On the 4th of July, the United States will celebrate its independence day. This year will mark the 243rd year since the country’s foundation. As the country celebrates its independence day, it’s worth remembering some of the events in history that made the United States what it is today. One of those events is the emergence of the Second American Industrial Revolution that set the stage for the United States to become a global superpower technologically and economically. Generally lasting from the mid to late 19th century to the early 20th century, many would remember this era as one of the rapid industrializations, the introduction of new inventions and the rise of large corporations and monopolies.
Indeed, it was a period that changed the social and economic structure of American society in ways that can still be felt today. The massive industrial growth that took place sped up the trend towards a more urbanized society and the new economic landscape opened up endless possibilities and opportunities. As some benefit more than others, it also brought to light the many issues and discussions about inequality, labor, and greed. Regardless, its contributions to the development and widespread use of technology can’t be ignored. Some of the more notable industrial accomplishments of that era include;
The ability to harness electricity is often considered among the most important achievements of mankind. It has drastically altered the way of life and made possible the creation of numerous other technological inventions and advancements in the coming years. Although electricity’s potential was well known since the beginning of the 19th century, it wasn’t until the late 19th century that the foundations for its widespread application were realized through the work of Thomas Edison, George Westinghouse, and Nikola Tesla. The key to this revolutionizing change is the development of alternative current (AC) and direct current (DC) generators.
Both Thomas Edison and George Westinghouse were involved in an intense rivalry with each other in what is popularly known as ‘War of the Currents.’ In the mid-to-late 1880s, Edison’s dominance in the electric power transmission network was challenged by Westinghouse and his Alternative Current (AC) system and both men engaged in a series of campaigns to discredit and overtake the other. Edison’s complete belief in the superiority of his DC system drove one of his more brilliant engineers, Nikola Tesla, away when he refused to take his advice. Westinghouse would later buy Tesla’s patents and improve on it. By the early 1890s, the war was dying down and it was Westinghouse’s AC that ultimately prevailed and implemented on a large scale. DC isn’t entirely extinct either, it has found uses in applications where lower voltage is needed and its more stable property has prompted further research into the use of high voltage direct current (HVDC) to transport electricity over long distances.
One of the most significant American technological achievements in the 19th century is the building of a network of railroads that link several parts of the country together. Although there had been several railroad networks prior to the mid-19th century, their reach is limited and it wouldn’t be until the early 1860s that work on the first transcontinental railroad to connect the eastern and western parts of the country would begin. Though embroiled in the Civil War, the US Government understood the importance of fast, reliable transportation in a vast country and passed the Pacific Railway Act which gave land and financing to two companies, the Central Pacific Railroad Company to build from the West and the Union Pacific Railroad Company to build from the East. In 1869, both railroads met at Promontory Summit, Utah which marked the completion of the railroad. The completion of the first transcontinental railroad was a pivotal moment in American history that ushered in a new era of progress and had the psychological effect in bringing a sense of connectedness to the country.
Railway networks would continue to expand in the coming decades and well into the 20th century. These railway projects were often undertaken by private companies with government assistance and many of them would eventually be bought over or merged with larger ones. The two of the current biggest railroad companies in the country, Union Pacific Railroad and BNSF Railways can trace their origins back to the 19th century and consolidated their power through a series of mergers. BNSF, in particular, has claimed to be the product of over hundreds of railway mergers and acquisitions in the last 160 years.
The modern American steel industry had its start in the second industrial revolution. Prior to that, steel was an expensive product to produce and was only used in limited volumes. This changed with the invention of the Bessemer process by Englishman Henry Bessemer that allowed steel to be mass-produced in a cheaper manner. This revolutionary process soon found its way to America and played a crucial role in transforming the country into one of the largest steel producers in the world. As steel was widely regarded as a better and cheaper alternative to iron, it was used in everything from railroad tracks to construction of buildings, vehicles and everyday items.
The strong demand for steel meant tremendous business opportunities and no individual has made an impact like Andrew Carnegie and the Carnegie Steel Company. Carnegie was one of the first to realize the potential of the Bessemer process and took full advantage it to build his business empire and become the largest manufacturer of steel in the world. Carnegie had also invested in new technological innovations to improve the efficiency of his mills and quality of the steel they produce.
Carnegie’s rise probably would not have been possible without the help of his partner and coal industrialist Henry Clay Frick. The roots for their partnership began in the early 1880s when Carnegie was looking for Coke, a key ingredient in the production of steel created from the heating of bituminous coal. The partnership between both men was set to be mutually beneficial, Carnegie has a steady supply of Coke through Frick’s company and Frick had access to Carnegie’s capital to further his business ambitions. Throughout the course of their partnership, Frick proved himself to be a masterful businessman and was eventually asked by Carnegie to be chairman of the board in the Carnegie Brother’s Steel Company. In the coming years, Frick would undertake several successful initiatives to expand the company and streamline production including the reorganization of assets into the Carnegie Steel Company Ltd in 1892. Their relationship, however, is far from perfect and their disagreements over the handling of several issues put an end to their partnership. However, the impact they made was immense. By increasing the production of steel and lowering its cost, steel became a major component in everyday life.
In 1901, the Carnegie Steel Company Ltd was sold to JP Morgan and other business leaders who merged it with other similar companies to form the United States Steel Corporation (U.S. Steel), the first billion-dollar company in American history. The sale made Andrew Carnegie into the richest man in the world and among the wealthiest in modern history.
The Second Industrial Revolution has brought profound benefits to the American people. Many Americans achieved a higher standard of living in the more urbanized society which contributed to a growing middle class which had more spending power and gave opportunities to the younger generation to pursue higher education and specialization in certain fields, leading to a more educated society. Rapid industrialization that often took advantage of immigrant labor along with the mass circulation of low-cost newspapers and the development of rapid transport across the country helped shaped the American identity while technological advances allowed the United States to flex its muscle on the world stage.
The technological advances of the century offered many enterprising inventors and businessmen a chance to build their own companies leading to fierce competition in the market. As some of these companies gain prominence, new business practices were developed to remain competitive. Among them is the use of horizontal and vertical integration. Horizontal integration is the practice of acquiring similar companies to reduce competition. A group of similar competing companies may also choose to cooperate with each other. In this case, a trust may be formed. The participating companies would turn in their stocks to a group of trustees in exchange for trust certificates. The trustees, who are some of the most important individuals in the industry would then assume control of the companies and ran them as if they were one. Trusts were highly unpopular amongst the public because of the huge amounts of control companies have over the industry. Apart from the already controversial worker abuse and exploitation, trusts made competition difficult and paved the way for a monopoly. Due to public pressure, the US Government passed the Sherman Antitrust Act in 1890 to break up monopolies. The Standard Oil Trust created by John D Rockefeller was one of the first great trusts. Rockefeller and his partners dominated the oil and gas industry and had relied on the horizontal integration strategy to expand its influence. In vertical integration, a company seeks to own every part of the production process from obtaining raw materials to product marketing. The use of vertical integration eliminates the middlemen completely which saves costs and streamlines the production process. Before its sale and merger to the US Steel, the Carnegie Steel Company led by Andrew Carnegie achieve market dominance in the steel industry through a vertical integration strategy. By the end of the 19th century, large corporations came to dominate the American economy through a series of mergers and acquisitions in what would be known as ‘The Great Merger Movement.’ Some of these companies such as General Electric and U.S. Steel would still maintain their dominance to this day.
The nature of work and how labor is viewed has also changed. The move from an agricultural society to an urban one has been difficult for some. While many Americans did prosper in this era, there are also many others who weren’t so lucky. A lot of manufacturing jobs were difficult and dangerous. Workers are often exploited and expected to work long hours with little pay and many face the looming threat of being replaced at any time. Because of this, unions and became popular among the poorer workers. Through frequent and often bloody strikes, the unions fought for reasonable wages, hours and time off.