Why did the modern corporation become popular among railroad magnates and other industrialists after the Civil War?

36. The Gilded Age

Roadside America

The Golden Spike: Does it really symbolize the completion of the transcontinental railroad?

From the ashes of the American Civil War sprung an economic powerhouse.

The factories built by the Union to defeat the Confederacy were not shut down at the war's end. Now that the fighting was done, these factories were converted to peacetime purposes. Although industry had existed prior to the war, agriculture had represented the most significant portion of the American economy.

After the war, beginning with the railroads, small businesses grew larger and larger. By the century's end, the nation's economy was dominated by a few, very powerful individuals. In 1850, most Americans worked for themselves. By 1900, most Americans worked for an employer.

The growth was astounding. From the end of Reconstruction in 1877 to the disastrous Panic of 1893, the American economy nearly doubled in size. New technologies and new ways of organizing business led a few individuals to the top. The competition was ruthless. Those who could not provide the best product at the cheapest price were simply driven into bankruptcy or were bought up by hungry, successful industrialists.

Courtesy of Francois Micheloud

The cartoon reads "One sees his (Uncle Sam's) finish unless good government retakes the ship"

The so-called captains of industry became household names: John D. Rockefeller of Standard Oil, Andrew Carnegie of Carnegie Steel, and J. Pierpont Morgan, the powerful banker who controlled a great many industries. Their tactics were not always fair, but there were few laws regulating business conduct at that time.

Industrial Strength

Nevertheless, the American economy grew and grew. By 1914, the small nation once seen as a playground for European empires had now surpassed them all. The United States had become the largest industrial nation in the world.

However, the prosperity of America did not reach everyone. Amid the fabulous wealth of the new economic elite was tremendous poverty. How did some manage to be so successful while others struggled to put food on the table? Americans wrestled with this great question as new attitudes toward wealth began to emerge.

What role did the government play in this trend? Basically, it was pro-business. Congress, the Presidents, and the Courts looked favorably on this new growth. But leadership was generally lacking on the political level. Corruption spread like a plague through the city, state, and national governments. Greedy legislators and "forgettable" Presidents dominated the political scene.

True leadership, for better or for worse, resided among the magnates who dominated the Gilded Age.

Primary Source Set The Industrial Revolution in the United States

• Student Discovery Set - free ebook on iBooks External

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  Lippitt Mill, 825 Main Street, West Warwick, Kent County, RI
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  The Workers' anvil
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  First Telegraphic Message---24 May 1844
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  "93, 402,151 Now Live on Uncle Sam’s Land," The Bemidji daily pioneer
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  Child Labor in the Canning Industry of Maryland
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  Resolution on Enlarging the Locks of the Erie Canal
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  New Map of the Union Pacific Railway...
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  "GROUND FLOOR, SOUTHWEST TURBINE - Slater Mill, Pawtucket, Providence County, RI."
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  Anti-trust cartoons: Nursery Rhymes for Infant Industries
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  Something New Starts Every Day
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  Solvay Process Co.'s Works, Syracuse
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  Labor and Capital
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  Breaker boys, Woodward Coal Mines, Kingston, Pa
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  Excavating for a New York foundation
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  Taping Coils: Westinghouse Works
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  Mrs. Langdon Stewardson requests funds for National Child Labor Committee
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  [Assembly]
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  With Drops of Blood: The History of the Industrial Workers of the World Has Been Written.

The resources in this primary source set are intended for classroom use. If your use will be beyond a single classroom, please review the copyright and fair use guidelines.

Teacher’s Guide

To help your students analyze these primary sources, get a graphic organizer and guides: Analysis Tool and Guides

The Industrial Revolution took place over more than a century, as production of goods moved from home businesses, where products were generally crafted by hand, to machine-aided production in factories. This revolution, which involved major changes in transportation, manufacturing, and communications, transformed the daily lives of Americans as much as— and arguably more than—any single event in U.S. history.

Background

An early landmark moment in the Industrial Revolution came near the end of the eighteenth century, when Samuel Slater brought new manufacturing technologies from Britain to the United States and founded the first U.S. cotton mill in Beverly, Massachusetts. Slater’s Mill in Pawtucket, Rhode Island, like many of the mills and factories that sprang up in the next few decades, was powered by water, which confined industrial development to the northeast at first. The concentration of industry in the Northeast also facilitated the development of transportation systems such as railroads and canals, which encouraged commerce and trade.

The technological innovation that would come to mark the United States in the nineteenth century began to show itself with Robert Fulton’s establishment of steamboat service on the Hudson River, Samuel F. B. Morse’s invention of the telegraph, and Elias Howe’s invention of the sewing machine, all before the Civil War. Following the Civil War, industrialization in the United States increased at a breakneck pace. This period, encompassing most of the second half of the nineteenth century, has been called the Second Industrial Revolution or the American Industrial Revolution. Over the first half of the century, the country expanded greatly, and the new territory was rich in natural resources. Completing the first transcontinental railroad in 1869 was a major milestone, making it easier to transport people, raw materials, and products. The United States also had vast human resources: between 1860 and 1900, fourteen million immigrants came to the country, providing workers for an array of industries.

The American industrialists overseeing this expansion were ready to take risks to make their businesses successful. Andrew Carnegie established the first steel mills in the U.S. to use the British “Bessemer process” for mass producing steel, becoming a titan of the steel industry in the process. He acquired business interests in the mines that produced the raw material for steel, the mills and ovens that created the final product and the railroads and shipping lines that transported the goods, thus controlling every aspect f the steelmaking process.

Other industrialists, including John D. Rockefeller, merged the operations of many large companies to form a trust. Rockefeller’s Standard Oil Trust came to monopolize 90% of the industry, severely limiting competition. These monopolies were often accused of intimidating smaller businesses and competitors in order to maintain high prices and profits. Economic influence gave these industrial magnates significant political clout as well. The U.S. government adopted policies that supported industrial development such as providing land for the construction of railroads and maintaining high tariffs to protect American industry from foreign competition.

American inventors like Alexander Graham Bell and Thomas Alva Edison created a long list of new technologies that improved communication, transportation, and industrial production. Edison made improvements to existing technologies, including the telegraph while also creating revolutionary new technologies such as the light bulb, the phonograph, the kinetograph, and the electric dynamo. Bell, meanwhile, explored new speaking and hearing technologies, and became known as the inventor of the telephone.

For millions of working Americans, the industrial revolution changed the very nature of their daily work. Previously, they might have worked for themselves at home, in a small shop, or outdoors, crafting raw materials into products, or growing a crop from seed to table. When they took factory jobs, they were working for a large company. The repetitive work often involved only one small step in the manufacturing process, so the worker did not see or appreciate what was being made; the work was often dangerous and performed in unsanitary conditions. Some women entered the work force, as did many children. Child labor became a major issue. Dangerous working conditions, long hours, and concern over wages and child labor contributed to the growth of labor unions. In the decades after the Civil War, workers organized strikes and work stoppages that helped to publicize their problems. One especially significant labor upheaval was the Great Railroad Strike of 1877. Wage cuts in the railroad industry led to the strike, which began in West Virginia and spread to three additional states over a period of 45 days before being violently ended by a combination of vigilantes, National Guardsmen, and federal troops. Similar episodes occurred more frequently in the following decades as workers organized and asserted themselves against perceived injustices.

The new jobs for the working class were in the cities. Thus, the Industrial Revolution began the transition of the United States from a rural to an urban society. Young people raised on farms saw greater opportunities in the cities and moved there, as did millions of immigrants from Europe. Providing housing for all the new residents of cities was a problem, and many workers found themselves living in urban slums; open sewers ran alongside the streets, and the water supply was often tainted, causing disease. These deplorable urban conditions gave rise to the Progressive Movement in the early twentieth century; the result would be many new laws to protect and support people, eventually changing the relationship between government and the people.

The Industrial Revolution is a complex set of economic, technological, and social changes that occurred over a substantial period of time. Teachers should consider the documents in this collection as tools for stimulating student thinking about aspects of the Industrial Revolution.

Suggestions for Teachers

• After providing a definition of the Industrial Revolution and explaining the time span across which it took place, teachers might supply small groups of students with a set of the documents in this primary source set. Students can categorize the documents by whether they provide information about what happened, why it happened, or its effects. Some documents may fit into more than one category. When small groups have completed their work, the teacher can facilitate creating a class list of events of the Industrial Revolution, causes (or supporting factors), and effects. Students may search the Library’s online collections to find additional evidence to support the causes and effects on the class chart.
• Using the documents in this primary source set, students can create a timeline of important events in the Industrial Revolution. The last document in the set is dated 1919. Was the Industrial Revolution over by 1919? Challenge students to find evidence in the Library of Congress digital collections to support their answer (there are documents that suggest industrialization in the South was still taking place into the 1930s).
• Understanding a historical event as it was experienced by those who lived through it is an important skill of historical thinking—and one that can be difficult to develop. Teachers may challenge students to study documents in the collection to identify varied perspectives on the changes brought by the Industrial Revolution, as experienced by people of the day. Would students classify the responses as mainly positive, mainly negative, or about equally divided? How did people respond to what they perceived as negative effects of the Industrial Revolution?
• In 1893, Chicago hosted the World’s Columbian Exposition, which highlighted achievements of the United States and other nations in a variety of fields, including manufacturing and technology. An entire building was devoted to electricity. Using the primary source set as a starting point, ask students to design an exhibit about the development of American industry for the World’s Columbian Exposition.

Additional Resources

What caused American industry to expand during the late 19th century quizlet?

Which statement best explains the growth in the iron and steel industries after the US Civil War?

In which form of corporate consolidation is a group of businesses that do the same thing consolidated?

Which of the following are the primary goals of Taylorism?