Chapter 16
B.
The Triumph of a National
Marketplace, 1877-1893
I. Building a Corporate Economy
A. New spirit of competition defined
-rapid
economic development after the Civil War brought US hurtling into industrial
age.
“The day
of small things [is] past,” wrote
William Dean Howells in his novel The Rise of Silas Lapham (1885) “and I don’t suppose
it will ever come again in this country.”
1. Rivalries and business
differences came to be emphasized.
-old
practices based on “character” and “personal
contacts” became less important, especially
with expansion of large manufacturing corporations such as Standard Oil
- mass
distribution of national brand-name products transformed the country’s economic activities
-competition
intensified conflicts between rival companies and accentuated differences
between employers, workers, merchants and farmers, landlords and tenants.
2. Aggressive business practices
defended by reference to Social Darwinism.
-corporate
leaders such as Rockefeller and Steel Magnate Andrew Carnegie viewed ‘social darwinism’ simply
as survival of the fittest.
-concentration
of corporate wealth meant that by 1890, the wealthiest 9 per cent of the
population controlled 71 per cent of national wealth.
3. New middle class of white-collar
workers emerged.
- but
survival of fittest also provoked concerns about the survival of the less
fortunate
4. Farmers and workers began
organizing for self-protection.
-with the
goal of influencing government policies to preserve an economy of small
producers.
5. Humanitarian reformers worked to
protect the weak.
-why?
Largely because economic changes had aroused anxieties about preserving a moral
society.
-These
themes appeared in Mark Twain’s classic
“The Adventures of Huckleberry Finn (1884) - a story of youth
seeking liberation from social rules and regulations, what Twain called “sivilization”. In the
end it was impossible dream for Huck, or one only possible in his imagination.
B. Railroad development heralded the new economy.
1. Railroads set the pace of
economic change and demonstrated society's problems.
-between
1877 and 1890 US trackage increased over 80,000 miles, creating a system that
touched every corner of the nation – entering
towns and cities across the country.
-railroad
growth required immense capital resources, mostly from foreign investors
-by 1893,
33 railroad companies, each worth at least $1 million, controlled 69 per cent
of the lines
-freight
volumes increased rapidly, tripling to 700 million tons annually; passengers
surpassed 500 million.
-as part
of their control over the new emerging economy they sought to standardize their
business affairs: adopting uniform shipping procedures, common bills of lading,
thereby enabling them to transport goods across multiple lines without pausing
to unload and re-ship.
- with
high fixed investments and stiff competition profits remained precarious so
numerous companies organized “pools” to divide traffic and earnings while maintaining rates and
fares.
- price fixing, secret rates to selected
customers eroded corporate cooperation, accentuated problems within the
industry between labour and capital.
2. Small businesses and farmers at
mercy of unregulated rates.
3. Taxes and bonds for railroad
support fell on local communities.
4. Railroads always seeking to cut
costs; wages often fair game.
“The great
principle” explained one railroad executive “was to earn more and to spend less.”
-It was
in this context that a band of
Missouri-based outlaws led by Jesse James after the Civil War, achieved
folk-hero status by attacking the most powerful corporations in the land.
-In July
1877, in the midst of an economic Depression, the Baltimore and Ohio announced
wage cuts of 10 per cent.
-Wages
for workers were already low, $1.75 for a brakeman fora twelve hour shift
(Zinn, 241)
-Workers
in Martinsburg, West Virginia called a strike to restore earnings and stopped
trains from running.
-Crowds
gathered in support of striking workers, too many for local police to disperse.
-B&O
officials asked the governor for military protection, he sent in the militia.
-A train
tried to get through protected by the militia, a striker tried to derail it,
and exchanged gunfire with militiamen attempting to stop him. The striker was
shot in the arm and thigh. His arm amputated that day and nine days later he
died.
-By that
point six hundred freight trains jammed the yards at Martinsburg.
The
governor appealed to the president for assistance. Money was tight, and many
troops were tied up in Indian battles out west. J.P. Morgan, August Belmont and
other bankers offered money to pay officers (not enlisted men).
5. President Rutherford B. Hayes
used federal troops to quell railroad strike in 1877.
C. Labor uprisings common throughout the country in 1877.
1. Workers throughout the nation
struck for better wages and protections.
-in
response to the B and O incident and conditions generally strikes occurred
almost every hour. (Zinn 241-242).
-B and O
strike spread to Pittsburgh and the Pennsylvania Railroad; again the militia
was called out and with thousands of
cars idle, gunfire broke out between Philadelphia troops sent into clear the
tracks, ten people were killed; The city rose in anger, a huge elevator and a
small section of the city went up in flames, and a few days later 24 in total
24 had been killed, 79 buildings destroyed and with a general strike
developing, the entire national guard in Pennsylvania (some 9,000 men were
called out).
-situations
varied from place to place, in some disputes militia downed their weapons and
marched with workers (happened at Harrisburg, Penn. State Capital); some
strikes never materialized because of disunity and race jealousy.
2. Corporate and federal power
triumphed; workers and unions lost.
3. Helped accelerate development of
the National Guard.
-backed by private business benefactors, states and cities,
armouries were constructed in urban centres and within 20 years the National
Guard consisted of 100,000 volunteers, 4 times the size of the regular army, at
its core it was class based as most officers came from the wealthier classes.
D. Railroads standardized their services in order to improve
efficiency.
1. Developed complicated
bureaucracies for employee supervision.
-these
were headed by salaried managers who supervised both white-collar employees and
the general work force.
-“captains of industry”
reflected military model of corporate organization, many in fact were Civil War
generals
-middle
managers were from the 8 per cent who finished high school
2. Divided nation into four time
zones in 1883.
-on 18
November 1883, railroad heads ordered their unilateral adoption
-time
zones were on railroad time, they changed at places convenient for the
railroads
-evidence
of the consequences lives today – example
Railway Association of Canada (RAC) Mid-Continent Task Force, union matters at
borders.
3. Converted to uniform track in
1886; later standardized brakes and couplers.
II. Building Industrial Corporations
A. Businessmen adopted innovations in the way they ran their
operations.
1. Introduced new technologies and
improved efficiency.
2. Innovated managerial practices.
3. Created predictable markets.
-stabilized
the flow of outputs.
B. Efforts to make business more efficient encouraged
technological inventions.
1. Federal government issuing 25,000
patents annually by 1890.
-in steel
was the “Bessemer process” of manufacturing –
displaced iron production as the basic ingredient of railroad tracks and
increased output from 30,000 tons in 1870 to 1.9 million in 1890.
-flaws in
Bessemer steel led to the introduction of the open hearth process which tripled
production and forged higher quality steel (Craig Heron’s book)
2. New technology led to innovations
in factory design.
-making
factories more “efficient” was the order of the day
3. Allowed unskilled workers to
perform more and more jobs.
(Karl
Marx, Harry Braverman) —
alienation
4. Adopted detailed accounting
procedures to improve record keeping.
-typewriters
appeared in offices, creating clear paper trails of business decisions and
opportunities to monitor managerial performance
5. Time and motion studies used to
develop best way of performing a task.
C. John D. Rockefeller's Standard Oil embodied movement for
centralization.
1. Controlled 90 percent of the
nation's refined oil by 1878--horizontal monopoly.
-corporate
headquarters in New York, had departments to coordinate suppliers, sales,
transportation and personnel, and they could dictate resource development and
oil prices for the entire country.
2. Went on to handle all facets of
the oil industry--vertical monopoly.
-same
kind of monopolistic corporations also dominated other industries refining of
sugar and cotton industries
-farm
implements / machinery, improved plows, complicated threshers and binders,
brought greater efficiency to agricultural production and encouraged crop
specialization.
-huge
harvests stimulated new industrial systems for storage and distribution,
mechanized flour mills emerged in Minneapolis and by 1890 produced over 7
million bushels of flour annually.
-Automatic
canning transformed companies into household names (Heinz pickles and ketchup,
Campbell’s soup, Diamond Matches and so on... )
D. Improvements in mass production led to new approaches to
corporate marketing.
-credit
agencies, formed before the Civil War, developed national networks to provide
references for wholesalers and retailers.
1. Introduction of mass packaging
was important development.
- carried
products further afield,
-cotton
sacks unavailable during the Civil War were superceded by the mass produced
paper bag, then cardboard, and paper box making
in the 1870s.
2. Transformed relationship between
mass producers and individual consumers.
-the
former now penetrated deeper into the lives, the very psyche of the latter
3. First law protecting product
trademarks came in 1870.
-ensured
product recognition, “the man
with the Quaker Garb the first cereal” which
could emphasis speedy preparation and product purity
4. Mass magazines and newspapers
allowed for product advertising.
-they
catered to particular niches and directed target audiences and helping to
define both the public and private spheres in magazines such as Cosmopolitatan,
Ladies Home Journal, McClure’s.
-Chicago
boasted 2 dozen daily newspapers, some with multiple editions
-the
Associated Press’ wire service brought world and local
news into communities
-
national advertising soared to $300 million
5. Montgomery Ward introduced mail
order sales in 1872.
- in so
doing revolutionized rural trade, and was joined by Sears Roebuck in 1887.
6. New department stores in urban
areas gave consumers limitless choices.
III. The Changing Face of Urban Life
A. Important changes in urban landscape during this period.
1. By 1890, one-third of
2. Attraction of cities reflected
limitations of rural life.
3. Technology abounded in cities; so
did vices like gambling and prostitution.
4. Cities attracted 6 million
northern European immigrants between 1877 and 1890.
5. First immigrants from southern
and eastern
B. Technology attempted to solve the problems of urban life.
1.
Steel-framed skyscrapers allowed for taller buildings--took up less street
space.
2. Electric streetcars and trolleys
facilitated transportation and improved sanitation.
3. Class-based housing segregation
developed as a result of new transportation.
4. Urban leaders employed dumbbell
tenement in effort to improve housing.
IV. Struggling for Workers' Rights
A. Economic Fluctuations created uncertainties for workers.
1. Unskilled male workers, women,
children, African Americans paid poorly.
2. Working conditions also very
unsafe; little compensation if injured or killed.
3. Some jobs carried risks of
illness or disease.
B. The Knights of Labor emerged as early advocate for
workers' rights.
1. Formed in 1869 specifically to
help out tailors in
2. Broad plans for social reform.
3. Expanded in 1881 to include all
workers who made a product.
4. Organized southern blacks,
European immigrants, women.
5. Opposed Asian immigration;
refused to admit Chinese as members.
6.missing?
