Chapter 13

A patent is a license that gives an inventor the exclusive right to make, use, or sell an invention for a set period of time. The amount of goods and services created in a given period of time is called productivity. Two new forms of energy, oil and electricity, marked the start of the 2 industrial revolution.
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In 1859, Edwin L. Drake, sent by the Pennsylvania Rock Oil Company to drill for oil, successfully created the first oil well. Thomas Edison was also known as The Wizard of Menlo Park. He did not invent the light bulb, but improved it so that it would last longer. He also developed the idea of a central power plant, making electric power widely available. Other inventors later improved upon Edisons work. Lewis Latimore developed an improved method for producing the filament in light bulbs. George Westinghouse began experimenting with a new form of electricity called alternating current, which could be generated more cheaply and travel further distances than direct current. Electricity helped to improve the productivity of the business world and transform the environment of workplaces. It was cheaper and more efficient than other previously existing sources of power. Goods could be produced more quickly and easily, allowing thousands of jobs to open up. Electricity also revolutionized many aspects of daily life, such as refrigeration. The success of Samuel F.B. Morse signaled the start of a communications revolution. Although he did not invent the telegraph, he perfected it. He also devised Morse code, a code of short and long electrical impulses to represent the letters of the alphabet. In 1876, Alexander Graham Bell patented a talking telegraph### the telephone. Bell and a group of partners set up the American Telephone and Telegraph Company (AT&T) to build longdistance telephone lines in 1885. Christopher Scholes invented the typewriter. The transcontinental railroad, completed in 1869, was a key event in expanding the rail business. It took 7 years to build. The Central Pacific Railroad began laying track in Sacramento, California, and was built mostly by Chinese immigrants### three Cs: Central California Chinese. The Union Pacific Railroad worked westward, from Omaha, Nebraska, and was built mostly by Irish immigrants### three vowels: Union Omaha Irish. Leland Stanford drove the golden spike, connecting the two railroads in Promontory Point, Utah. Improvements in train and track design gave railroads a big boost. These railroad developments allowed train travel to become less dangerous. First, steel rails replaced iron rails, and track gauges and signals became standardized. That way, goods and passengers did not have to be moved to different trains, saving costly delays. Also, in 1869, George Westinghouse developed more effective air breaks to replace the previous unreliable breaks. In 1887, Granville Woods patented a telegraph system for communication within moving trains to reduce the risk of collision. Finally, in 1883, C.F. Dowd developed a national system of time zones to improve railroad scheduling. Railroads played a key role in revolutionizing business and industry in the United States. They provided a faster and more practical means of transporting goods, lowered costs of production, created national markets, were a model for big business, and stimulated other industries### TCMMI: Transporting Costs Markets Model Industries. In the 1850s, Henry Bessemer and William Kelly independently developed the Bessimer

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Process, a new process for making steel. As a result, a new age of building began. Production in great amounts is called Mass Production.

Engineer Washington Roebling took over the Brooklyn Bridge project after his father, John A. Roebling, died shortly after its construction began in 1869. The terms robber barons and captains of industry describe powerful industrialists who established large businesses in the late 1800s. Robber barons stole from the public, drained the country of its natural resources, corrupted public officials, and forced workers to work under poor or dangerous conditions. On the other hand, captains of industry helped society, created jobs, and expanded markets. John D. Rockefeller formed the Standard Oil Company in 1870. He is known for using horizontal consolidation. Andrew Carnegie started working on a cotton mill at 12 years old. He expanded the steel business and preached a gospel of wealth, which stated that people should be free to make as much money as they desired, but they should give it away. Herbert Spencer and William Graham Sumner promoted social Darwinism, a philosophy that applied Charles Darwins concept theory of evolution to business### survival of the fittest. Big business differed from earlier forms of business in the United States. They had a wider geographic span, larger pools of capital, a broader range of operations, revised role of ownership, and new methods of management### SCOOM: Span Capital Operations Ownership Management. Capitalism is an economic system based on free market and private ownership of property (POP). Laissez-Faire Capitalism calls for no government regulation of economic matters. A monopoly is the complete control of a product or service. A loose association of businesses that make the same product is called a cartel. Gaining control of the many different businesses that make up all phases of a products development is called vertical consolidation. Horizontal consolidation is a method of industrial control that involves the bringing together of many firms in the same business. As production increases, the cost of each item produced is lower. This is called economies of scale. Many Americans moved to cities in the late 1800s due to low prices and more competition from foreign wheat producers. Plentiful work in factories attracted former farmers. The federal government passed the Contract Labor Act in 1864, when labor was scarce during the Civil War, to encourage immigration. Piecework is a system in which workers receive a fixed amount of money for each finished piece they produce, rather than by the time worked. Most piecework was performed in sweatshops### shops where employees worked long hours at low wages, with poor working conditions.

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Frederick Winslow Taylor observed workers in the steel plant where he was chief engineer to increase worker productivity and thereby increase profits. He used his studies to found an entire system for the scientific management of workers, described in his book, The Principles of Scientific Management.

The goal of scientific management was to increase worker productivity. Therefore, division of labor into separate tasks was used to produce goods more efficiently. Many workers came to resent these methods because they felt that they gave owners too much control over their work. Factory working conditions were not always safe. There was often deafening noise pollution. Lighting and ventilation were poor. There were frequent fires and accidents due to fatigue, defective equipment, and careless training. Although it was dangerous, employers suffered no shortage of labor since factory work offered higher pay and more opportunities than one could find elsewhere. In the 1880s, children made up more than 5 percent of the industrial labor force. In 1892, social reformer Jacob Riis wrote Children of the Poor, a book against child labor. Socialism is an economic and political philosophy that favors public instead of private control of property and income. Socialists believe that wealth should be distributed evenly. Karl Marx and Friedrich Engels wrote a famous pamphlet called the Communist Manifesto in 1848. In it, they denounced the capitalist economic system and predicted that workers would one day overturn it. Rather than becoming Socialists, many workers chose to work within the system by forming labor unions. A labor union is an organization of workers formed to protect the interests of its members. They had always existed, but gained strength after the Civil War. Employers took measures to stop unions by forbidding union meetings, firing union organizers, forcing new employees to sign contracts (in which the worker promised never to join a union or participate in a strike), refusing to bargain collectively, and refusing to recognize unions as legitimate representatives. Terence Powderly led the Noble and Holy Order of the Knights of Labor. It was formed in Philadelphia in 1869. Members believed in equal pay for equal work and emphasized education and social reform. The Knights of Labor recruited anyone### the skilled, the unskilled, women, and African Americans, thus putting them at a disadvantage. In 1886, the American Federation of Labor (AFL), led by Samuel Gompers, was formed. Unlike the Knights of Labor, it was a craft union, a union devoted to a specific craft, which contributed to its success and existence today. The AFL excluded women and African Americans. Their goals were better wages, better hours, and better working conditions (called a bread-and-butter unionism). They relied on economic pressure such as strikes and collective bargaining. They also pressed for a closed shop, a workplace in which only union members would be hired. Collective bargaining is a process in which workers negotiate as a group with employers. This tactic was used to cause economic pressure against employers. In July of 1877, the Great Railroad Strike began when the Baltimore and Ohio Railroad announced a wage cut of 10% in the midst of a depression. Angry railway workers called a strike. Starting in Martinsburg, West Virginia, violence spread throughout several cities (Pittsburgh, Chicago, St. Louis, etc.), so President Rutherford B. Hayes sent in federal troops to restore order. In Pittsburgh, soldiers fired on rioters, killing and wounding many. A crowd reacted in anger by setting fire to the railroad company property, causing the president to send in troops

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again. A scab is a negative term for a worker called in by an employer to replace striking laborers. A radical who opposes all government is called an anarchist.

The Haymarket Riot took place in 1886 when a national demonstration was mounted in numerous cities throughout the country. Groups protested for an eight-hour workday (eight hours for work, eight hours for rest, eight hours for what we will). On May 3, police broke up a fight between strikers and scabs, resulting in several casualties. The next day, the strikers called a rally in Haymarket Square. A group of anarchists joined the strikers, as well. During the event, when a bomb was thrown into a police formation (an officer was killed), the police opened fire. Eight anarchists were tried for conspiracy to commit murder### four were hanged, another committed suicide in jail, and the remaining three were pardoned. Thus, the public began to associate unions with violence and radical ideas. Henry Frick, Andrew Carnegies business partner, had tried to cut workers wages at Carnegie Steel, thus causing the Homestead Strike (Homestead, Pennsylvania) of 1892. When the union called a strike, Frick called in the Pinkertons, a private police force known for their ability to break strikes. In a shootout with strikers on the shore of the Monongahela River, several people died and many were wounded. Although he was not connected with the strike, when anarchist Alexander Berkmen failed an attempt to assassinate Frick, the public associated his act with labor violence. The strike was called off. An injunction is a court order to stop a strike. In 1894, there was another great strike outside Chicago. George Pullman, the inventor of luxury sleeping railroad cars (Pullman cars), constructed a company town, a town just for workers. In the Panic of 1893, Pullman laid off workers and cut wages, but kept rent and food prices in his town at the same levels. When angry workers complained to him, three were fired, causing the Pullman Strike. The American Railway Union (A.R.U.) voted to support the strike and called for a boycott of Pullman cars throughout the country. Eugene V. Debs, their leader, instructed strikers not to interfere with the nations mail, but the strike got out of hand, disrupting western railroad traffic completely. Railroad owners turned to the federal government for assistance. By citing the Sherman Antitrust Act, Attorney General Richard Olney won an injunction. Two days later, President Grover Cleveland sent in federal troops to ensure that strikers obeyed the court order. After a week, the strike was over. After the Pullman Strike, unions lost momentum. Factory owners appealed frequently for court orders against unions. The government, denying unions recognition as legally protected organizations, regularly accepted their appeals.

Reina Hoshino