THE AGE OF INVENTION AND ECONOMIC GROWTH
In 1876, Thomas A. Edison built his workshop in Menlo Park, New Jersey, and proceeded to produce some of the most important inventions of the century
Edison’s greatest invention was the lightbulb
Edison’s pioneering work in the development of power plants also proved immensely important
His advances allowed for the extension of the workday, which previously ended at sundown, and the wider availability of electricity, both for industry and the home
The last quarter of the 19th century is often called the Age of Invention because so many technological advances like Edison’s were made
These advances, in turn, generated greater opportunities for mass production, which then caused the economy to grow at a tremendous rate
People known as the “captains of industry” to their fans (and robber barons to others), who owned and controlled the new manufacturing enterprises, became extremely rich and powerful during this period
Industrialization, Corporate Consolidation, and the Gospel of Wealth
As more and faster machines became available to manufacturers, businessmen discovered that their cost per unit decreased as the number of units they produced increased
The more raw product they bought, the cheaper the suppliers’ asking price. The ceaper the asking price, the closer to capacity they kept their new, faster machines running. The closer to capcity they kept their machines running, the less the cost of labor and electricity per product. The loerr the cost of labor and electricity per product, the cheaper they could sell their products. The cheaper the product, the more they sold: the concept of economies of scale
Bad employee conditions
Downside of this new business practice was that it required employees to work as efficiently, and repetitively, as machines
Assembly line production had begun to take hold when Eli Whitney developed interchangeable parts, but it reached a whole new level in Ford plants in the early 20th century, this type of production required workers to perform a single task over and over often (before labor reform) for 12 to 14 hours a day
Factories were dangerous; machine malfunctions and human error typically resulted in more than 500,000 injuries to workers per year.
Industrial profits
The overriding concern for businessmen was that profits continued to increase by huge margins
Although government made some efforts to regulate this rapid growth, these were tentative. Also, the government remained uncertain as to how to enforce regulations, widespread corruption existed among those bureaucrats charged with enforcing the regulations
Finally, courts of the era (especially the Supreme Court) were extremely pro-business, with almost no restraint, business such as railroad companies followed the path that led to greater economies of scale, which meant larger and larger businesses, known as corporate consolidation.
Monopolies
One new form of business organization called a holding company, holding company owned enough stock in various companies to have a controlling interest in production of raw material, means of transporting that material to a factory, factory itself, distribution network for selling the production
Logical conclusion is a monopoly, one holding company, for example, gained control of 98 percent of sugar refining plants in the U.S., while the company did not control the entire sugar industry, it did control one very important aspect of it
Most common form of business consolidation at the end of the 19th century was horizontal and vertical integration. One is legal; one is not; both were practiced by “captains of industry” during the Gilded Age
horizontal integration
Created monopolies within a particular industry, the best-known example being Standard Oil, created by John D. Rockefeller
In horizontal integration, several smaller companies within the same industry are combined to form one larger company, either by being bought out legally or by being destroyed through ruthless business practices such as cutthroat competition or pooling agreements
Many of these business practices are illegal today because of antitrust legislation passed at the turn of the 20th century
Vertical integration
Remains legal provided the company does not become either a trust or a holding company, but rather allows other companies in the same industry to survive and compete in the marketplace
In vertical integration, one company buys out all the factors of production, from raw materials to finished product
For example, Swift Premium might control the stockyards, the slaughterhouse, and the processing and packaging plants but still compete with Oscar Mayer or Hebrew National
Numerous problems arose because of consolidation of power (monopolies)
Rapid growth required lots of money, businessmen borrowed huge sums, and when their businesses occasionally failed, bank failures could result
During last quarter of the 19th century, the U.S. endured one major financial panic per decade. Though irresponsible investors caused the panics,lower classes suffered the most, as jobs and money became scarce.
Monopolies created class of extremely powerful men whose interests clashed with rest of society. As these businessmen grew more powerful, public resentment increased, and government responded with laws to restrict monopolies (which the courts, in turn, weakened)
Back-and-forth battle among the public, the government, and the courts is best exemplified by the Sherman Antitrust Act of 1890.
Laws about monopolies
Public pressure led to the passage of Sherman Antitrust Act forbidding any “combination…or conspiracy in the restraint of trade.”
Unfortunately, wording of the Sherman Antitrust Act was ambiguous enough to allow the pro-business Supreme Court to interpret law as it saw fit.
For example, in 1895, Court ruled that E. C. Knight, company that controlled 98 percent of the sugar refining plants in the U.S., did not violate the Sherman Antitrust Act because local manufacturing was no subject to congressional regulation of interstate commerce (U.S. v. E.C. Knight Co., 1895)
On the other hand, labor unions were often found to be “in restraint of free trade” and declared illegal. This loophole was closed during Wilson’s administration in 1914 with passage of the Clayton Antitrust Act, which made allowances for collective bargaining.
collective bargaining.
Social Darwinism, Gospel of Wealth
Another response to public pressure for reform came from industrialists themselves
Steel mogul Andrew Carnegie promoted philosophy based on work of Charles Darwin, Social Darwinism. Using Darwin’s theory of evolution as analogy, Carnegie argued that in business, as in nature, unrestricted competition allowed only the “fittest” to survive
Aside from fact that Carnegie’s analogy to Darwin’s theory was at best dubious, it also lacked consistency; while Carnegie argued that he was against government regulation, he supported all types of government assistance to business (in the form of tax abatements, grants, tariffs, and so on)
Carnegie further argued that concentration of wealth among a few was natural and most efficient result of capitalism
Carnegie also asserted that great wealth brought with it social responsibility
Dubbing his belief Gospel of Wealth, he advocated philanthropy, by building libraries and museums or funding medical research, but no charity
Some of his peers were as generous; others were not.
Labor in cities
Manufacturers cut costs and maximized profits in every way
They reduced labor costs by hiring women and children
In cities, where most factories were located, manufacturers hired the many newly arrived immigrants who were anxious for work.
Because manufacturers paid as little as possible, cities in which their employees lived suffered many of the problems associated with poverty, such as crime, disease, and the lack of livable housing for a rapidly expanding population
Factories were dangerous, and many families had at least one member who had been disabled at work
Insurance and worker’s compensation didn’t exist then, either
Immigrants, poverty, growth of suburbs
Poverty level in cities also rose because those who could afford it moved away from city centers
As factories sprang up, cities became dirtier and generally less healthy environments
Advances in mass transportation, such as expansion of railroad lines, streetcars, and the construction of subways, allowed the middle class to live in nicer neighborhoods, including bedroom communities in the suburbs, and commute to work.
Growing middle class was made up of managers, secretaries, bureaucrats, merchants, and the like.
As a result, immigrants and migrants made up the majority of city populations.
Starting around 1880, majority of immigrants arrived from Southern and Eastern Europe. (Prior to 1880, most immigrants to America came from Northern and Western Europe.) Prejudice against new arrivals was widespread, and many immigrants settled in ethnic neighborhoods usually in tenements. Worse off still were Black and Latino migrants. Many employers refused them any but the worst jobs.
Political Bosses
Municipal governments of the era were not like those of today, In fact, such governments were practically nonexistent. Most Americans expected churches, private charities, and ethnic communities to provide services for the poor
However, many of those services were provided instead by a group of corrupt men called political bosses
Bosses helped the poor find homes and jobs; they also helped them apply for citizenship and voting rights. They built parks, funded auxiliary police and fire departments, and constructed roads and sewage lines.
In return, they expected community members to vote as they were instructed. Occasionally, they aso required “donations” to help fund community projects.
Political bosses – whose organizations were called political machines – rendered services that communities would not otherwise have received. However, because the bosses resorted to criminal means to accomplish their goals, the cost of their services was high. The most notorious of these bosses was “Boss” Tweed of Tammany Hall in NYC
William “Boss” Tweed
Became a NYC alderman in the 1850s, he expanded his influence by gaining a seat on New York’s Board of Supervisors, which allowed him to embezzle millions of dollars through corruption in city construction projects
Tweed also became prominent leader of Tammany Hall, the political machine of New York’s Democratic Party
Tweed gave out jobs, homes, and protection to new immigrants in exchange for their votes in local elections
By 1870s, Tweed’s power became noticeable to leading journalists including The New York Times and political cartoonist Thomas Nast. Nast drew images of Tweed’s corrupt practices in Harper’s Weekly, and The New York Times published ledgers proving that Tweed embezzled millions of dollars through extortion and fraudulent construction projects.
One estimate claimed that TWeed charged the city of New York almost $180,000 ($2.5 million today) for 3 tables and 40 chairs, and that one worker earned over $130,000 ($1.8 million today) for two days’ work. Tweed was eventually found guilty and died in prison in 1878, but not before escaping from prison and getting all the way to Spain, only to be recaptured because people recognized him from Nast’s cartoons.
Labor unions
Widespread misery in cities led many to seek changes
Labor unions formed to try to counter the poor treatment of workers, unions were considered radical organizations by many, and the government was wary of them; businesses and the courts were openly hostile to them
Hired goons and, in some cases, federal troops often broke strikes
Before the Civil War, the few unions that existed were small, regional, or local and represented workers within a specific craft or industry. One of the first national labor unions was the Knights of Labor, founded in 1869 by Uriah Stephens, a Philadelphia tailor.
The Knights of Labor
Organized skilled and unskilled workers from a variety of crafts into a single union
Goals included 8 hour workday; equal pay for equal work for men and women; child labor laws, including prohibition of working under age of 14; safety and sanitary codes; federal income tax (not enacted until ratification of 16th Amendment in 1913); government ownership of railroad and telegraph lines.
Although Knights advocated arbitration over strikes, they became increasingly violent in efforts to achieve their goals
By 1880s, after series of unsuccessful strikes under leadership of Terrence Powderly, popularity of the Knights began to decline
American public began to associate unions with violence and political radicalism
Propagandists claimed that unions were subversive forces –position reinforced in public opinion by the Haymarket Square Riot
During 1886 labor demonstration in Chicago’s Haymarket Square, a bomb went off, killing police
Many blamed incident on the influence of radicals within union movement, although no one knew who set off the bomb.
1892, Carnegie’s Homestead Steel Factory strike
workers at Carnegie’s Homestead Steel factory went on strike, protesting wage cut and refusal of factory manager Henry Clay Frick to allow them to form a union
Frick locked out workers when their contract expired, hired replacement workers, and called in the Pinkerton Detective force to prevent the steel workers from protesting
Ensuing clash between the Pinkertons and the strikes led to several deaths and the retreat of the Pinkertons
Eventually, the PA state militia ended the strike, and Frick hired new workers to replace the striking workers.
1894, Pullman Palace Car Factory strike
Workers faced a wage cut and an increase in the cost of their housing
They organized a strike, and the American Railway Union (ARU) joined their strike in May, leading to over 150,000 railway workers walking off the job, shutting down rail travel in 27 states
ARU president Eugene V. Debs refused to end the strike, even after President Cleveland ordered the Army to end it and Debs was ordered to stop the strike because it was disrupting delivery of federal mail
Debs was convicted and jailed for refusing to follow a court order.
While in jail, DEbs is said to have read Karl Marx’s Communist Manifesto. When released from jail, he became active in the socialist movement, and eventually became the leader of the American Socialist Party
Later unions, problems with unions
Many early unions did indeed subscribe to utopian and/or socialist philosophies
Later on, the American Federation of Labor, led by Samuel Gompers, avoided those larger political questions, concentrating instead on such “bread and butter” issues as higher wages and shorter workdays, an approach that proved successful
Gompers also realized that his union could gain more power if it excluded unskilled workers; the AFL was formed as a confederation of trade unions (unions made up exclusively of workers within a single trade)
History of early unions is marred by the fact that most refused to accept immigrants, Black people, and women among their memberships.
Settlement houses, middle class charity
Charitable middle-class organizations, usually run by women, also made efforts at urban reform
These groups lobbied local governments for building-safe codes, better sanitation, and public schools
Frustrated by government’s slow pace, members also founded and lived in settlement houses in poor neighborhoods, became community centers, providing schooling, childcare, and cultural activities.
In Chicago, for example, Jane Addams founded Hull House to provide English lessons for immigrants, day care for children of working mothers, childcare classes for parents, and playgrounds for children
Addams also campaigned for increased government services in slums, awarded Nobel Peace Prize for her work in 1931
Middle class, more leisure activities
While the poor suffered, life improved for both the wealthy and the middle class
Increased production and wealth meant greater access to luxuries and more leisure time
Sports, high theater, vaudeville (variety acts), and later, movies became popular diversions
Also during this period that large segments of the public began to read popular novels and newspapers
Growth of the newspaper industry was largely the responsibility of Joseph Pulitzer and William Randolph Hearst, both of whom understood the commercial value of bold, screaming headlines and lurid tales of scandal
New style of sensational reporting became known as yellow journalism.
Jim Crow LAws and Other Developments in the South
Most advances made during the machine age affected primarily northern cities
In the South, agriculture continued as the main form of labor
The industrialization programs of Reconstruction did produce some results, however. Textile mills sprang up around the South, reducing cotton farmers’ reliance on the North. Tobacco processing plants also employed some workers. Still, vast majority of Southerners remained farmers.
Postwar economics forced many farmers to sell their land, which wealthy landowners brought and consolidated into larger farms
Sharecropping, landless farmers
LAndless farmers, both Black and white, were forced into sharecropping
Method by which they rented land was called the crop lien system; it was designed ot keep the poor in constant debt
Because these farmers had no cash, they borrowed what they needed to buy seed and tools, promising a portion of their crop as collateral
Huge interest rates on their loans and unscrupulous landlords pretty much guaranteed that these farmers would never overcome their debt, forcing them to borrow further and promise their next crop as collateral.
In this way, landlords kept the poor, both black and white, and in a state of virtual slavery
Loss of rights/protections for black people
The advent of Jim Crow laws made matters worse for Black people
As the federal government exerted less influence over southern states, towns and cities passed numerous discriminatory laws
The Supreme Court assisted the state by ruling the the 14th Amendment did not protect Black people from discrimination by privately owned businesses and that Black people would have to seek equal protection from the states, not from the federal government
In 1883, the Court also reversed the Civil Rights Act of 1875 (which said that businesses and public facilities couldn’t be segregated), thus opening the door to legal segregation
In 1896, the Supreme Court ruled in Plessy v. Ferguson that the role of federal government was not to maintain social equality, “separate but equal” facilities for the different races were legal. Court set back the civil rights gains made during Reconstruction.
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Unit 429
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Unit 4 pt. 226
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Unit 629
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Unit 6 Pt. 228
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Forever Dates Memorize20
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Units 1-2 Princeton Review30
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Units 1-2 Princeton Review Pt. 222
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Unit 3 Princeton Review30
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Unit 3 Princeton Review Pt. 225
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Unit 4 Princeton Review33
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Unit 4 Princeton Review Pt. 229
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Unit 4 Princeton Review Pt. 332
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Unit 4 Princeton Review Pt. 420
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Unit 5 Princeton Review30
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Unit 5 Princeton Review Pt. 230
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Unit 5 Princeton Review Pt. 325
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Unit 7 Princeton Review31
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Unit 7 Princeton Review Pt. 233
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Unit 7 Princeton Review Pt. 330
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Unit 8 Princeton Review31
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Unit 8 Princeton Review Pt. 230
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Unit 8 Princetown Review Pt. 321
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Unit 8 Princeton Review Pt. 422
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Unit 6 Princeton Review31
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Unit 6 Princeton Review PT. 231
