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Chapter 18: America Transformed into the Industrial Giant of the World (1870– 1910)
Important Keywords
Taylorism: Following management practices of the industrial engineer Frederick Winslow Taylor, the belief that factories should be managed in a scientific manner, utilizing techniques that would increase the efficiency of the individual workers and the factory process as a whole.
Horizontal integration: Strategy of gaining as much control over a single industry as possible, often by creating trusts and holding companies; this strategy was utilized by John D. Rockefeller and Standard Oil.
Vertical integration: Strategy of gaining as much control over a single industry as possible by controlling the production, marketing, and distribution of the finished product. Andrew Carnegie and United States Steel are the best examples from the era of this approach.
“Gospel of Wealth”: Philosophy of Andrew Carnegie who believed that wealthy industrialists had an obligation to help local communities and philanthropic organizations.
Knights of Labor: Established in the 1880s, this was the major union of that decade. It was made up of unions of many industries and accepted unskilled workers.
American Federation of Labor: National labor union formed by Samuel Gompers in 1886; original goal was to organize skilled workers by craft.
Industrial Workers of the World: More radical than the American Federation of Labor, this union was formed in 1905 and attempted to unionize unskilled workers not recruited by the AFL. Members of this union were called “Wobblies.”
Gilded Age: Depiction of late nineteenth-century America that emphasizes a surface of great prosperity hiding problems of social inequality and cultural shallowness.
Pendleton Civil Service Act (1883): Federal act that established a civil service system at the federal level. For the first time, not all government jobs would be political appointments.
Tammany Hall: Political machine that ran New York City Democratic and city politics became a model for other urban political machines in the late 1800s.
Key Timeline
1869: Knights of Labor founded in Philadelphia
1870: Beginning of Tammany Hall’s control over New York City politics
1877: Major strike of railroad workers; President Hayes sends in federal troops to break up strike in Pittsburgh
1879: Publication of Progress and Poverty by Henry George
1881: Assassination of President James Garfield
1882: Chinese Exclusion Act passed by Congress
1883: Pendleton Civil Service Act enacted
1885: Completion of Home Insurance Company building in Chicago, America’s first skyscraper
1886: Haymarket Square demonstration and bombing in Chicago
1887: Interstate Commerce Act enacted
1888: New Jersey passes legislation allowing holding companies
Publication of Looking Backward by Edward Bellamy
1890: Publication of How the Other Half Lives by Jacob Riis
1892: Ellis Island opens to process immigrants on the East Coast
1893: Beginning of major depression in America
1894: March of Coxey’s Army on Washington, DC United States becomes world’s largest manufacturing producer
1896: Decisive victory of Republican William McKinley breaks decadeslong deadlock between Democrats and Republicans
America begins to recover from great depression of early 1890s
1897: America’s first subway begins regular service in Boston
1901: Assassination of President William McKinley
1903: Ford Motor Company established
1905: Industrial Workers of the World formed
1906: Publication of The Jungle by Upton Sinclair
1909: Strike of International Ladies Garment Workers Union in New York City
1910: Angel Island opens to process immigrants on West Coast Number of American children attending school nears 60 percent
1913: Webb Alien Land Law enacted, prohibiting aliens from owning farmland in California
Ford Motor Company begins to use assembly line techniques; 250,000 automobiles produced in one year
An Industrial Revolution
In 1860, almost one in four Americans worked in industry; by 1900, one in two did.
These workers worked in huge factories with thousands of workers by the turn of the century.
Large numbers of Americans left their farms for the cities.
They had to adjust to whistles and time clocks after leaving rural life.
They had to stay at a workstation and repeat the same motions for hours instead of moving around.
The Second Industrial Revolution brought new industries like steel and chemicals, power sources like electricity and petroleum, and business structures like trusts to these Americans.
In the late 19th century, most American leaders believed in laissez faire economics and left business development to the "invisible hand" of the market.
Changes in American Industry
Before the Civil War, American factories made food and textiles.
After the war, steel, petroleum, and machinery industries emerged to supply these industries.
The steel industry thrived by supplying railroads, builders, and other industries.
The oil industry provided fuel to factories as well as homes.
High-grade machine products enabled businessmen to launch new industries.
In 1860, most American factories relied on water power.
Anthracite coal mines in Pennsylvania and West Virginia lowered coal prices and accelerated the switch to steam power.
Steel production flourished around Birmingham, Alabama, thanks to Apostles of the New South.
Modern textile mills in the South took advantage of cheap labor and raw materials.
The American Tobacco Company started a new industry in Dixie with machine-made cigarettes.
A Changing Workplace
American industrialists sought ways to compete and maximize profits as business grew.
Efficiency consultants advised factory owners on how to produce their goods.
Frederick W. Taylor, a mechanical engineer, founded "scientific management."
He timed workers and machines and redesigned work spaces to reduce wasteful motions.
Traditional methods that slowed production were useless to him.
Taylor advocated paying workers "by the piece" to encourage production.
The assembly line represented new business organization and technology that made the US the world's industrial leader.
In 1903, Henry Ford established Ford Motor Company.
In 1910, his company produced 12,000 cars using a "craft" approach.
In 1913, Ford introduced the assembly line to his factories and produced 250,000 cars.
New manufacturing methods boosted productivity in other industries.
This period saw workers no longer needing to be skilled craftsmen.
Henry Ford's assembly line workers might spend all day attaching doors or lamps.
Ford's pioneering $5-a-day wage compensated his workers for their monotonous work.
Most factory jobs were repetitive, so unskilled workers could learn them.
In the late 19th century, immigrants provided industrial labor.
Textile workers were mostly women.
Shoe and textile factories employed many children.
In 1900, 20% of 10–15-year-olds worked.
Some states tried to regulate child labor, but failed.
Employers saw no reason to pay men and women equally.
Men were paid more because they were often considered household heads and stronger and able to work harder.
Men were paid more because they were household heads and stronger and could work harder.
Skilled women earn $5 per week, while unskilled men earn $8.
Despite these inequalities, many working-class women preferred factory work to maids and household servants.
Offices employed some educated women. Some clerked.
Many low-wage women turned to prostitution.
Once married, women were expected to leave their jobs and be supported by their husbands.
Some married women worked outside the home or earned extra money by sewing or laundering.
Big Business
New industries and larger industries spurred business organization creativity after the Civil War.
Dynamic business tycoons built massive companies that needed new corporate structures to manage.
Some entrepreneurs became rich and famous.
Andrew Carnegie, a penniless eight-year-old who immigrated to the US, became one of the world's richest men by manufacturing steel.
Standard Oil, founded by John D. Rockefeller, once dominated American oil.
Some industrialists may be cruel to get rich.
They believed that only the strong survived in business.
Companies sometimes fixed prices and production quotas to reduce competition.
The Interstate Commerce Act of 1887 banned business collusion that hurt consumers.
Because the Interstate Commerce Commission it created was staffed by business-friendly men, this act failed to regulate railroads for years.
In the postwar years, state laws made it difficult to run interstate businesses or own other corporations, which caused legal issues for larger businesses.
Trusts were one legal response.
Rockefeller and Standard Oil pioneered this corporate structure.
A trust allowed subsidiary company stockholders to "trust" their shares to Standard Oil's corporate board.
Rockefeller bought many smaller oil companies to expand Standard Oil horizontally using this organizational method.
Trusts were then outlawed. Holding companies resulted.
In 1899, New Jersey was the first state to allow businesses to own stock of other corporations.
Standard Oil shareholders bought stock and controlled other oil companies.
Rockefeller and his managers merged 43 oil companies into Standard Oil of New Jersey using the holding company model.
Rockefeller supplied 90% of US oil by the 1890s.
Rockefeller then bought oil fields to market oil products after refining and distributing them.
From drilling for crude oil to selling refined oil products in stores and gas stations, he would control the oil business.
Gustavus Swift in meatpacking and Andrew Carnegie in steel were vertical integrators.
Great industrialists made huge fortunes, widening the wealth gap.
These businessmen were justified by Social Darwinism.
Social Darwinists like William Graham Sumner believed human interactions reflected Charles Darwin's "natural selection" principle.
Smart, determined, and strong people would succeed, while others would fail.
By this logic, the rich's wealth and power were their due and nature's plan.
Andrew Carnegie's "Gospel of Wealth" softened Social Darwinism.
He called the wealthy industrialists "guardians" of America.
He believed industrialists should give much of their wealth to the community rather than to their children.
Carnegie built libraries nationwide to help bright young people succeed.
Carnegie and Rockefeller foundations have donated over $650 million to educational and artistic causes.
Carnegie, Rockefeller, and other industrialists funded museums and universities.
Despite their charitable giving, many industrialists of this period were called "Robber Barons" for their Social Darwinist treatment of workers.
The Emergence of Labor Unions
The first nationwide railroad strike occurred in July 1877.
Strikers protested railroad layoffs and wage cuts due to economic hardship. Strikes were violent.
Nationwide railroad property was destroyed.
Pittsburgh militiamen killed 30 strikers.
President Hayes sent federal troops to end the strike and violence.
The president backed the owners but urged them to “remove the distress which afflicts laborers.”
The Knights of Labor were the most influential 1870s union.
They sought to represent all workers, not just shoemakers.
Their union recruited immigrants, African Americans, and women.
They reached 750,000 members in the mid-1880s.
Their leaders envisioned a more cooperative society where workers shared more of their earnings.
Their peaceableness made them reluctant to call strikes, making them less effective in dealing with hard-nosed employers.
The Knights of Labor lost workers to more confrontational labor unions.
In the spring of 1886, McCormick reaper workers in Chicago went on strike.
On May 1, 100,000 people showed support for workers.
Next day, Haymarket Square saw a smaller protest.
European radicals and anarchists supported the strike.
The bomb and bullets injured many police and civilians.
The Haymarket Square tragedy convinced many Americans that labor organizations like the Knights of Labor fostered violent extremism.
It fueled hostility toward immigrants and radicals.
American Federation of Labor (AFL) outperformed the Knights of Labor.
Samuel Gompers, a tough and cunning leader, kept the AFL away from political and social radicalism for many years.
Gompers prioritized "bread and butter issues" like higher wages and shorter hours over remaking American society.
The 1892 Carnegie Steel Company strike in Homestead, Pennsylvania, and the 1894 American Railway Union strike against the Pullman Palace Car Company garnered national attention.
Eugene V. Debs led the American Railway Union (ARU).
He turned socialist after the Pullman strike was crushed.
Socialist Party leader Debs ran for president several times.
By 1917, the AFL had 2.5 million members despite strike failures.
Industrial Workers of the World (IWW)
Western industrial miners formed this union under harsh working conditions.
The IWW advocated revolution and socialism.
Members of the IWW were nicknamed “Wobblies.”
The leader of the IWW was Big Bill Haywood of the Western Federation of Miners.
“Mother” Jones worked with coal miners.
The IWW did not shy away from strikes and bloodshed.
Because of its extremist reputation, the union was brutally quashed by the federal government during World War I.
Some unions raised wages and improved working conditions.
Workers struggled to organize.
The AFL, the most successful union, only represented skilled workers.
The AFL believed that organizing women, African Americans, and unskilled workers weakened its members' bargaining power. Here, women formed unions.
The International Ladies Garment Workers Union struck New York City in 1909.
Organized labor faced other issues.
Most manufacturers discourage unionization.
Unions were associated with radicalism and weakened American individualism and self-reliance.
The military broke up strikes and supported business owners during strikes.
State and local governments and police usually supported businessmen.
Pinkerton detectives could also protect factories and intimidate strikers.
Uneven Affluence
Industrialization benefited many Americans.
They helped create a consumer society where ordinary Americans could buy luxury items like tea and silk stockings.
Department stores represented new opportunities for American consumers.
Middle-class Americans could buy what they wanted.
1900–1920 saw a six-year increase in life expectancy.
Indoor plumbing and electricity reached more middle-class homes.
Rural sharecroppers and immigrants in overcrowded urban neighborhoods could not afford the new consumer society.
In the 1920s and 1930s, most working-class homes got flush toilets.
Higher wages were offset by rising living costs that made many consumer goods unaffordable for most workers.
The New Immigration
Before this, most immigrants were from Northern Europe, mostly Britain and Germany. Because they spoke the same language as Americans, the Irish and English were easier to assimilate than the Germans, who came from a similar culture.
The large number of immigrants alarmed some Americans.
28 million immigrants entered America between 1870 and 1920.
In 1900–1910, immigration peaked.
In 1892, Ellis Island became a federal reception center in New York City harbor.
Immigrants had to pass basic health and security tests.
Angel Island in San Francisco was a Pacific Coast reception center.
14,000 Chinese workers were imported to finish the transcontinental railroad.
"Native" workers hated these Asian immigrants because they feared they would lower wages by working for less.
The 1882 Chinese Exclusion Act restricted Chinese laborers' entry into the US.
Many Chinese moved to ethnically homogenous "Chinatowns" in big cities to avoid racism.
Hawaii's 1898 annexation allowed Japanese residents to work on farms in California.
Japanese immigration revived Chinese concerns and prejudices.
In 1906, the San Francisco Board of Education separated Asian students into separate schools.
The persistently anti-Japanese Californians passed the Webb Alien Land Law in 1913, barring noncitizen Asians from owning land in the state.
These California initiatives strained US-Japan relations because Japan was proud and powerful.
Most immigrants first settled in large coastal cities.
Eastern and Southern European immigrants fled religious and economic persecution.
As most of them moved from rural to urban life and worked in large factories in the US, acculturation was difficult.
Like the Chinese, many preferred living in ethnic neighborhoods in cities where they could speak their language and practice their religion.
New York City's Lower East Side was the world's most densely populated at the end of the nineteenth century.
Many immigrants planned to work in the US for years before returning home.
Most stayed and boosted the US economy.
East and Midwest immigrants worked in factories. Immigrants farmed west, some mined.
Immigrants avoided the South due to its depressed agrarian economy.
The Rise of the Modern American City
Industrialization and immigration swelled American cities after the Civil War.
As mechanization consolidated agriculture, many farmers left.
Booming cities offered economic opportunity. Urban slums housed the poor.
Before the Civil War, most American cities were small enough to walk around.
New transportation helped people navigate the growing cities.
New York City introduced elevated trains in 1867 and Boston a subway in 1897.
Public transportation allowed upper- and middle-class commuters to live farther from their city jobs.
The wealthy moved to suburbia in the early nineteenth century after building in town.
Banks, department stores, and offices ruled city centers.
Outside the central business district were factories and warehouses. Workers could get to work because cheap housing blocks surrounded factories.
Rich and poor were growing apart geographically and financially.
Older middle class apartment buildings were subdivided to house more poor families.
Tenement houses were built for large groups.
They had few amenities, outdoor bathrooms, many rooms had no ventilation or views, no elevators, dirty buildings, poor plumbing and sewers spread disease.
Gangs terrorized neighborhoods due to poverty.
Building codes cleaned the worst tenements. Some buildings had gas, electricity, and water.
American cityscapes changed drastically.
Pre-Civil War buildings rarely exceeded four or five stories.
New materials and methods revolutionized architecture.
Builders could build taller buildings with Bessemer steel girders.
In the early 1880s, elevators made climbing taller buildings easier.
Louis Sullivan of Chicago designed the first "skyscrapers."
The Home Insurance Company building in Chicago, completed in 1885, was a pioneering office building. The ten-story building had four elevators.
Late 19th- and early 20th-century American cities were under construction.
Schools, roads, sewers, and parks were built alongside office buildings, factories, and apartments.
City planners tried to organize the rapid development.
Gilded Age Politics
Mark Twain popularized the term "Gilded Age.”
It satirized American society's political corruption and greed.
Gilded items have a thin layer of gold over a base metal.
Political and economic contrasts confused many observers.
The Gilded Age's politics are often dismissed as a waste of time.
As the country industrialized and urbanized, they criticized politicians for not intervening more in tariff and currency debates.
They wanted to restore a more normal political equilibrium after the Civil War and Reconstruction, believing that the government's role was strictly limited.
“The lesson should be constantly enforced that though the people support the Government the Government should not support the people,” President Grover Cleveland was admired for saying.
Americans enjoyed politics in the Gilded Age.
Political issues and party identification were important to them.
Nearly 75% of registered voters voted in presidential elections.
Elections were close and Congress changed hands frequently.
Political positions were moderated because parties feared alienating swing voters.
Republicans relied on the industrial Northeast, while Democrats relied on the "Solid South."
Most elections depended on swing states like New York, Indiana, and Ohio.
Congress became more important after the war as presidents limited their powers. Spoils were an issue.
After an election, the winning party should give its supporters government jobs, a tradition dating back to Andrew Jackson.
Presidents of the office-rich executive branch had to remove opposing party members from government positions, which was a major burden.
President Rutherford B. Hayes attempted patronage reform.
He appointed officials based on merit, not politics.
He upset his own party's congressional leaders by firing Chester A. Arthur, the Port of New York Collector, who had benefited from the spoils system.
In 1880, Hayes's actions split the Republican Party and prevented him from being renominated for president.
Congressman James Garfield of Ohio, the Republican nominee, also called for spoils system reform.
Garfield won the election, but a deranged man assassinated him in July 1881, only a few months after taking office.
Congress decided to reform the spoils system after Garfield's assassination.
President Chester A. Arthur, who supported the spoils system, supported reform.
Congress passed the Pendleton Civil Service Act in 1883 to remove political control over government jobs.
It established the Civil Service Commission to manage these positions. These jobs required applicants to pass exams.
Government officials could no longer donate to political campaigns under the Pendleton Act.
The legislative and executive branches became professional bureaucracies after these reforms. Over time, the new civil service regulations covered more jobs.
Most jobs today are covered by civil service regulations, but many managerial positions in the federal bureaucracy are still filled by political appointees.
1884's election was dominated by candidates' personal issues.
Maine Senator James Blaine was the Republican nominee.
He was accused of accepting stock for supporting railroad bills.
New York Governor Grover Cleveland was the Democratic nominee.
Cleveland had an illegitimate child as a young man.
“Ma, Ma, where's my Pa!” Republicans chanted during the election.
Despite this scandal, Cleveland won a close election.
The Gilded Age's biggest political issues were tariffs and currency.
To protect American industry and jobs, Republicans supported high tariffs.
With their base in the agrarian South and West, most Democrats wanted lower tariffs.
Eastern Democrats and Western Republicans voting with their region's economic interests complicated matters.
President Cleveland's 1888 campaign focused on tariff reduction.
Cleveland lost the Electoral College despite winning the popular vote.
Benjamin Harrison, his Republican opponent, became president.
In 1892, Cleveland became the only president to serve two nonconsecutive terms after defeating Harrison.
The US entered one of its worst depressions after Cleveland's second inauguration.
Many factories closed, laying off millions of workers.
The economic downturn made farmers' problems worse.
Government aid was led by Populists.
Jacob Coxey, an Ohio populist, led unemployed workers to Washington.
Cleveland and Congress ignored Coxey's Army.
Pressure increased to coin more silver to loosen currency supply.
Economic conservative Cleveland supported the gold standard.
1896's election was shaped by this currency debate.
Republican electoral dominance began with William McKinley's decisive victory.
Some historians consider McKinley the first "modern" president because of the way he organized and concentrated power in his office.
The modern presidential campaign was started by Mark Hanna, McKinley's campaign manager.
The "boss" and his associates were kept in power by these highly structured organizations.
Machines gave immigrants jobs, loans, and other favors in exchange for their votes.
After taking over city hall, the machine extracted kickbacks from city contractors.
Machine operatives with city jobs often returned a portion of their pay to the organization. This money kept the machine well-oiled.
The most famous political machine was New York City's Tammany Hall.
William M. Tweed, the Tammany boss, and a corrupt group of officials stole millions from City Hall in the 1860s and 1870s.
Thomas Nast's political cartoons mercilessly mocked Tweed, who was investigated and imprisoned.
Despite Tweed's imprisonment, Tammany Hall ruled New York City politics for decades.
Machines helped the poor, even though they were corrupt.
Education and social service reforms were supported by some machine politicians.
Social Criticism in the Gilded Age
Beginning with Mark Twain, Gilded Age writers criticized American society.
Looking Backward (1888), a socialist novel by Edward Bellamy, was a surprise hit.
In 2000 Boston, the book's hero discovers peaceful economic "nationalism" has replaced unfettered capitalism.
How the Other Half Lives (1890) was a groundbreaking study of New York City's poor by journalist Jacob Riis.
Riis's haunting photos of Lower East Side tenement houses pioneered photojournalism.
The Jungle (1906), Upton Sinclair's exposé of Chicago's meatpacking industry, made waves.
Sinclair wanted to argue for socialism, but most readers focused on his graphic descriptions of meatpacking plant sanitation.