American Republic Ch. 9

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Industrialization

1865–1901
Why It Matters
The rise of the United States as an industrial power began after the Civil War. Many factors
promoted industry, including cheap labor, new inventions and technology, and plentiful raw
materials. Railroads rapidly expanded. Government policies encouraged growth, and large
corporations became an important part of the economy. As industry expanded, workers tried to
form unions to fight for better wages and working conditions.

The Impact Today


Trends which began in this era can still be seen today.
• Corporations continue to play an important role.
• Technology continues to change American life.
• Unions remain powerful in many industries.

The American Republic Since 1877 Video


The Chapter 9 video, “Building America,” examines industrial
expansion in the United States in the late 1800s.

1869 1876
• Transcontinental • Alexander Graham Bell 1882
railroad completed invents telephone • Standard Oil
forms trust
1879
• Edison
perfects
lightbulb
▲ ▲
A. Johnson Grant Hayes Garfield Arthur Cleveland
1865–1869 1869–1877
▲ 1877–1881 ▲ 1881 1881–1885 1885–1889

1865 1875 1885

▼ ▼ ▼ ▼
1876
• Korea forced to 1881
1867 trade with Japan • Russian czar
• British colonies unite to 1869 Alexander II
form Dominion of Canada assassinated
• Chemist Dmitri Mendeleyev
creates periodic table of elements

306
This painting by twentieth-century artist Aaron Bohrod captures the dynamism of an
industrializing nation. Bohrod titled his work The Big Blow: the Bessemer Process.

1892 1901
• Homestead • J.P. Morgan
strike occurs forms U.S. Steel
1894
1886 • Pullman strike
• Haymarket begins 1903
Square riot
• Women’s Trade HISTORY
▲ ▲ Union League
B. Harrison Cleveland McKinley T. Roosevelt founded
1889–1893 1893–1897 1897–1901 1901–1909
▲ ▲ ▲ Chapter Overview
Visit the American Republic
Since 1877 Web site at
1895 1905 tarvol2.glencoe.com and
click on Chapter Overviews—
▼ ▼ ▼ Chapter 9# to
to preview
preview chapter
chapter
1892 1896 1900 information.
• Rudolf Diesel patents • Athens hosts first • Boxer Rebellion
diesel engine modern Olympic begins in China
games

307
The Rise of Industry
Main Idea Reading Strategy Reading Objectives
American industry grew rapidly after the Organizing As you read about the • Identify the effects of expanding popu-
Civil War, bringing revolutionary changes changes brought about by industrializa- lation on industry.
to American society. tion, complete a graphic organizer similar • Explain the effects of technological
to the one below listing the causes of innovations such as the telephone and
Key Terms and Names industrialization. telegraph on American development.
gross national product, Edwin Drake, Causes
laissez-faire, entrepreneur, Morrill Tariff, Section Theme
Alexander Graham Bell, Thomas Alva United States
Economic Factors The free enterprise
Edison Becomes an system nurtured the growth of American
Industrial Nation industry.

✦1860 ✦1870 ✦1880 ✦1890


1859 1865 1876 1879 c. 1893
Edwin Drake Thaddeus Lowe Alexander Graham Bell Thomas Edison Northrop automatic
drills first oil well invents ice machine invents telephone perfects lightbulb loom introduced

On October 21, 1879, Thomas Alva Edison and his team of workers were too excited to
sleep. For weeks they had worked to create an electric incandescent lamp, or lightbulb,
that would burn for more than a few minutes. For much of the 1800s, inventors had strug-
gled to develop a form of lighting that would be cheaper, safer, and brighter than tradi-
tional methods such as candles, whale oil, kerosene, and gas. If Edison and his team could
do it, they would change the world. Finally, after weeks of dedicated effort, they turned
night into day. Edison later recalled:

“ We sat and looked and the lamp continued to burn and the longer it burned the more
fascinated we were. None of us could go to bed and there was no sleep for over 40 hours;
we sat and just watched it with anxiety growing into elation. It lasted about 45 hours and
Thomas Edison
then I said, ‘If it will burn 40 hours now I know I can make it burn a hundred.’

—quoted in Eyewitness to America

The United States Industrializes


Although the Industrial Revolution began in the United States in the early 1800s, the
nation was still largely a farming country when the Civil War erupted. Out of a popula-
tion of more than 30 million, only 1.3 million Americans worked in industry in 1860.
After the Civil War, industry rapidly expanded, and millions of Americans left their farms
to work in mines and factories.
By the early 1900s, Americans had transformed the United States into the world’s
leading industrial nation. By 1914 the nation’s gross national product (GNP)—the total

308 CHAPTER 9 Industrialization


value of all goods and services produced by a the first oil well near Titusville, Pennsylvania. By
country—was eight times greater than it had been 1900 oil fields from Pennsylvania to Texas had been
when the Civil War ended. opened. As oil production rose, it fueled economic
expansion.
Natural Resources An abundance of raw materials
was one reason for the nation’s industrial success. The A Large Workforce The human resources available
United States contained vast natural resources upon to American industry were as important as natural
which industry in the 1800s depended, including resources in enabling the nation to industrialize rap-
water, timber, coal, iron, and copper. The presence of idly. Between 1860 and 1910, the population of the
these resources meant that American companies United States almost tripled. This population pro-
could obtain them cheaply and did not have to import vided industry with a large workforce and also cre-
them from other countries. Many of the nation’s ated greater demand for the consumer goods that
resources were located in the mountains of the factories produced.
American West. The settlement of this region after the Population growth stemmed from two causes—
Civil War helped to accelerate industrialization, as large families and a flood of immigrants. American
did the construction of the transcontinental railroad. industry began to grow at a time when social and
Railroads brought settlers and miners to the region, economic conditions in China and eastern Europe
and carried the resources back to factories in the East. convinced many people to leave their nations and
At the same time, a new resource, petroleum, move to the United States in search of a better life.
began to be exploited. Even before the invention of Between 1870 and 1910, roughly 20 million immi-
the automobile, petroleum was in high demand grants arrived in the United States. These multitudes
because it could be turned into kerosene. Kerosene added to the growing industrial workforce, helping
was used in lanterns and stoves. The American oil factories increase their production and furthering
industry was built on the demand for kerosene. It demand for industrial products.
began in western Pennsylvania, where residents had
long noticed oil bubbling to the surface of area Reading Check Explaining How did oil production
springs and streams. In 1859 Edwin Drake drilled affect the American economy?

Major Industries, c. 1900


In
Motion
90°W 80°W

Early
Pennsylvania
oil well
N

W E
Boston S

Chicago
New York City 40°N

Pittsburgh

Washington, D.C.
Coal mining
Iron ore
Prairie 1. Interpreting Maps Where were most industrial cities in
Chief manu-
facturing cities the Northeast located?
0 200 miles
Iron/Steel mills 2. Applying Geography Skills What natural resources
Oil field
0 200 kilometers contributed to making Pittsburgh, Pennsylvania, a major
Lambert Equal-Area projection
Railroad steel center?
Sawmills

CHAPTER 9 Industrialization 309


1876
American Inventions Alexander Graham
Bell, telephone
1865
Thaddeus Lowe,
ice machine

✦1850 ✦1865

1852 1874
Elisha Otis, Stephen Dudley Field,
1864
elevator brake electric streetcar
George Pullman,
rail sleeping car

Free Enterprise of factories and thousands of miles of railroad track.


An equally important source of private capital was
Another important factor that enabled the United
Europe, especially Great Britain. Foreign investors
States to industrialize rapidly was the free enterprise
saw more opportunity for profit and growth in the
system. In the late 1800s, many Americans embraced
United States than at home, and their money also
the idea of laissez-faire (leh·say·FAR), literally “let
helped to fund the nation’s industrial buildup.
do,” a French phrase meaning “let people do as they
choose.” Supporters of laissez-faire believe the govern- Reading Check Explaining What does it mean
ment should not interfere in the economy other than to when a government has a laissez-faire economic policy?
protect private property rights and maintain peace.
These supporters argue that if the government regu-
lates the economy, it increases costs and eventually
hurts society more than it helps. Government’s Role in Industrialism
Laissez-faire relies on supply and demand rather In many respects, the United States practiced
than the government to regulate prices and wages. laissez-faire economics in the late 1800s. State and
Supporters claim that a free market with competing federal governments kept taxes and spending
companies leads to greater efficiency and creates low and did not impose costly regulations on
more wealth for everyone. Laissez-faire advocates industry. Nor did they try to control wages and
also support low taxes to ensure that private individ- prices. In other ways, the government went beyond
uals, not the government, will make most of the deci- laissez-faire and adopted policies intended to help
sions about how the nation’s wealth is spent. They industry, although these policies frequently pro-
also believe that the government’s debt should be duced results other than what had been intended.
kept limited since money the government borrows Since the early 1800s, the struggle between the
from banks is not available to be loaned to individu- northeastern states and the southern states had
als for their own uses. shaped the economic debate in the United States.
In the United States, the profit motive attracted Northern leaders wanted high tariffs to protect
people of high ability and ambition into business. American industry from foreign competition. They
American entrepreneurs—people who risk their cap- also sought federal subsidies for companies build-
ital in organizing and running a business—appreci- ing roads, canals, and railroads to the west.
ated the challenges and rewards of building a Southern leaders opposed subsidizing internal
business and making profits for themselves. improvements, and they favored low tariffs to pro-
In the late 1800s, the prospect of making money in mote trade and to keep the cost of imported manu-
manufacturing and transportation attracted many factured goods low.
entrepreneurs. The savings that New Englanders The Civil War ended this debate. When the South
accumulated through trade, fishing, whaling, textile seceded, the Republicans were left in control of
mills, and shoe manufacturing helped build hundreds Congress. They quickly passed the Morrill Tariff,

310 CHAPTER 9 Industrialization


1877
Thomas Edison, 1893
phonograph 1887 Charles and J. Frank Duryea,
Granville T. Woods, gasoline-powered car
electromechanical brake

✦1880 ✦1895
1879 1883
Thomas Edison, Jan E. Matzeliger,
incandescent lightbulb shoemaking machine
1879
James Ritty, cash register

reversing years of declining tariffs. By the end of the that the new American industries could compete
Civil War, tariffs had risen sharply. Congress also with the large established European factories unless
gave vast tracts of western land and millions of dol- tariffs were put in place to protect them. By the early
lars in loans to western railroads. The government 1900s, many American industries were large and
also sold public lands with mineral resources for highly competitive. Business leaders increasingly
much less than their market value. Historians still began to push for free trade because they believed
dispute whether these policies helped to industrial- they could compete internationally and win.
ize the country.
Reading Check Analyzing Do you think govern-
Supporters of laissez-faire generally favor free
trade and oppose subsidies, believing that tariffs and ment policies at this time helped or hindered industrialization?
subsidies drive up prices and protect inefficient com- Why?
panies. They point out that one reason the United
States industrialized so rapidly in the 1800s was
because it was one of the largest free trade areas in New Inventions
the world. Unlike Europe, which was divided into
A flood of important inventions helped increase
dozens of states, each with tariffs, the entire United
the nation’s productive capacity and improved the
States was open to trade. The Constitution bans
network of transportation and communications that
states from imposing tariffs, and there were few fed-
was vital to the nation’s industrial growth. New
eral regulations to impede the movement of goods
inventions led to the founding of new corporations,
across the country. Similarly, the United States prac-
which produced new wealth and new jobs.
ticed free trade in labor, placing very few restrictions
on immigration.
TECHNOLOGY
High tariffs, however, contradicted laissez-faire
ideas and hurt many Americans. When the United Bell and the Telephone One of the most dramatic
States raised tariffs against foreign goods, other inventions in the late 1800s came in the field of com-
countries raised their tariffs against American goods. munications. In 1874 a young Scottish-American
This hurt American companies trying to sell goods inventor named Alexander Graham Bell suggested
overseas, and in particular, it hurt farmers who sold the idea of a telephone to his assistant, Thomas
their products to Europe. Ironically, the problems Watson. Watson recalled, “He had an idea by which
farmers faced may have helped speed up industrial- he believed it would be possible to talk by tele-
ization, as many rural Americans decided to leave graph.” Bell intended to make an electrical current of
their farms and take jobs in the new factories. varying intensity transmit sound.
Despite the problems tariffs created for trade, Bell worked until 1876 before he succeeded in trans-
many business leaders and members of Congress mitting his voice. Picking up the crude telephone, he
believed they were necessary. Much of Western called to the next room, “Come here, Watson, I want
Europe had already industrialized, and few believed you.” Watson heard and came. The telephone

CHAPTER 9 Industrialization 311


revolutionized both business and personal communi- In the early 1870s, Gustavus Swift hired an engineer to
cation. In 1877 Bell and others organized the Bell develop a refrigerated railroad car. In 1877 Swift
Telephone Company, which eventually became the shipped the first refrigerated load of fresh meat. The
American Telephone and Telegraph Company (AT&T). widespread use of refrigeration allowed food to be
kept fresh longer and reduced the risk of disease from
Edison and Electricity Perhaps the most famous food poisoning.
inventor of the late 1800s was Thomas Alva Edison. The textile industry had long depended on machines
A great innovator, Edison worked tirelessly to invent to turn fibers into cloth. By the mid-1800s, the introduc-
new products and to improve devices created by oth- tion of the Northrop automatic loom allowed cloth to
ers. His laboratory at Menlo Park, New Jersey, staffed be made at an even faster rate. Bobbins, which previ-
by skilled assistants, became the forerunner of the ously had been changed by hand, were now changed
modern research laboratory. Edison stood as a symbol automatically without stopping the loom.
for the emerging age of technology. Great changes also took place in the clothing
Edison first achieved international fame in 1877 industry. Standard sizes, developed from measure-
with the invention of the phonograph. Two years ments taken of Union soldiers during the Civil War,
later, Edison perfected the lightbulb and the electric were used in the manufacture of ready-made clothes.
generator. His laboratory then went on to invent or Power-driven sewing machines and cloth cutters
improve several other major devices, including the rapidly moved the clothing business from small tai-
battery, the dictaphone, the mimeograph (an early lor shops to large factories.
copying machine), and the motion picture. Similar changes took place in shoemaking. New
In 1882 the Edison Electric Illuminating Company processes and inventions made increased production
launched a new industry and began the transforma- possible in the shoe industry. Large factories could
tion of American society when it began to supply mass-produce shoes more cheaply and efficiently
electric power to customers in New York City. In 1889 than local cobblers and could pass these savings on
several of Edison’s companies merged to form the to their customers in the form of lower prices. By
Edison General Electric Company, which today is 1900 local cobblers had nearly disappeared. Prices of
known as GE. many other products also dropped as the United
States industrialized.
Technology’s Impact As knowledge about technol-
ogy grew, almost everyone in the United States felt its Reading Check Explaining How did the use of
effects. Shortly after the Civil War, Thaddeus Lowe electric power affect the economic development of the United
invented the ice machine, the basis of the refrigerator. States?

TM
Study Central To review this section, go to
TM
tarvol2.glencoe.com and click on Study Central .

Checking for Understanding Critical Thinking Analyzing Visuals


1. Define: gross national product, laissez- 5. Synthesizing What role did the federal 7. Applying Time Lines Copy the time
faire, entrepreneur. government play in increasing indus- line on pages 310 and 311 onto a
2. Identify: Edwin Drake, Morrill Tariff, trialization in the United States after the separate sheet of paper. Add other
Alexander Graham Bell, Thomas Alva Civil War? inventions you have learned about to
Edison. 6. Organizing Use a graphic organizer the time line in proper chronological
3. Explain how an abundance of natural similar to the one below to indicate order. Be sure to include the date for
resources contributed to economic how the inventions listed affected the each invention.
growth in the United States in the late nature of American work and business.
Writing About History
1800s.
Invention Effects 8. Descriptive Writing Imagine you are a
Reviewing Themes telephone young person living in this country in
4. Economic Factors How did the lightbulb the late 1800s. Choose one of the
principles of the free enterprise system, automatic loom inventions discussed in the section, and
laissez-faire, and profit motive write a journal entry describing its
encourage the rise of industry? impact on your life. Use standard gram-
mar, spelling, sentence structure, and
punctuation.

312 CHAPTER 9 Industrialization


Critical Thinking

Making
Inferences

The Wright Brothers Triumph at Kitty Hawk


Why Learn the Skill?
Just as you are about to leave home to catch your
school bus, you hear a radio report. Firefighters are
battling a blaze near the bus garage. Your bus is
late. Although no one told you, you know that the
fire disrupted the bus schedule. You have made an
inference. From the limited facts available, you
formed a conclusion. By combining facts and gen-
eral knowledge, you inferred that the fire trucks
delayed your bus.

Learning the Skill


Learning how to make inferences will help you First flight at Kitty Hawk, December 17, 1903
draw conclusions about particular situations. To
make accurate inferences, follow these steps: 1 What are the facts regarding Langley’s attempt?
• Read or listen carefully for stated facts and ideas. 2 What are the facts regarding the Wright broth-
• Review what you already know about the same ers’ attempt?
topic or situation. 3 What inferences might you draw based on the
• Use logic and common sense to form a conclu- success of the Wright brothers and failure of
sion about the topic. Langley?
• If possible, find information that proves or dis-
proves your inference.
Skills Assessment
Complete the Practicing Skills questions on
Practicing the Skill page 333 and the Chapter 9 Skill Reinforcement
Activity to assess your mastery of this skill.
Read the following passage about early air-
planes, and then answer the questions that follow.
On December 8, 1903, Samuel Langley was ready for
his second attempt at flying a manned, self-propelled
Applying the Skill
aircraft. This had never been done before. Making Inferences Reread the American Story about
Langley used a $50,000 U.S. government grant to Thomas Edison on page 308, then answer these
build a plane based on unmanned aircraft designs, questions.
adding a very powerful engine. The plane broke apart on 1. What device did inventors struggle to develop for
takeoff and crashed into the Potomac River. much of the 1800s?
In contrast, Wilbur and Orville Wright used a little 2. Why did Edison want to develop this new device?
more than $1,000 of their personal savings to build their
3. Based on these facts, what inference can you make
aircraft. The brothers carefully studied the problems with
about Thomas Edison’s methods? What inference
previous planes and designed one with better wings, a
can you make about how his invention would
more efficient propeller, and a strong but light engine.
affect the economy?
On December 17, 1903, these intrepid Americans made
the first manned, powered flight in history on the sand
Glencoe’s Skillbuilder Interactive Workbook
dunes of Kitty Hawk, North Carolina.
CD-ROM, Level 2, provides instruction and
practice in key social studies skills.

313
The Railroads
Main Idea Reading Strategy Reading Objectives
After the Civil War, the rapid construction Organizing As you read about the devel- • Discuss ways in which the railroads
of railroads accelerated the nation’s opment of a nationwide rail network, spurred industrial growth.
industrialization and linked the country complete a graphic organizer similar to • Analyze how the railroads were
together. the one below listing the effects of this rail financed and how they grew.
network on the nation.
Key Terms and Names Section Theme
Effects
Pacific Railway Act, Grenville Dodge, Individual Action The railroads pro-
Leland Stanford, Cornelius Vanderbilt, vided new ways for some Americans to
Nationwide Rail
time zone, land grant, Jay Gould, Crédit Network amass wealth.
Mobilier, James J. Hill

✦1870 ✦1875 ✦1880 ✦1885


1869 1872 1873 1883
First transcontinental Crédit Mobilier scandal First direct rail service between Time zones instituted
railroad completed takes place New York and Chicago begins

At Promontory Summit, Utah, on May 10, 1869, hundreds of spectators gathered to


watch a historic event. Dignitaries from the East and the West met to hammer gold and sil-
ver spikes into the final rails that would join two great railroad lines—the Union Pacific and
Central Pacific—and span the entire country.
Telegraph offices around the country stood ready to receive news that the last spike had
been driven. When the news arrived, bells pealed across the nation, and even the Liberty
Bell was rung. In Chicago a seven-mile procession paraded through the streets, and the
pealings of church bells resonated throughout the nation’s small towns. General Grenville
Dodge, who had overseen part of the construction, observed:

“ The trains pulled up facing each other, each crowded with workmen who sought advan-
tageous positions to witness the ceremonies. . . . The officers and invited guests formed on
each side of the track. . . . Prayer was offered; a number of spikes were driven in the two
Grenville Dodge adjoining rails . . . and thus the two roads were welded into one great trunk line from the


Atlantic to the Pacific.
—quoted in Mine Eyes Have Seen

Linking the Nation


In 1865 the United States had about 35,000 miles of railroad track, almost all of it east
of the Mississippi River. After the Civil War, railroad construction expanded dramati-
cally, linking the distant regions of the nation in a transportation network. By 1900 the
United States, now a booming industrial power, boasted over 200,000 miles of track.

314 CHAPTER 9 Industrialization


The railroad boom began in 1862 when President railway supplies, fuel for locomotives and trains, and
Abraham Lincoln signed the Pacific Railway Act. supplies for men and animals on the entire work—
This act provided for the construction of a transconti-
nental railroad by two corporations, the Union
had to be transported from the Missouri River.

—quoted in The Growth of the American Republic
Pacific and the Central Pacific railroad companies.
To encourage rapid construction, the government The railroad workers included Civil War veterans,
offered each company land along its right-of-way. new immigrants from Ireland recruited especially for
Feverish competition between the two companies the task, frustrated miners and farmers, cooks, adven-
developed, as each sought to obtain as much public turers, and ex-convicts. At the height of the project, the
land and money as possible. Union Pacific employed about 10,000 workers. While
most of the laborers camped along the line, about one-
The Union Pacific and Grenville Dodge Under fourth of them slept three-deep in bunk beds on rolling
the direction of engineer Grenville Dodge, a former boarding cars. Camp life was rough, dirty, and danger-
Union general, the Union Pacific began pushing ous, with lots of gambling, hard drinking, and fighting.
westward from Omaha, Nebraska, in 1865.
The laborers faced blizzards in the mountains, The Big Four and the Central Pacific The Central
scorching heat in the desert, and sometimes angry Pacific Railroad began as the dream of engineer
Native Americans. Labor, money, and engineering Theodore Dehone Judah, who convinced the
problems plagued the supervisors of the project. As California legislature to organize a state railroad con-
Dodge observed: vention to support his idea. He sold stock in his
fledgling Central Pacific Railroad Company to four
“ At one time we were using at least ten thousand
animals, and most of the time from eight to ten thou-
Sacramento merchants: grocer Leland Stanford, shop
owner Charley Crocker, and hardware store owners
sand laborers. . . . To supply one mile of track with Mark Hopkins and Collis P. Huntington.
material and supplies required about forty cars. . . . These so-called “Big Four” eventually made huge
Everything—rails, ties, bridging, fastenings, all fortunes from their investment. Leland Stanford

History

Engineering Victory The Union Pacific and Central Pacific were joined near
Ogden, Utah. The last spike driven was made of gold. It was quickly removed and
kept as a symbol. What did the event mean for the nation’s commerce?
became governor of California and later served as a unconnected lines existed.
United States senator after founding Stanford The challenge for eastern HISTORY
University in 1885. capitalists was to create a
Because of a shortage of labor in California, the single rail transportation
Student Web
Central Pacific Railroad hired about 10,000 workers system from this maze of Activity Visit the
from China. All the equipment—rails, cars, locomo- small companies. American Republic
tives, and machinery—was shipped from the East, Railroad consolidation Since 1877 Web site at
either around Cape Horn at the tip of South proceeded rapidly from tarvol2.glencoe.com
America or over the Isthmus of Panama in Central 1865 to 1900. Large rail and click on Student
America. lines took over about 400 Web Activities—
small railroads, and by Chapter 9 for an
Reading Check Examining Why were many work-
1890 the Pennsylvania activity on
ers on the Central Pacific Railroad recruited from China? Railroad was a consolida- industrialization.
tion of 73 smaller compa-
nies. Eventually seven
Railroads Spur Growth giant systems with terminals in major cities and
The transcontinental railroad was the first of many scores of branches reaching into the countryside con-
lines that began to crisscross the nation after the Civil trolled most rail traffic.
War. This expansion spurred American industrial One of the most famous and successful railroad
growth. By linking the nation, railroads helped consolidators was Cornelius Vanderbilt, a former
increase the size of markets for many products. Huge boat captain who had built the largest steamboat fleet
consumers themselves, the railroads also stimulated in America. By 1869 Vanderbilt had purchased and
the economy by spending extraordinary amounts of merged three short New York railroads to form the
money on steel, coal, timber, and other necessities. New York Central, running from New York City to
Buffalo. Within four years he had extended his con-
Linking Other Lines In the early 1800s, most rail- trol over lines all the way to Chicago, which enabled
roads had been built to promote specific cities or to him to offer the first direct rail service between New
serve local needs. By 1865 hundreds of small York City and Chicago. In 1871 Vanderbilt began con-
struction of New York’s Grand Central terminal.

The Benefits of a National System Before the


1880s each community set its clocks by the sun’s
position in the sky at high noon. At noon in Chicago,
for example, it was 12:50 P.M. in Washington, D.C.,
The Trans-Siberian 12:09 P.M. in Louisville, Kentucky, and 11:41 A.M. in
Railroad St. Paul, Minnesota. Local time interfered with train
Nearly 50 years after Americans completed their scheduling and at times even threatened passenger
transcontinental railroad, the Russians hammered the safety. When two trains traveled on the same track,
final spike into their own cross-country rail line. Begun in collisions could result from scheduling errors caused
1891 and completed in 1916, the Trans-Siberian Railroad by variations in time.
was the longest in the world, running nearly 5,800 miles To make rail service safer and more reliable, in
(9,330 km) from Moscow in the west to Vladivostok on 1883 the American Railway Association divided the
the Sea of Japan in the east. Like the American railroads, country into four time zones in regions where the
the Trans-Siberian line same time was kept. The federal government ratified
opened up the way for 0 1,000 miles this change in 1918.
trade and settlement 0 1,000 kilometers Large integrated railroad systems benefited the
Two-point Equidistant projection
throughout Russia’s fron- nation. They were able to shift cars from one section
tier—an arctic, windswept of the country to another according to seasonal needs
land known as Siberia. Moscow and in order to speed long-distance transportation.
°N

RUSSIA
50

How might the construc- At the same time, new locomotive technology and
tion of a railroad affect N Vladivostok the introduction of air brakes enabled railroads to
towns along the line? W Trans-Siberian put longer and heavier trains on their lines. The new
E 30°N
Railroad rail systems, along with more powerful locomotives,
S
110°E

316 CHAPTER 9 Industrialization


Railroads, 1870 and 1890 Miles of Track, 1870–1890
In
N
Motion 175
W 50°N

Total Miles of Railroad Operating


E
S
150

125

(in thousands)
100
Boston
Chicago 75
40°N
New York City
50
San Francisco Washington, D.C.
25
70°W

ATLaNTic 0
Ocean 0°N 1870 1875 1880 1885 1890
3
120°W
Year
Source: Historical Statistics of the United States:
Colonial Times to 1970.
Gulf of Mexico
PaCIFic
Ocean
0 600 miles

Pacific
110°W Time Zone 0 600 kilometers 20°N
Lambert Equal-Area projection
80°W 1. Interpreting Maps What part of the United States saw
Mountain Time Zone
Central Time Zone the greatest expansion in rail lines by 1890?
Eastern Time Zone 2. Applying Geography Skills In which time zone did the
Railroads built by 1870 Central Pacific originate?
Railroads built by 1890
*Time zones and borders shown as of 1890

made railroad operation so efficient that the average sell the land to settlers, real estate companies, and
rate per mile for a ton of freight dropped from two other businesses to raise the money they needed to
cents in 1860 to three-fourths of a cent in 1900. build the railroad.
The nationwide rail network also helped unite In the 1850s, the federal government granted indi-
Americans in different regions. Looking back at a vidual states over 28 million acres of public lands to
quarter century of railroad travel, the Omaha Daily give to the railroads. After the Pacific Railway Acts of
Republican observed in 1883 that railroads had 1862 and 1864, the government gave the land directly
“made the people of the country homogeneous, to the railroad companies.
breaking through the peculiarities and provin- During the 1850s and 1860s, the federal land grant
cialisms which marked separate and unmingling system awarded railroad companies over 120 million
sections.” This was, perhaps, an overstatement, but acres of land, an area larger than New England, New
it recognized a significant contribution that railroads York, and Pennsylvania combined. Several railroad
made to the nation. companies, including the Union Pacific and the
Central Pacific, earned enough money from the gov-
Reading Check Explaining Why did the American
ernment’s generous land grants to cover much of the
Railway Association divide the country into four time zones? cost of building their lines.
Reading Check Summarizing How did the govern-
The Land Grant System ment help finance railroads?
Building and operating railroad lines, especially
across the vast unsettled regions of the West, often
required more money than most private investors Robber Barons
could raise on their own. To encourage railroad con- The great wealth many railroad entrepreneurs
struction, the federal government gave land grants acquired in the late 1800s led to accusations that they
to many railroad companies. Railroads would then had built their fortunes by swindling investors and

CHAPTER 9 Industrialization 317


taxpayers, bribing government officials, and cheating Sun listing the members of Congress who had
on their contracts and debts. The person with proba- accepted shares. The scandal led to an investigation
bly the worst reputation for this kind of activity was that implicated several members of Congress, includ-
Jay Gould, who often practiced “insider trading.” He ing Speaker of the House James G. Blaine and James
used information he received as a railroad owner to Garfield, who later became president. It also revealed
manipulate stock prices to his benefit. that Vice President Schuyler Colfax had accepted
Bribery occurred frequently in this era, partly stock from the railroad.
because the state and federal governments were so
deeply entangled in funding the railroads. Railroad The Great Northern The Crédit Mobilier scandal
investors quickly discovered that they could make provided sensational newspaper headlines. It created
more money by acquiring government land grants the impression that all railroad entrepreneurs were
than by operating the railroad. As a result, many robber barons—people who loot an industry and give
investors bribed members of Congress and the state nothing back—but the term was not always deserved.
legislatures to vote for more grants. One railroad entrepreneur who was clearly not a
robber baron was James J. Hill. Hill built and oper-
The Crédit Mobilier Scandal The corruption in the ated the Great Northern Railroad from St. Paul,
railroad industry became public in 1872 when the Minnesota, to Everett, Washington, without any fed-
Crédit Mobilier scandal erupted. Crédit Mobilier eral land grants or subsidies. He built the Great
was a construction company set up by several stock- Northern across good land, carefully planning his
holders of the Union Pacific, including Oakes Ames, route to pass by towns in the region. To increase busi-
a member of Congress. Acting for both the Union ness, he offered low fares to settlers who homesteaded
Pacific and Crédit Mobilier, the investors signed con- along his route. He then identified American products
tracts with themselves. Crédit Mobilier greatly over- that were in demand in China, including cotton, tex-
charged Union Pacific for the work it did, and since tiles, and flour, and arranged to haul those goods to
the same investors controlled both companies, the Washington for shipment to Asia. This enabled the
railroad agreed to pay the inflated bills. railroad to earn money by hauling goods both east and
By the time the Union Pacific railroad was com- west, instead of simply sending lumber and farm
pleted, the investors had made several million dol- products east and coming back empty, as many other
lars, but the railroad itself had used up its federal railroads did. Operating without government subsi-
grants and was almost bankrupt. To convince dies or land grants, the Great Northern became the
Congress to give the railroad more grants, Ames gave most successful transcontinental railroad and the only
other members of Congress shares in the Union one that was not eventually forced into bankruptcy.
Pacific at a price well below their market value.
During the election campaign of 1872, a disgrun- Reading Check Describing How was the Great
tled associate of Ames sent a letter to the New York Northern different from other railroads of the time?

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Checking for Understanding Critical Thinking Analyzing Visuals


1. Define: time zone, land grant. 5. Synthesizing How did railroad expan- 7. Examining Maps and Graphs Study
2. Identify: Pacific Railway Act, Grenville sion in the United States lead to indus- the map and the graph on page 317.
Dodge, Leland Stanford, Cornelius trial growth? Then make up a quiz of at least five
Vanderbilt, Jay Gould, Crédit Mobilier, 6. Organizing Use a graphic organizer questions based on the information
James J. Hill. similar to the one below to list the presented.
3. Explain the provisions of the Pacific different ways that railroads were
Writing About History
Railway Act. financed.
8. Persuasive Writing Take on the role
Reviewing Themes of an employee of a major railroad
4. Individual Action How did Grenville Ways Railroads corporation. Your job assignment is
Were Financed
Dodge contribute to the economic to write an advertisement to recruit
growth of the United States in the late workers for your corporation. After
1800s? writing the advertisement, present it
to your class.

318 CHAPTER 9 Industrialization


Big Business
Main Idea Reading Strategy Reading Objectives
After the Civil War, big business assumed Organizing As you read about the rise of • Analyze how large corporations came
a more prominent role in American life. corporations in the United States, com- to dominate American business.
plete a graphic organizer similar to the • Evaluate how Andrew Carnegie’s inno-
Key Terms and Names one below to describe the steps large vations transformed the steel industry.
corporation, stockholder, stock, business owners took to weaken or elimi-
economies of scale, fixed costs, operating nate competition. Section Theme
costs, pool, Andrew Carnegie, Bessemer Economic Factors Large national corpo-
process, vertical integration, horizontal Slashed prices rations formed in the United States in the
integration, monopoly, trust, holding temporarily mid-1800s and contributed to greater
company production.

✦1865 ✦1875 ✦1885 ✦1895


1862 1875 1879 1882 1901
John D. Rockefeller Andrew Carnegie opens Woolworth’s chain Dow Jones & J.P. Morgan forms
buys first oil refinery steel mill in Pittsburgh store opens Company founded U.S. Steel

In the 1860s, the oil industry in the United States was highly competitive. One highly effi-
cient company was Standard Oil, owned by John D. Rockefeller and his associates. Because
his company shipped so much oil, Rockefeller was able to negotiate rebates, or refunds, from
railroads that wanted his business. This gave his company an advantage, and he began to
pressure other oil companies to sell out to him.
Oil producer Franklin Tarbell pledged never to surrender. Tarbell’s daughter Ida later
recalled her father’s indignation over Rockefeller’s maneuvers:

“ It was as if somebody had tried to crowd me off the road. . . . There were rules, you
couldn’t use the road unless you obeyed those rules. . . . The railroads—so said my
father—ran through the valley by the consent of the people; they had given them a right of
way. The road on which I trotted was a right of way. One man had the same right as
another, but the railroads had given to one something they would not give to another. . . .
The strong wrested from the railroads the privilege of preying upon the weak.

—quoted in All in the Day’s Work
Cartoon of John D. Rockefeller

The Rise of Big Business


Before the Civil War, the personal wealth of a few people operating in partnership
financed most businesses, including many early factories. Most manufacturing enterprises
were very small. By 1900 everything had changed. Big businesses dominated the economy,
operating vast complexes of factories, warehouses, offices, and distribution facilities.

CHAPTER 9 Industrialization 319


ECONOMICS also able to negotiate rebates from the railroads, thus
lowering their operating costs even further.
The Role of Corporations Big business would
Small businesses with high operating costs found
not have been possible without the corporation. A
it difficult to compete against large corporations, and
corporation is an organization owned by many
many were forced out of business. At the time, many
people but treated by law as though it were a single
people criticized corporations for cutting prices and
person. A corporation can own property, pay taxes,
negotiating rebates. They believed the corporations
make contracts, and sue and be sued. The people
were behaving unethically by using their wealth to
who own the corporation are called stockholders
drive small companies out of business. In many
because they own shares of ownership called stock.
cases, the changing nature of business organization
Issuing stock allows a corporation to raise large
and the new importance of fixed costs that caused
amounts of money for big projects while spreading
competition to become so severe forced many small
out the financial risk.
companies out of business.
Before the 1830s, there were few corporations in
the United States because entrepreneurs had to con- Reading Check Describing What factors led to the
vince a state legislature to issue them a charter. rise of big business in the United States?
Beginning in the 1830s, however, states began pass-
ing general incorporation laws, allowing companies
to become corporations and issue stock without char-
ters from the legislature.
The Consolidation of Industry
Many corporate leaders did not like the intense
Economies of Scale With the money they raised competition that had been forced on them. Although
from the sale of stock, corporations could invest in falling prices benefited consumers, they cut into prof-
new technologies, hire a large workforce, and pur- its. To stop prices from falling, many companies
chase many machines, greatly increasing their effi- organized pools, or agreements to maintain prices at
ciency. This enabled them to achieve what is called a certain level.
economies of scale, in which corporations make American courts and legislatures were suspicious
goods more cheaply because they produce so much of pools because they interfered with competition
so quickly using large manufacturing facilities. and property rights. As a result, companies that
All businesses have two kinds of costs, fixed costs formed pools had no legal protection and could not
and operating (or variable) costs. Fixed costs are enforce their agreements in court. Pools generally did
costs a company has to pay, whether or not it is oper- not last long. They broke apart whenever one mem-
ating. For example, a company would have to pay its ber cut prices to steal the market share from another,
loans, mortgages, and taxes, regardless of whether it which then allowed competition to resume. By the
was operating. Operating costs are costs that occur 1870s, competition had reduced many industries to a
when running a company, such as paying wages and few large and highly efficient corporations.
shipping charges and buying raw materials and
other supplies. Andrew Carnegie and Steel The remarkable life of
The small manufacturing companies that had been Andrew Carnegie illustrates many of the different fac-
typical before the Civil War usually had very low fixed tors that led to industrialism and the rise of big busi-
costs but very high operating costs. If sales dropped, it ness in the United States. He was born in Scotland, the
was cheaper to shut down and wait for better eco- son of a poor hand weaver who emigrated to the
nomic conditions. By comparison, big companies had United States in 1848. At a young age, Carnegie
very high fixed costs because it took so much money worked as a bobbin boy in a textile factory earning
to build and maintain a factory. Compared to their $1.20 per week. At 14 he became a messenger in a tele-
fixed costs, big businesses had low operating costs. graph office, then served as private secretary to
Wages and transportation costs were such a small Thomas Scott, a superintendent and later president
part of a corporation’s costs that it made sense to of the Pennsylvania Railroad. Carnegie’s energy
keep operating, even in a recession. impressed Scott, and when Scott was promoted,
In these circumstances, big corporations had sev- Carnegie succeeded him as superintendent.
eral advantages. They could produce goods more As a railroad supervisor, Carnegie knew that he
cheaply and efficiently. They could continue to oper- could make a lot of money by investing in companies
ate in poor economic times by cutting prices to that served the railroad industry. He bought shares in
increase sales, rather than shutting down. Many were iron mills and factories that made sleeping cars and

320 CHAPTER 9 Industrialization


Vertical Integration Horizontal Integration
Purchase of Companies Purchase of Competing
at All Levels of Production Companies in Same Industry
Ace Meat
Industries

U.S. Oil Company


Delivery Wagons

Meat Packing Plants

Cooled Warehouses
Independent Oil Refineries
Refrigerated Railroad Cars

Slaughterhouse

Cattle

Horizontal and vertical integration were the two


most common business combinations in the late
locomotives. He also invested in a company that built 1800s.
railroad bridges. In his early 30s, he was earning Evaluating Which combination do you think
$50,000 per year, and he decided to quit his job with would yield the most efficient business? Why?
the railroad to concentrate on his own business affairs.
As part of his business activities, Carnegie fre-
quently traveled to Europe to sell railroad bonds. On the different businesses on which it depends for its
one trip, he met the English inventor, Sir Henry operation. Instead of paying companies for coal,
Bessemer, who had invented a new process for mak- lime, and iron, Carnegie’s company bought coal
ing high quality steel efficiently and cheaply. After mines, limestone quarries, and iron ore fields.
meeting Bessemer, Carnegie decided to concentrate Vertical integration saved companies money while
his investments in the steel industry. He opened a enabling big companies to become even bigger.
steel company in Pittsburgh in 1875 and quickly Successful business leaders like Carnegie also
adapted his steel mills to use the Bessemer process. pushed for horizontal integration, or combining
Carnegie often boasted about how cheaply he could many firms engaged in the same type of business into
produce steel: one large corporation. Horizontal integration took
place frequently as companies competed. When a
“ Two pounds of iron stone mined upon Lake
Superior and transported nine hundred miles to
company began to lose market share, it would often
sell out to competitors to create a larger organization.
Pittsburgh; one pound and one-half of coal mined and By 1880, for example, a series of buyouts had enabled
manufactured into coke, and transported to Pittsburgh; Rockefeller’s Standard Oil to gain control of approxi-
mately 90 percent of the oil refining industry in the
one-half pound of lime, mined and transported to
United States. When a single company achieves con-
Pittsburgh; a small amount of manganese ore mined in
trol of an entire market, it becomes a monopoly.
Virginia and brought to Pittsburgh—and these four Many Americans feared monopolies because they
pounds of materials manufactured into one pound of believed that a company with a monopoly could
steel, for which the consumer pays one cent.
” charge whatever it wanted for its products. Others,
however, supported monopolies. They believed that
—quoted in The Growth of the American Republic
monopolies had to keep prices low because raising
prices would encourage competitors to reappear and
Vertical and Horizontal Integration To increase offer the products for a lower price. In some indus-
manufacturing efficiency even further, Carnegie took tries companies had a virtual monopoly in the United
the next step in building a big business. He did this States but were competing on a global scale. Standard
by beginning the vertical integration of the steel Oil, for example, came very close to having a monop-
industry. A vertically integrated company owns all of oly in the United States, but competition with other

CHAPTER 9 Industrialization 321


MOMENT
in HISTORY
LABOR SAVERS
American inventiveness and
the nation’s growing industrial
might combined to provide
turn-of-the-century consumers
with an ever-increasing array of
products. Here, a homemaker
wields an early electric vacuum
cleaner. Mass-produced house-
hold devices had a tremendous
impact on the lifestyles and
buying habits of millions of
middle-class Americans. In
cities, huge shopping empo-
riums replaced the cozy dry
goods stores of the 1800s. Even
rural customers could buy an
almost endless variety of mer-
chandise from mail-order cata-
logues such as Sears, Roebuck
and Montgomery Ward.

oil companies throughout the world forced the they were not violating the law. This arrangement
Standard Oil Company to keep its prices low. enabled the trustees to control a group of companies
as if they were one large merged company.
Trusts By the late 1800s, many Americans had
grown suspicious of large corporations and feared Holding Companies Beginning in 1889 the state of
the power of monopolies. To preserve competition New Jersey further accelerated the rise of big business
and prevent horizontal integration, many states with a new general incorporation law. This law
made it illegal for one company to own stock in allowed corporations chartered in New Jersey to own
another without specific permission from the state stock in other businesses without any need for special
legislature. In 1882 Standard Oil formed the first legislative action. Many companies immediately used
trust, a new way of merging businesses that did not the New Jersey law to create a new organization
violate the laws against owning other companies. A called a holding company. A holding company does
trust is a legal concept that allows one person to man- not produce anything itself. Instead, it owns the stock
age another person’s property. The person who man- of companies that do produce goods. The holding
ages another person’s property is called a trustee. company controls all of the companies it owns, effec-
Instead of buying a company outright, which was tively merging them into one large enterprise. By 1904
often illegal, Standard Oil had stockholders give their the United States had 318 holding companies.
stocks to a group of Standard Oil trustees. In Together these giant corporations controlled over
exchange, the stockholders received shares in the 5,300 factories and were worth more than $7 billion.
trust, which entitled them to receive a portion of
the trust’s profits. Since the trustees did not own the Reading Check Explaining What techniques did
stock but were merely managing it for someone else, corporations use to consolidate their industries?

322 CHAPTER 9 Industrialization


Selling the Product
The vast array of products that American indus-
tries churned out led retailers to look for new ways to
market and sell goods. N.W. Ayer and Son of The New York Stock Exchange In 1792 business-
Philadelphia, for example, developed bold new for- people met in New York City to establish a stock
mats for advertising. Large display ads with illustra- exchange—a marketplace for buying and selling
tions replaced the small-type line ads that had been stock in companies. At first, the new stock exchange
standard in newspapers. By 1900 retailers were was located under a buttonwood tree on Wall Street.
spending over $90 million a year on advertising in The organization took its present name, the New
newspapers and magazines sold across the nation. York Stock Exchange, in 1863. Huge amounts of the
capital required for the nation’s industrialization after
Advertising attracted readers to the newest retail
the Civil War passed through the New York Stock
business, the department store.
Exchange.
In 1877 advertisements billed John Wanamaker’s
As stock trading grew, investors across the nation
new Philadelphia department store, the Grand Depot, needed financial news. In 1882 Henry Charles Dow
as the “largest space in the world devoted to retail sell- and Edward D. Jones founded Dow Jones & Company.
ing on a single floor.” When Wanamaker’s opened, This new company sent bulletins on the
only a handful of department stores existed in the day’s business to Wall Street’s financial
United States; soon hundreds sprang up. Department houses. The day’s last delivery
stores changed the idea of shopping by bringing a contained a news sheet,
huge array of different products together in a large, which became the Wall
elegant building. They created an atmosphere that Street Journal in July 1889.
made shopping seem glamorous and exciting.
Chain stores, a group of similar stores owned by the
same company, first appeared in the mid-1800s. In con-
trast to department stores, which offered many serv- mail-order catalogs. Two of the largest mail-order
ices, chain stores focused on thrift, offering low prices retailers were Montgomery Ward and Sears, Roebuck.
instead of elaborate service and decor. Woolworth’s, a Their huge catalogs, widely distributed through the
chain store that opened in 1879, became one of the mail, used attractive illustrations and friendly
most successful retail chains in American history. descriptions to advertise thousands of items for sale.
To reach the millions of people who lived in rural
areas in the late 1800s—far from chain stores Reading Check Identifying What innovations did
or department stores—retailers began issuing retailers introduce in the late 1800s to sell goods to consumers?

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Checking for Understanding Critical Thinking Analyzing Visuals


1. Define: corporation, economies of 5. Forming an Opinion Do you think an 7. Analyzing Photographs Study the
scale, fixed costs, operating costs, individual today can rise from “rags to photograph on page 322 of a woman
pool, vertical integration, horizontal riches” like Andrew Carnegie did? Why using an early electric vacuum cleaner.
integration, monopoly, trust, holding or why not? How would you compare this to today’s
company. 6. Organizing Use a graphic organizer vacuum cleaners? How do you think
2. Identify: stockholder, stock, Andrew like the one below to list ways business new mass-produced appliances such as
Carnegie, Bessemer process. leaders in the late 1800s tried to elimi- this one affected the lives of women in
3. List the new methods of advertising nate competition. this era?
and selling that helped push consumer
Writing About History
goods in the late 1800s.
8. Expository Writing Write a newspa-
Reviewing Themes per editorial in which you explain why
Attempts to
4. Economic Factors What factors Eliminate Competition entrepreneurs such as John D.
allowed corporations to develop in the Rockefeller and Andrew Carnegie were
United States in the late 1800s? a positive or a negative force on the
U.S. economy in the late 1800s.

CHAPTER 9 Industrialization 323


Investigating Standard Oil
B
y the 1880s, the Standard Oil Company, under the direction of John D.
Rockefeller and his associates, had gained control of more than 90 per-
cent of the oil refining business in the United States. Did Standard Oil
use unfair tactics? The United States Industrial Commission investigated, call-
ing Rockefeller himself to testify. Rockefeller said his success was due to the
efficiency of his company. George Rice, an independent refiner from Marietta,
Ohio, told the Industrial Commission that Standard Oil’s advantage was crim-
inal collusion with the railroads. Was he right? You’re the historian.

Read the following excerpts from the Industrial Commission hearings of 1899. Then
complete the questions and activities on the next page.
John D. Rockefeller

Standard Oil stock

Question: To what advantages, or It has not hesitated to invest mil-


favors, or methods of manage- lions of dollars in methods of
ment do you ascribe chiefly the cheapening the gathering and 1. Command of necessary capital.
success of the Standard Oil distribution of oils by pipe lines, 2. Extension of limits of business.
Company? special cars, tank steamers, and 3. Increase the number of per-
tank wagons. . . . sons interested in the business.
Answer [Rockefeller]: I ascribe the
4. Economy in the business.
success of the Standard to its con- Question: What are, in your judg- 5. Improvements and economies
sistent policy to make the volume ment, the chief advantages from which are derived from knowl-
of its business large through the industrial combinations—(a) edge of many interested per-
merits and cheapness of its prod- financially to stockholders; (b) to sons of wide experience.
ucts. It has spared no expense in the public? 6. Power to give the public
finding, securing, and utilizing
improved products at less
the best and cheapest methods of Answer: All the advantages which
prices and still make a profit
manufacture. It has sought for the can be derived from a coopera-
from stockholders.
best superintendents and work- tion of person and aggregation of
7. Permanent work and good
men and paid the best wages. It capital. . . . It is too late to argue
wages for laborers.
has not hesitated to sacrifice old about advantages of industrial
machinery and old plants for new combinations. They are a neces-
and better ones. It has placed its sity. And if Americans are to have Cartoon criticizing Standard Oil
manufactories at the points the privilege of extending their
where they could supply markets business in all the States of the
at the least expense. It has not Union, and into foreign countries
only sought markets for its prin- as well, they are a necessity on a
cipal products, but for all possible large scale, and require the
by-products, sparing no expense agency of more than one corpora-
in introducing them to the public. tion. Their chief advantages are:

324 CHAPTER 9 Industrialization


Oil derricks

I am a citizen of the United States. unable to do. I have had to conse- their general trade, and thus effec-
. . . Producer of petroleum for quently shut down, with my busi- tually wipe out all competition, as
more than 30 years, and a refiner ness absolutely ruined and my fully set forth. Standard Oil prices
of same for 20 years, but my refin- refinery idle. This has been a very generally were so high that I
ery has been shut down during sad, bitter, and ruinous experi- could sell my goods 2 to 3 cents a
the past 3 years, owing to the ence for me to endure, but I have gallon below their prices and
powerful and all-prevailing endeavored to the best of my cir- make a nice profit, but these sav-
machinations of the Standard Oil cumstances and ability to combat age attacks and cuts upon my
Trust, in criminal collusion and it the utmost I could for many a customers’ goods, and their con-
conspiracy with the railroads to long waiting year, expecting relief sequent loss, plainly showed
destroy my business of 20 years of through the honest and proper them their power for evil, and the
patient industry, toil, and money execution of our laws, which have uselessness to contend against
in building up, wholly by and as yet, however, never come. . . . such odds, and they would buy
through unlawful freight discrim- Outside of rebates or freight dis- no more of my oil. . . .
inations. I have been driven from criminations I had no show with
pillar to post, from one railway the Standard Oil trust, because of
line to another, for 20 years, in the their unlawfully acquired monop-
absolutely vain endeavor to get oly, by which they could tem- Understanding the Issue
equal and just freight rates with porarily cut only my customers’ 1. What potential advantages could
the Standard Oil Trust, so as to be prices, and below cost, leaving the companies like Standard Oil offer
able to run my refinery at any- balance of the town, nine-tenths, consumers?
thing approaching a profit, but uncut. This they can easily do 2. What did George Rice believe to be
which I have been utterly without any appreciable harm to the reason Standard Oil was so
successful?
3. How would you assess the credibility
of the two accounts?

Activities
1. Investigate Today many industries,
unions, and special interest groups
lobby Congress for favorable legisla-
tion. What are the most powerful
groups? How do they operate?
2. Check the News Are there any com-
panies that recently have been inves-
tigated for unfair or monopolistic
practices? Collect headlines and news
articles and create a bulletin board
display.

CHAPTER 9 Industrialization 325


Unions
Main Idea Reading Strategy Reading Objectives
In an attempt to improve their working Sequencing As you read about the • Describe industrial working conditions
conditions, industrial workers came increase of American labor unions in the in the United States in the late 1800s.
together to form unions in the late 1800s. late 1800s, complete a time line similar • List the barriers to labor union growth.
to the one below by filling in the inci-
Key Terms and Names dents of labor unrest discussed and the Section Theme
deflation, trade union, industrial union, results of each incident. Individual Action People like Samuel
blacklist, lockout, Marxism, Knights of Gompers and Mother Jones strove to bal-
Labor, arbitration, closed shop 1877 ance the power of corporations with the
needs of workers.

✦1875 ✦1885 ✦1895 ✦1905


1877 1886 1886 1894 1903
Great Railroad American Federation Riot in Chicago’s Pullman Strike Women’s Trade Union
Strike of Labor founded Haymarket Square League founded

On September 6, 1869, hundreds of miners’ wives and children heard the repeated
shrill blasts of the Avondale Mine’s whistle, which signaled an accident. The families ran
to the mine’s entry and beheld a terrifying sight: hot smoke billowing from the mine shaft.
The owners of the Avondale Coal Mine in Luzerne County, Pennsylvania, had not built
a second entrance. Without an escape route, the 179 miners trapped below soon died.
Songs to commemorate the disaster later gave voice to the silenced victims:

“ And as their souls ascended


To God who gave them breath
They plead against the company
Whose greed had caused their death

Following the deaths at Avondale, John Siney, an Irish immigrant and union leader,
Avondale urged his fellow miners to unionize:
Mine disaster

“ Men, if you must die with your boots on, die for your families, your homes, your
country, but do not longer consent to die like rats in a trap. . . .

—quoted in Labor’s Untold Story

Working in the United States


Life for workers in industrial America was difficult. As machines replaced skilled
labor, work became monotonous. Workers had to perform highly specific, repetitive
tasks and could take little pride in their work. In addition, working conditions were

326 CHAPTER 9 Industrialization


often unhealthy and dangerous. Workers breathed in had more control over how they organized their time
lint, dust, and toxic fumes. Heavy machines lacking on the shop floor. Common laborers had few skills
safety devices caused a high number of injuries. and received lower wages.
Despite the difficult working conditions, industri- In the 1830s, as industrialism began to spread,
alism brought about a dramatic rise in the standard craft workers began to form trade unions—unions
of living. While only a few entrepreneurs became limited to people with specific skills. By the early
rich, real wages earned by the average worker rose 1870s, there were over 30 national trade unions in the
by about 50 percent between 1860 and 1890. United States. Among the largest and most successful
Despite the rise in the standard of living, the were the Iron Molders’ International Union, the
uneven division of income between the wealthy and International Typographical Union, and the Knights
the working class caused resentment among work- of St. Crispin—the shoemakers’ union.
ers. In 1900 the average industrial worker made 22¢
per hour and worked 59 hours per week. Industry Opposes Unions Employers were often
At the same time, an economic phenomenon of forced to recognize and negotiate with trade unions
the late 1800s made relations between workers and because they represented workers whose skills they
employers even more difficult. Between 1865 and needed. However, employers generally regarded
1897, the United States experienced deflation, or a unions as illegitimate conspiracies that interfered
rise in the value of money. Throughout the late with their property rights. Owners of large corpora-
1800s, deflation caused prices to fall, which tions particularly opposed industrial unions, which
increased the buying power of workers’ wages. united all craft workers and common laborers in a
Although companies cut wages regularly in the late particular industry.
1800s, prices fell even faster, so that wages were Companies used several techniques to prevent
actually still going up in buying power. Workers, unions from forming. They required workers to take
however, believed that companies wanted to oaths or sign contracts promising not to join a union,
pay them less money for the
same work. Eventually, many
workers decided that the only
way to improve their working
conditions was to organize
unions. With a union, they
could bargain collectively to
negotiate higher wages and
better working conditions.

Reading Check
Describing What aspects of
industrial life caused frustration for
workers in the late 1800s?

Early Unions
There were two basic types
of industrial workers in the
United States in the 1800s—
craft workers and common
laborers. Craft workers had
special skills and training.
They included machinists, iron
molders, stonecutters, glass-
blowers, shoemakers, printers, History
carpenters, and many others. Unsafe Working Conditions Workers in the late 1800s often faced unsafe working conditions. Many began to
Craft workers generally join labor unions in an attempt to improve these conditions. What unsafe conditions does this photograph of a
received higher wages and steel mill show?

CHAPTER 9 Industrialization 327


and they hired detectives to go undercover and seize control of the factories, and overthrow the
identify union organizers. Workers who tried to government.
organize a union or strike were fired and placed on a Marxists claimed that after the revolution, the gov-
blacklist—a list of “troublemakers.” Once black- ernment would seize all private property and create a
listed, a laborer could get a job only by changing res- socialist society where wealth was evenly divided.
idence, trade, or even his or her name. Eventually, Marx thought, the state would wither
If workers formed a union, companies often used away, leaving a Communist society where classes did
a lockout to break it. They locked workers out of the not exist. Marxism strongly shaped the thinking of
property and refused to pay them. If the union called European unions.
a strike, employers would hire replacement workers, While many labor supporters agreed with Marx, a
or strikebreakers, also known as scabs. few supported anarchism. Anarchists believe that
society does not need any government. At the time,
Political and Social Opposition Workers who some believed that with only a few acts of violence,
wanted to organize a union faced several major prob- they could ignite a revolution to topple the govern-
lems. There were no laws giving workers the right to ment. In the late 1800s, anarchists assassinated gov-
organize or requiring owners to negotiate with them. ernment officials and set off bombs all across Europe,
Courts frequently ruled that strikes were “conspira- hoping to trigger a revolution.
cies in restraint of trade,” for which labor leaders As Marxist and anarchist ideas spread in Europe,
might be fined or jailed. tens of thousands of European immigrants began
Unions also suffered from the perception that arriving in the United States. Nativism—anti-
they threatened American institutions. In the late immigrant feelings—was already strong in the
1800s, the ideas of Karl Marx, called Marxism, had United States. As people began to associate immi-
become very influential in Europe. Marx argued grant workers with revolution and anarchism, they
that the basic force shaping capitalist society was became increasingly suspicious of unions. These
the class struggle between workers and owners. He fears, as well as the government’s duty to maintain
believed that workers would eventually revolt, law and order, often led officials to use the courts,
the police, and even the army to
crush strikes and break up unions.
Reading Check Identifying
in History Why were some Americans suspicious of
Unions?
Mother Jones 1830–1930
Mary Harris “Mother” Jones emi-
grated to the United States from Ireland
in 1835 at the age of five. Jones The Struggle to
became the nation’s most prominent Organize
woman union leader after a tragic
personal loss. In 1867 her husband Although workers attempted on
George, a union organizer, and their many occasions to create large indus-
four children died from yellow fever. trial unions, they rarely succeeded. In
Widowed and childless, Jones moved many cases the confrontations with
to Chicago and opened a dressmaker’s owners and the government led to
shop. From her shop window, Jones
violence and bloodshed. In 1868
could see the effects of the economic A journalist who followed Jones on
downturn of the 1870s: “poor shivering her trip reported that Jones began her William Sylvis, president of the Iron
wretches, jobless and hungry.” At night speeches slowly, encouraging her listen- Molders Union and leader of the
she attended rallies for the Knights of ers to “look on yourselves, and upon National Labor Union, wrote to Karl
Labor. each other. Let us consider this together Marx to encourage Marx’s work and
By 1890 Jones had become an for I am one of you, and I know what it express his own hopes:
organizer for the United Mine Workers. is to suffer.” Then Mother Jones would
In 1897 she traveled to West Virginia. make an impassioned plea for the min-
The intrepid labor organizer trudged ers to join the union. “You pity your- “ Our cause is a common
one. . . . Go ahead in the good
from camp to camp along railroad selves, but you do not pity your
tracks or rode atop farm wagons. She brothers, or you would stand together work that you have undertaken,
slept in a tent. to help one another.” until the most glorious success
crowns your efforts . . . monied

328 CHAPTER 9 Industrialization


Strikes and Labor Unrest, 1870–1890
Coeur
CANADA
WASH. d'Alene,
1892, 1899
MONT. N. DAK. ME. N
OREG. MINN. VT. E 60°W
Baltimore N.H. W
IDAHO S. DAK. WIS. Rail Strike, MASS. S
40°
N N.Y.
WYO. MICH. 1877
Haymarket Riot, 1886 R.I.
PA.
NEBR. IOWA N.J.CONN.
NEV. COLO. DEL. Atlantic
UTAH Pullman, 1894 ILL. IND. OHIO
CALIF. Homestead, 1892
W.
MD. Ocean
Leadville, 1896 VA. VA.
KANS. MO. KY. 0 400 miles
Cripple Creek, 1903–04
OKLA. N.C.
ARIZ. TERR. TENN. 0 400 kilometers
TERR. N. MEX. IND. ARK. Lambert Equal-Area projection
TERR. TERR. ALA. S.C.
30°N MISS. GA.

TEXAS Birmingham-
Pacific Texas and
LA. Bessemer
1894
Ocean Pacific R.R.,
1886 FLA.

T RO MEXICO Gulf of Mexico


PIC O
F CAN
CER 110°W
120°W 90°W 80°W 70°W
Railroad strike
Miners' strike
Other strike or riot 1. Interpreting Maps In what part of the nation did most
Counties with strike
of the strikes occur?
activity, 1881–1894 2. Applying Geography Skills Why did most of the labor
No strikes reported conflicts take place where they did?
1890 border

power is fast eating up the substance of the people. and Chicago. The governors of several states called
We have made war upon it, and we mean to win it. If out their militias to stop the violence. In many places,
we can we will win through the ballot box; if not, we gun battles erupted between the militia and striking
will resort to sterner means. A little bloodletting is workers.
Determined to stop the violence, President Hayes
sometimes necessary in desperate causes.
” ordered the army to open the railroad between
—quoted in Industrialism and Philadelphia and Pittsburgh. He then sent troops to
the American Worker Chicago, where the strike had paralyzed the entire
city. The troops restored order, but by the time the
The Great Railroad Strike of 1877 In 1873 a strike ended, more than 100 people lay dead, and
severe recession known as the Panic of 1873 struck millions of dollars of property had been destroyed.
the American economy and forced many companies
to cut wages. In July 1877, as the recession continued, The Knights of Labor The failure of the Great
several railroads announced another round of wage Railroad Strike convinced many labor organizers that
cuts. This triggered the first nationwide labor protest. workers across the nation needed to be better organ-
The day after the cuts took effect, railroad workers in ized. By the late 1870s, enough workers had joined a
Martinsburg, West Virginia, walked off the job and new organization, the Knights of Labor, to make it
blocked the tracks. the first nationwide industrial union.
As word spread, railroad workers across the coun- The Knights called for an eight-hour workday and
try walked off the job. The strike eventually involved a government bureau of labor statistics. They also
80,000 railroad workers in 11 states and affected two- supported equal pay for women, the abolition of
thirds of the nation’s railways. Angry strikers child labor, and the creation of worker-owned facto-
smashed equipment, tore up tracks, and blocked rail ries. The Knights’ leaders initially opposed the use
service in New York, Baltimore, Pittsburgh, St. Louis, of strikes, preferring to use boycotts to pressure

CHAPTER 9 Industrialization 329


employers. They also supported arbitration, a struck the United States, causing the Pullman
process in which an impartial third party helps work- Company to slash wages. The wage cuts made it dif-
ers and management reach an agreement. ficult for workers to pay their rent or the high prices
In the early 1880s, the Knights began to use strikes, at the company stores. In May 1894, after Pullman
and they achieved great success initially. After strik- fired three workers who complained, a strike began.
ing Knights convinced one of Jay Gould’s railroads to In support, the ARU stopped handling Pullman cars
reverse wage cuts in 1885, membership in the union all across the United States.
leapt from 100,000 to 700,000 in less than a year. The The boycott of Pullman cars tied up railroads
following year, 1886, marked the peak of their suc- and threatened to paralyze the economy.
cess. In the spring of that year, an event known as the Determined to break the union, railroad managers
Haymarket Riot undermined the Knights’ reputa- arranged for U.S. mail cars to be attached to the
tion, and the union rapidly declined. Pullman cars. If the strikers refused to handle
the Pullman cars, they would be interfering with
The Haymarket Riot In the early 1880s, the move- the U.S. mail, a violation of federal law. President
ment for an eight-hour workday began to build sup- Grover Cleveland then sent in troops, claiming it
port. In 1886 organizers called for a nationwide was his responsibility to keep the mail running.
strike on May 1 to show support for the idea. On that When a federal court issued an injunction ordering
date, strikes took place in many cities, including the union to halt the boycott, the strike at Pullman
Chicago. and the ARU both collapsed.
On May 3, a clash between strikers and police in
Reading Check Analyzing Why did industrial
Chicago left one striker dead. The next evening, an
anarchist group organized a meeting in Chicago’s unions frequently fail in the late 1800s?
Haymarket Square to protest the killing. Around
3,000 people gathered to hear the speeches. When
police entered the square, someone threw a bomb. The American Federation of Labor
The police opened fire, and workers shot back. Seven Although large-scale industrial unions generally
police officers and four workers were killed. failed in the late 1800s, trade unions continued to pros-
Police arrested eight people for the bombing. per. In 1886 delegates from over 20 of the nation’s trade
Seven of those arrested were German immigrants unions organized the American Federation of
and advocates of anarchism. The incident hor- Labor (AFL). The AFL’s first leader was
rified people across the country. Samuel Gompers. His approach to labor
No one knew who threw the bomb. relations—which he called “plain and
Although the evidence was weak, all simple” unionism—helped unions to
eight men were convicted, and four become accepted in American society.
were later executed. Unfortunately for Gompers believed that unions should
the Knights of Labor, one of the men stay out of politics. He rejected socialist
arrested was a member of the union. and communist ideas. Rather, he
The incident badly hurt the Knights’ believed that the AFL should fight for
reputation, and they began to lose small gains—such as higher wages and
members rapidly. better working conditions—within the
American system. He was willing to use
The Pullman Strike Although the the strike but preferred to negotiate.
Haymarket Riot set back the drive to Under Gompers’s leadership, the
create industrial unions, other labor Samuel Gompers AFL had three main goals. First, it tried
organizers continued their efforts. In to convince companies to recognize
1893 railroad workers created the American Railway unions and to agree to collective bargaining. Second,
Union (ARU) under the leadership of Eugene V. it pushed for closed shops, meaning that companies
Debs. One of the companies the ARU unionized was could only hire union members. Third, it promoted
the Pullman Palace Car Company. an eight-hour workday.
The Pullman Company was based in Illinois. It The AFL grew slowly, but by 1900 it was the biggest
had built a town named Pullman near its factory and union in the country, with over 500,000 members. Still,
required its workers to live in the town and to buy at that time, the AFL represented less than 15 percent
goods from company stores. In 1893 a depression of all non-farm workers. All unions, including railroad

330 CHAPTER 9 Industrialization


unions, represented only 18 percent. As the 1900s
began, the vast majority of workers remained unor-
ganized, and unions were relatively weak.
Reading Check Analyzing What AFL policies
contributed to its growth as a union?

Working Women
Throughout the 1800s, most wage-earning work-
ers in the United States were men. After the Civil
War, the number of women wage earners began to
increase. By 1900 women made up more than 18 per-
cent of the labor force.
The type of jobs women did outside the home in
the late 1800s and early 1900s reflected society’s ideas
History
about what constituted “women’s work.” Roughly
one-third of women worked as domestic servants. Detail Work These women worked in the National Elgin Watch
Another third worked as teachers, nurses, sales Company’s gilding room, where they gilded metal watches with thin layers
clerks, and secretaries. The remaining third were of gold. What do you notice about their working conditions?
industrial workers, but they were employed in light
industrial jobs that people believed appropriate to of Jane Addams and Lillian Wald—the founders of
their gender. Many worked in the garment industry the settlement house movement—they established
and food processing plants. the Women’s Trade Union League (WTUL), the first
Regardless of their employment, women were national association dedicated to promoting
paid less than men even when they performed the women’s labor issues. The WTUL pushed for an
same jobs. It was assumed that a woman had a man eight-hour day, the creation of a minimum wage, an
helping to support her, either her father or her hus- end to evening work for women, and the abolition of
band, and that a man needed higher wages to sup- child labor. The WTUL also collected funds to sup-
port a family. For this reason, most unions, including port women on strike.
the AFL, excluded women.
In 1903 two woman labor organizers, Mary Reading Check Comparing How were female
Kenney O’Sullivan and Leonora O’Reilly, decided to industrial workers treated differently than male workers in the
establish a separate union for women. With the help late 1800s?

TM
Study Central To review this section, go to
TM
tarvol2.glencoe.com and click on Study Central .

Checking for Understanding Critical Thinking Analyzing Visuals


1. Define: deflation, trade union, 5. Analyzing Why did early labor unions 7. Analyzing Photographs Examine the
industrial union, lockout, Marxism, fail? photograph at the top of this page of
arbitration, closed shop. 6. Organizing Use a graphic organizer workers in a watch factory. Most of the
2. Identify: blacklist, Knights of Labor. similar to the one below to list the fac- people in the picture are women. What
3. List the groups of workers represented tors that led to an increase in unions in do you think the jobs were of the men
by the Knights of Labor and the the late 1800s. in the photograph?
American Federation of Labor.
Reviewing Themes Factors Contributing
Writing About History
4. Individual Action What political to Unionization 8. Persuasive Writing Imagine that you
contribution did Mary Harris “Mother” are an American worker living in one of
Jones make to American society? the nation’s large cities. Write a letter to
a friend explaining why you support or
oppose the work of labor unions.

CHAPTER 9 Industrialization 331


Reviewing Key Terms Reviewing Key Facts
On a sheet of paper, use each of these terms in a sentence. 23. Identify: Morrill Tariff, Andrew Carnegie.
1. gross national product 12. horizontal integration 24. The United States had an advantage in industrializing due to
its resources and large workforce. What resources did the
2. laissez-faire 13. monopoly
nation have? Why was its workforce large?
3. entrepreneur 14. trust
25. How did inventions contribute to economic growth in the
4. time zone 15. holding company United States in the late 1800s?
5. land grant 16. deflation 26. How did the federal government encourage railroad compa-
6. corporation 17. trade union nies to construct railroads?
7. economies of scale 18. industrial union 27. What new methods of selling products were developed in the
late 1800s?
8. fixed costs 19. lockout
28. Why did workers try to organize labor unions in the United
9. operating costs 20. Marxism States in the late 1800s?
10. pool 21. arbitration 29. What were the two basic types of workers in American indus-
11. vertical integration 22. closed shop try at this time?

Critical Thinking
30. Analyzing Themes: Individual Action List the names and
actions of five people who contributed to American eco-
nomic growth in the late 1800s.
31. Organizing Use a graphic organizer similar to the one
Factors Behind Industrialization below to list the factors that led to making the United States
• Abundant natural resources an industrial nation.
• Cheap immigrant labor force
• High tariffs that reduced foreign goods
• National communication and transportation networks
Factors Leading
to Industrialization
Growth of Business
• Little or no government intervention
• Development of pools, trusts, holding companies,
and monopolies
• Small businesses could not compete with 32. Interpreting Primary Sources Americans like Ida Tarbell
economies–of–scale of large businesses criticized large corporations such as the Standard Oil
• Practices of some big businesses sometimes limited Company. In the following excerpt from History of the
competition Standard Oil Company, she warns of the results of
Rockefeller’s business practices on the nation’s morality.
Read the excerpt and answer the questions that follow:
Changing Workplace
• Rural migration and immigration created large,
“ Very often people who admit the facts, who are will-
ing to see that Mr. Rockefeller has employed force and
concentrated workforce fraud to secure his ends, justify him by declaring, ‘It’s
• In large–scale industries, low wages, long hours, and business.’ That is, ‘It’s business’ has come to be a legiti-
dangerous working conditions were common
mate excuse for hard dealing, sly tricks, special privileges.
• First large unions formed but had little bargaining
It is a common enough thing to hear men arguing that
power against large companies
the ordinary laws of morality do not apply in business.
HISTORY
Steel Production, 1865–1900
Self-Check Quiz
Visit the American Republic Since 1877 Web site at
12
tarvol2.glencoe.com and click on Self-Check Quizzes—
11
Chapter 9 to assess your knowledge of chapter content.
10
9
As for the ethical side, there is no cure but in an
8

Millions of Tons
increasing scorn of unfair play. . . . When the business-
7
man who fights to secure special privileges, to crowd his
6
competitor off the track by other than fair competitive
5
methods, receives the same summary disdainful
4
ostracism by his fellows that the doctor or lawyer who is
‘unprofessional,’ the athlete who abuses the rules, 3

receives, we shall have gone a long way toward making 2


1
commerce a fit pursuit for our young men.

—quoted in Readings in American History
1865 1870 1875 1880 1885 1890 1895 1900
a. According to Tarbell, what practices had Rockefeller Year
used to establish the Standard Oil Company? Source: Historical Statistics of the United States: Colonial Times to 1970.

b. In what way did Tarbell believe the attitudes of the


American people contributed to Rockefeller’s business
practices?
had to say about their experience during the project. What
33. Analyzing Analyze the impact of technological innovations attitudes do you think each man had toward the workers?
and industrialization on the American labor movement.
Economics and History
Practicing Skills 37. The graph above shows steel production from 1865 to 1900.
34. Making Inferences Reread the passage titled “Working in Study the graph and answer the questions below.
the United States” from Section 4, page 326. Then answer a. Interpreting Graphs Between what years did steel
the following questions. production have the greatest increase?
a. What facts are stated about working conditions in the b. Making Inferences How did increased steel production
United States during this time period? contribute to American industrialism?
b. Based on your answer to the previous question, what can
you infer about the attitude of employers toward their
workers during this time?

Writing Activity Standardized


35. Portfolio Writing: Persuasive Writing Think of a product Test Practice
that you think is essential to life today. Write an advertise- Directions: Choose the best answer to the
ment for this product that would persuade people to following question.
purchase it. Labor unions were formed in order to
F protect factory owners and improve workers’ wages.
Chapter Activity G improve workers’ wages and make factories safer.
36. American History Primary Source Document Library H make factories safer and prevent lockouts.
CD-ROM Read “Driving the Golden Spike” by Alexander J prevent lockouts and fight deflation.
Toponce, under Reshaping the Nation. For further back-
ground, reread your textbook’s coverage of the same subject Test-Taking Tip: Read each part of each answer choice
on page 315. Then prepare a presentation for your class- carefully. Only one answer choice contains two correct
mates. In it, describe what Toponce had to say about the reasons.
workers during the celebration and what Grenville Dodge

CHAPTER 9 Industrialization 333

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