Day 8: The Perils of Capitalism

Focus:   What were the downsides to a rapidly industrializing economy?

Task One: Discuss the first two chapters of How and Economy Grows and Why it Crashes.

1. How can underconsumption and risk lead to an improved quality of life? (Chapter 1: "An Idea Is 

    Born")

2. What is capital? (Chapter 1: "An Idea Is Born")

3. Why are people unlikely to lend without interest payments? (Chapter 2: "Sharing the Wealth")

4. What is the difference between saving and investing? (Chapter 2: "Sharing the Wealth")

5. Do lenders exploit borrowers? (Chapter 2: "Sharing the Wealth")

Task Two: Child Labor
Though children have always participated in economic activity, industrialization, the tumultuous economy, and the influx of poor immigrants at the turn of the century made cheap child labor an institution in all kinds of industries and occupations. Historians estimate that up to 25% of children were employed in manufacturing by 1910. As the Progressive Era dawned, many reformers began addressing the issue.

Reformer Lewis Hine captured thousands of arresting images of child workers in the early 20th century while on behalf of the advocacy group The National Child Labor Committee.
This 1908 report on child labor in New York City tenements illustrates the weakness of the state's child labor restrictions in a system where manufacturers give laborers work to do at home.

Questions to consider:
1. According to the report, how did the home work system conflict with the intent of New York's compulsory education requirements?
2. What, according to the report, are the "evils" of the sweat shop system?
3. What advantages did manufacturers gain by allowing home work?
Citations:  
Link to Report: http://www.tenant.net/Community/LES/kleeck9.html  

Task Three:  The Knights of Labor

As corporations gained more power and specialization and mechanization of labor undermined the status of the skilled laborer, American workers sought to organize themselves into unions that could collectively bargain with employers. The most important of these early labor organizations was the Knights of Labor, founded as a secret organization in 1869. The Knights garnered opposition from the more prevalent craft unions because they included almost anyone from any industry, including African Americans and women. The Knights espoused a utopian vision for the future of the American labor force, in which workers owned the means of production. The Knights also advocated social reforms such as women's suffrage and temperance. Their membership peaked in the mid-1880's. Some historians attribute the organization's decline to the opposition of the union's leading figure, Terrance Powderly, to strikes and the extremely broad goals and membership. Many members deserted the Knights simply because they felt they could get more done in a more narrowly focused, aggressive organization.

The seal of the Knights of Labor carries the motto, "That is the most perfect government in which an injury to one is the concern of all." This image is found below.

Questions to consider:
1. Summarize the goals of the Knights of Labor Organization as presented in their constitution.
2. Contrast the philosophy of the Knights regarding capital and wealth with that of Andrew Carnegie in The Gospel of Wealth.
3. Discuss the differences between craft and industrial unions (see "Some Useful Definitions). Why would craft unions be threatened by more broad-based, industrial unions like the Knights of Labor?

Citations:  
The 1878 Constitution of the Knights of Labor appears at: http://darkwing.uoregon.edu/~dreiling/kolconstit.htm 


Task Three:  The Haymarket Affair
Many labor groups rallied around the idea of an 8-hour workday as they tried to regain control of work. On May 1, 1886, mass strikes and the largest spontaneous labor demonstration in the nation's history occurred in Chicago. Among the 100,000 demonstrators were anarchists that alarmed police. Although the demonstration passed calmly, violence ensued two days later when police shot and killed 2 unionists demonstrating against "scabs" at McCormick Reaper Works. The next day, a bomb exploded at Haymarket Square as police tried to break up a demonstration against the shooting of the unionists. Mass arrests of radicals followed and 8 anarchists were convicted of the bombing under somewhat questionable circumstances. The Haymarket affair renewed fears of radicalism and led some employers to develop blacklists of unionists and strengthen their resolve against strikers' demands. The incidents also precipitated the decline of the Knights of Labor, whose disillusioned members defected as anti-labor sentiment swelled.

This detailed chronology of the Haymarket Affair and Trials appears below.

The colorful account of the violence at McCormick Reaper Works cast the demonstrators as drunken anarchists is provided below.

This version of the "Attention Workingmen!" announcement was used by the prosecution in the subsequent trial. The circled inflammatory line was cut from the final version of the flyer, but not before a few hundred of the original went into circulation.

The following circular was distributed by anarchists on the night of May 3rd in response to the killing of workers at the McCormick Reapers Works by police.

In "Effect of the Haymarket Bombing on the Knights of Labor," labor organizer Oscar Ameringer describes his naivete as a young man in the midst of the heated demonstrations.

Questions to consider:
1. What does the Haymarket Affair demonstrate about the anxieties of workers? What effect do you think this incident had on labor-management relations?
2. After the Haymarket Affair, how do you think citizens and law enforcement reacted against radicals and labor?
Citations:   
Link to Haymarket Chronicles: http://www.law.umkc.edu/faculty/projects/ftrials/haymarket/haymarketchrono.html
"Bloodshed in Chicago" Document: http://www.law.umkc.edu/faculty/projects/ftrials/haymarket/news5-4.html
Link to Flyer One: http://www.law.umkc.edu/faculty/projects/ftrials/haymarket/attention.html
Link to Circular: http://www.law.umkc.edu/faculty/projects/ftrials/haymarket/attention.html
Link to "Effect of the Haymarket Bombing on the Knights of Labor": http://historymatters.gmu.edu/d/98/
 

Day 7: America's Rapid Industrial Growth

FOCUS:

1. The reasons for the rapid industrial development of the United States in the late nineteenth century

2.   The array of new technology and its impact on industrial growth

3.   The role of the individual entrepreneur in various American industries

PRESENTATION:

TASK ONE:   WHAT WAS THE GILDED AGE? 

      The term "Gilded Age" was factitiously coined by Mark Twain and Charles Dudley in their 1873 novel The Gilded Age: A Tale of Today. The "Gilded Age" generally refers to the decades between the end of reconstruction and the turn of the century (about 1870 to 1900). It was a time of unprecedented industrial and economic growth, tumultuous politics, and a wave of immigration. The dazzling flurry of technological innovation that occurred is sometimes referred to as the "Second Industrial Revolution." The industrial, transportation, and communications industries quickly boomed, but were subject to the tumult of an unstable economy. The word "monopoly" could easily characterize this era, in which a few trusts and individuals thrived and amassed fortunes while many Americans lived in poverty and lost their personal autonomy to the corporate machine. The Gilded Age was a formative period in American history, in which the standards for modern business and economics were just beginning to take shape.

The timeline below includes major events in economic and political history during this time period.
The political cartoon, "Hopelessly Bound to the Stake," addresses the discontent of some laborers with the changing nature of work during the era of industrialization.
The political cartoon, "What a Funny Little Government," satirizes the relative power and prowess of large business concerns and the U.S. government.

Question to consider:
1. Why would Twain describe this era as the "gilded" age rather than the "golden" age?
2. How do you interpret the message of the "Hopelessly Bound" cartoon?
3. How do you interpret the message of the "What a Funny Little Government" cartoon? 

Citations: 

      An edited Gilded Age Timeline from: http://www.digitalhistory.uh.edu/historyonline/gildedage_chron.cfm

      The political cartoon, "Hopelessly Bound to the Stake" appears at: http://www.library.gsu.edu/spcoll/spcollimages/labor/19clabor/Labor%20Prints/80-39_1.jpg

The 1900 "What a Funny Little Government" cartoon appears  at http://haleyghiringhelli.files.wordpress.com/2011/02/rock.jpg

 TASK TWO:   Captains of Industry or Robber Barons? 

      Names like Rockefeller and Carnegie are synonymous with wealth and power. Individual tycoons like these played a pivotal role in making the US the leading industrialized nation in the world during the late 19th and early 20th centuries. The debate over whether these men were greedy, corrupt, and immoral "robber barons" or innovative and enterprising "captains of industry" is still going on today. Nevertheless, each were instrumental in the "corporate revolution" of the time period, in which new business practices led to the industrial advantages of economies of scale.

A short audio lecture (3:38 minutes) on Rockefeller and Carnegie, found below, gives a brief outline of their lives.

John D. Rockefeller built a massive fortune in the oil industry using practices including swallowing up competitors and negotiating exclusive deals with railroad companies. In 1911, Standard Oil's monopoly was dissolved in a Supreme Court decision based on the 1890 Sherman Anti-Trust Act. Rockefeller was often maligned in the press and some perceive him as one of the most hated figures of his day. By the time of his death, Rockefeller, a devout Baptist, had given away over $500 million in philanthropic pursuits.

JP Morgan was one the most influential and powerful figures in the financial world. His philosophy that only ruthless competition would lead economic stability led him to begin a series of consolidations in the railroad and a number of other industries, leading the formation of colossal corporations including US Steel and General Electric. The cool and rational Morgan was a avid art collector and once served as President of the Metropolitan Museum of Art.

Andrew Carnegie, a Scottish immigrant, is known for being a truly self-made man. Though brilliant in matters of business, workers and labor unions at the Carnegie Steel Company found him dismissive of their concerns. At the turn of the century, he sold his steel company to JP Morgan (who integrated it into the mammoth US Steel) and dedicated his time and fortune to philanthropy. He famously wrote, "the man who dies rich, dies disgraced."

Railroad entrepreneur Jay Gould considered himself to be one the most hated men of the 19th century. Gould was the archetypal "robber baron," constantly mired in scandal and corruption. One of his major achievements was helping Western Union ascend to dominance in the telegraph industry.

Questions to consider:
1. In a time when the "rules of the game" for big business were just being hashed out, is it fair to call successful industrialists "robber barons"?
2. Do you think that extraordinarily successful individuals are always subject to public scrutiny? Do you think the industrialists of the Gilded Age deserved their reputations?
3. Given the status of the United States as the world leading industrial nation at the turn of the century, do you think that the industrialists' sometimes questionable business ethics can be excused?

 Citations:    Carnegie and Rockefeller.mp3 

TASK THREE: The Steel Industry

      Andrew Carnegie's steel mills set new standards for the steel industry at the turn of the century. His dedication to underselling his competitors led him to effectuate new strategies to increase efficiency, cut costs, vertically integrate, and invest in new technology. Carnegie was able to produce steel at profoundly reduced prices, which made engineering feats like bridges and tall buildings much more affordable. His obsession with cutting costs, however, translated to low wages and dangerous working conditions for laborers in his mills.
Prominent financier J.P. Morgan bought out Carnegie's business and integrated it into U.S. Steel. U.S. Steel became the world's first billion-dollar corporation in 1901. The mammoth corporation counts legendary business giants like Andrew Carnagie, J.P. Morgan, and Charles Schwab amongst its founding fathers.

The chart of iron, steel, and coal production shows the dramatic rise of the United States to industrial dominance beginning in the 1880's.
The graph comparing the prices of steel and iron rails shows the dramatic plunge in price that occurred when the Bessemer process of steel production was introduced after the Civil War. This was one of the many innovations in steelmaking that Carnegie adopted to cut costs.
The map below includes some of the many companies incorporated by U.S. Steel (vertical integration), as well as examples of different related industries absorbed by the company(horizontal integration).

Question to consider:
1. List a few reasons why an efficient steel production operation could be very lucrative (consider other industries that use steel).

Day 6: The Closing of the Frontier

FOCUS:  What does the actual history of the American West tell us about the significance of the frontier in American history? What was the myth of the frontier? What was the reality of the frontier? Why do you think Americans have been so persistent in maintaining the myths of the West?

TASK ONE:     Fredrick Jackson Turner's "Frontier Thesis"

Reflecting on the impact of the expansion of the United States during the nineteeth century, historian Fredrick Jackson Turner developed his "frontier thesis" in his influential 1893 work The Significance of the Frontier in American History. Turner argued that the existance of a frontier beyond which lay vast tracts of unsettled wilderness throughout much of United States history was the defining factor in the development of Western democracy and the American character. Though this thesis has guided the thinking of many historians, its many critics complain that its assertions ignore other facets of the American experience such as the Civil War, the subjugation of minorities, and the importance of cooperation in frontier life, to name only a few.

Questions to Consider
1. According to Turner, what specific effects did the frontier have on shaping the American indentity and institutions?
2. Do you agree that the frontier experience is the defining factor in the American character and the development of Western democracy? Why or why not?
3. Which aspects of the thesis could provoke controversy? Explain your answer.

The Significance of the Frontier in American History: http://www-personal.umd.umich.edu/~ppennock/doc-FJTurner.htm

TASK TWO:

The Dawes Severalty Act (1877)

The Dawes Severalty Act of 1887, otherwise known as the General Allotment Act, was designed to encourage the breakup of Indian tribes and promote assimilation of Indians into American Society by independent farming. The Dawes Act was the major Indian policy of the national government until the 1930s.

Questions to consider:
1. Why did the national government promote the development of agriculture among Indians?
2. Did the act include funding for equipment/material needed for agriculture?
3. How long would Native Americans have to live on the land before they would receive title to the land?
4. How did the Dawes Act address citizenship for Native Americans?

Link to Dawes Severalty Act:http://www.ourdocuments.gov/doc.php?flash=true&doc=50&page=transcript

HOMEWORK:   READ / SKIM CH. 17    

Day 5: The Last West

Chapter Summary: 
 

The western frontier has been, and remains, such a powerful influence on American culture and memory that it is important to recall that much of this memory was shaped from romantic myths and seldom-realized ideals. For some, the West was a land of adventure, and there were examples of brave and courageous people who took up a rugged life in hopes of a better future. But the land that was new to thousands of migrants on the overland trails was far from empty and unknown. Major portions of the American West had long been populated by Indians, Spanish, and Mexicans. And the post–Civil War boom of settlement was not just by white Americans, but by people from around the world, many having similar aspirations and finding similar challenges. White settlement followed boom-and-bust patterns in the three industries that came to dominate the region in the second half of the nineteenth century: mining, ranching, and commercial agriculture. Whites, Blacks, Asians, Mexicans, and many others made up the labor force for these three industries. The result was a fluid, racially diverse, and often mobile population beset with terrific prejudice and discrimination. Still, there were many accomplishments.

            Earlier in the nineteenth century, the West had been a decidedly underdeveloped region with an almost colonial relationship to the more industrial and populated Northeast and Midwest. Except for a few pockets in the Far West, by 1860 the frontier line of agricultural settlement stopped at the eastern edge of the Great Plains. Plains Indians who waged a fierce fight to stay on their lands, an unfamiliar environment, and the absence of sufficient rainfall combined to discourage further advancement westward. However, by the end of the century, the Indian barrier to white settlement had been removed. A transcontinental railroad now linked East with West. Cattlemen had spearheaded development of Texas and the Southwest. Farther west, gold and silver strikes had convinced thousands to come out in search of wealth. In between were an increasing number of white farmers who used the new railroad branches to reach far-away markets. The economic rewards were sometimes great, but so too were the risks. The competition was intense, and the markets had wide fluctuations in demand and prices. Throughout it all, people came and stayed in such numbers that by the 1890s, the era of the frontier seemed to be ending. Americans, in particular, longed to keep alive this place of their imagination and assumed values. From this grew the iconic West. In art and stories and even reenactments, the Wild West remained, at least in spirit, as the nation progressed toward the twentieth century. 

Focus:  

1.   The transformation of the Far West from a sparsely populated region containing Indians and 

      various settlers of Hispanic, European, and Asian background into a part of the nation’s capitalistic
      economy

2.   The closing of the frontier as Indian resistance was eliminated; as miners, ranchers, and cowboys penetrated the West; and as railroads opened the area for general settlement

3.   The development of mining, ranching, and commercial agriculture as the three major industries of the West

4.   The cultural development of a romantic Western myth as an extension of traditional American beliefs and ideals

Task One:  Presentation

ClosingTheWesternFrontier

Task Two:  Westward Bound Simuation 

 Play the Westward Simulation and see how you fare.   Click HERE
  

Task Three:  Watch this video on the Heartland

HOMEWORK: Skim Ch. 16 pgs. 402- 425