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THE INDUSTRIALISTS

BIG IDEA: In the late 1800s, the industrial revolution went into overdrive. Business in America was dominated by a few enormously wealthy tycoons who engaged in unethical business practices, but also gave away their fortunes to benefit all of society.

In the decades after the Civil War, the industrial revolution exploded in the North. This period saw a rise in consolidation and the development of monopolies dominated by extraordinarily wealthy industrialists.

Cornelius Vanderbilt dominated the transportation industry.  He started with ferries, but later owned the New York Central Railroad.  He was the first to start giving away his fortune.  His money built Vanderbilt University.

Andrew Carnegie consolidated the steel industry. Pittsburg grew as the center of the steel industry. Carnegie sold his steel empire to J.P. Morgan in 1901. He gave his money away to build libraries, universities and Carnegie Hall in New York City.

Andrew Mellon was a leader in the banking industry. He also served in government as Secretary of the Treasury. He gave his money to build the National Art Gallery in Washington, DC.

J.P. Morgan was also a banker. He bought Carnegie’s steel company and renamed it US Steel. He also owned controlling stakes in General Electric, AT&T and numerous railroads.

John D. Rockefeller was the nation’s richest man. He owned Standard Oil. He pioneered the use of trusts as a way to avoid antitrust laws. Rockefeller gave his money away to build universities and hospitals.

Other great industrialists of the time included Marshall Field who owned a department store chain and Leland Stanford who owned land and railroads in California. Stanford University was built with his money. William Clark dominated copper mining.

People who admired these men called them captains of industry. Those who criticized them for their underhanded competitive tactics and mistreatment of workers called them robber barons.

Some of these industrialists tried to dominate all of one stage of a business. For example, Clark bought all of the copper mines. This is a horizontal monopoly. Others bought one company at each stage of business. Carnegie bought a steel mine, iron ore mine, railroad and ships. This is a vertical monopoly. Rockefeller used trusts to hide his businesses. In this way, he controlled many companies that the public thought were competitors.

CORRUPTION & PHILANTHROPY

BIG IDEA: The late 1800s was a time of both enormous political corruption and the beginning of corporate philanthropy.

The years after the Civil War saw a series of forgettable presidents who did not have much power relative to Congress. One thing government dealt with was corruption. The Pendleton Civil Service Act made many government jobs open to candidates based on competitive exams. This helped limit the spoils system of giving jobs as rewards for supporting political candidates.

This period was also a time of corruption in city governments. Big city mayors used their power to give jobs and contracts to friends. In exchange they bought votes, stayed in power, took bribes, and became rich. These political machines were common. The most famous was nicknamed Tammany Hall in New York.

Money was not always as source of corruption and evil. Andrew Carnegie’s essay the Gospel of Wealth encouraged the wealthy to use their money to benefit humanity.

ORGANIZED LABOR

BIG IDEA: Organized labor unions emerged in the late 1800s, although their efforts were often limited because government generally sided with business owners.

The period after the Civil War saw a growth of labor unions. The Great Upheaval of 1877 was the nation’s first mass strike as workers in the railroad industry started a strike that spread and was supported by striking workers across the nation.

Labor unions used boycotts and strikes to stop work and try to force owners to meet their demands. Owners locked out workers and hired scabs to break strikes. Most strikes in the late 1800s went badly for workers. A large number of immigrants were willing to work for low wages and take the place of striking workers. Government usually supported owners and the police and army broke strikes at Carnegie’s steel plant in Pittsburg and a strike at the Pullman railroad car factory in Chicago.

The first major union was the Knights of Labor. They lost support after the Haymarket Square Riot.

A new union grew as the Knights of Labor fell out of favor. The American Federation of Labor was led by Samuel Gompers and focused on basic issues like wages and working conditions instead of political reform. The AFL was a composite of many smaller craft unions, so they did not represent unskilled workers.

Eugene Debs led the American Socialist Party. This group wanted to change America’s system of government. They wanted to take leadership of the nation’s industries away for the rich. Although they were popular with workers, they never gained the support of more than a small percentage of all Americans.

A more extreme group were the Industrial Workers of the World.  They wanted a violent revolution to take power away from the wealthy and the overthrow the government.  Although Americans rejected these ideas, they eventually caught on in Russia and led to the Communist Revolution there in 1917.

GOVERNMENT REGULATION

BIG IDEA: A series of progressive presidents in the first decades of the 1900s, beginning with Teddy Roosevelt, tried to balance the power of workers and owners and took trusts and monopolies to court.

Theodore Roosevelt took an interesting road to the White House. He was born rich, became a national hero in the Spanish-American War, was briefly a cowboy, became Governor of New York, and eventually vice president. Republican leaders who didn’t like Roosevelt chose him to be vice president on purpose, because they believed he would be sidelined and would have no influence. They didn’t expect McKinley to be assassinated.

As president, Theodore Roosevelt wanted to balance the needs of workers and owners. When trusts were beneficial to the growth of the nation, he ignored them. When he thought business leaders were hurting people and the nation, he took them to court to break up their monopolies.

Roosevelt grew tired of the job and helped William Howard Taft win as his successor. Taft continued Roosevelt’s trustbusting ways. In 1912, Roosevelt came back, this time with his own Bull Moose Party to try to win back his old job. Republicans were split between Taft and Roosevelt, giving the electoral win to Woodrow Wilson, a democrat.

Wilson was also a progressive, and used government’s power to promote reform. During his time in office he created the Federal Reserve to stabilize the nation’s banking system and the Federal Trade Commission to oversee business practices.