The Gilded Age

AP Notes: Unit 6-The Gilded Age

Part 16: The Last West and the New South (1865-1900)

This chapter details the goings on in the South and the West following the Civil War, including the Jackson Frontier Thesis.

A. The West: Settlement of the Last Frontier. Following the War, many Americans now turned to settling the West, as the land between the Mississippi and the pacific had been referred to as the “Great American Desert.” Why? Gold in California, fishing and farming in Oregon, etc. Although there was light yearly rainfall west of the 100th meridian, there were 15 million buffalo, which provided food, clothing, shelter, and tools to the natives who lived there. By 1900 these buffalo herds were all but wiped out and the frontier was virtually gone. Homesteaders had fenced in the land, the railroad had created cities and towns, and states had been carved out. (Only AZ, OK, and NM remained as territories by 1900.) The rush for minerals in the west had caused this destruction and the natives who stood in the way of the onslaught paid the price in culture and lives. Settlement of the frontier was achieved by 3 groups: miners, cattleman and cowboys, and farmers.

a. The Mining Frontier: California gold rush in 1848 started the beginning of a quest for gold and silver that extended into the 20th century. Gold and silver strikes in Utah, Nevada, Idaho, Montana, Arizona, and South Dakota kept people coming West. 100,000 miners came to Colorado in 1859 when gold was discovered near Pike’s Peak. The Comstock Lode (over $340 million in gold and silver in Nevada by 1890) brought Nevada into the Union in 1864.
i. The method: Individual prospectors would look for traces of gold and silver in the streams by placer mining (panning.) Deep-shaft mining took its place, which required wealthy investors and corporations. A strike meant a rush, boom town. Lawless towns sprang up all over the West, including Virginia City, NV, where Mark Twain started his writing career on the local paper. Many boom towns became ghost towns just as quickly as miners moved on to the next strike. ii. As mines developed, professional miners from Asia and Europe arrived, as it was not unusual for half the population of a mining town to be foreign born. By the 1860s, 1/3 of the miners in Nevada were Chinese immigrants. In California, anti-immigrant feeling led to a $20 miner’s tax on all foreign miners as well as the infamous Chinese Exclusion Act of 1882, which prohibited further immigration from China. This was the first major Congressional Act to restrict immigration on the basis of race and nationality. iii. Negative Effects: These strikes not only affected the population shifts in America, but they also brought about discussion of gold and silver backed currency to the forefront, which would become a leading political issue in the 1880s and 90s. Also, the mining left scars on the land that can still be seen today, as well as a disastrous effect on the Natives.
b. The Cattle Frontier: Following the War, many saw the vast open grasslands of Texas as another source for economic boom: Cattle. We basically stole the idea of the cowboy from Mexico, as well as the cattle themselves (Texas Longhorns were originally from Mexico.) During the War, after the Union cut Texas off from the rest of the Confederacy, over 5 million head of cattle roamed freely throughout Texas. When the War ended, the Texas cattle business was easy to get into because both the cattle and the land were free.
i. Railroads Impact on Cattle: The construction of RR into Kansas after the war gave Texan cattlemen a destination. If you could get the cattle to Kansas, they could be placed on the trains and sent to Chicago for slaughter and hamburger. Joseph McCoy realized the huge profitability to be made by sending beef to Chicago. Cows were sold for $30-$50 a head in Chicago. McCoy built the first stockyards in Abilene, Kansas. Dodge City, Sedalia, Kansas City and other cow towns followed along the railroad. Trails were established with these cow towns as the final destination: Chisholm Trail, Goodnight-Loving Trail, in the 1860s and 70s. The cowboys, many of them black or Mexican, were paid on average of $1 a day. ii. Cattle drives die out: In the 1880s overgrazing destroyed the grass and a horrible blizzard and drought in 1885-86 killed off 90% of the cattle. Homesteaders also destroyed the Open Range by putting up barbed wire fences all along the frontier. Wealthy cattlemen then turned to developing huge private ranches with scientific methods, learning that if you feed the cattle better grains, the meat is much more tender and tastier. iii. Eating habits change: These cattle drives turn America from a pork eating country to a beef eating country. It also gave rise to the legend of the loner American hero, the cowboy.
c. The Farming Frontier: Homestead Act of ’62 encouraged farming on Great Plains, offering 160 acres of public land free for five years of settlement. Hundreds of thousands came, including immigrants. Overall, over 500,000 families took advantage, but five times that number ended up having to pay for land because rich speculators took most of the best land.
i. Sodbusters: Those who came first, built their homes of sod bricks, experienced the locusts and the heat/cold, lonely life on the prairie. Little water, wood nonexistent. 1874 Joseph Glidden invented barbed wire (due to scarcity of lumber for fences). However, by 1900 at least 2/3 of the farms had been foreclosed due to inability to keep up with the elements. What saved the Great Plains? Irrigation, dams, etc. ii. Turner’s Frontier Thesis: Oklahoma Territory (once set aside for natives) was opened to settlement in 1889, providing for the last great land rush in US history. The 1890 census then announced that the frontier was now settled, or closed. Reacting to this news was historian Frederick Jackson Turner who wrote the essay “The Significance of the Frontier on American History” (1893). He wrote that 300 years of frontier experience had played a major role in the development of US history.
1. Promoted a habit of independence and individualism.
2. Acted as a powerful social leveler, breaking down class distinctions, fostering social and political democracy.
3. The frontier forced Americans to be inventive and practical-minded, but also quite wasteful in their attitude toward natural resources.
4. Free land on the frontier had always been a safety valve (get rid of the trouble, etc.)
5. Had always been a fresh start.
6. Does this mean we would now have to follow the European model and create class division and social conflict?
7. What about imperialism? iii. Many debated the Turner Thesis, as they still do, but by the end of the 1890s, Americans were moving back to the cities and the Plains farms were declining.

B. The Removal of the Native Americans: Natives were the ultimate loser in the westward progression. 2/3 of the western tribal groups lived on the Great Plains. (Sioux, Blackfoot, Cheyenne, Crow, and Comanche. They were developed horsemen and life centered on the buffalo. Large tribes of thousands generally lived in smaller sub groups between 300-500 men. The basic problem with the natives is that the Americans wanted to put them on reservation, but the natives wanted to follow the buffalo.
a. Reservation Policy: As we moved west, we wanted the natives out of our way. At Ft. Laramie and Ft. Atkinson in 1851 the federal government began to assign the plains tribes to tracts of land. The natives paid no heed to the restrictions of moving off the reservation to follow the buffalo.
b. Indian Wars: Warfare was inevitable as Americans began to arrive. 1864-the Sand Creek massacre occurred. Federal men killed an encampment of Cheyenne men, women, and children.
i. In the Sioux War of 1865-67 the Sioux actually massacred an army column. These wars were followed by new treaties and reservations, with promises of government support. Meanwhile, the massacre of buffalo begins in earnest. Indians began neglecting the treaties. ii. In the 1870s a new wave of fighting opens, including the Red River War against the Comanche and a second Sioux War featuring Crazy Horse and Sitting Bull. George Custer and his 7th Cavalry were ambushed and destroyed at Little Big Horn in 1876. iii. Chief Joseph’s attempts to lead a Nez Perce band into Canada were defeated in 1877. His famous quote? “We will fight no more…forever.”
c. Assimilationists: Helen Hunt Jackson wrote of the injustices done to Native Americans in her 1881 book “A Century of Dishonor.” The book created sympathy, but most felt the Indians should assimilate into American society. Formal education (Carlisle School in Pennsylvania, for example), conversion to Christianity, etc.
d. Dawes Severalty Act (1887): A new approach, instead of treating the natives as separate nations, treats them all the same. This act was designed to break up tribal distinctions; many people felt it was these tribal customs that kept the Indians from becoming civilized. Dawes Act divided the Indian lands into 160 acre plots, after living on the plot for 25 years and leading a “civilized life”, the Indians were American citizens. 47 million acres were distributed, over 90 million acres of former reservation land was sold off by the government to rich real estate investors, much of this land being very good farm land. This new policy was a disaster, as by 1900 only 200,000 natives remain, most of them wards of the federal government.
e. Ghost Dance Movement: The last effort to resist. Whites assumed the Ghost Dance was a preparation for a massive war; Sitting Bull was killed during his arrest, then in Wounded Knee, SD federal soldiers killed over 200 natives (men, women, and children) in what became known as the “Battle” of Wounded Knee.
f. U.S. Indian Policy in the 20th Century: In 1924, the US government granted full citizenship to all natives, FDR later reestablished all Indian tribal rites in his Indian Reorganization Act (1934). Today there are over 1.8 million Native Americans, 116 tribes, some on reservations, some off.
C. The New South: Many southerners now want to become a self-reliant economy, led by Atlanta Constitution editor Henry Grady. He wanted economic diversity and laissez-faire capitalism. Tax exemptions were offered to people who would start businesses in southern states, and there was plenty of cheap labor in the South.
a. Economic Progress: Birmingham became a leading steel center, Memphis became a leading lumber center, and Richmond was rebuilt and became a leader in the tobacco industry.
i. Cheap labor meant Georgia, NC, and SC to become leaders in the textile industry, with 400 cotton mills by 1900 employing 100,000 white workers. Railroads also contributed to the South, by 1890 they had an integrated RR (same gauge) and by 1900 the South had equaled or surpassed that of the other areas of the country (in terms of population, industry, and railroads.)
b. Continued Poverty: South remained an impoverished region, however. Northern financing dominated the southern economy now more than even before the War, Northern investors owned 75% of the southern railroads and controlled the Southern steel industry by 1900. Industrial workers in the South earned half the national average and worked longer hours (94% of the industrial workers in the South were white). Most southerners lived in traditional roles of sharecroppers and tenant farmers.
i. Why was the South so impoverished? 2 reasons:
1. The South’s late start at industrialization.
2. South had a poorly educated work force. No tech school, few possessed the technological skills needed for industrial development. With this lack of education, the South is still basically cut off from economic opportunities for the rest of the 19th century.
c. Agriculture: Southern economy was still mainly tied to growing cotton. Between 1870 and 1900, the number of planted acres doubled, which only added to the cotton farmer’s problems. Cotton prices declined by more than 50% in the 1890s due to a glut of cotton on the world market. Per capita income declined in the South, leading to farm failures. By 1900, over half the white farmers and 75% of the blacks were tenant farmers (15 to 20 acres each.) Crop lien system develops out of this. Basically, crop lien is where farmers borrow supplies from local merchants in the spring with a lien, or mortgage, on their crops to be paid at harvest time. This forces poor farmers to remain tenants, like serfs tied to the land by debt.
i. Innovation Attempts: George Washington Carver, a scientist at Tuskegee Institute, promoted growing peanuts, potatoes, and soybeans so that the farm can diversify. Others picked up on this example. ii. Cycle of debt and poverty: These hard times produced a harvest of discontent. By 1890 the Farmer’s Southern Alliance had more than a million members. The Colored Farmer’s National Alliance had roughly 250,000 members. Both organizations rallied behind political reforms to solve the problems. These organizations should have combined forces; they would have been a strong force. However, as separate unions they did not have near the power needed to knock out the controlling elites in the South.
d. Segregation: With the end of Reconstruction, the North withdrew its protection of the freedmen in 1877. The Redeemers were in control, so it was up to the freedmen to take control of their political, economic and social futures. The business community and white supremacists supported the redeemers, who in turn supported segregation and separation. By playing on the racial fears of whites, the redeemers gained and kept political power as they fought to keep blacks in their place.
i. Discrimination in the Supreme Court: Supreme Court began striking down Reconstruction Acts as soon as Reconstruction ended. In the Civil Rights Cases of 1883, the Court ruled that Congress could not legislate against the racial discrimination practiced by private citizens, which included railroads, hotels, and other businesses used by the public. (It’s your private right to be a bigot.)
1. Plessy v. Ferguson: (1896) Court upheld a Louisiana law requiring “separate but equal accommodations” for white and black passengers on railroads. The Court ruled that this did not violate the 14th Amendment’s guarantee of equal protection of the laws.” A wave of segregation laws, called Jim Crow Laws, followed. Segregated washrooms, drinking fountains, park benches, and other facilities. Only the use of streets and most stores were not restricted according to race.
e. Loss of civil rights: Other discriminatory laws resulted in the wholesale disenfranchisement of black voters by 1900. Examples: Louisiana had 130,000 registered black voters in 1896 but only 1,342 in 1904 (99% decline.) Various legal devices and obstacles were used to stop black from voting, for example literacy tests, poll taxes, political primaries for whites only, grandfather clauses (which allowed a man to vote only if his grandfather had voted in elections prior to Reconstruction.) The Supreme Court declared these laws constitutional in an 1898 case, which it upheld that literacy tests can be used to determine citizens’ qualifications for voting.
i. The forms of discrimination: Blacks could not serve on juries, they were given stiffer penalties for similar crimes, blacks were not given the benefit of court-ordered sentences, lynch mobs killed 1,400 men during the ‘90s, blacks were kept out of skilled trades and factory jobs, so while poor whites were moving ahead, blacks were kept in farming and low pay domestic work.
f. Responding to segregation: Black leaders advocated leaving the South for Kansas, Oklahoma, or even Africa. Bishop Henry Turner formed the International Migration Society in 1894 to migrate to Africa, Ida B. Wells, editor of the Memphis Free Speech (a black paper), fought against lynching and Jim Crow laws. Wells had to eventually move to the North as death threats and the destruction of her printing press forced her out.
i. Booker T. Washington’s Ideas: A former slave who graduated from Hampton Institute in 1881, Washington established an industrial and agricultural rural school in Tuskegee, Alabama which became the largest and best industrial school in the nation. He taught blacks skill trades, the virtues of hard work, moderation, and economic self-help. Earning money was “like having a little green ballot. People will pay attention.” At the Atlanta Exposition and Protest, he declared “the agitations of the questions of social equality is the extremist folly.” In other words, let’s prepare ourselves before we demand equality…make ourselves capable of success before we go out and beg for it. In 1900 he founded the National Negro Business League, which supported businesses owned and operated by blacks around the country. He also preached racial harmony and economic cooperation, which drew praise from Andrew Carnegie and Teddy Roosevelt. ii. In later years, many considered Washington’s stance a bit of a sellout to discrimination and segregation. In the 20th century, W.E.B. DuBois would demand an end to segregation and the granting of equal rights.
D. Farm Problems: North, South and West: Farmers were becoming the minority throughout the country, the percentage of farmers in society dropped from 60% of the working population in 1860 to 37% in 1900.
a. Changes in agriculture: Farming was becoming more commercializes and specialized. Farmers in the North and West single cash crops, like corn or wheat, for national and international markets. Farmers also began to procure their food from stores in town and manufactured goods from mail order catalogs like Sears and Roebuck or Montgomery Ward. Farmers also began to rely heavily on big farm equipment like steam engines, seeders, and combines. Farms began to run like factories and small farmers were run out of business.
i. Falling prices: Increase in world production of wheat, cotton and other crops drove crop prices down. As prices fell, farmers with mortgages faced both high interest rates and the need to grow two or three times as much just to pay off the debt. This overproduction led to further falling of prices. This vicious cycle ended with more debt, foreclosures, and more tenant and sharecroppers. ii. Rising costs: Industrial corporations were able to keep manufactured good prices high by forming monopolies (trusts). Middlemen (wholesalers and retailers) took their cuts before selling to farmers. Railroads, warehouses, and elevators then took their cut, leaving the farmer, or the consumer, to pay high prices to cover everyone’s cut. Railroads often charged more to haul short hauls with no competition than they charged for long hauls with heavy competition. Greedy bastards. To make it worse, the government charged heavy taxes on farm equipment and land but no taxes on stocks and bonds. Tariffs didn’t help farmers, they only helped industrialists.
b. Fighting Back: The rugged individualism that farmers possessed kept them from forming alliances, but with all of these problems farmers began to collectively seek a solution.
i. National Grange Movement: The National Grange of Patrons and Husbandry was organized in 1868 by Oliver Kelley primarily as a social and educational organization for farmers and their families. By the 1870s, the Grange was taking political action to defend against middlemen, railroaders, and trusts. Granges in every part of the country formed cooperatives, businesses owned and run by farmers in order to save the costs charged to middlemen. The Grange was probably most powerful in the Old Northwest, or the Midwest as we call it today. ii. The real targets of the Grange: Storage costs and shipping rates. Railroads would charge smaller farmers two or three times what they would charge larger shippers. That is, until the Grange placed pressure on state politicians to pass laws regulating the rates charged by railroads and elevators. Other Granger laws made it illegal for railroads to fix prices by means of pooling and to give rebates to privileged customers.
1. Munn v. Illinois: (1877) SC upheld the right of a state to regulate businesses of a public nature, such as railroads.
c. Interstate Commerce Act: States could only regulate short hauls or local hauls because once the line crosses a state border, it is under the jurisdiction of another state…this caused mass confusion as to who truly had the right to regulate the railroads. Interstate commerce had always been regulated by the federal government, so in the case of the railroads the railroad companies simply applied the Granger laws by raising their long-haul rates.
i. Wabash v. Illinois: (1886) SC ruled that individual states could not regulate interstate commerce. In effect, this ruling nullified many of the Granger laws in individual states. ii. With farmers in an uproar, the federal government addressed the problem by passing the first federal laws regulating the railroad. The Interstate Commerce Act of 1886 required railroad rates to be “reasonable and just.” It also set up the Interstate Commerce Commission, the first federal regulatory agency, which had the power to investigate and prosecute pools, rebates, and other discriminatory practices. Ironically, this regulation initially helped the railroads more than the farmers because it allowed the railroads to curtail competition and stabilize rates, plus the fact that the Commission lost most of its cases in the federal courts.
d. Farmer’s Alliances: Separate alliances were formed in different states, but the fact was that farmers were tired of being oppressed by “the man.” They served farmers needs for education and the latest scientific methods, as well as organize farmers for political and economic action. Unlike the Grange, this alliance had a serious possibility of turning into a real political party simply because its common man approach appealed to people outside of farming.
e. Ocala Platform: The National Alliance met in Ocala in 1890 to address the problems of rural America. They attacked both major parties for merely being puppets of Wall Street bankers and big business. Delegates at Ocala introduced a platform that would resurface in the future.
i. Direct election of senators. ii. Lower tariffs. iii. A graduated income tax. iv. A new banking system regulated by the federal government.
v. Wanted treasury notes and silver be issued so that there would be more money in circulation (farmers wanted this to create inflation and raise crop prices.) vi. Wanted federal storage for farmers’ crops and federal loans, which would lessen farmers’ reliance on middlemen.
f. Effects of the Grange and Farmers Alliances: The backing of local and state candidates who pledged support for alliance goals often proved decisive in the elections of 1890. Many reforms became the basic platform of the Populist movement and would eventually be seen as part of the Progressive party at the turn of the century.

Part 17: The Rise of Industrial America, 1865-1900

A combination of forces led to the U.S. being the leading industrial power in the world by 1900. What were these forces? 1. America’s natural resources (coal, iron ore, copper, lead, timber, oil. 2. Abundant labor supply (immigrants, freedmen, etc.)
3. A growing population combined with advanced transportation systems led to the U.S. becoming the largest market in the world for industrial goods. 4. Lots of capital, as Europeans saw the promise of America and invested in its future. 5. Technologies saved on labor (over 440,000 new patents between 1960-1890.)
6. Laissez faire policy of the federal government allowed railroad to expand, U.S. manufacturing to grow, and kept taxes relatively low. 7. Talented entrepreneurs emerged at this time as well, building vast monopolies.

A. The Business of Railroads: RR production increased more than five-fold from ’65-’90. The development of the American RR network was the single greatest achievement of the 19th century, having the greatest impact on American economic life. Also, and very importantly, the RR business promoted other industries, especially coal and steel. Railroads also separated the nation into four time zones in 1883, a change the country adopted officially. The most important innovations of the RR may have been the creation of the stockholder corporation and the development of complex structures in finance, business management, and the regulation of competition.
a. Eastern Trunk Lines: In the early days of the RR, all kinds of different companies built little RR lines connecting small towns. These lines were often of different gauges, which led to no main line. This stopped for the most part after the Civil War with the consolidation of many lines. These small lines were integrated into trunk lines, which mean a trunk line is a major route connecting two large cities; smaller branch lines would connect outlying towns.
i. Commodore Cornelius Vanderbilt: Used his fortunes gained in steamboat business to merge local railroads into the New York Central RR, which ran from NYC to Chicago on more than 4,500 miles of track. Many other trunk lines connected other major eastern cities as well.
b. Western Railroads: RR played a major role in settling the west in two basic ways, first they promoted settlement on the Great Plains and secondly, they linked the east and the west creating one giant national market.
i. Federal Land Grants: Federal government new that the RR would lead the way to settlement, so the Fed gave them many land grants and loans. 80 RR companies got over 170 million acres. The government expected that the RR companies would then sell this land to new settlers to finance construction of the actual rail lines. It was hoped that the completed RR would increase the value of government lands and that the lines would provide lower rates for transporting mail and troops.
1. Negative consequences to the land grants and loans: First, they promoted hasty and poor construction and secondly, it led to widespread corruption in all levels of government. For example, the Credit Mobilier scandal, in which a company was used in order to pocket huge profits. Also, by the 1880s, it was discovered that the RR’s controlled nearly half of the land in the West, which led to protests. ii. Transcontinental Railroads: Two new companies were given this job (tying Cali to the rest of the Union). Union Pacific was to build westward from Omaha, while the Central Pacific was to build eastward from Sacramento. Gen. Grenville Dodge oversaw the Union Pacific with massive use of war veterans and Irish immigrants. Charles Crocker oversaw the Central Pacific, where he used over 6,000 Chinese to blast their way through the Sierra Nevada Mountains. May 10, 1869 they came together at Promontory Point, Utah, where the golden spike was driven.
1. Four other transcontinental railroads were built before 1900: Southern Pacific tied New Orleans to LA; the Atchison, Topeka and Santa Fe tied KC to LA; the Northern Pacific tied Duluth, Minnesota to Seattle; and the Great Northern connecting St. Paul and Seattle. The Great Northern was built by James Hill and was the only one to be built without federal subsidies. iii. Competition and Consolidation: The railroads were overbuilt, which means many of them did not make any money. Also, mismanagement and fraud were commonplace.
1. Jay Gould-a speculator, went into the RR business to make a quick buck, he made millions by selling off his assets and watering his stock. (Inflating the value of a corporation’s assets and profits before its stock to the public.)
2. To Survive, RR’s offered rebates and kickbacks to favored shippers, while raising the prices for smaller shippers and farmers. They also formed secret pools, in which competing companies agreed to fix rates and share traffic.
3. Panic of ’93 forced 25% of RR’s to go bankrupt. J.P. Morgan and other bankers quickly swooped in to take control of the bankrupted RR’s and consolidated them. This reduced competition and allowed owners to stabilize rates and remove debts. By 1900, seven giant systems controlled 2’3 of the nation’s RR’s. Unfortunately, these seven companies had interlocking directorates, meaning one man (like Morgan) served on the Board for several RR companies, meaning that these companies were basically one huge monopoly controlled by a small group of wealthy men.
4. Attempts to change this control was slow. Granger Laws were overturned by the courts in the 1870s, and the Interstate Commerce Act of ’86 was worthless without a ballsy president to enforce it. Only with the Progressives of the 20th century did we actually see change. Until then, in the words of William Vanderbilt (son of the Commodore), “Let the public be damned!”
B. Industrial Empires: This period (post Civil War to 1900) has been called the “Second Industrial Revolution.” Instead of producing clothing and leather, these factories produced steel, petroleum, electric power, and the industrial machinery to produce other goods.
a. The Steel Industry: The big breakthrough came when men figured out a new process for making larger quantities of steel (called the Bessemer process after Henry Bessemer of England, but also discovered by William Kelly in the U.S.) The Great Lakes area (with the Mesabi Range in Minnesota) became the leading steel producer.
i. Andrew Carnegie: Came to America as a dirt poor Scottish immigrant but by the 1850s had worked his way up to a superintendent of a Pennsylvania railroad. He began producing steel in the 1870s, using salesmanship and the latest technology to pull away from his competitors. His vertical integration (whereby a company would control every stage of the industrial process, from mining of raw materials to transporting the finished product) was ahead of its time. By 1900, Carnegie Steel, which employed 20,000 workers, was the leader in its industry, out-producing all the steel mills in Britain. ii. U.S. Steel Corporation: Carnegie wanted to go into philanthropy in 1900, so he sold Carnegie Steel to J.P. Morgan for $400 million. U.S. Steel was the largest corporation in the world, it became the world’s first multi-billion dollar company, employing 168,000 people and controlling 3/5 of the world’s steel business.
b. The Oil Industry: First U.S. oil well was drilled by Edwin Drake in 1859 in Pennsylvania. 4 years later, a young John Rockefeller started a company that would eventually control most of the country’s oil supply. He was known as a fiercely competitive man, and took over hundreds of companies by any means necessary.
i. Rockefeller employed the latest technologies and the practices, he also forced rebates from the railroads as well as lower his oil price (kerosene at the time) forcing others out of business and then raising his prices to make up for the losses. Standard Oil Trust controlled 90% of the oil refinery business by 1881. Standard Trust was made up of all the companies that Rockefeller had acquired, with Rockefeller himself controlling the Board. This was called horizontal integration, in which all of your competitors are brought under one umbrella, so that you control the entire industry. He controlled the supply and prices of oil products, thus creating a true monopoly. He did manage to keep prices low for consumers. His fortune soared to over $900 million at the time of his retirement. Other businessmen followed Rockefellers lead, leading to the creation of more trusts in other industries.
c. Antitrust Movement: The trusts came under attack in the 1880s, both by the rising new middle class who feared the unchecked power of the trusts, and by the old wealth of the cities, who resented the rise of new wealth. Stats would not touch it, primarily because of payoffs and pressure. Congress passed the Sherman Antitrust Act of 1890, which prohibited any “contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce.”
i. The Sherman Act was vaguely worded, thus it was not used very often. Then, in 1895, in the court case U.S. vs. E.C. Knight the Supreme Court established that the Sherman act could be applied only to commerce and not to manufacturing. Long story short, it’s not until the Progressive Era that the U.S. gets real antitrust convictions.
C. Laissez-Faire Capitalism: this belief went with the prevailing feelings of the times.
a. Conservative Economic Theories: Adam Smith, way back in 1776, had written in The Wealth of Nations that business should be regulated by “the invisible hand,” (law of supply and demand) and not by government. Business should be motivated by its own self-interest to offer improved goods and services at low prices. However, in the 19th century business got an added bonus, they got high protective tariffs and government subsidies. However, the monopolies of the time went against this competitive requirement. What the monopolies wanted was freedom to continue their rule without government interference.
b. Social Darwinism: People like Herbert Spencer (English social philosopher) applied the ideas of natural selection and survival of the fittest to the marketplace. He thought the concentration wealth in the hands of the “fit” was a benefit for the future of the human race. William Graham Sumner of Yale argued that government assistance for the poor only interfered with the laws of nature and weakened the evolution of the species by preserving the unfit.
c. Gospel of Wealth: Many rich people of the time period used God as a reason why they were rich, especially people like Rockefeller. Reverend Russell Conwell preached in his “Acres of Diamonds” lecture that everyone had a duty to become rich. Andrew Carnegie wrote in an article entitled “Wealth” that the wealthy had the God-given responsibility to civic philanthropy. Carnegie eventually distributed over #350 million to the building of libraries, universities, etc.
D. Technology and Innovations: These things led to greater productivity, etc.
a. Inventions: Morse Telegraph (1844)-sped up communications and, along with the railroad, revolutionized transportation. Cyrus Field’s transatlantic cable in 1866 made it possible to send messages across the seas in an instant. By 1900, all continents were connected. In 1876, Bell invented the telephone. Also, the typewriter (’67), the cash register (’79), the calculating machine (’87), and the adding machine (’88). Consumer products included George Eastman’s Kodak camera (’88), Lewis Waterman’s fountain pen (’84), and King Gillette’s safety razor (’95).
b. Edison: He got his first patent in 1869 (a machine for recording votes). In 1876 he established an invention laboratory in Menlo Park, New Jersey. It was revolutionary because it created the world’s first research lab where teams of inventors and engineers worked together, not alone as most inventors did at the time. Over a thousand patented inventions came out of this lab, including the phonograph, the light bulb, the dynamo for generating electric power, the mimeograph machine, and the motion picture camera.
i. George Westinghouse: held more than 400 patents. He developed air brakes for the RR (’69), a transformer for producing high-voltage electric currents (’85) which made it possible to light cities and operate electric streetcars, subways, and electricity in the home.
c. Marketing Consumer Goods: The Department store was born out of trying to get more stuff into people’s hands faster. R.H. Macy in NY and Marshall Field in Chicago were the first urban department stores, while Frank Woolworth’s five and ten cent store brought the idea of the limited department store to towns. Sears, Roebuck and Co. and Montgomery Ward were the first mail order companies for those who could not get in to the cities, their catalogs were known as “wish books.”
i. Kellogg and Post brand names became popular, refrigerated railroad cars changed the way people ate because now beef could be shipped to the east. Canning helped as well, both canning and refrigeration were introduced by Gustavus Swift. Also, advertising and marketing created a new consumer economy in which “going shopping” became an American pastime.
E. Impact of Industrialization: The growth of the American industry raised the standard of living for many, but it also created a sharper division between the classes (rich, middle and poor.)
a. The Concentration of Wealth: By the 1890s, the richest 10% of the American population controlled 90% of its wealth. These new wealthy types lived lavish lifestyles, (Vanderbilt’s in Newport, RI with summer homes throughout the country.)
b. Horatio Alger myth: Americans liked the idea of the American Dream, or the “self-made man”, instead of realizing how poor they actually were. Also, the ideas of Horatio Alger’s books, (titles include Fame and Fortune, Ragged Dick, Mark the Match Boy) in which a young man of modest means ended up rich and successful by the end. It was possible to move up in society (much more so than in Europe at the time), but it was not very likely. The average millionaire of the time came from wealth and was white.
c. The Expanding Middle Class: This growth of large corporations led to the opening of white collar management jobs. (White collar jobs are ones which are high paid and require no manual labor.) Middle management was needed as a buffer between the chief executives and the factory workers, but there were also jobs for accountants, clericals, salespeople, which were middle class jobs. In turn, these middle class people began a demand for other middle class types, like doctors, lawyers, storekeepers, etc. All of these jobs considerably increase the income of the middle class.
d. Wage Earners: By 1900, 2/3 of all working Americans worked for wages. Generally, hours were 10 hours a day, 6 days a week. Wages were based on supply and demand, and the supply of workers was high.
i. Low wages were justified by David Ricardo’s Iron Law of Wages. It said that raising wages could only increase the working population, and this availability of workers would only cause wages to fall, thus creating a cycle of misery and starvation. ii. Although wages rose, a family could not support a family on one income. Therefore, women and especially children were expected to work. In 1890, 11 million of the 12.5 million families in the U.S. averaged less than $380 a year income.
e. Working Women: In 1900, one in every five women were working for wages. Most were young and single, only 5% of married women worked outside the home in 1900. In 1900, men and women still believed that the woman belonged in the home, if economically feasible. If working, women were supposed to go into jobs that were extensions of the home, like textiles, garments, food processing. Women soon became secretaries (a formerly male profession), bookkeepers, telephone operators. Any job that became feminized usually lost status and were paid less.
f. Labor Discontent: Before the Industrial Revolution, workers produced entire products and usually felt a sense of accomplishment and liked their jobs. However, this condition radically changed with factories. Factories were all about productivity. This work was repetitive and monotonous, requiring only semi-skilled workers. You were now working under the tyranny of the clock, and the conditions were often unsafe. Complain? You’re fired.
i. Workers generally changed jobs every three years, the most common form of worker protest at the time was absenteeism and quitting, not striking. 20% of people who worked in the factories left that life behind as their personal form of protest, a much higher number than those who joined unions.
F. The Struggle of Organized Labor: The late 19th century witnessed the most violent labor conflicts in the nation’s history. The reports of workers fighting with police and military were so commonplace that many feared we were heading for open class warfare between labor and management.
a. Industrial Warfare: The problem for the workers is that there were too many of them. Management could simply hire strikebreakers or scabs; there was no desperate need for workers. There were, however, certain tactics that management used to defeat unions.
i. The lockout: closing the factory to break a labor movement before it could get organized. ii. Blacklists: names of pro-union workers were circulated. iii. Yellow Dog Contracts: workers were told that in order to work, they had to sign a contract promising not to join a union. iv. Private Guards and State Militia: often called in to quell uprisings.
v. Court Injunctions: were often used to stop strikes, because the government in this time period did not support labor unions as they tended to slow production and raise wages. vi. Most believed during this time period that labor unions were anarchistic and un-American. Before 1900, management won most of its court battles with unions because violence was frowned upon by state and federal governments. vii. Labor itself was not sure how it wanted to achieve its goals, some wanted strikes, others wanted picketing or slowdowns to achieve collective bargaining. viii. Great Railroad Strike of 1877: During an economic depression, railroad lines started cutting its wages to save money. A strike on the Ohio and Baltimore line quickly spread across 11 states, and 500,000 workers from other industries joined in on the strike, which was quickly becoming national in scale. President Hayes was forced to call out the military to end the violence. More than 100 were killed; some companies actually improved the conditions of the workers, while others attempted the hard line and busted the workers’ organizations.
b. Attempts to Organize National Unions: before the 1860s, unions were local in nature. This changes after the War.
i. National Labor Union: The first attempt to organize all workers, skilled and unskilled. Founded in 1866, there were 640,000 members in 1868. Goals: higher wages, 8-hour day, equal rights for women and blacks, monetary reform, worker cooperatives. Its big victory was winning the 8-hour day for government workers. It lost support during a depression of ’73 and the unsuccessful events of ’77. ii. Knights of Labor: Founded in 1869, started as a secret society in order to avoid detection by employers. Terence Powderly was its leader, it went public in 1881. All workers were welcome, including blacks and women. Powderly wanted the following: worker cooperatives “to make a man his own employer, abolition of child labor, and abolition of trusts and monopolies. He wanted arbitration to settle labor disputes, not strikes. The Knights were a loose organization, so Powderly had no control over local units who decided to strike. Its membership peaked in 1886 with 730,000 members, but the Haymarket Riot in Chicago in 1886 turned public opinion against unions. iii. Haymarket Square Bombing: The first May Day labor movement took place in Chicago in May of 1886. 80,000 Knights showed up there. 200 anarchists were also living in Chicago at the time. The May Day movement called for a general strike on May 1. Labor violence breaks out at the McCormick Harvester plant in Chicago. Days later, at public meeting (May 4) in Haymarket Square, a labor meeting was going on. Cops arrived to break up the meeting and a bomb went off. Seven cops were killed, the bomb thrower was never found. 8 anarchists were tried for the crime (some of them weren’t even in Chicago at the time.) Seven were sentenced to death, but the real death occurred with the labor movement, as most Americans now associated unions with violence and bombs. The Knights, especially lost membership, as they had been the most visible. iv. American Federation of Labor: Unlike the Knights, the AF of L sought only practical economic goals. Founded in 1886 as an association of craft unions. Samuel Gompers (head of the union from 1886-1924) wanted higher wages and improved conditions. He advocated walkouts until management agreed to collective bargaining. Over 1 million members by 1900 but became highly successful in 20th century.
c. Strikebreaking in the 1890s: Two massive strikes in the ‘90s demonstrate two basic things: Labor is unhappy and management wins industrial disputes.
i. Homestead Strike (1892): Henry Clay Frick, who ran Carnegie’s Homestead Steel plant near Pittsburgh, caused a strike by cutting wages by 20%. Frick used lockouts, private guards and strikebreakers to end the strike after 5 months. This failure of the union set back the labor movement in the steel industry until the New Deal. ii. Pullman Strike: George Pullman ran a company town near Chicago. The plant manufactured the famous Pullman Cars (sleeper cars). In 1894 he announced a cut in wages and fired the delegation of workers who were sent to negotiate with him. The workers laid down their tools in retaliation and sought help from the American Railroad Union and its leaders Eugene V. Debs. Debs directed railroad workers across the country not to handle any trains with Pullman cars, which leads to a general standstill.
1. Railroad owners sided with Pullman, and began to attach his cars to mail trains. They then went to President Cleveland, who used the army to keep the trains running. A federal court issued an injunction forbidding interference with the mail and ordered the workers to abandon the boycott and the strike.
2. The case of In re Debs (1895): The Supreme Court approved the use of court injunctions against strikes, which gave employers a very valuable weapon against strikes. Debs served six months in jail then came out more radical than when he went in. He turned to socialism and founded the American Socialist party in 1900.
3. By 1900, only 3% of the nation’s workers belonged to unions. Management held the upper hand, with government taking its side.

Part 18: The Growth of Cities and American Culture, 1865-1900

A. A Nation of Immigrants: US population jumped from 23.2 million in 1850 to 76.2 million in 1900. 16.2 million immigrants arrived during this time, with 8.8 million more arriving from 1901-1910 (the peak years of immigration.)
a. Growth of Immigration: Pushes (negative factors from which people are fleeing) and pulls (positive attractions of the adopted country) of immigration.
i. Negatives in Europe at the time: displaced farm workers replaced by mechanization, population boom in Europe resulting in overcrowding and joblessness, and religious persecution (i.e. the pogroms in Russia.) ii. Positives reasons to come to US: Political and religious freedom, economic opportunities, cheap travel to America (could travel in “steerage” on the steamers allowed millions to emigrate from Europe.
b. “Old” Immigrants and “New” Immigrants: 1880s, vast majority of immigrants came from northern and western Europe (the British Isles, Germany, Scandinavia). Most of these “old” immigrants were Protestants, although a large minority were Irish and German Catholic. Most spoke English, most were skilled workers, making it easier to blend into American society. Many of them moved to the Midwest and farmed, not necessarily settling into poor neighborhoods on the East Coast.
c. New Immigrants: Starting in the 1890s (and continuing through WWI), there was a new source of immigration: These new immigrants came from southern and eastern Europe (Italians, Greeks, Croats, Slovaks, Poles and Russians.) Many were poor and illiterate, had left autocratic countries and were unused to democracy. These were Roman catholic, Greek orthodox, Russian orthodox, and Jewish. Most crowded into the poor ethnic neighborhoods of New York, Chicago, etc.
i. At least 25% of them were “birds of passage” (young men contracted for unskilled factory, mining, construction jobs, and would return to their mother country once they saved enough money for their family back home.
d. Restricting Immigration: By 1886, Congress had passed a number of new laws restricting immigration (the same year that Bartholdi’s Statue of Liberty was placed in New York Harbor.)
i. Anti-immigration laws: Chinese Exclusion Act 1882, ban on all new immigrants from China. Followed by a ban of all undesirables (criminals, mentally incompetent.) In 1885, a law was passed prohibiting contract labor in order to protect American workers. With Ellis Island opening in 1892, immigrants had to pass more rigorous medical exams and had to pay an entry tax before getting in. ii. Who supported anti-immigration? Labor unions, the American Protective Association (openly prejudiced against Roman Catholics, and Social Darwinists, who viewed these new immigrants as biologically inferior to English and German immigrants. Also, during the economic depression 1890s foreigners became scapegoats and were often blamed for strikes violence, etc. iii. In 1900, 15% of the US population was immigrant, so although there were limitations, they kept on coming. Only the Quota Acts in the 1920s would severely slow immigration.
e. Urbanization: Urbanization and industrialization went hand in hand. The jobs were in the cities, factory made goods were available in the cities. With each passing decades, more and more people moved to the cities. By 1920, for the first time in history, more Americans lived in cities than in rural areas.
i. Both immigrants and Americans were moving to the cities, leaving farms behind. Including a “great migration” of blacks from the South.
f. Changes in Nature of Cities:
i. Streetcar Cities: With streetcars, cable cars, horse-drawn cars being replaced by electric trolleys, elevated railroads, and subways, and the Brooklyn Bridge (1893) people began to live not so close to their place of work.
1. The effect of mass transportation: Segregated workers by income. Upper and middle class moved to streetcar suburbs to escape the pollution, poverty and crime of the city. Older sections of the city were left for the poor, often immigrants. ii. Skyscrapers: Increasing land values in the cities caused the construction of high rises. 1885, William Le Baron Jenny built the ten story building in Chicago (the first skyscraper with a steel skeleton.) The Otis elevator and a central steam heating system made these buildings possible. By 1900, skyscrapers overshadowed church spires in the big cities. iii. Ethnic Neighborhoods: Landlords began to divide up the housing in urban areas into smaller, more affordable and more profitable rooms. The resulting slums meant you could jam 4,000 people into one city block. NYC passed a law in 1879 saying that all bedrooms in the city had to have a window. Builders found ways around it, and overcrowding and filth promoted the spread of diseases such as cholera, typhoid, and tuberculosis.
1. Ethnic neighborhoods were created, with each group maintaining its own language, culture, etc. These ghettos were still areas were people dreamed the “American Dream.” iv. Residential suburbs: In Europe, rich people live in the cities and the poorer types live in the suburbs. Why is this different in the U.S.? Because the upper and middle classes in the 19th century moved out to escape the noise and immigrants in the cities. Factors that encouraged this were: abundant land at low cost, inexpensive transportation by rail, low cost construction methods, ethnic and racial prejudice, an American fondness for grass, space, privacy, and a detachment from work and other houses.
1. Frederick Law Olmsted was one of the first to design a suburban community, by 1900 they were everywhere. This gave rise to the American ideal of a house, a lawn, and a white picket fence. We were the world’s first suburban nation.
v. Private city vs. public city: It took a while for municipalities to understand the necessity for public services, like waste collection, pollution control, disease, crime, fires, etc. Advocates slowly convinced city leaders of the need for water purification, sewage systems, street lighting, police departments, zoning laws, etc.
g. Boss and Political Machines: Political parties in the cities came under the control of tightly organized groups of politicians, known as political machines (just like business was being controlled by a few powerful men in each industry.)
i. Each machine had a boss, who doled out orders to the rank and file of the party and jobs to loyal supporters. Tammany Hall in Hew York was the biggest, which actually started as a social club but evolved into a group which gave support to the poor and immigrants in exchange for votes. ii. In a sense, these machines brought a sort of welfare for urban newcomers; there was always support for you if you needed it, but at a price. They would find you a job, an apartment; bring baskets of food during hard times. Why would you not support them if you were poor? Well, it turns out they were stealing millions from taxpayers in the form of graft and fraud. For example, in the 1860s an estimated 65% of building funds wound up in the hands of Boss Tweed.
B. Awakening of Reform: A new social consciousness arises in the 1880s and 90s. As usual, it is started through books.
a. Books of the era:
i. Henry George’s Progress and Poverty (1879): Critical of laissez-faire economics. He called for a one-time tax on land as a solution to poverty (as opposed to a yearly property tax), and he also attacked the inequalities in wealth caused by industrialization. ii. Looking Backward, by Edward Bellamy. (1888) He envisioned a future in which a cooperative society eliminated greed, corruption, crime. People were inspired by these books and joined social reform groups. Basically, social reformists wanted more government control of business (which we won’t truly get until the Progressive Era and New Deal.)
b. Settlement Houses: Volunteers who provided aid to the poor, social services, etc. Hull House in Chicago was the most famous, by Jane Addams in 1889. Taught English to immigrants, early childhood education, taught industrial arts, neighborhood theaters, music schools. Over 400 settlement houses in America by 1900.
i. These were the forerunners of the modern day social worker. They also crusaded for child labor laws, housing reform, women’s rights. Frances Perkins and Harry Hopkins were settlement house workers who went on to great roles in the New Deal era.
c. Social Gospel: Preachers who preached the importance of applying Christian principles to social problems. Leaders were Walter Rauschenbusch in New York (in Hell’s Kitchen, he wrote several books urging religious organizations to take up the cause of social reform.) His work linked Christianity with the Progressive movement later on and encouraged middle class Protestants to attack urban problems.
d. Religion and society: All religions began adapting to the challenges of urban living. Roman Catholics gained enormous umbers from immigration and Catholic leaders like Cardinal James Gibbons of Baltimore inspired old and new immigrants by supporting the Knights of Labor and organized labor. Among Protestants, Dwight Moody and his Moody Blue Institute helped generations of urban evangelists to adapt traditional Christianity to city life.
i. The Salvation Army (which started in England) helped the poor and homeless while preaching the gospel. ii. Mary Baker Eddy: taught that good health was result of correct thinking about “Father-Mother-God.” By the time of her death in 1910, hundreds of thousands had joined her Christian Science church.
e. Families and women in urban society: Urban life placed great strains on the family, divorce rate increased to one in 12 marriages by 1900 (partly due to the fact that many states had made it easier to get a divorce, citing desertion and cruelty as possible cause.) Family sizes were reducing, on the farm more kids were a plus, but not in the city.
i. Women’s suffrage: Vigorously carried forward during the era. National American Women’s Suffrage Association was created by Stanton and Anthony in NY in 1890. Its goal was to get the right to vote. Wyoming was the first state to grant full suffrage for women (1869). By 1900, some states allowed women to vote in local elections, and most allowed women to own and control property after marriage.
f. Temperance and morality: Many felt that drinking was a major cause for poverty among immigrants and the working-class. Women’s Christian Temperance Movement (WCTU), founded in 1874, wanted to correct this. 500,000 members by 1898, led by Frances Willard. The Anti-saloon League, founded in 1893, had persuaded 21 states to close down all saloons and bars by 1916. Carry Nation, of Kansas, actually raided saloons and smashed barrels of beer and whiskey with a hatchet.
i. Moralist types saw the cities as a breeding ground for vice and obscenity, pushing Anthony Comstock of NYC to form the Society for the Suppression of Vice. He persuaded Congress to pass the Comstock Law in 1873, which prohibited the mailing or transportation of obscene and lewd material.
C. Intellectual and Cultural Movements: this move to the city affected all parts of American life, including culturally.
a. Changes in education: The complexity of modern life, combined with the ideas of Darwin, raised questions as to what the public schools should teach.
i. Public Schools: Elementary schools continued to teach the 3 r’s along with the moral values in McGuffey’s Readers. Compulsory laws meant there were many more kids in school; As a result, the literacy rate grew to 90% by 1900. Kindergarten was becoming very popular by 1900. ii. Public High Schools: Became more popular, and went from private college prep courses to vocational and citizenship education to reflect the students’ needs. iii. Higher Education: The number of U.S. colleges increased largely as a result of the Morrill Acts (land grant colleges) of the 1860s and 1890; universities