Industrialization and Progressivism.notebook The Progressive Era February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 American History Content Standards TOPIC: INDUSTRIALIZATION AND PROGRESSIVISM ﴾18771920﴿ Ignited by postCivil War demand and fueled by technological advancements, largescale industrialization began in the United States during the late 1800s. Growing industries enticed foreign immigration, fostered urbanization, gave rise to the American labor movement and developed the infrastructure that facilitated the settling of the West. A period of progressive reform emerged in response to political corruption and practices of big business. CONTENT STATEMENTS: 10. The rise of corporations, heavy industry, mechanized farming and technological innovations transformed the American economy from an agrarian to an increasingly urban industrial society. 11. The rise of industrialization led to a rapidly expanding workforce. Labor organizations grew amidst unregulated working conditions, laissezfaire policies toward big business, and violence toward supporters of organized labor. 12. Immigration, internal migration and urbanization transformed American life. 13. Following Reconstruction, old political and social structures reemerged and racial discrimination was institutionalized. 14. The Progressive era was an effort to address the ills of American society stemming from industrial capitalism, urbanization and political corruption TOPIC: FOREIGN AFFAIRS FROM IMPERIALISM TO POSTWORLD WAR I ﴾18981930﴿ The industrial and territorial growth of the United States fostered expansion overseas. Greater involvement in the world set the stage for American participation in World War I and attempts to preserve postwar peace. CONTENT STATEMENTS: 15. As a result of overseas expansion, the SpanishAmerican War and World War I, the United States emerged as a world power. Industrialization and Progressivism.notebook February 14, 2017 Topic: Industrialization and Progressivism (18771920) Ignited by postCivil War demand and fueled by technological advancements, largescale industrialization began in the United States during the late 1800s. Growing industries enticed foreign immigration, fostered urbanization, gave rise to the American labor movement and developed the infrastructure that facilitated the settling of the West. A period of progressive reform emerged in response to political corruption and practices of big business. Industrialization and Progressivism.notebook February 14, 2017 Content Statement #10 The rise of corporations, heavy industy, mechanized farming and technological innovations transformed the American economy from an agrarian to an increasingly urban industrial society. Industrialization and Progressivism.notebook February 14, 2017 LAISSEZ FAIRE An economic belief supported by the U.S. that opposes the government regulating business. • In the late 1800’s businesses operated without much government regulation. This is known as laissezfaire economics. • Laissezfaire means ‘allow to be’ or the government stays out of a person’s business in French. • Laissez faire supports our economic system of capitalism Industrialization and Progressivism.notebook February 14, 2017 CAPITALISM Economic system characterized by private property ownership • Individuals and companies compete for their own economic gain (Profit) • Capitalists determine the prices of goods and services. • Production and distribution are privately or corporately owned. • Reinvestment of profits • Supports laissez faire and the “free enterprise” system Industrialization and Progressivism.notebook February 14, 2017 US GOVERNMENT ASSISTS INDUSTRY MORRILL TARIFF ACT, 1862 To protect and encourage American industry, Congress passed this tariff after the South seceded from the Union. NATIONAL BANKING SYSTEM, 1863 To stimulate the economy and set up a banking system, Congress passed this act which was a significant step towards a unified, national banking system until replaced by the Federal Reserve in 1913. MORRILL ACT, 1862 To promote education, Congress provided grants of public lands to the states for support of education. “Landgrant colleges” LAND GRANTS TO RAILROADS US Govt. donated land to railroad companies to encourage growth of this mode of transportation. US Govt. donated approx. 160 million acres of land……. Industrialization and Progressivism.notebook February 14, 2017 BUSINESS ORGANIZATIONS • Corporation: form of business consisting of a group of people authorized by law to act as a single person and with the ability to sell shares of stock to raise “capital” • Shareholders or stockholders: investors who invest their money into a corporation who each receive a share of ownership in proportion to the amount they invested • if the corporation makes a profitthan investor • gets a “dividend” or a share of the profit. • Limited liability: Important aspect of a corporation is limited liability. Shareholders have the right to participate in the profits, through dividends and/or the appreciation of stock, but are not held liable for the company's debts. • “Risk is spread over the shareholders so if the company goes bankrupt, the loss is not so devastating” Industrialization and Progressivism.notebook February 14, 2017 Keys about business owning Proprietorship Partnership Formation Corporations Organized by Individual or person By agreement associations and decides to operate a between associates legalized through business (partners) state charter Jointly by two or more individuals; or by terms of a partnership agreement Ownership Individual Control and Management By owner or persons By partners or delegated by the persons they proprieter delegate Stockholders, according to number of shares Through Board of Directors, elected by the stockholders (usually one vote per share of stock held) Dividends: to stockholders= Profits Net Profits and losses Profits to owner losses absorbed by owner, Unlimited Liability Shared according to Partnership agreement. Unlimited Liability Lose: Only to the amount invested by stockholders according to number of shares Limited Liability Industrialization and Progressivism.notebook February 14, 2017 Industrialization & the Rise of Big Business • Who were the Big Business Tycoons? • Andrew Carnegie Carnegie Steel‐ later sold to JP Morgan US Steel • Cornelius Vanderbilt Shipping and Railroads • John D. Rockefeller Standard Oil • J.P. Morgan Banking CNN Wealthiest Americans of all time (2014) “Rags to Riches” • What does this mean? Industrialization and Progressivism.notebook February 14, 2017 Rags to Riches? The exception, not the rule! • 95% of executives & financiers in the US around 1900 came from upper class backgrounds • Fewer than 3% started as poor immigrants or farm children • 2% of US Industrialists came from working‐class origins • By 1910, the top 1% control 1/3 (33%) of all personal income. • Huge differences in the proportion of wealth eventually leads to conflict in the Gilded Age Industrialization and Progressivism.notebook February 14, 2017 Some tried to gain “monopolies”… • To gain complete control of a product or service; consumers have no other choices Some corporations formed pools or “cartels”… • Businesses making the same product work together, agree to limit production to keep prices high Industrialization and Progressivism.notebook BUSINESS ORGANIZATIONS Conglomerate A group of unrelated business owned by a single corporation. Still used today by companies that merge. Pool (Cartel) Competing companies that agree to fix prices and divide regions among members so that only one company operates in each area. Outlawed today. Trust (Monopoly) Companies in related fields agree to combine under the direction of a single board of trustees, which meant that shareholders had no say. Outlawed today. Holding Company A company that buys controlling amounts of stock in related companies, thus becoming the majority shareholder, and holding considerable say over each company's business operations. Outlawed today February 14, 2017 Industrialization and Progressivism.notebook Trusts and Monopolies What argument could be made for their creation? Why are we distrustful of them? February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 Other ways to increase profits include: • “Horizontal Integration” • Buying out rival businesses to gain more control of an industry • “Vertical Integration” • Gaining control of the many different businesses that make up all phases of a product’s production Industrialization and Progressivism.notebook February 14, 2017 Examine the following questions over Vertical and Horizontal integration monopolies from the side of the producer as well as from the consumer. 1. What are the advantages to being a Vertical integration Monopoly? 2. Why is this a potentially dangerous business practice? 3. Are there any businesses that do this today? 4. What are the advantages to being a Horizontal integration Monopoly? 5. Why is this a potentially dangerous business practice? 6. Are there any businesses that do this today? 7. Find a couple of examples of conglomerates and list the parent company as well as some of the ones under its umbrella. Industrialization and Progressivism.notebook Vertical and Horizontal Integration February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 Advantages Vertical Integration • You are always in control of supply of the products you need • In control of labor cost, land/resources • Always in control of the cost • Schedule your production of autos because you are in control of all factors • Can you give another example of this? Industrialization and Progressivism.notebook February 14, 2017 ROBBER BARRONS Extortion:Forced against your will • Rebates: discount or refund on “freight charges” • Drawbacks / Kickbacks: Standard Oil gave certain railroads all its shipping business if it agreed to charge Standard Oil 25% to 50% less than its competitors • Buyouts: Larger corporations forced smaller businesses to sell out • Congress was “bought out” by the monopolies • Spies: Stealing your competitor's ideas Small businesses complained “monopolies” eliminated fair competition Industrialization and Progressivism.notebook February 14, 2017 Robber Baron • Tycoons that bought out small businesses, formed monopolies & cartels, and swindled the poor Captains of Industry • Big businesses provided jobs, strengthened the economy, improved technology, and donated money to universities, charities, etc. • ***Andrew Carnegie’s “Gospel of Wealth” > Philanthropy Industrialization and Progressivism.notebook February 14, 2017 Entrepreneur: A person who organizes, operates, and assumes the risk for a business venture Were these men Captains of Industry or Robber Barons? Pick a couple of the major ones from the time and defend your stance on them with information that you are able to gather from the Ipads. • • • • • “Captains of Industry” The business leaders served their nation in a positive way. They increased the supply of goods by building factories. They raised productivity and expanded markets. They created jobs that enabled many Americans to buy new goods and raise their standard of living. They also created museums, libraries, and universities, many of which still serve the public today. “Robber Barons” • Business leaders built their fortunes by stealing from the public. • They drained the country of its natural resources. • They persuaded public officials to interpret laws in their favor. • They ruthlessly drove their competitors to ruin. • They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions. Industrialization and Progressivism.notebook February 14, 2017 SOCIAL DARWINISM 1. All living things have always competed for survival. Survival of the fittest. 2. All living things have evolved over millions of years as a result of genetic changes. 3. Some plants and animals developed traits that helped them survive. 1. Every human activity individuals compete for success. 2. The unfit or Herbert Spencer incompetent lose and the strong or competent win. 3. These winners make up a natural upper class. 4. Hard worked paid off, and lazy were inferior. Industrialization and Progressivism.notebook February 14, 2017 Social Darwinism • 4,000 Americans became millionaires during the Gilded Age. • Used Darwin’s Theory of Natural Selection to explain the economic evolution of human society. • Wealth was the result of strong work ethic. • The poor are lazy and inferior and deserved no aid. • Supported laissezfaire. • Social Darwinists believed that companies struggled for survival in the economic world and the government should not tamper with this natural process. • The fittest business leaders would survive and would improve society. Belief that hard work and wealth showed God’s approval and those that were poor were lazy and naturally a lower class Industrialization and Progressivism.notebook February 14, 2017 • Capitalists used Social Darwinism to justify their success > Social Darwinism also coincided with the ideas of Adam Smith, especially concerning the laws of supply & demand and free markets • Carnegie wrote The Gospel of Wealth (1901) which claimed wealthy people have power but also an obligation to society • Baptist preacher Russell H. Conwell preached about “Acres of Diamonds” – everyone who wanted to be rich had the opportunity • Horatio Alger’s “Luck and Pluck” manual pushed the idea of ragstoriches at the time to encourage everyone (think Jackson) Industrialization and Progressivism.notebook February 14, 2017 Content Statement: The Progressive era was an effort to address the ills of American society stemming from industrial capitalism, urbanization and political corruption. Industrialization and Progressivism.notebook February 14, 2017 Expectations for Learning: Analyze and evaluate the success of progressive reforms during the late 19th and early 20th centuries in addressing problems associated with industrial capitalism, urbanization and political corruption. Industrialization and Progressivism.notebook February 14, 2017 Prelude to Progressivism • Industrial capitalism, urbanization, and political corruption contributed to many of the problems in American society in the late 19th and early 20th centuries • Organized movements, such as the Farmers’ Alliances and the Populist Party, were reactions to the effects of industrialization Industrialization and Progressivism.notebook February 14, 2017 Prelude to Progressivism • A reform agenda was created which contributed to the rise of Progressivism Journalists, called muckrakers, exposed political corruption, corporate and industrial practices, social injustice and life in urban America Industrialization and Progressivism.notebook February 14, 2017 Farmers • Farm Unions/Organized Movements > Grangers – – – – The first national farm organization was the Patrons of Husbandry, also known as The Grange Many farmers joined the Grange to get help during the difficult economic times Pressured railroads to reduce their rates to haul their goods to market Grangers created cooperatives, which were marketing organizations that worked for the benefit of their members > Farmers Alliance – – Farmers’ Alliances were created throughout the south and west The Farmers’ Alliance moved into politics in the early 1890's under the banner of the People's Party, commonly known as the “Populists” > Populist Party – Wanted federal ownership of railroads – Help to increase farm prices (prices were low due to overproduction because of industrialization) – Low interest loans – Unlimited coinage of silver – A graduated income tax – Direct election of U.S. Senators Industrialization and Progressivism.notebook February 14, 2017 Muckrakers • Journalists who exposed waste, corruption, and scandal in newspapers and magazines • The print revolution enabled publications to increase their subscriptions dramatically • Public outcry demanded reform The Progressive Movement • The Progressive Movement was an urban, middleclass reaction to social and economic dislocations fostered by the growth of the United States as an industrial power Industrialization and Progressivism.notebook Progressive Reformers • Fight business corruption • Fight monopolies > Monopoly: the exclusive possession or control of the supply or trade in a commodity or service > New laws would regulate big business and prevent monopolies • Better living conditions • Strengthen political system > Voters will have more say in selecting candidates • Many people involved in progressive movement February 14, 2017 Industrialization and Progressivism.notebook Causes of Social Ills • • • • Immigration Urbanization Industrialization Laissezfaire economics > The government had little or no regulation on business or corporate practices • Unregulated market • Political machines February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 Reform Legislation Progressives introduced reforms to address the ills associated with industrial capitalism • Meat Inspection Act > Government had right to inspect meat > The Jungle by Upton Sinclair brought this to Teddy Roosevelt’s attention • Pure Food and Drug Act > Manufacture and sale of impure foods, drugs, and liquors was forbidden • Employers’ Liability Act > Provided accident insurance for railroad workers • Strengthen Interstate Commerce Commission (ICC) > Hepburn Act said that the ICC would regulate railroads • Federal Reserve Act > Passed to control the nation’s money supply and regulate the banking system > Established the Federal Reserve System, the central banking system of the United States > Granted the federal reserve the legal authority to issue money • Newlands Reclamation Act > Money from sales of land in west would go to build dams and canals > This allowed for dry areas to get water • Creation of the U.S. Forest Service & National Park Service Industrialization and Progressivism.notebook Other Reforms • • • • • • Childlabor laws Workmen’s compensation Insurance for sick, old, and disabled Minimum wages were established By WWI, 26 states were “dry” (prohibition) Changed tax laws to heavily tax: > The rich > Big businesses > Inheritance • Political Corruption • Progressives introduced reforms to make the political process more democratic > Secret ballot > Primary elections > Initiative Referendum > Recall > New types of municipal government > Civil service reform February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 Other Reforms Continued • Australian ballot > Secret ballot > Used to help stop political bosses • Direct primary > Mississippi and Wisconsin used it first in 1902 > Each party candidates voted by the people • Initiative > The people can start a bill by using a petition > Takes 5 to 8% of registered voters Referendum • > A direct vote from the people to make a new law or change an old law • Recall > The people could replace an elected official > Example: In 2003 California used the recall to replace the governor (Gray Davis) with Arnold Schwarzenegger New Types of Municipal Government • Progressives sought to reform municipal (city) government and lessen the power of political machines • Reformers supported > Citywide elections > Nonpartisanship > Professional city administration Proponents denounced the distribution of offices by the winners of elections to their supporters as corrupt • and inefficient • They demanded nonpartisan scientific methods and credential be used to select civil servants Industrialization and Progressivism.notebook Progressive Amendments th • 16 Amendment > Income Tax th • 17 Amendment > Direct Election of Senators th • 18 Amendment > Prohibition th • 19 Amendment > Women’s suffrage February 14, 2017 Industrialization and Progressivism.notebook February 14, 2017 Sherman Antitrust Act Progressives’ efforts led to antitrust suits • Northern Securities Company > In 1903 The Supreme Court ruled 5 to 4 against the stockholders of the Great Northern and Northern Pacific railroad companies > The court ruled a monopoly had been formed and the Northern Securities Company to be dissolved • Clayton Antitrust Act > Federal law outlawing practices considered harmful to consumers > Sought to prevent anticompetitive practices like – Monopolies – Cartels an association of suppliers with the purpose of maintaining prices at a high level and restricting competition – Trusts Industrialization and Progressivism.notebook February 14, 2017
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