Industrialism (Key Concepts in American History)

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Key Concepts in American History

Industrialism

Set Contents

Key Concepts in American History Abolitionism Colonialism Expansionism Federalism Industrialism Internationalism Isolationism Nationalism Progressivism Terrorism

Key Concepts in American History

Industrialism

Jason Mauch Jennifer L. Weber, Ph.D. General Editor University of Kansas

Key Concepts in American History: Industrialism Copyright © 2010 by DWJ BOOKS LLC DEVELOPED, DESIGNED, AND PRODUCED BY DWJ BOOKS LLC All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval systems, without permission in writing from the publisher. For information contact: Chelsea House An imprint of Infobase Publishing 132 West 31st Street New York NY 10001 Library of Congress Cataloging-in-Publication Data Mauch, Jason. â•… Industrialism / Jason Mauch ; Jennifer L. Weber, general editor. p.â•… cm. – (Key concepts in American history) Includes bibliographical references and index. ISBN 978-1-60413-222-9 (hardcover) ISBN 978-1-4381-2953-2 (e-book) 1.â•‡ United States—Economic conditions—To 1865—Encyclopedias, Juvenile.â•‡ 2.â•‡ United States—Economic conditions—1865-1918—Encyclopedias, Juvenile.â•‡ 3.â•‡ Industrial revolution—United States—History—19th century—Encyclopedias, Juvenile.â•‡ 4.â•‡ Industrial revolution—United States—History—20th century—Encyclopedias, Juvenile.â•‡ I.â•‡ Weber, Jennifer L., 1962-â•‡ II.â•‡ Title.â•‡ III.â•‡ Series. HC105.M225 2009 338.097303–dc22 2009025283 Chelsea House books are available at special discounts when purchased in bulk quantities for businesses, associations, institutions, or sales promotions. Please call our Special Sales Department in New York at (212) 967-8800 or (800) 322-8755. You can find Chelsea House on the World Wide Web at http://www.chelseahouse.com Cover printed by Bang Printing, Brainerd, MN Book printed and bound by Bang Printing, Brainerd, MN Date printed: May 2010 Printed in the United States of America 10â•‡ 9â•‡ 8â•‡ 7â•‡ 6â•‡ 5â•‡ 4â•‡ 3â•‡ 2â•‡ 1 This book is printed on acid-free paper. Acknowledgments pp. 1, 12, 44, 62, 76: The Granger Collection, New York; p. 29: Hulton Archive/Getty Images; pp. 14, 51: Library of Congress, Prints and Photographs Division; pp. 24, 97: The New York Public Library.

Contents List of Illustrations ...........................vi Reader’s Guide to Industrialism .....vii Milestones in Industrialism (1790-present) .............................viii Preface ...............................................x What Is Industrialism? ..................... 1

Electricity ........................................ 47 History Makers: Thomas Alva Edison (1847–1931) ............. 48 Field, Marshall (1834–1906) ........... 50 Ford, Henry (1863–1947) ................ 52 History Speaks: Henry Ford Describes the Assembly Line .............................. 53 Free Enterprise ............................... 54 Gilded Age ...................................... 59 Haymarket Square Riot .................. 61 Immigration and Industrialization .......................... 63 Laissez-faire .................................... 66 Mining............................................. 68 Morgan, J.P. (1837–1913) ............... 69 History Speaks: J.P. Morgan Jr. on Banking .................................. 70 Oil .................................................... 71 Paciﬁc Railway Act (1862) .............. 74 Pullman Strike ................................ 75 History Makers: Grover Cleveland (1837–1908) ................ 77 Railroads ......................................... 78 History Makers: Jay Gould (1836–1892) ................................. 79 Rockefeller, John D. (1839–1937) ................................. 82 Steel ................................................ 83 Supreme Court, U.S. ....................... 86 Time Zones ...................................... 89 Trusts ............................................... 90 Unions ............................................. 94 Vanderbilt, Cornelius (1794–1877) ................................. 95 History Speaks: A Letter from Cornelius Vanderbilt .......... 96 Women’s Trade Union League (WTUL) ......................................... 97 Woolworth’s ................................... 98

Industrialism from A to Z African Americans and Industrialization .......................... 10 History Makers: Lewis Latimer (1848–1928) ................................. 11 Alger, Horatio (1832–1899) ............ 13 American Federation of Labor (AFL) .................................. 14 History Makers: Samuel L. Gompers (1850–1924) ................................. 15 American Railway Union (ARU)............................................ 18 Anarchists ....................................... 19 Banks and Banking......................... 20 Then & Now: Money and Banking ................................ 21 Bell, Alexander Graham (1847–1922) ................................. 23 Business Cycles ................................ 24 Business, Organization of .............. 26 Carnegie, Andrew (1835–1919) ................................. 28 Chain Stores .................................... 30 Then & Now: Woolworth’s and Wal-Mart .............................. 31 Cities, Growth of ............................ 32 Coal ................................................. 34 Congress of Industrial Organizations (CIO) .................... 39 Corporations ................................... 41 Deere, John (1804–1886) ............... 44 Electric Streetcar............................. 46

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vi

J

Industrialism

Viewpoints About Industrialism Munn v. Illinois, 1877 ..................... 99 Wabash, St. Louis & Pacific Railroad Company v. Illinois, 1886............................... 101 From California as I Saw It, 1849–1900, David L. Phillips ..... 103

An Interview with Thomas Edison, 1870s ............................. 105 Glossary of Key Terms ................. 108 Selected Bibliography .................. 113 Index ............................................. 116

List of Illustrations Photos Henry Ford’s Model T ....................... 1 Tuskegee students .......................... 12 Samuel L. Gompers casting ballot............................................ 14 Alexander Graham Bell and Telephone .................................... 24 Andrew Carnegie ........................... 29 John Deere’s early riding plow ...... 44

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First Marshall Field store ................ 51 Haymarket Riot engraving ............ 62 Pullman Strike illustration ............. 76 Cornelius Vanderbilt ...................... 98

Maps The Growth of Cities, 1870–1900 ..................................... 9 U.S. Time Zones .............................. 91

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Reader’s Guide to Industrialism Business and Industry; Concepts and Ideas; Entrepreneurs and Inventions; Laws and Legislation; Literature; People and Politics; Society; and Unions and Organizations. Some articles appear in more than one category, helping readers see the links between topics.

The list that follows is provided as an aid to readers in locating articles on the big topics or themes in American Industrial History. The Reader’s Guide arranges all of the A to Z entries in Key Concepts in American History: Industrialism according to these 8 key concepts of the social studies curriculum: Business and Industry Banks and Banking Business Cycles Business, Organization of Coal Corporations Gilded Age Immigration and Industrialization Laissez-faire Mining Oil Railroads Steel Trusts Unions

Concepts and Ideas Anarchists Corporations Electricity Free Enterprise Gilded Age Immigration and Industrialization Laissez-faire Time Zones Trusts Unions

Entrepreneurs and Inventions Alger, Horatio (1832–1899) Bell, Alexander Graham (1847–1922) Carnegie, Andrew (1835–1919) Chain Stores Deere, John (1804–1886) Electricity Field, Marshall (1834–1906)

Ford, Henry (1863–1947) Morgan, J.P. (1837–1913) Railroads Rockefeller, John D. (1839–1937) Vanderbilt, Cornelius (1794–1877) Woolworth’s

Vanderbilt, Cornelius (1794–1877)

Society

Alger, Horatio (1832–1899) Gilded Age Haymarket Square Riot

African Americans and Industrialization Anarchists Banks and Banking Business Cycles Chain Stores Cities, Growth of Corporations Electric Streetcar Electricity Free Enterprise Gilded Age Haymarket Square Riot Laissez-faire Pullman Strike Time Zones Unions

People and Politics

Unions and Organizations

African Americans and Industrialization Alger, Horatio (1832–1899) Bell, Alexander Graham (1847–1922) Carnegie, Andrew (1835–1919) Deere, John (1804–1886) Field, Marshall (1834–1906) Ford, Henry (1863–1947) Morgan, J.P. (1837–1913) Oil Railroads Rockefeller, John D. (1839–1937) Steel

African Americans and Industrialization American Federation of Labor (AFL) American Railway Union (ARU) Anarchists Chain Stores Congress of Industrial Organizations (CIO) Corporations Mining Pullman Strike Railroads Steel Trusts Unions

Laws and Legislation Corporations Laissez-faire Pacific Railway Act Supreme Court, U.S. Time Zones

Literature

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At its beginning, the United States was primarily an agricultural nation made up of small farmers in the North and a mix of small farmers and wealthy plantation owners in the South. Before the Civil War (1861–1865), small industries began to develop in the North. After the Civil War ended in 1865, the growth of industry leapt to new heights. By about 1900, the United States was the leading industrial nation in the world.

1790

Samuel Slater establishes the first water-powered mill in Pawtucket, Rhode Island.

1791

First Bank of the United States is organized.

1816

Second Bank of the United States is organized.

1836

Charter for the Second Bank of the United States expires, leading to a lack of central banking authority in the nation.

1837

Panic of 1837 leads to economic crisis; John Deere produces his first steel plow.

1849

California Gold Rush causes increase in immigration from Europe, Asia, and Latin America as people flee their homelands because of famine and political upheaval.

1859

Oil discovered in Titusville, Pennsylvania, by Edward L. Drake.

1860s Horatio Alger begins publishing rags-to-riches novels aimed at boys’ audience. 1861

Civil War begins.

1862

Homestead Act provides for cheap land for Western set-

tlers; Pacific Railway Act provides assistance to railroad companies. 1865

Civil War ends; Thirteenth Amendment abolishes slavery in the United States.

1869

First Transcontinental Railroad is completed at Promontory, Utah.

1876

Alexander Graham Bell receives patent for the telephone.

1877

Reconstruction ends; Exoduster Movement, the westward migration of formerly enslaved blacks, begins.

1879

United States returns to the gold standard for the first time since the Civil War.

1880s American cities increasingly become wired for electricity. 1881

Marshall Field opens his retail department store, Marshall Field and Company, in Chicago, stressing customer service.

1882

Thomas Edison opens electric power plant in New York City.

1886

Haymarket Square Riot in Chicago hurts the labor movement;

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Industrialism (1790-present) United States Supreme Court rules that a corporation is legally a “person” and is guaranteed the protections of the Fourteenth Amendment.

1910s Beginning of the Great Migration of African Americans to northern cities. 1911

United States Supreme Court orders oil giant Standard Oil broken up into 38 smaller companies.

1913

With its huge reserves, the United States becomes the world’s leader in coal production.

1914

United States enters World War I, greatly increasing industrial growth.

1890

Sherman Antitrust Act is passed by Congress.

1891

Sears Roebuck Company is founded as a mail-order catalog company.

1893

American Railway Union (ARU) is founded.

1894

Pullman Strike in Chicago is put down by federal troops.

1900

Pennsylvania leads the nation in coal production.

1918

1901

Oil is discovered in Spindletop, Texas.

First refrigerator marketed in the United States.

1919

1902

President Theodore Roosevelt (1901–1909) begins crackdown on trusts by instructing his attorney general to prosecute the Northern Securities Company.

Richard Sarnoff founds the Radio Corporation of America (RCA).

1921

Emergency Quota Act limits immigration to the United States.

1927

Anarchists Sacco and Vanzetti are executed for murder.

1938

Congress of Industrial Organizations (CIO) splits from the AFL.

1946

Taft-Hartley Act is passed, making union organizing more difficult.

1955

AFL and CIO reunite.

1903

Ford Motor Company established; Wright brothers fly first successful airplane.

1907

Panic of 1907 eventually leads to the establishment of the Federal Reserve System in 1913.

1908

Ford Model T becomes first car that is affordable for the average worker.

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Preface

T

he United States was founded on ideas. Those who wrote the U.S. Constitution were inﬂuenced by ideas that began in Europe: reason over religion, human rights over the rights of kings, and self-governance over tyranny. Ideas, and the arguments over them, have continued to shape the nation. Of all the ideas that inﬂuenced the nation’s founding and its growth, 10 are perhaps the most important and are singled out here in an original series—KEY CONCEPTS IN AMERICAN HISTORY. The volumes bring these concepts to life, Abolitionism, Colonialism, Expansionism, Federalism, Industrialism, Internationalism, Isolationism, Nationalism, Progressivism, and Terrorism. These books examine the big ideas, major events, and inﬂuential individuals that have helped deﬁne American history. Each book features three sections. The ﬁrst is an overview of the concept, its historical context, the debates over the concept, and how it changed the history and growth of the United States. The second is an encyclopedic, A-to-Z treatment of the people, events, issues, and organizations that help to deﬁne the “-ism” under review. Here, readers will ﬁnd detailed facts and vivid histories, along with referrals to other books for more details about the topic. Interspersed throughout the entries are many high-interest features: “History Speaks” provides excerpts of documents, speeches, and letters from some of the most inﬂuential ﬁgures in American history. “History Makers” provides brief biographies of key people who dramatically inﬂuenced the country. “Then and Now” helps readers connect issues of the nation’s past with present-day concerns. In the third part of each volume, “Viewpoints,” readers will ﬁnd longer primary documents illustrating ideas that reﬂect a certain point of view of the time. Also included are important government documents and key Supreme Court decisions. The KEY CONCEPTS series also features “Milestones in. . . ,” time lines that will enable readers to quickly sort out how one event led to another, a glossary, and a bibliography for further reading. People make decisions that determine history, and Americans have generated and reﬁned the ideas that have determined U.S. history. With an understanding of the most important concepts that have shaped our past, readers can gain a better idea of what has shaped our present. Jennifer L. Weber, Ph.D. Assistant Professor of History, University of Kansas General Editor x

What Is

Industrialism?

I

ndustrialism is the growth of manufacturing. It is the spread of transportation systems and of new machines to factories. Many of these big changes occurred in the United States between the end of the Civil War in 1865 and the end of World War II in 1945. Industrialism also refers to ideas. These are the social and cultural ideas that people formed in the nineteenth century—and continue to form—about American society. How did people view the changes brought by technology, by manufacturing, by telecommunication? What new structures appeared in society? How did innovations in each individual industry affect the whole process of manufacturing and impact people’s lives and the entire economy? Answers to these questions show us how the growth of manufacturing dramatically changed the character of the United States. WHAT WERE THE NEW TECHNOLOGIES? Industrialization—the process by which a society moves away from farming and produces goods and services—made such a huge impact on American society because so many new products and industries appeared in such a short time. Over just a handful of decades, the steel and automobile in dustries transformed manu facturing, construction, and transportation, and the introduction of electricity changed homes and businesses forever.

Although Henry Ford had been trained as an engineer, his interest in automobiles began as a hobby. His Model T, including this 1915 example, revolutionized American transportation.

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Industrialism

Steel Steel became one of the most important new products to appear after the Civil War. This strong and ﬂexible metal improved rail lines by allowing for smoother travel and heavier freight cars. Steel made the skyscraper possible; the modern vertical city could not have happened without the steel skeleton construction. The arrival of high-quality steel in large quantities remade existing industries and helped found new ones. Farm equipment became more powerful and more complex. The steel plow began an agrarian revolution that continued with the design of heavy and more mechanized equipment. With the new machinery, more land could be farmed, and more difﬁcult land could be put to use than hand tools and earlier plows had allowed. Automobile Industry As the automobile industry matured after 1900, steel construction was vital in creating tough vehicles for primitive roads. Early cars were essentially toys that slowly developed into practical and reliable transportation. This process required automobile design to not only take advantage of existing industrial innovations but also spur many more. Henry Ford (1863–1947) became one of history’s greatest industrialists by adapting the assembly line system of production to produce massive numbers of sturdy, inexpensive cars priced for working people. The assembly line method of production uses a belt or rail to move a product along from station to station. At each station, an employee performs a single, well-deﬁned task on each unit. Ford recognized that this method also could be used on the larger scale of automobile production and could simplify the production of even a complex item. Electricity Another big improvement for manufacturing industries came with the arrival of electricity. Electric light provided the same steady and clean illumination day and night. It provided ready and constant power for assembly lines and tools. Additionally, it allowed factories to be located far from natural power supplies such as rivers and to avoid burning large quantities of fuel on-site.

Industrialism

Consider for a moment how many elements came together to form the automobile industry that grew from virtually nothing in 1900 to a major source of jobs and economic activity by 1920. Within this one new industry were gathered the discoveries and developments of the previous 40 years. The automobile inspired further innovations in rubber, glass, and even gasoline. Its continuing development helped perfect the assembly line method of production and helped push the study of industrial materials like steel from a craft to a rigorous science. However, all of this industrial growth and change had effects beyond the factory ﬂoor. In an industrial society, social, cultural, and economic changes follow technological and industrial advances. HOW DID INDUSTRIALISM AFFECT AMERICAN SOCIETY AND CULTURE? Industrialism brought major changes to Americans’ social and economic relationships in an astoundingly short time. By 1860, the steam engine had already contributed to growth in manufacturing while improving transportation by both land and sea. The steam engine was also responsible for the steampowered press, which made reading materials available to a wide audience. However, many aspects of American life remained essentially similar to the early days of the republic. A majority of the population lived on farms. Industry remained concentrated in the northeastern quarter of the country, and many small companies undertook modest factory operations. Transportation and communication networks were incomplete and underdeveloped. Farms and Cities By 1900, most farms had mechanized, bringing in heavy equipment to do work that previously required long hours from a large number of people. Farmers had relied for generations on having large numbers of children to share the work, but suddenly, many farm families had more children than were needed to work their land. Farms grew larger in land and smaller in number. Agriculture began to change from a traditional way of life for a large portion of the population to a specialized industry.

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Cities swelled with people who moved from rural areas to ﬁnd a new livelihood, as well as with immigrants seeking an entirely new life. Many found work in factories, which had grown vastly in both number and size. They turned out amazing quantities of goods, ranging from the old staple products families had always needed to new products destined to become household necessities. New Inventions and Stores Many of these necessities were powered by electricity. Toasters and electric coffeepots were just two of the many popular appliances appearing in homes soon after the turn of the twentieth century. Middle-class families living in and near cities bought these items in department stores. These retail behemoths sold household items, clothing, and sporting goods in enormous, multistoried downtown buildings, and shoppers moved between ﬂoors via another new invention— the elevator. From 1890 to 1930, department store shopping made even mundane purchases into symbols of a comfortable social status. Retail selling, a new industry that evolved from the humble general or dry-goods store, went far beyond the department store and the well-off city folk who made it a temple of commerce. Frank Woolworth devised a method for selling vast amounts of merchandise at the perennial prices of five and ten cents. Woolworth’s became a multimillion-dollar company by allowing those who had only pocket change to participate in the great American activity of buying things. Corporations Increasingly by the latter part of the nineteenth century, people were employed by and purchased goods from corporations. Corporations represented a new form of business organization. They were bigger and backed by more investors who could provide a larger pool of money while exposing themselves to less risk. If the corporation lost money, the investors could only lose the money they invested, and creditors of the corporation could not come after the investors’ other assets—for example, their family home—to recover debts owed by the corporation.

Industrialism

Though rare and subject to public suspicion early in American history, corporations had become the leading model for organizing a company by the 1880s. A big country, ﬁnally tied together by rail lines from coast to coast, needed producers and retailers big enough to serve newly national markets. Corporations formed trusts and gathered large pools of money under the direction of professional managers. Some corporations, such as General Electric (GE), came to lead entire industries. In GE’s case, this meant building power-generation and transmission equipment to serve entire cities, while also popularizing home appliances. Unions Gradually, factory workers began to earn enough money to buy not only the staples but also the manufactured luxuries. They achieved this primarily by forming labor unions. By cooperating, workers slowly transformed industrial jobs paying survival wages into middle-class jobs that provided the basis for the world’s leading consumer economy. This means that they had the money to buy the products they built. The idea that industrial workers should have protection from exploitative employment practices took decades to catch on. The ﬁrst American labor unions, with their beginnings around the middle of the nineteenth century, were predominantly trade unions. The unions focused on skilled workers and organized them according to different crafts, largely ignoring the growing numbers of unskilled factory workers. The use of the assembly line increased the number of unskilled workers at the expense of skilled craftspeople. By breaking the process of making an item into many small, repeatable tasks, assembly line workers did not strictly need to know what they were assembling so long as they properly attached the component assigned to them. Meanwhile, the changing nature of consumer goods also created large numbers of new factory workers. Toasters were never built in small craft shops by masters and apprentices. They always rolled off assembly lines in General Electric or Westinghouse

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factories, and by around 1900, the ﬁght for better conditions for the workers in those factories had become a major component of American labor unionism. The great nineteenth-century clashes between labor and the owners of industry concerned the eight-hour workday, the elimination of child labor, and the trimming of the workweek ﬁrst to six, then ﬁve, days. Many business owners and managers bitterly opposed the formation of a union among their workers, knowing that agitation regarding these issues would follow. Sometimes these clashes turned horribly violent. In 1886, an unknown person threw a bomb in Chicago’s Haymarket Square during a strike. The chaos of this incident resulted in the demise of one of the ﬁrst national labor unions, and the campaign for the eight-hour workday suffered a decade-long setback. With the twentieth century came new industries for the unions to organize, as well as a new attitude toward industrial labor on the part of political leaders. The Progressive political era, from 1901 into the 1910s, viewed labor not as a threat to the social order but as the legitimate representation of a large and growing segment of the working population. The United Mine Workers won important battles organizing in the nation’s coalﬁelds, and even the trade union-centered American Federation of Labor started to organize factory workers. In the 1930s, organization of the automobile and steel industries ﬁnally established unionized labor as an institution of the modern economy. More importantly, these struggles at long last guaranteed economic security to industrial laborers and brought them into the American middle class. THE ARRIVAL OF A NEW ECONOMY A nation’s economy describes the relations of production and consumption, spending, trading, bartering, saving, borrowing, and lending; together, these activities describe how people go about making a living and acquiring the materials necessary to do so. All economies are fantastically complex, com-

Industrialism

posed of an endless number of trades and arrangements made every day between individuals, various types of companies, and governments. During the nineteenth century, the American economy became the most complex economy in the world’s history. This involved tremendous change in the everyday lives of all Americans. The economy is composed of many different pieces, sometimes called sectors. They ﬁt together like the pieces of a puzzle. Parts of one sector push into another sector; for example, the manufacturing sector relies on the transportation sector to move what it produces, while the transportation companies rely on manufacturing industries to provide them with business. All of the sectors, the pieces of the puzzle, link together to form the big picture of the economy as a whole. Prior to the industrial age, the major sectors making up the American economic puzzle included the raising of crops and livestock, the making of goods, and transportation and communication. The raising of crops and livestock, or farming, was the single largest piece in the puzzle. Goods were made by families in their homes or by small producers, often tradespeople who had developed their knowledge in a particular craft area, such as silversmithing or carpentry. Education in such a trade came through apprenticeship, a system in which young boys learned the basic skills and slowly acquired the more difﬁcult concepts, then the artistic touches, that allowed them to proceed from journeyman (a competent but inexperienced tradesperson) to master (someone who knew perfectly the fundamentals of the trade. The force of industrialism created a much more varied economy. It also created much more specialization of jobs, even though these jobs tend to be within companies that operate broadly by taking on a variety of activities. Industrialism has added a great deal of complexity to the United States since 1860. It also largely remade America’s sense of itself from a nation of small craft producers and agriculturalists to a nation of specialized professionals, organized in large corporations capable of endless

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Industrialism

innovation, founded upon efﬁcient and high-quality production. As the twenty-ﬁrst century continues, many of the assumptions that form these attitudes will likely change, and new conceptions of how the American economy is organized will no doubt become important. Many of the forces that motivated and helped or hindered the people and organizations described in this book still impact American life. The entries that follow attempt to capture not only the who and the what but also the why and the how of the tremendous changes brought about by industrialism— and to help the reader think about how these and other forces may shape the next big change.

FURTHERREADING Brands, H.W. Masters of Enterprise: Giants of American Business from John Jacob Astor and J.P. Morgan to Bill Gates and Oprah Winfrey. New York: The Free Press, 1999. King, David C. The Age of Technology: Nineteenth Century American Inventors. Auburndale, Mass.: History Compass LLC, 2001. Levinson, Jeff, ed. Mill Girls of Lowell. Auburndale, Mass.: History Compass LLC, 2007. Mandle, Jay R. Not Slave, Not Free: The African American Economic Experience Since the Civil War. Durham, N.C.: Duke University Press, 1992. Yamasaki, Mitch, ed. Movin’ On: The Great Migration. Auburndale, Mass.: History Compass LLC, 1998.

The Growth of Cities, 1870–1900

Immigration in the late 1800s led to a vast increase in the populations of many American cities. These immigrants, many of whom came from Europe, China, and Japan, provided a ready-made workforce for the quickly expanding industries of the United States during the second half of the nineteenth century.

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Industrialism from A to Z

A–B African Americans and Industrialization

in 1877 when the United States troops left the Southern states. Pioneering black leaders had been elected to ofﬁce in many Southern states. Within a few years, however, they were effectively blocked from even exercising their right to vote. White supremacists staged a brutal terror campaign designed to keep blacks politically powerless. Between 1882 and 1903, 1,985 lynchings were recorded.

Blacks and their roles in the growth of American economic might in the late 1800s. African Americans comprise the largest racial minority group in the United States, about 12 percent of the population in 2000. After the Civil War (1861–1865) and the end of slavery, African Americans became inventors; engineers; and industrial, or manufacturing, workers. Migration to the industrial, urbanized North provided African Americans with new opportunities and fresh challenges.

Waves of Migration After Reconstruction, African Americans sought new opportunities outside the South. The Exoduster Movement of 1877– 1881 consisted of 70,000 Southern blacks moving to Kansas. It was a conscious and organized attempt to reach a land of new opportunities. After the Exodusters, the destination of most migrants was not open space to build a new community but instead the industrializing urban centers of the North. This movement started slowly but became massive in just a few decades. In 1900, 90 percent of African Americans lived in the South (80 percent of this group lived in rural poverty), while 10 percent lived in predominantly urban settings in the North. By 1950, the percentage of African Americans living in the South had fallen to 68; the

THE END OF RECONSTRUCTION Reconstruction was the name given to the period immediately after the Civil War, a time in which the divided North and the South worked to become one country again. The political terms were set by the North. They included the acceptance by the formerly rebellious states of the Thirteenth, Fourteenth, and Fifteenth Amendments to the U.S. Constitution. For a brief period, political and social equality between black and white Americans seemed to be possible. However, Reconstruction was unpopular among Southern whites, and Northerners soon faced difﬁculties closer to home. Reconstruction ended 10

African Americans and Industrialization

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Lewis Latimer (1848–1928) Lewis Latimer was an African American inventor and draftsman who is best known for his work improving the electric light. Latimer was born in Chelsea, Massachusetts, to parents who had escaped slavery and were determined to rear their children as free people.

INVENTIONS AND INNOVATIONS In 1864, Latimer falsified his age to join the United States Navy. After serving honorably, he worked in a patent law firm. Latimer taught himself drafting, or the drawing of mechanical and architectural structures, and moved up from running the firm’s errands to serving as its head draftsman by 1878. Latimer secured his first patent in 1874 for an improved railcar toilet system. In 1876, his drafting helped Alexander Graham Bell secure a key patent for the telephone just hours ahead of a rival. Latimer moved to Bridgeport, Connecticut, in 1879 to serve as assistant manager and draftsman for the U.S. Electric Lighting Company. His most important patent was granted in 1881 for the “Process of Manufacturing Carbons,” an improved method for

North was home to 28.2 percent of blacks, and the West, 3.8 percent. In the 1910s, migration of black Americans northward sped up and became more rewarding because better-paying factory jobs were available. Local Southern factors other than racism played a role: Infestation by the boll weevil, an insect that destroyed cotton crops,

producing lightbulb filaments that made electric light cheaper and more practical. In 1884, Latimer joined the Edison Electric Light Company. In addition to conducting research, he served as an expert witness for the company when competitors challenged its patents. Latimer was a founding member of the Edison Pioneers, the only African American in the initial group of 28.

ACTIVIST, POET Lewis Latimer and his wife, Mary Wilson Latimer, had two daughters. In addition to work and family, Latimer played the flute, painted, and wrote poetry. He taught engineering, drawing, and English to newly arrived immigrants. Latimer also remained deeply patriotic, serving as an officer in the Civil War veterans’ organization the Grand Army of the Republic, and he also committed himself to the civil rights activities of his era. On his death in 1928, the Edison Pioneers eulogized him as one of the first people to hold a “keen perception of the potential of the electric light and kindred industries.”

forced out sharecroppers and farm laborers. World War I (1914–1918) also played a key role in African Americans’ moving to the North. The war required massive amounts of war material. The factories that were turning out these vast quantities of supplies eventually ran short of white workers, who had been sent to

A– B

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Europe to fight. Employment of blacks in industrial work in factories climbed from 500,000 in 1910 to 901,000 in 1920. The war also cut off most European immigration to the United States. In 1914, 1.2 million Europeans arrived in the United States; in 1918, only 100,000 came. Organizing Workers Mutual suspicion between black and white workers made labor organizing difﬁcult. Housing issues led to open hostility and riots in the streets. White rioters

killed 39 blacks in East St. Louis in 1917. In 1919, East Chicago erupted in a ﬁve-day race war that killed 23 blacks and 15 whites and required federal troops to restore order. Ghettoes After 1919, segregated African-American ghettoes in Northern cities became ﬁrmly established. These isolated neighborhoods provided a degree of insulation from white prejudice and reduced the danger of racially motivated violence. At the same time, social institutions, including churches, thrived.

The Tuskegee Institute was founded in 1881 in response to limited educational opportunities for African Americans in the post–Civil War South. The industrial arts formed an important segment of the Tuskegee program. Students learn woodworking in this 1906 photograph.

Alger, Horatio (1832–1899)

American cities had long had ghettoes, steeped in many distinctive cultures. Unlike the residents of immigrant ghettoes, however, African Americans were unable to work their way out of these often horribly overcrowded neighborhoods. White America gave them nowhere else to go. AFRICAN-AMERICAN INVENTORS AND INNOVATORS Despite segregation and prejudice, black inventors made important contributions to the industrial economy. Frederick McKinley Jones (1863– 1961) held more than 60 patents and is best known for pioneering work in refrigeration and air-conditioning. Percy Julian (1899–1975) was a research chemist and early leader in synthesizing human hormones on an industrial scale. The ﬁrst machine for mass-producing shoes was built by Jan Matzeliger (1852–1889); shoe prices in the United States fell by half after its introduction. These innovators represented genius that could not be overlooked from either side of the color line. In the quickening pace and growing complexity of the industrialized twentieth century, all these pioneers served as models for a more equal nation. See also: American Federation of Labor (AFL); Congress of Industrial Organizations (CIO); Electricity.

FURTHERREADING Lemelson Center Invention Features: Lewis Latimer. Available online. URL: http:// invention.smithsonian.org/centerpieces/ ilives/latimer/latimer.html. Mandle, Jay R. Not Slave, Not Free: The African American Economic Experience Since the Civil War. Durham, N.C.: Duke University Press, 1992.

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Yamasaki, Mitch, ed. Movin’ On: The Great Migration. Auburndale, Mass.: History Compass LLC, 1998.

Alger, Horatio (1832–1899) Successful novelist whose name became synonymous with the ideal of hard-won social advancement and symbolized the rags-to-riches opportunities of the Gilded Age. Alger was born in Massachusetts in 1832. LIFE AND CAREER After graduating Harvard University in 1852, Alger became a journalist and teacher. Dissatisﬁed, he returned to Harvard to attend the School of Divinity, where he studied religion from 1857 to 1860. He engaged in a one-year career as a minister. In the early 1860s, Alger published the ﬁrst of 135 novels for a boys’ audience. One of the most successful books, Ragged Dick, first appeared in 1867 and remained in print for 40 years. Alger’s novels generally followed the same story structure. In each, a boy living in difﬁcult circumstances with no resources captures the attention of a well-to-do gentleman. Though he knows only the hard life of an industrial-era child laborer, the youngster displays courage and moral character. The gentleman takes the boy in and provides education and social reﬁnement. The novels generally end with the young man ﬁnding economic security in a middle-class social position. For many years, Alger lived in roominghouses in New York City, sharing the environment of the young boys who inspired his writing. He died of heart disease in 1899.

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scribe any person born with few resources who became wealthy. In this common cultural usage, the shorthand description of Alger’s work came to symbolize the fewer, much more inﬂuential individuals, rather than those people whom Alger had romanticized in his novels. See also: Free Enterprise; Capitalism.

FURTHERREADING Weiss, Richard. The American Myth of Success: From Horatio Alger to Norman Vincent Peale. Urbana: University of Illinois Press, 1988. Alger, Horatio. Ragged Dick. New York: W.W. Norton, 2007.

American Federation of Labor (AFL)

AFL founder and longtime president Samuel Gompers poses as he prepares to cast his electoral ballot in 1912.

CULTURAL IMPACT After his death, many of Alger’s novels were reprinted in inexpensive editions. They sold well into the 1920s, matching Americans’ faith in social mobility, or increasing wealth and status. The books also reﬂected belief in reformist politics, the idea that government policies can heal social ills. Horatio Alger’s actual work was largely forgotten after this era. The novels found few readers. However, a “Horatio Alger story” came to de-

Large organization aimed at unionizing skilled workers and tradespeople. Founded in 1886, the AFL allowed 25 established trade unions to share resources and cooperate on a national scale. Samuel Gompers (1850– 1924) built the AFL into one of American labor’s most powerful institutions. FOUNDATION AND GROWTH Gompers founded the AFL in Columbus, Ohio, in 1886. Forty-two delegates represented 25 unions, such as the Iron Molders, Typographers, Furniture Workers, Metal Workers, Carpenters, and Granite Cutters. The federation formalized the mutual support these unions had given to one another’s strikes and boycotts. At its start, the AFL had about 150,000 members and grew to 250,000 over the next decade. By 1902, member-

American Federation of Labor (AFL)

ship crossed the one million mark. Gompers worked tirelessly to build the organization from his small ofﬁce. He served as president of the AFL for all but one year until his death in 1924. The AFL was a reformist, rather than revolutionary, organization. Its leadership staunchly defended American economic and political institutions. The AFL supported President Woodrow Wilson (1913–1921) during World War I (1917–1918) and remained strongly anticommunist

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after the 1917 Bolshevik Revolution in Russia. In 1938, the conservatism, or unwillingness to accept new ideas, of the AFL caused the Congress of Industrial Organizations (CIO) to split from the union. The CIO focused on organizing unskilled industrial workers and had close ties to socialist and communist organizations. The CIO fought for, and won, contracts aimed at building the collective strength of the workers. It was less concerned than the AFL tended to be with labor-management

Samuel L. Gompers (1850–1924) Born in 1850 in England, Samuel Gompers became one of the most important figures in the history of American unions. He left school at age 10 to become an apprentice. His eventual trade, cigar maker, led him to union organizing and the creation of the American Federation of Labor (AFL). Gompers joined the cigar makers’ union in 1864. Although he briefly favored revolutionary politics, he soon found value in setting and achieving smaller goals rather than remolding society. His practicality matched that of many other trade union leaders and members who felt their identities disappearing into the Knights of Labor. The Knights believed all workers should be organized in a single national union. Gompers and his fellow tradespeople wanted to act in their own interest. In 1886, this dissatisfaction led to the formation of the AFL. For the first few years, Gompers operated out of

an 8-foot (2.4-m) by 10-foot (3-m) office with improvised furniture. “There was much work, little pay, and very little honor,” he recalled later. As the AFL grew, Gompers became an important political figure nationally. Through him, both Democrats and Republicans sought to reach the labor voters who were growing ever more important. Gompers always placed greater value on building alliances with individual political leaders than he did in following a party line. Gompers also introduced the idea of “voluntarism.” This opposition to governmental provision of social security payments, unemployment insurance, and similar benefits combined the unions’ distrust of governmental agencies and regulations with their idea that the union preserved its members’ self-reliance in a way government could not. Samuel Gompers died in San Antonio, Texas, in 1924.

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cooperation. The two organizations reunited in 1955 as the AFL-CIO. POLITICS OF THE AFL In the late nineteenth century, skilled laborers were mostly male and white. They were more politically conservative than unskilled industrial workers because they sought to have a voice in two-party mainstream politics rather than create a new state and economic system through revolution. They were not yet middle class, but they were not desperately poor. The craft unionists and tradespeople who formed the AFL enjoyed a better social standing than unskilled laborers and could strike effectively because they were more difficult to replace. Unskilled labor suffered in its bargaining capability because the steady tide of immigrant labor made strikebreaking easy for business owners. Gompers wanted to build a strong labor union, not a political party. He worked to avoid divisions among AFL members by working with laborfriendly politicians in both the Democratic and Republican parties. The AFL sought to improve the working conditions and wages of its members. The unions within it sought recognition from employers and entered collective bargaining agreements, supporting each others’ efforts with the threat of strikes. The AFL also lobbied state legislatures and Congress for regulations requiring better working conditions, a shorter workweek, an eight-hour workday, and limits on immigration to ease job competition. It was ﬁrmly nonpartisan, seeking always to reward labor’s friends and punish its enemies regardless of their party afﬁliation.

Rejection of Radicalism At its founding, the AFL competed with the older Knights of Labor for the role of a national umbrella labor organization. The unions that joined the AFL rejected the Knights’ refusal to distinguish between skilled and unskilled labor. The AFL won economic gains for its limited constituency, but by the turn of the twentieth century, new political movements and increased union radicalism threatened to isolate the AFL. Socialism and populism became important political movements between 1890 and World War I. Both sought to reorganize the nation’s industrial economy on a much more equal footing between workers and business owners. The AFL aligned itself with the populism-themed presidential campaign of Democrat William Jennings Bryan in 1896 and worked with progressives in both major parties in the early twentieth century. However, Gompers steered the organization far away from socialism. In contrast, another labor group, the Industrial Workers of the World (IWW), was much closer in its ideology to socialist and anarchist groups. The IWW challenged the basic structure of capitalism. On the other hand, the unions of the AFL fought for more of capitalism’s rewards for their members. The IWW proposed “one big union” drawn from all trades and skill levels. The IWW rejected collective bargaining with particular shops or companies. Instead, it favored the mass action of all laborers, aiming to undermine capitalism and impose socialism. Years of Struggle Although Gompers sought political allies from both

American Federation of Labor (AFL)

the Democratic and Republican parties, the AFL faced stiff resistance from business owners. After 1910, Philadelphia metal industrialists pushed out the ironworkers’ union by hiring scabs and blacklisting (refusing to hire) union members. Industrialists risked violent confrontations in the hopes of reorganizing their operations around unskilled labor and assembly line practices, ridding themselves of the trade unions. The U.S. legal system also challenged the AFL with decisions that heavily favored property rights. Hardwon legislative victories were often struck down through judicial review. The Supreme Court restricted picketing and boycotts by the union. Although the AFL carefully cultivated political allies, the union continued to be viewed as a threat by many in government. Federal and state courts also disrupted strikes by issuing injunctions. These court orders undercut the effectiveness of strikes by banning useful tactics and forcing strikers back on the job. As many as 4,300 of these orders may have been issued between 1880 and 1930. Diversification The AFL’s goals were determined by the identity of the majority of its members. White, male, and trained in a particular discipline, their notion of how the workplace should operate and what status they should hold within it belonged to an era already fast disappearing by the year of the AFL’s founding. Early on, the AFL unions mostly refused to accept female, nonwhite, immigrant, and unskilled members of the workforce. Gradually, the trades grew, and the AFL expanded and diversiﬁed with

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them. Sometimes the names of the unions evolved in step with this haphazard expansion; one result was the International Association of Marble, Slate and Stone Polishers, Rubbers and Sawyers, Tile and Marble Setters Helpers, and Terrazo Helpers. Many U.S. labor unions have mixed historical records on racial inclusiveness. Few readily accepted African American workers and too often only did so by developing segregated local afﬁliates. Because of their race, Chinese immigrant laborers were sometimes targeted or ignored by union leaders, including in several of Samuel Gompers’s pamphlets. LEGACY The American Federation of Labor provided strong representation to millions of American workers at a time when the rewards of work did not necessarily come close to matching the effort and commitment put into it. At the turn of the twentieth century, the AFL was America’s largest labor organization. Though criticized at the time for ignoring the needs of all workers rather than just a select few, and for its commitment to a narrow and particular vision, it helped to deﬁne the American middle class and ensure the dignity of work. See also: African Americans and Industrialization; American Railway Union (ARU); Anarchists; Congress of Industrial Organizations (CIO); Women’s Trade Union League.

FURTHERREADING Meltzer, Milton. Bread and Roses: The Struggle of American Labor 1865–1915. Miami, Fla.: Replica Books, 2001.

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Mofford, Juliet H. Talkin’ Union: The American Labor Movement. Auburndale, Mass.: History Compass LLC, 1997. Simonds, Patricia. The Founding of the AFL and the Rise of Organized Labor. Englewood Cliffs, N.J.: Silver Burdett Press, 1991. Skurzynski, Gloria. Sweat and Blood: A History of U.S. Labor Unions. Minneapolis, Minn.: Twenty-first Century Books, 2008. Yates, Michael D. Why Unions Matter. New York: Monthly Review Press, 1998.

American Railway Union (ARU) America’s ﬁrst industrial union, combining railroad workers of all disciplines and skill levels in a single organization. The ARU was formed in Chicago, Illinois, on June 20, 1893, under the leadership of locomotive ﬁreman Eugene V. Debs. Within a year of its founding, the ARU opened more than 100 locals and enrolled more than 140,000 members nationally. THE GREAT NORTHERN RAILWAY STRIKE The Great Northern Railway ran from St. Paul, Minnesota, to Seattle, Washington, a distance of more than 1,700 miles (2,736 km). Between August 1893 and April 1894, the Great Northern cut wages between 30 and 70 percent in several stages. In April, the ARU reacted with a strike that shut down the Great Northern for 18 days. After arbitration, the union won the return of wage rates to the 1893 level. THE PULLMAN STRIKE The Pullman Palace Car Company, builder of Pullman sleeping cars, was based in the company town of Pullman, just south of Chicago. Founder George Pullman’s stated desire was to provide his workers a better environment than the usual working-class

tenement. In practice, the workers returned most, if not all, of their wages to the company. An economic crisis in 1893 caused the company to cut wages but not rents on homes or prices in the town’s stores. The resulting strike soon shut down the Pullman factory, and the broader membership of the ARU sought to support their fellow members. The strike went national on June 26, 1894, as ARU members refused to work on any train containing a Pullman car. Rail lines running west from Chicago were especially slowed. However, the power of the boycott turned public opinion against the ARU. Railroad managers hooked Pullman cars to mail trains. The employees’ refusal to work these mail trains forced the involvement of the federal government. An injunction was issued against the ARU on July 2, 1894. The union’s leadership was not allowed to give encouragement and orders to its members, on the authority of the Sherman Antitrust Act of 1890. This federal legislation made it a crime for any business combination, including a union, to interfere in trade and commerce. On the next day, 20,000 federal troops broke the boycott, and the union with it. As the Pullman strike and boycott collapsed, Eugene Debs was arrested on charges of conspiracy to interfere with the mail and violation of the injunction. He spent six months in jail, and the American Railway Union ceased to exist. LEGACY The ARU offered a new model in labor organizing. It sought to organize all

Anarchists

workers within a particular industry in one body. The Pullman boycott brieﬂy demonstrated how powerful this level of solidarity could be. See also: American Federation of labor (AFL); Congress of Industrial Organizations (CIO); Railroads; Supreme Court, U.S.

FURTHERREADING Laughlin, Rosemary. The Pullman Strike of 1894. Greensboro, N.C.: Morgan Reynolds, 2006. Yates, Michael D. Why Unions Matter. New York: Monthly Review Press, 1998.

Anarchists Political radicals who oppose the existence of a coercive government. The term anarchist refers to members of several different political traditions. Generally, anarchists seek to eliminate government in favor of a society where individuals determine economic and social relations amongst themselves. HAYMARKET SQUARE The Federation of Organized Trades and Labor Unions set May 1, 1886, as the beginning of the eight-hour workday. A general strike brought reaction and scabs. In Chicago, on May 3, a ﬁght broke out on the picket line. Four people died as the police broke up the incident. The next day, a group of anarchists staged a demonstration in Haymarket Square. Someone threw a bomb, and the resulting battle killed seven police ofﬁcers and four demonstrators. The Haymarket events were commemorated internationally four years later, and May 1 became the annual cele-

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bration of International Worker’s Day, but the demonstration failed to win the eight-hour day. Instead, after Haymarket, the campaign for the eight-hour day collapsed. Union membership fell signiﬁcantly. The anarchists who had planned the meeting faced murder charges. The protest meeting was perfectly legal, and no evidence connected them to the bombing, but most of the organizers were convicted. Four were hanged. THE CASE OF SACCO AND VANZETTI World War I (1914–1918) and the 1917 Bolshevik Revolution in Russia produced a wave of anti-immigrant feeling in the United States, as well as a deepened suspicion and hostility toward leftist, or extremely socialistic, political radicals. The April 1920 murders of a paymaster and a guard at a Boston shoe company raised fears that these emotions could interfere with the workings of America’s justice system. Two Italian immigrants, Bartolomeo Vanzetti and Nicola Sacco, were charged with the murders. Both were anarchists. The judge in the case, Webster Thayer, made clear that he believed the men were guilty. No direct evidence linked the men to the murders, and Thayer’s certainty of guilt may have prejudiced the jurors against the accused. The conviction and sentence of death handed down against Sacco and Vanzetti in July 1921 worried neutral observers, and it caused the organized left to begin a campaign to overturn the verdict.

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The governor of Massachusetts ordered a special committee to review the trial records. The committee found the verdict to be in order. Meanwhile, the case was appealed to various courts; each agreed with the guilty verdict. When the two men were executed on August 23, 1927, riots marked the event in cities across Europe. American and European literary ﬁgures had written forcefully against the execution before it happened. Eulogies and artistic tributes came after. However, no evidence ever convincingly cleared the men of the murders, just as no one could offer hard proof that the trial had been unjust. The Sacco and Vanzetti case became the most disturbing and highproﬁle part of the Red Scare years (1919–1920), a period in United States history when many Americans feared that communists would take over the country. It caused doubt in the minds of many recent immigrants, and many international observers, about the fairness of the American system. The left fed that doubt for its own purposes, but the lingering uncertainty about the propriety of the court’s actions and the guilt of the executed meant that the case remained controversial for decades. See also: Haymarket Square Riot; Immigrants and Industrialization.

FURTHERREADING Eltzbacher, Paul. The Great Anarchists: Ideas and Teachings of Seven Major Thinkers. Mineola, Minn.: Dover Publications, 2004.

Banks and Banking Providers of capital to new and growing businesses and the founda-

tion of a stable money supply. Banks are essential to American commerce. Alexander Hamilton, the nation’s ﬁrst secretary of the treasury, and other Founders believed that a central, or national, bank was key to the country’s growth. The idea of a central bank, however, raised controversy early in American history but became an unavoidable reality in the industrial economy, when huge amounts of money were needed. CENTRAL BANKING A country’s central bank helps keep the value and supply of money stable. It helps make loans available at reasonable rates to entrepreneurs for business growth and consumers for major purchases such as houses. The Bank of the United States Two early attempts were made at establishing a central bank. The First Bank of the United States received its charter in 1791. By 1811, it ceased to exist. With branches in most American cities, the bank’s commercial business threatened to outcompete other banks, which had been chartered by the individual states. The Second Bank of the United States received its charter in 1816. Its size and power alarmed many Americans. The Second Bank restricted the lending practices of the state-chartered banks. They made few loans and limited proﬁts. The Second Bank had an important central banking function, serving as the lender of last resort to state banks in an emergency. Thus, it could loan money to one unstable bank to help prevent a general financial panic, or economic crisis. A panic occurred when large numbers of

Banks and Banking

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Money and Banking Banking today includes far more services and options and a wider base of customers than it did in nineteenth-century America. Today, many banks operate in several states, making financial transactions easier than ever before. The great banking controversy of the nineteenth century followed the Civil War (1861–1865) because different segments of the population disagreed over what should constitute the nation’s currency. The cost of the war forced the federal government to leave the gold standard and issue a large amount of paper currency without any gold to back it up. This caused inflation, meaning that money was worth less over time and prices rose to keep the values of products steady. Rising prices for farm goods caused farmers to borrow heavily and expand operations. After the war, the government slowly withdrew paper currency and returned to the gold standard in 1879. This caused deflation, and falling prices hit farmers very hard. They struggled to repay their wartime loans, and often failed. Farmers pushed for paper currency in the belief that, with more money in circulation, they could more easily cover their

people demanded their deposited savings back in cash. People did this when it seemed likely that a bank would not have enough money to cover all deposits. Though it was the lender of last resort, the Second Bank angered farmers who wanted easier access to credit. President Andrew Jackson (1829–1837) believed the Second Bank was a threat to democracy. He

debts. After the gold standard returned, the farmers advocated a silver standard, allowing the nation’s money to be backed by both metals. City dwellers, including both workers and factory owners, opposed the silver standard. They would have been paying the higher prices desired by farmers. Today, the United States no longer relies on the gold standard. The value of currency is monitored by the Federal Reserve, which works to correct problems of too much or too little money in circulation. Banks still have the essential functions of accepting savings deposits and paying interest to depositors, allowing customers to write checks drawn on their deposits, and making loans to consumers and business people for a variety of purposes. In the twentieth century, the use of loans to purchase homes became much more common, and the use of loans to purchase automobiles became widespread. Many banking functions, including depositing cash and checks and withdrawing cash, can now be done at automated teller machines (ATMs). Additionally, customers can see balances, transfer money between accounts, and pay bills on personal computers, by way of the Internet.

vetoed its renewal, and it ceased to exist in 1836. State Banks and Panics Throughout the 1800s, most banks in the United States only operated in one state. These banks issued paper notes, which people used like modern cash. However, these notes could not be used to repay debts because lenders often would not accept them. Because

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Banks and Banking

different banks issued the notes, they all had slightly different real values. The value of a particular bank’s notes depended upon the amount of money deposited in that bank. More deposits meant the note had more real money, especially gold, backing its value. For the less valuable notes from weaker banks, the public had to keep track of the discounts that determined their actual value. Counterfeit, or fake, bills made this headache even worse. The Panic of 1837 The Panic of 1837 actually lasted several years. The federal government was selling large amounts of land in the Western territories at reasonable prices to encourage settlement. When the government directed the agents selling the land to accept only gold, a run on deposits started at the banks. This caused some banks to fail when they could not pay back all the deposits. States responded to the panic by setting up funds to back failing banks. Some of these worked. Together they demonstrated how much stronger a national system could be. The Civil War The United States government suspended the gold standard during the Civil War (1861–1865) and issued $450 million worth of “greenbacks,” a new national paper money. These notes all had the same real value. The Panic of 1907 and the Federal Reserve In October 1907, a lack of sufﬁcient money in the banking system again started a ﬁnancial crisis. The ordinary systems for borrowing between banks were not enough to stop the crisis. The ﬁnancier J.P. Mor-

gan assembled a pool of money to lend to the strained New York banks. The nation needed a system that could more easily add currency into circulation when needed and reduce the amount passing around in the economy when there was extra. In 1913, Congress passed the Federal Reserve Act. It created the Federal Reserve System (also known as the Fed), along with 12 Federal Reserve Banks across the nation, and a Federal Reserve Board to govern them. The Federal Reserve was designed in part to replace J.P. Morgan as the nation’s central bank. It would manage a crisis in the monetary system much as Morgan had done in his library in 1907. The creation of the Federal Reserve System marked the beginning, rather than the end, of a long process of preventing the world’s largest economy from spinning out of control. The proper balance between the power of the Fed to control the lending market and the action of forces in that market to ﬁnd their own natural levels has not always been easy to ﬁnd. In the years leading up to the Great Depression, the Fed sought to “enlarge credit resources.” As the amount of money remained the same, credit grew by 61 percent. The bursting of this credit bubble helped mark the beginning of the Depression. See also: Business Cycles; Free Enterprise; Laissez-faire; Morgan, J.P.; Trusts.

FURTHERREADING Cashman, Sean Dennis. America in the Age of the Titans: The Progressive Era and World War I. New York: New York University Press, 1988.

Bell, Alexander Graham (1847–1922)

Eagleton, Catherine, Jonathan WIllimas, Joe Cribb, and Elizabeth Errington. Money: A History. Tonawanda, N.Y.: Firefly Books, 2007. Kaplan, Edward S. The Bank of the United States and the American Economy. Westport, Conn.: Greenwood Press, 1999. Wells, Donald. The Federal Reserve System: A History. Jefferson, N.C.: McFarland & Company, Inc., 2004.

Bell, Alexander Graham (1847–1922) Inventor of the telephone. Alexander Graham Bell spent his life as an educator and inventor. His bestknown success came from years of studying language and speech and teaching hearing-impaired students. The telephone revolutionized communication across the country and around the world. It sped up the ongoing movement to an industrial society. EARLY LIFE Bell was born March 3, 1847, in Edinburgh, Scotland. His father taught elocution, the study of formal speaking elements and techniques. Bell had a talent for vocal mimicry and ventriloquism. His mother’s ongoing hearing loss during his teenage years heightened Bell’s interest in speech as well as nonvocal communication. The young Bell was a much better student outside the classroom than in it. He was indifferent to most subjects other than science. However, a year in London with his grandfather, after leaving high school at age 15, stimulated Bell’s desire to learn. He became both a student and a teacher at Weston House Academy.

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EMIGRATION AND EXPERIMENTATION In his own workshop on the family’s 10-acre farm in Canada, Bell continued to experiment with speech, sound, and electricity. On the farm, Bell sought a way to send multiple messages across a single wire by giving each message a different pitch. Bell’s teaching career soon took him to Boston, and for a number of years, he taught by day and experimented by night. In 1873, he decided to develop his ideas. At this time, the growing volume of telegraph trafﬁc had become “the nervous system of commerce.” THE TELEPHONE By hiring the engineer and mechanic Thomas Watson, Bell turned his concepts into working machines. He was issued the patent for the telephone on March 7, 1876. A series of lectures and public demonstrations soon brought the telephone to public attention. In 1877, the Bell Telephone Company came into existence. By 1889, the United States had 150,000 telephone users. In 1915, Bell, in New York City, spoke with Watson, who was in San Francisco. While developing and marketing the new technology, the Bell Company had faced numerous lawsuits from inventors who claimed to have beaten Bell; many challenged his patents. LATER LIFE AND LEGACY On July 11, 1877, a few days after the Bell Telephone Company was established, Bell married Mabel Hubbard. Later, the strains from various lawsuits caused Bell to resign from the Bell Telephone Company, allowing

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See also: Edison, Thomas Alva; Free Enterprise; Capitalism.

FURTHERREADING Gray, Charlotte. Reluctant Genius: Alexander Graham Bell and the Passion for Invention. New York: Arcade Publishing, 2006. Matthews, Tom L. Always Inventing: A Photobiography of Alexander Graham Bell. Washington, D.C.: National Geographic Children’s Books, 2006.

Business Cycles

Alexander Graham Bell, seated at an early telephone in 1892, opens the Chicago-New York long distance line. Bell’s lifelong interests in human speech and mechanical innovation combined to produce this fundamental tool of the industrial age.

him to pursue other interests. These included aeronautics, as well as helping to found the National Geographic Society. Bell died at his estate in Nova Scotia on August 2, 1922. Bell’s invention became one of the emblems of the industrial age as well as one of its most important tools. Instant communication over vast distances allowed businesses to operate faster and smarter. Telecommunications became a vast industry in its own right and continues to build on the work of Bell and other pioneers.

Term referring generally to the peaks and valleys in the economy. There is no set amount of time to a business cycle and no predictable pattern. The idea of the business cycle is that, in a capitalist economy, economic boom-times are followed by recessions, which are followed again by booms. In today’s industrialized society, however, the government works to minimize the impact of business cycles by encouraging continued economic growth. BOOM AND BUST During an economic boom, the economy is growing. Common indicators of a boom are new jobs coming into existence and more products being produced in greater variety. In general, during a boom the gross domestic product (GDP) increases. The value of GDP is deﬁned as the money value of all the goods and services produced in the economy. The boom continues as long as GDP continues to rise, but part of the idea of a business cycle is that the value of GDP will eventually peak. When GDP peaks and starts to decline, the economy may enter a recession. During a recession, GDP decreases. To complete the business

Business Cycles

cycle, the value of GDP must ﬁnd the “trough,” the lowest point in the recession. After reaching this point, the economy will begin to grow again, starting a new business cycle. PANICS In the nineteenth century, panics, leading to severe recessions and even depressions, occurred regularly. Two of the most serious ﬁnancial crises of the nineteenth century were the Panic of 1837 and the Panic of 1873. Many panics followed a period of speculation, during which the market value of a commodity, such as land, exceeded its real value. The speculative “bubble” pops when the commodity’s market value falls back in line with its real value. SHOULD GOVERNMENT INTERVENE? Modern economists are split between those who favor intervening in the economy to keep it stable versus economists who believe that government intervention is not effective and may be harmful. Anti-Interventionist Arguments Some economists (business cycle theorists) believe that boom and bust cycles come from outside shocks to the economic system; for example, if oil suddenly becomes unavailable or much more expensive. These theorists see the market as able to quickly adjust, faster than the government could. Another group, the new classical economists, believes privatesector action undoes government attempts to respond to a downturn. For example, if the government increases the money supply, prices will simply adjust to match the change.

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In general, non-interventionists believe that the market knows what it needs better than the government does. Some opponents of interventionism, in contrast, consider the market as flawed as government. They point to the lag in economic data (which makes the current state of the economy hard to know and its future state impossible to reliably predict) as a good reason to let market forces sort themselves out. Pro-Interventionist Arguments Some economists argue that, in a recession, recovery will take too long without some sort of intervention. Politicians will probably prove unable to resist popular calls for action, even if that action is not perfect. Interventionist economists generally do not see the market as quick to adjust to a downturn. This means unemployment will persist without corrective action. For example, when the economy peaks and GDP falls, the economy’s move toward a recession can be slowed by cutting interest rates. Lower interest rates promote investment in new machinery, facilities, or technology. This investment may help spark economic growth. See also: Banks and Banking; Morgan, J.P.

FURTHERREADING Beyer, Janet, and Joanne B. Weisman, eds. The Great Depression: A Nation in Distress. Auburndale, Mass.: History Compass LLC, 1996. Kaplan, Edward S. The Bank of the United States and the American Economy. Westport, Conn.: Greenwood Press, 1999. Wells, Donald. The Federal Reserve System: A History. Jefferson, N.C.: McFarland & Company, Inc., 2004.

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Business, Organization of

Business, Organization of The way owners of a business choose to structure their company. Some of the early business models took time to develop, and some developed into dominating businesses that were eventually declared illegal. In the early years of the nation, most businesses were owned and operated by a single person, which ﬁt in with the country’s agrarian, or agricultural, society. Later, as the nation grew, entrepreneurs needed more capital to set up and run successful operations. FROM A SINGLE OWNER TO MANY INVESTORS Some businesses have very little structure. If a company is owned by a single person, it is known as a sole proprietorship. This does not necessarily mean that the business is small but simply that it is under the control of one person. Partnerships A partnership describes a company that has more than one owner. The partners make decisions together about how to run the company, and they are both liable for all money lost if the company fails. Traditionally, partners must pay all company debts from their own resources. A modern variation, the limited liability partnership (LLP), owes its existence to later legal principles based on corporations. In colonial America and the early United States, sole proprietorships and partnerships formed the vast majority of businesses. Most companies operated only locally. Large ﬁrms had a regional reputation. However, in

the years before and after the Civil War (1861–1865), manufacturing ﬁrms began to grow beyond the size manageable under a single owner or group of partners. Also, industrial production required much larger amounts of capital than a few partners could pull together, unless they were already successful individuals. Corporations A business that sells shares of its ownership to a wide group of investors—who can only lose as much money as they invest, rather than face liability for the company’s entire losses—is known as a corporation. A corporation’s investors are shareholders, but not partners. They control the company by electing a board of directors. The board governs the company, and it often hires managers to run its daily operations. THE IMPORTANCE OF CORPORATIONS After the Civil War, companies that manufactured goods began to develop into huge industrial corporations that controlled their manufacturing processes from beginning to end—from the buying of raw material to the distribution of the final product. Corporations sold shares to a wide number of investors. They raised large amounts of money with limited risk to any one investor. If the corporation failed, only its assets could be taken to pay debts. In a traditional partnership, the personal assets of investors can be taken to cover business losses. The limited liability of stockholders is one principle of the corpo-

Business, Organization of

rate structure. Another is corporate personhood. In 1886, the Supreme Court ruled in Santa Clara County v. Southern Paciﬁc Railroad that a corporation was legally a person under the Constitution’s Fourteenth Amendment. This means that states cannot pass laws that treat corporations differently from any living, breathing person. TRUSTS BREED SUSPICION Though corporations have the legal rights of people, they can be much harder to hold accountable if they fail to uphold the law. The corporation itself cannot go to jail, and depending on how the company is structured, the individuals most responsible for any wrongdoing may hold informal or invisible power. The organization of trusts proved highly successful in part because legal challenges to them seemed unlikely to succeed. At the time, the tools of law were inadequate. The Interstate Commerce Act of 1887 had established a commission with no real power, although its existence had reduced public anger toward the railroads. Similarly, the Sherman Antitrust Act of 1890 had no real power to stop or reverse the organization of trusts. The members of Congress who created it did not fully understand trusts. They created a weak law that could only be enforced by a determined president with wide support independent of corporate interests. That president was Theodore Roosevelt (in power 1901–1909). In 1902, Roosevelt directed his attorney general to prosecute the

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Northern Securities Company. This was a holding company assembled by entrepreneur J.P. Morgan; it was designed to end the struggle for control over the railroads of the nation’s northern quarter. It worked to the mutual beneﬁt of several of the country’s largest railroad owners and banks. The Supreme Court ordered Northern Securities to dissolve in 1904. Roosevelt started 40 antitrust prosecutions and won 25. He became known as a “trust-buster.” Roosevelt did not believe that all trusts were bad. He did not oppose big business routinely. Mostly, he wanted business to know that the U.S. government would not follow orders from corporations, trusts, bankers, or industrialists. No matter how well organized business became, or how much the control of industry became concentrated in a small number of hands, the government would counter the weight of business and society and balance evenly the interests of all citizens. See also: Banks and Banking; Business Cycles; Chain Stores; Corporations; Free Enterprise; Laissez-faire; Oil; Steel; Trusts.

FURTHERREADING Geisst, Charles. The Encyclopedia of American Business History. New York: Facts On File, Inc., 2006. Gordon, John Steele. Empire of Wealth: The Epic History of American Economic Power. New York: Harper Perennial, 2005. Lommel, Cookie. Madame C.J. Walker, Entrepreneur. Los Angeles: Holloway House Publishing Co., 1993.

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Carnegie, Andrew (1835–1919)

C Capitalism See Free Enterprise.

Carnegie, Andrew (1835–1919) Industrialist who played a leading role in developing U.S. steelmaking. From his roots as a working-class immigrant, Carnegie became one of America’s wealthiest individuals and a leading philanthropist. In addition to other gifts, Carnegie funded 3,000 public libraries across 47 U.S. states. WORKING-CLASS IMMIGRANT Andrew Carnegie immigrated to the United States from Scotland in 1848. His father was a weaver, and at the age of 13, Carnegie held his ﬁrst job as a bobbin boy, changing spools of thread in a cotton mill 12 hours a day, six days per week. In 1851, Carnegie became a telegraph messenger boy. He joined the Pennsylvania Railroad Company in 1853 and rose quickly in the company’s ranks. THE CIVIL WAR YEARS The outbreak of the Civil War (1861– 1865) damaged Union rail shipping and telegraph communications. Andrew Carnegie was appointed superintendent of the Military Railways and the Union’s telegraph lines. He oversaw the efﬁcient reconstruction of rail lines damaged by Confederate forces, and he also reorganized wire communications.

Carnegie saw firsthand the Union’s need for iron and steel. During the war, he invested in a steel mill. After the Union’s victory in 1865, Carnegie left the railroad industry to focus on iron and steel working. CAPTAIN OF INDUSTRY Carnegie founded the Union Ironworks in Pittsburgh, Pennsylvania, after the Civil War. He also founded the Keystone Bridge Works, which utilized his railroad industry connections to replace many of the outdated wooden bridges on the Pennsylvania lines with iron bridges. Carnegie bought iron-ore ﬁelds around the Great Lakes and a line of steamships to transport the ore to his mills. This structure is known as vertical integration, a process of participating in an industry from raw material to ﬁnished good and including the transportation and additional supply networks needed to create the product. Carnegie’s mastery of vertical integration helped him become a leader in steelmaking. By 1888, Carnegie’s company was one of the world’s largest steel and iron producers. One of Carnegie’s leading products was steel rails for America’s growing railroad network. In 1889, the steel output of the United States surpassed that of Great Britain. RETIREMENT AND PHILANTHROPIC WORK At the age of 66, Carnegie prepared to retire. He sold Carnegie Steel to

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the banker John Pierpont Morgan on March 2, 1901. Morgan would combine Carnegie’s company with several others to form the United States Steel Corporation. Carnegie became one of America’s richest individuals. Carnegie had long viewed great wealth as coming with the responsibility of giving back to the community. He had published these views in an article entitled “Wealth” in 1889. Now, he followed his own model by giving away the vast fortune he had spent the ﬁrst part of his life building. He continued the project of partnering with communities to establish free public libraries. He also funded higher education by founding the Carnegie Institute of Technology in Pittsburgh and supporting the Tuskegee Institute in Alabama, under the leadership of Booker T. Washington. Seen here on the grounds of his Pittsburgh home, AnPart of Carnegie’s drew Carnegie, son of poor Scottish immigrants, held his wealth also went toward first job at age 13. After building a vast fortune from and steel working, he spent his last years donating establishing pensions for iron much of the money to cultural and educational former Carnegie Steel em- enterprises. ployees. Yet, these acts of giving did not result in universal ad- tation lasted 143 days and resulted in miration. Carnegie had paid his work- 10 deaths. The strike permanently ers as poorly as any other industrial tainted Carnegie’s reputation. Andrew Carnegie died in Lenox, employer of the time. In 1892, an attempt to cut wages at the main Carn- Massachusetts, on August 11, 1919. He egie plant led to the Homestead Strike had given away more than $350 in Pennsylvania. The violent confron- million.

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See also: Steel.

FURTHERREADING Brands, H.W. Masters of Enterprise: Giants of American Business from John Jacob Astor and J.P. Morgan to Bill Gates and Oprah Winfrey. New York: The Free Press, 1999. Kent, Zachary. Andrew Carnegie: Steel King and Friend to Libraries. Berkeley Heights, N.J.: Enslow, 1999. Rau, Meachen. Andrew Carnegie: Captain of Industry. Mankato, Minn.: Compass Point Books, 2006.

Chain Stores Centrally managed retail outlets that sell the same goods in many different locations. Beginning in the nineteenth century, chain stores took advantage of industrial production by buying large amounts of items at lower costs and selling them more cheaply to customers. REVOLUTIONIZING THE DRY-GOODS MARKET The dry-goods store was the most common form of retail selling across the United States early in the industrial period. It stocked household items, fabric and ready-made clothes, and toiletries. A town of modest size would have one, and larger cities might have several. Dry-goods stores were generally family-owned, with each store providing a livelihood as a solitary small business. As settlement of the West continued in the later decades of the nineteenth century, farmers were often too far from ﬂedgling towns to make efﬁcient use of stores that could be a day’s wagon trip away. The scattered populations also presented a market inefﬁciency to manufacturers. Mass production was making products

easier to assemble for less money, and the real money came from producing and successfully marketing large quantities of goods. Because farms and towns followed the railroads, products could reach them efﬁciently if the retailer could be certain of a sale. Richard Warren Sears (1863–1914) solved this problem with a mail-order catalog. The Sears, Roebuck company was organized by 1891. Its catalog allowed farm families to shop together without leaving home, and it provided the price beneﬁt of purchasing power no local store could match. Sears could sell a sewing machine for one-third the price a store might charge, and the catalog included a wide range of practical, well-made goods that were useful and, at these prices, essential to a modern American family anywhere in the country. BRICK AND MORTAR The Sears catalog did not simply market goods. It created markets, as families with previously limited access to stores fulﬁlled already existing needs and bought new products as they became available. In time, what were once luxuries became necessities. Technological innovations were transformed from novelties to everyday items. American industry began to supply the nation with consumer goods that seemed endless in both quantity and variety. This phenomenon led to chain stores. Sears opened stores, in addition to distributing its catalog, around World War I (1914–1918). Montgomery Ward and J.C. Penney also became mail-order companies, as well as

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Woolworth’s and Wal-Mart For more than a century, the success of discount retail chains has proven that Americans love a bargain. Two big chains are examples of that trend. In 1889, Woolworth’s had gross sales of $246,000. Woolworth’s sold a polish that, if applied regularly, kept a stove from rusting. It also offered a deal on hairpins, hatpins, shoelaces, shoe polish, combs and brushes, and knitting needles. Recent immigrants formed an important part of Woolworth’s customer base. They mostly arrived in America with few or no home essentials and had little money to spend—even on basic items. In 1890, Frank Woolworth took his first trip to Europe, a working vacation that allowed him to meet a number of his suppliers. Having previously worked through merchants, he now arrived at deals directly with the manufacturers to produce for the entire chain at an even lower price. The American retail market continued to grow and diversify during the twentieth century. As chain stores became dominant in

national chains. Woolworth’s invented and dominated the concept of the “ﬁve and dime,” a chain store that sold goods priced solely at either ﬁve or ten cents, a term that held on for decades, even after prices had increased. The chain stores sold standardized, mass-produced goods. The stores themselves were heavily standardized, with little variation from store to store, and they were ultimately run from a central ofﬁce. Comparison to Department Stores While Sears brought industrial plenty

the grocery and pharmacy markets, numerous discount chains appeared to challenge Woolworth’s. Still other chains positioned themselves as middle-market retailers, selling more fashionable items than discounters but still offering a good price. No retailer has combined these trends to a greater degree than Wal-Mart. Starting out as a discount retailer in the 1970s, Wal-Mart grew to have 2,612 “supercenters” by 2009. Each supercenter combined a grocery store and pharmacy with departments common to chain retailers, departments such as clothing, home furnishings, and sporting goods. Wal-Mart also partnered with companies to create new lines of products and sell them at a consistently cheaper price than rival retailers could match. In 2004, Wal-Mart generated a profit of $10.3 billion, essentially by selling everyday items slightly cheaper. In short, Wal-Mart perfected the direct connection to suppliers pioneered by Frank Woolworth more than 100 years ago.

to the countryside, names like Macy’s, Bloomingdale’s, and Marshall Field’s deﬁned the height of fashion and fashionable commerce in America’s cities. The department store developed to provide the middle and upper classes with the best clothing and furnishings available. Those who acquired wealth by managing the industrial economy displayed it by shopping for goods of the highest craft in America’s downtowns. Unlike the chain stores, the department stores mounted elaborate window

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displays that “sold” lifestyles, rather than particular products. The department stores included top-quality services within their walls. Department stores had distinctive local personalities, though they often belonged to a chain or group. Before World War II (1939–1945), the department store provided an education in what the consumer should wish to buy, even if what was bought instead came from a chain store. After World War II, the line between the department store and the chain store blurred before largely disappearing. Downtown locations became less proﬁtable as people moved to newly built suburbs. Some stores, including Marshall Field’s, followed customers to the suburbs by building locations in the new shopping centers. The new locations had generally the same selection of goods but lacked many of the exclusive services that the downtown stores provided. They more closely resembled interchangeable chain stores than the downtown ﬂagship store. They competed more directly with chain stores, often sharing the same malls. See also: Business, Organization of; Corporations; Free Enterprise; Field, Marshall; Gilded Age; Laissez-faire; Woolworth’s.

FURTHERREADING Farrell, James J. One Nation Under Goods: Malls and the Seductions of American Shopping. Washington, D.C.: Smithsonian Books, 2003. Pitrone, Jean Maddern. F.W. Woolworth and the American Five and Dime. Jefferson, N.C.: McFarland & Company, Inc., 2003.

Whitaker, Jan. Service and Style: How the American Department Store Fashioned the Middle Class. New York: St. Martin’s Press, 2006.

Cities, Growth of The expansion of urban America. Cities grew taller, spread out, and appeared across the former frontier of the nation. Industrialism brought skyscrapers and slums, as well as suburbs and the motorized transportation that allowed workers to commute to and from outlying communities and urban centers. FROM REGIONAL PORTS TO INDUSTRIAL CENTERS Colonial America and the early United States relied on seaports along the coast of the Atlantic Ocean and the nation’s rivers for trade and shipping. The country was an agrarian society, trading farm products to Europe for ﬁnished goods. New York, Boston, and Philadelphia were the three largest American cities in 1790, though their populations were small compared to the present day. New York had 33,131 inhabitants. In 1850, the three largest cities were New York, with a population of 515,547; Baltimore, a distant second with 169,054; and Boston, at 136,881. In the second half of the nineteenth century, however, the trends of industrialization and westward expansion started to change America’s pattern of urbanization. Cities grew tremendously in just 50 years; New York’s population grew from more than half a million people to almost 3.5 million by 1900. Philadelphia’s population increased 10 times, to almost 1.3 million. Most remarkably,

Cities, Growth of

America’s second-largest city in 1900, Chicago, had not even ranked in the top 10 in 1850. Chicago had almost 1.7 million people at the start of the twentieth century. Its size represented the transcontinental nature of the soon-to-be-modern United States. Its railroad hub powered interstate commerce; its manufacturing turned out the products that deﬁned the growing consumer economy; and its slaughterhouses and meatpacking plants fed the continent. TENEMENTS AND PALACES As cities grew denser, taller, and more complex, and as they ﬁlled with heavy industry and industrial workers, they became more sorted by class than earlier American urban centers. In the small port cities, rich and poor had lived on the same block. In the growing industrial centers, living conditions grew very far apart. The second half of the nineteenth century saw rapid urban growth, partially due to immigration. In New York, especially, recent arrivals grouped themselves in small neighborhoods, tightly packed to share the cost of overcrowded tenement apartments. The word tenement did not originally mean “slum”; it simply meant a large building with many small spaces available for rent. The lack of air, light, running water, adequate sanitation, and reasonable amount of living space gave tenements their reputation as slums. As technology, especially the elevator, improved to allow ever-taller buildings, the variety of living spaces available to the middle and upper classes grew. Early on, the term

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French ﬂat meant that the space was nicer than a tenement but lacked modern comforts. Residential hotels appeared a little later, offering housekeeping services and a communal dining room. Over time, the modern apartment came to dominate urban living. Its essential combination of convenience and independence allowed a vast spectrum of lifestyles, from simplicity to luxury, creating buildings to appeal to many different positions in life. THE MODERN WORLD TAKING SHAPE By the turn of the twentieth century, many of the features that make up modern life had been knitted together in a dense and layered urban fabric. New infrastructures made the modern city unlike any previous human living arrangement. Electricity powered lights in houses, offices, and factories. Gas lines provided cooking fuel. Water pipes below streets fed fresh water into homes for cooking and bathing. Conversely, the latest improvements in city sewer design, served by the remarkable new ﬂush toilet, removed household waste with a lessened degree of public nuisance. Public transit, again thanks to electricity, became faster, smoother, and cleaner when the electric streetcar replaced the horse-drawn streetcar. SUBURBAN GROWTH The streetcar inspired a new idea of how far one could live from work and commute each day. Many smaller cities acquired a ring of “streetcar suburbs” in the decades around the turn of the twentieth century.

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Cities continued to grow from 1900 to 1950. Much of this growth was outward. Trains, subways, streetcars, and bus lines all helped with this expansion, but the force most responsible for stretching urban centers across ever-larger areas was the private automobile. After World War II (1939–1945), the car took its place as modern America’s primary form of daily transportation. Suburbs began to have economic lives independent of city centers, which placed enormous economic strain on the cities. Businesses moved their headquarters to suburban campuses, while downtown department stores lost business to suburban shopping malls. Freeways cut through old city neighborhoods to serve the volume of trafﬁc headed in and out of downtown areas each day. For many postwar families, the suburbs meant a newer, bigger house packed with the comforts of modern life, set in a green place with clean air. Unfortunately, the postwar movement to the suburbs is also associated with the phenomenon of “white ﬂight,” situations in which more afﬂuent, or wealthier, white residents of a neighborhood moved to the suburbs, while black families, having no choice because of the prejudices of lenders and biases of their potential neighbors, stayed and sought to maintain inner-city neighborhoods. TODAY’S TRENDS Today’s economy in the United States is often called “postindustrial,” meaning that much of the manufacturing and heavy industrial work that once took place in the United States now takes place in other countries. Two

factors account for this change. First, production of most goods is cheaper in other countries. Second, Americans have come to prefer not to live with the air and water pollution that often comes with industrialization. U.S. cities today are as likely to be centers of commerce, banking, and research as they are of manufacturing. Individuals have greater freedom to choose between living in the city or a suburb than a half-century ago. Furthermore, in recent years, the demand for housing in many central city neighborhoods has been rising. See also: African Americans and Industrialization; An Interview with Thomas Edison in the Viewpoints section; Immigration and Industrialization; Ford, Henry; Railroads; Unions.

FURTHERREADING Johnson, Paul. A History of the American People. New York: HarperCollins Publishers, 1997. Misa, Thomas J. A Nation of Steel: The Making of Modern America. Baltimore: The Johns Hopkins University Press, 2004. Roark, James L., et al. The American Promise: A History of the United States. New York: Bedford/St. Martin’s, 2005.

Cleveland, Grover See Pullman Strike.

Coal Found beneath the earth’s surface, black or brown mineral that provided one of the main sources of fuel during the industrialization of America. Coal consists of plant remains, highly concentrated and compressed over millions of years. It contains a great deal of energy, which is released when the coal is burned.

Coal

TYPES AND LOCATIONS Coal exists in many varieties. Whether black or brown, shiny or dull-looking, coal is found throughout the world. Sometimes it is ﬂaky and breaks apart easily. In other locations, the coal is rock-hard. It has been used as a fuel in Europe for centuries. Coal became the primary fuel for home heating, domestic ﬁres, and craft-working in London in the 1500s. Anthracite Two main types of coal are found in the United States, and the two types vary by location. Anthracite coal comes from eastern Pennsylvania. It was discovered in large volumes, spread among many small deposits. Anthracite coal provided one of the main sources of home heating and other domestic purposes in nineteenth-century America. A hard and shiny version of coal, anthracite is difﬁcult to light but burns for a long time and burns cleanly once it catches ﬁre. Anthracite coal can be found along the eastern coast of the United States because of continental drift. Millions of years ago, the earth’s continents collided to form a supercontinent, called Pangea. The coal already existed in the ground, but the force of continental collision compressed and folded it back on itself, creating a denser, purer form. Relatively little anthracite ever existed in the world. Much of what has been found has been discovered in ﬁve counties of eastern Pennsylvania. Bituminous The second type of coal common in the United States is known as bituminous coal. Western Pennsylvania yields very large amounts of bituminous coal, from a

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deposit extending into southeastern Ohio. The city of Pittsburgh, Pennsylvania, became a primary center of iron and steel production because of this deposit. Bituminous coal is used to produce coke, which by 1900 had become the primary fuel for the intense heat of steel production. In 1900, Pennsylvania led the states in production of coal. Illinois followed in second place. Kentucky, Tennessee, and Alabama all produced important amounts of coal. An ironmaking industry grew up in northern Alabama around Birmingham, taking advantage of the local coal reserves. PRODUCTION Coal production grew steadily throughout the nineteenth century. In 1870, 37 million tons (33.56 million metric tons) of coal were produced. By 1900, production reached 350 million tons (317.5 million metric tons). The number of mineworkers grew from 186,000 to 681,000 during those few decades. By 1913, the United States had become the world’s leading coal producer. It produced 500 million tons (453.6 million metric tons) that year, thanks to two advantages. First, the United States had enormous reserves of coal. Second, much of this coal could be mined from the ground more cheaply than coal could be mined in other countries because substantial coal deposits were very close to the earth’s surface and could be mined from open pits. U.S. production continued to grow, while in other nations, production levels fell. World War I (1914– 1918) cut deeply into European coal production. Mines in the United

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States proﬁted by pushing up national production to 611 million tons (554.3 million metric tons) by 1918. USES AND IMPACTS ON INDUSTRY In colonial America and the early United States, homes were heated and food was cooked using wood as fuel. Eventually, the growing cities of the East Coast came to face the same problem with which London, England, had struggled in the 1500s— there was no more nearby wood. A market for coal for domestic use appeared in the cities, but at ﬁrst, coal imported from England best ﬁlled the need for cheap fuel. Bringing bituminous coal over the Allegheny Mountains from the Pittsburgh area was more expensive than bringing it across the Atlantic Ocean. Anthracite coal was closer but had to be burned in special stoves. Sending anthracite downriver to Philadelphia was dangerous and not very proﬁtable. One solution was to construct a canal to connect the areas. This transportation solution was put to use quite often in the ﬁrst decades of the nineteenth century. Eventually, as happened in many places, a railroad replaced the canal. Ironworking Just as anthracite had taken time to be accepted as a home fuel source, it could not immediately be used to produce iron. In the ﬁrst few years of railroad expansion, U.S. railroad companies relied on iron rails imported from England. Fortunately, an immigrant from Wales named David Thomas developed a method for smelting iron with anthracite coal. By 1849, 50 anthracite-fueled ironworks had

opened. This number doubled in just ﬁve years. The price of iron fell dramatically, allowing railroads and industries to greatly expand. Steel After the Civil War (1861–1865), the production of steel helped create the ever-growing need for coal. Steel is produced from iron ore but is much stronger and lighter. For centuries, it remained a difficult and expensive commodity to produce. It was used only in high-quality knives and swords and high-precision instruments. The Bessemer process, developed in Great Britain in the 1850s, made steel an item for mass production. Buildings, bridges, and rail lines could all be constructed from it. The modern American city acquired its skyline, as tall buildings rose on steel skeletons, their bones forged in furnaces stoked with bituminous coal. To make steel, bituminous coal was baked to make coke. Gases rose from the baking coal, carrying off impurities that would otherwise have ruined the metal. By the late 1870s, coke had begun to replace anthracite as the primary fuel for producing both steel and iron. The coking process produced coal gas as a by-product. This gas could be trapped and piped in to factories and homes, where it was burned in light ﬁxtures. A key at the base of a ﬁxture turned the gas on or off. Though rather dangerous, coal gas proved a popular lighting source before electricity. It also helped people grow comfortable with the idea of piping ﬂammable gas underneath city streets and burning it in homes,

Coal

helping natural gas to gain quick and wide acceptance. LABOR ISSUES Coal mining was dirty, dangerous work. In eastern Pennsylvania, miners struggled to organize a labor union in the mid-1870s. The ownership of the mines was highly consolidated. The Reading Railroad had purchased about one-third of the mines, and its president, Franklin B. Gowen, had organized a pool with the other mine owners to control the price and keep out unions. Gowen’s business arrangement was not illegal, but it grew unpopular. Coal customers feared this consolidation and expressed support for the miners when they went on strike in 1875. One newspaper commented that the coal cartel “with one hand reaches for the pockets of the consumers, and with the other for the throats of the laborers.” The 1875 strike lasted ﬁve months and had several violent outbreaks. At its end, Gowen presented to the public a list of crimes of which he accused unionists. The private Coal and Iron Police, which answered to Gowen and provided most of the area’s law enforcement, rounded up dozens of workers Gowen accused of belonging to a secret society called the Molly Maguires, known as Mollies. In the spring of 1876, Gowen served as prosecutor in the murder trial of ﬁve accused Mollies, but he expanded the proceedings to charge many more suspected Mollies with a variety of violent acts. Twenty-six were hanged and 20 more impris-

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oned. However, Gowen had ﬁnancially overextended the Reading Railroad and lost his position at the company. The railroad and its coal holdings came under the control of a group of New York bankers, led by J.P. Morgan. Rise of the United Mine Workers At the turn of the twentieth century, 681,000 people worked in coal production, either in the mines or with hauling and railcar loading nearby. In the late nineteenth century, trade unionism had come to dominate the labor movement. This meant that the most effectively organized workers were skilled laborers who belonged to a union organized for their particular craft, or trade. Many unskilled laborers had not yet been effectively organized, leading to controversy and division among labor activists. Mining became one industry where an effective, well-organized, and truly industry-wide union came into existence and made real gains for workers. By the 1890s, the United Mine Workers (UMW) included members from a variety of racial and ethnic backgrounds. By concentrating on their common interests and not allowing their differences (including multiple languages) to come between them, the UMW won impressive victories when other unions seemed largely ineffective, disorganized, or too radical to cooperate with other unionists for long-term gains. In 1897, the UMW won recognition of the union from employers in the Midwestern bituminous coalﬁelds. Recognition meant

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that the union would have a permanent and ofﬁcial role to play, protecting the collective interests of the workers as they negotiated with employers. The Coal Strike of 1902 Success in the coal anthracite ﬁelds of eastern Pennsylvania did not come quite as quickly for the UMW. Two small strikes in 1900 and 1901 made minor gains and prepared UMW President John Mitchell to make broader demands. In 1902, the union demanded a wage increase and shorter hours. It also demanded payment ﬁgured by weight, rather than by the number of cars ﬁlled with coal. This payment, said the union, should come every two weeks rather than monthly. At the same time, the union wanted company stores and company doctors abolished, as many mine families felt that their pay went directly back to the company. Finally, the union demanded recognition to safeguard these gains and build upon them. John Mitchell had a reputation as a modest man who sought to be reasonable even with opponents. The mine owners appointed as their spokesperson George F. Baer, the president of the Philadelphia and Reading Railroad. Baer simply refused to discuss recognizing the union. On May 12, 1902, 147,000 miners walked off their jobs. The mines went unworked all summer. The price of anthracite rose from $5 to $14 as supply ran low. President Theodore Roosevelt (1901–1909) took unprecedented action, inviting Baer and Mitchell to the

White House to discuss the situation on October 3. At the meeting, Baer stated the view that the mine owners, and only the mine owners, had a Godgiven duty to see to the well-being of their workers as they saw ﬁt. Roosevelt took Baer’s comment as a challenge to the power of the federal government to mediate disputes between citizens and provide for the equal protection of their interests. He threatened to take control of the mines and run them with federal troops. No president had ever nationalized an industry before, but Baer took Roosevelt’s threat as serious. John Mitchell took the productive step of suggesting a tribunal, appointed by Roosevelt, to settle the strike. The mine owners, with the concerned advice of J.P. Morgan, proposed their own arbitration commission, but without a representative of the union. Roosevelt went along with the owners. He asked only to add a wellknown sociologist, E.E. Clark, for perspective. Clark happened also to be a grand chief of the Order of Railway Conductors. With its backdoor labor representative, the commission resolved the strike on October 23, 1902. The UMW’s gains did not match its original demands. The working day was decreased from 10 hours to nine, with no reduction in pay. A sixmember reconciliation board would address disputes, in place of union recognition and representation. Roosevelt’s involvement signaled an important shift in political power. As a Progressive, Roosevelt would

Congress of Industrial Organizations (CIO)

not lean toward business owners the way that previous presidents had done. Roosevelt asserted the right of the federal government to involve itself in disputes between labor and management. In 1903, the Roosevelt administration made this a regular part of government by adding the Department of Commerce and Labor to the Cabinet. See also: Cities, Growth of; Electricity; Electric Streetcar; Oil; Railroads; Steel.

FURTHERREADING Cashman, Sean Dennis. America in the Age of the Titans: The Progressive Era and World War I. New York: New York University Press, 1988. Freese, Barbara. Coal: A Human History. Cambridge, Mass.: Perseus Publishing, 2003. Long, Priscilla. Where the Sun Never Shines: A History of America’s Bloody Coal Industry. New York: Paragon House, 1989. Logan, Michale. Coal. Farmington Hills, Mich.: Greenhaven Press, 2007.

Congress of Industrial Organizations (CIO) Group of unions that broke off from the American Federation of Labor (AFL). In the mid-1930s, two important questions faced organized labor in the United States. Should industrial workers—the less skilled members of the mass-production industrial economy—be organized? And if so, how? DISSENSION WITHIN THE AFL The AFL began as a collection of craft unions, each narrowly focused on members who shared a certain welldeveloped and not easily replaced skill. By the 1930s, the AFL struggled

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to determine how to respond to the need for union representation for industrial workers. As president of the United Mine Workers, John L. Lewis often disagreed with other AFL leaders on this question. Lewis wanted the AFL to move in the direction of creating unions that would represent all workers within a particular industry. The production lines of entire factories and plants would be brought into a single union, rather than dealt out to multiple, specialized trade unions as the AFL tended to favor doing. On November 11, 1935, Lewis and the leadership of seven other AFL unions formed the original CIO, the Committee for Industrial Organization. This early CIO sought to inﬂuence AFL policy but was instead suspended from the larger federation on September 10, 1936. By 1938, 10 former AFL unions had formed the Congress of Industrial Organizations as a rival to the AFL. EARLY SUCCESSES Two CIO-affiliated unions experienced dramatic success in 1937. The United Auto Workers (UAW) won a 44-day sit-down strike against General Motors (GM) in Flint, Michigan. Though illegal, the strike won recognition of the UAW as the sole representative of GM’s factory workers. In contrast to the spontaneous, worker-led UAW strike, the Steel Workers’ Organizing Committee (SWOC) signed a collective bargaining agreement with United States Steel following negotiations between company management and CIO organizing staff. Hundreds of

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organizers had worked to sign up U.S. Steel employees as SWOC members. The company recognized the union in part to avoid the possibility of a disruptive strike like the one at GM. The UAW also built on its success by organizing Chrysler. Management at Ford pushed back harder against the union, and recognition was not won until 1941. The SWOC became known as the United Steel Workers of America, and throughout 1941, it used a combination of strikes and negotiations to win recognition at many of the smaller companies that made up U.S. Steel’s competition. Together, the unions of the CIO organized almost 4 million workers into 32 national or international unions in the organization’s ﬁrst two years. More than 30,000 companies signed contracts with CIO unions during this time. COMPETITION AND INTERNAL CONFLICT Along with the early successes in 1937 came tragic confrontations as the SWOC tried to organize some of the smaller steel companies. Chicago police ﬁred on a picket outside Republic Steel on May 30, 1937, killing 10. In Massillon, Ohio, six weeks later, police shot and killed three union members. Attempts to organize textile workers in the southern United States also saw setbacks. The CIO was much more open to organizing AfricanAmerican and women workers than the AFL, but it had only limited success in these areas. The founding of the CIO came about partially from

the frustration of Lewis and others as they watched independent unions organize militantly, often going so far as to vocally support socialist or communist economic systems. The UAW and others competed successfully against these organizations, but the CIO-backed Textile Workers Organizing Committee allowed itself to be divided by race. As a result, it struggled behind radical unions that aggressively organized black and white textile workers together. The CIO’s early leaders also feuded among themselves. John L. Lewis disagreed with the leaders of two prominent unions over how best to ﬁght the CIO’s battles and seek public support. One of them, Philip Murray of the SWOC, replaced Lewis as president of the CIO when Lewis resigned in 1941. The CIO grew substantially during World War II (1939–1945). Strikes continued to occur, but they were much shorter and not aimed at increasing wages. Arbitration by the federal government allowed for union recognition by employers and modest wage increases, in return for uninterrupted wartime production. During the war, the CIO also had a good record of confronting racial tensions that appeared as African Americans increasingly found jobs in manufacturing. The CIO’s organizers worked to prevent “hate strikes” called by white workers when blacks were hired. CHALLENGES FOR THE CIO AFTER WORLD WAR II The end of World War II and the beginning of the Cold War with the So-

Corporations

viet Union brought anticommunist feelings into the labor movement. Such sentiments raged in all areas of American public life in the decade after the war. The 1946 Taft-Hartley Act made organizing more difficult for the unions and allowed the states to pass right-to-work laws. It also required union ofﬁcers to sign documents certifying that they were not communists before they could bring cases before the National Labor Relations Board (NLRB) for arbitration. This was eventually struck down by the U.S. Supreme Court as unconstitutional, but in the short term, it caused a purge in the CIO. CIO President Philip Murray was not a communist, but top ofﬁcers in many of the CIO member unions were. By 1948, Murray had grown tired of ﬁghting the communists on issues such as which presidential candidate to endorse and whether to support the Marshall Plan. He ﬁred a CIO regional director and the federation’s chief legal counsel. Anticommunist state and local ofﬁcials expelled communist ofﬁcials, and in 1950, the CIO went so far as to expel ﬁve communist-leaning unions. In 1952, Philip Murray died and was succeeded as president by Walter Reuther. George Meaney became head of the AFL at the same time, and the two men began discussing a merger of the organizations. Reuther feared he would be undercut by the head of the United Steel Workers, and this internal rivalry compromised the CIO’s strength in the merger bargaining. However, the AFL had embraced industrial unioniza-

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tion, and the merger was completed in 1955. The AFL-CIO, as the combined organization is known, has been one of American labor’s most important institutions for more than half a century. See also: African Americans and Industrialization; American Federation of Labor (AFL); Immigration and Industrialization; Mining; Women’s Trade Union League.

FURTHERREADING Neyland, James. Phillip Randolph: Labor Leader. Los Angeles: Holloway House Publishing Co., 1994. Yates, Michael D. Why Unions Matter. New York: Monthly Review Press, 1998.

Corporations Business organizations with legal rights similar to those of people and whose shareholders can only lose the amount of money they have invested in the business if it fails. Organizations referred to as corporations have existed for centuries, but it was only in the middle nineteenth century in the United States that the corporation became a leading form of business organization. PREINDUSTRIAL CORPORATIONS Forms of corporations existed in ancient India and Rome. The word comes from the Latin corpus, meaning “body” or “body of people.” In medieval Europe, churches and local governments formed corporations. The ﬁrst commercial corporation in Europe formed in the fourteenth century. As European nations sought colonies, they formed chartered compa-

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nies, such as the Dutch East India Company. These companies’ shares were traded on an open exchange in Amsterdam; shareholders held paper certiﬁcates as proof. The company had another modern feature: limited liability. Under this concept, investors are only liable for the money each contributes individually. CORPORATIONS IN THE UNITED STATES In colonial America and the early United States, corporations were rare and generally discouraged under the laws of most states. Mostly, America’s early corporations were used to set up businesses with a public purpose, including banks, turnpikes, and railroads. Setting up a corporation could be difﬁcult. In New York prior to 1846, the creation of a new corporation required the state legislature to pass a special law. As the corporation became a more widely accepted form of organization, general laws allowed the creation of a new corporation without an extraordinary action of government. In the U.S. Supreme Court case Dartmouth College v. Woodward, Chief Justice John Marshall described a corporation as “. . .an artiﬁcial being, invisible, intangible and existing only in contemplation of law.” Marshall stated that corporations have immortality even as the people investing come and go. The corporation acted as a distinct individual, regardless of how many times shares changed hands. In the ﬁrst half of the nineteenth century, partnerships were the most common way to organize multiple

owners of an enterprise. They worked ﬁne for local businesses, but often had difﬁculty operating across the geographic expanse of the United States. The corporation provided a much more efﬁcient structure for large businesses. As legal barriers were removed during and after the Civil War (1861– 1865), corporations became much more common. Andrew Carnegie’s steel company remained a partnership, but by the 1890s, this was uncommon for such a large business. Not everyone incorporated, but the big operators generally did, and often a few corporations controlled a large portion of each market. In 1919, 31.5 percent of businesses were corporations. This third of the nation’s businesses employed 86 percent of the workforce to produce 87.7 percent of the value of the nation’s goods. IMPACT ON INDUSTRIALIZATION The corporation ﬁt the vast size of the United States by the beginning of the twentieth century. Investors needed only to know the company’s reputation and performance, rather than the soundness of individual partners. A corporation could attract investors from all over the country. An important change occurred between 1870 and 1900. A few large corporations came to dominate each of many major industries. Many of these corporations had a vertically integrated structure. They owned the raw materials, worked these resources or purchased others, created ﬁnished goods, and distributed these products to wholesalers and sometimes even directly to retailers.

Corporations

These modern corporations employed far more people than had earlier firms. They operated larger manufacturing facilities and modernized them periodically to keep up with competitors and lower production costs. The money needed for these improvements had to come from a much larger group of investors than a partnership structure could have provided. New professions grew out of the move from partnerships and sole proprietorships to corporations. A corporation is governed by a board of directors that is elected by all the shareholders. The board then hires managers who actually run the company. In older forms of business organization, a firm is run by its owners. On a day-to-day basis, professional managers run a corporation. They receive a salary in return and often own some stock in the company. The top manager in a corporation commonly holds the title of chief executive officer. The modern corporation also became the nurturer and guardian of invention and innovation. While inventors like Thomas Edison and Alexander Graham Bell had made a high art of inventing, corporations made research and development a regular function. In the new industrial corporations, the process of refining technology and protecting the resulting patents became a fulltime occupation. The issue of TrusTs The years right before and after the beginning of the twentieth century brought an incredible number of

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business mergers. These resulted in highly consolidated industries, in which only a handful of companies competed against one another. From 1887 to 1897, 86 mergers took place among industrial combinations; the companies involved had a combined capitalization of under $1.5 billion. From 1897 to 1902, 2,653 companies in mining and manufacturing were combined into larger firms, involving $6.32 billion in capital. An average of 300 independent companies disappeared each year between 1895 and 1904. For example, the Dupont Corporation came to control 85 percent of the chemicals market, while General Electric held the same portion of the market for electric power.

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Antitrust sentiments and resulting Measures Followers of the Progressive Movement, an important political movement of the 1900s and the 1910s, believed trusts worked against independent citizens and democracy. Many Americans outside of this movement also held trusts in suspicion. Business consolidation led to lost jobs in many places and narrowed the profits of farmers and shopkeepers. The Sherman Antitrust Act of 1890 declared trusts and other forms of organization that restrained free trade to be illegal. The enforced breakup of Standard Oil was the most striking. Standard Oil became 38 separate companies. The largest, Standard Oil of New Jersey, later become the Exxon Corporation. Though trustbusting disassembled monopolies

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and encouraged competition in industry, the corporation remained the most important form of organization in American business. See also: Business, Organization of; Free Enterprise; Laissez-faire; Railroads; Trusts; Unions.

FURTHERREADING Atack, Jeremy, Peter Passell, and Susan Lee. A New Economic View of American History: From Colonial Times to 1940. New York: W.W. Norton, 1994. Gordon, John Steele. Empire of Wealth: The Epic History of American Economic Power. New York: Harper Perennial, 2005.

D–F Deere, John (1804–1886) Blacksmith and developer of the ﬁrst commercially successful steel plow. Deere’s innovation made the Midwestern United States a productive farming region. Before Deere produced the steel plow, farmers strug-

gled through the Midwest’s sticky soil with inadequate iron plows. STRUGGLE AND SUCCESS John Deere was born in Vermont in 1804, the son of a tailor who was lost at sea when the younger Deere was only four years old. After minimal

In this engraving, the artist depicts a John Deere riding plow from around 1880. The all-steel blade revolutionized farming in the Midwestern United States.

Deere, John (1804–1886)

education, Deere took an apprenticeship with a local blacksmith at age 17. After completing his term as an apprentice, he struggled to establish himself as a journeyman blacksmith in an area with much talented competition in the ﬁeld. Deere married Demarius Lamb in 1827. By 1837, they had four children. Deere’s shop had been destroyed twice by ﬁre, and the economy of Vermont faced crisis in both the farming and banking sectors. Facing bankruptcy, Deere made the difﬁcult decision to leave his children and pregnant wife to seek work in Illinois. Settling in the village of Grand Detour, Deere quickly found business. He also discovered that other uprooted New Englanders in the region were struggling with iron plows, which had turned the sandy soil of Vermont but clung to the sticky soil of the Midwest and then required manual cleaning every few paces. Deere’s exact inspiration is uncertain, but he came to realize that a highly polished steel plow would shed the excess soil from itself, allowing farmers to plow the rich land with comparative ease. Deere produced his first steel plow from a broken saw blade in 1837. The next year, his wife and ﬁve children joined him in Illinois. A GROWING BUSINESS With partners providing financial backing, Deere slowly increased production. Early on, his biggest expense was importing steel from England. A move to Moline, Illinois, in 1848, allowed Deere to access the Mississippi

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River as a power source and means of shipping his finished plows. Production soon reached 1,600 per year, with the steel now ordered to specification from Pittsburgh, Pennsylvania. Deere continued to refine his plow design. When a business partner suggested the design was good enough, Deere replied, “I will never put my name on a product that does not have in it the best that is in me.” DEERE’S LEGACY John Deere ﬁrst became politically active in the early 1850s as a county ofﬁcial of the Whig Party, but he joined the Republican Party soon after its formation in 1854. He was a staunch abolitionist throughout the Civil War (1861–1865). In 1873, he became mayor of Moline, Illinois. During his two-year term, Deere continued a theme of civic improvement and modernization, spearheading sidewalk and street improvements as well as sewer construction. He also faced the challenge of balancing the growing temperance movement with the desire of other residents to pass a liquor license ordinance. Deere was sympathetic to temperance, which forbade the drinking of alcohol, but he helped pass the ordinance. By the time of Deere’s death on May 17, 1886, Moline had grown to 10,000 residents. Deere had contributed enormously to the city’s growth. In addition to the economic force of his growing company and his service as mayor, Deere gave money to cultural and charitable groups. He also served as a trustee of a local church.

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The John Deere Company Starting with Charles, members of the Deere family continued to lead the company for 96 years after its founder’s death. The invention of the internal combustion engine made Deere’s growing line of products more powerful, complex, and essential to modern agriculture. Today, the distinctive green and yellow John Deere logo and paint job make the company’s tractors, combines, and other machinery recognizable around the world. See also: Free Enterprise.

FURTHERREADING Collins, David R. Pioneer Plowmaker: A Story About John Deere. Lakeville, Minn.: Hobar Publications, 1990. Sutcliffe, Jane. John Deere. Minneapolis, Minn.: Lerner, 2006.

Edison, Thomas Alva See Electricity.

Electric Streetcar In American cities, mode of mass transit popular from the late nineteenth through the middle of the twentieth century. The electric streetcar replaced horse-drawn versions but was itself ﬁrst replaced in part by buses and then largely by the automobile. A PART OF THE MODERN CITY Beginning in New York in 1832, many nineteenth-century American cities featured streetcars, running regular routes on rails, pulled by horses or mules. At the time, it was an efﬁcient combination that provided city-wide mobility to the great many

who could never afford to keep, or preferred not to hire, a private horsedrawn carriage. In the 1880s, electricity became one of the new elements of infrastructure that helped define the modern city. A natural task of the new power grid was replacing the manure by-product and expensive care of the horses on the streetcar lines. Functional, though experimental, electric streetcars (or “trolleys”) appeared at the 1884 World Cotton Centennial World’s Fair in New Orleans. The townspeople of Richmond, Virginia, inaugurated the nation’s ﬁrst regular electric-streetcar service in 1888. Designer Frank Sprague helped introduce a piece of technology forever associated with the streetcar; namely, the trolley pole. This was a long, ﬂexible pole mounted on the car’s roof and angling back and up to make contact with the electric line running overhead. For many cities installing streetcars after 1888, the system components were very similar. Rails were laid in the streets, as ﬂush with the pavement as possible. The streamlined trolley cars offered multiple doors to enter and exit and carried dozens of passengers. The trolley pole kept contact with the overhead electrical supply line to run the car’s electric motor. Power came from a central generating station, most likely burning coal to generate electricity. STREETCAR SUBURBS With faster and more reliable commuting systems in place, workers

Electricity

could live farther from their jobs. Many cities expanded, adding a ring of “streetcar suburbs” at a distance from the city center previously considered too far for daily transit. For several decades, the streetcar determined the maximum length of the average commute. Soon, though, the automobile redeﬁned the idea of how far one could travel to work each day. Each trip was measured in miles rather than city blocks. DISMANTLEMENT AFTER WORLD WAR II The Great Depression of the 1930s hurt attempts to expand, modernize, or improve streetcar lines. With the end of World War II (1939–1945), many governments and manufacturers sought to introduce buses in place of streetcars. Residents often viewed the trolleys as relics. Many aspired to own their own automobiles, anyway. In addition, switching to buses meant that road repair didn’t have to compete with track maintenance. Rising incomes and the movement of many former city-dwellers to suburbs far beyond streetcar range diminished ridership. Most U.S. cities dismantled their streetcar lines in the 1950s and 1960s. Urban and suburban expansion in the postwar years was built primarily to accommodate the automobile. See also: Cities, Growth of; Coal; Electricity; Steel.

FURTHERREADING Spangler, James R., and James A. Toman. Cleveland and Its Streetcars. Mount Pleasant, S.C.: Arcadia Publishing, 2005.

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Warner, Sam Bass. Streetcar Suburbs: The Process of Growth in Boston, 1870–1900. Cambridge, Mass.: Harvard University Press, 2004.

Electricity Source of power for industrial purposes and household tools and comforts. Electricity is a natural phenomenon caused by the opposing positive and negative charges of atoms. During the nineteenth century, the study of electricity started as an amusing curiosity and ended as the power supply of the modern industrial economy. CENTURIES OF FASCINATION The earliest humans knew something of electricity in the form of lightning. Static electricity is another easy way to observe a natural instance of electricity. The ancient Greeks rubbed amber with wool and observed the sparks of electric current leaping from the charged amber when it came within range of a path to earth. The Greeks also knew that certain ﬁsh, such as electric eels, could deliver a powerful shock. Perhaps the most famous early exploration of electricity occurred in 1752. The American printer and inventor Benjamin Franklin ﬂew a kite on a stormy day. A metal key was knotted just below the kite itself, in a kite string that Franklin moistened to allow current to travel. Sparks jumped from the string to Franklin’s fingers as the storm’s electricity sought a path to the ground. The pace of discovery quickened. In 1800, the ﬁrst battery was devel-

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Thomas Alva Edison (1847–1931) Edison was an American innovator and inventor and is perhaps most famous for creating a usable lightbulb. Edison took a practical approach to scientific pursuits; his hard work produced more than 1,000 patents between 1876 and 1900. Edison’s ancestors fled to Canada after the American Revolution (1775–1783) because they remained loyal to the king of England. His family joined a rebellion against the Canadian government in 1837. As a result, he was born poor in Ohio. Young Edison had only a few months of formal school, mostly learning and conducting experiments at home. He worked from an early age, selling newspapers on a railroad at age 12. Though constantly moving, Edison devoted his spare time to experimentation and invention. Edison claimed not to understand the mathematics and geometry of Sir Isaac Newton (1643–1727), the brilliant scientist whose laws of motion and explanations of gravity formed the foundation of physics and engineering. He instead drew his scientific inspiration from Michael Faraday, an English researcher of humble begin-

oped by Alessandro Volta, an Italian scientist. The ﬁrst electric motor followed, in 1821. With the analysis of the electric circuit in 1827, electrical engineering pushed basic research forward and eventually into millions of homes.

nings who made the first practical electric battery. Edison’s association with the telegraph provided inspiration and income as an inventor. He worked to refine the technology, as the volume of traffic spread from 6 million messages in 1866 to 30 million by 1880. He received his first patent in 1869. Edison, at the peak of his career, submitted a patent application every 11 days. At Menlo Park, New Jersey, Edison created the world’s first true industrial laboratory. From it emerged the foundations of many of the twentieth century’s new industries. Here, he perfected the phonograph (1877) and the incandescent lightbulb (1879). He drove his team of 50 assistants as relentlessly as he drove himself. Edison understood the importance of building upon each discovery, refining and advancing the technology. His New York power plant of 1881 began the process of building electrical infrastructure. Edison also went beyond creating a usable motion-picture camera, to constructing an entire filmmaking process and a distribution system to reach the audience.

THE ELECTRIC REVOLUTION Thomas Edison and his research team at Menlo Park, New Jersey, tried a variety of materials and shapes for the ﬁlament of a lightbulb. None proved acceptable, though a carbon ﬁlament became the likeliest candidate. Edison

Electricity

still struggled with its form, though. He could not bake the carbon wire into a spiral, but his associate, Charles Batchelor, formed it into a horseshoe shape. This ﬁlament burned for 16 hours on November 17, 1879. Early Developments Electricity became a fact of daily life and an essential tool at home and at work in 1882. In that year, Thomas Edison opened an electric power plant in New York City. This experiment only provided power to a small area. The direct current lost too much power in transmission to cover much ground, let alone allow for transmission between cities. Two other inventors, George Westinghouse and Nikola Tesla, developed a new transformer in the late 1880s capable of transmitting highvoltage current over a long distance. This relied on alternating current. Edison stood by his direct current system, but through the 1890s, alternating current proved more efﬁcient and effective. In many moments of innovation, two alternate methods or systems will develop, and eventually, the market must choose between them. In 1896, the hydroelectric power plant at Niagara Falls accepted alternating current. This helped decide the question. Hydroelectric power got its U.S. start in Appleton, Wisconsin, in 1882. Hydroelectricity uses the power of a river to spin a generator, producing electric current. In California in the late 1890s, hydropower and highvoltage lines began carrying electricity up to 70 miles. Higher voltage

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and longer distance became the new pattern. Early Twentieth-Century Developments By 1903, the United States had three major electric companies operating more than 1,000 central power plants and lighting 1.25 million electric lamps. Between 1909 and 1914, the amount of electric power used in manufacturing more than doubled, reaching 3.8 million horsepower. In the ﬁrst two decades of the twentieth century, alternating current became the standard as public utility companies worked to fulﬁll growing demand. Hydroelectric power continued to grow, backed up by steam generation. Electriﬁcation promoted urbanization and improved standards of living. At the same time, industry expanded. An excellent example of this growth process is found in southern California. The area was ﬁrst serviced by hydropower between 1903 and 1906. In 1909, Ezra F. Scattergood became the chief electrical engineer of Los Angeles. He assembled a coalition of seven states to build and share the Boulder Canyon Dam. The development of such ambitious projects meant that 83 percent of homes in California were wired for electricity by 1924. At the time, the national rate was 35 percent. In Los Angeles, an extensive all-electric railroad system spurred growth. Today, the rails are gone, but the complex and highly traveled L.A. freeway system follows many of its routes. A WORLD OF NEW PRODUCTS The introduction of electricity to homes created a huge potential

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market for electrical tools and appliances. After 1900, today’s household conveniences began to appear at high speed. The vacuum cleaner was introduced as early as 1901, and the toaster followed along in 1909. The wafﬂe iron was the kitchen wonder of 1911, and throughout the 1910s, various electric coffeemakers came on the market. The refrigerator was invented following developments in ice-making technology throughout the nineteenth century. The first genuine fridge was marketed in 1918. It became the Frigidaire; the company sold 10,000 units at $600 each in 1920. In 1928, 560,000 Frigidaires sold at a much lower price of $334. From 1880 until the end of the Great Depression (1929–1939), electric appliances steadily appeared, ﬁrst as toys of the well-to-do. Prices fell as quantities expanded and new companies found cheaper, more efﬁcient production methods. They slowly became part of the everyday experience of many American families. By the mid-twentieth century, electricity and the conveniences and luxuries it provided had become an essential feature of industrial America. See also: An Interview with Thomas Edison in the Viewpoints section; Coal; Electric Streetcar; Oil.

FURTHERREADING Cowan, Ruth Schwartz. A Social History of American Technology. New York: Oxford University Press, 1997. King, David C. The Age of Technology: Nineteenth Century American Inventors. Auburndale, Mass.: History Compass LLC, 2001.

Field, Marshall (1834–1906) Chicago dry-goods merchant and retailer who helped create the modern department store. Marshall Field introduced much greater customer service and elegance to the retail shopping experience. He is also remembered as one of Chicago’s great philanthropists. EARLY LIFE AND CAREER Born on a Massachusetts farm, Field took his ﬁrst job in a dry-goods store at age 17. Four years later, he moved to Chicago, finding employment with the dry-goods merchant Cooley, Wadsworth, and Company. Partners came and went, with Field buying a partnership in 1862 in what then became Farwell, Field & Co. In 1881, Field bought out his remaining partners and formed Marshall Field and Company. By 1890, the Marshall Field retail store on State Street in Chicago had become one of America’s leading retail enterprises and an innovator in customer service. The sheer size of the store and the range of products, including a wide variety of overseas imports, left Field with few competitors. Field embraced hallmarks of the department store as practiced throughout America and Europe, including published store hours, ﬁxed prices, and a guaranteed return policy. Field and his managers encouraged a higher level of service, embodied in the slogans “Give the lady what she wants” and “The customer is always right.” The Marshall Field store pioneered and helped develop many of the innovations that deﬁned the mod-

Field, Marshall (1834–1906)

ern department store. The space itself was luxurious and modern, the organization of departments made selecting goods easy, and staff specialized in their respective departments provided abundant assistance. The store combined services as well as goods. Its success came in part from an ability to identify customer needs and respond to them. The tearoom was an example of this. According to the social customs of the nineteenth century, women were not supposed to eat lunch in a restaurant unescorted; they would often travel to the store in the morning, return home for lunch, then return in the afternoon. Field added a tearoom in the store where female customers could have lunch, their propriety intact, and return to shopping with minimal interruption.

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Seen here is the annex building to the flagship Marshall Field store in downtown Chicago. Not only was the size of the store impressive, but also the focus on stylish goods and customer service revolutionized retail selling.

LEGACY Marshall Field became the wealthiest and most powerful businessman in Chicago during his lifetime. He avoided politics but gave money to a variety of causes. Field worked with John D. Rockefeller, a powerful industrialist and founder of Standard Oil, to found the University of Chicago. His greatest contribution went to the Field Museum of Natural History, named for him after an

initial endowment of $1 million in 1894. In 1906, Marshall Field died of pneumonia. In his will, he left another $8 million to the Field Museum. The Marshall Field Brand The downtown department store kept its place at the pinnacle of American retailing until shortly after World War II (1939–1945). The growth of suburbs involved new shopping districts, and Marshall Field’s followed its

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customers away from the city center with new stores in suburban Chicago and newly developed shopping centers in other Midwestern suburbs. By 2003, 64 stores in eight states carried the Marshall Field name. Some of these closed in the next few years, while the remainder, under new ownership, became Macy’s stores, including the historic original State Street store in Chicago. See also: Chain Stores; Cities, Growth of; Free Enterprise; Rockefeller, John D.

FURTHERREADING Madsen, Axel. The Marshall Fields: The Evolution of an American Business Dynasty. Hoboken, N.J.: John Wiley and Sons, 2002.

Ford, Henry (1863–1947) Pioneer of industrial production methods. Ford’s methods of fast, simple, and efﬁcient production helped turn the automobile from a toy for the rich to a transportation option eventually available to the majority of American consumers. Thanks partially to Ford, the car became a dominating force in twentieth-century American society, culture, and economics. EARLY LIFE AND CAREER Henry Ford was born July 30, 1863, on the family farm near Dearborn, Michigan. At age 16, he became an apprentice machinist. At the time of his marriage to Clara Bryant, he was running a sawmill, but in 1891, Ford joined the Edison Illuminating Company in Detroit as an engineer. With a good salary and leisure time, Ford experimented with gasoline engines. By 1896, his hobby had produced a functional vehicle, the

Quadricycle. Running on bicycle wheels and steered with a rudder like a boat, the Quadricycle hardly resembled a modern automobile, but it attracted investors. These backers helped Ford through two failed companies before the Ford Motor Company, established 1903, found modest success by building a few vehicles per day. THE MODEL T Henry Ford’s greatest personal engineering triumph appeared in 1908. The Model T was designed to be sturdy and efﬁcient, easy to repair, and able to withstand the rough roads outside of cities. Most of all, it was affordable. Its first year, Ford sold 5,986 Model Ts for $850 each. In 1916, the price had dropped to $360 per car, and 577,036 were sold. Production of the Model T ended in 1927. Ford sold more than 15 million of them in less than 20 years. FORDISM In the words of historian Paul Johnson, by 1912 “America was swiftly acquiring a production-line economy, with high wages, high spending, and high output.” Henry Ford played a central role in the development of this new America. In 1916, the term Fordism was introduced to describe the industrialist’s business philosophy and strategy. The production (or assembly) line was the central element to Fordism. A production line broke down the process of building a product into many small steps. Each step was assigned to a worker who did that, and only that, job. This specialization of tasks made production much faster and became one of the main means of lowering the price of the Model T. Part of the

Ford, Henry (1863–1947)

reason so many cars sold, however, came from another aspect of Fordism. In 1914, the average industrial worker earned a wage of $11 per week. Ford paid each of his workers ﬁve dollars

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per eight-hour day. His workers became consumers. They all bought Model Ts, and with the shorter working day, they had time and money to explore America’s roads.

Henry Ford Describes the Assembly Line

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n 1913, Ford Motor Company founder Henry Ford described the assembly line process used in making a Ford car. In the early 1900s, Ford implemented and then improved upon this assembly method to streamline auto production. One result of using the assembly line was that cars became more affordable for the average worker.

A Ford car contains about ﬁve thousand parts—that is counting screws, nuts, and all. Some of the parts are fairly bulky and others are almost the size of watch parts. In our ﬁrst assembling we simply started to put a car together at a spot on the ﬂoor and workmen brought to it the parts as they were needed in exactly the same way that one builds a house. When we started to make parts it was natural to create a single department of the factory to make that part, but usually one workman performed all of the operations necessary on a small part. The rapid press of production made it necessary to devise plans of production that would avoid having the workers falling over one another. . . .

The ﬁrst step forward in assembly came when we began taking the work to the men instead of the men to the work. We now have two general principles in all operations—that a man shall never have to take more than one step, if possibly it can be avoided, and that no man need ever stoop over. . . . In short, the result is this: by the aid of scientiﬁc study one man is now able to do somewhat more than four did only a comparatively few years ago. That line established the efﬁciency of the method and we now use it everywhere. The assembling of the motor, formerly done by one man, is now divided into eighty-four operations—those men do the work that three times their number formerly did.

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Inflexible in Later Years Ford started with a conviction that a simple, sturdy automobile at an affordable price would win the American car market. He was correct, and even after other cars appeared that could compete with the Model T on price and quality, Ford’s design continued to sell well. In the 1920s, Ford faced serious competition from General Motors under the leadership of Alfred P. Sloane. Sloane’s strategy was to offer many different models and let the consumer choose. Ford still believed any consumer would choose price and ease of use over other considerations. However, it became clear that choice itself was what the market wanted. Sloane’s cars offered comfort and style. The models changed regularly, encouraging people to trade “old” but serviceable cars for the latest styles and accessories. Though the Ford Motor Company largely created the market for affordable automobiles in the United States, by the mid-1930s GM was selling more cars while Ford was divided and without effective leadership. After the end of Model T production in 1927, the company failed to regain its lead. LEGACY Though he strongly resisted labor unions, Henry Ford understood the need for workers to be consumers in a mass-production society. He proved that manufacturing companies could pay their workers enough to participate in the expanding economy, yet remain extremely proﬁtable.

By ensuring that even people of modest means could own automobiles, Ford helped establish the car as one of the main elements of twentieth-century American culture. The Ford Motor Company survived long after Henry Ford’s death in 1947. Today, it is a global corporation manufacturing or distributing vehicles on six continents. See also: Business, Organization of; Cities, Growth of; Oil; Steel.

FURTHERREADING Brands, H.W. Masters of Enterprise: Giants of American Business from John Jacob Astor and J.P. Morgan to Bill Gates and Oprah Winfrey. New York: The Free Press, 1999. Schaefer, Lola M. Henry Ford. Minneapolis, Minn.: Coughlan Publishing, 2000.

Free Enterprise Economic system based on capitalism, the ownership of businesses and wealth by individuals and private companies as opposed to ownership by the government or other communal organization. In the United States, people have always had the freedom to start, run, and proﬁt from businesses. The U.S. government has generally avoided competing with private companies but instead has regulated certain industries, taxed economic proﬁt, and provided safeguards to keep the system healthy. FROM CRAFT TO INDUSTRIAL PRODUCTION In the United States, people who wish to start a business and enter a particular industry are free to do so. No permission from the government is required. Business enterprises

Free Enterprise

compete among themselves in their chosen industries. They either succeed and earn a living for their owners and investors, or they fail, depending upon the skill and efﬁciency of the individuals involved. In a capitalist economy, some form of currency, such as money in modern economies, can be exchanged freely for goods and services. This means that all people participating in such an economy are both producers and consumers. They produce a good or service to trade for currency. This includes producing their own labor and selling it to another person or company in exchange for a wage or salary. As consumers, people take the currency they earn as producers and trade it for the goods and services they cannot produce for themselves. Capitalism in the United States has grown and reﬁned itself throughout the nation’s history. In colonial America and the nation’s early years, many goods, including clothes and household items, were produced at home. Families produced what they needed, rather than buy many of these items in stores the way that Americans do today. Sometimes families would produce a surplus of a particular good they had skill in making. They could then trade their homemade goods, along with any extra materials they had and did not need, thereby expanding the craft economy through barter. Industrialization, or a shift from an economy based on farming to one of mass production, brought two important changes to this system. One change involved the movement

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of people from farms to the cities, where they worked factory jobs and sold more of their hours to buy goods than they spent making goods for themselves. The second change grew from the fact that factory production made large amounts of goods much more cheaply than the craft system could. Mechanization of farming freed up more people for industrial work, and the pace of growth in manufacturing increased. As the nineteenth century ended and the twentieth century began, capitalism not only provided the staples of everyday life in greater quantity and quality, but the system also began to offer products that could never have been crafted at home. FREE ENTERPRISE AND INDUSTRIALISM The United States ranked ﬁfth in output among manufacturing nations in 1840. It claimed fourth place in 1860, but by 1894, it not only held the top spot but also had twice the manufacturing output of Great Britain. Six key factors contributed to the ways in which the United States achieved this amazing growth in industrial power. First, the United States granted wide patent rights to inventors. People got to proﬁt from their discoveries, which made invention a worthwhile pursuit in its own right. Second, labor in the United States was much scarcer than in Europe, as it was a younger and less densely settled country. This gave an incentive to design and install laborsaving machinery, making manufacturing more efﬁcient and allowing

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more of it to go on with the same number of people. The third reason for this great growth of industry was the standardization of machinery and parts that came with mass production. The fourth reason for success in industry came from the amazing success of the United States in agriculture. A nation that can feed itself proﬁts much more when it sells its manufactured goods to the world than a nation that has to trade for food. The fifth reason for industrial success was power, in large amounts and from various sources. Waterpower from the continent’s great rivers came ﬁrst, followed by steampower that was produced by burning a tiny fraction of the nation’s huge wood and coal reserves. Electricity made these resources transferable from source to user, thousands of miles apart. A sixth factor added to these resources and advancements: a careful balance of protection and laissez-faire in government policies. As it expanded westward, the United States became the largest free-trade zone in the world, while high tariffs protected American manufacturers from foreign competition at home. THE ROLE OF GOVERNMENT Government at the federal, state, and local levels has played important roles supporting free enterprise throughout the nation’s history. Generally, government has avoided entering business itself. When it has attempted to take an active role, the results have not always been successful.

In the early nineteenth century, canals became an important mode of transportation. Several state governments attempted to enter the canalbuilding business. They borrowed heavily, largely from European investors. The Panic of 1837 ended many of these projects because the states lacked the money to pay back their creditors. Some of the canal projects were finished under private management, but others had started too late and were abandoned in favor of a technology that offered faster transportation at a lower cost—the railroad. Learning from the ﬁnancial panic and its effects, the states avoided entering the business of railroad building. They offered substantial support to private railroad builders, however. The federal government did as well. Much of this support came in land, given to the railroad companies not only to lay track but also to sell. As the railroads pushed the frontier westward, they sold or gave land to settlers to establish farms and towns, ensuring a continuous growth in customers for the railroads and in landholding citizens for the nation. For half a century, generous gifts of federal land made the railroad companies proﬁtable, populated the western territories that became states of the Union, and provided economic opportunity to a constant stream of Americans. The railroad experience set a pattern. Rather than compete with private industry, the federal government gave to it resources that could be turned into wealth. Indirectly, gov-

Free Enterprise

ernment ﬁnanced the vast resources of the United States and ensured that free enterprise had every asset it could acquire for success. BANKING One necessity for the continuation of a free enterprise system and the ongoing development of a capitalist economy is a strong and stable banking system. Usually, this can be accomplished through central banking. Early Banking The First and Second Banks of the United States existed early in the nation’s history. The Second Bank had a 20-year charter, but it was not renewed after 1836. Many people, including President Andrew Jackson (1829–1837), distrusted the power of central banks. For the rest of the nineteenth century, the United States relied solely on a growing economy and private interests to regulate the money system. Unfortunately, this led to periodic banking crises, such as the Panic of 1837, because when individual banks failed, no central organization assisted them and reassured customers that their banks wouldn’t be next to fail. Another pressure on this system came from the fact that, while the U.S. economy generally grew rapidly during these decades, it did not grow consistently. Slowdowns in growth led to business failures and job losses. An average upward trend in the economy could still be plagued with nasty ﬁnancial downturns, as in 1877 and in the depression that began in 1893 and lasted approximately four years.

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After the depression years of the 1890s, businesses consolidated rapidly. Many industries became nearmonopolies, as a single huge ﬁrm or several very large ones controlled the market. Supporters often described this control as a way to increase efﬁciency by ensuring that goods were marketed profitably at affordable prices. However, another banking crisis in 1907 demonstrated its ongoing vulnerability. The 1907 crisis was largely managed and resolved by J.P. Morgan and the bankers he organized to put up funds that stabilized the system. Morgan was a ﬁgure unlike any other in American ﬁnance, and clearly, no private entity could replace the control he exerted. By 1914, a new central banking system, the Federal Reserve System, had been created. The “Fed” The “Fed” works to regulate the loaning of money between banks. This provides for a regular and well-distributed pool of capital for the banks to then lend to businesses and consumers. The Fed also serves as lender of last resort, able to support a bank that has overextended itself and might fail without a means of correcting its undercapitalized position. In September 2008, a worldwide financial crisis demonstrated the need for such controls. For several years, companies had made bad home loans, too large for the people borrowing the money to realistically pay back. These loans were bought and traded by banks and investment ﬁrms. When these companies and their investors realized how worth-

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Free Enterprise

less the loans were, a great deal of money was lost, and in a near-panic, banks refused to make loans to enough customers to keep the economy growing. This credit “freezeup” required a drastic response. The federal government passed a law in late 2008 that provided $700 billion to some banks so that new loans could be made. Yet consumers still found new loans difficult to obtain, and the economy remained stagnant. In early 2009, President Barack Obama (2009– ) urged Congress to pass a new economic stimulus bill. Congress quickly passed, and President Obama signed, a $787 billion bill designed to rouse the nation’s economy and bring an end to the recession. The long-term effect of this landmark legislation remains to be seen. The gilded Age And reforM The second half of the nineteenth century became known as the Gilded Age, in honor of the public displays of wealth put on by the vastly successful so-called captains of industry and finance. Generally, this was also an era of weak government. Little regulation existed to protect consumers or workers. Many people grew distrustful of big business. Farmers, especially, grew frustrated with railroad shipping rates they believed were too high. They also resented the gold standard, which limited the amount of money in circulation, thus keeping prices for farm products low and limiting the farmers’ ability to borrow to expand acreage or mechanize. Some workers also grew frustrated. They turned to radical politics,

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supporting anarchism or socialism and replacements for capitalism and free enterprise. These movements remained relatively small, but their existence helped launch reforms. rise of the Progressives At the turn of the twentieth century, a group of intellectuals, writers, and eventually politicians began to popularize the idea that government should promote the welfare of all citizens and work to expand opportunity. The progressives were deeply concerned by the growing gap between rich and poor, the harsh conditions faced by industrial workers, and the feeling that business was motivated by greed to the exclusion of the population’s well-being. Progressives and labor activists worked together to eliminate child labor, improve wages and conditions, and provide opportunities for personal growth such as settlement houses. Progressives worked to eliminate corruption in city governments and clean up cities themselves through urban-planning initiatives. national reforms At the federal level, President Theodore Roosevelt (1901–1909) worked with Congress to pass important consumer protection laws. The Meat Inspection Act of 1906 and the Pure Food and Drug Act of 1906 are two cornerstones of the federal regulations that ensure safe products on grocery store shelves today. Meanwhile, the antitrust actions of Roosevelt and his successor, William H. Taft (1909–1913), restored competition to the most consolidated industries.

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Gilded Age

The creation of the Federal Reserve also ﬁt in with the Progressive Era’s focus on creating new governmental institutions and powers that counterweighted the power of business. The model of American government has continued to respect free enterprise, balanced by the availability of government power to correct abuses of the system. See also: Anarchists; Banks and Banking; Business Cycles; Business, Orga-

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nization of; Chain Stores; Corporations; Gilded Age; Laissez-faire; Trusts; Unions.

FURTHERREADING Atack, Jeremy, Peter Passell, and Susan Lee. A New Economic View of American History: From Colonial Times to 1940. New York: W.W. Norton, 1994. Gordon, John Steele. Empire of Wealth: The Epic History of American Economic Power. New York: Harper Perennial, 2005.

G–L Gilded Age Name given to the years after the Reconstruction era (1865–1877); these years featured large concentrations of wealth held and displayed by a very small percentage of the American public. The vast and public displays of wealth were particularly notable because of their sharp contrast to the poverty faced by many Americans during the same period. LIFESTYLES OF THE SUPREMELY RICH American author Mark Twain chose “The Gilded Age” as the title of one of his earliest and most successful books. Twain’s description captured an era in which surface glamour covered over corruption below. In the post–Civil War decades, between 1870 and 1900, American industry grew faster than that of any other nation, and it propelled its owners to vast fortunes. Oil, in the form of kerosene for lamps; iron; and railroads developed into mature indus-

tries. Manufacturing grew, turning new capacity built for war supplies to applications in civilian life. The upheaval and uncertainty of war between the states turned to growth and endless accumulation. America’s wealthiest citizens no longer owned factories or farms. Instead, they dominated industries and set out to own substantial pieces of subsidiary industries to ensure their independence. Reaching the top of society brought rewards, such as mansions and yachts. It also allowed for more absurd displays of wealth. For example, the New York Riding Club threw gala dinners at ﬁne restaurants, remaining mounted on horseback throughout the meal. A society lady could choose to throw a party for her dog and to outﬁt the guest of honor in a $15,000 diamond collar. THE GROWING RANKS OF THE POOR In 1879, the United States returned its currency to the gold standard,

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meaning that the amount of money in circulation would not exceed the value of the gold held by the government to back its currency. This policy kept inﬂation low, preventing the value of money from eroding. However, with limited amounts of money to go around and large concentrations of it held by a small number of people, a large number of people had very little money. By 1890, the United States was inhabited by approximately 12 million families. Of them, 11 million each earned $1,200 or less per year. The average income for these families was $380, not enough to buy the basic things they needed. Farm families struggled with high expenses and low prices for their produce. By 1890, prices for crops had fallen 10 percent from their price in 1860. Farmers led a push for permanently ending the gold standard to put more money in circulation. During this same time, many rural Americans moved to the cities to ﬁnd work. Arriving immigrants also caused city populations to grow rapidly. The poorest lived in tenements. These crowded, cramped apartment buildings lacked adequate light, ventilation, and toilet facilities. City services usually were not delivered by a professional administration. If the essentials of metropolitan government did reach poor neighborhoods, they often came from corrupt political machines, which traded services for votes. In this way, the machines held on to the power that allowed politicians and their organizations to get rich from government funds.

In the cities, the very rich and the very poor existed within one another’s presence while occupying different worlds. Newspapers allowed the lower classes to know of the upper class’s activities. Tension grew into strikes and riots, widespread through the end of the century. CULTURE AND INNOVATION Despite the occasional excesses, America’s upper class became important patrons of the arts during the Gilded Age. Opera, theater, and the visual arts all found new funding. Though artistic achievement, reflected in the patronage of the wealthy, became a symbol of the era, innovation was also a driving force. Not only did American industry steadily turn new inventions into staples of domestic life, the pressure of competition helped solidify the scientiﬁc approach in engineering and manufacturing. A new notion of how best to create a certain good, such as a batch of steel, gave way to controlled experimentation, rigorous testing, and the steady improvement that can make a company a leader in its ﬁeld. See also: Carnegie, Andrew; Corporations; Free Enterprise; Morgan, J.P.; Oil; Rockefeller, John D.; Steel; Vanderbilt, Cornelius.

FURTHERREADING Roark, James L., et al. The American Promise: A History of the United States. New York: Bedford/St. Martin’s, 2005.

Gompers, Samuel L. See American Federation of Labor (AFL).

Haymarket Square Riot

Gould, Jay See Railroads.

Haymarket Square Riot Demonstration in Chicago that turned violent when someone threw a bomb at the police. The 1886 incident occurred as part of a national wave of strikes, but it hurt the labor movement badly. A YEAR OF STRUGGLE The year 1886 came to be known as the Great Upheaval. More than 1,500 strikes involved 400,000 workers nationwide. One of the main issues was the length of the workday. The strikers wished to replace the existing 10-hour day with eight-hour shifts at the same weekly wage. At the McCormick Harvester Company in Chicago, tensions had been growing between workers and management since the founder’s son cut wages in 1884. The proﬁtable company instead spent money replacing workers with machines. The McCormick workers joined two national unions, the Metalworkers Union and the Knights of Labor. Once the strike began, McCormick paid strikebreakers to work the factory in place of the regular employees. Management enraged the strikers by giving the strikebreakers eighthour days. TWO DAYS OF VIOLENCE On May 3, some striking McCormick workers attacked a group of strikebreakers leaving the plant. The police on the scene tried to disperse the crowd of strikers. When the crowd

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would not move, the police opened ﬁre. Two workers died, and several more were wounded. In response, a demonstration was planned for Haymarket Square on the evening of May 4. A smaller crowd gathered than was expected, and the meeting looked likely to break up early. The peaceful group listened to a series of socialists and journalists speak. A large group of police ofﬁcers, close to 200, arrived in the square. The speaker assured the police commander, “We are peaceable.” Suddenly, however, an iron bomb exploded in the group of police. One died immediately; six more died later of their wounds. The police began shooting into the crowd of demonstrators. More than 70 were wounded, and four died. The police arrested eight anarchists. National outrage demanded a strong response from the authorities, even though the person who threw the bomb was never identiﬁed. A HEAVY BLOW TO THE LABOR MOVEMENT With no bomber to put on trial, the police rounded up the meeting’s organizers instead, though the meeting had been perfectly legal. This group of anarchists faced suspicion both for their political beliefs and the supposed inﬂuence of foreigners and immigrants in the labor movement. Journalist August Spies, one of the accused, attempted to set the record straight. He reported that the meeting attendees had discussed the eight-hour day and that “There was not a syllable said about anarchism at

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On May 4, 1886, a bomb exploded among a group of police officers in Chicago, as depicted in this colored engraving. The formerly-peaceful public meeting became a scene of chaos and death, damaging the reputation of the labor movement for years to come.

the Haymarket meeting.” Spies forcefully stated his belief that capitalism would be replaced by a more just and equal social organization, even if a few advocates of change lost their lives: You may pronounce the sentence on me, honorable judge, but let the world know that in 1886, in the state of Illinois, eight men were sentenced to death because they believed in a better future; because they had not lost their faith in the ultimate victory of liberty and justice. The court convicted all eight anarchists. It sentenced four to death by

hanging. The others received long prison terms. Meanwhile, the campaign for the eight-hour day fell apart. Union membership fell dramatically as employers found new ways to combat organized labor. These weapons included blacklists. Owners and managers circulated lists of known and suspected union activists and supporters, who they refused to hire. Yellow-dog contracts also became a barrier to unionization. Management forced job applicants to sign agreements saying they would not join a union. Lockouts and strikebreakers continued to be used by business owners

Immigration and Industrialization

to respond to the Great Upheaval. Chicago settled down, and the McCormick strike came to an end. The regular employees of the plant gained nothing and returned to their jobs, working 10-hour days as before. The Haymarket Riot and its aftermath was one of the least encouraging eras in the history of the American labor movement. For 15 years after the riot, American political leaders tended to think of unions as dangerous or even destructive to the nation. After the successes of American labor in the twentieth century and the acceptance of unions as necessary social institutions to industrial economies, the riot could be more properly understood as a senseless tragedy lacking political meaning. See also: Anarchists; Pullman Strike; Unions.

FURTHERREADING Brexel, Bernadette. Knights of Labor and the Haymarket Riot: The Fight for an EightHour Workday. New York: The Rosen Publishing Group, Inc., 2003.

Immigration and Industrialization Millions of people moved from Europe and Asia to the United States during the period of American industrialization, in which the country moved from an economy based on farming to one of mass production. Immigrants sought the economic security of jobs or land ownership. Many came to escape political repression, ethnic violence, famine and disease, or lack of opportunity at home. SEEKING A NEW LIFE Immigrants came to the United States in at least two distinct waves during

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the period of industrial expansion. Between 1865 and 1890, approximately 10 million people arrived in the United States, mostly from England, Scotland, Ireland, Germany, and the Scandinavian countries. In the 1880s, 9 percent of the total population of Norway immigrated to the United States. From 1890 to 1914, 15 million more people came to the United States. Many of the immigrants in this wave came from eastern or southern Europe. The Slavic countries were well-represented, and Italian immigration peaked. Russian Jews also made up a substantial portion of the second wave. In 1881, a series of pogroms began against the Jews in Russia. In the years from 1903 to 1914, approximately 76,000 Jews left Russia each year, immigrating to the United States to escape ethnic violence. EXCEPTIONS AND RESTRICTIONS Not everyone was welcomed by the immigration officials. After 1892, most new arrivals passed through Ellis Island Immigration Station in New York Harbor, where they underwent a medical examination; were quarantined if found to have a disease; and were questioned about their pasts, resources, and likely future prospects. Few were denied admission. In San Francisco, Angel Island Immigration Station performed much the same function but with different results. The 1882 Chinese Exclusion Act prevented the families of Chinese male immigrants from entering the country. The result was a bachelor community facing a hostile, racist en-

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vironment. In 1907, a so-called Gentlemen’s Agreement extended a similar policy to Japanese immigrants. The 1917 Russian Revolution and establishment of the Soviet Union stirred old nativist feelings in the United States. The “Red Scare,” lasting into the 1920s, became the ﬁrst of several episodes of national dread at the thought of a foreign ideology, in this case communism, taking root in the United States and seriously challenging both capitalism and democracy. Later, new laws sharply limited immigration, and the annual numbers of new arrivals fell dramatically. The Emergency Quota Act of 1921 set the ﬁrst legal limit on the annual number of immigrants; a total of 357,000 new arrivals from Europe were to be permitted each year. The 1924 JohnsonReed Act reduced the total and capped any given country at 2 percent maximum of the total. Immigration fell from 4,107,200 in the decade of the 1920s, to just 528,400 in the 1930s, though the Great Depression (1929–1939) also played a major role in this decrease. OPPORTUNITIES IN INDUSTRY Many immigrants found jobs in the booming manufacturing industries based in Northern cities after the Civil War (1861–1865). Factory work often proved difﬁcult and unpleasant, but it provided a steady wage and the basis for a new life. Irish immigrants headed west from the East Coast to build railroads. Many Chinese immigrants worked on the transcontinental lines as well, including the Central Paciﬁc leg of the ﬁrst such line, starting from Sacramento,

California, and meeting the Union Paciﬁc in Utah in 1869. Thousands of recent immigrants from Hungary, Italy, and the Slavic countries took jobs in anthracite coal mines in eastern Pennsylvania. In the 1890s, the United Mine Workers (UMW) was more forward-thinking than other unions, in that it hired organizers who spoke the many languages of the workers. The UMW became very successful by focusing on the common experience of coal mining; it built solidarity around this commonality, rather than allow the miners’ differences to work against them. As a result, the miners were extremely loyal to the UMW and its president, John Mitchell. OPPORTUNITIES IN AGRICULTURE The owners of the railroads had received large amounts of land from the U.S. government, in part to sell it and finance construction of new lines. Railroad companies sent agents to Europe to promote their land sales among prospective buyers. Immigrants came to play an important role in the tremendous expansion of American agriculture in the late nineteenth century. The federal government also passed legislation and adopted policies that made acquiring land easy for those who could afford the modest fees. The Homestead Act of 1862 provided 160 acres of already surveyed land to a tenant for $1.50 per acre after six months’ residence. Or, the tenant could stay on the land for ﬁve years and at that point own it outright, for no cost at all. Over the next

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half-century, Congress added means of increasing the size of such holdings, still at little cost to the farmers who took them. In 1878, for example, Congress passed the Timber and Stone Act. Up to 160 acres of land, valuable for either resource, could be bought for as little as $2.50 per acre. After the turn of the century, revisions to the Homestead Act sought to make homesteading even more attractive. In 1909, the homestead acreage was increased to 320 acres. A 1912 law made the land free after only three years’ residence, rather than ﬁve. The maximum size of a homestead doubled again in 1916, to 640 acres. Agriculture grew enormously because of the arrival of a great number of people willing to work the land. It was also aided by a structure that provided people with land to work and with a reward for owning it. The United States had 2 million farms in 1860; by 1910, that number had tripled to 6 million farms. In 1910, 500 million acres of land were under cultivation in the United States. That is an area equal in size to all of western Europe. CONTRIBUTIONS Many of the notable ﬁgures of the industrial age immigrated to America. Samuel Gompers, founder of the American Federation of Labor, came to the United States with his family at the age of 10. Alexander Graham Bell, inventor of the telephone, arrived in his twenties. Tuberculosis had killed his older brother, and Bell himself had experienced several years of illness, when his father de-

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cided to move the remaining family to America. Andrew Carnegie also made the passage as a child. His Scottish family sought new opportunity as his father’s livelihood disappeared, replaced by a mechanized textile mill. Not all important contributions produced household names. For example, David Sarnoff’s Russian Jewish family escaped to New York. Sarnoff came to run the infant Radio Corporation of America (RCA) in 1919. He guided radio broadcasting from a dream founded on hobbyists’ equipment to a mass medium and big business. THE IMMIGRANT EXPERIENCE Mass immigration to the United States involved millions of people, from a multitude of countries, over a span of decades. No single experience or even set of experiences can deﬁne it, but some elements were common throughout. Often, a father and eldest child made the journey ﬁrst, supporting themselves in the Americas meagerly and sending money to support the rest of the family back in Europe. Slowly, children joined them, year upon year. The journey to ports and waiting ships often took on a tone of escape. Europe did not always give up productive citizens willingly. Midnight border crossings or bribery often proved necessary. For most, the transatlantic crossing required years of carefully saving money. The cheapest accommodations aboard ship were known as steerage. These were cramped quarters, rows of cots below the main

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decks. Very few who made the trip failed to experience seasickness. Ellis Island Between 1880 and 1930, 27 million people entered the United States as immigrants. Twenty million of them entered at Ellis Island in New York Harbor. They formed lines before the inspectors. The experience of Ellis Island commonly involved a great deal of waiting and worrying. By law, if a child was rejected for admission to the United States, an adult had to accompany him or her to the home they had intended to leave forever. Language difﬁculties and a lack of translators often made the inspectors’ questions confusing. Then there was a matter of money. Immigrants needed to show the inspectors that they carried $25 per person. This was intended to demonstrate that those entering the United States had the means to support themselves. Ellis Island had been built for efficiency. At its peak, it processed 10,000 new immigrants per day. For many of the new arrivals, though, it was a grim place. Exhaustion and seasickness took tolls. For many, sadness seemed to hang in the air. Of course, other accounts, particularly from those who passed through Ellis Island as children, focus on simple pleasures of dry land, fresh food, and the adventure of it all. Ellis Island inspectors also Americanized immigrants’ names. Inspectors used their interpreters at their own discretion and demonstrated widely varying degrees of interest in faithfully reproducing names as told to them. A social service worker on

the island later recalled such name changes as the substitution of Sanda for Skyzertski, and Goldberg standing in for Goldenburg or Goldenburger. First names also received alteration, such as “Walter” in place of “Vladimir.” These changes became part of the process of reidentifying one’s self as an American. See also: African Americans and Industrialization; American Federation of Labor (AFL); Anarchists; Bell, Alexander Graham; Business, Organization of; Carnegie, Andrew; Cities, Growth of; Free Enterprise; Gilded Age; Unions.

FURTHERREADING Brownstone, David M., Irene M. Franck, and Douglass L. Brownstone. Island of Hope, Island of Tears. New York: Rawson, Wade Publishers Inc., 1979. Johnson, Paul. A History of the American People. New York: HarperCollins Publishers, 1997.

Industrialization See African Americans and Industrialization; Immigration and Industrialization.

Laissez-faire Idea that government should not involve itself in economic activities beyond actions necessary to maintain peace and property rights. Practicing laissez-faire generally means avoiding interference with the individual freedom of others. This philosophy allowed rapid industrialization in the United States but meant that protections for workers and the environment were

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often resisted as unnatural economic interference.

sumer by eliminating the expense of wasteful competition.

ECONOMIC PRINCIPLE In French, the term laissez-faire means “leave alone.” Supporters of laissez-faire economics believe that government should avoid introducing restrictive regulations into the economy. This philosophy holds that the best health of the overall economy, and therefore the best position for individual members of society, will come from the forces of the market, without entangling inﬂuences from the government. In the eighteenth century, the British economist and philosopher Adam Smith described the force of the market as the “invisible hand.” He believed forces unseen and difﬁcult to measure, such as competition and efficiency, would more broadly spread good economic outcomes than the heavy hand of governmental involvement. Yet Smith did not believe that absolute laissez-faire would provide the best outcome. He saw a role for government in supporting trade through the construction of facilities such as canals and docks, and in protecting the home market from being overrun with the unregulated importing of foreign goods. In the nineteenth century, larger businesses more easily dominated markets, while the organization of trusts came to eliminate competition through cooperation in some industries. The idea of laissez-faire capitalism changed with the times. Business owners emphasized that the freedom to work together beneﬁted the con-

LAISSEZ-FAIRE SOCIAL ATTITUDES Laissez-faire can also refer to a philosophy of social relations. The term has been used by many commentators throughout American history as another way to describe social libertarianism. Either term often refers to a social outlook based upon the idea of individuals resolving issues with a minimum of input and involvement from government, while seeking to permit each other the maximum possible freedom of action and choice. A laissez-faire social outlook tends to place high value on allowing individuals to freely make choices, as long as those choices do not violate the rights of another person. The laissezfaire attitude has appeared in many social contexts throughout American history. In the 1810s, the State Department published its policy on immigration, written by then-statesman John Quincy Adams (1825–1829): The American Republic invites nobody to come. We will keep out nobody. Arrivals will suffer no disadvantages as aliens. But they can expect no advantages either. Native-born and foreignborn face equal opportunities. What happens to them depends entirely on their individual abilities and exertions, and on good fortune. Adams wrote these words at a time when the continent seemed endless and work could be easily found for

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every available hand. Though the United States has always prided itself on protecting the rights and freedoms of all, laissez-faire attitudes can become harder to maintain as resources grow scarcer.

FURTHERREADING

See also: Business, Organization of; Corporations; Free Enterprise; Trusts.

See African Americans Industrialization.

Wells, Donald. The Federal Reserve System: A History. Jefferson, N.C.: McFarland & Company, Inc., 2004.

Latimer, Lewis and

M–P Malls See Chain Stores.

Mass Production See Ford, Henry.

Mining Removal of precious or useful metal ores or stones from the earth’s crust, usually below the surface. In the United States, mining has always been a proﬁt-seeking activity, with private individuals and companies scrambling to discover and retrieve deposits. The ability to retrieve some of the enormous wealth of useful materials below ground contributed greatly to the rise of the United States as a leading industrial country. PRECIOUS METALS Gold and silver drew some of the earliest European explorers to the Americas. The lure of gold pulled prospectors across North America, especially to California in 1849. There, the earliest of the tens of thousands of new arrivals separated gold from gravel in the mountain streams. The less speedy became laborers in belowground mineshafts or in the process of breaking quartz to get at gold within.

The gold rush swelled California’s population from 14,000 to more than a quarter-million. Big strikes of silver and gold continued across the American West for the rest of the nineteenth century. The railroads helped build boomtowns at amazing speed. Fortunes were made, as often by supplying, equipping, and housing miners as by prospecting itself. IRON ORE Iron-ore mining and ironworking date back to colonial America. Iron formed the early railroads and helped begin the industrial age. The removal of impurities from raw iron results in steel. The processed metal has far greater strength per unit of weight. In the midnineteenth century, steel offered seemingly limitless possibilities to architects and designers, but only if it could be produced in large quantities. When the process became available, the ore was already plentiful. It often came by train from Michigan to Pittsburgh, Pennsylvania. Later, the major steel companies would own enormous iron deposits in the West. Iron extraction faced many of the

Morgan, J.P. (1837–1913)

same pressures as the rest of the growing industrial economy. ORGANIZED LABOR AND THE MINES The United Mine Workers (UMW) emerged as the most successful organizing body of miners. Far less radical than the Industrial Workers of the World (IWW), which opposed capitalism, the UMW won a key labor battle of the Progressive Era. In autumn 1902, President Theodore Roosevelt (1901–1909) intervened in a strike by 140,000 UMW members. The president stunned observers by taking the miners’ side, threatening to take over the mines and run them with federal troops if the owners continued to starve out the workers. See also: Congress of Industrial Organizations (CIO); Coal; Immigration and Industrialization; Oil; Unions.

FURTHERREADING Altman, Linda Jacobs. The California Gold Rush in American History. Berkeley Heights, N.J.: Enslow, 1997. Schanzer, Rosalyn. Gold Fever!: Tales from the California Gold Rush. Washington, D.C.: National Geographic Children’s Books, 2007.

Morgan, J.P. (1837–1913) Leading banker of the late nineteenth and early twentieth centuries. Although Morgan was neither the richest nor the most powerful man of the era, he may have been the most inﬂuential in ﬁnancial matters. BRINGING ORDER TO A CHAOTIC SYSTEM Morgan came from a background of money and experience with ﬁnance. His father had made a successful career

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in banking. Morgan’s fellow bankers saw him as a virtual aristocrat, honorbound by family heritage to a code of straight dealing and sound ﬁscal policy. Morgan’s own career began as an apprentice in a New York City ﬁrm. At age 22, he made his ﬁrst major transaction, buying and successfully reselling a shipment of coffee. Like many well-to-do men of military age, he paid a substitute $300 to take his place in the Union draft during the Civil War (1861–1865). By the 1880s, Morgan had a central role in New York’s ﬁnancial industry. He inspired wider trust within that community than any other banker, and in this unelected and informal position, he had more inﬂuence than the U.S. presidents of the era. The country still lacked a central bank. Meanwhile, industrialists pushed to retain gold as the sole basis of the nation’s currency, while farmers also backed the use of silver to allow more money in circulation and lower the cost of their debts. Morgan did more than any other person or agency to keep the ﬁnancial system balanced and orderly. Responding to Panics Morgan believed the key to a strong economy was the careful balancing of freedom and order. He supported two important business organizations to accomplish this, the corporation and the trust. Despite the wide adoption of these forms, the volatile and controversial currency and lack of central ﬁscal management made panics a regular feature of American economic life. Morgan helped lessen the impact and correct the failing of the ﬁnancial system in several of these events.

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J.P. Morgan Jr. on Banking

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n May 23, 1933, at the height of the Great Depression, J.P. Morgan Jr., the son of J.P. Morgan Sr., and also a banker, addressed Congress. Below is an excerpt from a statement made before the Senate SubCommittee on Banking and Currency of the U.S., in which Morgan explains his views about the role of bankers in modern society.

FIRST-CLASS BUSINESS IN A FIRST-CLASS WAY I have ventured to frame a brief statement of my views on the subject of duties and uses of bankers. The banker is a member of a profession practiced since the middle ages. There has grown up a code of professional ethics and customs, on the observance of which depend his reputation, his fortune, and his usefulness to the community in which he works. Some bankers are not as observant of this code as they should be; but if, in the exercise of his profession, the banker disregards this code— which could never be expressed in legislation, but has a force far greater than any law—he will sacriﬁce his He enabled the U.S. government to meet the Army’s payroll in 1877. The 1893 panic resulted from the depletion of the nation’s gold reserves. At President Cleveland’s (in ofﬁce 1885–1889, 1893–1897) request, Morgan marketed U.S. securities to European investors in

credit. This credit is his most valuable possession; it is the result of years of fair and honorable dealing and, while it may be quickly lost, once lost cannot be restored for a long time, if ever. The banker must at all times conduct himself so as to justify the conﬁdence of his clients in him and thus preserve it for his successors. . . . The banker must be ready and willing at all times to give advice to his clients to the best of his ability. If he feels unable to give this advice without reference to his own interest he must frankly say so. The belief in the integrity of his advice is a great part of the credit of which I have spoken above, as being the best possession of any ﬁrm. exchange for gold, restoring balance to the currency system. Morgan was well-prepared for the panic of 1907. When prominent New York ﬁnancial houses looked ready to fail, Morgan met with the city’s top bankers to discover the severity of the

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problem. Then, he assigned a team to quickly review the records of the New York ﬁrms. They were to determine which could be saved and which had to fail for the good of the system. With this information, Morgan assembled a pool of money from the bankers and the U.S. Treasury. He then announced to the stock exchange that money was available to save the firms worth saving. The panic ended, the market corrected, and Morgan’s actions formed part of the model for the Federal Reserve System created seven years later. LEGACY Morgan became a leading art collector. He supported public access to great art by working with New York City’s Metropolitan Museum of Art. Morgan became a trustee of the Met in 1888 and its chairman in 1904. His leadership turned a notable collection into one of the top collections in the world. Morgan also created a superb private library. Bequeathed to the nation after his death in 1913, it remains an internationally important collection of rare books and manuscripts. Morgan, and many other “robber barons” of the time, gave back to society through generous contributions that have lasted to the present day. See also: Banks and Banking; Corporations, Free Enterpnse.

FURTHERREADING Byman, Jeremy. J.P. Morgan: Banker to a Growing Nation. Greensboro, N.C.: Morgan Reynolds, 2001. Green, Carl R., and William R. Sanford. American Tycoons. Berkeley Heights, N.J.: Enslow, Inc., 1999.

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Oil Fossil fuel that became the main source of home lighting in the midnineteenth century and the primary source of fuel for motor vehicles early in the twentieth century. Oil drilling, reﬁning, and distributing became a major industry in the 1860s, and the large amount of cheap oil available in the United States by the late nineteenth century helped many industries expand and boost efficiency through mechanization. EARLY SOURCES AND THE GROWTH OF OIL Pennsylvania became the ﬁrst center of U.S. oil production. The ﬁrst big strike came at Titusville in 1859; it was made by Edwin L. Drake. During the 1860s, a huge number of individuals and small companies ﬂocked to Pennsylvania to try their luck at ﬁnding oil. Many failed. Many others pumped oil successfully but failed to proﬁt from it. The price for a barrel of oil fluctuated greatly throughout the decade, reaching a high of $13.75 and plunging to a low of 10 cents. In this era, the real money in petroleum was not in drilling for oil but in reﬁning the crude petroleum into kerosene. As in drilling, many people attempted to set up proﬁtable reﬁning operations, and only a minority succeeded. The success stories included the entrepreneur John D. Rockefeller, the founder of Standard Oil, who proved to be an efﬁcient manager and a ruthless business strategist. By 1880, the U.S. oil industry produced 25 million barrels of oil per

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year. Its primary use was to reﬁne kerosene for home lighting, but within a few decades, this purpose had been taken over by the electric light. Oil would soon ﬁnd a new market, as the gasoline engine revolutionized transportation. Even before motor fuel dramatically increased the demand for oil, the number of states producing it increased. Texas became a major petroleum state in 1901. On January 10 of that year, partners Patillo Higgins and Anthony F. Lucas struck oil at a well called Spindletop. Within weeks, Spindletop was producing 100,000 barrels of oil per day. The opening of major new oilﬁelds in Texas and California also allowed new companies to challenge Standard Oil. STANDARD OIL AND ITS CRITICS In the 1880s, John D. Rockefeller’s Standard Oil grew to control 90 percent of the U.S. oil industry. Though oil prices fell during the years of Standard’s domination, many people viewed the company with suspicion. Some of Rockefeller’s critics were former business rivals who were driven out of the industry. George Rice, formerly a smalltime oil reﬁner, spoke to the U.S. Industrial Commission in 1899 about Standard’s practice of negotiating rebates with the railroads. Standard appeared to pay full price for shipping, but the railroad secretly returned part of Standard’s fare. Rice found it impossible to compete: I have been driven from pillar to post, from one railway line to another, for twenty years, in the absolutely vain endeavor to get equal and just freight rates with

the Standard Oil Trust, . . . but which I have been utterly unable to do. I have had to consequently shut down, with my business absolutely ruined. Some journalists also criticized Standard’s practices. In a 1902 McClure’s magazine piece, Ida Tarbell summarized her concerns: One of the most depressing features. . . is that instead of such methods arousing contempt, they are more or less openly admired . . . There is no gaming table in the world where loaded dice are tolerated, no athletic ﬁeld where men must not start fair. Yet Mr. Rockefeller has systematically played with loaded dice. . . Business played in this way loses all its sportsmanlike qualities. It is ﬁt only for tricksters. In 1911, the U.S. Supreme Court ordered Standard Oil broken up into 38 companies. The Court held that Standard had violated the Sherman Antitrust Act by unreasonably restraining the trade of competitors. THE MOTOR CAR AND ITS EFFECTS Ransom E. Olds proved the commercial potential of motor cars by selling 425 cars in the year 1901, at $650 per car. By 1904, sales reached 5,000 cars. At the turn of the century, the motor car was becoming popular, but the gasoline engine was not yet its leading source of power. Steam powered 40 percent of cars, while electric batteries ran 38 percent. Only 22 percent ran on gasoline. The electric cars of the early twentieth century only traveled a few miles before needing to be recharged.

Oil

This might prove practical in a city, but for someone like Henry Ford, who was determined to serve a large, rural market with a rugged and highly usable vehicle, gasoline provided the only practical technology available. The automobile industry spurred innovations in steelmaking, rubber production, and glassmaking, among other new materials and techniques. Oil reﬁning also needed to change to produce higher-quality gasoline with higher-energy content. In its earliest form, gasoline consisted of the separated portions of crude oil too light to form kerosene. The industry soon developed the process of “cracking,” or heating petroleum to split the large molecules into smaller chemical structures. Such gasoline burned better and improved engine performance. The steady string of innovations prompted more entrepreneurs to enter the auto industry. The most successful companies focused on building affordable cars from standardized parts. Ford perfected this formula. The 15 million Model Ts he sold deﬁned transportation in the nation for the rest of twentieth century and the foreseeable future. The mass-market gasoline automobile prompted a huge expansion in highway construction. In 1918, the states spent a total of $75 million on highway construction. In 1932, they combined to spend more than $1 billion building highways. Taxes on gasoline ﬁrst helped pay for such construction in Oregon in 1919. New Ways to Work and Play The gasoline motor brought a mechani-

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cal revolution to farmwork. Tractors and trucks replaced horses, mules, and carts. The combine is a large machine that only became popular when it could be easily powered by petroleum-based fuels. However, it makes harvesting much faster and easier by combining the threshing and cleaning of the grain into one mechanized process. One result of this increased agricultural efﬁciency was the accelerated migration of farmers’ children and farm laborers into cities to ﬁnd new lines of work. The gasoline motor also powered boats of various sizes and purposes, from commerce to recreation. It inspired the invention of the motorcycle in 1885, after which many bicycle manufacturers began offering models with internal combustion engines attached. The arrival of the lightweight gasoline engine also made the ﬁrst airplane possible. Powered ﬂight had long been a dream of many inventors, though prominent scientists and the general public mostly believed it to be impossible. Though many failed, Orville and Wilbur Wright of Dayton, Ohio, succeeded on December 17, 1903. They had developed a practical knowledge of mechanics by building and repairing bicycles. Trial and error produced a design for a workable glider, or unpowered airplane. They then added a 12-horsepower engine of their own design and construction (no suitable model was yet commercially available). Orville Wright ﬂew this airplane for a 12-second ﬂight at Kitty Hawk, North Carolina—the ﬁrst successful, powered, piloted ﬂight in history.

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See also: Business, Organization of; Coal; Corporations; Mining; Rockefeller, John D.; Trusts.

Pacific Railway Act (1862) Act of Congress giving land and other assistance to the Union Paciﬁc and Central Paciﬁc Railroads in their efforts to build a transcontinental railroad. The new rail line would eventually run from the Missouri River to central California, but only with substantial public assistance. A WILLING CONGRESS After the start of the Civil War (1861–1865), the Southern members of the U.S. Congress left Washington, D.C. The Republican Party from the Northern states dominated Congress and was able to pass legislation that the Southerners would never have allowed to become law. The Paciﬁc Railway Act primarily beneﬁted the Northern states. Its primary lobbyist was a Californian, an engineer named Theodore D. Judah. Judah represented a group of entrepreneurs and bankers based in San Francisco. The purpose of the transcontinental railroad was to cover 1,500 miles (2,414 km) of Western territory, not only simplifying and speeding commerce between California and the East Coast but also developing the lands in between. At the time the act was passed, a trip from New York to San Francisco took several months. Travelers could choose a difﬁcult overland journey or a dangerous sailing voyage around the tip of South America.

THE TERMS OF THE DEAL The Paciﬁc Railway Act made provisions to give the two railroad companies, combined, 6,400 square miles (10,300 km2) of federal land. For each mile of track put down, the railroad laying it received 200 square miles (61 km2) on each side. The railroads sold this land to settlers, who built farms and towns. The settlers also built the railroad’s customer base, while funding the construction itself. Additionally, the railroads used unsold land as collateral for bank loans to help pay construction costs. For some stretches of track, this still was not enough money to complete the work. The Paciﬁc Railway Act included a provision for the two railroads to borrow at low interest rates from the federal government. The companies could borrow $16,000 per mile of track on ﬂat terrain, but up to $48,000 for a mile of track in the mountains. THE RESULTS OF THE ACT With the act promising ﬁnancial backing, the railroads began construction. The Union Paciﬁc headed west from Omaha, Nebraska, drawing upon recent Irish immigrants for much of its 10,000-man labor force. In Sacramento, California, the Central Paciﬁc began building eastward. Many of its laborers were Chinese immigrants. After the end of the Civil War (1861–1865), veterans from both sides joined the work crews, often still wearing remnants of their respective armies’ uniforms. The railroads met on May 10, 1869, at Promontory, Utah. The

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Central Paciﬁc’s president, former California governor Leland Stanford, drove a ﬁnal golden spike to connect the track. Telegraph lines sent the news to both coasts. The transcontinental railroad ensured the growth of the West and established national markets for regional specialties in manufacturing and agriculture. For example, farm tools and household items that were manufactured in the East were shipped to farmers in the West. In return, crops grown on the fertile plains of the Midwest were shipped to consumers in the East. The Pacific Railway Act was a prime example of the U.S. government’s ability to trade a raw natural resource to private business interests in exchange for development that led to a broader, more modern economy. See also: Railroads.

FURTHERREADING Ely, James W. Railroads and American Law. Lawrence: University Press of Kansas, 2001. Wiatrowski, Claude. Railroads Across North America: An Illustrated History. Osceola, Wis.: Voyageur Press, 2007.

Pullman Strike An organized work stoppage by employees of U.S. railroad companies that began with the Pullman Palace Car Company, a manufacturer of railroad cars, and spread to impact the national rail network. In 1894, about 4,000 Pullman workers were told that, because of the economic depression of the last year, their pay would be cut by 28 percent. Their frustration led to one of the nine-

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teenth century’s worst struggles between workers and management. A COMPANY TOWN Compared to other industrial workers of the era, the Pullman workers enjoyed an excellent standard of living. The owner of the Pullman Palace Car Company, George Pullman, founded a town near Lake Calumet in Illinois and named it after himself. He provided each working family with a warm, safe home and built a school and library for the free education of their children. This system of a company taking care of all the practical needs of its workers came to be known as welfare capitalism. There was another side to this system, however. All the stores in the town of Pullman were owned by the Pullman Company. When workers bought on credit or overspent, the company deducted that amount from future paychecks. George Pullman controlled everything within the town. He saw nothing wrong with sending his managers into his workers’ homes to make sure they were being kept clean and tidy. He curbed freedom of speech and criticism of the company and would not allow his workers to print their own independent newspapers. Though George Pullman had tried to prevent union organizing in his town, many of his workers were members of the American Railway Union (ARU). On the evening of May 10, 1894, union leaders met to decide whether they should ask the workers to strike or not. While they felt the workers were justiﬁed in striking, they also knew that a strike would hit

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In this illustration from a contemporary newspaper in 1894, a line of police officers tries to subdue rioting workers to allow a train to pass during the Pullman strike of 1894. In solidarity with striking workers at the Pullman factory, the American Railway Union attempted to halt all railroad traffic in the United States.

most of these struggling families very hard, as they would not be able to pay their rent and other bills. Union leaders began to plan on how to provide possible strikers with food and medicine. The next morning, their representatives walked into the Pullman factory and announced that the time to vote had arrived. Thousands of men and women marched to a community center. The strike was on. THE STRIKE SPREADS The cars made by the Pullman Company were used by 24 different rail-

way lines that ran through Chicago. All of these railway lines paid their workers about the same wage. This illegal cooperation, known as collusion, kept wages lower than a competitive market would have allowed. The rail companies thought wage controls presented a uniﬁed front against any labor organizing. By the time the Pullman strike began, their workers were dissatisﬁed and bitter over years of pay cuts and inﬂation. They wanted to do something to support the striking Pullman workers. Their own wage situation also pushed them toward collective action.

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Grover Cleveland (1837–1908) Grover Cleveland was the only American president to serve two nonconsecutive terms (1885–1889, 1893–1897). He was born on March 18, 1837, in Caldwell, New Jersey, to the Reverend Richard Cleveland and Ann Neal Cleveland. Cleveland went on to serve as the mayor of Buffalo and the governor of New York, before running for president in the election of 1884. His Republican opponents spread a story, which was true, that he had fathered a child out of wedlock. Yet he won the election, and as president, he immediately began a program of government reform. Cleveland insisted that federal jobs be appointed on merit rather than political affiliation, and he slashed the bloated budgets of various government departments. Personally, his first term in office was a happy time for him, and on June 2, 1886, he married Frances Folsom in the first wedding ever held at the White House. Cleveland was rejected by voters in his bid for reelection in 1888, and after

Eugene V. Debs led the American Railway Union (ARU). He had years of experience organizing the railroad industry. He also believed that strikes had the greatest effect when they involved workers across an entire industry, rather than isolated strikes by brakemen or engineers. The Pullman situation offered a test of the power of such cooperation. At ﬁrst Debs was skeptical about the Pullman strike. The ongoing eco-

a fierce battle over protective tariffs, Republican Benjamin Harrison (1889–1893) claimed the White House. Cleveland was elected president again in 1892. His second term was dominated by the Wall Street Panic of 1893 and the Pullman Railroad strike of 1894. When the Pullman strikers in Chicago violated a court order to return to work, Cleveland sent federal troops to enforce it. “If it takes the entire army and navy of the United States to deliver a post card in Chicago,” he said, “that card will be delivered.” Many Americans took pride in the forceful way in which Cleveland handled the strikers. However, others criticized him for his handling of the Panic of 1893, in which many banks collapsed and unemployment grew widespread. Cleveland’s policies did little to ease the financial crisis. After his second term, Cleveland retired to Princeton, New Jersey. He died of a heart attack on June 25, 1908. He was buried in the Princeton Cemetery of Nassau Presbyterian Church.

nomic crisis ensured that the Pullman Company could easily ﬁnd replacement workers, also known as scabs. After visiting Pullman and listening to the workers’ stories, Debs decided to throw the full weight of the ARU behind the Pullman strike. The union launched its boycott on June 26, and within a few days, 18,000 engineers, switchmen, and car inspectors had stopped working. They warned the management of their companies that

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if scab workers were hired, the strike would spread even further and include even more workers. When the initially peaceful strike developed into riots and caused property damage, President Grover Cleveland (in office 1885–1889, 1893–1897) sent in federal marshals and the Army to end the strike. Some, including Illinois governor John Altgeld, argued that this was unnecessary and unconstitutional, but President Cleveland felt it had to be done because commerce and the U.S. Mail were being disrupted.

In the end, 13 people, all strikers, were killed in the violence, and 57 strikers and law enforcement agents were wounded. After being convicted of violating a court order related to the strike, Eugene Debs served six months in prison for his role in the strike. See also: American Railway Union (ARU); Railroads.

FURTHERREADING Laughlin, Rosemary. Pullman Strike of 1894: American Labor Comes of Age. Greensboro, N.C.: Morgan Reynolds, 1999.

R–S Railroads Form of transportation that contributed enormously to the growth of the American economy. The railroad also profoundly affected much of American society, including the shipment of goods, travel and transportation, and the establishment of time zones. EARLY DEVELOPMENT In the mid-1820s, steam locomotives ﬁrst came into use in Great Britain, drawing on enormous coal reserves in the northern part of the country. In the United States, the ﬁrst railroad began operation in South Carolina in 1830. By 1860, the United States had 30,000 miles (48,000 km) of railroad track. In the ﬁrst few decades of U.S. railroad development, the bulk of construction was in the more industrialized New England and midAtlantic regions. This network grew quickly; the United States had 2,800

miles (4,506 km) of track in 1840, compared to only 1,800 (2,896 km) miles across Europe. In the South, rail lines did not form a network so much as they provided individual routes for cotton to reach shipping ports. In the 1850s, the railroads made more money from carrying freight than they did from passengers. The average train was made up of a dozen 10-ton (9.07– metric ton) freight cars or a dozen passenger cars, each carrying 40 to 50 people. A distinctive style of American locomotive developed. These brightly painted and brass-accented engines burned wood for fuel, with the smoke exiting from a smokestack shaped like an upside-down bell. Some state governments had invested in canals earlier in the nineteenth century, but the economic crash of 1837 left many states unable to pay back creditors for the money borrowed to build canals. Thus, the

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Jay Gould (1836–1892) Jay Gould was a famous business entrepreneur and railroad owner who made a huge fortune from the railroad industry. However, some of his business practices became illegal in later years. Gould came from an old and respected New England family. He was a small and quiet man who began his career in tanning and leather. While on Wall Street, he learned about railroad stock. Gould partnered with Daniel Drew and Jim Fisk, both known for reckless behavior in business, and the three attempted a stock raid on the Erie Railroad in 1867. This brought them in direct competition with Cornelius Vanderbilt, another railroad owner, who also wished to acquire the Erie. The three partners bought and sold Erie stock so that its price rose and dipped. Vanderbilt and Gould bought off competing judges, each trying to illegally force the other to halt illegal actions.

states left the business of railroad building to private companies and investors. The states, local governments, and federal government supported railroad building, especially with land grants. Between 1830 and 1860, $1.25 billion of private money went toward railroad building. UNITING THE NATION By 1850, railroads commonly offered a faster and cheaper way to ship farm products and ﬁnished goods than the canals and turnpikes could offer. Rail

Gould threw 100,000 shares of Erie stock into the market, and the price collapsed. The partners bought up the withered stock and made a great show of bunkering themselves in a New Jersey hotel, fortified against Vanderbilt’s supposed retaliation. The Erie went bankrupt in 1877 and did not pay a dividend again until 1942. Gould, along with his partners, came to be called “robber barons,” a term coined by The New York Times. The name captured both the immense power of wealthy capitalists in American society, along with their sometimes utter lack of concern for right and wrong. Gould especially faced this description because he often overvalued the stock of his railroads. With this practice, he became immensely rich from investors buying shares that immediately plunged in value. Outrage eventually led to regulation.

lines were also more direct than steamboats, as the rail lines traveled directly into the heart of a city or town. Steamboats, on the other hand, often docked miles from the city center. After the construction of the New York Central and Pennsylvania lines in the 1830s, routes from the East Coast to the Mississippi River came into service in the 1840s. In 1853, a new rail line connected New York and Chicago. Also in 1853, the federal government completed the Gadsden Pur-

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chase, buying a strip of land from Mexico that would eventually become the southernmost parts of Arizona and New Mexico. The purchase was intended to provide a southern route to the Paciﬁc Ocean, but the Civil War (1861–1865) interrupted the project. After the Civil War After the war, the ﬁrst transcontinental railroad was completed in 1869. The Union Paciﬁc met the Central Paciﬁc in Promontory, Utah. A golden spike completed the joining of the Atlantic and Paciﬁc coasts. The railroads generally followed the frontier. Grants of federal land followed the railroads, bringing development of farms, ranches, and towns to the frontier. From 1850 through 1871, 19,000 miles (30,578 km) of track were laid. The railroad companies received 131 million acres of land from the federal government. Throughout the nineteenth century, the federal government gave the railroads an area larger in size than the nation of Germany. Direct governmental aid was valued at $350 million from 1861 to 1890. The government received reduced shipping rates in return for the land. Social and Cultural Effects The railroads had started out as an improved method of moving farm products. By the turn of the twentieth century, they had tightly connected the various sections and specializations of an emerging global leader in industrial production. Access to national markets led to cheaper prices for consumers and bigger proﬁts for manufacturing ﬁrms.

Social and cultural changes followed the building of railroads as well. In 1883, U.S. and Canadian rail companies adopted time zones and standard time. Previously, towns had kept their local time based on when the sun reached high noon; before 1883, each rail company kept its own time, creating confusion in major rail terminals and stations. A local, observable idea of time fell away so that each community could have its assigned place in an emerging national life. Standard gauge followed standard time in 1886. Gauge refers to the distance between each of the two rails of the track, or the width between a railcar’s wheels. Several different standard gauges existed across the country, and nonstandard gauges even appeared on some lines. Arriving at a standard gauge was an early example of how cooperation could promote efﬁciency. Industrial standards have helped speed up innovation and development ever since. DIFFICULTIES FACED BY THE RAILROADS The railroads made a small number of people very wealthy. In good ﬁnancial times, the well-run companies paid a dividend to investors. Not all rail companies were well run, however. Many never became proﬁtable, and in economic crisis years, some of the rail companies failed. The years 1873 and 1893 brought panics in the U.S. ﬁnancial system, which resulted in the failure and closing of several railroads. Rail companies sometimes grew quickly but often proved too poorly managed to survive a lean year.

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The railroad managers also caused problems for themselves through corrupt activities, including priceﬁxing. Price-ﬁxing is an agreement by business competitors to charge the same rates to consumers. This price coordination beneﬁts the businesses but hurts the consumers. Despite the problems, technology kept improving into the twentieth century. Heavier rails permitted stronger engines and more cars, while better electric signals helped the system to run more smoothly. Issues with Workers and Farmers Two of the largest labor disruptions occurred in the nineteenth century. The 1877 general strike involved 100,000 rail workers, spreading from West Virginia to Baltimore, Pittsburgh, Chicago, and St. Louis. Federal troops were used to break the strike. More than 100 people died before the strikers abandoned their walkout. The Pullman Strike began in 1893 with unrest among manufacturing employees over declining wages. The American Railway Union, led by Eugene V. Debs, joined the strike and tried to prevent the movement of any train containing a Pullman car. When railroad managers included mail cars in trains along with Pullman cars, the federal government sent in troops. Debs went to jail, and the strike collapsed. Farmers and the general public also expressed frustration over railroad business practices in the nineteenth century. Many farmers received unfair shipping rates from the railroads. They responded by forming the Granger Movement. In 1874, this organization began pres-

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suring state legislatures to pass Granger Laws. The laws required railroads to publish schedules of maximum rates, and they banned the practice of charging more to haul farm products only a short distance. In addition, the laws prohibited legislators from receiving free passes, and they also included anti-consolidation regulations designed to keep competition in place between the rail lines. The U.S. Supreme Court ruled that Granger Laws were acceptable in the decision Munn v. Illinois (1876). The Court reversed itself in 1886, in Wabash, St. Louis & Paciﬁc Railroadco. v. Illinois. The next year, Congress passed the Interstate Commerce Act, putting the Granger principles into federal law. LATER DEVELOPMENT By 1900, the U.S. railroad industry employed 1 million workers. By 1920, 2 million worked in railroads. Track mileage and the number of workers peaked in these years, but proﬁts remained uncertain, and competition from other transit systems increased. After the comparatively secure years of World War II (1939–1945) came two important innovations. First, radio communication expanded and improved to allow more accurate timetables and higher trafﬁc. Second, the diesel locomotive increased efﬁciency, providing more power so cars could be added to trains. However, airplanes cut days off long trips, while automobiles let travelers determine their own route and schedule. The interstate highway system improved long-distance automotive travel greatly. It also made

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long-distance trucking of goods efﬁcient. By the 1980s, 37 percent of freight trafﬁc moved between U.S. cities on the rails, while only 3 percent of travelers chose trains. The federal government again played an important role in the 1980s. Amtrak, a governmental corporation, began offering passenger train service. The railroad companies soon discontinued their own passenger service. The government formed a second corporation, Conrail, to run several bankrupt Upper Midwest lines. By the end of the 1980s, these lines were making a proﬁt under federal management. They were sold to private interests. See also: American Railway Union (ARU); Cities, Growth of; Paciﬁc Railway Act; Pullman Strike; Munn v. Illinois (1877) in the Viewpoints section; Time Zones; Trusts; Unions; Wabash, St. Louis & Paciﬁc Railroad Company v. Illinois (1886) in the Viewpoints section.

FURTHERREADING Cowan, Ruth Schwartz. A Social History of American Technology. New York: Oxford University Press, 1997. Misa, Thomas J. A Nation of Steel: The Making of Modern America. Baltimore: The Johns Hopkins University Press, 2004.

Rockefeller, John D. (1839–1937) Founder of Standard Oil and leading oil tycoon. From middle-class beginnings, Rockefeller became one of

America’s richest individuals and his name synonymous with wealth. EARLY LESSONS John D. Rockefeller was born to Scottish Baptists in Rickford, New York. He learned early the workings of capitalism. His parents encouraged their children to work. Young John raised turkeys and saved $50. He loaned the money to a neighbor for an interest payment of $3.50. Money, he discovered, could be used to make more money. The Rockefeller family moved to Cleveland in time for the young man to ﬁnish high school and become a bookkeeper. After the ﬁrst major oil discovery in Pennsylvania, an employer sent Rockefeller to survey the growing industry as a potential investment. He reported back that the oil rush was not worth his investor’s attention, and then proceeded to make his own fortune from it. TYCOON Rockefeller began his ﬁrst reﬁnery operation, with a partner, in 1863. Oil was a volatile commodity in the 1860s; the price per barrel wavered from a high of $13.75 to a low of 10 cents. Rockefeller proved an effective manager, always seeking greater efﬁciency. He kept his operations in business through lean times and formed Standard Oil in 1870. Rockefeller now personally held 26.7 percent of a company that came to control 90 percent of the U.S. oil industry by 1880. Standard’s most important product during this era was kerosene for lamps. In pursuing this

Steel

market, Rockefeller used certain business tactics (legal at the time) that are outlawed today. Predatory pricing involved selling an item for less than its cost. The company purposefully lost money to take business from competitors who could not, or would not, match the price. Another tactic involved negotiating with the railroads that shipped Standard’s oil. Standard paid full price, then received a rebate, or kickback, from the railroad based on the large amount of oil shipped. Standard Oil also mastered the practice of vertical integration. To increase efﬁciency, the company purchased necessary resources at every stage of extracting, processing, transporting, and retailing its products. However, owning everything from drilling equipment to delivery vehicles made for a complicated corporate structure. Varying laws of incorporation among the states made this especially unwieldy, so in 1882 Standard Oil’s lawyers devised the trust form of organization. Though controversial for its size and power, Rockefeller’s goal in forming the trust was order in the marketplace, not illegal advantage. Even with a near-monopoly, the prices for oil and oil products fell steadily from 1870 to 1900. PHILANTHROPIST By 1897, Rockefeller had turned most of his personal energy from running Standard Oil to giving away his vast fortune. He made an initial gift of $600,000 to the University of Chicago in 1889; he and his family eventually gave the university more than $80 mil-

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lion. Other projects included the Rockefeller Foundation, the Rockefeller Institute, the Laura Spelman Rockefeller Memorial Foundation, and the General Education Board. By the time of his death in 1937, Rockefeller had given away half of his wealth, in excess of $550 million. See also: Business, Organization of; Corporations; Oil; Trusts.

FURTHERREADING Brands, H.W. Masters of Enterprise: Giants of American Business from John Jacob Astor and J.P. Morgan to Bill Gates and Oprah Winfrey. New York: The Free Press, 1999. Laughlin, Rosemary. John D. Rockefeller, Oil Baron and Philanthropist. Greensboro, N.C.: Morgan Reynolds, 2004.

Steel Strong, stable metal that made the modern world possible. Steel revolutionized railroads, urban construction, and manufacturing. A MODERN NECESSITY Steel is created from iron ore. It has been used for centuries in weapons and tools but could only ever be produced in very small quantities. In the second half of the nineteenth century, the United States proved to have large reserves of the right type of iron ore, and the right type of coal to get that ore hot enough for steel production. By the middle of the nineteenth century, huge iron-ore fields had been discovered in the upper Midwestern states, especially Michigan, Wisconsin, and Minnesota. The ore was of very high quality. It also proved easy to reach; it was buried beneath

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only a thin skin of soil deposited by retreating glaciers. The Mesabi deposit was discovered in Minnesota in 1892. By 1900, this ore ﬁeld produced one-third of the iron ore mined in the United States and one-sixth of the world total. Mesabi ore produced half of the world’s ore for steel production at that time. Pittsburgh became the leading center of iron and steel production. Andrew Carnegie’s operations were centered around the city, including the huge Homestead Mill. The creation of U.S. Steel in 1901 built upon this structure. Though the local coal reserves had been largely used up by that point, Pittsburgh was located at the joining of two rivers to form the Ohio River. While Pittsburgh beneﬁted from cheap transportation, northern Alabama built up an iron and steel industry centered around Birmingham and based on local coal reserves. Between 1901 and 1909, the area’s annual steel output rose from 10 million tons to 24 million tons. BESSEMER RAILS Steel passed through distinct developmental stages. For each new way of using it, new technology had ﬁrst to be developed. The earliest stage, and the ﬁrst to produce steel in massive quantities, was the development of the Bessemer process. In 1872, at one of the peaks of U.S. railroad construction, more steel rails were imported than were produced domestically. Several techniques had been devised for making steel by blowing steam or air through molten iron. The Bessemer process

was the best known. Developed in Great Britain, the Bessemer process was brought to the United States by Alexander Holley. In America, the Bessemer process was reﬁned to produce the maximum output, choosing quantity over quality. Until about 1890, this made the process perfect for producing steel rails in U.S. factories. For several decades, the railroads not only added new lines but also replaced old iron rails with Bessemer rails. OPEN-HEARTH STEEL AND THE SKYSCRAPER By the end of the 1880s, American steelmakers had begun adding the open-hearth process to their operations. The new process was named in contrast to the enclosed furnace of the Bessemer process, and it featured extremely high temperatures. Railroad bridges provided early engineering and design lessons to be applied later to buildings. Some of the earliest metal-skeleton buildings resembled rail bridges, composed of joined metal beams, placed on end. The Brooklyn Bridge, completed in 1883, also helped architects conceptualize new structures. The 1870s brought, among other inventions, the elevator, telephone, typewriter, and electric light. These tools made working in tall buildings practical. They enabled an ofﬁce culture and means of communication that could thrive in steel-framed buildings of 10 stories and eventually many more. In the 1890s, the skyscraper began to appear as the iconic form of building in the center of America’s cities. New York proceeded cau-

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tiously, and architects and builders continued to prefer masonry and iron construction in which the outer walls carried part of the building’s weight. Chicago became the ﬁrst home to the steel-skeleton building. Following the massive ﬁre that destroyed much of Chicago’s central business district in 1871, some of the rebuilding had been badly conceived and some had proven simply inadequate. Led by Louis Sullivan (1856–1924), the Chicago School of architects developed the tall, steelframed building. Sullivan pioneered curtain walls, in which the outer walls are essentially a skin of glass panels, or a combination of windows and terra-cotta tiles. Such walls carry no weight and can be attached to the building’s structure from the top down or starting in the middle. Skyscrapers housed the industries that grew from industry, the business activities that could exist once the capacity for manufacturing was well in place. Publishing, retailing, insuring, and ﬁnance all became business activities in which the fundamental wealth of a productive economy could be magniﬁed, reinvested, and transformed. In these areas, steel not only contributed to the industrial economy but also laid the foundation for the postindustrial economy—in which major industrial countries in the late twentieth century moved away from producing goods and toward producing services. STEEL IN MANUFACTURING At the turn of the twentieth century, the steelmaking industry was nearing maturity, and its impact was felt in all

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other fields of manufacturing. In 1900, of the nation’s 14 largest factories, 12 produced either steel itself or goods that relied on steel. Relying on steel required the ability to cut it. Starting in 1898, Frederick W. Taylor and Maunsel White conducted a series of experiments at Bethlehem Steel in Pennsylvania to determine the best process for hardening steel tools. They sought a metal that could cut at high speeds, powered by electric motors. They discovered a process that combined heating a tool to a very hot temperature, then only allowing it to cool very slowly. More importantly, they controlled their experiments in a highly rigorous fashion, setting a new standard for materials science. They also measured temperature rather than judging heat by the color of the steel. They operated as scientists, rather than craftsmen. The development of faster tools led to more efﬁcient factories with higher rates of production. The greatest factories belonged to the automobile companies that became the largest customers for steel in the 1910s. The car companies had a unique need for steel. They not only required massive quantities, as the railroads had previously, but they also needed a wide range of grades and qualities to complete vastly different forms and items. To meet these needs, steel producers created new alloys. An alloy is a metal formed from a blend of two or more other metals. Alloys have distinct properties from the metals that go into their creation. As with steel for cutting tools, proper heat treatment proved an

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important element of creating appropriate automotive steel alloys. Another important development came in the 1910s with the introduction of continuous-sheet steel. Steel producers had spent decades looking for a way to roll sheets of steel. Their introduction allowed automotive body parts to be stamped whole, from one sheet of steel, with any excess trimmed away as needed. From the 1920s until U.S. steel production peaked in 1969, steel remained a stable and mature commodity. Production rose or dipped with economic factors, but the industry remained one of the essential parts of the American economy. See also: Business, Organization of; Carnegie, Andrew; Corporations; Railroads; Trusts.

FURTHERREADING Misa, Thomas J. A Nation of Steel: The Making of Modern America. Baltimore: The Johns Hopkins University Press, 2004. Rau, Meachen. Andrew Carnegie: Captain of Industry. Mankato, Minn.: Compass Point Books, 2006.

Streetcar See Electric Streetcar.

Supreme Court, U.S. Highest court in the United States. During the industrial age, the Supreme Court settled many important questions and disputes between various powerful interests. SUPREME COURT RULINGS IN THE INDUSTRIAL AGE Industrialism brought new forms of organization to American society and

business. An agrarian society, made up largely of farmers, evolved into a manufacturing society, filled with urban industrial workers. Many issues inevitably arose that required carefully weighing the interests and arguments of individuals and groups. It is the job of the courts to use the law to determine who is right and who is wrong when interests conﬂict, and to decide who is entitled to what. One of the major issues throughout the industrial period was the right of workers to organize in a union, versus the right of employers to run a union-free workplace. Another issue became the power of monopolistic trusts to dominate entire industries with little or no competition. Civil rights, and the equality of all Americans under the law regardless of race, also came up in these years. One issue was decided relatively early, and with great impact on American business: the nature of corporations and the right to form them. Corporations In the early years of the United States, corporations were rare and hard to form, often requiring a special act of a state legislature. Partnerships were the dominant form of multi-owner organization. The Supreme Court under Chief Justice John Marshall changed this arrangement permanently in the case Dartmouth College v. Woodward (1819). Marshall described a corporation as “. . . an artiﬁcial being, invisible, intangible and existing only in contemplation of the law.” However, a corporation had rights, just like a living being, yet it was immortal. Own-

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ers of shares could come or go, but the corporation itself remained. It also remained attractive to investors, thanks to the concept of limited liability. Investors in a corporation risked only the amount of money directly invested. In contrast, the partners in a ﬁrm could ﬁnd their individual assets taken to cover the partnership’s debts, in the event of misfortune. The Issue of Trusts Corporations helped the economy operate more efﬁciently. They allowed the formation of large companies with substantial resources, without having to rely upon a few very wealthy partners. For some in business, the idea of further consolidation and control became attractive. If multiple companies could be organized into a trust, the owners could avoid destructive competition by setting a proﬁtable price for a particular product or good. In the late nineteenth and early twentieth centuries, powerful trusts formed in many industries, including oil and sugar. Many Americans looked upon these industrial concentrations with deep skepticism. From the viewpoint of farmers and others, the trusts seemed to efﬁciently concentrate money in the hands of a few individuals, who were already fantastically rich. In 1890, Congress passed the Sherman Antitrust Act. This provided for the breaking-up of industrial combinations that acted in restraint of trade. Over the next dozen years, the government brought 18 antitrust suits with no success. The Sherman Act did prove useful against trade unions, though.

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SUPREME COURT RULINGS Under President Theodore Roosevelt (1901–1909), the federal government undertook a new round of antitrust prosecutions, interpreting the Sherman Act in new ways. The deﬁnitive case became Standard Oil v. U.S., decided by the Supreme Court on May 15, 1911. The government won, and the Court ordered the breakup of the icon of the trust era. However, Chief Justice Edward Douglass White introduced the idea that only unreasonable combinations and undue restraint of trade were illegal under the Sherman Act. White’s majority opinion was the high point of the antitrust movement, though it also demanded a new moderation in antitrust prosecutions. Union Battles in the Court Throughout the industrial age, American labor unions fought to organize, while some employers fought to keep unions out. For the unions, workers were exercising their right to work together to assure the most reasonable pay and working conditions. Employers, meanwhile, described their ﬁght as defending the right to run their businesses as they saw ﬁt, and to work out arrangements with their employees without a third party involving itself. Some tactics led to legal ﬁghts. In 1908, the Court settled what was known as the Danbury Hatters case, or more formally, Loewe v. Lawler. In this unanimous verdict, the Court held that a union attempting to organize a factory could not organize secondary boycotts of stores that sold the factory’s goods in other states. This, said the Court, was a combina-

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tion in restraint of trade, violating the Sherman Antitrust Act. State legislatures also became involved in the ongoing battle between labor and employers, by passing laws that supported one side or the other. The case of Muller v. Oregon, decided by the Court in Oregon’s favor in 1908, grew out of such a circumstance. The Court upheld a state law that set a maximum workday length of 10 hours for women employed in laundries. The reasoning behind the law was that any longer of a workday would impair the childbearing potential of the women employees. Taxation and Commerce The growth of the federal government, and the beginnings of the United States as a world power, required that the government raise more money to spend on roads, industrial regulation, and the armed forces. In 1913, Congress passed legislation organizing the nation’s first peacetime income tax. Like the creation of the Federal Reserve, this step brought controversy. The Supreme Court ultimately upheld the constitutionality of the tax, voting seven to two in Brushaber v. Union Paciﬁc Railroad Co., on January 24, 1916. The issue of interstate commerce also came up with regard to the Granger Laws. These were passed by a number of states, in response to concerns of farmers (organized into “granges”) that the railroads were overcharging them. The Granger Laws featured schedules of maximum

rail-freight rates, bans on higher charges for short hauls than long hauls, and anti-consolidation clauses as barriers to railroad monopolies. The Supreme Court upheld the Granger Laws in 1876, ruling for the farmers in Munn v. Illinois. However, the Court reversed itself in 1886, striking down the laws in the case Wabash, St. Louis Paciﬁc Railroad v. Illinois. The Court refused to allow any one state to impose limitations on commerce beyond its own boundaries. In response, the U.S. Congress created the Interstate Commerce Commission to resolve disputes between railroads and their customers. The Supreme Court contributed to American industrialism by checking the powers of Congress and of the president and by continuing to interpret the U.S. Constitution for a rapidly changing society. The astounding expansion of the economy and the clashing of social forces throughout the industrial age provided many opportunities for the Supreme Court to vitally impact American society for decades to come. See also: California As I Saw It, 1849– 1900 in the Viewpoints section; Railroads; Munn v. Illinois (1877) in the Viewpoints section; Time Zones; Trusts; Unions; Wabash, St. Louis & Paciﬁc Railroad Company v. Illinois (1886) in the Viewpoints section.

FURTHERREADING Baum, Lawrence. The Supreme Court. Washington, D.C.: CQ Press, 2006.

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T–Z Time Zones System for compromising between strictly local time and globally recognized time. In North America, in 1883, the railroad companies adopted four standard time zones across the continent, with the rest of commerce and society following along in later decades. TRADITION GIVES WAY TO TELECOMMUNICATION Traditionally, cities and towns kept local time using a sundial or a clock. As long as the residents agreed among themselves on the time, there was no one to disagree. The railroad and the telegraph changed this. Suddenly, communications were instant, even between places where high noon occurred hours apart. Trains kept regular schedules, and their large numbers of passengers needed to know when to leave. Also, switchers had to accurately track trains’ positions to avoid collisions. In Great Britain, railroads adopted time zones in 1847. The American railroads continued to keep their own time through the Civil War (1861–1865). At one point, the station in Pittsburgh tracked and displayed six different times, each for a different railroad company. In the United States, standardized time zone systems were proposed by both Charles Dowd and William F. Allen in the 1860s and 1870s. Finally, in 1883, the U.S. and Canadian railroad companies adopted a four-zone system of standardized time. Sunday,

November 18, 1883, came to be known as “The Day of Two Noons,” as train station clocks changed from local to standard time as noon arrived in each time zone. NO HURRY TO ACCEPT STANDARD TIME Within a year, 85 percent of American cities with populations of 10,000 or more had accepted standard time— approximately 200 communities. Naturally, some communities were less eager to accept standard time. The city of Detroit, Michigan, sat on the border between the Eastern and Central time zones. Detroit retained its own local observed time until 1900. It then adopted Central Standard Time. After a few years, the city changed to local mean time, which is based, not on the sun’s actual observed position, but on a calculated idea of its position relative to an earthbound location’s distance north or south of the equator. From local mean time, Detroit transitioned to Eastern Standard Time (EST), backed up with a local ordinance in May 1915. The city was still on EST when the U.S. Congress adopted standard zone times for the nation on March 19, 1918. IMPACT The establishment of four standard time zones (Eastern, Central, Mountain, and Paciﬁc) across the continental United States from the Atlantic Ocean to the Paciﬁc meant that what communities gave up in local control they gained in communicating with

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the wider world. Modern people have come to accept time as a ﬁction—noon by the sun is unlikely to read noon on the clock. (It will in a handful of places, but not in most time zones.) This effect has led to a breakdown of parochialism in American life. Parochialism is a focus on one’s own surroundings or circumstances to the exclusion of other possibilities, opportunities, or ways of being. Modern communication and travel have offered greater choice in how and where to live and a greater appreciation for the nation’s cultural and geographic diversity. See also: Railroads.

FURTHERREADING Stephens, Carlene E. On Time: How America Has Learned to Live Life by the Clock. New York: Bulfinch, 2002.

Trusts Business combinations designed to limit competition and promote proﬁt and efficiency. Trusts reached the height of their power and organization in the years 1890–1910. Antitrust actions by the federal government broke up the trusts that came closest to monopoly, and after the 1910s, industries tended to be dominated by large corporations instead. FORMS AND PURPOSES The growth of the railroad industry throughout the nineteenth century convinced certain businesspeople, notably investment banker J.P. Morgan, that excessive competition could do great damage to industry. The battles fought among railroad owners for control of companies sometimes left those

companies in poor shape. A classic example was the 1867 struggle for control of the Erie line, waged between railroad owner Cornelius Vanderbilt, a grouping of investors, and railroad owners Jim Fisk, Jay Gould, and Daniel Drew. The Erie went bankrupt in 1877, after its stock had been devalued to keep it out of Vanderbilt’s hands. Morgan and other investment bankers kept damaged railroads in business but demanded seats on the corporate boards in exchange. Over time, the bankers gained enough control to prevent takeover bids by forming interlocking directorates. This simply meant that enough of the same men sat on enough of the railroads’ boards that they could control the companies among themselves. They governed many companies as though they were one combined ﬁrm. Further Refinement The next step was to make such a combination of businesses proﬁtable for investors. A trust agreement established which companies were to join in a trust. Owners of stock in these companies deposited their shares with a board of trustees. The former shareholders received a trust certiﬁcate in exchange. If a shareholder owned a large amount of stock in one of the smaller companies combining into the trust, the shareholder might come to own a relatively small portion of the new combination. However, the profit from that smaller portion could prove far larger. The investor now owned part of companies that had been competitors of the original company. The combined management eliminated wasteful competition. In

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The growth and expansion of the railroads in the 1800s was an important factor in the establishment of standardized time zones across the United States. By using standardized time zones, rather than local time, railways were able to set accurate passenger schedules and improve rail safety.

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some cases, the investor might come to own a piece of an entire monopolized industry. Why Trusts Succeeded A successful trust maintained a strong market price for its good, promoted efﬁcient production and avoided waste, and kept foreign competition out of the market. It succeeded by creating an economy of scale. This concept means that the most efﬁcient way to produce a good is to produce and distribute the maximum amount—and no more—that the market will buy. If the market for a particular good has several competing companies, the ﬁrms have a hard time knowing how much each will produce. They risk producing leftover units of the good that drag down its price. None of the ﬁrms can achieve an economy of scale because none can produce the most efﬁcient number of units at the best possible price. The Most Effective Trusts The trust form of organization worked very well in certain industries. These were the industries in which the good became a ﬁnished product at one particular step, and only a limited number of companies would be able to make a proﬁt by efﬁciently performing that step. Sugar reﬁning became an early trust. There could be many sugar producers and any combination of large and small ﬁrms involved, but the refining process would not reward small volume, and only so many big companies could split the work profitably. They were even more proﬁtable when they combined into a trust and shared the work rather than compete for it.

Oil became perhaps the greatest trust of all. When the ﬁrst major oil strikes in Pennsylvania created a wild new industry, anyone could drill for oil (legally or not). Reﬁning crude oil into a product that made money required capital, to create infrastructure, to produce efﬁciently enough to survive the inevitable drops in price. John D. Rockefeller became so successful in the oil industry because he understood these needs. Rockefeller had avoided drilling in favor of reﬁning. His company steadily absorbed less frugal competitors during the 1860s. After the formation of Standard Oil, few had any realistic hope of competing. Most of Standard’s competitors sold out to the trust, becoming wealthy in the process. The size and power of Standard Oil helped bring about its fall. By 1911, Standard Oil had become a symbol of the dangerous inﬂuence the trusts held over American commerce and politics. Its breakup was the grand finale of a two-decade cultural and political backlash against the trusts. THE ANTITRUST MOVEMENT By 1890, the trusts were well established. They were an important part of American business, important enough to earn the distrust of many. Congress passed legislation intended to make certain business combinations illegal and to allow the government to break them apart. The Sherman Antitrust Act of 1890 declared illegal, “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states or with foreign nations. . . ” But

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the new law had no impact at ﬁrst. Congress had not understood many speciﬁc details of trusts and failed to write them into the act, so companies were unlikely to be ordered dissolved under it. The years 1893–1897 brought more pragmatic reasons not to prosecute the trusts, mainly because of a severe economic recession. Company mergers slowed down, and when they did happen, owners blamed the poor economy. The federal government had no desire to appear to attack business in general or a particular company’s health when times were tough.

balance against the trusts. His attorney general’s prosecution of the Northern Securities Company under the Sherman Act resulted in the Supreme Court ordering the breakup of the company. Roosevelt and his lawyers undertook 25 trust prosecutions. His successor, William Howard Taft (1909–1913), added 43 more. The greatest case came in 1911. In Standard Oil v. U.S., the Supreme Court found that Standard’s monopoly had worked to “drive others from the ﬁeld and exclude from them their right to trade.” Standard Oil had six months, from May 15, 1911, to sell its many subsidiaries.

Maximum Consolidation and Reforms After the economy recovered in 1897, the business community entered its greatest phase of consolidation. The holding company brieﬂy became the favorite means of organizing monopolistic enterprises. To start holding companies, promoters tried to buy large amounts of stock in at least two companies in an industry. Their goal was to own enough stock to control the voting for the companies’ ofﬁcers. In many ﬁrms, this meant owning a simple majority of the stock. With the stock in hand, the promoters elected the same people as directors of as many companies as they could control; these directors would then run the companies as one. In a well-designed holding-company scheme, promoters could gain control of a $1 million company for $500,001. President Theodore Roosevelt (1901–1909) decided to put the weight of the federal government in

Standard Oil The stockholders of Standard’s holding company, Standard Oil of New Jersey, received shares in the many new companies in proportion to the shares they had held in the trust. The 38 companies of Standard Oil did not change to different owners. They merely returned to corporate governance under the laws of the individual states where they were incorporated, separate from one another. Many expanded from simply reﬁning and began drilling, distributing, and retailing oil products as well. In the Standard Oil ruling, the Supreme Court introduced a “rule of reason” to antitrust actions. The new provision meant that a reasonable degree of trade restraint would be permitted before the Court ordered a business combination broken up. Organization as a corporation became more attractive for ﬁrms that dominated their industries. The rule of reason gave greater beneﬁt of the doubt to a corporation

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that grew naturally—by being successful—to control its market. See also: Business, Organization of; Corporations; Unions.

FURTHERREADING Gordon, John Steele. Empire of Wealth: The Epic History of American Economic Power. New York: Harper Perennial, 2005. Laxer, James. Oil. Toronto: Groundwood Books, 2008.

Unions Groups or organizations of workers who cooperate to advocate for better working conditions or higher wages. Unions concentrate the power of individual workers, making it very difficult for managers and business owners to ﬁre or disregard workers with legitimate complaints. Unions grew alongside industries, with new unions organizing as new types of businesses formed. THE KNIGHTS OF LABOR The Knights of Labor became an early nationwide organization. Founded in 1869, the Knights grew throughout the 1870s but reached their peak under the leadership of Terence V. Powderly after 1879. More than 30,000 railroad workers were injured or killed on the job in 1881 alone. Employers did little to compensate families or improve safety. Male employees generally worked 10 or more hours per day, 6 days per week, for less than $10 per week. Women and child laborers often matched the men’s hours for only half the pay. Strikes in 1877 and 1884 increased the membership of the Knights of Labor. Powderly sought to

organize both skilled trade workers and unskilled manufacturing employees. The Knights organized women and children, and they also organized African Americans when most early unions refused, though the Knights did so in segregated chapters. The Knights had more than 700,000 members in 1886, a year known as the Great Upheaval for the many strikes across the country. The McCormick strike in Chicago led to the Haymarket Square riot. The national mood turned anti-union, and the Knights lost signiﬁcance as the wave of strikes broke. TRADE, OR CRAFT, UNIONISM Even before the Knights of Labor was founded, craft unions had begun to organize skilled workers of various trades, including bricklaying, carpentry, and metalworking. Each trade had its union. These unions had little interest in unskilled labor. After the disaster of Haymarket and the failure to win the eight-hour workday in 1886, the Knights of Labor withered. A new organization ﬁlled the leadership vacuum and responded to the new anti-union mood. This new American Federation of Labor (AFL) combined the various craft unions into a nationwide presence. Samuel Gompers led the AFL from its founding in December 1886 until his death in 1924. The AFL made friends in both political parties and avoided noneconomic issues. Gompers believed in “pure-andsimple unionism,” but his afﬁliated unions did not have any place for unskilled workers. The AFL would be severely challenged by the drive of technology toward an industrial

Vanderbilt, Cornelius (1794–1877)

economy, with little emphasis on craft production. THE INDUSTRIAL WORKERS OF THE WORLD The AFL had a union of shoemakers, but it soon found itself living in a world where machines made the shoes and the people in need of organizing were the ones who tended the machines. Urban factory workers and mineworkers needed a union that would organize all the workers in an industry, rather than those in particular disciplines. In 1905, the Industrial Workers of the World (IWW) began with that idea in mind. However, leaders Eugene V. Debs, Daniel De Leon, and William Haywood expressed additional ideas through the IWW that prevented it from growing the way that they hoped. The IWW was explicitly radical. It sought to replace capitalism with public ownership of industry, and to abolish the wage system. Many workers did not necessarily agree, but the IWW offered energy and experience to help ﬁght for better conditions. In 1912, the “Wobblies” led 12,000 textile workers in Lowell, Massachusetts, in a strike against a 30-cent wage cut. The strikers won. The IWW strongly opposed World War I (1914–1918). It called strikes, and even advocated sabotage, while the AFL avoided strikes for the sake of the war effort. Many Wobblies went to jail. By the 1920s, the IWW was in steep decline. INDUSTRIAL UNIONISM Far more successful than the IWW, the United Mine Workers (UMW) bal-

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anced confrontation and compromise to win over important political leaders of the Progressive Era. UMW president John Mitchell had a soft-spoken modesty. When he led 140,000 UMW members into a strike in 1902, many observers were surprised that President Theodore Roosevelt supported the mineworkers. Like the AFL, Mitchell’s union succeeded by allowing labor’s friends to support it without being labeled radicals. See also: African Americans and Industrialization; American Federation of Labor (AFL); American Railway Union (ARU); Coal; Congress of Industrial Organizations (CIO); Mining; Steel; Women’s Trade Union League.

FURTHERREADING Levinson, Jeff, ed. Mill Girls of Lowell. Auburndale, Mass.: History Compass LLC, 2007. Skurzynski, Gloria. Sweat and Blood: A History of U.S. Labor Unions. Minneapolis, Minn.: Twenty-first Century Books, 2008. Wagner, Vigi, ed. Labor Unions. Farmington Hills, Mich.: Greenhaven Press, 2007.

Vanderbilt, Cornelius (1794–1877) Highly successful owner of shipping lines, and then rail lines. Vanderbilt was given the title “Commodore” by newspapers who wrote about the building of his vastly proﬁtable shipping ﬂeet. He later made a vast fortune in the developing railroad industry. BUILDING A FLEET At the age of 16, Vanderbilt’s mother loaned him $100 for the purchase of a sailboat suitable for ferrying passen-

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gers and goods to Manhattan. From this local start, Vanderbilt quickly built up a ﬂeet of sailing ships running up and down the East Coast. Vanderbilt had switched to steamships by the 1830s, and he became America’s leading ship owner. One proﬁtable route went to California by way of Nicaragua. Establishing the railway that cut across the Central American nation to join the Atlantic and Paciﬁc oceans inspired Vanderbilt to enter the railroad industry in the United States. He purchased the

New York Central railroad and built a second fortune. A CONTROVERSIAL FIGURE At the age of 21, Vanderbilt operated his sailing vessel Bellona in the Hudson River. He violated the monopolistic Fulton-Livingstone compromise by doing so, essentially operating as a pirate. Vanderbilt believed he operated Bellona in the tradition of American liberty, and he was one of a number of American businessmen of the era to

A Letter from Cornelius Vanderbilt

C

ornelius Vanderbilt was an impatient entrepreneur who was used to having his own way. When he believed some colleagues were being dishonest, he quickly took matters into his own hands.

Gentlemen: You have undertaken to cheat me. I won’t sue you, for the law is too slow. I’ll ruin you. Yours truly, Cornelius Vanderbilt In 1853, Vanderbilt wrote the letter above to several former business associates. These men had attempted to take control of Vanderbilt’s company while he was on vacation. To regain control, Vanderbilt ﬁrst dumped his shares of the company into the market. The price fell, and fell even farther when Vanderbilt worked with a former competitor to reduce fares. He then started buying up shares, regain-

ing control before his rivals could react. The letter became a symbol of Vanderbilt as the hard-charging, rough-hewn businessman. The Commodore fought when challenged. He built an empire in an age of corrupt government and defended it against men who were little more than stock market pirates. Fortunately, the public enjoyed the entertainment, and by the time Vanderbilt died in 1877, his contemporaries took in good faith his assertion, “I have always served the public to the best of my ability. Why? Because, like every other man, it is in my interest to do so, and to put them to as little inconvenience as possible.”

Women’s Trade Union League (WTUL)

openly disregard laws that effectively granted a business monopoly to one company or other combination of operators. When prosecuted for these actions, Vanderbilt won, but he held on to his view of laws as tools created by particular businesspeople for gaining advantage over others. These various traits and tendencies made Vanderbilt and other industrialists somewhat distasteful to many Americans. The New York Times gave him the title “robber baron.” This sarcastic descriptor combined the idea of thievery with the notion of unrestrained power. Though these qualities inspired a divided public opinion of him, they also led him to achieve enormous success. During the 1860s, he sold his shipping ﬂeet and focused on railroads. His reputation for efﬁcient management caused a railroad’s stock to increase dramatically in value on the news that Vanderbilt had taken control. When he died in 1877, he controlled 4,300 miles (6,920 km) of rail line in the eastern half of the United States. He left a fortune worth $105 million.

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Women’s Trade Union League (WTUL) Organization that worked with unions for women employees in order to promote better conditions. The WTUL was closely associated with the Progressive Movement, which sought to bring about social and political reforms in the United States. For example, the Progressives sought to improve working conditions in factories, establish an eight-hour workday, and secure better housing for workers.

See also: Gilded Age; Steel; Railroads.

FURTHERREADING Green, Carl R., and William R. Sanford. American Tycoons. Berkeley Heights, N.J.: Enslow, 1999.

Cornelius Vanderbilt began ferrying passengers between Manhattan and New Jersey at age 16. His commercial steamship fleet grew to become one of America’s largest.

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ADVOCATING FOR IMPROVEMENTS The Women’s Trade Union League was formed in 1903. It had close ties, and overlapped involvement, with the settlement house movement. Settlement houses brought welleducated residents into the slums of industrial cities. The residents of these group homes engaged in a broad effort to improve the lives of poor people and develop a sense of community in overcrowded, rundown neighborhoods. By 1910, more than 400 settlement houses operated across the country. In 1903, most women working in factories were recent immigrants with few or no economic options; they served as sweatshop laborers. Only 3 percent of women workers belonged to a union. The number of women working outside the home grew steadily in the late nineteenth and early twentieth centuries. They numbered 2.6 million in 1880, 5.1 million by 1900, and 7.8 million in 1910. The WTUL sought the establishment of minimum wages and maximum hours. The League improved material conditions for women in the workplace, but it did not achieve equality. In 1950, the WTUL dissolved. See also: Unions.

Woolworth’s Company that grew from one store to many by selling large amounts of inexpensive, factory-made goods. The stores of the F.W. Woolworth Company came to be known as ﬁve-and-

dimes because the stores carried two lines of products. The items in one line sold exclusively for 5 cents each, while the items in the second line sold for 10 cents. “PLAYING STORE” Even as a child, Frank Woolworth (1852–1919) knew he wanted to be a merchant. The youngster’s favorite pastime on his parent’s farm in Rodman, New York, was “playing store.” After two terms’ worth of business college, Woolworth started clerking, unpaid, in a grocery store. He moved on to a paying position two years later and continued off and on as a shop clerk until 1878. In that year, Woolworth first heard of a store with a sales counter devoted exclusively to items priced at 5 cents each. He talked his employer into loaning him some money to start his own store in Utica, New York, but his ﬁrst attempt at a 5-cent store only lasted three months. Despite this setback, Woolworth wanted to try again in Lancaster, Pennsylvania, with an expanded line of goods. His employer, W.H. Moore, backed him again. Woolworth added a 10-cent line, and soon he was opening additional stores in other cities. By the time Frank Woolworth died in 1919, he was playing store at more than 1,000 locations in the United States and Canada. See also: Chain Stores.

FURTHERREADING Pitrone, Jean Maddern. F.W. Woolworth and the American Five and Dime. Jefferson, N.C.: McFarland & Company, Inc., 2003.

Viewpoints About

Industrialism Munn v. Illinois, 1877 This excerpt is part of a decision handed down by the United States Supreme Court. The Court had been asked to decide whether the Granger Laws were permitted under the United States Constitution. The Granger Laws were intended to help farmers secure for their crops fair and reasonable shipping and storage rates from railroad companies and warehouses. In Munn, the Court upheld the Granger Laws, which had been passed by the state of Illinois. The storage company in this case believed that the Granger Laws violated its constitutional right to conduct business. Try to follow the Court’s reason for disagreeing with the storage company.

“

MR. CHIEF JUSTICE WAITE delivered the opinion of the court. The question to be determined in this case is whether the general assembly of Illinois can, under the limitations upon the legislative power of the States imposed by the Constitution of the United States, ﬁx by law the maximum of charges for the storage of grain (in bulk) in warehouses at Chicago and other places in the State(.) It is claimed that such a law is repugnant–

3. To (the due process clause of) amendment 14 which ordains that no State shall “deprive any person of life, liberty, or property, without due process of law. . . .” We will consider the last of these objections ﬁrst. Every statute is presumed to be constitutional. The courts ought not to declare one to be unconstitutional, unless it is clearly so. If there is doubt, the expressed will of the legislature should be sustained. ...

1. To (the Commerce Clause) of the Constitution of the United States. . . ;

While (due process) is new in the Constitution of the United States, as a limitation upon the powers of the States, it is old as a principle of civilized

...

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(continued) government. It is found in Magna Charta, and (in most state) constitutions(.) ... When one becomes a member of society, he necessarily parts with some rights or privileges. . . . This (authorizes) laws requiring each citizen to so conduct himself, and so use his own property, as not unnecessarily to injure another. . . . From this source come the police powers, (under which) the government regulates the conduct of its citizens one towards another, and the manner in which each shall use his own property, when such regulation becomes necessary for the public good. In their exercise it has been customary in England from time immemorial, and in this country from its first colonization, to regulate ferries, common carriers, hackmen, bakers, millers, wharfingers, innkeepers, &c., and in so doing to fix a maximum of charge to be made for services rendered, accommodations furnished, and articles sold. . . . (W)e find that . . . (p)roperty does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. . . . He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control. ... . . . It remains only to ascertain whether the warehouses of these plaintiffs in error, and the business which is carried on there, come within the operation of this principle. For this purpose we accept as true (these) statements of fact. . . .

“(T)he great producing region of the West and North-west sends its grain by water and rail to Chicago. . . . The quantity (of grain) received in Chicago has made it the greatest grain market in the world. This business has created a demand for means by which the immense quantity of grain can be handled or stored, and these have been found in grain warehouses, which are commonly called elevators. . . . It has been found impossible to preserve each owner’s grain separate, and this has given rise to a system of inspection and grading, by which the grain of different owners is mixed, and receipts issued for the number of bushels. . . . This mode of conducting the business was inaugurated more than twenty years ago, and has grown to immense proportions. . . .” ... (I)t is difficult to see why, if the common carrier, or the miller, or the ferryman, or the innkeeper, or the wharfinger, or the baker, or the cartman, or the hackney-coachman, pursues a public employment and exercises “a sort of public office,” these plaintiffs in error do not. . . . Certainly, if any business can be clothed “with a public interest . . . ” this has been. . . . (The Court must decide if the legislature had the power to enact the legislation, not if the Court thinks the legislation is useful.) Of the propriety of legislative interference within the scope of legislative power, the legislature is the exclusive judge. ... (The plaintiffs argue they are entitled to reasonable compensation and

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... We come now to consider the effect upon this statute of the power of Congress to regulate commerce.

. . . The warehouses of these plaintiffs in error are situated and their business carried on exclusively within the limits of the State of Illinois. Their regulation is a thing of domestic concern, and, certainly, until Congress acts in reference to their inter-state relations, the State may exercise all the powers of government over them, even though in so doing it may indirectly operate upon commerce outside its immediate jurisdiction. . . . ... We conclude, therefore, that the statute in question is not repugnant to the Constitution of the United States, and that there is no error in the judgment. . . . Judgment afﬁrmed.

“

that this is an issue for the judiciary, not the legislature.) A person has no property, no vested interest, in any rule of the common law. . . . To limit the rate of charge for services rendered in a public employment, or for the use of property in which the public has an interest, is only changing a regulation which existed before. . . . We know that this is a power which may be abused; but that is no argument against its existence. For protection against abuses by legislatures the people must resort to the polls, not to the courts.

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Wabash, St. Louis & Pacific Railroad Company v. Illinois, 1886 In 1886, the question of whether or not the Granger Laws were permitted by the U.S. Constitution again came before the U.S. Supreme Court, as they had in 1870. However, the Wabash case had a different outcome than that of the earlier Munn case. In 1886, the Supreme Court decided that the Granger Laws were an unacceptable interference by a state government with the railroad’s right to conduct business across state lines.

“

This is a writ of error to the supreme court of Illinois. The ﬁrst count . . . charged that the Wabash, St. Louis & Paciﬁc Railway Company had (violated an Illinois state statute

through) unjust discrimination in its rates . . . for the transportation of freight. (The railroad company charged Elder & McKinney $39, a rate of 15 cents per hundred pounds, to transport 26,000 pounds of goods (continues)

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(continued) from Peoria, Illinois, to New York City. The same day, the railroad company agreed to charge Bailey & Swannell $65, a rate of 25 cents per hundred pounds, to transport goods from Gilman, Illinois, to New York City, a trip which is 86 miles [138 km] shorter along the same route.) (A) discrimination against Bailey & Swannell was made(.) (The statute says that if any railroad corporation charges an equal or greater amount to transport any passenger or freight than is charged to another to go a greater distance on the same road, it constitutes unjust discrimination and is prohibited.) (T)he defendant pleaded . . . that said act does not control . . . undertakings to transport freight from the state of Illinois to the state of New York, which (are) wholly controlled by the terms of the (Commerce Clause) of the constitution of the United States(.) ... (J)udgment (at trial was) rendered against the defendant, (who appealed.) ... (I)f each one of the states through whose territories these goods are transported can fix its own rules for prices, for modes of transit, for times and modes of delivery, (etc.) it is readily seen that the embarrassments upon interstate transportation, as an element of interstate commerce, might be too oppressive to be submitted to. “It was . . . to meet just such a case that the commerce clause of the constitution was adopted.” (T)he right of continuous transportation, from

one end of the country to the other, is essential, in modern times, to that freedom of commerce, from the restraints which the states might choose to impose upon it, that the commerce clause was intended to secure. This clause, giving to congress the power to regulate commerce among the states, and with foreign nations, . . . was among the most important of the subjects which prompted the formation of the constitution. And it would be a very feeble and almost useless provision, . . . if, at every stage of the transportation of goods and chattels through the country, the state within whose limits a part of this transportation must be done could impose regulations concerning the price, compensation, or taxation, or any other restrictive regulation interfering with and seriously embarrassing this commerce. ... We . . . hold that it is not, and never has been, the deliberate opinion of a majority of this court that a statute of a state which attempts to regulate the fares and charges by railroad companies within its limits, for a transportation which constitutes a part of commerce among the states, is a valid law. (I)n the present case, the owner of corn, the principal product of the country, desiring to transport it from Peoria, in Illinois, to New York, finds a railroad company willing to do this (for) 15 cents per hundred pounds for a car-load, but (must pay) 25 cents per hundred pounds, because the railroad company has received from a person residing at Gilman 25 cents per hundred pounds for the transpor-

Industrialism

at all, of a general and national character, and cannot be safely and wisely remitted to local rules and local regulations, we think is clear(.) And if it be a regulation of commerce, as we think we have demonstrated it is, . . . it must be of that national character; and the regulation can only appropriately exist by general rules and principles, which demand that it should be done by the congress of the United States under the commerce clause of the constitution. The judgment of the supreme court of Illinois is therefore reversed(.)

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tation of a car-load of the same class of freight over the same line of road from Gilman to New York. This is the result of the statute of Illinois(.) The effect of it is that whatever may be the rate of transportation per mile charged by the railroad company from Gilman to Sheldon, a distance of 23 miles (37 km), in which the loading and the unloading of the freight is the largest expense incurred by the railroad company, the same rate per mile must be charged from Peoria to the city of New York. ... . . . That this species of regulation is one which must be, if established

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From California as I Saw It, 1849–1900, David L. Phillips In 1876, David L. Phillips took his ill son to California in hopes that the better climate would improve his son’s health. The older Phillips then wrote about his experiences in California. In this excerpt, he discusses the impact of railroads on California, and he defends the railroads by discussing the wealth they have created in California. The railroads, built in the late 1800s, connected California and the West with the rest of the nation back East.

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WHAT CALIFORNIA RAILROADS HAVE DONE

But, turning away from the plunderings and rascally rogueries of the “corral of wild cattle” that gathers biennially at Sacramento, what have Leland Stanford and his associates done for this State of California? Let us

see: In 1862, the people here had no railroads. Plundering mail contractors and stage companies held the carrying trade and passenger business of California, and, as between the Pacific Coast and the Middle and Atlantic States, communications were had overland once in about two (continues)

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(continued)

and by the Paciﬁc Mail Steamship Company, via Panama, in about the same time. The cost of transit from New York to San Francisco was about $300, and the same by stage-coach overland. California was, agriculturally, and in all else except the mines, as poor As poverty. To-day, the cost by sea or overland from New York to San Francisco, excluding board, is $140—time, overland, six days; and, as a result, almost all the trade between China, Japan and the islands of the Pacific Ocean, is now gathering at the docks of San Francisco, and will, in a great measure, pass overland to Chicago and New York, and at reduced rates of freight as well as time. [Phillips next describes the effects on California of 500 miles (805 km) of new rail lines.] Lying along this line of railway which has not cost the State one dollar, there is on each side a body of land 9 miles [14 km] wide, which would be equal to 9,000 square miles [14,484 km2], or 5,760,000 acres. This land, before the road was built, was worth, on the average, $1.25 per acre, but no man will hesitate now to tell you that its average value is $8 per acre. The net increased value, therefore, contributed directly to the wealth of the State, by the railroad company, is $6.75 per acre, or a sum equal to $48,888,000. To this sum may be fairly added the products, either present or prospective, of onehalf the 5,760,000 acres of land thus directly affected . . . The increased value of the land has been realized already, if not ex-

ceeded, and the productive capabilities of the country opened up are fully equal to the figures given . . . Nor does it stop here. It will continue to build roads until it shall have penetrated every accessible portion of the State, thus opening up highways for the products of the people to markets, in all directions. (Next, Phillips uses sarcasm to argue against criticisms that Governor Leland Stanford and other political and business leaders have acted only from self-interest.) The question comes up, what are the crimes of this corporation, about which there is so much noise? I answer, they are two: First, the men who have poured untold millions of dollars into the various lines of these roads want reasonable passenger and freight rates for persons and property transported, of which they claim to be the judges—or, in other words, while they are conferring benefits they want some profits. Second, that Stanford and his associates have grown rich. As to the first, the rates charged for passengers is about four cents per mile, on the average. For freights, the local charges are a shade higher than in Illinois, but not in disproportion to the general charges for other things in California. As to the second, I don’t think that any decent, reasonable man in the United States will say that Stanford and his associates have made any more than they should. No one charges them with being dishonest. They are only charged with exacting exorbitant freight and passenger rates from the patrons of the road. People in California pay Wells, Fargo Co. and the Coast Line

Industrialism

members of the General Assembly. In my judgment, Gov. Stanford and his associates have added in ﬁfteen years $300,000,000 to the permanent wealth of California, and have done already, and will do in the future, more for its permanent wealth and prosperity than all the pseudoreformers who have been or ever will be

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Wells, Fargo Co. and the Coast Line Stage Company never less than ten, and often twenty cents per mile, for passage in their stages, and I hear no complaints. They pay those rates cheerfully. But when the Central Paciﬁc Railroad Company charges four or ﬁve cents a mile on their cars, there is a general outcry among demagogues, politicians and rapacious

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An Interview With Thomas Edison, 1870s In this New York Times interview from the 1870s, Thomas Edison describes his plans for distributing electricity, which contributed greatly to the nation’s industrial growth. The reporter mentions rumors he has heard about the materials required for electrical transmission.

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EDISON’S ELECTRIC LIGHT: CONFLICTING STATEMENTS AS TO ITS UTILITY

There was no lack of enthusiasm or of confidence about Mr. Edison as he greeted the Times reporter who entered his laboratory at Menlo Park, N. J., yesterday. The inventor, a short, thickset man, with grimy hands, led the way through his workshop, and willingly explained the distinctive features of what he and many others look upon as an apparatus which will soon cause gas-light to be a thing of the past.

The ﬁrst place visited was the room in which the furnace for car-

bonizing the paper is situated . . . When the ﬁlaments were taken from the mold they resembled pieces of black thread. The particles hung tenaciously together, however, and the black horse-shoe was easily placed in the platinum clamps of the globe of the lamp. The exhausting of the air takes place after the carbon is put in position, and when this is done the lamp is complete. “As there is no oxygen to burn,” said Mr. Edison, “you can readily see that this piece of carbon will last an ordinary life-time. It has the property of resisting the heat of the current of electricity, while at the same time it becomes incandescent, and gives out one of the most brilliant lights which the world has ever seen. The cost of preparing one of these little (continues)

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(continued) horse-shoes of carbon is about 1 cent, and the entire lamp will cost not more than 25 cents.” Here the inventor gave a practical illustration of his invention. He was standing just under an ordinary gas chandelier in which two of his lamps were burning. He took one of the lamps out, and it appeared simply as a glass globe. He placed it back in the burner, and immediately a brilliant horse-shoe of golden light illuminated the globe. Mr. Edison then, by turning a screw in the lamp, brought the light down to a spark, turned it off completely, as gas can be turned off, and turned it on again to a brilliant incandescence by a twist of his fingers. He certainly demonstrated that in his own laboratory at Menlo Park, the electric light is as obedient to his will as the gas light is to the general public. The light from each lamp is of about the power of an ordinary gas-jet, but Mr. Edison claims that by increasing the electricity, he can raise the power to 15 gas-jets. Eighty-four lights are burning night and day in the laboratory, and they are all supplied with electricity by an 80-horse-power engine, which is stationed in the basement of one of the buildings. This engine, in addition to feeding these lamps, furnishes the motive power for all the machines in the laboratory, and at night feeds the electric lights which have already been erected in Menlo Park, in anticipation of the proposed grand illumination. The wires which are to convey the electricity to the lamps for the grand display are to be above ground, so that all spectators can see and investigate them. They will lead directly from the lamps to the

generator in the laboratory, and any person can trace them from point to point. Mr. Edison said: “The size and amount of conductors for carrying electricity for lighting purposes depends, of course, upon the distance to which the electricity is to be carried. If I have to carry it 10 miles [16 km] my conductor must be larger than it must be if I have to carry it 10 feet [3 m]. My idea is to have central stations to cover, say a square of three or four blocks. The pipes containing the wires on a street, if this idea is carried out, will not exceed in size the circumference of your arm. They will be laid under the flag-stones just at the edge of the sidewalk, as gas-pipes are now laid.” “What will be the cost of these conductors,” asked the reporter. “The cost, compared to gas-pipes, will be very small, and there is very little chance of their getting out of order. The wire itself, which will convey the electricity, will be an ordinary No. 9 telegraph wire, the same wire that you see in use every day by the Western Union Company. That is as near the size of a barrel as I intend to get.” “How will the light be distributed?” “Precisely as gas is now distributed. You see that I can turn that burner off entirely if I wish to; I can lower it or I can raise it, just as you can lower or raise a gas jet. Our electricity will go from our central stations just as gas flows from the meter. Whether the company will charge for the light according to the amount of electricity which each consumer uses, or whether so

Industrialism

paper is the only substance which is capable of becoming thoroughly incandescent, and at the same time of offering to the current of electricity sufficient resistance to prevent it from melting away. The vacuum in the globe, of course, offers no oxygen of any consequence to burn; but the intense heat generated by the electricity would destroy any other substance than this carbonized paper. There is absolutely nothing there to fuse. It is carbon, pure and simple, and no machine known to this age can generate enough electricity to destroy it.” (The reporter then asks if any other “electricians” have come to visit Edison in his lab.) “No electricians have been here yet, nor are there likely to be any here. Electricians are a very scarce article in this country, although there are many persons here who call themselves electricians. They don’t come here, because they know that if they do they will be convinced that my light is at last a perfect one. I am glad they don’t come. Practical men, with experience, and what I call ‘horse sense,’ are the best judges of this light, and they are the men whom I like to welcome to my laboratory.”

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much a month will be charged to each consumer I cannot say. That is a question which the company will determine when the electric light is introduced.” “Do you intend to illuminate Menlo Park on New Year’s Eve?” (the reporter next asked Edison). “Not for the public as soon as that. Menlo Park is now illuminated every night to a certain extent. All the lamps that we have on hand are lighted nightly, but we cannot give the grand display that I intend to give until we have more lamps. You can say this, however, that the electric light is perfected, and that all the problems which have been puzzling me for the last 18 months have been solved. I expect to have every house here lighted, and a number of streetlamps going within 10 days. When I once get the light started, I shall keep them burning night and day for at least two weeks, in order to make a time test of my carbon. I believe that it is practically infusible, and I have confirmed my belief by experiments here in my laboratory for several weeks, but I want the public to believe it from their own knowledge, and the only way to make the public believe it is to show it to them. I think that my carbonized

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Glossary of Key Terms abolitionist A person who believed in ending slavery and the worldwide slave trade prior to the Civil War (1861–1865). aeronautics The study of aircraft design and ﬂight. agrarian Related to agriculture and farming; agrarian society is one in which the majority of people farm, and agriculture is a primary economic activity. appeal A proceeding undertaken by the unsuccessful party in a legal action to have the decision reviewed and reconsidered by a higher legal authority. arbitration Process in which a third party is used to settle a strike or a dispute between workers and management. barter A type of trade in which goods, services, or both are exchanged directly for other goods or services, without the use of money. boycott To abstain from using or buying (a good or service) as an expression of protest. capital Wealth, such as paper money, used to begin or grow a business enterprise such as a corporation. capitalism An economic system in which wealth, and the means of producing wealth, such as industry, are owned by private individuals rather than by a governmental entity or the people collectively. capitalist economy An economic system based on free enterprise,

in which individuals or businesses, rather than the government, own the means of productions—land, labor, and capital. coke Carbonized coal, baked to burn off the impurities and used as a fuel in the production of iron and steel because of its high heat and minimal smoke. communist One who follows the political theories of communism and believes that all means of production—land-labor, and capital— should be owned jointly by the people. collateral Property used to secure a loan, which means the creditor may take the collateral if the borrower does not pay back the loan. collective bargaining Process whereby workers organize and negotiate with management as a group. company town Community established by an employer for the employees. constituency The body of voters of a district represented by an elected ofﬁcial. depression A period of deep economic slowdown characterized by high unemployment, business closures, and an unwillingness of banks to issue credit. dividend Money paid to stockholders based on the number of shares owned when a corporation has surplus proﬁt not reinvested in the business. economy of scale The lowering of the price of a product due to an

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increase in the output of the product. entrepreneur Someone who sets up new businesses to make a proﬁt. ﬁlament A thin, often coiled, piece of carbonized paper, later replaced by tungsten metal, which converts electrical current into light inside an incandescent light bulb. fossil fuel A natural resource, of which only a limited quantity exists, created over millions of years from decayed plant and animal matter and which when consumed provides energy. ghetto An area, usually restricted by discrimination or economic pressure, where people of the same race, religion, or ethnic group live. gross domestic product The total market value of all goods and services produced by residents of a country or other region during a speciﬁc period. ideology A systematic group of theories and concepts by which an individual attempts to understand, explain, and perhaps change society. immigrants People who move away from their country of origin and settle in a different country. immigration Process of entering a country to take up residence. industrial Of or having to do with businesses and manufacturing. industrial age (or period) The period of social and economic change during which the United States moved from an economy based on farming and craft methods of production, to a more spe-

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cialized and centralized society in which farming has become one industry among many. Most goods were produced in high volumes in a standardized fashion, usually in factories set up in highly developed cities. infrastructure Constructed elements, such as roads, bridges, ﬁber-optic cable, electricgenerating plants and transmission lines, and water and sewer lines—all of which serve vital functions to large numbers of people and may be either publicly or privately owned. injunction A court order prohibiting a party from a speciﬁc action. interlocking directorates A situation in which two boards of directors (of companies) share at least one director in common; illegal if the two companies are competitors. judicial review The power of the courts to review the actions of the executive and legislative branches and to invalidate them if they are unconstitutional. legislation A potential law, also called a bill, to be voted on by Congress or by a state or local assembly. liable (liability) Having responsibility for harm or injury done to another person; usually involves giving money or other compensation to the other person because of their loss. limited liability Situation in which an owner’s responsibility for a company’s debts are limited to the size of the owner’s investment in the ﬁrm; applies to common shareholders and limited partners in a limited partnership.

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lobbyist A person professionally employed to convince public ofﬁcials to take a particular position on an issue or vote a particular way on legislation. local (union local) A branch or chapter of a union, with its own president and other ofﬁcers, which may include one or more workplaces but is usually limited to a given town and industry. lynching An act of mob violence usually directed at a person or small group of people to intimidate them or as punishment for a supposed crime outside of the proper justice system. Marshall Plan Condition under which money was loaned and given to Western Europe to rebuild after World War II (1939–1945). mass production The use of machines, steam or electric power, and an assembly line system of simpliﬁed tasks, in a specialized factory setting. Mass production produces large quantities of a particular product, each of which is standardized to the others and essentially interchangeable with them. migration The movement of people from one country to another, or the movement of a group of people from one region of a country to another within the same country. monopoly Situation in which a single entity controls an entire market. nationalization An action by a government to take over an industry from private owners. nativism A policy of favoring native inhabitants and asserting na-

tive culture and interests over those of immigrants. nonpartisan Not favoring one political party or another. ore A mineral that contains valuable metal and that can be mined and processed to extract the metal. patent The exclusive right to make, use, or sell an invention for a speciﬁed period, granted by the federal government to an inventor if the device or process is new, useful, and not obvious. pension A retirement plan that provides a portion of the former salary and sometimes continues beneﬁts such as insurance for the remaining lifetime of a long-term employee who has ﬁnished working. philanthropists Individuals, often wealthy, who provide private wealth money and other resources to support humanitarian causes. picket line A method of protest used by striking workers, not usually intended to block entrance to an employer’s property, but to demonstrate that—by crossing the picket line to enter a factory or ofﬁce—a person indicates her or his lack of support for the workers’ demands. pogrom An organized persecution or massacre of a minority group, usually an attack that is sanctioned or ordered by the government; from the Russian word for “devastation.” political machine An organization, particularly associated with American cities of the nineteenth century, dedicated to the building of local inﬂuence through the ac-

Industrialism

cumulation of money and owed favors, and generally associated with corruption and favoritism in politics. populism A political movement of the nineteenth century that advocated for farmers, distrusted industrialization, and advocated for the federal government to issue paper money backed by silver rather than rely solely on the gold standard. Progressive movement Organized effort begun in the early 1900s to correct abuses and injustices in United States life, to restore greater equality of economic opportunity, and to return government control to the people. progressives Members of an early twentieth century political movement who sought better working conditions in factories and protection of the rights of the poor, while remaining opposed to the socialistic and anarchistic ideologies of the day. purge The removal of people who have come to be considered undesirable from an organization. racism The belief that one race is superior to other races. recession A decline in the total money value of the goods and services produced by a nation’s population for an extended period of time, usually half a year or more. Reconstruction The period immediately after the Civil War (1861–1865), in which the North and South worked to become one country again; marked by the presence of federal troops in the former Confederate states until 1877.

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reformist Referring to a policy or instance that calls for change or improvement of a situation or condition. right-to-work laws Laws that prohibit, in some states only, agreements betweens unions and employers making union membership or payment of union dues a condition of employment. scabs People hired to replace striking workers. socialism A group of political theories favoring collective or governmental ownership of industry and manufacturing, with the goal of creating a more equal distribution of society’s wealth among its members. socialist An advocate of collective or governmental ownership of the resources and means of industrial production. sole proprietorship A business owned by one person. solidarity The idea that workers act in support of the struggles of other workers, such as by refusing to cross a picket line. speculation The act of taking large risks, especially buying land or other ﬁnancial opportunities, in the hopes of making ﬁnancial gains in the future. strike An organized stop or slowdown of work by a company’s employees intended to convince the employer to meet the employees’ demands. strikebreaking The act of crossing a union picket line during a strike in order to work. subsidy Money paid by the government to a business or farm to help

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it become established or proﬁtable or to keep it from failing. suffrage The right to vote. supremacists Individuals who believe that they and their own racial, ethnic, national, or religious group are better than any other group. sweatshop A workplace that does not adhere to fair labor practices and that forces its employees to work long hours for minimal pay, without regard for their human rights. tariffs Taxes placed on goods imported from other countries. telecommunications Electronic devices (such as telephones, cellular phones, Internet, or fax) that allow people to interact across distances. telegraph A communications system that transmits and receives simple electric impulses, especially one in which the stations are directly connected by wires. temperance A viewpoint advocating that people should not drink alcohol and emphasizing the dangers of excessive consumption of alcohol. Temperance was inﬂuential in establishing Prohibition (1920–1933), a constitutional ban on the manufacture, sale, and transportation of alcoholic beverages, which was overturned when it became unenforceable. tenement A building for human habitation that is, in general, rundown and whose facilities and maintenance barely meet minimum living standards. trade unions An organization of workers that represents the personnel of several ﬁrms from the same industry; also called industrial unions.

transcontinental Crossing a continent, as in traveling by rail from the East Coast of the United States to the West Coast. trust unanimous United in agreement, as in an unanimous vote or other choice made by a group. urbanization The movement of a country’s population from mostly rural farms and small towns to cities. Urbanization often results from the growth of manufacturing industries and the availability of factory jobs in cities. vertical integration Business situation in which the same entity owns multiple parts of the chain of product distribution, as in owning the manufacturer, shipping company, and distributor of a widely needed good; for example, lamp oil in the years before the electric lightbulb. welfare capitalism The practice of businesses providing extensive, nonmonetary beneﬁts to employees, such as housing, health care, and pensions. white ﬂight The departure of white families, in the years following World War II (1939–1945), from central city neighborhoods to newly developed suburbs, usually from neighborhoods undergoing racial integration or beginning school desegregation as the civil rights of African Americans began to receive long-delayed recognition. yellow-dog contracts Agreements between employers and employees in which the employees agree not to be members of a labor union.

Selected Bibliography Alger, Horatio. Ragged Dick. New York: W.W. Norton, 2007. Altman, Linda Jacobs. The California Gold Rush in American History. Berkeley Heights, N.J.: Enslow, 1997. Atack, Jeremy, Peter Passell, and Susan Lee. A New Economic View of American History: From Colonial Times to 1940. New York: W.W. Norton, 1994. Baum, Lawrence. The Supreme Court. Washington, D.C.: CQ Press, 2006. Beyer, Janet, and Joanne B. Weisman, eds. The Great Depression: A Nation in Distress. Auburndale, Mass.: History Compass LLC, 1996. Bolwing Green State University. “John D. and Standard Oil.” Available online. URL: http://www.bgsu.edu/ departments/acs/1890s/rockefeller/ bio2.htm Brands, H.W. Masters of Enterprise: Giants of American Business from John Jacob Astor and J.P. Morgan to Bill Gates and Oprah Winfrey. New York: The Free Press, 1999. Brexel, Bernadette. Knights of Labor and the Haymarket Riot: The Fight for an Eight-Hour Workday. New York: The Rosen Publishing Group, Inc., 2003. Brownstone, David M., Irene M. Franck, and Douglass L. Brownstone. Island of Hope, Island of Tears. New York: Rawson, Wade Publishers Inc., 1979. Byman, Jeremy. J.P. Morgan: Banker to a Growing Nation. Greensboro, N.C.: Morgan Reynolds, 2001. Cashman, Sean Dennis. America in the Age of the Titans: The Progressive Era and World War I. New York: New York University Press, 1988. Collins, David R. Pioneer Plowmaker: A Story About John Deere. Lakeville, Minn.: Hobar Publications, 1990.

Cowan, Ruth Schwartz. A Social History of American Technology. New York: Oxford University Press, 1997. Eagleton, Catherine, Jonathan Williams, Joe Cribb, and Elizabeth Errington. Money: A History. Tonawanda, N.Y.: Fireﬂy Books, 2007. Eltzbacher, Paul. The Great Anarchists: Ideas and Teachings of Seven Major Thinkers. Mineola, Minn.: Dover Publications, 2004. Farrell, James J. One Nation Under Goods: Malls and the Seductions of American Shopping. Washington, D.C.: Smithsonian Books, 2003. Freese, Barbara. Coal: A Human History. Cambridge, Mass.: Perseus Publishing, 2003. Geisst, Charles. The Encyclopedia of American Business History. New York: Facts On File, Inc., 2006. Gordon, John Steele. Empire of Wealth: The Epic History of American Economic Power. New York: Harper Perennial, 2005. Green, Carl R., and William R. Sanford. American Tycoons. Berkeley Heights, N.J.: Enslow, 1999. Hine, Darlene Clark, Stanley Harold, and William C. Hine. African Americans: A Concise History. 3rd ed. Upper Saddle River, N.J.: Prentice Hall, 2008. Horatio Alger. “The Horatio Alger Historical Society.” Available online. URL: http://www.thehoratioalgersociety. org/ Jackson, Byron. Encyclopedia of American Public Policy. Santa Barbara, Calif.: ABC-CLIO, Inc., 1997. John Deere History. Available online. URL: http://www.deere.com/en_US/ compinfo/history/index.html Kaplan, Edward S. The Bank of the United States and the American Economy.

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Westport, Conn.: Greenwood Press, 1999. Kent, Zachary. Andrew Carnegie: Steel King and Friend to Libraries. Berkeley Heights, N.J.: Enslow, 1999. King, David C. The Age of Technology: Nineteenth Century American Inventors. Auburndale, Mass.: History Compass LLC, 2001. Laughlin, Rosemary. John D. Rockefeller, Oil Baron and Philanthropist. Greensboro, N.C.: Morgan Reynolds, 2004. Laughlin, Rosemary. The Pullman Strike of 1894. Greensboro, N.C.: Morgan Reynolds, 2006. Laxer, James. Oil. Toronto: Groundwood Books, 2008. Lemelson Center Invention Features: Lewis Latimer. Available online. URL: http://invention.smithsonian.org/ centerpieces/ilives/latimer/latimer. html. Levinson, Jeff, ed. Mill Girls of Lowell. Auburndale, Mass.: History Compass LLC, 2007. Lieurance, Suzanne. Triangle Shirtwaist Fire and Sweatshop Reform in American History. Berkeley Heights, N.J.: Enslow, 2003. Logan, Michale. Coal. Farmington Hills, Mich.: Greenhaven Press, 2007. Lommel, Cookie. Madame C.J. Walker, Entrepreneur. Los Angeles: Holloway House Publishing Co., 1993. Long, Priscilla. Where the Sun Never Shines: A History of America’s Bloody Coal Industry. New York: Paragon House, 1989. Madsen, Axel. The Marshall Fields: The Evolution of an American Business Dynasty. Hoboken, N.J.: John Wiley and Sons, 2002. Mandle, Jay R. Not Slave, Not Free: The African American Economic Experience Since the Civil War. Durham, N.C.: Duke University Press, 1992. Meltzer, Milton. Bread and Roses: The Struggle of American Labor 1865– 1915. Miami, Fla.: Replica Books, 2001.

Misa, Thomas J. A Nation of Steel: The Making of Modern America. Baltimore: The Johns Hopkins University Press, 2004. Mofford, Juliet H. Talkin’ Union: The American Labor Movement. Auburndale, Mass.: History Compass LLC, 1997. Neyland, James. Phillip Randolph: Labor Leader. Los Angeles: Holloway House Publishing Co., 1994. Pitrone, Jean Maddern. F.W. Woolworth and the American Five and Dime. Jefferson, N.C.: McFarland & Company, Inc., 2003. Railroad History Museum. Available online. URL: http://cprr.org/Museum/ index.html Rau, Meachen. Andrew Carnegie: Captain of Industry. Mankato, Minn.: Compass Point Books, 2006. Schaefer, Lola M. Henry Ford. Minneapolis, Minn.: Coughlan Publishing, 2000. Schanzer, Rosalyn. Gold Fever!: Tales from the California Gold Rush. Washington, D.C.: National Geographic Children’s Books, 2007. Simonds, Patricia. The Founding of the AFL and the Rise of Organized Labor. Englewood Cliffs, N.J.: Silver Burdett Press, 1991. Skurzynski, Gloria. Sweat and Blood: A History of U.S. Labor Unions. Minneapolis, Minn.: Twenty-first Century Books, 2008. Spangler, James R., and James A. Toman. Cleveland and Its Streetcars. Mount Pleasant, S.C.: Arcadia Publishing, 2005. Stephens, Carlene E. On Time: How America Has Learned to Live Life by the Clock. New York: Bulfinch, 2002. Sutcliffe, Jane. John Deere. Minneapolis, Minn.: Lerner, 2006. The American Experience. “The Telephone.” Available online. URL: http://www.pbs.org/wgbh/amex/ telephone/peopleevents/mabell.html

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United States Steel Corporation. Available online. URL: http://www.ussteel. com/corp/company/profile/about. asp Wagner, Vigi, ed. Labor Unions. Farmington Hills, Mich.: Greenhaven Press, 2007. Warner, Sam Bass. Streetcar Suburbs: The Process of Growth in Boston, 1870–1900. Cambridge, Mass.: Harvard University Press, 2004. Weightman, Gavin. The Industrial Revolutionaries: The Marking of the Modern World 1776–1914. Jackson, Tenn.: Grove Press, 2009.

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Wells, Donald. The Federal Reserve System: A History. Jefferson, N.C.: McFarland & Company, Inc., 2004. Whitaker, Jan. Service and Style: How the American Department Store Fashioned the Middle Class. New York: St. Martin’s Press, 2006. Yamasaki, Mitch, ed. Movin’ On: The Great Migration. Auburndale, Mass.: History Compass LLC, 1998. Yates, Michael D. Why Unions Matter. New York: Monthly Review Press, 1998.

Index Page numbers in boldface indicate topics covered in depth in the A to Z section of the book.

A Adams, John Quincy, 67 African Americans, 10–13, 17, 40, 94 agriculture, 3–4 airplanes, 73, 81–82 Alger, Horatio, 13–14 Allen, William F., 89 Altgeld, John, 78 American Federation of Labor (AFL), 6, 14–18, 94–95. See also Congress of Industrial Organizations (CIO); unions American Railway Union (ARU), 18–19, 75–78 Amtrak, 82 anarchists, 19–20 anthracite, 35 appliances, household, 4, 50 assembly line, 2–3, 5–6, 52–54 automobiles about, 2–3 and gasoline, 72–73 and Henry Ford, 52–54 and railroads, 81–82 and steel, 85–86 and streetcar dismantlement, 47 and suburban growth, 34

B Baer, George F., 38 Bank of the United States, 20–21, 57 banks and banking, 20–23, 57–58 Batchelor, Charles, 49 batteries, 47–48 Bell, Alexander Graham, 11, 23–24, 65 Bell Telephone Company, 23–24 Bessemer rails, 84 bituminous coal, 35

blacklisting, 62 Brushaber v. Union Paciﬁc Railroad Co., 88 business, organization of, 26–27 business cycles, 24–25

C canals, 56, 78–79 capitalism. See free enterprise Carnegie, Andrew, 28–30, 42, 65, 84 cars. See automobiles chain stores, 4, 30–32, 50–52, 98–99 Chinese Exclusion Act, 63 Chrysler Group, LLC, 40 cities, growth of, 4, 32–34 Clark, E. E., 38 Cleveland, Grover, 77, 78 coal, 34–39 communism, 16, 19–20, 40, 58, 64 Congress of Industrial Organizations (CIO), 15–16, 39–41. See also American Federation of Labor (AFL); unions Conrail, 82 corporations, 4–5, 26–27, 41–44, 86–87

D Dartmouth College v. Woodward, 42, 86–87 De Leon, Daniel, 95 Debs, Eugene V., 18, 77–78, 81, 95 Deere, John, 44–46 department stores, 4, 31–32, 50–52, 98–99 Dowd, Charles, 89 Drake, Edwin L., 71 Drew, Daniel, 79, 90 Dupont Corporation, 43

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E economy, cycles of, 24–25 economy, transformation of, 6–8 Edison, Thomas, 48–49 Edison Pioneers, 11 electric streetcars, 33–34, 46–47 electricity, 2–3, 46, 47–50, 56 elevators, 33, 84 Ellis Island, 66 Emergency Quota Act, 64 Exodusters Movement, 10 Exxon Corporation, 43–44

F Faraday, Michael, 48 Federal Reserve, 22, 57–59, 71 Federation of Organized Trades and Labor Unions, 19 Field, Marshall, 50–52 Fisk, Jim, 79, 90 Ford, Henry, 2, 52–54, 73 Ford Motor Company, 40, 52–54 Fordism, 52–53 Franklin, Benjamin, 47 free enterprise, 54–59. See also laissez-faire Frigidaire, 50

G Gadsden Purchase, 78–79 gasoline. See oil gauge, standard, 80 General Electric, 5, 43 General Motors, 39, 54 Gentlemen’s Agreement, 64 Gilded Age, 58–60 gold rush, 68 gold standard, 22, 59–60, 69 Gompers, Samuel, 14–16, 65, 94–95

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Gould, Jay, 79, 90 Gowen, Franklin B., 37 Granger Movement, 81 Great Northern Railway Strike, 18 Great Upheaval, 61–63 gross domestic product, 24–25

H Hamilton, Alexander, 20 Haymarket Square Riot, 6, 19, 61–63, 94 Haywood, William, 95 Higgins, Patillo, 72 Holley, Alexander, 84 Homestead Act, 64–65 Homestead Strike, 29 hydroelectric power, 49

I immigration, 12, 17, 19–20, 63–66 Industrial Workers of the World (IWW), 16, 69, 95 internal combustion engine, 46 Interstate Commerce Act, 27, 81 ironworking, 36, 68–69, 83–84

J Jackson, Andrew, 21, 57 J.C. Penney, 30 John Deere Company, 44–46 Johnson, Paul, 52 Johnson-Reed Act, 64 Jones, Frederick McKinley, 13 Judah, Theodore D., 74 Julian, Percy, 13

K

limited liability, 26–27, 42, 87 Loewe v. Lawler, 87–88 Lucas, Anthony F., 72

M Macy’s, 52 Marshall, John, 42, 86 Marshall Field and Company, 50–52 Matzeliger, Jan, 13 McClure, 72 McCormick Harvester Company, 61–63 Meaney, George, 41 Metalworkers Union, 61 migration, 10–12 mining, 68–69 Mitchell, John, 38, 64, 95 Molly Maguires, 37 monopolies. See trusts Montgomery Ward, 30 Moore, W. H., 98 Morgan, John Pierpont about, 69–71 Carnegie Steel, purchase of, 28–29 and coal mines, 37, 38 and Panic of 1907, 22, 57 railroad trusts of, 27, 90 motorcycles, 73 Muller v. Oregon, 88 Munn v. Illinois, 81, 88 Murray, Philip, 40–41

N National Labor Relations Board (NLRB), 41 Newton, Isaac, 48 Northern Securities Company, 27, 93

O

Knights of Labor, 15, 16, 61, 94

Obama, Barack, 58 oil, 71–74, 92 Olds, Ransom E., 72

L

P

laissez-faire, 66–68. See also free enterprise Latimer, Lewis, 11 Lewis, John L., 39–40 lightbulbs, 11, 48–49, 84

Paciﬁc Railway Act, 74–75 Panic of 1837, 22, 25, 56 Panic of 1873, 80 Panic of 1893, 70, 77, 80 Panic of 1907, 22, 25, 69–70

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patents, 23, 43 plows, 2, 44–45 Powderly, Terence V., 94 precious metals, 68 price-ﬁxing, 81 Progressive movement, 6, 38–39, 43, 58–59, 97 Pullman, George, 75 Pullman Strike, 18, 75–78, 81

R racism. See African Americans Radio Corporation of America (RCA), 65 railroads about, 78–82 Bessemer rails, 84 and Cornelius Vanderbilt, 95–97 and free enterprise, 56–57 and the gold rush, 68 and immigration, 64 Paciﬁc Railway Act, 74–75 Pullman Strike, 18, 75–78, 81 steel rail lines, 2 and Supreme Court, 81, 88 and trusts, 90 Reconstruction, 10–13 retail stores, 4, 30–32, 50–52, 98–99 Reuther, Walter, 41 Rice, George, 72 riots. See strikes robber barons, 71, 79, 97 Rockefeller, John D., 51, 71–72, 82–83, 92 Roosevelt, Theodore reforms of, 58 and trusts, 27, 87, 93 and unions, 38–39, 69, 95

S Sacco, Nicola, 19–20 Santa Clara County v. Southern Paciﬁc Railroad, 27 Sarnoff, David, 65 Scattergood, Ezra F., 49 Sears, Richard Warren, 30 Sears, Roebuck Company, 30–31 shareholders. See corporations

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Sherman Antitrust Act, 18, 27, 43, 72, 87, 92–93 skyscrapers, 2, 84–85 Sloane, Alfred P., 54 Smith, Adam, 67 socialism, 16, 19–20, 40, 58, 64 Spies, August, 61–62 Sprague, Frank, 46 Standard Oil breakup of, 43–44, 72, 92 business tactics of, 82–83 growth of, 71, 92 Standard Oil v. U.S., 87, 93–94 Standard Oil v. U.S., 87, 93–94 Stanford, Leland, 75 steam engine, 3 steel, 2, 36–37, 44–46, 83–86 Steel Workers’ Organizing Committee (SWOC), 39–40 streetcars, 33–34, 46–47 strikes Coal Strike, 38 of the Congress of Industrial Organizations (CIO), 39–40 Great Northern Railway Strike, 18 Haymarket Square, 6, 19, 61–63, 94 Homestead Strike, 29 Pullman Strike, 18, 75–78, 81 railroad, 81 and unskilled labor, 16–17 suburbs, development of, 33–34 sugar reﬁning, 92 Sullivan, Louis, 85 Supreme Court about, 86–88 and corporations, 27, 42 and railroads, 81, 88 and unions, 17, 86, 87–88 Supreme Court cases Brushaber v. Union Paciﬁc Railroad Co., 88 Dartmouth College v. Woodward, 42, 86–87 Loewe v. Lawler, 87–88 Muller v. Oregon, 88 Munn v. Illinois, 81, 88 Santa Clara County v. Southern Paciﬁc Railroad, 27

Standard Oil v. U.S., 87, 93–94 Wabash, St. Louis & Paciﬁc Railroad Co. v. Illinois, 81, 88

T Taft, William H., 58, 93 Taft-Hartley Act, 41 Tarbell, Ida, 72 Taylor, Frederick W., 85 telephones, 23–24, 84 tenements, 33, 60 Tesla, Nikola, 49 Textile Workers Organizing Committee, 40 Thayer, Webster, 19 Thomas, David, 36 Timber and Stone Act, 65 time zones, 80, 89–90, 91 trains. See railroads transportation. See automobiles; electric streetcar; railroads trolleys. See electric streetcar trusts, 27, 43–44, 87, 90–94 Twain, Mark, 59

U unions. See also American Federation of Labor (AFL); Congress of Industrial Organizations (CIO) about, 5–6, 94–95 American Federation of Labor (AFL), 14–18, 94–95 American Railway Union (ARU), 18–19, 75–78 Congress of Industrial Organizations (CIO), 15–16, 39–41 Federation of Organized Trades and Labor Unions, 19 Industrial Workers of the World (IWW), 16, 69, 95 Knights of Labor, 15, 16, 61, 94 Metalworkers Union, 61 Steel Workers’ Organizing Committee (SWOC), 39–40

Supreme Court and, 17, 86, 87–88 Textile Workers Organizing Committee, 40 United Auto Workers (UAW), 39–40 United Mine Workers (UMW), 6, 37–38, 39, 64, 69, 95 United Steel Workers of America, 39–41 Women’s Trade Union League, 97–98 United Auto Workers (UAW), 39–40 United Mine Workers (UMW), 6, 37–38, 39, 64, 69, 95 United States Steel, 39–40, 84 United Steel Workers of America, 39–41 urbanization, 32–34

V Vanderbilt, Cornelius, 79, 90, 95–97 Vanzetti, Bartolomeo, 19–20 vertical integration, 28, 42, 83 Volta, Alessandro, 47–48

W Wabash, St. Louis & Paciﬁc Railroad Co. v. Illinois, 81, 88 Wal-Mart, 31 Watson, Thomas, 23 welfare capitalism, 75 Westinghouse, 5–6 Westinghouse, George, 49 White, Edward Douglass, 87 White, Maunsel, 85 Wilson, Woodrow, 15 Women’s Trade Union League, 97–98 Woolworth, Frank, 4, 31, 98–99 Woolworth’s, 4, 31, 98–99 World War I, 11–12 Wright brothers, 73

Y yellow-dog contracts, 62