Sources of Industrial Growth

Industrial Technologies

The rapid emergence of new technologies and the discover of new materials were among the most essential sources of late 19th century industrial growth. Communications were improved upon with new innovations. The first transatlantic telegraph cable between Europe and the states was laid in 1866. By 1900, there were 1.35 million telephones, and by 1920, 13.3 million. Radio technology also grew popularized in the 1890s. One of the most revolutionary industrial innovations was electricity as a light source. Light bulbs and generators revolutionized city systems, and brought electric power to street railway systems, elevators in skyscrapers, factories, offices, and homes.

The Technology of Iron and Steel Production

Production of iron and steel, both moving at a relatively slow progression rate before the Civil War, took off in the 1870s and 1880s. Railroads added 40,000 new miles of track, and steel was on track to dominate the metals industry. Bessemer’s process of making steel was one of many that made possible the production of steel in great quantities and could now be of use to manufacturing locomotives, rails, and girders for construction. Massive new furnaces for smelting iron were constructed to be able to produce over 500 tons a week. The steel industry’s need for lubrication for its machines also helped create another important new industry in the late 19th century, oil, which would become a primary fuel source later on.

The Automobile and the Airplane

Gasoline and the self-contained engine were the two major technologies that led to the development of the automobile. After being introduced in Europe, automobiles quickly became mobilized in the U.S., and Henry Ford had a huge role in popularizing the swift manufacturing and use of cars through the assembly line system. As the use of gas-powered inventions was popularized, Wilbur and Orville Wright constructed a glider that could be propelled through the air by an internal combustion engine, and successfully flew it.

• Henry Ford: maker of the Ford brand of cars, popularized the assembly line factory system

• Wilbur and Orville Wright: creators of the first successful airplane and flight in 1903

Research and Development

Corporate research-and-development (R&D) laboratories were created as the government’s support for technological research declined, as many new industrial technologies were still being invented and popularized. Scientists and engineers both had qualms with the R&D departments of companies, being more frequently tied into the commercialization of knowledge and discovery.

Making Production More Efficient

The changes in techniques of production were revolutionary and characterized this fast-paced time. Winslow Taylor’s method of separating steps of manufacturing to different roles that were easier for each person to focus on, aimed to minimize worker errors, speed up the production process, and make workers more interchangeable and therefore easier to replace. This gave way to the assembly line, which Henry Ford introduced in his automobile plants in 1914. It was a concept that stressed the complete interchangeability of parts.

• “Taylorism”: principles of “scientific management” that many industrialists embraced by the turn of the century, where human labor would be compatible with the demands of the machine age

Railroad Expansion and the Corporation

Railroads still had a significant part in industrial development in the late 19th century. They gave access to distant markets and remote sources of raw materials. The increasing expansion of railroads across the country also added new jobs and fueled growth for new communities across the continent. In total, railroad trackage increased from 30,000 miles in 1860 to 193,000 miles in 1900. Railroad magnates and other industrialists realized that these massive projects couldn’t be financed by a single person or small group, introducing the rise of the modern corporation. The new ability to buy and sell stock in these companies made it possible for entrepreneurs to gather large sums of money to undertake great projects with some financial risk. These larger business organizations severely minimized competition from rivals, becoming monopolies.

• Andrew Carnegie: a Scottish immigrant who opened his own steelworks In Pittsburgh in 1873, dominating the steel industry and expanding his monopoly

• J.P. Morgan: a wealthy banker, merged Carnegie interests with others to create the giant United States Steel Corporation

• Horizontal integration: combines a number of firms engaged in the same enterprise into a single corporation (consolidating many different railroad lines into one company)

• vertical integration: a company takes over all the different businesses on which it relies for its primary function, such as Carnegie Steel

• John D. Rockefeller: owner of Standard Oil, was able to ally himself with other wealthy capitalists to hold a monopoly over the oil industry for decades

Capitalism and its Critics

Survival of the Fittest

Many saw the new capitalistic systems in America’s growing culture a threat to their ways of life. Farmers, workers, and middle-class businessmen, and many others were in opposition to this business model. The new rationale argued by wealthy capitalists was that individualism and hard work fueled wealth and success, and anyone who failed could credit it to ignorance, stupidity, or laziness. The idea that those who failed were unfit for success was upheld by the wealthy for decades following the new boom of industry and wealth.

• Social Darwinism: Darwin’s theories argued that the fittest forms of life survived over thousands of years because of their biological fitness, applying to those who rose or fell in society because of their innate “fitness”

The Gospel of Wealth

While many monopolies used their profit for only the company’s fortune, others preached social welfare and spreading their wealth. Many industrialists, such as Andrew Carnegie, devoted large parts of their fortunes to philanthropic pursuits. Lectures and sermons by priests also reflected these values, with one even claiming (inaccurately) that most millionaires in the U.S. had begun on the lowest part of the economic ladder and worked up to success.

• “gospel of wealth”: the argument that people of great wealth not only had great power but also a responsibility to use their riches to advance social progress

• Horatio Alger: originally a minister in rural Massachusetts, he moved to New York and wrote over a hundred novels attributed to the ability of Americans to rise from “rages to riches”

• Louisa May Alcott: a popular author of the late 19th century who wrote Little Women

Alternative Visions

Many alternate philosophies also existed at the time, challenging corporate ethos and even capitalism itself. Lester Frank War argued that civilization was governed by human intelligence rather than natural selection. Some dissenters of the conventional systems founded the Socialist Labor Party, and later on the American Socialist Party. Many, such as Henry George, were angry that wealthy capitalists and monopolies were gaining wealth while those in lower classes still struggled to “make it.”

• American Socialist Party: a dissident of the Socialist Labor Party, it aimed to forge stronger ties with organize labor and provide alternatives for advocates against capitalism

• Henry George: a California writer and activist, his published American history novels and blamed social problems on the few monopolies

• Edward Bellamy: author of the utopian novel Looking Backward, describing the experiences of a young Bostonian who emerged in a new peaceful utopian society

The Problems of Monopoly

As time went on, a growing number of people were deeply concerned by the growth of the monopoly. Industries, such as railroads, where almost all competition was wiped out gave lead to high rates because customers had no choice but to pay them. Beginning in 1873, the economy fluctuated erratically, with severe recessions resulting from the hold of monopolies over the working public.

• monopoly: the exclusive possession or control of the supply of or trade in a commodity or service

Conclusion

Comprehension Questions

1. Who were some of the business and industrial titans of the late nineteenth century, and what did they contribute to America’s industrial growth?

2. What changes took place in corporate organization in the late nineteenth century, and how did these changes affect the nation’s economy?

3. What was the gospel of wealth?

4. How did Social Darwinism attempt to justify the social consequences of industrial capitalism?

5. How did workers respond to the expansion of industrialization and the new industrial economy?