Industrialization of the U.S.

A new economy grew rapidly based on the
mass production and consumption of goods.

Industrialization in the North

→ The Civil War caused the process of industrialization to accelerate because of the
demand for war supplies.

→ There was very war little damage to northern industries.

→ Mechanized farming began in the north during the war.

→ After the war northern factories benefited from selling in overseas markets and
the transcontinental railroad.

→ Large numbers of immigrants to northern cities supplied cheap labor to factories.

→ Mineral (mining), lumber, and agriculture products (wheat & cattle) from the
West supplied the booming industrial economy.

Industrialization in the South

→ The Civil War destroyed the few factories and railroads.

→ The term “New South” was used to describe those areas of that were rebuilt with
railroads and factories.

→ Textiles, steel, and coal mining were the largest new industries.

→ Generally, the south remained agricultural.

→ Many blacks migrated to the north looking for factory jobs and fleeing severe racism/segregation.

The growth of corporations

→ Before the war most businesses were owned by one person or family.

→ New industries usually required more capital or money than one person could own.

→ Corporation: A business in which many investors own shares (stocks.) In return for this
investment, stockholders expect a dividend (share of profit.) Investors were also protected
from debt if the corporation failed.

→ Corporations that grew quickly during this time were in transportation, building, energy,
and communications.

Illegal “big” business organization

→ As corporations collected massive profits, they created forms of organization (that are now illegal)
which eliminated competition and dominated areas of the economy.

→ Monopoly: complete control over a market of field of business.

→ Conglomerate: a corporation that owns a group of unrelated companies (still legal.)

→ Pool: unofficial agreement of a group of companies to fix prices and divide business.

→ Trust: a group of corporations in the same market combine under one board of directors.

→ Holding Companies: One company buys a controlling share of stock in many companies in the same market.

Innovations that helped business

→ department stores: companies could market their goods under one roof

→ mail-order catalogues: retailers could now reach rural populations

→ telegraph/telephone: allowed businesses to sell, buy and communicate more quickly over long distances

→ electric light: allowed business, factories, cities, and homes to remain active at night

Ideas about business and society

→ Laissez-faire: an older idea introduced by Adam Smith in 1776 that means gov’t should have a
“hands-off” policy towards business

→ Social Darwinism: An idea that was loosely associated with Darwin’s theory of natural selection
that only the fittest survive in nature and business, and that charity violated “natural” laws.

→ Robber Barons: A negative term for business leaders suggesting they robbed resources from society.

→ Philanthropists/captains of industry: positive terms that suggested business leaders contributed
to society and contributed to the wealth and culture of their society.


Immigration in the U.S. can be divided into three eras (periods of time.)

Colonial Immigration

→ From the early 1600s to 1776 (Declaration of Independence)

→ Mostly English with some Germans, Scottish, Irish, Swedish, Dutch and many African slaves.

→ Faced hostile reactions from Native Americans and very rustic and hard-working life.

Old Immigration

→ pre 1850s

→ Irish came fleeing oppression by the British and starvation during the Potato Famine.

→ Germans fled civil war

→Jewish Germans and Catholic Irish faced discrimination from a mostly Protestant population

New Immigration

→ 1850s to 1920s

→ As Europe industrialized, their new economies “dislocated” or removed people from their ancestral lands creating a flood of refugees to America.

→ Many also escaped political persecution as civil wars were fought throughout Europe.

→ Most came from southern (ex: Italy) and Eastern (ex: Polish) Europe.

→ Many of these immigrants were forced into “ghettos”: densely populated, chaotic, unhealthy, and dangerous city neighborhoods.

→ Many of these immigrants faced discrimination because of their “un-American” culture and their religion (Catholic and Jewish)

→ Nativists felt that immigrants were a negative influence because their language, cultures, and religions were different. Many also feared that immigrants would take away their jobs because they were willing to work for less pay.

Immigration continues because…

… most big businesses find that immigrants work harder and will accept less pay.

… three trends challenge the nativist opposition :

1. Melting Pot: immigrant cultures merge or melt into American culture making a new, constantly evolving culture

2. Assimilation: most children of immigrants take on the culture, tradition, and language of mainstream America

3. Pluralism: While many immigrant cultures survive and flourish as a subculture in America, their immigrant culture adds positive features to America.

Labor Unions

Labor Union membership grew rapidly
after the Civil War because:

→ workers had no other way to challenge poor working conditions

→ wages did not increase as profits increased

→workers could be fired indiscriminately (without cause)

→ Owners and managers had excessive power over the lives of workers

→ short-term profit strategies often resulted in unemployment

The strength of unions comes from collective bargaining:

workers form a cooperative association
to negotiate working conditions with owners.

Three early (and powerful) labor organizations

1. Knights of Labor
→ founded in 1869 by Terence Powderly
→ accepted all workers regardless of skill, race, or gender
→ fought for an 8-hour work day, and end to child labor, and equal pay for women
→ rarely went on strike
→ power was diminished after the Haymarket Riot (1886) and the growth of the A.F.L.

2. American Federation of Labor (A.F.L.)
→ accepted only skilled workers
→ founded by Samuel Gompers
→ usually prevented women and blacks from joining
→ “Bread and Butter” policy: better wages, hours, and conditions
→ 1 million members in 1900

3. International Ladies Garment Workers Union (I.L.G.W.U.)
→ the majority of workers in the clothing industry were women
→ joined the AFL in 1910 after demonstrating their strength through successful strikes

The late 1800s were years dominated

by numerous and large strikes.

A cycle of conflict persisted that perpetuated these strikes:


The Federal Gov’t began to regulate businesses in the 1880s because of:

1. Periodic downturns in the national economy

2. Criticism of practices that saw businesses making huge profits at the expense of the poor and the working class.

3. Grassroots (citizen groups) political pressure for change.

Federal Gov’t responses to abuses by big business:

1. Interstate Commerce Commission: A federal agency that regulated interstate business.
Originally used to regulate railroad fares and sought to break up railroad cartels (pools.)

2. Sherman Anti-trust Act (1890): Declared illegal any monopoly, trust, or other business organization
that was “in restraint of trade or commerce.”