The Industrial Revolution had great influence on the economic development of the U.S. The First Industrial Revolution (1820-1870) occurred in Great Britain and then, centered in Germany and the United States. The meaning of it was in change from hand to the factory and machine production. This helped to create America’s fortune and growth. The Industrial Revolution changed American economy and turned it into a modern industrial country.
All social and economic problems and difficulties of the First Industrial Revolution were not major issues during the Civil War (1861-1865). After the War and further Reconstruction, the U.S. economy grew rapidly due to entering into the Second Industrial Revolution, the time frame between 1870 and 1914. The U.S. newly acquired territories had plenty of natural resources, the migration of African Americans from West and North, the availability of investment capital, a huge free market for manufactured goods, and an increasing number of labor immigrants from Europe. Saywack (2013) found the following:
Immigration to New York City in the nineteenth and early twentieth centuries came in two colossal waves. The first wave, old immigration, began in the 1840’s and consisted mainly of Irish and German immigrants. By the 1880’s, immigration from western Europe had declined and given way to the new immigration from Central and Eastern Europe, most notably Russia and Germany. The immigrants swarmed into New York City and were forced to take menial jobs. In the mid-nineteenth century, almost half of all employed immigrants worked in the garment industry or as manual labor, servants, cooks, waiters, and household help. (n.p.)
The Second Industrial Revolution took out of shadow of agricultural economies all small local communities with their production assisted by new production techniques and labor forces. During that period, transport innovations linked previously isolated communities together. They were new roads, the Eerie Canal, steamboats, and of course, the railroads. Finally, the goods from the U.S. could be directly transported to Europe, and vice versa. The ability to deliver products in huge distances changed the economic system of the U.S. Before that, the economy was mostly based on a barter trade and quite localized. The revolution in transport opened new spaces for bankers, industrialists, and farmers. They could now bring goods in the Mississippi Valley, in New York, in the Midwest, into a huge based on a credit system market. The invention of railroad transport brought the reduction of money and time it took to move heavy and large manufactured goods from one side of the country to another, creating new possibilities for development in a mainly agricultural society.
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The government actively promoted agricultural and industrial development, participating economic growth. High taxes were established to protect the U.S. economy from foreign rivalry, and the construction of railways was at an accelerated pace. In order to remove Indian tribes from western territories and give them to mining companies and farmers, the army was employed by tens of new soldiers. The growth of machine production, railroad construction, and mining created the new industrial type of economic system and stood in contrast to the old artisan workshop and small farm economic era.
In the early 20th century, it was not unusual to find men with 80 working hours per week. That did not mean a higher payment because the wage earners worked for a fixed salary per day. Wages were low, and many people did not even earn enough for living. The average wage in the U.S. in 1895 was $1.70, and the average working week was 84 hours.
From 1880 to 1900, new jobs for women were created, and their number went from 3 to 9 million. In the end of the 19th century, 4% of all clerical workers were women. By 1920, it was already 50%. Middle class women preferred to stay at home unlike the ones from poor families. They had to work. The women actually organized the first union in the early 19th century. By that time, they earn $1.25 to $2.00 working 16–17 hours per day. A worker in the non-union company would receive $4.20 per week against $12.00 for the same job in a union company. The workers usually were forced to buy their own instruments for work. They had been punished for the smallest misdemeanor or being late.
A European Economic Depression in 1873, combined with the consequences of the War years, caused the crisis in the U.S. economy. The banks failed, and unemployment rate rose to 14%. In July, 1877, in Martinsburg, West Virginia, a huge railroad strike broke out. The Ohio and Baltimore railroad cut the workers’ payment for and they refused to work. An Army was called, but the soldiers refused to shoot workers. The strike soon spread to Baltimore and Cumberland, then to Pittsburgh; the soldiers opened fire on the workers. 16 men were killed, and 39 buildings were ruined. The strike wave speeded across the country.
What is clearly evident, however, is that the working people of America have had to unite in the struggle to achieve the gains that they have accumulated during this century. Improvements did not come easily. Organizing unions, winning the right to representation, using the collective bargaining process as the core of their activities, struggling against bias and discrimination, the working men and women of America have built a trade union movement of formidable proportions. (ALF-CIO, 1981)
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The event showed an increasing trend of the government to use military force in order to break strikes. The injunction, issued usually by compliant judges on the government officials’ or corporations’ requests, became a legal instrument against the union action and organizing.
By the beginning of the 20th century, the U.S. produced one-third of the total world’s industrial good – more than Germany, Great Britain, and France. New technologies played an important role in daily lives of the middle-class and working people. The purchasing power of money and the living standards of society increased rapidly. In the time frame between 1870 and 1920, eleven million of Americans moved to the city, and another 25 million of settlers arrived in the following decades. For the first time in the U.S. history, in 1920, the cities had been more populated than the villages.
The development of railroad construction pushed up the extension of telegraph because the railroad lines bound with telegraph communications. The telegraph and the telephone in the following years opened the epoch of new communication technologies and founded the annihilation of distance. It was an outstanding change in the usual life. The differently new sense of unity all over the world was established with new technologies. They increased the manner and the pace of daily life in which people lived and worked.
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The Second Industrial Revolution was highly profitable for those who knew how to use the new opportunities. During the Crisis of 1873, Andrew Carnegie founded a company where every phase of technical process was under control from the very beginning. By the 1890’s, Carnegie’s company had gained a great fortune and had dominated in the steel industry. His factories and plants were the world’s most modern and technologically advanced. Carnegie led the expansion of the U.S. steel industry in the last decade of the 19th century. He was also a famous philanthropist.
Carnegie was born in Scotland, and emigrated to the U.S. in 1848, and started his career as a telegraph worker. Soon, he found Pittsburgh’s Carnegie Steel Company, sold it, and created the U.S. Steel Corporation. With the fortune he made, he founded Carnegie Corporation of New York and built Carnegie Hall.
John D. Rockefeller just like A. Carnegie also has become a very rich man although his fortune came from the oil industry. Chernov (1998) called his life “an epitome of the American Dream”. He founded the Standard Oil Company with his brother William that became the first U.S. business trust and dominated in the oil industry for years. Born in New York, he entered the oil business in 1863 by investing money in an Ohio and Cleveland refinery. He established Standard Oil, which controlled some 90% of the U.S. pipelines and refineries by early 1880s. During his life, Rockefeller donated more than $500 million to philanthropic causes, and the majority was in the medical arena. Rockefeller actually defined the structure of modern philanthropy. He also was one of the richest men in the world’s history and founded the Rockefeller University and Rockefeller Institute for medical research. Rockefeller financed the University of Chicago Foundation. J. Rockefeller and his company had shaped the monopoly laws and modern antitrust.
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The great changes in the U.S. economics came in the 20th century with the emergence of the huge corporations, which first appeared in the steel industry and then, spread all over the country. Technocrats replaced business barons and became well-paid managers and the heads of corporations. The emergence of the corporation in its turn pushed the rise of an organized labor movement. The Technological Revolution of the end of the 20th century brought a new massive and entrepreneurial culture with huge global market and globalization as a general trend. “By the 1990s, a second wave of globalization was in full swing and American agriculture was becoming part of an increasingly integrated global market, with both agricultural imports and exports rising rapidly” (Dimitri, Effland, & Conklin, 2005). The U.S. had entered into a new postindustrial age.
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