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Chapter 19

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Chapter 19

  1. 1. Chapter 19: The New Industrial Order, 1870-1914 Experience History DAVIDSON • GIENAPP • HEYRMAN • LYTLE • STOFF © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  2. 2. 2 Preview  “What made America in the 1880s so different from just a few decades earlier was not the speed and comfort of travel or the wonders of new technology. The true marvel was the emerging industrial order that underlay those technologies and made them possible. …Its growth in scale, scope, and complexity…was at first slow and required innovations in many different areas of society.” © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  3. 3. 3 The Highlights      The Development of Industrial Systems Railroads: America’s First Big Business The Growth of Big Business The Workers’ World The Systems of Labor © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  4. 4. 4 The Development of Industrial Systems  Natural Resources and Industrial Technology – – –  Bessemer process Petroleum industry Environmental costs Systematic Invention – Edison’s contribution – The spread of an electrical power system © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  5. 5. 5 Steel Production, 1880 and 1914 © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  6. 6. 6 © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  7. 7. 7  Transportation and Communication – The problem of scale – Telegraph: timely information could be received nationwide – Telephone: New Haven, Connecticut, opened the first telephone exchange  Finance Capital – Sources of capital: savings of firms and later savings and investment of individuals – Growth of a complex network of financial institutions © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  8. 8. 8  The Corporation – Advantages of the corporation: raise large sums of money, outlive its owners, limited liability, separated owners from day-to-day management – By the turn of the century, corporations were making two-thirds of all manufactured products in the U.S.  An International Pool of Labor – – – Global labor network Migration chains Domestic sources © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  9. 9. 9 Occupational Distribution, 1880 and 1920 © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  10. 10. 10 Railroads: America’s First Big Business  A Managerial Revolution – Pioneering trunk lines – The new managers: beneath owners but with wide authority over operations © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  11. 11. 11  Competition and Consolidation – Railroads saddled with enormous fixed costs: equipment, payroll, high debts – Rate wars – Pooling: informal agreements among competing companies to act together  The Challenge of Finance – New ways of raising money – Investment bankers advised companies about their business affairs © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  12. 12. 12 Map: Railroads, 1870-1890 © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  13. 13. 13 The Growth of Big Business  Strategies of Growth – – –  Salt makers drew together in the nation’s first pool Horizontal growth: joining loosely together with rivals Vertical integration: integrated several different activities inside one company Carnegie Integrates Steel – 1875: Carnegie opens first mill in midst of a severe depression – Expanded horizontally, purchasing rival steel mills and constructing new ones © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  14. 14. 14 © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  15. 15. 15  Rockefeller and the Great Standard Oil Trust – Rockefeller’s methods of expansion – The trust: stockholders of corporation surrendered their shares “in trust”  The Mergers of J. Pierpont Morgan – The holding company – The merger movement  Corporate Defenders – The gospel of wealth – Social Darwinism © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  16. 16. 16  Corporate Critics – Socialist Labor party – Sherman Antitrust Act – United States v. E. C. Knight Co.  The Costs of Doing Business – The boom-and-bust cycle – Three severe depressions rocked the economy in the last third of the nineteenth century © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  17. 17. 17 “Andrew Carnegie invoked the gospel of wealth to justify his millions, but a group of radical critics looked on his libraries and foundations as desperate attempts to buy peace of mind.” © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  18. 18. 18 Boom and Bust Business Cycle, 1865-1900 © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  19. 19. 19 The Workers’ World  Industrial Work – – – Pattern of industrial work Taylorism: time-and-motion studies Worker citizens: expected enough money to support and educate, as well as enough time to stay abreast of current affairs © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  20. 20. 20  Children, Women, and African Americans – On average, children worked 60 hours a week – Even more than women, African American men faced discrimination in the workplace  The American Dream of Success – Rising real wages – Social mobility © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  21. 21. 21 © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  22. 22. 22 The Systems of Labor  Early Unions – National Labor Union – NLU wilted during the depression of 1873  The Knights of Labor – Terence Powderly – Looked to abolish the wage system and replace with a cooperative economy © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  23. 23. 23  The American Federation of Labor – Samuel Gompers – Failure of organized labor  The Limits of Industrial Systems – – – – – Spontaneous protests Molly Maguires Great Railroad Strike Laundresses strike Haymarket Square riot © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.
  24. 24. 24  Management Strikes – Pullman strike (1894) – Management weapons: “yellow dog” contracts, lockouts “In a matter of only 30 or 40 years, the new industrial order transformed the landscape of America. It left its mark elsewhere in the world, too.” © 2011 The McGraw-Hill Companies, Inc. All Rights Reserved.

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