Ch. 24: Industrialization and Labor Unions

Industrialization

Railroad

• Exponential Growth
• Railroad was developing and resulted in an economic transformation in post civil war era which allowed US to become the US economic and industrial giant

Union pacific

• Started in Nebraska and headed west; already railroads in east of Mississippi
• Most workers were Irish immigrants
• Built more rail line- built over 1000 miles of rail

Central Pacific

• Started in California and was going east
• Workers were Chinese Immigrants (stereotypically they were more hard workers)
• Built just under 700 miles of rail
• Blast through mountains
• There were more mountains in the west
  • Topography: plains were flat and easy to build
• Companies meet up in Utah
• First transcontinental railroad in the world

Railroad: Social, Political, Economic Benefits

• Towns that got touched by railroad flourished; others became ghost towns
• Communities were fighting one another to get railroad to come through
• Bribe railroad officials to get through your town for flourishing town
• Joined west more firmly to the Union; we don’t have 50 states yet
• Facilitated flourishing trade with Asia; import and export goods
  • The economic center was the northeast because shipping goods was easier
• Helped pave the way for the growth of the west

Money:

• Hard Money Policy
  • Banking of gold
  • Republicans desired hard money
  • Wealthy and Creditors want a return on investments (someone who loans money but wants something in return) through hard money
• Soft Money Policy
  • Anything that’s worth less than gold; various forms of collateral
  • Democrats wanted inflation and the soft money policy
  • Greenback labor party also advocated for soft money
  • Debtors/Working class want soft money because it causes inflation and makes debts easier to pay

Causes of Panics of 1873 and 1893: Overspeculation

• How did the federal government fund the building of the transcontinental railroad?
  • Land grants (Give railroad companies land, railroad companies determine what land they need, then they sell other parcels of land to help build the railroad)
  • Federal government gives them loans
  • Subsidizes transcontinental railroad
• Railroad Touches American Life
  • Unites the nation in a physical sense; Joining the west with the east
  • Created an enormous domestic market for raw materials and manufactured goods (Ex. coal and lumber)
  • Invited foreign and domestic investors
  • Stimulated other industries including mining and agriculture industries
  • They grow off of the railroad
  • Spurred (Incited) industrialization of the post-civil war years
• Boom for Cities (business and population) and played leading role in city-ward movement; America was changing in post-civil war years---America starts to develop
  • Stimulated stream of immigration: opportunities (Jobs!)- advertising overseas
  • Led to the formation of time zones
  • They used the sun to set the time zones
  • They had to standardize time to avoid train crashes
  • 24 time zones: AROUND THE WORLD; 24 hours in a day
  • A maker of millionaires

Wrongdoing in Railroading

• Stock watering: Inflating the value of a company and selling the stock for more than it’s actually worth- harmful to the public because people inside company knows actually profitable
• Everyday investor was swindled
• Pool: agreement to divide business in given area and share the profits
• They start to establish monopolies
• WE have a regulated capitalist society; have to follow rules and regulations
• Capitalist economy: The consumers dictate the prices of goods and services
• Other railroad industrialists granted secret rebates in kickbacks to certain shippers (Rebate: Discount); rebates to people in power
• The farmers hated the railroads because of unfair competition
• When there’s monopolies it doesn’t help the smaller company, it helps the bigger company
• Populists wanted public ownership of railroads
• Government involvement in the economy started at the local level with Granger Laws--State laws that regulated the railroad (no pool, publish prices, etc.)
• The railroaders aren’t happy; they don’t want their businesses regulated
• Lawyers file lawsuits
• It goes to the supreme court: Wabash vs. Illinois
  • Ruled that individual states had no power to regulate interstate commerce
  • In essence it says that the Granger Laws are unconstitutional
  • People aren’t happy with decision; here’s another example of government helping to protect the interest of big businesses rather than people
  • Farmers have started to become political and they started to vote in blocks and congress doesn’t do something to appease farmers, they might be voted out of office
• In 1887: Congress passed Interstate Commerce Act
  • Rebates and pools are prohibited
  • Railroads had to publish their rates openly (have to know what you’re gonna pay; public has right to know)
  • First attempt by federal government to regulate business in the interest of society
  • the Interstate Commerce Act serve notice there was a public interest in private Enterprise the government was bound to protect
  • In private business (Public interest) and government has to protect public interest; businesses can’t do anything they want
  • Ex. Minimum wage laws, health and safety standards,

The Rich

• Carnegie, Rockefeller, Vanderbilt,Gould, Jay Cook,
• Believed in Social Darwinism
• New arriving wealth
• Pulled themselves up
  • Carnegie
  • American rags to riches
  • He was an immigrant came from Scotland and lived in poverty in Scotland and came to America with no money and turned himself into the richest man in the world
  • he believes he had innate qualities in trades that allowed him to excel and achieve
  • However, the poor can’t rise up because they don’t have the same the qualities
• They believed that God had chosen them to lead and that’s why they had been given these gifts; Carnegie takes it a step further in Gospel Of Wealth
• Carnegie believes that the wealthy have an obligation to make society a better place because God has chosen them and this is what God would want; when Carnegie sells Carnegie Steels to JP Morgan \n Carnegie made a commitment to giving his fortune away---philanthropic and charitable; he had given away 90% of his fortune by the time he died---donated to museums, universities, libraries
• Carnegie believed who were born into poverty---some had special gifts and needed to give them a vessel to utilize them; he makes libraries free, museums can utilize to grow and enhance their knowledge; endowing universities resulted in providing formal education
• NOT ALL POOR were Lazy; some need opportunities given to them
• Believed in the 3 phases of life:
• Learn as much as you can ; Carnegie learned on his own
• Earn as much as you can
• Give back; if you died with a fortune you wasted your life (according to Carnegie); he means leaving something to make society better

Government Regulation

• Moving away from Laissez Faire
• Sherman AntiTrust Act: Passed in 1890
• What it was supposed to: Forbade combinations in restraint of trade; supposed to prevent monopolies and trusts from forming
• USED IT TO GO AFTER LABOR UNIONS (Ex. through strikes, restraining freedom of trade)
• US vs. EC Knight Co.
  • EC Knight Company was the textbook definition of monopoly
  • US justice dept filed against them
  • The court was In favor of EC Knight Company
  • It was confirmation that the government was working on behalf of big businesses in late 19th century
• After Civil War, South remained overwhelmingly agrarian  (If there was a transcontinental railroad, it could have industrialized)
• One industry growth in south was the textile (make clothes/fabric) industry
  • They used immigrants, poor uneducated whites, and former slaves for cheap labor

Gilded Era: Strikes

• Era of monopoly capitalism
• Business was very powerful and workers had very little rights
• On average (non-agrarian) working 6 days a week 10 hours; $1.50 a day
• The workers saw that enormous fortunes were being made and they had dangerous conditions and not enough money
• They Wanted better wages and better working conditions
  • better work-life balance
• Felt like they were being used
• Railroad Strike of 1877: AKA great upheaval
  • railroad strike on the east coast (hit major cities)
  • became violent
  • rutherford sent in troops to cut down violence
  • first-time federal troops were used to put down a strike
• Haymarket Square:
  • huge protest
  • Haymarket Riot/Massacre: somebody threw bomb into the crowd
  • Never found who threw the bomb
  • 4 people were hanged for their crimes
• Public blames Knights of Labor and AFL
• Public support is lost when it became violent
• Homestead:
  • Carnegie’s home factory
  • Was very violent, so it lost support
  • Important: wiped out steel industry for 45 years
• Public become completely against the strikes
• Pullman Strike: people were attacked and the military was brought in
• justification for violence was the mail (the president) \n

Rise of Labor Unions

• Gilded Era:
  • Industrialization and Monopoly Capitalism
  • Not many rights on Capitalism
• Factory workers worked 10 hour days, 6 days a week, and wages were $1.50 a day
• Reactions to Monopoly Capitalism
  • political:
  • greenback labor party →populist →progressive era
  • people were fighting back they felt that they were being left behind and they were being ignored by the government (state and federal)

National Labor Union (NLU)

• Leader: William H. Sylvis
• Membership:
• Lasted 6 years and attracted 600,000 members: skilled, unskilled, and farmers; excluded Chinese, women and African Americans
• Somewhat promoted that they would allow all workers, but their actions were different and they were discriminatory
• Goals:
• Unify workers across locales and trades to challenge powerful bosses
• eight-hour work day, winning the latter for government workers \n Better wages and better working conditions
• Tactics:.
• Salary Arbitration (neutral third party for negotiation)
• Binding arbitration: this is agreement and both sides need to stick to it

Knights of Labor

• Leader:  Uriah Smith Stevens
• Terence Powderly (1869)
• Membership:
• One big union: only restricted services (non-producer), lawyers, alcohol sellers, bankers, lawyers; wanted all men and women and African Americans and Chinese
• Open membership; few successful strikes led to a period of rapid growth
• Goals:
• Wanted to unify all men and women into a national union; workers to combine their wages so they could collectively purchase mines, factories, and stores
• End prison labor; reduces job availability
• End Child labor (work for lower wages)
• Tactics: Oppose strikes (no social unrest) and favored arbitration
• Demise knights of labor: Haymarket Square \n \n

American Federation of Labor (AFL) (still exists today)

Union: Association of workers to improve working conditions (ex. Carpenters, teachers)

• Leader:  Samuel Gompers (leaders during the Gilded Age)
• Membership:
• No individual laborer could join the central organization (self-governing national unions)
• Basically non political
• Included: Skilled craftsmen (Carpenters, bricklayers, electricians, confederation of unions togethers resulted in strength in numbers)
• unskilled laborers, including women and especially AFrican Americans fend for  themselves
• Goals:
• Shunned politics for economic strategies and goals
• Demanded fairer share for laborer; promoting what he called a pure and simple”unionism, he  wanted better wages and working conditions
• “Trade agreement”authorizing the closed shop--all union labor
• “Closed shop” and collective bargaining---no political/economic clout
• “Closed shop”: Hire union members only \n Collective Bargaining: Negotiation of contract with business (leave, safety policies, wages, etc.) (everybody was under same contract);
• different wages were unfair and then strike; same wages resulted in equality
• In Numbers there is strength
• Tactics:
• Walkout and boycotts
• Stronger craft unions of the federation--by pooling funds--were able to amass money that would enable them to ride out prolonged strikes

International/Industrial Workers of the World (IWW)- still exist

• Leader:  Ben Haywood, Eugene V. Debs, Mother Jones
• Membership: never attracted more than 150,000 members \n All workers: teachers, social workers, construction, bartenders, ANYBODY CAN JOIN (Bosses can’t join) because they wanted worker unity and wanted to overthrow bosses; replace capitalism with socialism
• Goals: Craft unionism; Intended to be “One Big Union”; unite skilled and unskilled workers; a socialist economy
• Tactics: Pursued what was considered “bread and butter” issues (issues everyone wants to solve: better wages, better conditions, etc.)
• Direct Action Method: Propaganda, Strikes, Class Warfare/Violence, boycotts

Most successful: AFL (only focused on Unions’ needs and ONLY skilled workers)

Brooklyn Bridge NYC- 1883

• Became symbol of America’s transition from an agricultural to an industrial society (Small town and farms to urbanization) zx

Impact of Industrial Growth in the US was Uneven in Terms Of:

• Geography- most industry was in the North and Midwest with less in South
• People- few gained fortunes but most worked long, dangerous hours for little pay

Impact of Industrialization

1865- US ranked fourth in industrial output behind Britain, France, and Germany

1900- in many industries, the US produced more than the other three combined

By 1900- the US accounted for ⅓ of the world’s manufacturing capacity

Income Gap/Standard of Living

• Huge income gap during the Gilded Age
• 10% of the population (industrialists and their families) controlled 90% of the income
• Urban poor were at the bottom of the income ladder
  • They were working long hours in factory and mills jobs for little pay and no benefits
  • Now the rural poor were at the bottom
• Despite the poor working conditions, most Americans did see an increase in their standard of living, if even a slight one

Labor Movement

• By 1900, ⅔ of all employed Americans worked for wages
• The late 19th century witnessed the most deadly--and frequent--labor conflicts in American history; so many people felt exploited by big companies
• By 1900 only 3% of American workers belonged to unions
• Management held the upper hand in labor disputes, with support (generally) from the government
• People were beginning to recognize the need for better balance in the workplace
• Public attitudes were changing toward labor unions (muck bringing journalists expose horrible working conditions)

Women

• One adult woman out of five in 1900 was in the labor force working for wages (OUT OF ECONOMIC NECESSITY)
• Women were paid half of the men wages
• Worked the same hours as men----reasoning: men were more productive
• Though hard to believe, industrialization did have modest positive effect on women: Earning their place in society and becoming more independent

South During Industrialization

• Some Southerners promoted a vision for a “New South” with self-sufficient economy, industrial growth, modernized transportation, and improved race relations (ROMANTICIZED)
• Some success stories (NOT in race relations) were Birmingham, Memphis, and Richmond;
• South failed to prosper and grow as much as the North
• Remained rural and agricultural
• Textile industry did thrive in the South (cheap labor)

Continuity and Change

Work and Business (1865)

• Farming and sharecropping
• Working in maills
• Mining and Railroad work
• Segregation
• Start of business consolidation (predates monopolies) (Vertical/horizontal integration eventually becomes trusts)

Work and Business (1900)

• Farming and sharecropping
• Segregation
• Women and Children in workforce were cheaper labor
• Mechanization of agriculture
• Wage work in factories
• Monopolies and trusts
• Unions