated $350 million of his money to support the building of libraries and other public institutions) |
| Samuel F. B. Morse | (Helped communication)Invented the 1st workable telegraph in 1844 (which was the 1st radical change in the speed of communications) |
| Cyrus W. Field | (Helped communication)Invented an improved transatlantic cable in 1866 which suddenly made it possible to send messages across the seas immediately (by 1900, cables linked all continents of the world in an electronic network of instantaneous, global communication) |
| Alexander Graham Bell | Invented the telephone in 1876 (helped communication) |
| What were some important inventions in the late 19th century? | George Eastman's Kodak camera (1888), Lewis E. Waterman's fountain pen (1884), King Gillette's safety razor and blade (1895), the typewriter (1867), the cash register (1879), the calculating machine (1887), and the adding machine (1888) |
| Thomas Edison | (Greatest inventor of the 19th century) Started out as a telegraph operator and patented his first invention (a machine for recording votes) in 1869= His success of his early inventions have him the resources to establish in 1876 a laboratory in Menlo Park, New Jersey, for the purpose of inventing new technologies (was the world's first modern research laboratory and was his most important contribution to science and industry) |
| Why was Edison's laboratory in Menlo Park so important? | Because it introduced the concept of mechanics and engineers working on a project as a team rather than as lone inventors= Many patented inventions were made in the lab including the phonograph, the incandescent lamp (which was the 1st practical electric lightbulb), the dynamo for generating electric power, the mimeograph machine, and the motion picture camera |
| George Westinghouse | (Another great inventor) Held more than 400 patents and was responsible for developing an air brake for railroads (1869) and a transformer for producing high-voltage alternating current (1885) which made possible the lighting of cities and the operation of electric streetcars, subways, and electrically powered machinery and appliances |
| What was the result of the increased output of U.S. factories as well as the invention of new consumer products? | It created a need for businesses to find ways of selling their merchandise to a large public |
| R. H. Macy and Marshall Field | Made the large department store the place to shop in urban centers |
| Frank Woolworth | Made the "Five and Ten Cent Store" which brought nationwide chain stores to the towns and urban neighborhoods (unlike Macy and Field's store) |
| What were 2 large mail-order companies during the late 19th/early 20 century and why were they important? | "Sears" and "Roebuck and Montgomery Ward"= They used the improved rail system to ship to rural customers their goods which were ordered from their "Wish Books" (=nickname given to the thick catalogs) |
| What were some consumer good innovations and why were they important? | Packaged foods (EX: Kellogg and Post) became a common item in the kitchen pantries of American homes and refrigerated railroad cars and canning enabled Gustavus Swift and other packers to change the eating habits of Americans with mass-produced meat and vegetable products |
| What were the results of new advertising/marketing techniques? | They not only promoted a consumer economy but also created a consumer culture in which "going shopping" became a favorite pastime |
| What was the result of the growth of American industry? | It raised the standard of living for most people but it also created sharper economic and class ivisons among the rich, the middle class, and the poor |
| Describe the concentration of wealth in the 1890s | The richest 10% of the U.S. population controlled 9/10 of the nation's wealth= Inustrialization created a new class of millionaires, most of whom flaunted their wealth by living in mansions, sailing yachts, and throwing parties (EX: Vanderbilts had huge summer homes, had huge dinner parties, and gave away rich gifts) |
| How did Americans respond to the widening gap between the rich and the poor and why? | Most Americans ignored it by finding comfort in the highly publicized examples of "self-made men" in business (EX: Andrew Carnegie, Thomas Edison, etc.)= They also thought there might be some truth in the popular novels by Horatio Alger Jr. (which was largely sold) |
| Horatio Alger, Jr. | Wrote novels, all of which portrayed a young man of modest means who became rich and successful through honesty, hard work, and a little luck (in reality, the opportunity for upward mobility did exist, but the rags-to-riches career of his stories was rare) |
| Describe the typical wealthy businessperson of the late 18th/early 19th century | White, Anglo-Saxon, Protestant male (who came from an upper/middle class background), and whose father was in business or banking |
| What was the result of the growth of large corporations? | It introduced the need for many white-collar workers (=salaried workers whose jobs generally do not involve manual labor) to fill the highly organized administrative structures= Middle Management was needed to coordinate the operations between the chief executives and the factories= Also, industrialization helped expand the middle class by creating jobs for accountants, clerical workers, and salespersons (these middle-class employees increased the demand for services from other middle-class workers such as professionals (doctors, etc.), public employees, and storekeepers)= The increase in the number of good-paying jobs increased the income of the middle class |
| Describe wages by 19900 | 2/3 of all working Americans worked for wages (usually at jobs that required them to work 10 hours a day, 6 days a week)= Wages were determined by the laws of supply and demand, and because there was usually a large supply of immigrants competing for factory jobs, wages wee barely above the level needed for survival |
| David Ricardo | Justified low wages in his "Iron Low of Wages" which argued that raising wages would only increase the working population, and the availability of more workers would in turn cause wages to fall, thus creating a cycle of misery and starvation |
| What was the result of low wages? | Even though real wages (income adjusted for inflation) rose steadily in the late 19th century, but still most wage earners could not support a family decently on one income= This resulted in working-class families depending on the additional income of women and children (In 1890, the majority of families in the U.S. averaged less than $380 a year) |
| Describe the female's position in 1900 | 1/5 adult women were in the labor force working for wages |
| Describe the working women and their working conditions in the 1900s | Most were young and single (since 5% of all married women worked outside the home)= Men and women both thought that if it was economically feasible, a woman's proper role was in the home raising children= Therefore, factory work for women was often restricted to industries that were perceived as an extension of the home (EX: textile, garment, and food-processing industries)= As the demand for clerical workers increased, women moved into formerly male occupations as secretaries, book-keepers, typists, and telephone operators (occupations that became feminized usually lost status and received lower wages) |
| Describe the worker's job before the Industrial Revolution and after | Before the Industrial Revolution, workers enjoyed a personal and relaxed workplace that valued an artisan's skills (they had a sense of accomplishment in creating a product from start to finish)= Factory work, after the Industrial Revolution, was different since it was structured and regulated to increase productivity (workers were assigned just 1 step in the manufacturing of a product, performing semiskilled tasks that were repetitive and monotonous)= All had to learn to work according to the CLOCK |
| How were the working conditions in industries? | Many were dangerous (EX: railroads and mining)= workers were exposed to chemicals and pollutants that were later discovered to cause chronic illness and early death |
| How was the workplace in factories and industries? | It was highly mobile= Industrial workers changed jobs on the average of every 3 years= Absenteeism and quitting (not strikes and labor unions) were the most common forms of protest against intolerable working conditions (20% of factory workers eventually dropped out of the industrial workplace rather than continuing= this was a higher percentage than those who protested by joining labor unions) |
| What was the result of cheap labor? | Management had the power in struggles with organized labor forces= Strikers could be easily replaced by bringing in Scabs (=strikebreakers/unemployed persons desperate for jobs) |
| How did employers defeat unions? | Lockout (closing the factory to break a labor movement before it could get organized), Blacklists (=names of pro-union workers circulated among employers), Yellow-Dog Contracts (=workers being told, as a condition for employment, that they must sign an agreement not to join a union), calling in Private Guards and State Militia to put down strikes, and obtaining Court Injunctions against strikes |
| Describe the labor unions that fought management | They were often divided on the best methods for fighting management= Some union leaders called for political action while others favored direct confrontation (EX: strikes, picketing, boycotts, and slowdowns) to achieve union recognition and collective bargaining |
| Great Railroad Strike of 1877 | Terrible case of labor violence during an economic depression when the railroad companies cut wages to reduce costs= A strike on the Baltimore and Ohio Railroad spread across 11 states and shut down 2/3 of the country's rail trackage= Railroad workers were joined by many other workers from other industries in the now national strike |
| How did the Great Railroad Strike of 1877 end and what was the result? | President Rutherford B. Hayes used federal troops to end labor violence= The strike and violence ended (but many many were killed) and after the strike, some employers addressed the workers' grievances by improving wages and working conditions, while others took a hard line by destroying workers' organizations |
| National Labor Union (1866) | Was the 1st attempt to organize ALL workers in ALL states= Called for higher wages, the 8 hour day, equal rights for women and blacks, monetary reform, and worker cooperatives (its chief victory was winning the 8 hour day for workers employed by the federal government) |
| Knights of Labor (1869) | 2nd national labor union which began as a secret society in order to avoid detection by employers= The union went public in 1881, opening its membership to all workers, including African Americans and women |
| Terence V. Powderly | Led the Knights of Labor= Called for worker cooperatives to make each man his own employer, abolition of child labor, and abolition of trusts and monopolies= he favored settling labor disputes by means of arbitration rather than resorting to strikes= Because they were losely organized, he was unable to control local units that decided to strike |
| Why was Chicago so important in the labor union movement? | Having many Knights, it was the site of the 1st May Day labor movement= It also was home to anarchists who advocated the violent overthrow of all government |
| What was the May Day movement and what was the result of it? | It was the calling for a general strike to achieve an 8 hour day= In response, labor violence broke out at Chicago's McCormick Harvester plant= Workers later had a public meeting in Haymarket Square, and as police attempted to break up the meeting, someone threw a bomb, which killed seven police officers (the anarchist suspects were killed)= The bomb incident convinced many Americans that the union movement was radical and violent (the bombing also hurt the Knights) |
| American Federation of Labor (1886) | (AF of L) Concentrated on attaining practical economic goals= Was an association of 25 craft unions and did not call for a reform program to remake American society (unlike the Knights) |
| Samuel Gompers | Led the American Federation of Labor= Went after the basics of higher wages and improved working conditions= He directed his local unions of skilled workers to walk out until the employer agreed to negotiate a new contract through collective bargaining |
| Homestead Strike | Henry Clay Frick (manager of Andrew Carnegie's Homestead Steel plant) caused a strike in 1892 by cutting wages by 20%= He used weapons of the lockout, etc. to defeat the steelworkers' walkout after 5 months= The failure of the Hoomestead strike set back the union movement |
| Pullman Strike | George Pullman (who manufactured the railroad sleeping cars "Pullman Cars") cut in wages and fired the leaders of the workers' delegation that came to bargain with him= The workers laid down their tools and appealed for help from the American Railroad Union (led by Eugene V. Debs who directed railroad workers not to handle any trains with Pullman cars)= The union's boycott tied up rail transportation |
| How did railroad owners respond to the Pullman Strike? | They, supporting Pullman, linked Pullman cars to mail trains= They then persuaded President Grover Cleveland to use the army to keep the mail trains running (a federal court issued a claim that forbid interference with the operation of the mails and ordered railroad workers to abandon the boycott and the strike |
| What was the result of President Cleveland's response to the Pullman Strike? | Debs and other union leaders were arrested and jailed which ended the strike |
| In re Debs (1895) | Supreme Court case where the court approved the use of court injunctions against strikes, which gave employers a very powerful weapon to break unions |
| What was the result of the Pullman Strike? | By 1900, only 3% of American workers belonged to unions= Management held the upper hand in labor disputes (with government taking its side) |
