Please enable JavaScript.
Coggle requires JavaScript to display documents.
Industry Comes of Age - Coggle Diagram
Industry Comes of Age
Railroad
Expansion: Systems were essential but expensive, leads to government land grants and town-funded incentives
Diverse Labor: Union Pacific relied on Irish "Paddies," while Central Pacific employed 10k Chinese laborers; both faced conflict with Native Americans
Impacts
Economic: Stimulated Westward mining, agriculture, and urban growth
-
-
-
Corruption
Public Sentiment: While many hoped to "strike it rich," cutthroat competition and high rates led to a demand for reform.
Unethical Practices: Promoters used "stock-watering" to inflate asset values and sold stocks far beyond actual worth.
Political Influence: Titans bribed judges and legislators to ignore public interest; "pools" were created to divide business and share secret kickbacks.
Path to Regulation
Wabash v. Illinois: The Supreme Court ruled that states cannot regulate interstate commerce; only the federal government has this power.
Interstate Commerce Act (1887): Prohibited pools, mandated published rates, and established the ICC to enforce the law.
Historical Impact: This was Washington’s first major attempt to regulate business for the public good, setting a precedent for future federal oversight.
Titans of Industry
Andrew Carnegie
Carnegie feared he would die “disgraced” with so much wealth, and dedicated the remaining years to philanthropy
The steel king, practiced vertical integration: integrated every phrase of his steelmaking operation, from mines to marketing, to improve efficiency and quality
Create public libraries, pensions for professors, and other philanthropic purposes
-
John D. Rockefeller
Used horizontal integration: allying with competitors to monopolize a given market, creating trusts
Stockholders in various smaller oil companies assigned their stock to the board of directors of his Standard Oil Company (1870) consolidating previously competing enterprises
-
Oil Kingdom
The Rise of Oil: Started with "Drake’s Folly" in 1859; kerosene became a top U.S. export until the electric light bulb made it obsolete.
The Gasoline Boom: The internal combustion engine (1900) saved the industry by creating a massive new demand for gasoline.
Standard Oil Monopoly: Established in 1870, Rockefeller controlled 95% of all U.S. oil refineries by 1877 through ruthless efficiency and eliminating competitors.
Impact of Trusts: Rockefeller’s success sparked other monopolies in sugar, tobacco, and meat, creating a new class of "new rich" and disturbing the old economic order.
J. Pierpont Morgan
Used interlocking directorates which consolidated rival enterprises by placing officers of his own banking syndicate on their boards of directors
Gospel of Wealth
Social Darwinism
Justifying Inequality: This ideology provided the wealthy with a self-justification that often included contempt for the poor.
Herbert Spencer applied "survival of the fittest" to society, arguing that millionaires were the natural product of superior talent.
Plutocracy
The Interstate Commerce Act helped monopolists and trusts who sought refuge behind the 14th Amendment: courts interpreted a corporation to be a legal “person” and as such, it cannot be deprived of its property by a state without “due process of law”. (14th amendment)
Trust-busting
The Sherman Antitrust Act (1890) forbade combinations that restricted trade, but there was no distinction between “good” trusts and “bad” trusts: bigness, not badness, was the sin
Law proved ineffective, due to legal loopholes--it was mainly used to curb labor unions or labor combinations that were deemed to be restraining trade
-
Labor Unions and Workers
Strength in Union
The Power Imbalance: Factories depersonalized workers; with a massive labor pool, individuals were easily replaceable, making organization difficult.
Employer Tactics: Corporations used their wealth to hire lawyers, influence the press, and pressure politicians.
Suppression of Strikes
Direct Action: Companies used strikebreakers ("scabs"), employed thugs, and secured court injunctions to stop strikes.
Federal Intervention: If strikes persisted, employers requested state or federal troops to intervene.
-
Public Perception: Strikes were often portrayed as "unpatriotic" or "socialist" imports, leading a frustrated middle class to ignore the workers' plight.
-
-
-
-