THE INDUSTRIAL ECONOMY

1865--1900

“ROBBER BARONS”

• J.P Morgan (1837-1913)

• John D. Rockefeller (1839-1937)

• Cornelius Vanderbilt (1794-1877)

• Andrew Carnegie (1835-1919)

• James J. Hill (1838-1916)

• Jay Gould (1836-1893)

MONOPLIES

• Eliminate competition

• Raise prices

• Huge profits

• Protected by high tariffs

• Sherman Anti-Trust Act, 1890

– Outlawed “every contract, combination in the form of trust or otherwise, or conspiracy in the restraint of trade.”

– Violators could be fined or jailed and required to pay damages

– Vagueness made it difficult to enforce

– As interpreted by courts it had little effect

1873-1893: DEPRESSION AND RESPONSE

• 1873: Beginning of an agricultural depression that lasted for two decades

– Thousands of farmers moved to cities

– Immigrants from Europe went to urban areas

• The “Working Class”

– Layoffs were common (perhaps 30% od workers were unemployed every year)

– Those with jobs were badly paid and overworked

“Scientific Management”

• Frederick Winslow Taylor

– An efficiency expert

– Measured efficiency with stop-watches

– Trying to get the maximum productivity out of every movement

Child Labor

• 1900: 3 million children working full time in American factories and mines

– Reformers like Jane Addams began a crusade to eliminate child labor

– National Child Labor Committee organized in 1904

– Many states refused to pass child labor laws

• Feared that a neighboring state might gain a competitive advantage

• In 1907 the Senate voted down a federal law

The Children’s Bureau

• Established in the Department of Commerce and Labor in 1912

– To “examine all matters pertaining to the welfare of children”

– Headed by Julia C. Lathrop

The Supreme Court
and Child Labor

• Congress passed a child labor law in 1916

– Outlawed interstate shipment of goods produced by children under 14 (mine workers had to be 16)

– Declared unconstitutional by Court in 1919

– It regulated “working conditions” which were not part of interstate commerce

• An attempt to add a constitutional amendment in 1924 failed

• The 1938 Fair Labor Standards Act did outlaw full time employment of those under 16

– The Supreme Court upheld this law in 1941

INDUSTRIALIZATION AND CRIME

• In 1881 homicide rate in U.S. was 25 per million

• In 1898 it was 107 per million

• Income inequality and the gulf between rich and poor grew larger every year

BENEFITS OF INDUSTRIALIZATION

• A consumer-oriented economy emerged

– Processed food, ready-made clothing and telephones were now widely available

– Mass production made goods cheaper

• Leisure-time increased for Americans with some money

– Organized sports now open to all classes, not just the wealthy

– Most industrial workers still worked 10 to 12 hours a day—six days a week