HIST 2112 1st Edition Lecture 4 Outline of Last LectureI. The Grant Years, Racial and Class Discrimination Outline of Current LectureII. The Industrial Revolution Current LectureQuick add on to last week’s notes: Federal Government pulls out of Reconstruction ideas- Civil rights cases are ignored since they are not violations by state- Efforts of white southerners trying to restore superiority surface- Williams v. Mississippi Upheld Mississippi’s disfranchise laws 15TH Amendment case Williams was convicted of murder Jury list was drawn from registered voters (so none were African-American  Denied right to jury of peers  Court said none of Mississippi’s laws gave indication of race, so the jury is not in violation Other states see this and follow suit in taking away voteBeginning of Industrial Revolution: Economic Decline- Agriculture suffers- Only two large cities in Georgia, for example- More cities would have brought agriculture back- Increase supply and demand- No economic expansion or activity in the south Urbanization- Railroads were condensed in northeast- Only 18% of south was urban; north was 50% urban by 1900- South is behind the rest of country in urbanization- 1860-1910, rural population doubles (2x); urban sevenfold (7x) Immigrants- Before Civil War, immigrants were British- After Civil War, southern and eastern Europeans began to migrate to US- Drawn by the North’s industrial economy and promise of jobs- 1870-1910 > 20 million immigrants- Language, religion, political affinity make immigrant life difficult and influence US culture and politics- By 1900, major cities are 30% foreign-born- NY City > 80% were foreign- Migration created CONGESTION, FILTH, CORRUPTION Congestion: Factories with unskilled workers who work at the same time; tenant slums were highly populated Filth: Pollution by manure and waste disposal companies in cities; human waste was dumped into streams, which affected upstream drinking water, which created more diseases Corruption: Politics became corrupt due to large masses of immigrants who were ignorant of politics (and the English language). They were easy targets for votes, coerces votes by gifts and promises. People came into power by corrupted means, which kept corruption in factories and companies Industrial Revolution- By subsidizing the war effort, the federal government gives boost to North economy- Manufacturing expands- From 1860-90 capital rose from 1 billion to 10 billion- Mostly in steel by efficient production- Industrial work force quadrupled (4x)- Railroad mileage increases from 30K to 193K by 1890- Technological advances Bessemer: method for making steel more efficiently Westing airbrake: made stops more smooth on trains Too much increase?- Chaotic, unstable, and corrupt Subsidized railroad expansion (overcapitalized)- Cut throat competition- Bankers were controlling railroad network and no one could be sure of future because of corruption- Government regulated rate discrimination- Railroad owners had best lawyers and got by state laws (government was new to regulating business) Rebates- Granted selectively- Essentially a partial refund of money given to valued customers- Designed to draw in business- Problem connected with railroad expansion- Contributes to growth of big businesses and squeezing out of smaller businesses- Ex. When John D. Rockefeller shipped his oil around the nation, he made a deal with the railroad companies: he would solely use their railroad ifthey agreed to give him cheaper rates in the form of rebates. This was unfair to smaller businesses that had to pay higher prices for transportation. Jay Gould (Erie Rail Road) v Cornelius Vanderbilt (New York Central Rail Road)- Competed to ship cattle from west to Buffalo to New York City- (Gould is same guy who tried to corner the gold market)- Rate per car of New York Central was about $125- Gould drops rate and begins bidding war with Vanderbilt- Gould finally drops to $25 per car- Vanderbilt drops to $1 per car- Gould buys all cattle in Buffalo and ships on Vanderbilt’s cars and restores his prices back to $125 per car- This is an example of rate instability 1887 Interstate Commerce- Congress acts upon the chaos of rate instability of railroads- First government agency designed for economic regulation- ACT-ICC (Interstate Commerce Commission) Has power to investigate anyone engaging in interstate commerce HOWEVER, does not have power to enforce any guidelines set up by ICC unless they are in violation of the law HOWEVER, the ICC could only take them to court And the railroad companies could afforded smart lawyers who undermined the laws Trusts- Late 19TH Century- Any monopoly or near monopoly was labeled a trust Monopoly: the exclusive possession or control of the supply or trade in a commodity or service.- A trust was an agreement of organizations of related financial situations to operate together as one (for shared profits, volume buying, etc.)- Afforded ability to slash rates for a period of time to ruin competetors because of shared commerce- Controlled by groups of trustees- Interlocking directories- Another way of moving towards an organization known as Vertical Integration Vertical Integration: The combination in one company of two or more stages of production normally operated by separate companies- Single commercial industrial entity with capital circulated among members- John D. Rockefeller: Aimed at owning all aspects of oil production and companies Andrew Carnegie- Immigrated from Scotland- Father was wool weaver- Admirable story- Saw steel industry as a vital part of industrial revolution- What set him apart from other steel companiesdidn’t worry about PROFIT, worried about COST- Reduced cost by ways of vertical integration- Very successful business man., more successful than competetors- Sells Carnegie steel to J.P. Morgan, becomes Philantropist J.P. Morgan- Son of banker- Sold car deeds, piggybanks on that- Becomes involved with railroads and buys Carnegie