The Second Industrial Revolution in the US

The U.S. had its highest economic growth in the last two decades of the Second Industrial Revolution.^[33] The Gilded Age in America was based on heavy industry such as factories, railroads andcoal mining. The iconic event was the opening of the First Transcontinental Railroad in 1869, providing six-day service between the East Coast and San Francisco.^[34]

During the Gilded Age, American manufacturing production surpassed Britain and took world leadership.^[35] Railroad mileage tripled between 1860 and 1880, and tripled again by 1920, opening new areas to commercial farming, creating a truly national marketplace and inspiring a boom in coal mining and steel production. The voracious appetite for capital of the great trunk railroads facilitated the consolidation of the nation's financial market in Wall Street. By 1900, the process of economic concentration had extended into most branches of industry—a few large corporations, some organized as "trusts" (e.g. Standard Oil), dominated in steel, oil, sugar, meatpacking, and the manufacture of agriculture machinery. Other major components of this infrastructure were the new methods for manufacturing steel, especially the Bessemer process. The first billion-dollar corporation was United States Steel, formed by financier J. P. Morgan in 1901, who purchased and consolidated steel firms built by Andrew Carnegie and others.^[36]

Increased mechanization of industry is a major mark of the Gilded Age's search for cheaper ways to create more product. Frederick Winslow Taylor observed that worker efficiency could be improved through the use of machines to make fewer motions in less time. His redesign increased the speed of factory machines and the productivity of factories while undercutting the need for skilled labor. This was made possible due to the advent of electrification during this time period. Innovations were possible due to the high amassment of natural resources, which provided a source of capital for the U.S. to continue to build advancing technologies. Mechanical innovations such as batch and continuous processing began to become much more prominent in factories. This mechanization made some factories an assemblage of unskilled laborers performing simple and repetitive tasks under the direction of skilled foremen and engineers. In some cases, the advancement of such mechanization substituted for low-skilled workers altogether. The demand for skilled workers increased relative to the labor needs of the First Industrial Revolution. Machine shops grew rapidly, and they comprised highly skilled workers and engineers that were needed to oversee factory operation. Both the number of unskilled and skilled workers increased, as their wage rates grew^[37] Engineering colleges were established to feed the enormous demand for expertise. Railroads invented complex bureaucratic systems, using middle managers, and set up explicit career tracks. They hired young men at age 18-21 and promoted them internally until a man reached the status of locomotive engineer, conductor or station agent at age 40 or so. Career tracks were invented for skilled blue collar jobs and for white collar managers, starting in railroads and expanding into finance, manufacturing and trade. Together with rapid growth of small business, a new middle class was rapidly growing, especially in northern cities.^[38]

The United States became a world leader in applied technology. From 1860 to 1890, 500,000 patents were issued for new inventions—over ten times the number issued in the previous seventy years. George Westinghouse invented air brakes for trains (making them both safer and faster). Westinghouse developed alternating current long distance transmission networks. Theodore Vailestablished the American Telephone & Telegraph Company. Thomas A. Edison, the founder of General Electric, invented a remarkable number of electrical devices, including many hardware items used in the transmission, distribution and end uses of electricity as well as the integrated power plant capable of lighting multiple buildings simultaneously. Oil became an important resource, beginning with the Pennsylvania oil fields. Kerosene replaced whale oil and candles for lighting. John D. Rockefeller founded Standard Oil Company to consolidate the oil industry—which mostly produced kerosene before the automobile created a demand for gasoline in the 20th century.^[36]

At the end of the 19th century, workers experienced the "second industrial revolution," which involved mass production, scientific management, and the rapid development of managerial skills.^[39]The new technology was hard for young people to handle, leading to a sharp drop (1890–1930) in the demand for workers under age 16. This resulted in a dramatic expansion of the high school system.

The Second Industrial Revolution that swept across the United States in the later part of

the 19 century was carried along by the development of a national communications system in

the form of the telegraph system, and the advent of a railroad network that created a national

transportation system. This in turn led to the growth of larger and larger businesses toward the

end of the century. This would soon lead to the formation of growing corporations as states

moved to attract.

Before the growth of corporations, the average business was generally a local operation

with some operating on a regional level, or within a given state at best. Businesses usually

operated close to their suppliers and local markets, being constrained by the need to

communicate quickly between factories and the ability to transport their products. The

development of the telegraph (and later the telephone) and the national railroad system rapidly

changed this in the 19 century. Now, business could be operated at ever increasing distances as

the opportunity to expand became a profitable reality.

The larger businesses soon took advantage of this opportunity to expand their markets and

grew into corporations as their access to capital allowed them to do so. This expansion

immediately gave rise to the need for larger work forces in the form of labor. As businesses

grew, so did their demand for larger manufacturing facilities and therefore their need for larger

work forces. Beyond expanding their markets, manufacturing facilities and labor would become

the largest expenditures of businesses, and would be where they would look to cut costs. This

would quickly begin to create problems for both the corporations and their employees.

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