The Second Industrial Revolution and the Progressive Era brought about new ways of doing business, and due to these new ways of doing business changes had to occur for the safety and betterment of the workers. These eras would lead to the rise of entrepreneurs in the forms of captains of industry and robber barons and would also bring about the rise of unions and health and safety standards.
The later 1800s and early 1900s saw the rise of corporations, or businesses owned by multiple investors. Corporations operated by raising large amounts of capital by selling stock in the business. Stockholders, in turn, would receive a share in the company's profits and could pick the directors to run the company. The corporations were seen as a benefit for a time because they limited the risk for investors; owners of non-incorporated businesses risked losing their homes, property, and livelihood if the business folded but investors of corporations only risked the amount of money they had invested. At this time, banks were loaning huge amounts of capital to corporations, which allowed for the growth of industry; bankers made major profits off of these loans as well. One such banker was J.P. Morgan, a name that readers should be familiar with if they have one (or more) Chase credit card. Morgan gained control of key industries such as railroads and steel via issuing loans to corporations; he and his colleagues would also buy stock in troubled corporations, run them in a way that eliminated competition, and made those corporations profitable again.
The United States took a laissez-faire (hands-off) approach to business in the late 19th and early 20th centuries; Congress rarely made laws to regulate business practices, which led to a feeling of freedom and growth of industry at the time. This growth of industry and big business would lead to the rise of trusts and monopolies (more on these later in this post). The growth of industries also led to the rise of captains of industry and of robber barons.
Some famous captains of industry were: John D. Rockefeller, Andrew Carnegie, the previously mentioned J.P. Morgan, and Cornelius Vanderbilt. These men expanded their industries, gave people jobs, and literally built America.
John D. Rockefeller came from humble beginnings as the son of a peddler in New York City. At age 23, Rockefeller invested in an oil refinery and he used the profits earned from his investment to purchase other oil companies. Rockefeller competed in industry by lowering his prices to drive out competition; this resulted in Rockefeller forming the Standard Oil Trust in 1882.
Andrew Carnegie came from humble beginnings as well; as a poor Scottish immigrant, he worked his way up in the railroad business then entered the growing steel industry. Carnegie slowly gained control of every step of the steel making process; Carnegie would come to own iron mills, steel mills, railroads, and shipping lines. In 1892, Carnegie would combine his businesses into the Carnegie Steel Company, which would produce more steel than all of the mills of England. Although Carnegie was a ruthless businessman he was also a philanthropist and believed that the rich had a duty to improve society, so he donated hundreds of millions of dollars to build and fund libraries and concert halls and other charities.
One final captain of industry this post will discuss is Cornelius Vanderbilt, who built his wealth in shipping and railroads. he cut his teeth in the shipping industry working with his father as a ferryman between Staten Island and Manhattan. Vanderbilt turned to the railroad business as some of the railroads of his day were built to connect with steamboats that ran to New York. Vanderbilt dominated the steamboat business on the Long Island Sound and successfully launched a campaign in the 1840s to take over the New York/Providence/Boston Railroad, also known as the Stonington. Over time, Vanderbilt would take over numerous railroad lines, most notably the Hudson River Railroad and the New York Central Railroad. In 1869, Vanderbilt had directed the construction of the Grand Central Depot on 42nd Street in Manhattan for the terminus of his lines. The Grand Central Depot was finished and operational in 1871 and was renamed the Grand Central Terminal in 1913. Vanderbilt, who had also grown up poor, put his wealth to use by establishing Vanderbilt University in Tennessee.
I used the term "captains of industry" while describing these men because the term generally has positive connotations--captains of industry often: served their nation in a positive way; raised productivity and expanded markets; created jobs that raised the nation's standards of living; boosted the supply of goods by building factories; and created museums, libraries, universities, concert halls, and more, many of which still exist today. The term "robber baron" that I used earlier in this post had and has negative connotations--robber barons were people who became rich through ruthless business practices. Robber barons often: drained the country of its natural resources; persuaded public officials to interpret the law in their favor; ruthlessly destroyed their competitors; made their workers toil under dangerous and unhealthy conditions; paid their workers meager wages; and built their fortunes by stealing from the public.
Before moving on to the experiences of workers and the rise of labor unions, here are some important definitions:
Corporations--businesses owned by multiple investors
Monopoly--a company that controls most of all business in a particular industry
Trust--a group of corporations run by a single board of directors
Changes in the Workplace
Prior to the Civil War, most factories were fairly small; however, as industries grew due in part to immigration, the workplace had to change as well. Most of the factory workers were immigrants, poor native-born whites, and African-Americans who left Southern farms. In some industries, the majority of workers were even women and children. For example, women outnumbered men in the textile mills of New England, the garment sweatshops of New York and the tobacco factories of the South. Children worked in bottle factories, in textile mills, tobacco factories, coal mines, and garment factories.
Factory life was by no means ideal at this time--employers were not required to pay compensation for injuries that happened on the job or even to pay employees a living wage. Robber baron factory owners often cut costs at the expense of their workers; children were often injured or killed in the factories and coal mines, and one of the deadliest fires occurred in New York City on March 25, 1911 due to unsafe work practices. On March 25, 1911, fire broke out at the Triangle Shirtwaist Factory; the workers, most of whom were young women, rushed to the exits but found they had been barred to prevent the workers from walking off the job. Workers tried to escape the flames by jumping out the windows to their deaths. Nearly 150 workers lost their lives in the infamous Triangle Shirtwaist Factory fire. As a result, New York workers pushed for safer conditions in a number of ways.
One such way was through organizing and forming labor unions so the voices of workers could be heard as a collective. One of the oldest of these labor unions was the Knights of Labor. The Knights of Labor was established in 1869 by a group of Philadelphia clothing workers. The Knights admitted women, African-Americans, immigrants, and unskilled laborers. The Knights was one of the largest labor unions of its day. However, whatever success the Knights had was undercut by the Haymarket Riot. On May 4, 1886, in Chicago, striking workers rallied in Haymarket Square. Suddenly, a bomb exploded killing seven policemen; police sprayed the crowd with bullets. As a result of the Haymarket Riot the Knights of Labor, present at the riot, lost much of their influence. In its place, Samuel Gompers formed the American Federation of Labor (AFL) in Columbus, Ohio in 1886. Unlike the Knights, the AFL only admitted skilled workers because Gompers argued that their skills made it costly and difficult to train replacements; he also believed that the most effective way to achieve improvements was through collective bargaining where the union would negotiate with management for workers as a group. By 1904 the AFL had grown to more than a million members.
Women also participated in the labor movement. One woman who rose to prominence at this time was "Mother" Mary Harris Jones. Mother Jones tirelessly traveled the country campaigning for unions, giving support to striking unions, and calling attention to the hard lives of children who worked in factories.
Today, unions don't play as major of a role for workers as they did in the past. However, from the labor movements of the 19th and 20th centuries we continue to maintain child labor laws (which vary from state to state), OSHA standards, HAZ MAT standards, and more meant to benefit the workers.
The Second Industrial Revolution would bring about the rise of urbanization and factory work, and would lead to the rise of workers standing up for their rights needs. The next posts on this blog will be about the rise in education in the United States and the reforms of the Progressive Era.
The later 1800s and early 1900s saw the rise of corporations, or businesses owned by multiple investors. Corporations operated by raising large amounts of capital by selling stock in the business. Stockholders, in turn, would receive a share in the company's profits and could pick the directors to run the company. The corporations were seen as a benefit for a time because they limited the risk for investors; owners of non-incorporated businesses risked losing their homes, property, and livelihood if the business folded but investors of corporations only risked the amount of money they had invested. At this time, banks were loaning huge amounts of capital to corporations, which allowed for the growth of industry; bankers made major profits off of these loans as well. One such banker was J.P. Morgan, a name that readers should be familiar with if they have one (or more) Chase credit card. Morgan gained control of key industries such as railroads and steel via issuing loans to corporations; he and his colleagues would also buy stock in troubled corporations, run them in a way that eliminated competition, and made those corporations profitable again.
The United States took a laissez-faire (hands-off) approach to business in the late 19th and early 20th centuries; Congress rarely made laws to regulate business practices, which led to a feeling of freedom and growth of industry at the time. This growth of industry and big business would lead to the rise of trusts and monopolies (more on these later in this post). The growth of industries also led to the rise of captains of industry and of robber barons.
Some famous captains of industry were: John D. Rockefeller, Andrew Carnegie, the previously mentioned J.P. Morgan, and Cornelius Vanderbilt. These men expanded their industries, gave people jobs, and literally built America.
John D. Rockefeller came from humble beginnings as the son of a peddler in New York City. At age 23, Rockefeller invested in an oil refinery and he used the profits earned from his investment to purchase other oil companies. Rockefeller competed in industry by lowering his prices to drive out competition; this resulted in Rockefeller forming the Standard Oil Trust in 1882.
Andrew Carnegie came from humble beginnings as well; as a poor Scottish immigrant, he worked his way up in the railroad business then entered the growing steel industry. Carnegie slowly gained control of every step of the steel making process; Carnegie would come to own iron mills, steel mills, railroads, and shipping lines. In 1892, Carnegie would combine his businesses into the Carnegie Steel Company, which would produce more steel than all of the mills of England. Although Carnegie was a ruthless businessman he was also a philanthropist and believed that the rich had a duty to improve society, so he donated hundreds of millions of dollars to build and fund libraries and concert halls and other charities.
One final captain of industry this post will discuss is Cornelius Vanderbilt, who built his wealth in shipping and railroads. he cut his teeth in the shipping industry working with his father as a ferryman between Staten Island and Manhattan. Vanderbilt turned to the railroad business as some of the railroads of his day were built to connect with steamboats that ran to New York. Vanderbilt dominated the steamboat business on the Long Island Sound and successfully launched a campaign in the 1840s to take over the New York/Providence/Boston Railroad, also known as the Stonington. Over time, Vanderbilt would take over numerous railroad lines, most notably the Hudson River Railroad and the New York Central Railroad. In 1869, Vanderbilt had directed the construction of the Grand Central Depot on 42nd Street in Manhattan for the terminus of his lines. The Grand Central Depot was finished and operational in 1871 and was renamed the Grand Central Terminal in 1913. Vanderbilt, who had also grown up poor, put his wealth to use by establishing Vanderbilt University in Tennessee.
I used the term "captains of industry" while describing these men because the term generally has positive connotations--captains of industry often: served their nation in a positive way; raised productivity and expanded markets; created jobs that raised the nation's standards of living; boosted the supply of goods by building factories; and created museums, libraries, universities, concert halls, and more, many of which still exist today. The term "robber baron" that I used earlier in this post had and has negative connotations--robber barons were people who became rich through ruthless business practices. Robber barons often: drained the country of its natural resources; persuaded public officials to interpret the law in their favor; ruthlessly destroyed their competitors; made their workers toil under dangerous and unhealthy conditions; paid their workers meager wages; and built their fortunes by stealing from the public.
Before moving on to the experiences of workers and the rise of labor unions, here are some important definitions:
Corporations--businesses owned by multiple investors
Monopoly--a company that controls most of all business in a particular industry
Trust--a group of corporations run by a single board of directors
Changes in the Workplace
Prior to the Civil War, most factories were fairly small; however, as industries grew due in part to immigration, the workplace had to change as well. Most of the factory workers were immigrants, poor native-born whites, and African-Americans who left Southern farms. In some industries, the majority of workers were even women and children. For example, women outnumbered men in the textile mills of New England, the garment sweatshops of New York and the tobacco factories of the South. Children worked in bottle factories, in textile mills, tobacco factories, coal mines, and garment factories.
Factory life was by no means ideal at this time--employers were not required to pay compensation for injuries that happened on the job or even to pay employees a living wage. Robber baron factory owners often cut costs at the expense of their workers; children were often injured or killed in the factories and coal mines, and one of the deadliest fires occurred in New York City on March 25, 1911 due to unsafe work practices. On March 25, 1911, fire broke out at the Triangle Shirtwaist Factory; the workers, most of whom were young women, rushed to the exits but found they had been barred to prevent the workers from walking off the job. Workers tried to escape the flames by jumping out the windows to their deaths. Nearly 150 workers lost their lives in the infamous Triangle Shirtwaist Factory fire. As a result, New York workers pushed for safer conditions in a number of ways.
One such way was through organizing and forming labor unions so the voices of workers could be heard as a collective. One of the oldest of these labor unions was the Knights of Labor. The Knights of Labor was established in 1869 by a group of Philadelphia clothing workers. The Knights admitted women, African-Americans, immigrants, and unskilled laborers. The Knights was one of the largest labor unions of its day. However, whatever success the Knights had was undercut by the Haymarket Riot. On May 4, 1886, in Chicago, striking workers rallied in Haymarket Square. Suddenly, a bomb exploded killing seven policemen; police sprayed the crowd with bullets. As a result of the Haymarket Riot the Knights of Labor, present at the riot, lost much of their influence. In its place, Samuel Gompers formed the American Federation of Labor (AFL) in Columbus, Ohio in 1886. Unlike the Knights, the AFL only admitted skilled workers because Gompers argued that their skills made it costly and difficult to train replacements; he also believed that the most effective way to achieve improvements was through collective bargaining where the union would negotiate with management for workers as a group. By 1904 the AFL had grown to more than a million members.
Women also participated in the labor movement. One woman who rose to prominence at this time was "Mother" Mary Harris Jones. Mother Jones tirelessly traveled the country campaigning for unions, giving support to striking unions, and calling attention to the hard lives of children who worked in factories.
Today, unions don't play as major of a role for workers as they did in the past. However, from the labor movements of the 19th and 20th centuries we continue to maintain child labor laws (which vary from state to state), OSHA standards, HAZ MAT standards, and more meant to benefit the workers.
The Second Industrial Revolution would bring about the rise of urbanization and factory work, and would lead to the rise of workers standing up for their rights needs. The next posts on this blog will be about the rise in education in the United States and the reforms of the Progressive Era.
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