A Giant Takes the World Stage

A Giant Takes the World
Stage
Cockefair Chair Lecture
The Rise of American Industrialism
UMKC 10/28/14
William K. Black
Associate Professor of Economics and Law
University of Missouri – Kansas City

Theory of Development
Rule of Law & Institutions
Infrastructure
Innovation
Human capital
Natural resources/energy
Financial capital
Collectively, they produce Industrialization

Organization of our Talks
1. Emphasis on education and America’s
overall economy up to 1914
2. The rise of the U.S. automobile
industry to dominance
3. U.S. industries become dominant

Institution Building
“The rapid spread of public schooling across
the continent during the 19th century is one
of the most dramatic examples of institution-
building in American history.”

Educational Paradoxes
“During most of the 19th century, the
United States was overwhelmingly rural
and nonindustrial. The apparatus of state
control was extremely weak in most
communities. Enrollments were generally
higher in rural than in urban places, and
high enrollments generally preceded
industrialization.”

Capitalist Education?
“Scholars have looked for-and found-
harbingers of corporate capitalism and a
powerful state apparatus, especially in the
urban-industrial Northeast and in urban
educational systems.”

Education for Profit?
“Several studies of Massachusetts, in
particular, have argued that bureaucratic
urban education gave structural support
to industrial capitalism (Field 1976) and
that it was promoted largely by capitalist
elites and their professional allies, who
profited from the new economic and
educational arrangements (Katz 1968).”

19th
Century Changes
“The late 19th century was a period of
growing governmental influence and
consolidation of economic power. The
pace of corporate mergers increased
markedly about 1900. Huge new groups
of immigrants were attracted to serve as
laborers.”

Corporate Capitalism Evolves
“A new kind of corporate capitalism
became dominant-one foreshadowed in
mid-19th-century Massachusetts: urban,
organized, and adept at expanding the
state to accomplish its purposes in such
domains as education….”

Nonindustrial & Rural
“The United States was overwhelmingly
rural and nonindustrial until late in the
19th century. In 1860, only about 20% of
Americans lived in communities with a
population over 2,500. Even by 1900,
only 40% lived in such places.”

It’s Not all Economics
“[T]he spread of schooling in the rural
North and West can best be understood
as a social movement implementing a
commonly held ideology of nation-
building. It combined the outlook and
interests of small entrepreneurs in a world
market, evangelical Protestantism, and an
individualistic conception of the polity.”

Educated Before Industrial
“Educational enrollments were high very
early. [E]nrollment was already high in the
settled Northeast before the ‘common
school revival’ of the 1840s - averaging
over 70% of whites aged 5-19 - and that
the major achievement of the mid-century
movement was the extension of public
education to the western states (and to a
much lesser extent, to the South)….”

Except in the South
“[B]y 1870, 58% of the children in the
average state were enrolled in school.
When the southern and border states are
excluded, the figure rises to 76% and
shows only modest further increases [up
to 1930].”

Compulsory Attendance
“State control was extremely weak. [O]nly
6% of the states had a compulsory
attendance law by 1870. While this
proportion rose rapidly (to 49% by 1890
and to 100% by 1920), most of the rise
occurred after enrollment was almost
universal in the northern and western
states…. In 1890, the median size of
state departments of education was only
two, including the superintendent.”

High Rural Education
“[F]rom ages 5-14 children of northern
farmers had school enrollment rates
almost identical with those of nonfarmers'
children but that for older children rural
rates were considerably higher (58%
compared with 38%, for those aged 15-
19).”

Big but Peripheral
“Mid-19th-century America was largely a
nation of small entrepreneurs, of small
units such as family farms competing in
an expanding world market. As late as
1900, about 42% of the population still
lived on farms. Until the development of
corporate capitalism, most of America
had been at the periphery of a world
capitalistic system….”

An Ideology that Worked
“This 19th-century American economy
embodied a deeply rooted culture and
economic ideology glorifying and
rewarding quintessentially capitalistic
perspectives: property, rational
investment, technology, free labor, and
immense open markets (Foner 1970).”

Victorian Values
“Along with these economic tenets went
complementary Victorian values of thrift in
time and money, sobriety, temperance,
competition, and order (Howe 1976). This
class culture stressed production for long-
distance markets, not "traditional"
production for subsistence. [I]t drew on
long-standing religious values and a
congruent political ideology.”

A Concept of the Nation
“These economic and cultural values were
also embedded in a distinctive conception
of nation-building. The polity of free agrarian
capitalism was not to be consummated in a
strong and bureaucratic state; rather, it was
to be located in individuals and in the
exchange relations of a free society. One
main concern, as with other early forms of
capitalism, was to limit the state.”

A Pure, Inclusive Polity
“The polity was to be created in the hearts
and minds of individuals, in the purified
citizen-members of a redeemer nation.
The concern of these nation-builders was
not so much to control labor as to include
everyone in their definition of the polity.
Saved individuals, freed from the chains
of sin and tradition and ignorance and
aristocracy, were the carriers of political
authority and meaning and responsibility.”

Martin Luther & Literacy
“This conception of the republican polity
was grafted onto a tradition of Protestant
concern for the education of the individual
that stretched back to the time of Martin
Luther (literacy had been high in small
Protestant societies such as Sweden,
Scotland, and New England long before
the American Revolution). This
discussion, however, really applies only to
the northern and western states.”

The Non-Inclusive South
“There was an important exception to this
theory of an individualistic, free, capitalistic
polity: the slave South and its subsequent
caste society. Southerners were deeply
Protestant and also distrusted a centralized
state, but the political economy of the South
was in many respects sharply different.
Plantation slavery and the caste system
stymied the kinds of inclusive and millennial
nation-building movements found in the
North.

Controlling Black Workers
“In the southern version of agrarian
capitalism, labor control was a serious
problem. Black workers were kept in a
highly subordinated political, social, and
economic position, not only under slavery
but also under the subsequent caste
system (Genovese 1971).”

Southern Schools
“Southern and border states had radically
lower rates of enrollment and expenditures
and shorter school terms. On the eve of the
Civil War, the South provided only 10.6
days of public school per white child as
compared with 63.5 in New England and
49.9 in the north central States. Only slowly
did the South begin to catch up with the
North in the 20th century.”

The Critical Role of Farming
“One critical factor to understand in this
whole process is the role of the American
farmer, an important carrier of capitalistic
culture, involved in rational calculations in
a world market, and eager to maintain
free action in a free society.”

Education as Freedom
“A political economy or moral polity based
upon free individuals - freed both from
traditional forms of community and from an
old-world statism - requires great effort and
constant vigilance: to educate these
individuals (freedom from ignorance), to
reform their souls (freedom from sin), to save
them from political subordination (freedom
from aristocracy), and to save them from
sloth (freedom from old-world customs).”

Associations & Institutions
“The major educational agents of this
individualistic political culture of
capitalism-rational and universalistic in
premises but almost stateless in
structure-were actors whose authority
was more moral than official. They
combined in associations that look to
20th-century eyes like social move-
ments-religious and other voluntary
groups rather than organizations clothed
with the authority of a bureaucratic state.”

Creating the Common School
“[I]n this conception of the polity the
‘nation’ is really a state of mind more than
a powerful apparatus. Thus, it was natural
for religious leaders and missionaries,
local booster elites, frontier politicians,
and other scattered groups to join in a
common social movement to create the
common school….”

Coalition of Groups
“What held such individuals together, in this
19th-century conception of the polity, was not
the coercive or normative power of the state
but their common consciousness of the laws
of God and the demands of rational human
order. These groups acted not simply to
protect the status of their own children but to
build a millennial society for all children. Their
modes of thought and action were at once
political, economic, and religious.”

Ethnocentric yet Inclusive
“That these school promoters were often
in fact ethnocentric and served their own
religious, political, and economic interests
is quite clear; but they were doing so in a
very broad way by constructing an
enlarged national society.”

Source: Primary/Sec. Education
“Public Education as Nation-Building in
America: Enrollments and Bureaucratization in
the American States, 1870-1930.” John W.
Meyer, David Tyack, Joane Nagel and Audri
Gordon. American Journal of Sociology, Vol.
85, No. 3 (Nov., 1979), pp. 591-613.
University of Chicago Press
http://www.jstor.org/stable/2778585

Land Grant Colleges
“One of the biggest shifts was the federal
government becoming directly involved in
higher education, which developed during
the Civil War when southern congressmen
who opposed the legislation were absent.
The Morrill Act of 1862 set in motion an
elaborate program whereby states received
profits from the sale of an allotted portion of
western lands if used to establish programs
of agricultural, mechanical, and military
sciences, along with liberal arts.”

Agriculture Experiment Stations
“A key component of the land-grant
system is the agricultural experiment
station program created by the Hatch Act
of 1887. The Hatch Act authorized direct
payment of federal grant funds to each
state to establish an agricultural
experiment station in connection with the
land-grant institution there.”

Cooperative Extension Service
“To disseminate information gleaned from
the experiment stations’ research, the
Smith-Lever Act of 1914 created a
Cooperative Extension Service
associated with each land-grant
institution.”

Rationale
“WHY: Passage of the First Morrill Act
(1862) reflected a growing demand for
agricultural and technical education in the
United States. [H]igher education was still
widely unavailable to many agricultural and
industrial workers. The Morrill Act was
intended to provide a broad segment of the
population with a practical education that
had direct relevance to their daily lives.”

Embraced in Midwest
“Upon passage of the federal land-grant law
in 1862, Iowa was the first state legislature
to accept the provisions of the Morrill Act,
on September 11, 1862. Iowa subsequently
designated the State Agricultural College
(now Iowa State University) as the land
grant college on March 29, 1864. The first
land-grant institution actually created under
the Act was Kansas State University, which
was established on February 16, 1863, and
opened on September 2, 1863.”

Other Midwest Schools
The University of MO System
Michigan State University
University of Wisconsin-Madison
University of Minnesota
The Ohio State University
University of Nebraska System
University of Illinois (Urbana)
Purdue

New States Enter Union
24. Missouri Aug. 10, 1821 1735
25. Arkansas June 15, 1836 1686
26. Michigan Jan. 26, 1837 1668
27. Florida Mar. 3, 1845 1565
28. Texas Dec. 29, 1845 1682
29. Iowa Dec. 28, 1846 1788
30. Wisconsin May 29, 1848 1766
31. California Sept. 9, 1850 1769
32. Minnesota May 11, 1858 1805
33. Oregon Feb. 14, 1859 1811
34. Kansas Jan. 29, 1861 1727
35. West Virginia June 20, 1863 1727
36. Nevada Oct. 31, 1864 1849
37. Nebraska Mar. 1, 1867 1823
38. Colorado Aug. 1, 1876 1858
39. North Dakota Nov. 2, 1889 1812
40. South Dakota Nov. 2, 1889 1859
41. Montana Nov. 8, 1889 1809
42. Washington Nov. 11, 1889 1811
43. Idaho July 3, 1890 1842
44. Wyoming July 10, 1890 1834
45. Utah Jan. 4, 1896 1847
46. Oklahoma Nov. 16, 1907 1889
47. New Mexico Jan. 6, 1912 1610
48. Arizona Feb. 14, 1912 1776
49. Alaska Jan. 3, 1959 1784
50. Hawaii Aug. 21, 1959 1820

Demographics
“Municipalities” > 3,000 residents
1910: U.S.: 35.7 M (Munic) 56.2 M (Non)
MO: 1.2 M (Munic) 2 M (Non)
KS: 0.34 M (Munic) 1.35 M (Non)
KCMO: 0.248 M
St. Louis: 0.688 M
KCKS: 0.082 M
Wichita: 0.052 M

U.S. Population (Millions)
1860 31.4
1870 38.6
1880 50.2
1890 63.0
1900 76.2
1910 92.2
1920 106.0

U.S. & W. Europe Compared
1820 1870 1913 1950
U.S. GDP($M) 12.5 98.4 517 1456
U.S. Pop. (M) 9.6 38.6 97.2 151
W. Europe GDP 160 367 902 1396
W. Europe Pop. 133 188 261 305
UK GDP 36.2 100 225 348
UK Pop. 21 31.6 45.4 50.2
France GDP 35.5 72.1 144 220
France Pop. 30.3 36.9 39.5 41.8

Telephone: 1870s-1910s
1876: Alexander Graham Bell invents it
1881: First telephone Yellow Pages
1887: First coin-operated telephone
1891: First dial phone; 512,000 U.S. phones
1915: First "official" coast-to-coast call from
Alexander Graham Bell in New York City to
Thomas Watson in San Francisco

UK Finance Dominance
Sterling = world currency
UK invested 40% of trade surplus abroad
in 19th
Century
1914: 1/3 of UK wealth invested abroad,
primarily in U.S. & Latin America: Brits
held >50% of world’s foreign investments
1900s: UK running trade deficits
UK dominated high tech

Germany & U.S. Rivals
UK share of world trade falling
US had long exported primarily food &
commodities, but moved to trade surplus
in 1896
By eve of WW I U.S. had little debt in
foreign currencies & about to become a
net creditor
1913: 1st
time U.S.’ largest export was
finished goods

Rivals Gained on UK: 1913
Share of international trade:
UK: 15%, Germany: 13%, U.S. 11%
U.S. trade growing the most with Latin
America and Asia
Wilson cut U.S. tariffs to spur trade

1913: Transformation
“In the mid-1890s, America’s exports of
manufactures surged. Manufactured goods
jumped from 20 percent of U.S. exports in
1890 to 35 percent by 1900 and nearly 50
percent by 1913. The US suddenly and
rapidly shifted from being a large net importer
to a net exporter of manufactured goods
between 1890 and 1913. In just two decades,
the US reversed a century-old trade pattern
based on its specialization in agricultural
products.”

Natural Resources?
“Lipsey’s (1963, p. 59) observ[ed] that
‘the composition of manufactured exports
has been changing ceaselessly since
1879 in a fairly consistent direction —
away from products of animal or
vegetable origin and toward those of
mineral origin.’”

American Commercial Invasion
“The explosion of U.S. manufactured
exports in the mid-1890s, dubbed by
European observers as the “American
Commercial Invasion,” followed several
decades in which U.S. trade had been
relatively stagnant and its commodity
composition relatively stable. The volume
of U.S. exports crept up only 30 percent in
the fifteen years between 1880 and 1895.”

Cotton & Foodstuffs
“Exports continued to be dominated by
raw cotton and agricultural products,
particularly meat and dairy products and
grains, while manufactured goods
comprised a consistent 20 percent
of total exports.”

The Surge
“The value of manufactured exports rose
from $205 million in 1895 to $485 million
in 1900, increasing its share of total
exports from 25.8% to 35.3%. The
volume of manufactured exports rose an
astonishing 90 percent. Between 1908
and 1913, manufactured exports surged
again, rising in volume by 77% in those
five years and bringing the manufactured
share of total exports to nearly 50%.”

U.S. v UK Productivity
“In the 1880s, a decade in which there was
essentially no change in the commodity
composition of U.S. trade, capital per
worker in U.S. manufacturing rose rapidly
compared to the United Kingdom. During
the 1890s, a period in which U.S. exports
of manufactures expanded rapidly, growth
in capital per worker in U.S. manufacturing
increased relative to Britain but at a much
slower pace.”

Notable US Recessions (NBER)
October 1873 – March 1879: longest U.S.
Recession. Peak-to-trough GDP loss 65%
March 1882 – May 1885: GDP drops 38%
Between April 1865 (Appomattox) and
December 1914 (WWI) there were 49
years and 8 months (a total of 596
months). The economy was in recession
in 372 of these months – 62% of the time.

Frequent & Severe Recessions
The longest continuous period of
expansion in this period was January
1871 – September 1873: 32 months. The
longest continuous recession was
October 1873 – March 1879: 66 months,
over twice as long as the longest
continuous expansion.

Federal Reserve Created
1913: President Wilson
Regional Fed banks to provide liquidity –
Agriculture (only MO has two Fed banks)
Genesis was the banking panic of 1907
As JPMorgan tells the story:
https://www.jpmorgan.com/pages/jpmorgan/ab

It takes a “hero”
“In October 1907, J. Pierpont Morgan
summoned New York City’s major
financiers to his library on East 36th
Street to find a way to restore liquidity to
desperate markets.
The situation was grim. Markets had been
wildly unsettled for months and in March,
despite record corporate earnings, the
American stock market crashed.”

Global Crisis
“Prices crumbled, brokerage houses
closed, interest rates soared. There were
runs on U.S. banks with no central bank to
intervene since the Federal Reserve
System was not yet formed.
The crisis was global. The Bank of England
sent $3 million in gold to Alexandria to stop
the Egyptian Stock Exchange’s slide, only
to find itself short of cash.”

Systemic Crisis
“Banks throughout Japan failed. French
investors sold American stocks to buy
gold to send home, badly depleting U.S.
reserves.
“[Morgan] also persuaded the team of
financiers to supply liquidity to the
markets, including underwriting $30
million worth of New York City bonds to
keep the city from defaulting.”

And on the seventh day…
“With no central bank, J.P. Morgan & Co.
was the only institution with the
experience and authority to act.
J. Pierpont Morgan helped to save
several trust companies and a leading
brokerage house from insolvency, bailed
out New York City and rescued the New
York Stock Exchange.”

Reality
Morgan accomplished these things with
federal money – but private control of
which of his rivals would fail or be saved
Absent the federal funds Morgan would
have failed (more likely, he wouldn’t have
tried) to “save” Wall Street and NYC

20 Top Metro Areas
“For 80 years, from 1860 to 1930 inclusive,
New Orleans was the only southern city in
the top 20. Cincinnati was the first major
city of the Midwest, making the top 20 list
in 1820. By 1890 there were 9 midwestern
cities in the top 20. In 1850, 5 of the top 20
cities were in New York State: New York
City (1), Albany (7), Buffalo (10), Rochester
(16), and Syracuse (18).”
http://www.peakbagger.com/pbgeog/histmetrop

Shrinking Metro Areas
Metro Area High Rank Year High Rank
Louisville 1840 12
Rochester 1840 13
Buffalo 1850 10
Cincinnati 1860 5
St. Louis 1870 4
Minneapolis 1890 9
Pittsburgh 1910 6
Cleveland 1920 7
Detroit 1930 4
Milwaukee 1930 14
Chicago 1950 2

Life Expectancy Surges
“The steepest increase in life expectancy
occurred from the late 1800s to the mid-1900s.
Until the early 20th
century, the most common
age of death was in infancy.
In 1854, John Snow traced a cholera outbreak
in London to a water pump next to a leaky
sewer, and some of the big public works
projects of the late 1900s involved separating
clean water from dirty.”

Water
Clean water may be the biggest lifesaver
in history. Some historians attribute one-
half of the overall reduction in mortality,
two-thirds of the reduction in child mortality,
and three-fourths of the reduction in infant
mortality to clean water.
http://www.slate.com/articles/health_and_s
cience/science_of_longevity/2013/09/life_e
xpectancy_history_public_health_and_me
dical_advances_that_lead_to.html

Soap: Germs
Americans began to wash with soap
Increased wealth led to improved housing
and reduced tuberculosis: the biggest killer in
the cities
Rural US life expectancy was 10 years > city
Average height of Americans fell, rural taller

Nutrition
“Diseases of malnutrition were common
among the urban poor: scurvy (vitamin C
deficiency), rickets (vitamin D deficiency),
and pellagra (a niacin deficiency).
Improved nutrition at the end of the 1800s
made people taller, healthier, and longer
lived; fortified foods reduced the incidence
of vitamin-deficiency disorders.”

Contamination
“Refrigeration, public health drives for
pure and pasteurized milk, and an
understanding of germ theory helped
people keep their food safe. The Pure
Food and Drug Act of 1906 made it a
crime to sell adulterated food, introduced
labeling laws, and led to government
meat inspection and the creation of the
Food and Drug Administration.”

U.S. Life Expectancy
Life expectancy in
the USA, 1900-98
men and
women
Year M F
1900 46.3 48.3
1901 47.6 50.6
1902 49.8 53.4
1903 49.1 52.0
1904 46.2 49.1
1905 47.3 50.2
1906 46.9 50.8
1907 45.6 49.9
1908 49.5 52.8
1909 50.5 53.8
1910 48.4 51.8
1911 50.9 54.4
1912 51.5 55.9
1913 50.3 55.0
1914 52.0 56.8
1915 52.5 56.8
1916 49.6 54.3
1917 48.4 54.0
1918 36.6 42.2
1919 53.5 56.0

Erie Canal
Opened in 1825; reduced freight cost
from $100/ton to $10/ton. Improved canal
reduced cost to $3/ton: 97% reduction.
Turn NYC into an Atlantic port that also
served the Great Lakes.
U.S. soon had lowest freight costs in the
world. Grains were high weight relatively
low profit: canal made them profitable.
Dominated NY freight even in 1880.

Geography
Hudson River: navigable to NYC
Mohawk Valley & Mohawk River – a route
through the Appalachian Mountains
Linked 1st to Lake Erie rather than Lake
Ontario – navigable to Great Lakes
Navigable to Lake Superior w/ Soo locks
St. Lawrence Seaway only opened in 1959:
Welland Canal locks: 139.5 ft (Ontario/Erie)
(v. 85 feet for total Panama Canal).

Soo Locks: Link Lake Superior
By 1890, freight volumes exceeded Suez
By 1895, freight volumes 2X Suez canal
60% of those goods could not have been
moved profitably via railroad
From 1870-1898 U.S. railroad freight costs
fell by two-thirds
1870-1890: population of Buffalo, Chicago,
Cleveland & Detroit grew >200%

A Rapid Response to Rapids
“The St. Mary’s River is the only water
connection between Lake Superior and
the other Great Lakes. Near the upper
end of the river the water drops 21 feet
over hard sandstone in a short ¾ mile
long stretch. This rapids, or “sault” to use
the original old French term, made it
impossible for trade vessels to pass.”
http://www.lre.usace.army.mil/Missions/R
ecreation/SooLocksVisitorCenter/SooLock
sHistory.aspx

The Michigan Locks
• State Lock 1855 – 1888
“Built by the State of Michigan on the south
shore of the river, this project was
financed by a congressional land grant of
750,000 acres of public land to the
company that successfully built the lock to
the required specifications and within the
two year deadline.” By contrast, the Suez
canal, which required no locks, opened in
1869 after 10 years of construction
(cholera delay)

Panama Canal
Completed in 1914. Reduced voyage from
U.S. Eastern Seaboard to California by
8,000 miles (and avoided Cape Horn)
“The waters around the cape are particularly
hazardous, owing to strong winds, large
waves, strong currents and icebergs. These
dangers have made Cape Horn notorious as
a sailors' graveyard.”
The French failed twice to create the
Panama Canal: >25,000 workers died

Detroit Emerges Early
By 1890, 40M tons of freight passed Detroit
annually
Port of NY estimated to have 70M tons of
freight annually (and those figure overlap.)
Source: The Erie Canal and Transportation

Riverine & Lake Commerce
WATERBORNE COMMERCE OF THE
UNITED STATES-SUMMARY OF
CARGO TONNAGE: 1924 TO 1945
By 1924, canal, river, and Great Lakes
commerce carried about 80% of total
waterborne U.S. commerce: roughly 300
million tons of cargo

Railroad Everywhere: 1900
“Railroads were one of the nation’s
largest businesses. They employed
nearly 10 percent of all industrial
workers.”
http://amhistory.si.edu/onthemove/themes
/story_48_1.html
“May 10, 1869 the Union and Central
Pacific Railroads joined their rails at
Promontory Summit, Utah Territory” – the
Golden Spike.

Huge Investments
By 1913, U.S. railroads had:
•2.3M freight cars
•250,000 miles of track
•95,000 locomotives
Transported 1 billion tons
http://www2.census.gov/prod2/statcomp/d
ocuments/HistoricalStatisticsoftheUnitedS
tates1789-1945.pdf

Refrigerated Trains
“Cattle dealer Gustavus Swift had problems
delivering his live merchandise to Eastern
butchers. So he took an enormous risk,
deciding he'd slaughter the cattle in Chicago
and ship only the edible parts, chilled.
Refrigeration technology was primitive, but
in 1878 Swift commissioned engineer
Andrew Chase to design a refrigerated
railroad car [that used refillable ice bins].”

Unrevolutionary Plows
“The farmers of George Washington's day
had no better tools than had the farmers
of Julius Caesar's day; in fact, early
Roman plows were superior to those in
general use in America eighteen
centuries later.”
http://inventors.about.com/od/pstartinventi
ons/a/plow.htm

Improving the Plow
“The first real inventor of a practical plow
was Charles Newbold, of Burlington
County, New Jersey, who received a
patent for a cast-iron plow on June, 1797.
However, early American farmers
mistrusted the plow. They said it
‘poisoned the soil’ and fostered the
growth of weeds.”

John Deere: Steel
“In 1837, John Deere developed and
marketed the world's first self-polishing cast
steel plow. The large plows made for
cutting the tough American prairie ground
were called ‘grasshopper plows.’ Fifty
horsepower engines could pull sixteen
plows, and harrows, and a grain drill,
performing the three operations of plowing,
harrowing, and planting at the same time
and covering fifty acres or more in a day.”

Ag Tech Timeline: 1830s
1830 - About 250-300 labor-hours required
to produce 100 bushels (5 acres) of wheat
with walking plow, brush harrow, hand
broadcast of seed, sickle, and flail
1834 - McCormick reaper patented
1834 - John Lane began to manufacture
plows faced with steel saw blades
1837 - John Deere and Leonard Andrus
began manufacturing steel plows
1837 - Practical threshing machine
patented

1840s: Ag Innovations
1841 - Practical grain drill patented
1842 - First grain elevator, Buffalo, NY
1844 - Practical mowing machine
patented
1847 - Irrigation begun in Utah
1849 - Mixed chemical fertilizers sold
commercially

Ag Innovations: 1850s
1850 - About 75-90 labor-hours required
to produce 100 bushels of corn (2-1/2
acres) with walking plow, harrow, and
hand planting
1850-70 - Expanded market demand
for agricultural products brought adoption
of improved technology and resulting
increases in farm production
1854 - Self-governing windmill perfected
1856 - 2-horse straddle-row cultivator
patented

Ag Innovations: 1860
1862-75 - Change from hand power to
horses characterized the first American
agricultural revolution
1865-75 - Gang plows and sulky plows
came into use
1868 - Steam tractors were tried out
1869 - Spring-tooth harrow or seedbed
preparation appeared

Ag Innovations: 1870s
Silos come into use
1870's - Deep-well drilling first widely
used
1874 - Glidden barbed wire patented
1874 - Availability of barbed wire
allowed fencing of rangeland, ending era
of unrestricted, open-range grazing

Ag Productivity: 1890s
1890 - 35-40 labor-hours required to
produce 100 bushels (2-1/2 acres) of corn
with 2-bottom gang plow, disk and peg-
tooth harrow, and 2-row planter
produce 100 bushels (5 acres) of wheat
with gang plow, seeder, harrow, binder,
thresher, wagons, and horses

Ag Productivity: 1930s
1930 - One farmer supplied 9.8 persons in
the United States and abroad
produce 100 bushels (2-1/2 acres) of corn
with 2-bottom gang plow, 7-foot tandem disk,
4-section harrow, and 2-row planters,
cultivators, and pickers
produce 100 bushels (5 acres) of wheat with
3-bottom gang plow, tractor, 10-foot tandem
disk, harrow, 12-foot combine, and trucks

Agricultural Productivity
“Total labor used in U.S. farmwork declined
from a high of 24.1 billion hours in 1918 to
only 4.7 billion hours in 1977. Fertilizer use
increased from 890,000 tons in 1918 to 22.1
million tons in 1977, while tractor numbers
increased from 85,000 to 4.4 million….”
http://www.kansascityfed.com/PUBLICAT/EC
ONREV/econrevarchive/1979/3-
4q79dunc.pdf

Draft Animals
“Horsedrawn reapers, grain drills, corn
shellers, and cultivators came into
general use between the Civil War and
the turn of the century. During the same
period, public policy actively supported
the generation of new farming knowledge
and its distribution to farmers.”

Mechanized Farming
“The mechanical power revolution got
underway during World War I with the
wider acceptance of gasoline-powered
tractors by farmers. But it was not until
the country began to climb out of the
Great Depression that farm economics
became favorable for a widespread surge
in mechanization that lasted into the
1950s.”

Ag Productivity Gains
“ Before the Civil War it took 61 hours of
labor to produce an acre of wheat. By
1900, it took 3 hours, 9 minutes.”
Source: Howard Zinn

Federal Ag Programs
Public investments in agricultural research:
studies find 20-60% returns
Public extension services funding: studies
find 20-100% returns
Expenditures on both have been flat since
1970
http://www.ers.usda.gov/media/921552/aib
740_002.pdf

German Invention
You will recognize still famous names
The Industrial Revolution in America:
Automobiles (Hillstrom & Hillstrom 2006)
1885: Karl & Bertha Benz & Gottlieb Daimler
(Benz’ designer’s daughter: Mercedes).
Benz’ patents: speed regulation, spark
ignition powered by battery, spark plug,
carburetor, clutch, gear shift, and water
radiator. Car was based on bike design.

U.S. Auto Industry in 1900
http://web.bryant.edu/~ehu/h364/materials/
cars/cars%20_10.htm
“40% were steam powered; 38% were
electric; and just 22% were powered by
gasoline in an internal combustion engine.”
In 1906, a Stanley Steamer set the land
speed record of 127 mph.

Olds
“Ransom Olds opened the first automobile
factory in Detroit. During the first year of
operations (1901), the company produced
425 cars. The 3-h.p., curved-dash
Oldsmobile thus became the first real
success among commercially sold U.S.
automobiles. Ransom E. Olds became the
first automobile manufacturer to gear up for
genuine volume production.”

Design: “Modern”
Model T began in 1909; perceived as
modern “motorcar” v Olds “surrey”
GM redefined “modern” in 1927

Henry Ford
Fired as Chief Engineer of the Detroit
Automobile Co. when it failed in 1901. It
produced five cars in two years!
Ford became a successful car racer
Creditors put him in charge of “Henry Ford
Co,” but left to form Ford Motor in ’03 w/
$28,000 initial cap. & $100K par stock.
1902: >50 new auto manufacturers started
1904: U.S. > France; world’s largest mfg’r

Ford: Bigger than Life
‘04: Ford drove Model B: record 91 mph
Initial key to his success was getting his
partners – the Dodge brothers – to
provide their engines
Fought 7 year patents battle – perceived
as beating the powerful
Took on the Dodges to get full ownership

Autos: From luxury to norm
“In 1900, Americans owned 8 thousand
cars, in 1920, 8 million.” [Zinn]
In 1910 they owned 0.48M cars
By 1920 they owned 1.1M trucks
www2.census.gov/prod2/statcomp/docum
ents/HistoricalStatisticsoftheUnitedStates
1789-1945.pdf

Ford & US Domination
1912: “Just 4 years after its introduction, the
Model T accounted for 3/4 of all cars on
America's roads.” By 1914: “The introduction
of the moving assembly line at Ford allowed
the company to push production past
500,000 units, while dropping the price of a
Model T to $440, and raising workers wages
to $5 per day--twice the standard industrial
wage in America.”

Ford Workers: Middle Class?
“In terms of purchasing power, the Ford
$5 day gave workers a daily wage that
was equivalent to the weekly earnings for
an industrial worker in Britain. Thus,
assuming a 6-day work week for unskilled
and semi-skilled workers, the Ford
assemblers had twice the purchasing
power of their American counterparts, 6
times the purchasing power of workers at
comparable skill levels in Britain.

WWI Cements Dominance
1916: US auto production > 1M (> 50%
Model T).
1917: “Registrations of cars and trucks in
the U.S. reached 4.8 million. The total for
the rest of the world stood at 720,000.”
The car and truck were overwhelmingly
American and we were racing away from
our rivals mired in a ruinous war.

African-American Migration
“By the end of World War II, the character of
the black population had shifted: the
majority was urban. In 1970, at the end of
the second Great Migration, African
Americans were a more urbanized
population than whites: more than 80% lived
in cities, as compared to 70% for the general
population of the United States; and 53%
remained in the South, while 40% lived in
the Northeast and North Central states and
7% in the West.”

“The Great Migration”
“Between 1910 and 1940, roughly 1.5
million African Americans left the South
for Northern cities. Between 1940 and
1950, another 1.5 million African
Americans left the South. The migration
continued at roughly the same pace over
the next twenty years. By 1970, about five
million African Americans had made the
journey.”

Pushed & Pulled
There was a “massive collapse of
Southern agricultural employment. The
principal factors contributing to this
economic disaster were great declines in
the prices of sugar, tobacco, and
especially cotton, coupled with the
negative effects of federal policies
designed to rescue Southern planters (at
the expense of the workers).”

King Cotton
“With the onset of the worldwide
depression, cotton prices fell from 18
cents a pound in 1928 to less than 6
cents a pound in 1931. Despite crashing
prices, demand was suppressed further
by continued high production that bloated
surpluses; in the face of the price
collapse, farmers harvested a record crop
in 1933.”

“New Immigration” Post-1890
“Italian immigrants to the United States from
1890 onward became a part of what is
known as “New Immigration,” which is the
third and largest wave of immigration from
Europe and consisted of Slavs, Jews, and
Italians. This “New Immigration” was a major
change from the “Old Immigration” which
consisted of Germans, Irish, British, and
Scandinavians and occurred throughout the
19th century.”

Mass Immigration
“Between 1870 and 1920 some 11 million
immigrants came to the United States. Two laws
passed by Congress in the 1920s set quotas
that restricted the numbers of Southern and
Eastern Europeans that could enter the
country. The 1924 law also barred the entry of
all Asians except for residents of the
Philippines. There were no limits set on
immigration from the Western Hemisphere.”
http://learn.uakron.edu/beyond/industrialAge.ht
m

KKK Revival
“ In Akron, the Ku Klux Klan formed in
1921. By the mid 1920s the Klan’s
membership had grown to 52,000 members
and was the largest Klan chapter in the
United States. The Klan also controlled the
Mayor’s office, the Superintendent of
Schools, the County Sheriff, the County
Prosecutor, the Clerk of Courts, 2 of the 3
County Commissioners, and 4 out of 7 of the
seats of the Akron Board of Education.”

KKK Controlled Use of Force
“Influence also extended to the Akron
Police Department and the local National
Guard.”

KKK: 1920s
4.5M members in 1924; peaked at 5M
70 Lynchings in 1919: no convictions
KKK achieved local political power in
hundreds of cities
Internal corruption discredited it; not its
policies

Birth of a Nation: 1915
D.W. Griffith’s classic film glorifying KKK
Based on Thomas Dixon: “The
Clansman”
March 21, 1915: Woodrow Wilson attends
White House screening of movie. “After
seeing the film, an enthusiastic Wilson
reportedly remarked: ‘It is like writing
history with lightning, and my only regret
is that it is all so terribly true.’"
http://www.pbs.org/wnet/jimcrow/stories_
events_birth.html

Film Triumphed in North
“Thomas Dixon reveled in its triumph.
‘The real purpose of my film,’ he
confessed gleefully, ‘was to revolutionize
Northern audiences that would transform
every man into a Southern partisan for
life.’“ KKK used film to recruit.
Griffith eventually regretted the hate, and
produced “Intolerance,” but it never
rivaled “Birth of a Nation’s” popularity

Predominately Italian
“Between 1900 and 1915, 3 million
Italians immigrated to America, which was
the largest nationality of “new
immigrants.” These immigrants, mostly
artisans and peasants, represented all
regions of Italy, but mainly came from
the mezzogiorno, Southern Italy.”

Edward C. Banfield
“The Moral Basis of a Backward Society”
(1958). Theory: “Amoral familism.”
Based on his several months of research
in Basilicata in 1955.
Banfield put the “scientific” seal on the
common prejudice against Southern
Italians. Mezzogiorno means midday and
is applied to Southern Italy because it
gets so much sun.

The Disreputable Southerners
“Between 1876 and 1930, out of the 5
million immigrants who came to the
United States, 4/5 were from the South,
representing such regions as CalabriaCalabria,
Campania, AbruzziAbruzzi, Molise, and Sicily.
The majority (2/3 of the immigrant
population) were farm laborers or
laborers, or contadini.”

1913: Record High
“1913 was the year where a record high
of Italian citizens immigrated to the United
States. Most of these emigrants came
from Northern Italy, but more came per
capita from the South. Due to the large
numbers of Italian immigrants, Italians
became a vital component of the
organized labor supply in America.”

Italian Factory & Mine Workers
“They comprised a large segment of the
following three labor forces: mining,
textiles, and clothing manufacturing. In
fact, Italians were the largest immigrant
population to work in the mines. In 1910,
20,000 Italians were employed in mills in
Massachusetts and Rhode Island.”
https://www.mtholyoke.edu/~molna22a/cl
assweb/politics/Italianhistory.html

Repatriation & Status
1900-1920: “About 50% of Italians
repatriated” from the U.S. to Italy. “Many
Italians wanted to acquire land in Italy.
Therefore, they moved to America to work
and earn money, then repatriated.”
“It was not until the 1920s that Italians
became more integrated into the
American working class.”

U.S. Pay Far > Italy
“Agricultural workers who farmed year-
round would receive a meager 16-30
cents per day in Italy. A carpenter in Italy
would receive 30 cents to $1.40 per day,
making a 6-day week’s pay $1.80 to
$8.40. In America on the other hand, a
carpenter who worked a 56-hour week
would earn $18.”

Italian Ag Crisis
“Besides the already unfortunate situation of
many Italian farmers, a 19th century
agricultural crisis in Italy led to falling grain
prices and loss of markets for fruit and wine.
Specifically a disease, phylloxera,
destroyed grape vines used to produce
wine. Therefore, the United States was
pictured as a nation with abundant land,
high wages, lower taxes, and interestingly
enough, no military draft.”

The Rouge Plant
“In 1915 Henry Ford bought 2000 acres
along the Rouge River west of Detroit,
intending to use the site only to make coke,
smelt iron, and build tractors. Over the next
dozen years, however, the company turned
the Rouge, as it became known, into the
most fully integrated car manufacturing
facility in the world.”
http://www.nps.gov/nr/travel/detroit/d38.htm

U.S. Industrial Temple
“By 1927, when Ford shifted its final
assembly line from Highland Park to the
Rouge, the complex included virtually
every element needed to produce a car:
blast furnaces, an open hearth mill, a
steel rolling mill, a glass plant, a huge
power plant and, of course, an assembly
line.”

U.S. Scale & Efficiency
“Ninety miles of railroad track and miles
more of conveyor belts connected these
facilities, and the result was mass
production of unparalleled sophistication
and self-sufficiency. ‘By the mid-1920's,’
wrote historian David L. Lewis, ‘the Rouge
was easily the greatest industrial domain
in the world’ and was ‘without parallel in
sheer mechanical efficiency.’”

Massive Multiplex
“Located a few miles south of Detroit at
the confluence of the Rouge and Detroit
Rivers, the original Rouge complex was a
mile-and-a-half wide and more than a mile
long. The multiplex of 93 buildings totaled
15,767,708 square feet of floor area
crisscrossed by 120 miles of conveyors.”
http://www.thehenryford.org/rouge/history
ofrouge.aspx

A City of Work
“At its peak in the 1930s, more than 100,000
people worked at the Rouge. To
accommodate them required a multi-station
fire department, a modern police force, a
fully staffed hospital and a maintenance
crew 5,000 strong. One new car rolled off
the line every 49 seconds. Each day,
workers smelted more than 1,500 tons of
iron and made 500 tons of glass….”

Integrated Production
“There were ore docks, steel furnaces,
coke ovens, rolling mills, glass furnaces
and plate-glass rollers. Buildings included
a tire-making plant, stamping plant,
engine casting plant, frame and assembly
plant, transmission plant, radiator plant,
tool and die plant, and, at one time, even
a paper mill.”

Infrastructure
“A massive power plant produced enough
electricity to light a city the size of nearby
Detroit. The Rouge had its own railroad
with 100 miles of track and 16
locomotives. A scheduled bus network
and 15 miles of paved roads kept
everything and everyone on the move.”

The Ford Empire
“Ford Motor Company owned 700,000
acres of forest, iron mines and limestone
quarries in northern Michigan, Minnesota
and Wisconsin. Ford mines covered
thousands of acres of coal-rich land in
Kentucky, West Virginia and
Pennsylvania. Ford even purchased and
operated a rubber plantation in Brazil.”

The Ford Fleets
“To bring all these materials to the Rouge,
Ford operated a fleet of ore freighters and
an entire regional railroad company.
Ford’s ambition was never completely
realized, but no one has ever come so
close on such a grand scale. At no time,
for example, did Ford have fewer than
6,000 suppliers serving the Rouge.”

WWI: Birds to Eagle (boats)
“Ford had even considered turning the
land into a large bird sanctuary. That
changed near the end of World War I,
when Undersecretary of the Navy
Franklin D. Roosevelt engaged Henry
Ford to build boats. In 1917, a three-story
structure, Building B, was erected on the
Rouge site to build Eagle Boats, warships
intended to hunt down German
submarines.”

Coke Ovens & Blast Furnaces
“The first coke oven battery went into
operation in October of 1919, while blast
furnaces were added in 1920 and 1922.
Iron from the furnaces was transported
directly to the foundry where it was
poured into molds to make engine blocks,
cylinder heads, intake and exhaust
manifolds, and other automotive parts.”

The World’s Largest
“The foundry covered 30 acres and was,
at its inception, the largest on earth. In
1926 steelmaking furnaces and rolling
mills were added. Eventually, the Rouge
produced virtually every Model T
component, but assembly of the Model T
remained at Highland Park.”

Tractors First
“The first land vehicles actually
assembled in the Rouge were not cars
but farm tractors. No sooner had Henry
Ford achieved low-cost transportation
with the Model T than he set his sights on
doing the same for the world’s farmers. In
1921 production of the world's first mass-
produced tractor, the Fordson, was
transferred from the original Dearborn
plant to the Rouge.”

Electrical Power
“Ford put a mammoth power plant into
operation in 1920 that furnished all the
Rouge's electricity and one-third of the
Highland Park Plant's needs as well. At
times, surplus Rouge power was even
sold to Detroit Edison Company.”

Safety Glass
“An innovative glass plant began
operation in 1923. Utilizing a continuous
process that Ford had helped develop, it
produced higher quality glass at lower
cost. In 1928 the Model A became the
first low-priced car to use laminated
safety glass. By 1930 the Ford was
making its own safety glass at the
Rouge.”

“Ore to Assembly”
“The Rouge achieved the distinction of
automotive ‘ore to assembly’ in 1927 with
the long-awaited introduction of the Model
A. Building B would be the home of
assembly operations from that time forth.”

WWII: Arsenal of Democracy
“The Rouge settled with UAW
representation before World War II broke
out. During the war the giant complex
produced jeeps, amphibious vehicles,
parts for tanks and tank engines, and
aircraft engines used in fighter planes and
medium bombers.”

Battle of the Overpass
“Ford’s obsession with ever-increasing cost
reductions through methodical efficiency
studies made life difficult for workers. On
May 26, 1937, when a group of union
organizers led by Walter Reuther attempted
to distribute union literature at the Rouge,
Ford security and a gang of hired thugs beat
them severely. It would be known as
the Battle of the Overpass and became a
pivotal event for the United Auto Workers.”

Gray but with Green Tint
The Rouge complex included “a soybean
conversion plant turned soybeans into
plastic auto parts.”
“Like [George Washington] Carver, Ford
was deeply interested in the regenerative
properties of soil and the potential of
alternative crops such as peanuts and
soybeans to produce plastics, paint, fuel
and other products.”

Ethanol & Plastic Car Bodies
“Ford had long believed that the world
would eventually need a substitute for
gasoline, and supported the production of
ethanol (or grain alcohol) as an
alternative fuel. In 1942, he would
showcase a car with a lightweight plastic
body made from soybeans.”
http://www.history.com/this-day-in-
history/george-washington-carver-begins-
experimental-project-with-henry-ford

Anti-Semite, but…
“Ford and Carver began corresponding
via letter in 1934, and their mutual
admiration deepened after Carver made a
visit to Michigan in 1937. As Douglas
Brinkley writes in "Wheels for the World,"
his history of Ford, the automaker
donated generously to the Tuskegee
Institute, helping finance Carver's
experiments, and Carver in turn spent a
period of time helping to oversee crops at
the Ford plantation in Ways, Georgia.”

Carver: Began as a MO. Slave
Born into slavery in Diamond, MO: 1864?
Kidnapped by Ark. raiders and sold
Recovered by slaveholder, who after the
War provided for and educated George
and his brother because no local school
would educate blacks, eventually got
degree: Minneapolis High School (KS).
Highland College (KS) rescinded
admission when it learned his race. First,
black student at Iowa State (BS & MS).

Highland College
First university in Kansas
Original name: Highland University
Currently: Highland Community College
Up near KS, Nebraska, MO borders
Carver would have been, by far, their
most famous graduate

1904: Cadillac & Buick
Cadillac formed out of the bankruptcy
organization of Detroit Automobile Corp.
William C. Durant (Flint) buys the
bankrupt Buick in 1904. By 1908, Buick
was the largest producer of autos in the
world. Durant puts together Buick, Olds &
Cadillac to form “General Motors.”
Ford first sells the Model T in 1908.

Kansas City & the Auto: 1909
“In Kansas City, entrepreneur George
Pepperdine opened the Western Auto
Supply Co. as a mail order house supply
parts for the Model T. Business was good
because the Model T was sold without
tires, fenders, a top, a windshield, or
lights. A buyer of the Model T could
spend as much on such aftermarket
accessories as the car itself cost.”

The Model T Conquers: 1909
“Ford's success with the T (sales nearly
doubled from the 10,000 sold in the first
year of production) caused him to stop
production of higher priced models in
order to concentrate on the T.
http://web.bryant.edu/~ehu/h364/material
s/cars/cars%20_10.htm

Runners & the Unmoving Chassis
“In case you're wondering how Ford
workers could assemble 26,000 cars a
month before the introduction of the
assembly line, this is how they did it: The
frames were set on sawhorses in a line
down the middle of the plant. Parts
runners delivered parts to each chassis.
Assembly teams moved down the line of
chassis performing just one assembly
operation.”

Ford Championed Innovation
“From 1910, when Henry Ford opened
the 60-acre Highland Park plant, the
company had a policy of replacing
machines producing parts as quickly as
the tool room could develop those
specialized, single purpose machines that
so greatly improved the production rates
for parts. The Ford tool room was a major
center for innovation in machining and
tooling.”

Ford’s Tool Center
“They built the machines that made the
plant go. The new specialized machines
for producing parts were positioned
strategically according to 'what' they
produced in order to produce parts as
close to the assembly area as possible.
By 1914, the tool room had built and
installed 15,000 of its special purpose
machines. They were installed in a line
parallel to the chassis assembly area.”

Scientific Management
Led to moving assembly line (in stages)
that by 1914 reduced the time to assemble
a vehicle to 90 minutes. By 1920:
“Annual U.S. production of automobiles
stood at nearly 2.3 million. France, the
world's second largest producer of
automobiles, produced 40,000 units. The
world total production stood at just under
2.4 million.” Became known as “Fordism”“Fordism”

$5/day Wage & 8 Hour Workday
To combat high turnover, Ford introduced
the 8 hour (v. normal 10 hour) workday
and doubled the daily wage to $5 in 1914.
“A number of business leaders excoriated
Ford for the move….” but it was widely
praised (Hillstrom & Hillstrom). Ford
claimed it increased worker efficiency by
increasing retention. Some critics said it
was to fend off IWW unionization effort.

Early 1920s: Ford Dominates GM
1921: “Ford held just over 61% of the U.S.
market for automobiles. GM's market
share stood at just 12%.”
1923: “U.S. auto production passed 3.7
million units. The Ford Model T accounted
for just under 52% of cars produced in the
U.S. There were 13 million cars on
American roads.”

The Model T’s Zenith
1924: “For the second year in a row, Ford
production of Model T's approached the 2
million mark. The price dropped to $290.
Over half the cars in the world were Ford
Model T's.”
1925: “The price of a Ford Model T
Roadster dropped to $260. Ford had
10,000 U.S. dealers selling the Model T.”
1926: US auto production reaches 4M

Transforms Consumer Finance
“Unheard of just a decade earlier, credit
sales of automobiles had become the
industry standard. Installment purchases
accounted for more than 2/3 of all new car
sales. With the automobile leading the
way, credit purchases of expensive
consumer goods (e.g., home appliances)
was becoming a way of life for Americans.”

The T-Era Ends
1927: with > 15M total sales
Consumers view the T as outmoded
100,000 workers lost their jobs
GM embraces style: annual (cosmetic)
model changes, colors & devalues
technical innovations. But GM (Sloan)
also developed modern decentralized
management to run world’s largest firm.

Our biggest industry
“As the Model T was withdrawn from
production, automobiles sales had made
the industry the leading American industrial
sector in value of product. Automobiles
ranked 3rd on the list for value of product
exported. There was one registered
automobile for every 4.5 Americans, and
55% of American families owned a car.”

Coal
“In 1860, 14 million tons of coal were mined;
by 1884 it was 100 million tons.”
Source: Howard Zinn
Quadrillion = 1000 billion BTU = energy
required to raise 1 pound of water 1ºF
1885: 1st
time energy from coal > trees
1920: Energy from coal 6X from petroleum
http://www.eia.gov/totalenergy/data/annual/s
howtext.cfm?t=ptb1601

U.S. (Quadrillion BTUs)
Coal Hydro
1860 0.518
1865 0.632
1870 1.048
1880 2.054
1890 4.062 0.022
1900 6.841 0.250
1910 12.714 0.539
1920 15.504 0.738

Coal & Pittsburgh
“As demand for iron surged from 1840–1870,
larger tracts of forest land were required to
provide charcoal, and deforestation became
a problem. Charcoal was first replaced by
anthracite (hard coal) from Northeastern
Pennsylvania, but by 1875 bituminous (soft)
coal in the form of coke from Southwestern
Pennsylvania provided over 50 percent of
blast furnace fuel.” (Anthracite can produce
up to 3X the energy of bituminous.)

Coke
“Coke is prepared when great heat is
applied to coal kept out of direct contact
with air; it is nearly pure carbon.
Coal was transformed in the Connellsville
fields by means of beehive ovens,
averaging 7 feet high and 12 feet in
diameter. They were cheap to build.”

Worth More than Silver & Gold
“During its period of prime production
(1880- –1935), the Connellsville region
shipped 500 million tons of coke, requiring
770 million tons of metallurgical coal. At
its peak, 39,000 beehive ovens produced
over 20 million tons of coke annually. The
direct and indirect wealth produced by
this bounteous gift of nature far
exceeded the value of all the gold and
silver ever mined in the U.S.”

Steel v. Iron
Iron is highly ductile
Alloying it with (just enough) carbon can
produce a far harder material with greater
tensile strength and the ability worked in
certain ways (e.g., it can be sharpened)
Pig iron (> C% than steel) loses malleability
and becomes brittle
Cast iron can be cast, but is not malleable
even when hot

Bessemer: Making Steel
“In addition to its riches in coking coal,
three interrelated factors destined
Pittsburgh to be the nation’s steel capital:
the Bessemer process, the railroads and
Andrew Carnegie. The Bessemer steel-
making process consisted of air blown
through molten iron in a five-to-seven-ton,
egg-shaped Bessemer converter. The
oxygen in the air decarbonized the iron,
converting it to strong, workable steel.”

Mass Produced Steel
“The Bessemer process was widely
adopted in the U.S. between 1865 and
1875, and it made mass production of
steel possible. The iron industry became
the steel industry. Bessemer-driven steel
production coincided with an insatiable
demand from U.S. railroads for steel rails.
In 1860, U.S. railroad trackage was a
modest 30,000 miles. It doubled by 1870
and increased eight-fold by 1900.”

U.S. Steel
“By 1900, fully integrated in both iron ore
and coal, Carnegie Steel was the country’s
largest steel company with 3 million tons of
capacity. In 1901, J.P. Morgan consolidated
the steel industry with Carnegie and seven
other major companies into the giant U.S.
Steel Company with a capitalization of
$1.4 billion—the largest private company
in the world.”

Monopoly
“It controlled 60 percent of U.S. steel
production, with more than 40 percent
coming from the Carnegie properties. By
1910, Pittsburgh produced 25 million tons
of steel; more than 60 percent of the
nation’s total.”

Steel
“Before the Bessemer process, iron was
hardened into steel at the rate of 3 to 5
tons a day; now the same amount could
be processed in 15 minutes.
By 1880 a million tons of steel were being
produced; by 1910, 25 million tons.
Source: Howard Zinn

Steel & U.S. Exports
“This paper seeks to understand the rapid
growth of U.S. manufactured exports by
focusing on the iron and steel industry,
which was the driving force behind the
dramatic change in the commodity
composition of exports. This industry
demonstrates the link between the
exploitation of natural resources and the
expansion of manufactured exports….”

Mesabi, MN: Iron Ore
“The initial surge of iron and steel exports
during the 1890s can be traced to the
opening of the Mesabi iron ore range in
Minnesota, which cut the domestic price of
iron ore in half during that decade. The
lower domestic price of iron ore helped to
reduce the relative price of U.S. iron and
steel exports significantly and, according to
results reported below, was equivalent to
more than a decade’s worth of productivity
improvements in the industry.”

The Best in the World
“The ‘most remarkable deposit of high-grade
iron-ore known to-day, its reserves are
supposed to be twice as great as those of all
the old ranges combined, and the Lake
Superior mines led the world even before the
Mesabi was discovered.’ Even more
remarkable than its enormous size was the
ore’s location close to the earth’s surface,
which made strip mining a viable and
extremely inexpensive extraction technology.”

Iron Prices Plunged
“The Mesabi opening in 1892 had
dramatic consequences. Minnesota
accounted for just 6% of U.S. iron ore
production in 1890, but 24% in 1895 and
51 percent in 1905. The price of iron ore
plunged by about 50% when the Mesabi
shipments hit the market, from about $5
to $6 per ton in the early 1890s to about
$2 to $3 per ton by the mid-1890s.”

Iron Production Surges
“Between 1895 and 1913, U.S. production
of iron ore increased from 15,958 tons to
61,980 tons.”

U.S. Iron Cheaper than UK
“Between 1892 and 1898, when overall
export prices fell 16 percent, the export price
of iron and steel products fell 24 percent.
This price reduction significantly improved
the cost position of domestic producers vis-
a-vis British producers, then the leading
exporter of iron and steel products, because
British iron and steel export prices rose
slightly during this period.”

Monopoly Stalled Export Growth
“Andrew Carnegie began purchasing iron
ore-producing districts around Lake
Superior in 1894 and by 1907 U.S. Steel
owned 75% of total ore deposits of
Minnesota (U.S. Commissioner of
Corporations 1911). ‘the price of Lake
Superior ore during the greater part of
1902 to 1906 . . . has been established in
large measure by agreement among the
principal ore-producing interests.’”

Carnegie: US Steel & Mellon
“By 1901, the iron ore mines, the lake and
rail transport system, and the blast
furnaces were largely owned and
operated by … U.S. Steel.”

Large Copper Exports
“The second largest category of
manufactured exports was copper.
Exports of copper manufactures rose
from 0.3% of exports in 1890 to nearly 6%
of exports in 1913 because electrification
prompted much greater demand for a
host of copper-related manufactured
products, particularly copper wire.”

Copper Ore
“This growth was facilitated by massive
copper extraction in the West, but – as in
the case of iron ore – the United States
remained a small net importer of raw
copper through this period despite its
domestic abundance. In 1913, the United
States exported $3.0 million of raw copper
while importing $13.7 million.”

Top 7 US Exports
1890 1895 1900 1913 $M
Cotton Cotton Grains Cotton 546
Grains Meat Cotton Iron/St 305
Meat Grains Meat Grains 211
Petro. Petro. Iron/St Meat 154
Animals Animals Petro Copper 140
Wood Iron/St Copper Petro 130
Iron/St Tobacco Wood Wood 116

Steel Export Boom
“The export boom was not broadly-based
across manufacturing industries but
concentrated in iron and steel products. Iron
and steel was the largest category of
manufactured exports. Iron and steel exports
jumped from 4.0% of all exports in 1895 to
9.0% in 1900. The volume of iron and steel
exports rose by a factor of more than six. The
ratio of iron and steel exports to production
rose from 4.4% in 1889 to 11.7% in 1899.”

Steel Productivity Grew Rapidly
“Productivity growth was much more rapid
in iron and steel than in other
manufacturing industries: between 1899
and 1909, total factor productivity
increased 2.7% annually in the primary
metals industry and 2.3 percent in the
fabricated metals industry, compared with
just 0.7% in manufacturing overall.”

Electricity
Edison: commercially viable incandescent
lights in 1879; tungsten lights (mandated
by gov’t) were far more efficient.
“Electrical wire needed copper, of which
30,000 tons were produced in 1880;
500,000 tons by 1910.”
Source: Howard Zinn
1901: Marconi: 1st
transatlantic wireless

War of the Currents
Edison: (GE) Direct Current: Hard to
change voltage (Edison dishonest re AC)
Tesla: (Westinghouse) Alternating
current: Transformers change voltages
1893: Chicago World Fair. Tesla wins bid
1896: Tesla/Westinghouse power Buffalo
using Niagara Falls
http://energy.gov/articles/war-currents-ac-
vs-dc-power

A Giant Takes the World Stage

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