Flashcards in C24 - Industry Comes of Age 1865-1900 Deck (45):
William Graham Sumner
Yale professor who believed in Charles Darwin's beliefs of "survival of the fittest".
Sumner believed the millionaires are a product of natural selection. He said "they get high wages and live in luxury but the bargain is a good one for society".
He believed that even though America was seeing deepening class division (rich getting richer, poor getting poorer) during this 2nd Industrial Revolution, these few rich "captains of industry" created progress for everyone in America (more jobs for everyone, etc.)
Central Pacific Railroad
Rail line that pushed from Sacramento CA eastward.
One of the 4 financial backers of the Central Pacific RR. He had political connections.
National Labor Union
Formed in 1866. Lasted 6 years. Had a total of 600,000 members. They argued for an 8-hour workday and higher wages.
Depression of 1870s slowed down the labor movement.
yellow dog contract
Corporations would force workers to sign these contracts, forbidding workers to join a labor union.
John D. Rockefeller
"oil baron". Started the Standard Oil Company of Ohio in 1870. By 1877, he controlled 95% of all oil refineries in the country.
He used "horizontal integration" and the "trust" to gain competitive advantage in his industry.
Agreements between RRs to divide income. There was corruption related to this practice.
Invented many things in the 1800s: electric light bulb, phonograph (record player), mimeograph (copy machine), moving picture (as in videos/films).
He was almost deaf and a very hard worker. His quote: "Genius is 1% inspiration and 99% perspiration".
Government giving a gift of land/real estate to someone.
Manipulative financial move. Used to refer to the practice of feeding salt to cattle, making them thirsty so they would drink/be bloated and weigh more at the time of sale.
A similar maneuver related to selling shares in RR companies. Financiers would grossly inflate claims of what a RR was worth and then sell to buyers of bonds/stocks at that price. Then the price would drop, bondholders would lose money and the financiers would make huge profits.
Haymarket Square riot
1886 In Chicago, IL (The Windy City). Tensions related to strikes started by the Knights of Labor boiled over, a bomb was set off and people were killed.
Anarchists (violent people who wanted to overthrow the government) were mostly responsible for the violence, but it was blamed on the Knights of Labor. This crippled their future success as a Labor movement.
Collis P. Huntington
Lobbyist and one of "The Big Four" who backed the building of the Central Pacific RR line.
Founded after Civil War in 1867 as an advocacy group for agriculture.
John P. Altgeld
1892: Elected Governor of IL. Pardoned 3 men convicted in Haymarket Square riot.
Business groups that worked together to control prices and competition. This was a way to gain control over an entire market and reduce competition.
Some trusts would combine most smaller companies within a particular industry to create one giant "trust". This would create a monopoly and stomp out any competition.
There was also efficiency with a trust because many of the same machines, transportation and distribution could be used.
Trusts caused the few owners of trusts to become very wealthy.
Trusts were formed in many industries: oil, agriculture equipment, sugar, leather, meat.
"steel king". He pioneered (started) the entrepreneurial practice of "vertical integration" to gain competitive advantage in his industry.
J. Pierpont Morgan
Banking executive. Devised scheme of "interlocking directorates".
New method of making cheap steel - invented in 1850s. Revolutionized steel industry and made America the #1 steel producer.
Made millions in steamboating and then in his 60s turned to the RR business.
Vanderbilt started using steel for rails, instead of iron. This practice then became popular elsewhere. Steel was superior because it could bear heavier loads.
Later donated $1million to start Vanderbilt University in TN.
Business practice of combining into one organization all phases of manufacturing from mining to marketing. Goal of this practice: improve efficiency by making supplies more reliable, controlling the quality of the product at all stages of production, eliminating fees to middlemen or suppliers.
Example: Andrew Carnegie was a steel producer. He controlled the mine where raw materials for his steel came from, he controlled the transportation route (raw materials were shipped on Carnegie ships and put on Carnegie RRs), etc.
Union Pacific Railroad
Rail line approved by Congress in 1862, the year after the Civil War started. From 1850-1862, there was deadlock and disagreement about this Transcontinental RR. The South wanted it to run through Southern states. After the South seceded from the Union, Congress quickly approved the Northern route.
Called "Union" Pacific RR as a reference to the Union.
Line began in Omaha, NE and pushed westward.
gospel of wealth
Idea that rich men had a divine right to their $. John D. Rockefeller: "The good Lord gave me my money".
Andrew Carnegie believed that the rich had their $ entrusted to them by God and had to be morally responsible with their $. Carnegie spent his last years giving away his riches for the public good: built libraries, etc.
1886. Supreme Court case. Ruled that individual states had no power to regulate interstate commerce (that means business conducted in more than one state) like the railroads.
The US federal government had the authority to regulate interstate commerce, said the court.
As a result, Congress passed the Interstate Commerce Act in 1887. From this date forward, the Federal govt. had a major role in regulating private business.
Used by John D. Rockefeller. He would become friends with/work with competitors to monopolize his market.
Rockefeller's company Standard Oil created "trusts": Business groups that worked together to control prices and competition. He would accept some friends/competitors in the Oil industry, but then freeze out owners of smaller companies. This was a way to gain control over an entire market and reduce competition.
Leader of the American Federation of Labor.
Economic system ruled by only a few wealthy citizens.
RR financier who used questionable/illegal maneuvers to become rich. He inflated/deflated the value of RR stocks in order to make millions.
Industrial goods. Different from consumer goods, like clothing and shoes.
Alexander Graham Bell
1876. he invented the telephone.
Big companies used rebates to give special treatment to some customers.
J. Pierpont Morgan, the banker, started this scheme. Business owners whose businesses were in trouble due to the 1890s Depression was to place officers of his own banking company on the Boards of Directors of the hurting businesses.
This gave Morgan a great amount of control over all of these individual companies.
United States Steel
Company formed by J. Pierpont Morgan after he bought Andrew Carnegie's steel companies. This was America's first Billion dollar corporation.
Carnegie did not want to die rich, so he sold his company and spent years giving away money to form public libraries and other charitable (philanthropic) uses.
Terence V. Powderly
Leader of the Knights of Labor.
James J. Hill
Created the Great Northern RR from Duluth to Seattle. One of the smartest/best RR builders, he believed that the success of his RR depended upon the success of the areas that it ran through. He helped those areas develop economically.
When a court steps in to stop something, like a law, usually temporary until a case is resolved.
Henry W. Grady was one industrialist who tried to coax the rural south out of their fields and into factories.
American Tobacco Company was formed.
Cotton mills were built in the south. Cheap labor was a big draw for Northern Industrialists to build their mills in the south.
American Federation of Labor
Formed in 1866 as a result of conflict between both skilled and unskilled members of the Knights of Labor.
The skilled laborers wanted to break off from the others. They formed the American Federation of Labor.
Samuel Gompers was President of the AFL from 1866 to 1924.
The AFL was a group of individual unions.
Artist in 1890s who created the image of the "Gibson Girl", a magazine image of an independent and athletic "new woman".
The 2nd industrial revolution did change women's lives greatly...more opportunities for women to work due to the invention of the typewriter, telephone, etc. This offered more independence and choices for women.
1850-1862 - disputes/deadlock over where to put the line.
1862-1869: Union Pacific RR Company laid track starting in Omaha, NE and went west. Central Pacific RR Company started in Sacramento CA and went east.
1869: the 2 lines met in Ogden, UT, where the 2 lines were connected.
An amazing engineering feat to complete this RR line across the country.
Results: California and the West could flourish economically because their goods could be transported. Facilitated trade with Asia because their goods could be shipped across the Pacific Ocean to CA and then transported by RR to the eastern US.
After this line was completed, 4 more RR lines were laid before the 1900.
Evolution of Railroads/helping to cause Industrial Revolution
New inventions improved RRs: Steel instead of iron rails, Westinghouse Air Brake, Pullman Palace Cars (luxurious RR cars for passengers to ride in.
There were still terrible accidents almost daily.
Railroads were the single most important factor in the amazing industrialization that occurred after the Civil War.
Created amazing opportunities for raw materials and finished goods to be transported and sold across the country from the Atlantic coast to the Pacific coast.
Steel industry was booming because of RR demand for steel to lay track.
Stimulated immigration - made it easier to move immigrants west.
Helped to build cities
Stimulated mining and farming because of the ability to transport goods.
Created need for 4 time zones in the US ( to keep train schedules organized).
Created many millionaires - owners of RRs became very wealthy.
Interstate Commerce Clause
Passed by Congress in 1887. Gave the Federal Government power to control and regulate private businesses that did business across state lines ("inter"-state - different from "intra"-state, which would mean business conducted completely within one state).
Passed to deal with corruption related to the Railroads.
Opened the door for the federal government to pass many regulations and rules, which they still do today.
Evolution of oil industry
Started with Whale oil, which created the Whaling industry in New England. This oil was used in oil lamps.
Replaced by Kerosine after oil was discovered in the US. Oil was turned into petroleum, which was turned into Kerosine, which lit the oil lamps.
Then Thomas Edison invented the lighbulb, which replaced the need for Kerosine lamps.
The oil industry might have become a shrinking industry if not for the invention of the automobile.
Sherman Anti-trust act of 1890
Congress' first attempt to deal with the problem of monopolistic trusts that were controlling entire industries.
First time the US had a law that said that private greed would have to take a back seat to public need.
The act forbade combinations that would restrain trade.
Big drawback: The law only dealt with the "bigness" of trusts not the "badness". Some trusts, though big, had not been run by people acting badly.
This law was reinforced/improved in 1914.
North vs. South in the 2nd industrial revolution
South lagged way behind. Generally stayed rural.
Finally in 1880s machine-made cigarettes were developed.
James Buchanan Duke absorbed his main competitors in this industry to from the American Tobacco Company.
He shared his wealth with a college that they renamed it "Duke University" (in NC).