US History Unit 3.3a Name___________________________What’s next for the car industry?

Apr 21, 2008

Every automobile on the roads of the world reflects a long and complex chain of industrial production and energy usage. Yet we live in a world where many of the highest quality resources and energy supplies have already been exploited and lower quality resources are more expensive to extract and exploit, if they are even available. So the world’s automobile industry is in the midst of a revolution in both resource availability and energy consumption. 

What it takes to build a carToday the automobile business is vast. It is a global industry that has evolved by leaps and bounds in the 100 years since Henry Ford made his famous remark in 1908 about building “a car for the great multitude.” The worldwide customer base includes at least a billion people — spread over six continents — who have income sufficient to buy a car or small truck.

According to figures assembled at the MIT Sloan Automotive Laboratory, there are about 700 million automobiles and light trucks in the world. About 30 percent of those vehicles are in North America. 

Every car requires steel, aluminum, copper and lead. Each car requires rubber, plastic, and myriad of other petroleum and natural gas by-products. And there is much else in the long industrial ladder of automobile production. Just think in terms of the energy that goes into processing materials, fabricating parts, building components, assembling a finished product, and all the transportation along the way.

In addition to the basic energy and material resources that go into manufacturing an automobile, the sheer number of vehicles reflects a lot of fuel tanks to fill with gasoline and diesel. And this does not even touch on the energy and resources that go into building road systems.

The last 25 years The oil shocks of the 1970s — in both price and availability — spurred improvements in auto energy efficiency within the US as well as worldwide. In the US, the increase in fuel efficiency was related to rising costs for gasoline, as well as government mandates for higher fuel efficiency dating from the late 1970s.

On average over the past 25 years, the typical power train of gasoline-fueled automobiles in the US has improved in efficiency by about one percent per year according to data gathered by MIT. One percent improvements may not appear to be much, but the compound improvement in the typical US automotive engine over 25 years has been about 30 percent.

There has been even more progress in the fuel efficiency of diesel engines over the past 25 years. Diesel power trains are no longer the sooty, “knock-knock” devices that they were back in the days of disco. Most cars sold today in the European Union (EU), for example, are powered with clean-burning, fuel efficient, smoothly running diesel engines.In fact, the demand for diesel fuel in Europe is such that EU refineries routinely ship surplus gasoline to sell into the North American market. And in North America the relatively low prices for gasoline throughout the 1980s and 1990s discouraged the use of diesel engines.

So there have been significant improvements in automobile power train efficiencies over the past couple of decades. But have these improvements translated into any overall reduction in demand for fuel? No.

In 2007 motor fuel consumption in the US was as high as it has ever been. (Although according to the American Petroleum Institute, demand for motor fuel may be at a plateau due to price increases at the pump in 2006 and 2007.) In the past 25 years we’ve seen more people driving more cars for more miles. But compounding the fuel issue, the cars that people are buying and driving tend to weigh more and offer higher performance.

Is a car-dependent culture sustainable? As I’ve said over and over again, we live in a world of peaking oil output, and of energy and resource scarcity.

It helps to view the age of the automobile - and its future - as a systemic whole. And some social critics are out in front of the broad discussion, with a sharp focus on the automobile and what it has brought us as a society. James Kunstler, for example, author of highly regarded books such as The Geography of Nowhere and The Long Emergency, believes that the car-dependent suburban build-out of the US may be “the greatest misallocation of resources in all of human history.”

That is, in an era of expensive energy and scarce resources, a car-dependent culture has no real future and is in fact a hindrance to progress in other directions. That is quite a viewpoint, well-presented by Kunstler in his writing. It’s depressing, but it sure gets your attention.

Criticism of the automobile culture is not confined just to social commentators like Kunstler. Another remarkable indictment comes from no less an automotive insider than Prof. John Heywood, the director of the MIT Sloan Automotive Laboratory. He has stated that “cars may prove to be the worst commodity of all.” According to Prof. Heywood, cars are “responsible for a steady degradation of the ecosystem, from greenhouse emissions to biodiversity loss. What’s worse, even if we improve vehicle efficiency, turn to fuel hybrids or make rapid advances in hydrogen-based fuel technologies, the scale for slowing down the degradation may run to the decades. Turning the curve won’t be easy.”

People are going to have to do things differentlyYou can agree or disagree with the broad themes of Jim Kunstler or John Heywood. But there’s no argument with one of Prof. Heywood’s points. Wherever we are going, it will not be easy to “turn the curve.” Looking forward, some people believe the oil just is not there to fuel cars in the future in the way that we did it in the past. So a lot of people are going to have to do things differently. . . .

In addition, auto designers are coming up with new ways to eliminate weight and drag. (At higher speeds, up to 70 percent of the energy used to turn the wheels on a car goes just to push the air out of the way of the chassis.) The auto industry is looking towards different sorts of fuels, and moving towards what is called fuel-flexibility. 

Hopefully this will lead us to a great new investment in the car of the future.

Adapted from Byron W. King for Whiskey and Gunpowder as reprinted in MoneyWeek. 2 April 2009 <http://www.moneyweek.com/news-and-charts/economics/whats-next-for-the-car-industry.aspx>.

US History Unit 3.3a Name___________________________Questions for Investigation

1. How has resource availability influenced industrial growth? Use evidence from the automobile industry to support your answer.

2. How did decisions of entrepreneurs influence the growth of industry in America during the early 20th century? Use evidence from the automobile industry to support your answer.

3. How did decisions of entrepreneurs like Henry Ford and others in the automobile industry differ from decisions made by earlier industrialists? How might the fact that automobiles are sold directly to consumers have influenced these decisions?

4. How did the growth of industry affect migration within the United States? Use evidence from the automobile industry to support your answer.

5. How did the growth of industry affect immigration to the United States? Use evidence from the automobile industry to support your answer.

6. How did growth of industry affect the interactions between workers and the owners? Use evidence from the automobile industry to support your answer.

7. How did the growth of industry affect Michigan’s economy? Be sure to identify a time period under study and use evidence from the automobile industry to support your answer.

8. How did the growth of industry affect labor relations in Michigan? Be sure to identify a time period under study and use evidence from the automobile industry to support your answer.

9. How did the automobile industry change the nature of American society? Consider where people live and work (land use) and how the automobile provided a new meaning to freedom.

US History Unit 3.3b Name___________________________The Sherman Antitrust Act of 1890

Original Text In My Own WordsSec. 1. Every contract, combination in the form of trust or otherwise; or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.Sec. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any States or States or foreign nations, is hereby declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.Sec. 4. The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the courts shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decrees, the court many at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.

Sec. 5. Whenever it shall appear to the court before which any proceeding under Section four of this act may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpoenas to that end may be served in any district by the marshal thereof.

Sec. 6. Any property owned under any contract or by any combination, or pursuant to any conspiracy (and being the subject thereof) mentioned in section one of this act, and being in the course of transportation from one State to another, or to a foreign country, shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure, and condemnation of property imported into the United States contrary to law.

Sec. 7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefore in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.

Sec. 8. That the word "person," or "persons," wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, and the laws of any State, or the laws of any foreign country.

Teacher Background Material Sherman Anti-Trust Act (1890)

Approved July 2, 1890, The Sherman Anti-Trust Act was the first Federal act that outlawed monopolistic business practices

The Sherman Antitrust Act of 1890 was the first measure passed by the U.S. Congress to prohibit trusts. It was named for Senator John Sherman of Ohio, who was a chairman of the Senate finance committee and the Secretary of the Treasury under President Hayes. Several states had passed similar laws, but they were limited to intrastate businesses. The Sherman Antitrust Act was based on the constitutional power of Congress to regulate interstate commerce. (For more background, see previous milestone documents: the Constitution, Gibbons v. Ogden, and the Interstate Commerce Act.) The Sherman Anti-Trust Act passed the Senate by a vote of 51–1 on April 8, 1890, and the House by a unanimous vote of 242–0 on June 20, 1890. President Benjamin Harrison signed the bill into law on July 2, 1890.

A trust was an arrangement by which stockholders in several companies transferred their shares to a single set of trustees. In exchange, the stockholders received a certificate entitling them to a specified share of the consolidated earnings of the jointly managed companies. The trusts came to dominate a number of major industries, destroying competition. For example, on January 2, 1882, the Standard Oil Trust was formed. Attorney Samuel Dodd of Standard Oil first had the idea of a trust. A board of trustees was set up, and all the Standard properties were placed in its hands. Every stockholder received 20 trust certificates for each share of Standard Oil stock. All the profits of the component companies were sent to the nine trustees, who determined the dividends. The nine trustees elected the directors and officers of all the component companies. This allowed the Standard Oil to function as a monopoly since the nine trustees ran all the component companies.

The Sherman Act authorized the Federal Government to institute proceedings against trusts in order to dissolve them. Any combination “in the form of trust or otherwise that was in restraint of trade or commerce among the several states, or with foreign nations” was declared illegal. Persons forming such combinations were subject to fines of $5,000 and a year in jail. Individuals and companies suffering losses because of trusts were permitted to sue in Federal court for triple damages. The Sherman Act was designed to restore competition but was loosely worded and failed to define such critical terms as “trust,” “combination,” “conspiracy,” and “monopoly.” Five years later, the Supreme Court dismantled the Sherman Act in United States v. E. C. Knight Company (1895). The Court ruled that the American Sugar Refining Company, one of the other defendants in the case, had not violated the law even though the company controlled about 98 percent of all sugar refining in the United States. The Court opinion reasoned that the company’s control of manufacture did not constitute a control of trade.

The Court’s ruling in E. C. Knight seemed to end any government regulation of trusts. In spite of this, during President Theodore Roosevelt’s “trust busting” campaigns at the turn of the century, the Sherman Act was used with considerable success. In 1904 the Court upheld the government’s suit to dissolve the Northern Securities Company in State of Minnesota v. Northern Securities Company. By 1911, President Taft had used the act against the Standard Oil Company and the American Tobacco Company. In the late 1990s, in another effort to ensure a competitive free market system, the Federal Government used the Sherman Act, then over 100 years old, against the giant Microsoft computer software company.

Sherman Anti-Trust Act (1890). National Archives and Records Administration. 6 April 2009 <http://www.ourdocuments.gov/doc.php?flash=true&doc=51>.

Trust Busting Cartoon

"The President's Dream of A Successful Hunt" Clifford Kennedy Berryman, 1907.

“The Expedition was Passed.” America’s Story. Library of Congress. 6 April 2009 <http://www.americaslibrary.gov/cgi-bin/page.cgi/jb/progress/monopoly_3>.

US History Unit 3.3c Name___________________________Cartoon Analysis Worksheet

Level 1

Visuals Words (not all cartoons include words)

1. List the objects or people you see in the cartoon.

1. Identify the cartoon caption and/or title.

2. Locate three words or phrases used by the cartoonist to identify objects or people within the cartoon.

3. Record any important dates or numbers that appear in the cartoon.

Level 2Visuals Words

2. Which of the objects on your list are symbols?

3. What do you think each symbol means?

4. Which words or phrases in the cartoon appear to be the most significant? Why do you think so?

5. List adjectives that describe the emotions portrayed in the cartoon.

Level 3

A. Describe the action taking place in the cartoon.

B. Explain how the words in the cartoon clarify the symbols.

C. Explain the message of the cartoon.

D. What special interest groups would agree/disagree with the cartoon's message? Why?

The Pullman Strike

During the late 19th and early 20th centuries, Americans witnessed many strikes.  Their causes varied.  Sometimes economic grievances--low pay, and, especially, long hours--led to strikes.  Sometimes the conflicts were more subtle, as managers tried to increase their control over the work process. Usually, the basic issue was the right of workers to have unions and to engage in collective bargaining. Typically, strikes ended when the government applied its power against the unions. One strike in particular, the Pullman strike of 1894, was especially important in American perceptions of "the labor problem" of the time.  The Pullman strike brought Eugene Debs national attention, and it led directly to his conversion to socialism.  The events of the strike led other Americans to begin a quest for achieving more harmonious relations between capital and labor while protecting the public interest.

The company's manufacturing plants were in a company-owned town on the outskirts of Chicago. Pullman publicized his company town as a model community filled with contented, well-paid workers. The Pullman workers, however disagreed, especially after the onset of the economic depression that began in 1893.  During that depression, Pullman sought to preserve profits by lowering labor costs. When the firm slashed its work force from 5,500 to 3,300 and cut wages by an average of 25 percent, the Pullman workers struck. The American Railway Union (ARU), led by Eugene Debs, was trying to organize rail workers all across the country. The Pullman workers joined the ARU, and Debs became the leader of the Pullman strike.

The ARU enjoyed wide influence among the workers who operated trains.  To bring pressure on Pullman, the union asked trainmen to refuse to run trains on which Pullman sleeping cars were attached. The union told the railroads that their trains could operate without the Pullman cars, but the railroads insisted that they had contracts with the Pullman Company requiring them to haul the sleeping cars. The result was an impasse, with railroad workers in and around Chicago refusing to operate passenger trains.  The conflict was deep and bitter, and it seriously disrupted American railroad service.

“The strike ended with the intervention of the United States Army. The passenger trains also hauled mail cars, and although the workers promised to operate mail trains so long as Pullman cars were not attached, the railroads refused. Pullman and the carriers informed federal officials that violence was occurring and that the mail was not going through. Attorney General Richard Olney, who disliked unions, heard their claims of violence (but not the assurances of local authorities that there was no uncontrolled violence) and arranged to send federal troops to insure the delivery of the mail and to suppress the strike. The union leader, Debs, was jailed for not obeying an injunction that a judge had issued against the strikers." [Quoted from Mansel G. Blackford and K. Austin Kerr, Business Enterprise in American History (3rd. ed.; Boston: Houghton Miflin, 1994):183-84]

Source: The Pullman Strike. Multimedia Histories. Ohio State University. 6 April 2009 <http://ehistory.osu.edu/osu/mmh/1912/content/pullman.cfm>.

US History Unit 3.3d Name___________________________Case Preparation Sheet

1. What did the defendants do? List the facts of the case. Use your textbook and the handout on the Pullman Strike to assist in your description.

2. How exactly did they break the law? Refer to the Sherman Anti-Trust Act.

3. What flaws are there in the prosecutor’s case?

4. Were the actions of the defendants justifiable? Make an argument to support your side.

US History Unit 3.3e Name___________________________

Excerpt from The JungleChapter 14, by Upton Sinclair

With one member trimming beef in a cannery, and another working in a sausage factory, the family had a first-hand knowledge of the great majority of Packingtown swindles. For it was the custom, as they found, whenever meat was so spoiled that it could not be used for anything else, either to can it or else to chop it up into sausage. With what had been told them by Jonas, who had worked in the pickle rooms, they could now study the whole of the spoiled-meat industry on the inside, and read a new and grim meaning into that old Packingtown jest – that they use everything of the pig except the squeal.

Jonas had told them how the meat that was taken out of pickle would often be found sour, and how they would rub it up with soda to take away the smell, and sell it to be eaten on free-lunch counters; also of all the miracles of chemistry which they performed, giving to any sort of meat, fresh or salted, whole or chopped, any color and any flavor and any odor they chose. In the pickling of hams they had an ingenious apparatus, by which they saved time and increased the capacity of the plant – a machine consisting of a hollow needle attached to a pump; by plunging this needle into the meat and working with his foot, a man could fill a ham with pickle in a few seconds. And yet, in spite of this, there would be hams found spoiled, some of them with an odor so bad that a man could hardly bear to be in the room with them. To pump into these the packers had a second and much stronger pickle which destroyed the odor – a process known to the workers as "giving them thirty per cent." Also, after the hams had been smoked, there would be found some that had gone to the bad. Formerly these had been sold as "Number Three Grade," but later on some ingenious person had hit upon a new device, and now they would extract the bone, about which the bad part generally lay, and insert in the hole a white-hot iron. After this invention there was no longer Number One, Two, and Three Grade – there was only Number One Grade. The packers were always originating such schemes – they had what they called "boneless hams," which were all the odds and ends of pork stuffed into casings; and "California hams," which were the shoulders, with big knuckle joints, and nearly all the meat cut out; and fancy "skinned hams," which were made of the oldest hogs, whose skins were so heavy and coarse that no one would buy them – that is, until they had been cooked and chopped fine and labeled "head cheese!"

It was only when the whole ham was spoiled that it came into the department of Elzbieta. Cut up by the two-thousand-revolutions- a-minute flyers, and mixed with half a ton of other meat, no odor that ever was in a ham could make any difference. There was never the least attention paid to what was cut up for sausage; there would come all the way back from Europe old sausage that had been rejected, and that was moldy and white – it would be dosed with borax and glycerine, and dumped into the hoppers, and made over again for home consumption. There would be meat that had tumbled out on the floor, in the dirt and sawdust, where the workers had tramped and spit uncounted billions of consumption germs. There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it. It was too dark in these storage places to see well, but a man could run his hand over these piles of meat and sweep off handfuls of the dried dung of rats. These rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread, and meat would go into the hoppers together. This is no fairy story and no joke; the meat would be shoveled into carts, and the man who did the shoveling would not trouble to lift out a rat even when he saw one – there were things that went into the sausage in comparison with which a poisoned rat was a tidbit. There was no place for the men to wash their hands before they ate their dinner, and so they made a

practice of washing them in the water that was to be ladled into the sausage. There were the butt-ends of smoked meat, and the scraps of corned beef, and all the odds and ends of the waste of the plants, that would be dumped into old barrels in the cellar and left there. Under the system of rigid economy which the packers enforced, there were some jobs that it only paid to do once in a long time, and among these was the cleaning out of the waste barrels. Every spring they did it; and in the barrels would be dirt and rust and old nails and stale water – and cartload after cartload of it would be taken up and dumped into the hoppers with fresh meat, and sent out to the public's breakfast. Some of it they would make into "smoked" sausage – but as the smoking took time, and was therefore expensive, they would call upon their chemistry department, and preserve it with borax and color it with gelatine to make it brown. All of their sausage came out of the same bowl, but when they came to wrap it they would stamp some of it "special," and for this they would charge two cents more a pound.

Source: Sinclair, Upton. The Jungle. Chapter 14. Berkeley Digital Library. 6 April 2009 <http://sunsite.berkeley.edu/Literature/Sinclair/TheJungle/14.html>.

Discussion Questions:

What type of descriptive terminology did the writer use?

What were the more powerful feelings the writer evoked? How did he do this?

How might the public react to Sinclair’s book?

Regulatory Legislation

Meat Inspection Act of 1906

Brought the following reforms to the processing of cattle, sheep, horses, swine and goats destined for human consumption:

All animals were required to pass an inspection by the U.S. Drug Administration prior to slaughter

All carcasses were subject to a post-mortem inspection

Cleanliness standards were established for slaughterhouses and processing plants.

The primary goals of the law were to prevent adulterated or misbranded livestock and products from being sold as food, and to ensure that meat and meat products are slaughtered and processed under sanitary conditions.

Pure Food and Drug Act 1906

Provisions of the measure included the following:

Creation of the Food and Drug Administration, which was entrusted with the responsibility of testing all foods and drugs destined for human consumption

The requirement for prescriptions from licensed physicians before a patient could purchase certain drugs

The requirement of label warnings on habit-forming drugs.

The Pure Food and Drug Act of 1906 was the first federal law prohibiting the interstate transportation and sale of adulterated food enacted by Congress pursuant to its power under the COMMERCE CLAUSE.