Chapter 17 precis

Ummi Ciptasari

The revolutionizing of iron and steel production in the late of nineteenth century was perhaps the
most important technological development at the time. Henry Bessemer and William Kelly were the ones
who invented process to turn iron to steel, followed by Abram Hewitt’s new way to make steel, possible
to produce large quantities and dimensions for construction such as railroads. The steel industry spread all
over the U.S. New transportation systems emerged to serve steel industry, steam freighters were built to
transport steel, and railroads gave steel capital, transported it, and provided a market for it. Oil industry
also grew because of the needs to lubricate mill machinery. Development of automobile dependent upon
growth of two technologies: creation of gasoline from crude oil extraction, and 1870s Europe
development of “internal combustion engine”. By 1910 car industry was a major role in economy. First
gas-car built by Duryea brothers by 1903, Henry Ford began the production in 1906. The U.S. and Europe
soon started to experimenting with aeronautic devices. Wilbur and Orville Wright had the first successful
flight tests in North Carolina. Aviation had its farthest progress in France due to government funding, but
the U.S. tried to compete by created the National Advisory Committee on Aeronautics in 1915.
New industrial technologies lead companies to sponsor their own researches. General Electric
established first corporate lab in 1900, marked decentralization of government sponsored research. A rift
between scientists and engineers over the commercializing of knowledge occurred. Universities and
corporations became interconnected, and commerce and education are still connected. Principles of
“scientific management” began to be employed. Fathered by Frederick Taylor who argued employers
subdivide tasks to decrease need for highly skilled workers and increase efficiency by doing simple tasks
with machines, the adoption of “Taylorism” led to increased efficiency, but it made workers less
independent. Henry Ford introduced the moving assembly line into his car plants in 1914, which raised
wages, shortened hours, and cut prices.
However, railroads were still nation’s principal form of transportations that helped determine the
path of agricultural and industrial development and changed the economic, social and physical landscape.
It also altered concepts of time, divide US into four times zones in 1883. The rapid extension of these
railroads were keep going until there were about 193,000 miles of track by 1900.
The law of incorporation passed in many states led to the modern corporation. Americans could
buy stock with limited liability. In the steel industry, Andrew Carnegie dominated the business before sold
it to J.P. Morgan, who created the U.S. Steel Corporation. Corporate organizations developed new
management system included a division of responsibilities, cost-accounting procedures, and the
introduction of the middle manager. Consolidation occurred through horizontal integration that combined
firms with the same enterprise and vertical integration, control of all aspects of an industry. J.D.
Rockefeller’s Standard Oil Company, formed by both integration controlled 90% refined oil n US.
Failure of pools (informal agreements to stabilize rates and divided markets) led to less
cooperation and more centralized control company. Trusts were created, but they became obsolete when it
was possible for companies to buy other companies. Holding companies then emerged as corporate body
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to buy up stock and establish formal ownership of corporations in trust. In the end of 19 century, 1% of
corporations controlled 33% of manufacturing, system where power in hands of a few men.
As big businesses rose, criticism started to grow from middle class society. Defenders argued
capitalist economy expanding opportunities for individual advancement, and some tycoons were self-
made men. But most came to be wealthy as a result of ruthlessness, arrogance and corruption. Claims that
millionaires were the product of hard work led to the concept of Social Darwinism or survival of the
fittest as the application of Darwin’s law. Herbert Spencer and William Graham Sumner were important
proponents of this theory. Social Darwinism justified businessmen’s methods and said that unions would
fail, competition was key and also supported the idea of supply and demand. Andrew Carnegie wrote the
Gospel of Wealth, advocated idea that with great wealth came great responsibility to use riches to advance
social progress. A baptist minister, Russell H. Conwell known for his “Acres of Diamonds” speech, telling
people that get rich is their duty. Horatio Alger promoted stories of individual success in his works, that
anybody could become rich thru work, perseverance, and luck. Lester Frank Ward wrote Dynamic
Sociology, which said that civilization was not governed by natural selection but by human intelligence.
The Socialist Labor Party and the American Socialist Party were also against Social Darwinism. Henry
George wanted a “single tax” to replace all other taxes and distribute wealth. Edward Bellamy wrote a
utopian novel called Looking Backwards where the government helped society become a great machine
that ran itself, with no want, politics, or vice.
While few questioned capitalism, but movement grew in opposition to monopolies and economic
concentrations, and the artificially high prices, lowering of advancement opportunities, and grossly lavish
people they created. The standard of living was rising but the gap between rich and poor was increasing.
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Industrial work force grew late 19 century because of migration to industrial cities from both
rural areas and foreign immigration- late century most migrants from England, Ireland, North Europe, by
end shit toward South and East Europeans. Immigrants came to escape poverty, lured by opportunity and
advertisements by companies. Ethnic tensions increased because of job displacement and competition.
Low-paid immigrants replaced higher-paid ones. In 1900, the average income of a worker was $4-500 a
year, which was lower than needed for a comfortable life. There was a loss of control over production,
which made strikes useless. In 1900, 17% of the workforce was women, and people considered it
inappropriate for women to be working outside the home. They were unskilled labor and were paid very
low wages. Many children were employed in factories and agriculture for extra money for their families.
Child labor laws were passed but were ineffective. Men had even worse working conditions.
William H. Sylvis founded the National Labor Union in 1866, which was disappeared after the
Panic of 1873. Unions faced difficulty during 1870s recessions because of high unemployment and
hostility of middle class. The middle class was hostile toward union because they blamed them for violent
labor disputes. A railroad strike occurred in 1877 when eastern railroads announced a 10% wage cut. The
huge strike disrupted rail service and destroyed equipment. More than 100 people died in resulting
conflicts. This showed the resentment of the workers against the employers and the frailty of the labor
movement.
The Noble Order of the Knights of Labor was established in 1869 and was the first labor
organization to accept women. By 1866, the Knights of Labor had 700,000 members, but by 1890
Knights had collapsed due to failure of strikes in the Gould railway system. In1880s American Federation
of Labor was created, became most important and enduring national labor group - collection of
autonomous craft unions of skilled workers. They were averse to unskilled workers and women in the
workforce. They also didn’t want government interference in the labor movement. They demanded an 8-
hour workday and threatened to strike. On May 1, 1886 in Haymarket Square, Chicago, a large crowd of
strikers and police gathered. Someone threw a bomb and eleven people died that day. Seven anarchists
were sentenced to death. Anarchism became widely feared by middle class. It was also associated with
radical labor.
The Amalgamated Association of Iron and Steel Workers, a part of the AFL held large amount of
power in steel industry because of reliance on skilled workers. Members had control over their working
conditions and had a foothold in the Homestead Plant in Pittsburgh. When wages were cut a second time,
the Amalgamated called for a strike, and the company responded with guards, the guards were attacked
and state troops were sent in to end the strike. The Amalgamated lost members. In the Pullman strike of
1894, workers at the Pullman Palace Car Company held a strike to remove wage cuts without rent cuts.
Eugene Debs of the American Railway Union started the strike, which had to be put down by federal
troops because transportation had been disrupted and mail was not being delivered.
The abolition of the Contract Labor Law and the establishment of the 8-hour workday for
government workers occurred, but there was spotty enforcement and strikes continued to fail. There were
few labor gains because only 4% of workers were in unions, unions didn’t want unskilled workers, and
immigrants weren’t willing to organize. There was some social mobility, but mostly labor had no gains
because of corporate strength.