Between 1860 and World War I, the United States made the shift from an agrarian to a mighty industrial nation. American heavy industry stood unchallenged in 1900. In that year, the Carnegie Steel Company alone produced more steel than Great Britain’s entire steel industry. Industrialization also led to urbanization. While established cities, such as New York, Philadelphia, and Boston, grew even larger, other moderate-size cities, such as Pittsburgh, grew by leaps and bounds because of industrialization. Whereas 20 percent of Americans lived in cities in 1860, more than 40 percent did in 1900. By 1900, the United States had become the world’s richest nation and greatest industrial power. Yet serious questions remained about the quality of American life. In 1890, the richest 9 percent of Americans owned an incredible 71 percent of all the wealth. Labor unrest over unsafe working conditions, strict work discipline, and periodic cycles of devastating unemployment led workers to organize. By the turn of the twentieth century, one national organization, the American Federation of Labor, emerged as labor’s dominant voice. Its lack of real power, however, is reflected in its membership figures: in 1900, it constituted but 8.4 percent of the American industrial labor force. And part of the U.S. labor force remained almost entirely disenfranchised. Although the victory of the North in the Civil War led to the abolition of slavery, political, economic, and social opportunities for the African American population remained limited, and racist attitudes were widespread. During the so-called Progressive Era after 1900, the reform of many features of American life became a primary issue. At the state level, reforming governors sought to achieve clean government by introducing elements of direct democracy, such as direct primaries for selecting nominees for public office. State governments also enacted economic and social legislation, including laws that governed hours, wages, and working conditions, especially for women and children. The realization that state laws were ineffective in dealing with nationwide problems, however, led to a progressive movement at the national level. National progressivism was evident in the administrations of Theodore Roosevelt and Woodrow Wilson. Under Roosevelt (1901–1909), the Meat Inspection Act and Pure Food and Drug Act provided for a limited degree of federal regulation of corrupt industrial practices. Roo- sevelt’s expressed principle, “We draw the line against misconduct, not against wealth,” guaranteed that public protection would have to be within limits tolerable to big corporations. Wilson (1913–1921) was responsible for the creation of a graduated federal income tax and the Federal Reserve System, which gave the federal government a role in important economic decisions formerly made by bankers. Like many European nations, the United States was moving into policies that extended the functions of the state. By the end of the nineteenth century, many Americans believed that the United States was ready to expand abroad. The Pacific islands were the scene of great power competition and witnessed the entry of the United States on the imperialist stage. Eastern Samoa became the first important American colony; the Hawaiian Islands were the next to fall. Soon after Americans had made Pearl Harbor into a naval station in 1887, American settlers gained control of the sugar industry on the islands. When Hawaiian natives tried to reassert their authority, the U.S. Marines were brought in to “protect” American lives. Hawaii was annexed by the United States in 1898 during the era of American nationalistic fervor generated by the Spanish-American War. The defeat of Spain encouraged Americans to extend their empire by acquiring Puerto Rico, Guam, and the Philippine Islands (see Chapter 2). Canada, too, faced problems of national unity between 1870 and 1914. At the beginning of 1870, the Dominion of Canada had only four provinces: Quebec, Ontario, Nova Scotia, and New Brunswick. With the addition of two more provinces in 1871—Manitoba and British Columbia—the Dominion now extended from the Atlantic Ocean to the Pacific. But real unity was difficult to achieve because of the distrust between the Englishspeaking and French-speaking peoples of Canada. Fortunately for Canada, Sir Wilfrid Laurier, who became the first French Canadian prime minister in 1896, was able to reconcile Canada’s two major groups and resolve the issue of separate schools for French Canadians. Sir Laurier’s administration also witnessed increased industrialization and successfully encouraged immigrants from central and eastern Europe to help populate Canada’s vast territories.