Chapter 17 - Business and Labor in the Industrial Era (1860-1900)

• In the North, however, the need to supply the massive Union armies with shoes, boots, uniforms, weapons, supplies, food, wagons, and railroads ushered in an era of unprecedented industrial development.

• During the war years, the number of manufacturing companies in the United States almost doubled, and between the end of the war and 1900, America experienced explosive growth. The nation’s population tripled, agricultural production more than doubled, and manufacturing output grew six times over.

• By 1900, American industries and corporate farms dominated global markets in steel and oil, wheat, and cotton. Such phenomenal growth caused profound social changes, the most visible of which was the sudden prospering of large industrial cities such as Pittsburgh, Chicago, and Cleveland.

• While a few people made enormous fortunes, however, most laborers remained in unskilled, low-wage jobs. Big Business, a term commonly used to refer to the giant corporations that emerged after the Civil War, was untamed and reckless.

• In a capitalist democracy like America, the tensions between equal political rights and unequal economic status produce inherent social instability. The overwhelming influence exercised by business tycoons led to tensions that spurred the formation of labor unions and farm associations

Industrial and Agricultural Growth

• The most important was the creation of new transportation systems—canals, steamboats, railroads—along with instantaneous communication networks (telegraph and, later, telephone).
• In addition, Americans enjoyed the benefits of vast and valuable natural resources—land, forests, minerals, oil, coal, water, and iron ore. At the same time, a rising tide of immigrants created an army of low-wage, high-energy workers.
• Investment banker Jay Cooke marveled at the new breed of cold-blooded capitalists who emerged during and after the Civil War, most of them northerners and all of them driven by the “same all-pervading, all-engrossing anxiety to grow rich.”.
• The uncommon men who spearheaded the postwar economic boom elicited both praise and scorn. Admirers called them “captains of industry,” while critics called them “robber barons”.
• Bigness was the driving goal of industrial capitalism. Mass, scale, and size were the watchwords of the day. These predatory men—Cornelius Vanderbilt, John D. Rockefeller, Andrew Carnegie, and J. P. Morgan, among others—wanted to dominate their industries.

Corporate Agriculture

• At the same time that the manufacturing sector was experiencing rapid growth, the agricultural sector was also shifting to a large-scale industrial model of operation.
• Giant corporate-owned “bonanza” farms (growing mostly wheat and corn on thousands of acres) spread across the West. By. By 1870, the United States had become the world’s leading agricultural producer.

Technological Innovations

• Inventors, scientists, research laboratories, and business owners developed labor-saving machinery and mass-production techniques (such as the use of interchangeable parts) that spurred dramatic advances in efficiency, productivity, and the size of industrial enterprises.
• Such innovations helped businesses turn out more products more cheaply while enabling more people to buy more of them. Technological advances created economies of scale, whereby larger business enterprises, including huge commercial farms, could afford expensive new machinery and large workforces that boosted their productivity.
• After the Civil War, technological improvements spurred phenomenal increases in industrial productivity.

Bell’s Telephone

• In 1875, twenty-eight-year-old Alexander Graham Bell began experimenting with the concept of a “speaking telegraph,” or talking through wires.
• The following year, he developed a primitive “electric speaking telephone”. Bell then patented his device and started a company, the American Telephone, and Telegraph Company (AT&T), to begin manufacturing telephones.
• Five years later, he perfected the long-distance telephone lines that revolutionized communication

Typewriters and Sewing Machines

• Typewriters, for example, transformed the operations of business offices. Because women showed greater dexterity in their fingers, business owners hired them to operate typewriters.
• The introduction of sewing machines for the mass production of clothing and linens opened new doors to women—if not usually pleasant ones to walk through.
• So-called sweatshops emerged in the major cities, where large numbers of mostly young women, often immigrants, worked long hours in cramped, stifling conditions.

Thomas Edison

• His mother home-schooled him and allowed him to explore the outdoors and perform chemical “experiments.”. When Edison was twelve, he began working for the local railroad, selling newspapers, food, and candy to passengers. One day he was late for the train and ran after it. A conductor reached down and lifted him into the train by his ears. Edison felt something snap in his head, and soon he was deaf.
• Despite having no formal scientific education, the self-taught Edison in Jan 1869 at 21 yrs old announced his devotion to inventing.
• He moved to NYC to be closer to America’s financial district. He developed dozens of new machines, including a “stock market ticker” that would report the transactions on Wall Street in real-time.
• Soon, job offers and “real money” flooded his way. Edison, however, had a different goal: he wanted to become a full-time inventor, an electrical engineer devoted to creating new products.
• In 1876, he moved into his “science village” in Menlo Park, New Jersey. Edison became a mass production inventor. In the nation’s first industrial research laboratory, Edison and his assistants created the first phonograph in 1877 and a long-lasting electric lightbulb in 1879. He also improved upon the telephone.
• By the ripe age of thirty, Edison was the nation’s foremost inventor.

George Westinghouse and Electric Power

• Until the 1880s, buildings and streets were lit mostly by kerosene or gas lamps.
• In 1882, the Edison Electric Illuminating Company later renamed General Electric, supplied electrical current to eighty-five customers in New York City, launching the electric utility industry.
• Several companies that made lightbulbs merged into the Edison General Electric Company in 1888. George Westinghouse, the inventor of the railway air brake, developed the first alternating-current electric system in 1886 and set up the Westinghouse Electric Company to manufacture the equipment.
• Edison resisted the new method as too risky, but the Westinghouse system of transmitting electricity over long distances won the “battle of the currents,”
• After the invention in 1887 of the alternating-current motor by a Croatian immigrant named Nikola Tesla, Westinghouse improved upon it, and the company began selling dynamos/electric motors.
• Electricity enabled factories to be located wherever the owners wished; industry no longer had to cluster around waterfalls and coal deposits to have a ready supply of energy.
• Electricity also spurred urban growth by improving lighting, facilitating the development of trolley and subway systems, and stimulating the creation of elevators.

The Railroad Revolution

• Trains and Time- The railroad network prompted the creation of national and international time zones and spurred the use of wristwatches, for the trains, that were scheduled to run on time.
• Towns that had rail stations thrived; those that did not die. Such a sprawling railroad system was expensive, and the long-term debt required to finance it would become a major cause of the financial panic of 1893 and the ensuing depression.

Trains and the Industrial Era

• Railroads were America’s first truly big business, the first beneficiary of the great financial market known as Wall Street in New York City.
• The railroad boom was the catalyst for America’s transition to an urban industrial economy. Trains opened the West to economic development, enabled federal troops to suppress Indian resistance, ferried millions of European and Asian immigrants across the country, helped transform commercial agriculture into a major international industry, and transported raw materials to factories and finished goods to retailers.
• Railroads became the first industry to contract with “investment banks” to raise capital by selling shares of stock to investors. They also stimulated other industries through their mammoth purchases. In addition, railroad companies were the nation’s largest employers.

The Downside of the Railroad Boom

• Many developers, however, cared more about making money than building safe railroads. Companies often overlooked dangerous working conditions that caused thousands of laborers to be killed or injured. Railroad lobbyists helped to corrupt state and federal legislators by “buying” the votes of politicians with cash or shares of stock in the new railroad companies, Admitted Charles Francis Adams Jr., head of the Union Pacific Railroad.

Building the Transcontinental - The Work of Giants

• For decades, visionaries had dreamed of the United States being the first nation in the world to build a railroad spanning a continent.
• In the 1860s, the dream became reality as construction began on the first of four rail lines that would bridge the nation—and, as one promoter boasted, establish “our empire on the Pacific. The transcontinental railroads were, in the words of General William T. Sherman, the “work of giants.”
• Their construction required heroic feats by the surveyors, engineers, and laborers who laid the rails built the bridges and gouged out the tunnels through rugged mountains.
• Because the western routes passed through vast stretches of unpopulated plains and deserts, construction materials, as well as workers and their food and water, had to be hauled long distances. The construction process was like managing a moving army. Construction camps included tents for dance halls, saloons, gambling, and prostitution.
• Because the western routes passed through vast stretches of unpopulated plains and deserts, construction materials, as well as workers and their food and water, had to be hauled long distances. The construction process was like managing a moving army. Construction camps included tents for dance halls, saloons, gambling, and prostitution.

The Pacific Railway Act (1862)

• Before the Civil War, the construction of a transcontinental line had been delayed because northern and southern congressmen clashed over the choice of routes.
• Republicans in Congress passed the Pacific Railway Act in 1862. It authorized construction along a north-central route by two competing companies: the Union Pacific Railroad (UP) westward from Omaha, Nebraska, across the prairie, and the Central Pacific Railroad (CP) eastward from Sacramento, California, through the Sierra Nevada.
• Both companies began construction during the war, but most of the work was done after 1865. The competition led both companies to cut corners. Collis Huntington, one of the CP owners, confessed that his goal was to build “the cheapest road that I could.” so did Mark Hopkins, one of Huntington’s partners.

Railroad Workers

• The UP crews were composed largely of young, unmarried former Civil War soldiers, both Union and Confederate, along with ex-slaves and Irish and German immigrants. The CP crews were mainly young Chinese workers lured to America by the California gold rush or by the railroad jobs. Most of these “coolie” laborers were single men eager to make money to take back to China, where they could then afford to marry and buy a parcel of land. First came the surveyors, who selected and mapped the routes and measured the grade changes. Engineers then designed the bridges, trestles, tunnels, and snowsheds. Tree cutters and graders followed by preparing the rail beds. Wooden cross ties were then placed in the ground and leveled before thirty-foot-long iron rails weighing 560 pounds were laid atop them. Next came spikers, who used special hammers to wallop two-pound spikes attaching the rails to the ties. Finally, workers shoveled gravel between the ties to stabilize them against the weight of rolling trains. Yet for all of its precision and efficiency, the process of building the lines faced constant interruptions: terrible weather, late deliveries of key items, accidents, epidemics, or Indian attacks. Workers often fought and killed each other

The Race to the Finish

• Every major newspaper carried stories about the progress of the two competing companies.
• Finally, on May 10, 1869, former California governor Leland Stanford, one of the owners of the Central Pacific, drove a gold spike to complete the line at Promontory Summit in the Utah Territory north of the Great Salt Lake. The Union Pacific had built 1,086 miles of track compared with the Central Pacific’s 689. The golden spike used to connect the final rails symbolized the uniting of East and West, just as Robert E. Lee’s surrender four years earlier had come to represent the reunion of North and South.

The Rise of Big Business - The Growth of Corporations

• The transcontinental railroads were the first of many investor-owned, publicly-traded corporations during the industrial era.
• As businesses grew, they took one of several different forms. Increasingly, however, large companies that served national and international markets were converted into “corporations”—legal entities that separate the ownership of an enterprise from the management of its operations. Once a corporation is registered (“chartered” or “incorporated”) with a state government, it can raise money to operate (“capital”) by selling shares of stock—representing partial ownership of the company—to people not otherwise involved with it.
• Shareholders elect a board of directors who appoint and evaluate the corporation’s executives (“management”). One of the most important benefits of a corporation is “limited legal liability”: stockholders share in its profits but cannot be held liable for its debts if it fails.

Fighting Competition

• To eliminate cutthroat competition and thereby stabilize production, wages, and prices, rival companies selling similar products often formed “pools” whereby they secretly agreed to keep production and prices at specified levels. Such pools rarely lasted long, however, because they were unenforceable. One or more participants usually violated the agreement by cutting prices or increasing production—or both

The Barons of Business

• Moreover, during and after the Civil War, becoming rich emerged as a national ideal sanctified by many religious leaders. The industrial and financial giants personified the values that Conwell (Russel Conwell-prominent baptist minister) celebrated. They were men of grit and genius who found innovative—and at times unethical—ways to increase production, create efficiencies, and eliminate competition.
• The captains of commerce were also mercilessly adept at cutting costs and lowering prices. Several of the post–Civil War business barons stood out for their extraordinary accomplishments: John D. Rockefeller and Andrew Carnegie for their innovations in organization, and J. Pierpont Morgan for his development of investment banking.

John D Rockefeller

• Born in New York in 1839, John D. Rockefeller moved as a child to Cleveland, Ohio. Soon thereafter, his con-man father abandoned the family. Raised by his mother, a devout Baptist, Rockefeller developed a single-minded passion for systematic organization.
• As a young man in the 1860s, he decided to bring order and rationality to the new boom-and-bust oil industry. The first oil well in the United States began producing in 1859 in Titusville, Pennsylvania, and led to the Pennsylvania oil rush of the 1860s.
• The economic importance of the oil rush soon outstripped that of the California gold rush ten years earlier. Well before the end of the Civil War, oil refineries sprang up in Pittsburgh and Cleveland. his brother William and two other businessmen, Henry M. Flagler and Samuel Andrews (inventor of an inexpensive means of refining crude oil) to estab. Standard oil company. Although the company quickly became the largest oil refiner in the nation, John Rockefeller wanted to eliminate his competitors and take control of the entire industry.
• Early on, he pursued a strategy that came to be called horizontal integration, in which a dominant corporation buys or forces out most of its competitors. ” His goal was a monopoly, a business so large that it effectively controls an entire industry. he John D. Rockefeller Co-­founder of the Standard Oil Company.
• He shipped so much oil by rail, he forced railroads to pay him secret “rebates” on the shipments, enabling him to pay less for shipping than his competitors paid. Most importantly, instead of depending upon the products or services of other firms, known as middlemen, Standard Oil eventually owned everything it needed to produce, refine, and deliver oil—from wells to the finished product. In economic terms, this business strategy is called vertical integration.
• Rockefeller’s Standard Oil Company was both horizontally and vertically integrated. During the 1870s, Standard Oil bought so many of its competitors that it developed a virtual monopoly over the industry. Many state legislatures responded by outlawing the practice of one corporation owning stock in competing ones.
• In 1882, Rockefeller tried to get around such laws by organizing the Standard Oil Trust. A trust gives a person or corporation (the “trustee”) the legal power to manage another person’s money or another company. Instead of owning other companies outright, the Standard Oil Trust controlled more than thirty companies by having their stockholders transfer their shares “in trust” to Rockefeller and eight other trustees.
• This idea grew and generated intense criticism, congress responded by passing the Sherman Antitrust Act with only one dissenting vote-it declared corp. Efforts To monopolize industries and restrain competition were illegal- but the bill was so vague it was virtually toothless. State laws against monopolies were initially more effective than the Sherman Act.
• In 1892, Ohio’s Supreme Court ordered the Standard Oil Trust dissolved. A furious Rockefeller then developed another way to maintain control of his numerous companies: a holding company, which is a huge corporation that controls other companies by “holding” most or all of their stock certificates. That year, Rockefeller brought his empire under the direction of the Standard Oil Company of New Jersey, a gigantic holding company.

Andrew Carnegie

• Andrew Carnegie, who created the largest steel company in the world, rose to wealth from boyhood poverty. Born in Scotland, the son of weavers, he migrated with his family in 1848 to western Pennsylvania. At age thirteen, he went to work in a textile mill.
• In 1853, he became personal secretary to Thomas Scott, the district superintendent of the Pennsylvania Railroad and later its president. During the Civil War, when Scott became assistant secretary of war in charge of transportation, Carnegie went with him to Washington, D.C., and helped develop a military telegraph system.
• The ambitious Carnegie worked his way up. Carnegie accumulated vast wealth, and he often treated his workers ruthlessly. Steel until the mid 19th century could only be made from wrought iron- which was expensive- and only could be imported from Sweden, and manufactured in small quantities. That changed in the 1850s when Sir Henry Bessemer invented the Bessemer converter- a process where high-quality steel could be made by blasting oxygen through molten iron in a furnace.
• In the early 1870s, Carnegie decided to concentrate on steel, because Bessemer’s process had made it so inexpensive. Steel quantity went up, so prices dropped and industrial uses soared. Carnegie dominated the steel industry, acquiring competitors or driving them out of business by cutting prices and taking their customers.
• He also sought to expand his industry by vertical integration—gaining control of every phase of the steelmaking business. He owned coal mines in West Virginia, bought huge deposits of iron ore in Michigan and Wisconsin, and transported the ore in his own ships across the Great Lakes and then by rail to his steel mills in Pittsburgh.
• By 1900 Carnegie Steel Company was the largest industrial company in the world and Carnegie's employees were working as his mills operated nonstop w 12-hour shifts.

J. Pierpoint Morgan

• He was born to wealth, his father was a partner in a large English bank, he attended school in Switzerland and college in Germany. Morgan was sent in 1857 to work in New York City for a new enterprise, J. Pierpont Morgan and Company. The firm, under various names, invested European money into American businesses. Morgan took over poorly run companies, appointed new executives, and supervised operations. He owned a 1/6th of the nation’s railway systems, but his crowning triumph was the consolidation of the steel industry- he bought out Andrew Carnegies’ huge steel and iron holdings and added scores of related companies to form US steel Corp-the world’s first billion-dollar corp.

The Gospel of Wealth

• The captains of industry were convinced that they benefited the public by accelerating America’s transformation into an industrial colossus. s. In his essay “The Gospel of Wealth'' (1889), Andrew Carnegie argued that good has come to the anglo-Saxon race from the accumulation of wealth by those who have the ability and energy that produces it. He felt the need to justify his wealth and denounced the worship of money. He and Rockefeller gave much of their money back to society. Rockefeller had become the world’s leading philanthropist. His philanthropic influence continues today through the Rockefeller Foundation. Carnegie after retiring at 65, declared to devote himself to dispensing his 400 mill fortune, calling himself a distributor of wealth.

The Alliance of Business and Politics

• Republicans and Big Business- A key element of this alliance was tariff policy. Since 1789, the federal government had imposed tariffs—taxes on imported goods—to raise revenue and to benefit American manufacturers by penalizing their foreign competitors.
• In 1861, the republican dominate Congress enacted the Morrill Tariff which doubled tax rates on hundreds of imported items as a means of raising money for the war and rewarding businesses that supported the republican party.
• After the war, President Ulysses S. Grant, and later, Republican presidents and Congresses, continued the party’s commitment to high tariffs despite complaints that the tariffs increased consumer prices at home by restricting foreign imports and thereby relieving American manufacturers of the need to keep their prices down. Farmers in the South and Midwest resented tariffs.
• The Legal Tender Act of 1862 authorized the federal government to issue paper money (“greenbacks'') to help pay for the war. The National Banking Act (1863) created national banks authorized to issue greenbacks, which discouraged state banks from continuing to issue their own paper money.
• In the Homestead Act of 1862, Congress provided free 160-acre (or even larger) homesteads to settlers in the West which created new markets for goods and services and spurred railroad construction.
• The Morrill Land Grant Act of the same year transferred to each state 30,000 acres of federal land for each member of Congress the state had. The sale of those lands provided funds for states to create colleges of “agriculture and mechanical arts.”

Laissez-Faire

• In 1870, historian Henry Adams expressed concern that there “was no authority” capable of restraining the leaders of the nation’s largest corporations. Simply speaking, the government did not regulate big businesses or any oversight of business operations/ working conditions. Congress and the President both opposed the laissez-faire doctrine. For their part, the politicians were usually eager to help the titans of industry in exchange for campaign contributions—or bribes for looking the other way.

An Industrial Society

• The ways of the wealthy- Class divisions became more visible. The financiers and industrialists amassed so much fabulous wealth and showed it off so publicly that the period is still called the “Gilded Age.” The name derived from a popular novel by Mark Twain and Charles Dudley Warner, The Gilded Age: A Tale of Today, which mocked the crooked dealings of political leaders and the business elite.
• Most of the millionaires were white Protestants who voted Republican, except for a small number of wealthy southern Democrats. Many of the nouveaux riches (French for “newly rich”) indulged in what came to be called “conspicuous consumption.”

A Growing Middle Class

• The term middle class had first appeared in the 1830s and had become commonplace by the 1870s, as more and more Americans came to view themselves as members of a distinct social class between the ragged and the rich. While the rich were getting richer, many other people were also becoming better off in terms of their income and quality of life.

Middle-Class Women

• The growing presence of middle-class women in the workforce partly reflected the increasing number of women who were gaining access to higher education. By 1900, a third of college students were women. To be sure, college women were often steered into home economics classes and “finishing” courses intended to perfect their housekeeping or social skills. Still, the doors of the professions—law, medicine, science, and the arts—were at least partially opened.

Neurasthenia

• Women who tried to escape the “cult of domesticity” and pursue careers outside the home often paid a high price. Many contracted a peculiar affliction, which male physicians called neurasthenia. George M. Beard, a neurologist who popularized the term neurasthenia, concluded—incorrectly—that women were “more nervous, immeasurably than men. Charlotte Perkins Gilman, for instance, wrote her short story “The Yellow Wallpaper” to expose the horrors of the “rest cure” she was subjected to at age twenty-seven.

Jane Addams

• Social worker Jane Addams also struggled with neurasthenia and the dominant male notions of women’s roles. After graduating in 1881 from Rockford College in Illinois, she found few opportunities to use her degree and lapsed into a state of depression. Addams’s desire to engage in “real life” eventually led her to found Hull House in Chicago. There, she and other social workers helped immigrants adapt to American life and mentored young women to “learn of life from life itself.” By 1890, a magazine called the Arena would urge progressive-minded people to recognize the traditional view of “women as homebodies'' for what it was: “hollow, false, and unreal.”

The Working Class

• The continuing demand for unskilled workers by railroads, factories, mills, mines, slaughterhouses, and sweatshops attracted new groups to the workforce: immigrants above all, but also growing numbers of women and children. During the recessions and depressions that occurred about every six years, unskilled workers were the first to be laid off or to have their wages slashed. In addition, working conditions were difficult and often dangerous for those at the bottom of the occupational scale. The average workweek was ­fifty-nine hours. American industry has the highest rate of workplace accidents and death in the world.

Working Women

• Employers often recruited women and children for unskilled jobs because they were willing to work for lower wages than men received. In the manufacturing sector, women’s wages averaged $7 a week, compared to $10 for unskilled men.

Child Labor

• Most young people had always worked in America; farms required everyone to pitch in. millions of children took up work outside the home, Child labor increased as parents desperate for income felt forced to put their children to work. Pennsylvania, W. Virginia, E. Kentucky- boys worked in coal mines and in New England and the South, children labored in textile mills where at night shift they threw water at them to keep them awake. Children worked alongside adults, thus receiving little or no education.

The Dreadful Chill Of Change-Organized Labor

• The efforts of the working poor to form unions to improve their pay and working conditions faced formidable obstacles during the Gilded Age. Many executives fought against unions. often hired “scabs” (nonunion workers) to replace workers who went on strike. Another factor impeding the growth of unions was that much of the workforce was made up of immigrants who spoke different languages. W or w/o unions, strikes began which often led to violence which led to class tensions.

The Molly Maguires

• In the early 1870s, violence erupted in the eastern Pennsylvania coalfields, when a secret Irish American group called the Molly Maguires took economic justice into their own hands.
• The Mollies took their name from an Irish patriot who had led the resistance against the British. Outraged by dangerous working conditions in the mines and the owners’ brutal efforts to suppress union activity, the Mollies used intimidation, beatings, and killings to avenge the wrongs done to Irish workers.
• Their terrorism reached its peak in 1874–1875, prompting mine owners to hire men from the Pinkerton Detective Agency (commonly referred to as “Pinkertons”) to stop the movement. One of the agents who infiltrated the Mollies uncovered enough evidence to have the leaders indicted for the coalfield murders.

The Great Railroad Strike (1877)

• The major rail lines, fearful of a recession, had slashed workers’ wages.
• In 1877, the companies announced another 10 percent wage cut, which led most of the railroad workers at Martinsburg, West Virginia, to walk off the job. The strike spread to hundreds of other cities and towns. In Pittsburgh, thousands of striking workers burned thirty-nine buildings and destroyed more than 1,000 railcars and locomotives. The violence was not directed solely at employers, either.
• Workers who refused to join the strike or participate in the riots were harassed and beaten. The Great Railroad Strike became one of the most spectacular incidents of widespread violence in American history and revealed how polarized the working poor and business elites had become.
• Governors mobilized state militia units to suppress the rioters, but looting and burning continued until President Rutherford Hayes dispatched federal troops. Eventually, the disgruntled workers, lacking organized bargaining power, had little choice but to return to work.

The Sand-Lot Incident

• In California, the national railroad strike indirectly gave rise to a working-class political movement. In 1877, a meeting held in a sandy San Francisco lot to express sympathy for the railroad strikers ended with attacks on passing Chinese workers. In the aftermath of the so-called Sand-Lot Incident, white mobs attacked Chinatown.
• Soon an Irish immigrant, Denis Kearney, had organized the Workingmen’s Party of California, whose platform called for the United States to stop Chinese immigration. Although Kearney failed to build a lasting movement, his anti-Chinese theme became a national issue. In 1882, Congress voted to prohibit Chinese immigration for ten years.

The National Labor Union

• During the Civil War, because of the increased demand for skilled labor, so-called “craft unions” made up of workers expert at a particular handicraft grew in strength and number. Yet there was no overall connection among such groups until 1866 when the National Labor Union (NLU) convened in Baltimore.
• The NLU was more interested in advocating for improved workplace conditions than in bargaining with employers about wages and hours. Like most such organizations in the nineteenth century, however, the NLU did not allow women as members. The NLU also discriminated against African American workers, who were forced to organize black-only unions.
• After the NLU’s head, William Sylvis, died suddenly in 1869, its support declined, and by 1872 the union had disbanded.
• The NLU was not a total failure, however. It was influential in persuading Congress to enact an eight-hour workday for federal employees and to repeal the 1864 Contract Labor Act. Employers had taken advantage of the Contract Labor Act to recruit foreign laborers willing to work for lower wages than their American counterparts.

The Knights of Labor

• In 1869, another national labor group emerged: the Noble Order of the Knights of Labor. The union grew slowly at first, but as other unions collapsed during the depression of the 1870s, it spread more rapidly. The Knights of Labor endorsed most of the reforms advanced by previous workingmen’s groups, including the creation of bureaus of labor statistics and mechanics’ lien laws (to ensure payment of wages), the elimination of convict labor competition, the establishment of the eight-hour day and worker cooperatives, and the use of paper currency. One reform the group advocated was far ahead of the times: equal pay for equal work by men and women.
• By recruiting all types of workers, the Knights grew very large, but they also struggled with internal tensions between skilled and unskilled workers.
• In 1879, Terence V. Powderly, the thirty-year-old mayor of Scranton, Pennsylvania, became head of the Knights of Labor. Born of Irish immigrant parents, Powderly had started working for a railroad at age sixteen. Frail, sensitive to criticism, and indecisive, was in many ways unsuited to the job. He was opposed to strikes, and when they did occur, he did not always support the groups involved. Yet the Knights owed their greatest growth to strikes that occurred under his leadership.

Anarchism

• One of the many challenges they faced was hostility from middle-class Americans who came to view unionized workers, especially those involved in clashes with police, as “radicals” or “anarchists.” Anarchists believed that government—any government—was a device used by powerful capitalists to oppress and exploit the working poor. Labor-related violence increased during the 1880s as the gap between the rich and working poor widened.
• Chicago was a hotbed of labor unrest and a magnet for immigrants, especially German and Irish laborers, some of whom were socialists or anarchists who endorsed violence. The Chicago labor movement’s foremost demand was for an eight-hour workday, and what came to be called the Haymarket riot grew indirectly out of prolonged agitation for this goal.

The Haymarket Riot (1886)

• Some 40,000 Chicago workers went on strike in support of an eight-hour workday. On May 3, violent clashes between strikers and nonunion “scabs” hired to replace striking workers erupted outside the McCormick Harvesting Machine Company plant.
• The police arrived, shots rang out, and two strikers were killed. The killings infuriated the leaders of the tiny but outspoken anarchist movement in Chicago. August Spies, a German-born anarchist leader, printed leaflets in English.
• A mass protest was planned for the following night at Haymarket Square. On the evening of May 4, after listening to speeches complaining about low wages and long working hours, the crowd of angry laborers was beginning to break up when police arrived and ordered them to disperse. At that point, someone threw a bomb that left dozens of maimed and dying policemen scattered in the street. The police then fired into the fleeing crowd, resulting in more casualties.
• After being sentenced to be hanged, Louis Lingg declared that he was innocent but was “in favor of using force” to end the abuses of the capitalist system. Lawyers for the anarchists appealed the convictions to the Illinois Supreme Court. Meanwhile, petitioners from around the world appealed for clemency.
• One of the petitioners was Samuel Gompers, the founding president of the American Federation of Labor (AFL). “I abhor anarchy,” Gompers stressed, “but I also abhor injustice.” On November 10, 1887, Louis Lingg committed suicide in his cell. That same day, the governor commuted the sentences of two of the convicted conspirators to life imprisonment.

A Backlash Against Unions

• After the Haymarket riot, tensions between workers and management reached a fever pitch. The violence in Chicago had also triggered widespread hostility to the Knights of Labor and labor groups in general. Despite his best efforts, union leader Terence Powderly could never separate in the public mind the Knights from the anarchists, since one of those convicted of conspiracy in the bombing was a member of the union.
• Powderly clung to leadership until 1893, but after that, the union evaporated.
• Yet the Knights did attain some lasting achievements, among them an 1880 federal law providing for the arbitration of labor disputes, and the creation of the federal Bureau of Labor Statistics in 1884. Another of their successes was the Foran Act of 1885, which, though poorly enforced, penalized employers who imported immigrant workers.

Gompers and the AFL

• The craft unions, representing skilled workers, generally opposed efforts to unite with industrial unionism. Leaders of the craft unions feared that joining with unskilled laborers would mean a loss of their identity and bargaining power. Thus, in 1886, delegates from twenty-five craft unions organized the American Federation of Labor (AFL).
• Its structure differed from that of the Knights of Labor in that it was a federation of many separate national unions, each of which was largely free to act on its own in dealing with business owners.
• Samuel Gompers served as president of the AFL from its founding until his death, in 1924, with only one year’s interruption. Born in England, Gompers came to the United States as a teenager, joined the Cigar Makers’ Union in 1864, and became president of his New York City local union in 1877. Gompers focused on concrete economic gains—higher wages, shorter hours, and better working conditions.
• Two incidents in the 1890s stalled the emerging industrial union movement: the Homestead Steel strike of 1892 and the Pullman strike of 1894.

The Homestead Steel Strike

• The Amalgamated Association of Iron and Steel Workers, founded in 1876, was the nation’s largest craft union. At the massive steel mill at Homestead, Pennsylvania, along the Monongahela River near Pittsburgh, the union had enjoyed friendly relations with Andrew Carnegie’s company until Henry Clay Frick became chief executive in 1889.
• A showdown was delayed until 1892, however, when the union contract came up for renewal. As negotiations dragged on, the company announced on June 25 that it would stop negotiating with the 3,800 workers on June 29 unless an agreement was reached.
• A strike—or, more properly, a lockout, in which management closed down the mill to try to force the union to make concessions—would begin on that date. Frick ordered the construction of a twelve-foot-high fence around the plant. and equipped it with watchtowers, searchlights, barbed wire, and high-pressure water cannons. He also hired a private army of 316 Pinkerton agents to protect what was soon dubbed Fort Frick.
• A fourteen-hour battle broke out in which seven workers and three Pinkertons were killed, and dozens wounded. In the end, the Pinkertons surrendered. A week later, the Pennsylvania governor dispatched 4,000 state militiamen to Homestead. Frick refused to resume negotiations and hired strikebreakers.
• The union's cause was not helped when Alexander Berkman, a Lithuanian anarchist, tried to assassinate Frick on July 23. Carnegie and Frick, with the support of local, state, and national government officials, had eliminated the union. After the strike, none of Carnegie’s steel plants employed unionized workers.

The Pullman Strike

• The Pullman strike of 1894 was even more notable, as it paralyzed the economies of the twenty-seven states and territories in the western half of the nation. It involved a dispute at Pullman, Illinois, a “model” industrial suburb of Chicago owned by the Pullman Palace Car Company, which made passenger train cars (called “Pullmans” or “sleeping cars”).
• As a “company town,” Pullman was of much higher quality than the villages in the South owned by textile mills, and the death rate was less than half of that in neighboring communities. Yet over time, many workers complained that they did not like living under the thumb of the company’s owner, George Pullman. During the depression of 1893, Pullman laid off 3,000 of his 5,800 employees and cut wages 25 to 40 percent for the rest, but did not lower rents for housing or the price of food in the company store.
• In the spring of 1894, desperate workers joined the American Railway Union, founded the previous year by Eugene V. Debs. The charismatic Debs was a child of working-class immigrants who had quit school at age fourteen to work for an Indiana railroad. By the early 1890s, he had become a tireless spokesman for labor radicalism, and he worked to organize all railway workers—skilled or unskilled—into the American Railway Union, which soon became a powerful organization.
• He quickly turned his attention to the Pullman controversy, urging the workers to obey the laws and avoid violence. The workers went on strike on May 11, 1894. In June, after Pullman refused Debs’s plea for a negotiated settlement, the Railway Union workers stopped handling trains containing Pullman railcars. By the end of July, they had shut down most of the railroads in the Midwest and cut off all traffic through Chicago. To keep the trains running, railroad executives hired strikebreakers, and the U.S. attorney general, a former attorney for railroad companies, swore in 3,400 special deputies to protect them.
• Angry workers assaulted strikebreakers and destroyed property. Finally, on July 3, President Grover Cleveland sent 2,000 federal troops into the Chicago area, claiming it was his duty to ensure delivery of the mail. Meanwhile, the attorney general convinced a federal judge to sign an injunction (an official court decree) prohibiting the labor union from interfering.
• On July 13, the union called off the strike. A few days later, a court cited Debs for violating the injunction; he served six months in jail. The Supreme Court upheld the decree in the case of In re Debs (1895) on broad grounds of national sovereignty. Debs emerged from jail a socialist who would later run for president. In 1897, George Pullman died of a heart attack, and the following year, the city of Chicago annexed the town of Pullman.

Economic Success and Excess

• By 1900, the United States was producing a third of the world’s goods, and millions of immigrants from around the world continued to risk all in hopes of chasing the American Dream.

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