The Civil War crippled the economy of the South during the Civil War. In the North, businesses grew and expanded to fill the need of supplies for the Union army. This growth in industry continued after the Civil War in the North. From 1865 to 1900, America tripled in population, doubled agricultural production, and manufacturing grew by more than six times what it had been during the war. By 1900 there were dozens of large corporations that employed hundreds of thousands of managers, clerks, and workers.
Social changes occurred during this time because of the industrial growth. Young people began to leave farms for the promise of dependable manufacturing jobs in cities. Corporations grew quickly without intervention by the government. There were very few government regulations and many corporations took advantage of this by exploiting workers and the environment. Still, however, the growth of so much work led to higher standard of living overall in America. In order to combat the control of corporations, labor unions were formed and farm associations created to exercise power in gaining better working conditions and better wages.
Things that led to America's industrial growth.
Captains of Industry or Robber Barons?
As businesses grew, the men who formed them grew in economical worth and power. Some viewed them as captains of industry, a positive term used to describe big business owners as people who were innovative and provided hundreds of thousands of jobs that helped to fuel American growth. Others viewed those same men as robber barons, a negative label that implied big business owners took advantage of their workers, did not provide work place safety, and paid too little wages for workers to get ahead in society.
The Men Who Made America
Innovation Drives the Nation
In 1875 a twenty-eight year old inventor named, Alexander Graham Bell experimented with the "speaking telegraph." A year later he successfully called his assistant from another room, the world would never be the same again. He gained patents on his new device and started a company, the American Telephone and Telegraph Company, or AT&T. Five years later he perfected long distance calling. By 1895, more than 300,000 telephones were in use. His patent became the most valuable ever issued.
The invention of typewriters and sewing machines transformed the workforce because business owners hired women to operate typewriters as clerical workers. When sewing machines were invented they were installed in large factory buildings where women were hired to work in them. Women were hired by the business owners because they could pay them a lower wage than men. Children were often recruited to work for the same reasons. The hours were often long and with little to no benefits, but it did offer women in urban areas a way to make their own money.
Thomas A. Edison
There is probably no one more famous for being an inventor than Thomas Edison. Born in 1847 in Ohio, Edison showed an interest in science at a young age. Surprisingly, he struggled in school and was home schooled where he could spend more time tinkering on his inventions. He moved to New York and began working as an inventor full time. His invention of a machine that can record voices and play them back, called a phonograph, made him famous and highly desired for hire.
By the age of 27 he built his lab (the first such scientific lab in the country) in 1877 at Menlo Park, New Jersey. In 1879 he created a long-lasting lightbulb, and then later improved the telephone. By the time he was 30, he was America's foremost inventor. He was funded mostly by banking tycoon J. P. Morgan who wanted to invest in electricity and the light bulb.
When Edison perfected the use of direct current electricity (DC), under J. P. Morgan's financial backing, he created the first electric company, Edison General Electric Company (1888). Edison created a way to change street lamps from gas lamps (very dangerous because of fires) to electric lamps. Edison's direct current electricity limited the distance that it could be used (about two miles). However, Nikola Tesla began using his invention of the alternating-current electric system in 1886, this allowed electricity to move further away from the source of power. Edison disagreed with Tesla saying that AC current was too dangerous. Tesla was funded by George Westinghouse, an investor with an interest in the newly created electrical revolution. Tesla invented the electric motor in 1887, this allowed factories to build where they wanted, no longer limited to sites near rivers, which it used to power machinery.
The invention of the lightbulb and alternating current electricity allowed factories to be open for production twenty-four hours a day and made the work place safer because it replaced the use of fire as a mode to light factories. Each year, large and small cities were plagued by fires that could destroy entire blocks or even entire cites.
The Great Railroad Boom
The single most important innovation in industry after the Civil War that led to expansion of settlement and industry, was the railroad. Although it was invented before the Civil War, it was not until after the Civil War that railroad construction really took off. Railroads offered a cheaper and safer mode of transportation of goods and people. Railroads were America's first big business. From the 1860s to the 1960s, the railroad became the number one provider of transportation in the U.S. Railroads ferried men and material all over the country.
Railroads in Southeast Missouri
The first major railroad that was built through Southeast Missouri was started before the Civil War by Bloomfield lawyer and business man, Solomon G. Kitchen. Work was halted when war broke out in 1861, which at that point the railroad started at Cairo, Illinois and ended at Buffington (in between Morehouse and Gray Ridge). After the Civil War construction continued of the railroad through Stoddard County and into Butler County. Known as the Cairo and Texas Railroad (or C.A.T. for short), it would run from Cairo, Illinois to Texas. The government gave land to railroad companies in order to get them to build railroads. As the railroad was constructed through Stoddard County, towns were laid out along the railroad bed. People would bid on lots of the new town begin building commercial and residential buildings, this ensured that there would people along the railroad that would use it, thus making the railroad money. Towns created this way were Morehouse, Gray Ridge, Hunterville, Essex, Dexter, Bernie, Malden, and many others. Some towns, like Frisco, were built and named after railroad companies with hopes the railroad would come through their town ensuring their survival. Unfortunately for towns like Frisco, many were unsuccessful.
Southeast Missouri Business Growth
During the same time period as this unit, much of the area we now live in in Southeast Missouri was covered in large and very valuable timber. The problem was getting the timber after it was cut and made into planks, to the outside market, the railroad helped to make that possible.
The country wanted a rail link that would connect the East Coast with the West Coast, after the Civil War, this became a major focus for industrialists who saw the benefit of such a line that linked both ends of the country. The work, however, would be hard and dangerous, especially on the western half of the railroad where mountains had to be blasted, large bodies of water crossed, and scores of angry Native Americans waited for the right time to strike at the invaders.
Most who worked on the railroad were unmarried former Civil War veterans, but even that was not enough labor. Railroad owners began to import labor from China to work on the western sections of the railroad. They often faced racial violence and trouble from individuals who believed they were taking "American" jobs. Maps were used to send in timber cutters and rock blasters in order to clear a path for rail bed. Cross ties were laid and then 560 pound 30 feet sections of rail were laid and spikes driven to keep them in place. Engineers went ahead of the work to begin designing bridges and how to overcome obstacles. On May 10, 1869, the two lines, one from the East Coast and one from the West Coast, met a Promontory Summit, just north of Salt Lake City, Utah to drive the last stake into the ground. It only took 83 hours (3 and one half days) to travel from New York City to San Fransisco instead over three weeks.
Prior to the Civil War, most business was done locally or out of the home. With the large scale industrialization during the Civil War, the completion of the Transcontinental Railroad, and the host of inventions in communication and electricity, big businesses began to grow to never before seen proportions. As businesses grew, they needed more capital, or operating money, to continue growth. One method business owners used was the creation of corporations. Corporations consist of a shares or essentially "pieces" of the business. For example, if a new railroad company formed it might print 100 shares, the original owner might retain ownership of 51 shares and allow the remaining 49 to be sold to investors. This will allow the owner to be the President of the company and have the most power, but he will also have a board of advisors that represent the owners of the other 49 shares. If the company is successful the values of the share will increase, if it is not, they will decrease. Being a corporation allows for the sharing of the profits, but also sharing of the losses if it fails so that no one person has to absorb the entire loss.
Capitalism - Capitalism is the economic system that was adopted by the U.S. from the beginning of its existence as an independent nation. Capitalistic system is one with little government intrusion or impact (they pretty much stay out of business affairs) that is centered on private citizens owning businesses. This is also known as a free market system. This freedom allows for nearly anyone that can come up with an idea and money to start a business, but it also means if the business does not successfully make money, there is no safety net to keep the owner from losing everything. Competition is one of the greatest virtues or elements of capitalism. It became the goals of big business owners to find ways in order to eliminate the competition and control all of the market they were involved in. For example, Andrew Carnegie became a successful business man with his U.S. Steel Company, he sought and was usually successful, in buying out smaller steel mills thus making him the primary steel producer in the U.S. When this happens, capitalism is threatened because there is no longer any competition to keep prices competitive. If one owns every steel mill in the U.S. that person can control the prices of their steel and the buyer will have to pay it because there is no where else to get it. This became a major problem during this time. Companies that do this earned the name of "robber barons" because they believed it was unfair.
John D. Rockefeller
John D. Rockefeller came from a modest background and grew with a desire to organize and make money. In 1870, he teamed up with his brother and two other men to form Standard Oil Company of Ohio. He believed that he could run a successful business better than competitors because he believed they were inefficient and distracting. As Rockefeller became more successful he began to practice horizontal integration, or a business that buys out the competition and either makes them part of the business or closes them down all together. If done successfully, it can lead to a monopoly, a business so large that it controls the entire industry. A monopoly was Rockefeller's goal. Rockefeller also practiced what became known as vertical integration, which is a process in which a business buys up all the products or services needed to produce, refine, or deliver the product. Rockefeller bought out railroads, pipe factories, and etc. He believed that if you cut the middle man out, you made more money. Another method that Rockefeller used was to have his corporation buy the stocks of other companies, thereby owning shares in competing companies. He would then take all of the competing companies that he owned stock in and create a trust. In return the shareholders would receive annual payments from the trust's earnings. This was done to hide his monopoly.
In 1890 Congress passed the Sherman Anti-Trust Act in order to be able to combat monopolies from controlling entire industries. The problem with the legislation was that it was too vague and lacked any real way to enforce it. It was, however, one of the first times the federal government became directly involved with business affairs.
Laissez-Faire - means that government did not regulate the activities of big business, impose high corporate taxes, or provide any meaningful oversight of business operations or working conditions. Term used to describe the relationship of business with government after the Civil War.
The Rise of Labor Organization
Industrialization transformed more than just the economy of the U.S., it also impacted the social life of the nation. Class division became very clear with three main classes: The wealthy, the middle class, and the laboring class. Each struggled to coexist at times. This time period is often called the "Gilded Age," a term given by an author to sarcastically describe a crooked political system. What it means is that if something is gilded, it has a pretty and attractive gold finish or exterior, but the inside of the item is not made of that material. It's like gold plating a rotten apple. The exterior of the apple appears shiny and pretty, but the interior, or in the case of describing society, is rotten and ugly. Outwardly with lots of jobs and plenty of work, it looked like times may have been good during this time. There are pictures of women wearing big pretty hats, men wearing suits and bow ties, large beautiful homes, luxurious train cars, and etc., and that was true for a very small number of people, the vast majority worked in horrid working conditions that were unsafe and dirty. They lived in poorly made homes and poverty infested neighborhoods.
The Middle Class - With industrialization and the growing economy, big businesses needed more than just unskilled labor, it needed managers, engineers, clerks, consultants, and etc. This new line of work was above unskilled labor but certainly not enough to make one rich, thus a middle class emerged. Middle class Americans fall between the wealthy and those that do unskilled labor. They might be college educated or worked their way up the ranks in a factory to become a manager. Middle Americans were closer to the laboring class and thus often times had sympathy with their conditions. Many middle class women decided to attempt to make the lives others better. Jane Addams was a social worker that created the Hull House in Chicago, were social workers helped immigrants adapt to American life and also wanted to help women become more independent.
The Working Class - Unskilled laborers that worked on railroads, factories, mills, mines, slaughterhouses, and sweatshops. They could also be migrant farm workers that moved onto farms during a picking season and then left to find work else where, always temporary. Most immigrants fell into this category as they had little support upon arriving in America. In many cases, however, even though the working conditions were not very good, it was usually better than where they came from . Unskilled laborers generally worked 10 or more hours a day and were among the highest in workplace accidents and deaths. Between 1888-1894, there were 16,000 railroad workers killed and 170,000 maimed in on the job accidents. The U.S. at that time was the only industrial nation in the world that had no insurance program to cover medical expenses for on the job injuries.
Child Labor - Child labor became more common when parents struggled to make enough money to feed their families, in 1880, one in every six children under the age fourteen worked full time. By 1890 there were over 2 million child laborers. A child working in a southern textile mill was only half as likely to reach the age of twenty as a child who did not work in a mill.
Organized Labor - As time went on and working conditions did not improve in the workplace, workers looked to unite in order to be able to make business owners aware of their problems and achieve change. When talking about labor, organizing means to form a labor union. Labor unions use the group in order to get their voices heard. If a factory owner had only one person demand safer working conditions, they would just fire them, no big deal, but if the entire work force banded together and demanded safer working conditions, that would be a major problem for the factory owner because his factory would have to stop manufacturing. The most common tool used by labor unions in order to protest what they want, is through strikes. Strikes, also known as collective bargaining, are when members of an industry and sometimes more decide to no longer work, but instead, will usually hold signs up at the factory gate that protest their problems. The factory owner is now forced to either negotiate with the strikers or find a way to get rid or replace them.
In 1873, an economic recession hurt railroads, so railroads slashed the wages of their workers. In 1877, railroad companies again slashed wages, this time by 10%. This caused railroad workers in West Virginia to walk off the trains and block the tracks to shut down all rail traffic. Soon the strike spread to other railroads across the country. Workers began to attack railroad bosses and their property. Millions of dollars in property were destroyed and more than 100 workers and railroad bosses were killed in confrontations with one another. The Great Railroad Strike showed the gap between railroad executives and workers. In cities across the country, governors called up the state guard and eventually President Rutherford B. Haye's called in the U.S. military to break up protests and looting. While the U.S. army had broken the will of the strikers, it did not address the problems.
Knights of Labor - formed in 1869 to act as umbrella union for various different types of individual labor unions. The Knights of Labor argued for an eight hour work day, equal pay between men and women, and wanted protections from convict leasing. Convict leasing was when prisoners in jail were rented out by factory owners, mine operators, and large farmers, to work for them, often to replace striking workers.
By 1900 the U.S. produced a third of the world's goods, and millions of immigrants from around the world continued to risk all in hopes of chasing the American Dream. The majority of the workers in the country now worked in factories or mines rather than on farms. As the 20th century dawned, an unregulated capitalist economy had grown corrupt and recklessly out of balance, it appeared that only government intervention might restore some economic fairness to the work place.