Chpt. 18 - The Rise of Industrial America (1865-1900)

The Chinese Exclusion Act

(1882) Denied any additional Chinese laborers to enter the country while allowing students and merchants to immigrate. Not repealed until 1943.

Reasons for South's industrial retardation

-Devastation from the Civil War - so many banks failed during the war that by 1865 it had just 2% of the banks (with 1/4 the population), starting the crop lien system rather than cash along with a shortage of labor -racism -mainly a rural region - therefore more vulnerable to the fluctuations of commercial agriculture, as they grew mainly cash crops -illiteracy - states stopped the expansion of schools under the Freedmen's Bureau and other associations, severely limiting the technical and managerial workforce needed -low rate of innovation

Reasons for industrial growth

-abundant raw materials such as coal -a large growing labor supply using immigrants -surge in technological innovations, which stimulated productivity and enabled more unskilled labor at a lower cost -emergence of talented, ambitious, entrepreneurs who would cut costs, eliminate rivals, and create monopolies

National Labor Union

1866 - established by William Sylvis - wanted 8 hour work days, banking reform, and an end to conviction labor. an attempt to unite laborers during the labor crisis of the 19th century. faded quickly after Sylvis death in 1869; continued in the Knights of Labor

Henry George "Progress and Poverty"

1879, single tax on speculated land to ameliorate industrialization misery. since speculators reaped profits from the rising prices of land they did nothing to improve, the state could tax this increment and therefore raise money for social programs. benefits of socialism without the "disadvantage" - yet the funds granted by this unearned increment would only last with land speculation, and wasn't enough to truly sustain social programs.

American Federation of Labor (AFL)

1886 -Federation of national craft unions representing labor interests in wages, hours, and safety -Individuals were members of their local unions, which in turn, were members of the AFL -Rather than revolutionary changes, they sought a specific, practical changes -First president was Samuel Gompers -Grew to 1.6 million members by 1904

Sherman Antitrust Act

1890, first federal action against monopolies. Outlawed trusts and anything that fixed prices in restraint of trade, yet failed to define "trust;" therefore, when Standard Oil was challenged as a monopoly, they simply reorganized into an enormous holding company, which owned the majority of the stock of all of the companies rather than owning them outright.

Homestead Strike

1892 steelworker strike near Pittsburgh against the Carnegie Steel Company. Managers had cut wages to destroy the union, and when workers fired upon Pinkertons, they returned fire, leading to 7 worker and 3 Pinkerton casualties. Union crushed by National Guard.

James Garfield

20th President

Grover Cleveland

22nd President, 24th President

President McKinley

25th President

Andrew Carnegie

A Scottish-born American industrialist and philanthropist who founded the Carnegie Steel Company in 1892. By 1901, his company dominated the American steel industry. Used new technologies like Bessemer steel to cut costs and actually estimate the production cost per ton. "Watch the costs, and the profits will take care of themselves." kept his workers' wages brutally low, became a great philanthropist (Carnegie Hall). gave credence to the "rags to riches" story

Corporation

A business owned by stockholders who share in its profits but are not personally responsible for its debts.

Haymarket Riots

A demonstration of striking laborers in Chicago in 1886 that turned violent, killing a dozen people and injuring over a hundred. Protest over lethal force used by the Chicago police on labor strikers turned fatal when someone threw a bomb at police, after which the police fired into the crowd. The rally had been largely associated with a German anarchist newspaper, leading to xenophobic fears of foreign anti-capitalist conspiracy. 8 arrested, 4 executed.

Pinkertons

A private detective agency founded in 1850. During the labor unrest of the late 19th century, Pinkertons were hired to infiltrate labor unions, and as security guards. They were well known for their involvement in the Homestead Strike, where they protected the strikebreakers.

"Yellow Dog Contracts"

A written contract between employers and employees in which the employees sign an agreement that they will not join a union while working for the company, nor will they join a labor strike.

Horizontal Integration

Absorption into a single firm of several firms involved in the same level of production and sharing resources at that level, a consolidation of competition into a monopoly. Greatly utilized by Rockefeller.

Thomas Edison

American inventor best known for inventing the electric light bulb, acoustic recording on wax cylinders, phonograph, and motion pictures. Freed people from dependence on daylight, allowing work and other activities to continue well into the night. Epitomized the inventive impulse, had little formal education and worked in the telegraph industry. His first invention allowed him the finances to open an "invention factory" in Newark, New Jersey; realized that an electrical grid had to be built for his invention to be viable. 1882, JP Morgan finances his grid for NYC; upon his death, his laboratory became the model for the inventive scientific laboratories the world over.

Interstate Commerce Commision, 1887

Established by the Interstate Commerce Act of 1887, oversaw the practices of interstate railroads, attempted to ban monopolistic or discriminatory practices. Was challenged by the railroad companies many times, and was essentially nullified. Inspired by the idea that big business was the most efficient way to organize the economy

J. Pierpont Morgan

He was a banker who financed the reorganization of *railroads*, insurance companies, and banks. He bought out Carnegie and in 1901 he started the United States Steel Corporation, the first company worth over $1 billion. Created 7 monopolistic companies that controlled 2/3 of the nation's track.

Samuel Gompers

He was the creator of the American Federation of Labor. He provided a stable and unified union for skilled workers, while fighting for higher wages using higher organization. AFL was a federation of unions, thus preserving the autonomy of each craft.

Mother Jones

Labor activist who was a member of the Knights of Labor union and who used publicity techniques to create awareness of the plight of mine workers and child laborers. one of the limited successes of the labor movement.

Eugene V. Debs

Leader of the American Railway Union, he voted to aid workers in the Pullman strike. He was jailed for six months for disobeying a court order after the strike was over; the Supreme Court upheld his sentence in "In re Debs" which allowed the use of injunctions against labor unions.

Laissez Faire

Policy that government should interfere as little as possible in the nation's economy. literally translates to "let (it/them) do (as they wish)" or "let go;" proposes a hands-off approach to economics. Usually cites "The Wealth of Nations" which established supply and demand. Carnegie justified it using evolutionary means.

Vertical Integration

Practice where a single entity controls the entire process of a product, from the raw materials to distribution. Practiced widely by Carnegie in the steel industry, allows the manufacturer to cut costs

Jay Gould

Railroad entrepreneur who owned the Union Pacific line, innovated new ways of raising money by selling stocks and bonds to the public, put the railroad industry into a lot of public debt. along with Hill and Huntington, he consolidated the haphazard smaller lines in the west to create one unified system, owned by only 5 companies in 1893. called a "sinister figure" by Joseph Pulitzer, often depicted as a villain who manipulated for profit.

Standard Oil Trust

Rockefeller's company, in 1881, owned 90 percent of the oil refinery business, with a board of trustees at the head. Outlawed by the Sherman Anti-Trust Act in 1890, simply reorganized into a holding company.

John D. Rockefeller

Similar to Carnegie, knew the necessity of cutting costs for efficiency. Controlled the shipping of oil between the well, refinery, and retailer; aggressively forced out his competitors. At first using a "pool" or verbal agreement to set prices with rival firms, in 1882 he established the Standard Oil Company, the greatest, wisest, and meanest monopoly known in history. It was an umbrella corporation that ran the entire industry, gave stockholders "trust certificates," which paid them to allow the trust, run by Rockefeller, to control production. cut refinery numbers to lower supply, used both vertical and horizontal integration. Became the richest man in history by the 1910s, worth over $400 billion.

Social Darwinism

The belief that only the fittest survive in human political and economic struggle. Andrew Carnegie was a big proponent, used the ideas of Herman Spencer. "The law of competition is sometimes hard for the individual, but it is best for the race". William Graham Sumner joined him in this and created social darwinism, saying that inexorable natural laws govern the social order.

Pullman Strike, 1894

Workers rebelled because the Pullman Palace Car Company cut wages by 1/3 and the American Federation of Labor refused to support the strikers. Eugene V. Debs led the newly formed American Railway Union, which refused to switch Pullman rail cars, leading to the stopping of rail traffic through Chicago. Military action was taken in order to keep mail delivery on track, although alternatives were offered by the strikers, and in the ensuing riot 13 were killed.

Holding Company

a company whose primary business is owning a controlling share of stock in other companies

The New South Creed

an idea that promoted *industry*, diversification of agriculture, white and black cooperation, need for new men to lead South, and the need for harmonious relations with the North. promoted by Southern newspaper editors such as Henry W. Grady of the Atlanta Constitution, who said that the South's natural coal and timber sources made it ripe for industrialization. gained momentum in the 1880s, when Southern states began to subsidize business. Steel, iron, coal, and lumber all became staples of the South's industrial sector.

Das Kapital

book by Marx that stated that all social classes should end and all citizens should be equal with equal ownership of businesses. rested on the proposition that the only value of a commodity is that of the labor required to produce it; any profit made is only surplus value. predicted a shrinking bourgeoisie with most of the wealth and a massive proletariat, impoverished, that would eventually revolt violently.

Knights of Labor

labor union that sought to organize all workers and focused on broad social reforms. Led by Stephens, demanded equal pay for women, end to child labor, and cooperative ownership of businesses. called for a progressive tax. high membership under Powderly, who urged temperance and was anti-strike, as well as anti-Chinese immigration. defeated Gould in a railroad standoff, membeship soared to nearly 700,000. declined in 1880s

US v. E.C. Knight

ruled that companies engaged in manufacturing rather than interstate commerce were to be regulated by state and not federal law, and could not be dismantled by the federal government. Allowed the Knight firm, a monopoly that controlled over 90% of sugar refining, to continue restricting trade for profit.

Railroad Strikes of 1877

strike during 1877 of rail workers protesting pay cuts after the Panic of 1873 and subsequent depression. Froze transportation in the US, President Hayes sent in Federal Troops to stop the strike. 100 dead; stunned middle class America. Employers cracked down on labor, requiring the signing of "yellow dog" contracts in which they promised not to strike or join a union, and hired Pinkerton agents, or private police.