Important Dates:
1870: Industrialization begins with automatic signals, air brakes, and knuckle couplers on the railroads; the Bessemer and then the open-hearth process in the steel mills; the telephone, electric light, and typewriter. 1873: Andrew Carnegie "vertically integrates" his steel company, producing one of the largest monopolies of the era. 1877: Munn vs. Illinois ruled that a "state board was empowered to eliminate railroad rate discrimination and set maximum charges" (Foner, 2012). 1880: The transnational railroad establishes the national market for trade and a new shift to an industrial workforce encompasses American society. John D. Rockefeller's Standard Oil Company controls 90% of the nation's oil company from drilling to distribution. 1883: Establishment of the Civil Service Act which based government employment and promotion on examination of skills rather than on political influence. 1886: Federated Trades of the Pacific Coast rewrite the Declaration of Independence, including that "the workers had suffered at the hands of the unjust domination of a special class" (Foner, 2012). The Statue of Liberty was also dedicated to the new nation as a symbol of freedom. 1887: The establishment of the Interstate Commerce Commission in response to the unethical practices of the railroads. 1890: Two-thirds of the American populous works for wages rather than the traditional routes of self-employment. The Sherman Antitrust Act is passed and bans "the combinations and practices that inhibit free trade. The phonograph, motion picture, and electric generator usher in a new age of household technology such as the refrigerator, washing machine, and the internal combustion engine- progress to the first automobiles and the Wright Brothers’ first flight. The U.S. vs. E.C. Knight Co. case ruled that the act did not have the power to dissociate a monopoly of the sugar industry because the case dealt with manufacturing, not commerce. 1894: Political activist and renowned Muckraker, Henry Demarest Lloyd, writes Wealth Against Commonwealth, a detailed critique of the Standard Oil Company that was responsible for the exposure of the monopolies corrupt business maneuvers. 1900: Chicago becomes the nation’s second largest city becoming a center of production from steel to farm machinery to cattle processing. 1905: Lochner vs. New York voided that states could set limitations on how many hours an employee could work in a given week as it "interfered with the right of contract between employer and employee." 1913: America is the major producer of one-third of the world's industrial output in the global market. |
![]() Industrial Expansion:
In the aftermath of the Civil War and Reconstruction, the American economy had developed. During the period of 1870 and 1914, it was known as the Second Industrial Revolution. The United States flourished as it experienced an abundance "...of natural resources from its newly acquired territories, a growing supply of labor immigrating from Europe, large migration of emancipated African Americans to the North and West, an expanding market for manufactured goods, and the availability of capital for investment" (Foner, 2012). The Second Industrial Revolution became an explosive force behind American expansionism and globalism. By the year 1913, the United States was the major producer of one-third of the world's industrial supplies (Foner, 2012). Manufacturing was now the exceeded profession of the American populous with over two-thirds of the population working for wages at the hands of industry than the traditional professions (U.S. History Scene, 2012). With the economies rapid expansion, advancements towards transportation, such as new roads, steam boats, and most notoriously the railroads, became a center for modernism . The railroads would prove to be the greatest industrialization maneuver of the United States, as well as the most detrimental to the old way of life. While new transportation escalated the pathways of the American people, it generated a new industrialized economy that had attracted Americans towards factories, mining companies and railroad construction and factories. As the living standard changed in between 1870 and 1920 it contributed "11 million Americans moved from farm to city, and another 25 million immigrants arrived from overseas" (Foner, 2012). With the new advancement of technologies, at that time, the American people had preferred to live in the cities instead on the farmland as they believed there was greater opportunity for wealth and prosperity. The union between inventions and the Second Industrial revolution, was a divine marriage that would only increase the success of the industrial campaign in American society. According to ushistoryscene.com, the railroad stimulated the "...growth of the telegraph machine..." and the "...telegraph, and later the telephone, ushered in the era of instant communication." Electricity became commonplace, sparking the creation of the "...phonograph, lightbulb, motion picture, and the generation and distribution of electric power" (Foner, 2012). Innovation gave way to the brilliance of science. Nikola Tesla, a immigrant from Serbia, became an industrial legend with his development of the electric motor, making commercial and industrial electrical challenges distant memories. These inventions produced an economy that expanded the American people who urbanized through the new technology in the Second Industrial Revolution."These technologies also increased the pace of life and the manner in which people worked and lived" (U.S. History Scene, 2012). However, with industrial progressivism, businesses soon faced the harsh reality that competition was real and with the removal of money from the national market, it was inevitable (Foner, 2012). The rise of the corporation began in response to the decreasing value of goods, as men developed the notion that having the most product accounted for the largest profit. Corporations became monopolies, and the monopoly ushered in a new era of greed and "conspicuous consumption," an era where men valued money above freedom and prestige above prosperity (Foner, 2012). ![]() The Rise of Corporations:
One of the leading causes of the shift of American values and the destruction of the American dream was the rise of corporations. Americans had found themselves to be at odds as they grew in "awe, admiration, and hostility" of these new factions of the political and economic realms of society. Corporate leaders such as Carnegie and Rockefeller were considered "robber barons who wielded power without any accountability in an unregulated marketplace." Mostly hated for their domineering positions, repressive mentalities towards laborers, and consistent display of selfishness, corporations were thought to undermined the ideas of political and economic freedoms as fair competition was altogether shattered in the face of monopolies (Foner, 2012). During the years of 1873 to 1897, the world economy would face its greatest downturn (disregarding the Great Depression of the later 1930s) as production and consumption skyrocketed while the inverse occurred to the amount of money in circulation. With a scramble for wealth, businesses competed with one another for the greatest portion of the market with cutthroat tactics and teetering legal actions to establish supremacy (Foner, 2012). The most influential of all corporations was the railroad. It held within its capabilities the most vital of powers during a time of national and international trade, the right to regulate business and pricing. Rising as an economic and political machine, the railroad committed heinous acts of legalized oppression as it was allowed the right to refuse to transfer goods, store goods, or do business with "lesser" companies (Lloyd, 1881). It caused the downfall and demise of hundreds of businesses that were not able to meet its impossible standards and willingly participated in trades of favors with corporations that could deliver unimagined profits. As the railroad expanded, so did its partnerships and its roots into other industries. Henry Demarest Lloyd damned the railroads for their biased conduction of business, stating, "The railroads create the monopoly, and then make the monopoly their excuse" (Lloyd, 1881). It was through the efforts of leading men such as Thomas A Scott, that the railroad (in the case of Scott, the Pennsylvania Railroad) engineered the path of the corporate organization. Two of the most well-known corporations of the era were Andrew Carnegie's steel company and The Standard Oil Company, founded by John D. Rockefeller. Both, with significant ties to railroads, rose to the top of their industries, dominating their respective trade by capitalizing on every aspect of their industry and shutting out competition by making "secret deals" with the railroads (Foner, 2012). These two corporations would become history's most renowned demonstrations of the debilitation of the freedoms of democracy that would arise due to the commandment of the monopoly. Both Rockefeller and Carnegie used "vertical integration" and "horizontal integration" of competitors and the system of manufacturing to further their expansions. They were ruthless employer's who denounced worker's unions and worker compensations beyond their allotted salary, and willingly withdrew employment for those who chose to stand against their reign (Foner, 2012). As men who gave back to the community, they believed in the socialist act and that those of wealth were obligated to help rise from the stoops those less fortunate, but only at the cost of their laborers. ![]() But, corruption did not stop at the line of monopolies and corporate secrecy, but seeped into the very heart of politics. With wealth and unregulated power, corporations had now intertwined their interests with those of lawmakers and political leaders. Men of power had invested in these great monopolies, or were willing to be bought for favors, leading to the support of many bills that benefitted the continuance of corporate corruption and the dynamic enterprise of corporate wealth. Even with the Republican and Democratic parties at constant odds, neither was willing to damage relations with the businesses, bankers, or financiers and willing resisted the pleas of the poor for an increased disbursement of wealth and fair pricing on necessary goods (Foner, 2012). Those who suffered most were those laborers who were seen as nothing more than cattle. As the corporation grew westward, so did the growing need for money and for power. West-ward, established Americans were engulfed in the corporate lifestyle having mining, lumbering, and farming become commercialized businesses, independent land owners had now been integrated into the ranks of industrial employment (Foner, 2012). Even with the Supreme Court and consistent cases brought against impeding organizations, corporations and monopolies benefitted from an era where workers were "...granted the liberties they [did] not want and denied the liberty that [was] of real value to them." (Foner, 2012). Freedom and independence had now become mere fantasies for the average American. Only the wealthy knew true freedom, only the wealthy were above the laws of democracy.
The injustices brought on by the corporation were felt near and far across the laboring class, with men, women, and children having to face the disproportioned distribution of wealth. The corrupt system of money had slithered its way to the heart of democracy and its white horse was that of the corporation. As time brought upon changes and workers demanded rights to fair treatment and unionization, the damage to the American institution was done. Americans had now turned their attentions to the accumulation of wealth. "Passion for money," as written by Edith Wharton, "dominated society." Americans were possessed by the notion of consumption and were willing to use the backs of neighbors to reach the goal of high society. (Foner, 2012). Resources:
Donald J. Smythe. 2010. "The Rise of the Corporation, the Birth of Public Relations, and the Foundations of Modern Political Economy" ExpressO. http://works.bepress.com/donald_smythe/2 Foner, Eric. Give Me Liberty!. W.W Norton and Company, Inc., 2012. US History Scene. “The Second Industrial Revolution, 1870-1914.” Last modified February 27, 2012. http://www.ushistoryscene.com/uncategorized/secondindustrialrevolution/ Archive of Primary Sources: Lloyd, Henry Demarest., “The Story of a Great Monopoly.” The Atlantic, March 1881. Accessed October 1, 2014. http://www.theatlantic.com/magazine/archive/1881/03/the-story-of-a-great-monopoly/306019/ |