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Chapter 24 Industry Comes of Age 1865-1900 Railroads Ogden Utah Railroad Effects Vertical Integration Morgan Grange Impact of Industry Carnegie Wabash Case Horizontal Integration Bessemer-Kelly Gospel of Process Wealth National Labor Knights of Union Labor Interstate Commerce Act Rockefeller Sherman AntiTrust Act 1890 AFL Pullman Palace Cars US # 1 in Industry Interlocking Directorates Life in the South The Best and the Brightest are no longer entering politics. Railroads Transcontinental railroad building was costly and required government subsidies Arguments for – Military needs, and postal needs Congress finally says yes o 1862 give donations to the Central Pacific and the Union Pacific o The Union Pacific was Commissioned to move westward from Omaha o Laying rail at the California end was undertaken by the Central Pacific Many Chinese laborers worked Govt. provided Land Grants o Frontier towns touched by railroads flourished into cities those bypassed turned into ghost towns Hells on wheels called the tenting towns that popped up along the way Ogden Utah A “wedding of the rails in 1869 Driving the Golden spike into Ground (replaced with a silver one) The success of the western lines was facilitated by welding together and expanding the older eastern networks Many changes were made to improve railroads one was to replace the iron tracks with steel to make it safer and create a standard width Westinghouse air breaks and Pullman car Increased safety and luxury Railroad Effects Nation united in a physical sense/largest market in the world Purred industrialization Stimulated agriculture Increase the urban regions Help cause changes in the ecology of the land On Nov. 18 1883 the major rail lines decreed four time zones Maker of Millionaires The railroads were also very corrupt. Public affected by the brutal rate wars and competition wars. They bought and sold people in public lives Grange (Patrons of Husbandry) Farmers sick of the injustice of the railroads Wanted government to regulated railroads at the state level Wabash Case In 1886 the Supreme Court decreed that individual states had no power to regulate interstate commerce Interstate Commerce Act Prohibited rebates and pools and required the railroads to publish their rates openly Most important it set up the Interstate Commerce Commission It was the first large scale attempt by Washington to regulate business in the interest of society at large Do you think Cleveland like this? No he practiced Les affair US # 1 in Industry Liquid capital now becoming abundant –more millionaires Exploitation of natural resources Massive immigration helped make labor cheap and plentiful American ingenuity o Alexander Graham Bell o Thomas Edison Business became competitive – leaders needed to find new ways to out wit their competition Vertical Integration Carnegie pioneered this – combined into one organization all phases of manufacturing from mining to marketing Carnegie Made is millions in Steel in the area of Pittsburgh He was not a monopolist and disliked monopolistic trusts JP Morgan bought out Carnegie for 400 million dollars Give 350 million of it way to charities, libraries and education Horizontal Integration Allying with competitors to monopolize a given market. Rockefeller was the master John D. Rockefeller He organized the Standard Oil Company By 1877 Rockefeller controlled 95% of all the oil refineries in the country On one hand he put his competitors out of business on the other side his monopoly did turn out a superior product at a relatively cheap price Interlocking Directorates JP Morgan Placing officers of his own banking syndicate on various boards JP Morgan Influential Banker and financer After he but Carnegie out he took the holdings and lunched the enlarged United States Steel Corporation – Capitalized at 1.4 billion dollars the first to do so. STEEL the mighty metal ultimately held together the new steel civilization, from the skyscrapers to coal scuttles, while providing it with food shelter, and transportation. Scarce and expensive before the Bessemer-Kelly Process Bessemer-Kelly Process Named after a British inventor, although an American had stumbled on it a few years earlier Cold air blown on red-hot iron caused the metal to become white-hot igniting the carbon and thus eliminating impurities. America was one of the few places in the world where one could find relatively close together abundant coal for fuel, rich iron ore for smelting, and other essential ingredients and a labor supply Evidence that the Robber Barron’s were created to rule and be financially superior – Prove themselves morally responsible Gospel of Wealth Survival of the fittest theories of Charles Darwin (Herbert Spenser) The pulled themselves out of poverty—those who stay poor must be lazy and lacking enterprise Even with the Gospel of Wealth’s arguments – The masses of the people began to mobilize. Sherman Anti-Trust Act 1890 Flatly forbade combinations in restraint of trade, without any distinction between good trusts and bad trusts. Bigness not badness was sin. The law proved ineffective – contained a lot of legal loop-holes Used more to curb labor unions in the early stages As late as 1900 the south still produced a smaller percentage of the nation’s manufactured goods Life in the South Obstacle – Price Discrimination o Railroads The north set rates higher for the South Textiles fared better o But mixed blessing Brought in cheap labor paid even less then those in the North Impact of Industry The standard of living rose Agriculture declined in relation to manufacturing (Jeffersonian yeoman farmer no longer exists) Trust-Busting” Time == people now lived by the factory whistle, not the sunlight. Women o Entered industry as Hello Girls o Careers started to delay marriage and smaller families o Many women were working because of necessity Large class division o 1/10 of the people owned 9/10s of the nations wealth 1900 As individual originality and creativity were being stifled and less value than ever before was being placed on manual skills. Workers did not know their bosses anymore. National Labor Union Organized in 1866 and lasted six years Included skilled and unskilled farmers but excluded the Chinese and made nominal efforts to include women and blacks Wanted a 8 hour work day (govt. worker got) Depression caused a decline in membership Knights of Labor Started as a secret union in 1869 continued until 1881 Sought to include all workers under one union (not a good idea to big not specific to members needs) They refused to throw themselves at politician, instead they would campaign for reforms Knights involved in many strikes that became violent does not look good for them in the eyes of the public AFL American Federation of Labor Leader Samuel Gompers Only for Skilled labors It consisted of an association of self governing national unions, each of which kept its independence, with the AFL unifying an overall strategy Sought better wages, hours and working conditions