Outline Chapter 18 – The Rise of Industrial America 1865-1900

1. What cause economic prosperity?
1. Abundance of natural resources
2. Labor supply grew
3. Population grew with communication fueling the markets
4. Capital became more readily available to businessmen
5. Government was in support of the big businesses
6. Businessmen became to use new tactics to monopolize industries
2. Railroads
1. Railroad mileage was increasing rapidly after the Civil War
2. First nationwide railroad
1. The once separated railroads became connected across the nation
2. The East had the railroad system more efficient than the West.
3. The West was still being explored as a new frontier, offering tons of new land for railroads.
1. Railroads in the West were subsidized by government funds
2. More land was given to railroad tycoons than any other business entrepreneurs in the past
4. By linking the East with the West that national railroad was representative of the newly founded national market
5. The Land Grants and Cash Loans given to benefit railroads was directed to major railroad organizations – which were favored by the government
3. Goods and services could be transported across the nation as a whole
4. Competition
1. Jay Gould and Cornelius Vanderbilt were the two strongest railroad tycoons
2. First Captains of Industry/Robber Barons of the time.
3. Used there wealth and government support to douse the competition and monopolize the railroad industry
4. This practice eventually drifted into other industries as well
1. The steel industry followed shortly after the railroads
2. Andrew Carnegie followed in the footsteps of Jay Gould and applied business tactics – such as vertical integration – to the steel industry
3. Eventually he came to monopolize the steel industry with his Carnegie Steel corporation
4. Late sold over his steel monopoly to J.P. Morgan and U.S. Steel
1. First billion dollar transaction in U.S. history.
5. Oil came soon after steel
1. John D. Rockefeller was the Carnegie of oil
2. He was the first big businessman to use the trust to gain control of an industry
3. Brought all aspects of oil in the U.S. under his corporation
3. Controversy
1. These businessmen sparked protest from the average man
1. Many people felt as if these men were breaking laissez-fair capitalism because of their ability to dominate one industry and favoritism they received from the government
2. People led and antitrust movement that the government followed; however, the government failed to actually follow the movement efficiently.
1. Sherman Antitrust Act prohibited any restraint in commerce
2. U.S. v E.C. Knight Co – example of how the supreme court ruled in favor of businesses by ruling that Sherman Antitrust did not apply to manufacturing only commerce
3. People also felt that social gap that increased between the ten percent of Americans who concentrated ninety percent of American wealth, contrasted with the poverty that most Americans felt
2. Businessmen justified their actions...
1. Most of these Captains of Industry used their money in philanthropic efforts – building museums, theaters and libraries in communities
1. Andrew Carnegies Gospel of Wealth
2. Social Darwinism justified the dominance of these men in society
3. Inventions and technology arose due to this time period
1. Communication became more effective
2. Thomas Edison and his Westinghouse began to experiment more with electricity
3. Consumer goods were newly advertised through unique methods which had not previously been used. In essence, advertising began to become more like propaganda
4. Businessmen tried to convince Americans that all people could be like them with effort
1. Horatio Alger myth that you can rise from your middle class lifestyle to wealth
4. Impacts
1. Wages increased and laws were passed to set a minimum wage
2. The middle class – although largely separated from upper class – began to expand
3. Young and single women had more job opportunities, but were still very rare.
4. Labor discontent grew
1. Lots of death and illness grew because of poor working conditions
2. Most people quit the workplace rather than try to reform it
5. People tried to organize labor
1. Businesses did whatever they could to prevent labor organization
1. Lockouts
2. Blacklisting
3. Yellow-dog Contracts
4. Private Guards
5. Court Injunctions
2. Different organizations were made as an attempt
1. National Labor Union – too broad requirements to join and had too many people
2. Knights of Labor – included nearly all workers, hit high membership, some success, but eventually failed.
3. American Federation of Labor – Craft Unions which were limited and most successful when compared to the other two
3. Strikes
1. Railroad strike of 1877 – tycoons cut wages hoping to make more profit, through workers of numerous industries into outrage, causing the president to send in federal troops to resolve the problem
2. Homestead strike – workers began to strike, and were stopped by weaponry. Made the union movement seem violent and radical
3. Pullman strike – Pullman began to pay workers less, causing a strike of all Pullman cars. Later, a court injunctions forced workers to work, leaving them with poor working conditions.