Early 20th Century America
Growth of Factories & Big Business
Causes of Economic Development
The effects of the Civil War
Rapid population growth/food needed to support it
more land needed for factories, housing, transport, and farming
expanding transport system
access to raw material (coal, iron, cotton)
absence of regulation
availability of capital/development of banking system
protective tariffs/growing export markets
social attitudes were sympathetic to capitalism/industrial/commercial growth
Civil War: ammunition, guns, clothing, and transportation were needed at a faster rate than before. As a result, goods were being produced in large quanities, and tariffs were raised to avoid cheaper imports
Population Growth: the population growth provided for the workforce that was needed to keep up with the industrial expansion, but the reason it grew so quickly was due to the decrease in death rate (improvement of medicine and working conditions)
Land Availability: gains from the Louisiana Purchase and Mexico allowed for the growth from 2M KM of land to 7M KM, and the Homestead Act allowed for the farmers to settle there. Farmers didn’t prosper much, but the new farmland provided more food for the growing population.
Growth of Railroads: manufacturers needed a convenient way to bring in raw material & coal to power engines fnew machinery.
Raw Material Availability: the U.S. had lots of coal, iron ore, cotton, and timber
Techonological Innovations: The telephone, railway carriage, U.S. steel, & electrical power were invented
Capital Availability: railroads, steel mills, factories, and city electrification needed lots of monetary investment, so the stock market was invented to raise capital
Growth of Trusts, Corporations, and Robber Barons
The U.S. constitution gave little to no role for the federal government in eceonomic matters
There were no labor hour restrictions, tax prodits, and rules on conducting business or conditions
Sherman Anti-Trust Act: 1890; attempt to impose regulation, but was not enforced
Unions were divided between skilled and unskilled workers in the 19th century
Corporations could hire management, sue, buy/own/sell property, merge with other companies, and force rivals out of business.
Trusts: legal loophole used to avoid laws
Oil was the first industry to be controlled by one man, John Rockefeller. Followed Carnegie (steel), Swift (meat packing), and J.P Morgan (banking). This resulted in monopolies and mistreatment of their workers, titling them “robber barons.”
Urbanization
Immigrant labor increased, as people needed jobs and didnt mind long workdays. This increased the industrialization process.
Immigrants mostly came from England, Scotland, Ireland, Germany, Italy, Greece, Balkans, Russia, and the Austro-hungrarian Empire
These people left due to religious persecution, poverty, unemployment, political suppression, and economic disparities
The Panic of 1873:
- The 1st major recession in the U.S.
- speculative railroad expansion; as too many companies were building tracks in hopes of major cities appearing in new land.
- lack of a regulated national banking system
- business cut their employees wages by 25%, worsening recession. wages didnt rise again until the end of the 1870’s
The Panic of 1893
- Similar causes as 1873, but caused greater distress and lasted longer
- weak stock market, weak banking system
- severe drought in farming areas
- unemployment went from 3 million (1892) to 13 million (1894)
- large strike in coal/rail industries, and less demand due to decreased export and wage reductions
- gov’t provided no support, and made little attempt to analyze why it happened/how to prevent it
The Panic of 1907
- AKA “rich man’s panic”, occurred within Wall Street, NY
- speculation and large growth of investment trusts caused the panic, with the large “Knickerbocker Trust” collapse being due to poor investment
- 11% drop in industrial production in one year, demand for goods fell, and workers lost their jobs
- J.P Morgan played a major role in helping with relief from the crisis
- the Federal Reserve Bank was created to be a strong central bank after this in 1913
- unemployed industrial workers were never assisted
Working/Living Conditions
US cities increased greatly (e.g.: Chicago went from 300k to 1.5M citizens in 30 years), leading to urbanization
areas surrounding factories and meat packing plants were densely packed, with high working population living in the area
“dumbbell tenement buildings”, “poverty gap”, and “misery row” were used to describe the crammed, dirty living buildings
35,000 people (including children) were killed in industrial accidents in 1900 alone.
endless supply of cheap labor due to immigrant labor
weak labor unions who could not properly organize
no regulation from govt’s
businesses in control of federal, state, and local legislation
minimum 60 hour work weeks with llittle breaks and no sanitation
workers worked during holiday and being sick, or were not paid
KOL Labor Union
AKA: “Knights of Labor”
Wide industry range, including skilled and unskilled workers
700k members by mid 1880’s
1400 strikes involving 600k people occurred in 1886, leading to their 50% success rate in advocating for better pay & conditions
violence in a major 1877 strike led to violence nationwide, and 100 peple were killed. strikers lost their jobs, wage was cut, and working hours were extended
Carnegie destroyed unions in his steel mills, and ended an 1888 Knights’ strike. 3,723 migrant workers were killed
they did not achieve much, and membership dropped.
AFL Labor Union
limited success
loose merging of unions for pay improvement, benefits, hours, and working conditions; against immigration
Pullman workers went on strike since the company reduced its operations. the AFL’S American Railroad Union supported the Pullman men, but troops were brought in. ARU leaders were arrested, and when the Supreme Court ruled in favor of the railroad bosses, the strike ended in failure
Old vs New Immigrants
“Old Immigrants” came from North/West Europe (England, Germany, Ireland), and “New Immigrants” came from South/East Europe (Italy, Poland, Russia)
New Immigrants were often more poor, less educated, and faced discrimination; while Old Immigrants were literate and had stable income.
Ellis Island
New York Harbor that was used as the main immigration processing center for incoming migrants, where migrants would go through health screenings, literacy tests, and legal inspections.
Angel Island
West coast immigration processing center, but for migrants from Asia.
Strict interrogrations and detentions due to the Chinese Exclusion Act
Rise of Nativism/Restriction on Immigration
Nativism = Anti-Immigrant Ideology
established inhabitants believed they were better than newcomers
Believed immigrants to be threats to jobs, national identity/security, wage, and culture
Demanded strict immigration laws, which led to movements against Chinese, southern/eastern Europeans, and Catholic immigrants
Segregation
Rise in Ku Klux Klan members
African-Americans moved towards the North for job opportunities, voting rights, and ownership of assets
Poll Taxes
a price required of voters to pay, which was difficult for black people to pay for as they had minimal jobs and money.
Literacy Tests
tests that black voters needed to take to be able to vote, judging them off of their “academic” ability. African Americans had little education by this point, and the tests were biased against them passing.
Grandfather Clauses
a clause that allowed voters to vote if their grandfather did, which discriminated against African Americans as their grandfathers were slaves with no voting rights.
Plessy v Ferguson
1896
Significance: Established the “seperate but equal” narrative, supporting racial segregation under the 14th Amendment
Homer Plessy was arrested for sitting on a “whites-only” train when he was 1/8th black
Courth ruled that segregation was allowed as long as facilities were equal, which built Jim Crow laws in the future