Rise of Industry

I. Foundations of Economic Growth

A. Abundance of Natural Resources

1. Fertile soil

2. Swift streams and rivers

3. Large quantities of timer

4. Rich deposits of coal, iron ore, copper, and oil

B. Free Enterprise System

1. Capitalist system

a. Wealth is privately owned and invested

b. Producers who are effective stay in business

2. American culture stressed individualism, thrift and hard work

3. Belief in efforts rewarded with success

C. Contribution of Government

1. Laissez-faire (hands-off) policy

2. Government policies

3. Protective tariffs (helped protected American manufactures from competitions)

4. System of patents encouraged new inventions

a. Protects ideas from being stolen

II. Emergence of Modern Industrial Economy

A. Expansion of the Railroads

1. First transcontinental railroad

a. Links east and west

b. Completed in 1869

2. Railroads increased 5 times in 25 years

3. Connected raw materials to factories

4. Connected factories to consumers

5. Stimulated iron, steel, and coal industries.

6. Promoted settlement of the frontier

a. Brought settlers to the Great Plains

b. Promoted immigration

B. Growth of Population and a National Market

1. Between 1860 and 1900 population doubled

2. Immigration increased population

3. Mail order catalogues reach across the country

4. Department stores which offer any and all things are important

C. Causes

1. Technological Innovation

a. Inventions like the telephone, electricity, light bulb

b. Streetcars and subways

2. Capital Investments and productivity

a. More money to invest

b. Reduce risk of individual investment with stockholders

3. New forms of Business Organization

a. Corporations form

b. Stockholders

4. Population changes

a. Freed slaves and immigrants are cheap labor

b. Population shift to the city

5. Contacts with other societies

a. Global economy emerges

b. Sending goods to other places

c. Getting resources from other countries

6. Natural resources

a. Imperialism leads to cheap natural resources

b. More resources available

7. Government policy

a. Very few regulations

b. Government favoring business

c. Laissez-faire attitude

D. Effects

1. Changes in Standards of Living

a. Raised the standard of living

2. Greater Opportunities

a. Career choices increased

3. Beliefs, Arts, and Culture

a. Art styles

b. Fashions

c. Rise of Socialism and Communism

4. Family

a. Extended families change to smaller families

5. Relationships with Other Societies

a. Required raw materials need to be found elsewhere

b. Greater competition

c. Imperialism spurred

6. Organized labor and Government regulations

III. Big Business and the Government

A. Great Business Leaders

1. Argument overall good or bad

a. Gave to society

b. Took advantage

c. Robber-barons

2. Andrew Carnegie

a. Immigrant

b. Steel industry

c. No unions and low wages

d. Gave money to education, culture, medicine

3. John D. Rockefeller

a. Standard Oil Company

b. Monopoly on oil

c. Forced railroad and shipping to give him low rates

d. Gave money to education and science

B. Government intervenes

1. Monopolies growing and making business difficult

a. Monopoly is when one company controls most or all of the business of a particular industry

2. Government Favored Business Interests over workers unions

a. Money given to government

b. Fear of strikes

c. Public opinion not for unions.

3. Legislation

a. Interstate Commerce Act 1887: made rate control illegal for railroads, sets up Interstate Commerce Commission

b. Sherman Anti-Trust Act 1890: prevent growth of monopolies, illegal for actions by companies which take competition away

c. Wagner Act: FDR passed to guaranteed workers the right to unions and collective bargaining

d. Taft-Hartely Act: 1947 strikes can hurt the economy so government can stop a strike for a “cooling off period”

4. Government Actions:

a. Department of Labor: 1913, to study workers problems and propose solutions

C. Workers Problems

1. Poor Working Conditions

a. Hazardous

b. Few safeguards

c. 1,000s killed or injured each year

2. Low Wages

a. Hired chap labor

b. Women and children very low paid

3. Long Hours

a. 6 day work week

b. 10 to 14 hours a day

4. Lack of Security

a. Could be fired at any time

b. No unemployment

c. No health insurance

d. No pension

e. No paid sick or holidays

5. Boring Repetitive Tasks

a. Human machine

b. Less skilled labor

c. More repetitive

d. Boring

6. Examples

a. Triangle Shirtwaist Factory Fire in NY: killed 146 workers due to doors being locked from inside

7. To combat problems: Labor Unions are born

D. Birth of Labor Unions

1. Union: a group of workers organized to achieve common goals

2. Strike: walk off the job

3. Methods of Management against labor

a. Lockouts: close the factory

b. Strike-breakers: temporary workers (scabs)

c. Blacklisting: fired union members names sent to other employers to not hire

d. Yellow dog Contract: forces workers to sign agreements to not join a union

e. Company Union: management controlled union

f. Injunctions: court orders prohibiting strikes

4. Methods of Unions

a. Strikes: refuse to work

b. Collective bargaining: union represents workers in negotiations

c. Closed shop: all employees must be union members

d. Boycott: public does not buy goods from a company

e. Demanded government take action:

5. Early Labor Unions

a. Knights of Labor: 1869, one union of skilled and unskilled labor, 8 hour work day, higher wages, safety codes, limit immigration

b. American Federation of Labor (AFL): 1881 Samuel Gompers, unite with common economic interests, small unions like carpenters, shoemakers into one union, goals included 8 hour work day, better conditions, closed shops

c.

IV.