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Chapter 18: An Industrial Giant

Cornelius Vanderbilt
From steamboats to railroads, he built the infrastructure crucial to America's late-19th-century industrialization. A tough business leader and bold financial operator, he created transportation systems that stimulated and supported America's tremendous industrial growth. He ranked among that era's dominant business leaders and was one of America's richest men.
Alexander Graham Bell
He is best remembered for his invention of the "electrical speech machine"—the telephone—which quickly became the industrialized world's only means of long-distance vocal communication. He also founded the National Geographic Society in 1888 and served as its president from 1896 to 1904.
Thomas Edison
Despite a limited formal education, he became one of the nation's most prolific pioneers in the development of electronic inventions that have transformed the lives of people all over the world. Even during his lifetime, the character of such inventions as electric light, the phonograph, and motion pictures gave him an almost heroic stature in the common view, and a virtual mythology grew up about the events of his life and career. He organized companies to make and sell his various inventions that were eventually merged into what is now the General Electric Company.
Bessemer Process
This process, named after its inventor in the 1850s, was the first method by which steel could be mass produced. The process involved injecting air into molten pig iron to remove impurities. The resulting steel, relatively easy and inexpensive to produce, was also lighter and stronger than iron. This process revolutionized steel manufacture by decreasing its cost; the availability of cheap steel allowed large bridges to be built and enabled the construction of railroads, skyscrapers, and large ships.
Andrew Carnegie
He rose from poverty to become one of the richest men in the world by gaining virtual control of the U.S. steel industry. He had begun the process of vertical integration, by which he came to control raw materials, transportation, and distribution within the steel industry, managing every stage of the production process from beginning to end. U.S. steel production increased until the nation surpassed Great Britain as the foremost steel producer in the world. He was also notable as a philanthropist, who gave millions of dollars to advance education, establish public libraries, and promote world peace.
Gospel of Wealth
Millionaire and industrialist Andrew Carnegie advanced this philosophy that held that those who had accumulated wealth were morally and socially obligated to redistribute that wealth back into the community and help those less fortunate than themselves. During his lifetime, Carnegie reportedly donated more than $350 million to build schools, libraries, and public buildings, as well as supporting causes devoted to working for world peace.
J.P. Morgan
He was one of the richest men in America and was a dominant figure in the U.S. economy during the late 19th and early 20th centuries. He reorganized American railroads, becoming the greatest railroad magnate of his day. He also funded mergers between several prominent American companies, creating large American corporations, including General Electric Company, AT&T, and the United States Steel Corporation. His growing success and power frightened many people and prompted the U.S. government to take a more active part in regulating the economy.
John D. Rockefeller
As the moving force behind the Standard Oil Company, he helped create the American petroleum industry. His ruthless and cutthroat business practices brought him tremendous wealth, but his reputation with the public became severely damaged. Although he paid fair market value for many companies he acquired, he drove others into submission through cutthroat attacks. He pioneered large-scale, systematic philanthropy, giving away millions of dollars for the advancement of education, medicine, and science.
The trust
In 1882, this new business organization was designed by Standard Oil. All shares of stock from participating companies were held for the company owners by a small number of trustees. The trustees established prices and divided markets, thus eliminating competition and financially disastrous price wars among the participating companies. Owners profited from better earnings, stockholders profited from better dividends, and trustees profited from the fees they collected. Before long, many industires adopted this form of business organization. But their growing power and influence led newspapers, politicians, and the public to increasingly attack these business organizations, especially Standard Oil.
Henry George
He helped launch an entire generation of economic and social reform with his best-selling book, Progress and Poverty (1880). He advocated a single tax on land as a means of dealing with the wide disparity between enormous wealth and poverty in California.
Edward Bellamy
He attracted a huge following with his utopian novel, Looking Backward (1888). The novel's hero falls asleep in 1887 and wakes up in 2000 to discover that the poverty and suffering of late-19th-century industrial America have been replaced by a perfect society. The government owns the means of production and all members of society share equally in the nation's wealth. The book had a powerful impact, inspiring large numbers of reformers to take on the cause of reform.
Henry Demarest Lloyd
One of the early muckrakers, this crusading journalist and author exerted a major influence on reform in the late 19th and early 20th centuries. In 1894, he published Wealth Against Commonwealth, a thoroughly researched attack on Standard Oil and other monopolies. He advocated government regulation of industry and public ownership of all monopolies.
The Granger Movement
This movement began in 1867 to improve the status of farmers. Also known as The Patrons of Husbandry, the primary concerns of the movement were declining crop prices, an increase in indebtedness among farmers, and the sporadic rate system for freight imposed by the railroads. Gradually, other organizations like the Farmers' Alliances and the Populist Party emerged to support agricultural concerns, and by 1880, the membership declined.
Munn v. Illinois
In this case, the Supreme Court ruled that a business that served a public interest (like a railroad or grain elevator) could be regulated by state laws. The decision seemed to hold that Granger laws were constitutional.
Interstate Commerce Commission
Established in 1887, this was the first federal regulatory agency. It arose in response to public outrage over malpractice and profiteering by the railroad companies. The agency was primarily used to regulate the railroads and it sought to make sure prices were fair.
Sherman Anti-Trust Act
In 1890, Congress passed the first federal law to regulate large corporations and trusts and eliminate monopolies. It based on the constitutional power of Congress to oversee interstate commerce. The act outlawed any contract, combination, or conspiracy that restrained trade or monopolized any market. The act established a precedent for subsequent antitrust legislation and laid the groundwork for the trust-busting campaigns of President Theodore Roosevelt in the early 20th century.
U.S. v. E.C. Knight
Also known as the "'Sugar Trust Case,'" this Supreme Court case that limited the government's power to control monopolies. In 1892 the American Sugar Refining Company gained control of a 98% monopoly of the American sugar refining industry. President Grover Cleveland directed the national government to sue the Company under the provisions of the Sherman Antitrust Act. The court ruled that manufacturing was a local activity not subject to congressional regulation of interstate commerce.
Knights of Labor
This was the largest and most powerful labor union in America during the last half of the 19th century. It represented all workers—men and women, white and black, citizen and immigrant, and skilled and unskilled—in all industries. It was founded by Uriah Stephens, and under the leaderhsip of Terence Powderly, the union reached its peak strength of 750,000 members. The union's image was hurt when union members were blamed for the violence at Chicago's Haymarket Square riot in May 1886.
Haymarket Riot
This event ocurred on May 4, 1886 in Chicago. A bomb exploded among a group of policemen as they attempted to disperse a giant labor rally. The explosion killed seven policemen and injured 70 people. The incident received considerable nationwide publicity and seriously damaged the image of the growing labor movement--especially the Knights of Labor which was branded as a breeding ground for political dissidents rather than an organization of workers trying to secure better conditions.
This labor organization was an association of trade unions representing skilled workers in many industries. By the end of the 19th century, it was the dominant organization representing the interests of skilled labor in the United States. Under the leadership of Samuel Gompers, the union focused on improving the day-to-day conditions for workers and bargained for higher wages and shorter hours, rather than on social or political issues.
Railway Strike of 1877
This was the first rail strike and general labor strike in U.S. history. In response to wage cuts, railroad workers went on strike in West Virginia in 1877. The strikers blocked freight trains from moving and threatened to continue until pay cuts were reversed. The strikes spread wherever there were railroads and in many areas, evolved into a general labor strike. After over a month of constant rioting and bloodshed, President Rutherford B. Hayes sent in federal troops to end the strikes. The strike led to increased regulation of the railroad industry and better organization of the labor movement.
Horatio Alger
This author wrote books with rags-to-riches themes to reinforce the prevailing business philosophy of late-19th-century America. This philosophy held that any individual, however humble his or her beginnings, could become president or a millionaire by dint of hard work and good deeds. The legend embodied by his heroes became the basis of the "American Dream" of success through individual effort.
This was a tactic used by management to circulate names of troublesome workers-often labor organizers-to prevent or deny their future employment. These lists were used to discorage labor challenges to management.
yellow-dog contracts
This was a type of labor contract stating that an employee would not join a labor union; many employers forced employees to sign such contracts as a condition of employment.
Homestead Strike
This strike started on June 29, 1892 when the entire workforce of the Carnegie steel manufacturing plant stopped working. Fearful of losing their jobs and angry over pay cuts, they seized the steel plant. Management hired Pinkerton detectives and later gained the assistance of the state militia to put down the strike. Within days many were dead or injured. Within weeks, the strike was broken, and the union demolished. In many ways, the union's debacle at Homestead revealed the limited ability of organized labor to improve the conditions for America's workers during the Industrial Revolution.
Pullman Strike
This strike began in 1894 when workers walked out on a Chicago manufacturer of passenger railway cars. The American Railway Union, headed by Eugene V. Debs, was in sympathy with the striking workers, and led 125,000 workers in a nationwide boycott. Interference with the delivery of the U.S. mail gave the federal government cause to enter the dispute. President Grover Cleveland sent federal troops, who opened fire on a crowd of strikers, killing some 30 people. The federal courts then granted an injunction against the strike and the activities of the leaders of the American Railway Union. Debs went to jail for violating the injunction, and the American Railway Union called off the failed boycott two month later.
Eugene Debs
As a leader of organized labor and a presidential candidate for the Socialist Party, he passionately fought for radical social change in the United States. By 1893, he had organized the American Railway Union (ARU) and called a national strike that quickly tied up the nation's railroads to support the Pullman strike in Chicago. He was arrested and indicted on the charge of interfering with the mail. During the six months he spent in jail, he read socialist literature. Between 1904 and 1920, he ran as the Socialist candidate for president five times.