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The Crisis of the 1890s
Summary

As the nineteenth century ended, Americans faced economic collapse and despair brought with it social conflict. Labor and capital were locked in conflict. The 1890’s was a decade of despair and disillusionment for many but it was also a time in which the United States expanded its economic borders to become an international power.

     Hard Times: The economic depression of the 1890s spared no region of the nation or any sector of the economy. Agricultural prices plummeted along with the prices of manufactured goods. Unemployed and homeless, American workers battled police and in some instances banded together forming “industrial armies” which marched to Washington, D.C.

     The Overseas Frontier: The decade of the 1890s also brought a metaphorical closing of the American frontier. But as free land in the west was claimed, American farmers and manufacturers looked overseas for new consumers. The United States reorganized itself to compete in the global marketplace: the Congress commissioned the construction of three steel battleships, it began serious discussions of building a canal linking the Atlantic and Pacific Oceans, and it reconceived the tariff all in an attempt to open foreign markets to American goods.

     The Drive for Efficiency: The struggle between workers and employers for control of the workplace took on a new dimension at the end of the century. Employers relied on technology, scientific management, and federal power; workers organized. Efficiency experts and middle managers who supervised the workplace exerted control over workers’ activities in order to accelerate production. Workers reacted with new unions and skilled workers took control of the labor movement.

     Progress and Force: The struggle between employees and employers became violent in 1892 and again in 1894. Andrew Carnegie used his own private police force as well as the power of the state militia to break a workers’ strike at his steel mill at Homestead, Pennsylvania. Not only were the strikers broken and defeated, but also their union. In 1894, the Pullman Strike shut down the nation’s railroads for two weeks. Again police and soldiers enforced managements’ wishes. Workers were powerless against the forces of the corporation especially when the corporation was backed up by the army. Labor needed to find ways to adjust to this new circumstance.

     Corporate Consolidation: Between 1897 and 1904 more than 4000 companies merged to form 257 corporations. At the heads of these corporations, or holding companies, sat bankers, not industrialists. Financiers, like J. P. Morgan, could create the larger and leaner firms needed to take on foreign competitors.

Think About This

  1. Describe the effects of the Panic of 1893 on American workers and on American farmers.
  2. In what tangible ways did Alfred Thayer Mahan’s The Influence of Sea Power Upon History, 1600-1783 influence Congress?
  3. What caused the conflicts between labor and employers to be so common and so violent during the 1890s?
  4. Complete the following sentence: Foreign markets were believed to be vital to the success of American business and finance because. . .



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