Capital and Labor


                  JD Rockefeller                               Andrew Carnegie                              JP Morgan

Industrialization as a major component of American expansion in the late nineteenth century. Three technological developments that fostered the second industrial revolution of the late nineteenth and early twentieth centuries are mentioned in the chapter's introduction (the rise of electric-powered machines, the expanded use of engines powered by internal combustion, and new applications in the use of chemicals). The relationship between these three developments and industrialization is obvious in the discussion of Thomas Alva Edison and the electric industry, Henry Ford and the automobile industry, the du Ponts and the chemical industry, and the influence of technology on certain industries in the South. Have students keep these developments in mind as they study the chapter, and try to determine which developments apply to the various topics discussed in the chapter.

Industrialism changed the nature of work and in many respects caused an uneven distribution of power among interest groups in American society. Industrial workers were employees rather than producers, and repeating specialized tasks made them feel like appendages to machines. The emphasis on quantity rather than quality further dehumanized the workplace. These factors, in addition to the increased power of the employer, reduced the independence and self-respect of workers, but worker resistance only led employers to tighten restrictions.

Industrialism also brought more women and children into the labor force. Although job opportunities opened for women, most women went into low-paying clerical jobs, and sex discrimination continued in the workplace. Employers also attempted to cut wage costs by hiring more children. Although a few states passed child-labor laws, such laws were difficult to enforce and employers generally opposed state interference in their hiring practices. Effective child-labor legislation would not come until the twentieth century.

As the nature of work changed, workers began to protest low wages, the attitude of employers, the hazards of the workplace, and the absence of disability insurance and pensions. The effectiveness of legislation designed to redress these grievances was usually limited by conservative Supreme Court rulings. Out of frustration, some workers began to participate in unions and in organized resistance. Unionization efforts took various directions. The Knights of Labor tried to ally all workers by creating producer and consumer cooperatives; the American Federation of Labor strove to organize skilled workers to achieve pragmatic objectives; and the Industrial Workers of the World attempted to overthrow capitalist society. The railroad strikes of 1877, the Haymarket riot, and the Homestead and Pullman strikes were all marked by violence, and they exemplify labor's frustration as well as its active and organized resistance. Government intervention against the strikers convinced many workers of the imbalance of interest groups in American society, whereas the middle class began to connect organized working-class resistance with radicalism. Although this perception was by and large mistaken, middle-class fear of social upheaval became an additional force against organized labor.

Not only did industrialization affect the nature of work, it also produced myriad products that affected the everyday lives of Americans. As America became a consumer-oriented society, most of its citizens faced living costs that rose faster than wages. Consequently, many people could not take advantage of the new goods and services being offered. But, as has been seen, more women and children became part of the paid labor force. Although many did so out of necessity, others hoped that the additional income would allow the family to participate in the consumer society.

Increased availability of goods and services to a greater number of people was not the only reason for a general improvement in living standards. The era also witnessed advances in medical care, better diets, and improved living conditions. Furthermore, education, more than ever a means to upward mobility, became more readily available through the spread of public education.

American habits and attitudes were further affected by the democratization of convenience that resulted from the indoor toilet and private bathtub. At the same time, the tin can and the icebox altered lifestyles and diet, the sewing machine created a clothing revolution, and department stores and chain stores emerged that both created and served the new consumerism.

As American society became more consumer-oriented, brand names for products were created. Used by advertisers to sell products, these brand names in turn created consumption communities made up of individuals loyal to those brands. As producers tried to convince consumers of their need for particular products, advertising became more important than ever. And since the major vehicle for advertising in the late nineteenth century was the newspaper, advertising was transformed into news.

Although the American standard of living generally improved during the late nineteenth century, there were unsettling economic forces at work. Although rapid economic growth is a characteristic of the period, the period is also characterized by the economic instability and uncertainty produced by cycles of boom and bust. In an effort to create a sense of order and stability out of the competitive chaos, industrialists turned to economic concentration in the form of pools, trusts, and holding companies. Therefore, the search for order led to the merger movement and to larger and larger combinations that sought domination of their markets through vertical integration.

Defenders of business justified the merger movement and the pursuit of wealth and profits by advancing the Gospel of Wealth, which was based on Social Darwinism and on the precepts of laissez-faire capitalism. The business elite also used this philosophy to justify both its paternalistic attitude toward the less fortunate in society and its advocacy of government aid to business. The paradoxes and inconsistencies associated with the Gospel of Wealth gave rise to dissent from sociologists, economists, and reformers. The general public also began to speak against economic concentration in the form of monopolies and trusts. The inability of state governments to resolve the problems associated with economic concentration led to passage of the Sherman Anti-Trust Act by Congress in 1890, but this legislation represented a vaguely worded political compromise, the interpretation of which was left to the courts. Narrow interpretation by a conservative Supreme Court and failure of government officials to fully support the act meant that it was used more successfully against organized labor than against business combinations, again illustrating the uneven distribution of power among interest groups in late-nineteenth-century American society.

An Industrial Society: 1870-1910

1872-74 The great buffalo slaughter on the Great Plains.

1873 San Francisco builds first cable car line. Women's Christian Temperance Union founded. Comstock Law passed.

1874 Black Hills gold rush begins.

1876 Custer's defeat at the Battle of Little Bighorn. Johns Hopkins University opens nation's first graduate school.

1878 Yellow fever epidemic in Memphis.

1879 Henry George publishes Progress and Poverty. Mary Baker Eddy founds the Church of Christ, Scientist.

1881 Booker T. Washington founds the Tuskegee Institute.

1882 Congress passes Chinese Exclusion Act.

1883 Supreme Court rules Civil Rights Act of 1875 unenforceable. Brooklyn Bridge completed.

1885 William Dean Howells publishes The Rise of Silas Lapham. World's first skyscraper, the Home Life Insurance Building, built in Chicago.

1886 Haymarket Affair fuels nativism.

1887 Dawes Severalty Act passed. American Protective Association founded.

1888 First electrified streetcar system begins operation in Richmond, Virginia.
Edward Bellamy publishes Looking Backward.

1890 Jacob Riis publishes How the Other Half Lives.

1893 New York City aqueduct completed.

1895 Booker T. Washington gives Atlanta Compromise speech.

1896 Free rural mail delivery begins. Supreme Court upholds segregation in Plessy v. Ferguson decision.

1897 Boston opens first subway line.

1898 White race riot in Wilmington, North Carolina.

1909 W. E. B. Du Bois and others found the National Association for the Advancement of Colored People. 1924 Citizenship conferred upon all Native Americans.

                                                                                                              Vanderbilt Estate

Demographic Changes: Immigration was an important source of labor during the late nineteenth century. However, the changing national origins of immigrants limited labor's
ability to organize.

Economic Transformations: As noted in Chapter 16, industrialization was a national and international phenomenon. The causes of the Industrial Revolution acted on both manufacturing and agriculture. Business consolidation changed the relationship between labor and capital.

Environment: America's explosive industrial growth created enormous demand for natural resources, and spurred the development of the West. Industrialists looked to cut costs and a major result of that was pollution in cities, as well as waste.

Reform: Labor issues are primary here. Business consolidation put the individual worker at a disadvantage, and although workers, absolute standard of living rose, their relative standard declined. Labor's search for power and position in industrial America is told through the history of the union movement.

Digital History

The Rise of Big Business

Between the Civil War and World War I, the modern American economy emerged. A national transportation and communication network was created, the corporation became the dominant form of business organization, and a managerial revolution transformed business operations. By the beginning of the 20th century, per capita income and industrial production in the United States exceeded that of any other country except Britain. Unlike the pre-Civil War economy, this new one was dependent on raw materials from around the world and it sold goods in global markets. Business organization expanded in size and scale. There was an unparalleled increase in factory production, mechanization, and business consolidation. By the beginning of the 20th century, the major sectors of the nation's economy--banking, manufacturing, meat packing, oil refining, railroads, and steel--were dominated by a small number of giant corporations.

Around the turn of the 20th century, mass immigration from eastern and southern Europe dramatically altered the population's ethnic and religious composition. Unlike earlier immigrants, who had come from Britain, Canada, Germany, Ireland, and Scandinavia, the new immigrants came increasingly from Hungary, Italy, Poland, and Russia. The newcomers were often Catholic or Jewish and two-thirds of them settled in cities. In this chapter you will learn about the new immigrants and the anti-immigrant reaction.

Biography of America

Industrial Supremacy (series 14)
Steel and stockyards are featured in this program as the mighty engine of industrialism thunders forward at the end of the nineteenth century. Professor Miller continues the story of the American Industrial Revolution in New York and Chicago, looking at the lives of Andrew Carnegie, Gustavus Swift, and the countless workers in the packinghouse and on the factory floor.

Lecture Outlines

American Industrialization 1865-1900

Immigration 1880-1910

Railroads 1840-1890

The Rise of Labor

Student Assignments

Ch.17 Primary Source 

The History of Political Cartoons

Political Cartoon 


The Rise of Industrial America

Captains of Industry 

Technology of the 1800s