Download Industrialization of the United States 1865-1914

Chapter 4
• Describe the factors that led to
Industrialization in the late 1800’s
• What was the impact of
industrialization on Americans in the
late 1800’s
• Analyze the growth of big business and
the American public’s reaction to it.
• What steps did the government take to
limit the power of big business?
• What problems faced workers in the
late 1800’s and what action did they
take to improve their conditions?
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Protective tariff
Laissez faire
Thomas Edison
Monopoly
Cartel
Corporation
Horizontal integration
Vertical integration
Trust
Social Darwinism
ICC
Sherman Anti- trust Act
John D. Rockefeller
Andrew Carnegie
Sweatshop
Company town
Socialism
Knights of Labor
AFL
Haymarket Riot
Terence Powderly
Samuel Gompers
Eugene Debs
Homestead Strike
• End of the Civil War marked a big change in the United States
• Innovation, technology improved peoples lives
• Inventors, scientists and business leaders turned the United States
into an Industrial giant
• Railroads, natural resources, immigrant labor, innovation, capitalism
supported by the government allowed the “second industrial
revolution” to occur
• Changed America from an agrarian decentralized country to
an urban industrial society
• Shortage of labor after the Civil War led to mechanization
• Government imposed protective tariffs and kept out foreign
competition
• Government helped create interconnected national
transportation, communication network
• Electric power allowed machines to be more powerful and
efficient
• Created a system of applied research to the industrial process
• Changed the nature of work in America
• Natural resources- coal, timber, many navigable rivers, in 1859 oil was
discovered it became a new source of inexpensive energy
• Workforce growth- immigrants pushed from their homeland and pulled by
the opportunity that America offered. Mechanization of agriculture
pushed many farmers to the new, growing cities to find work. Provided
new industry a huge workforce
• Capitalism- system of free enterprise allowed entrepreneurs to fuel
industrial growth, established factories, created jobs, attracted foreign
investment
• Government Policies- encouraged growth of business. Provided
railroads millions of acres of land to link the country. Passed protective
tariffs, encouraged laissez- faire policies Strong legal system and private
property rights encouraged investment and growth
• Late 1800’s drive for efficiency led to
innovation.
• Number of patents increased at this time
• Business invested heavily in new
technology and innovation created new
industries and expanded old ones
• Technology changed more peoples lives
than political or intellectual ideas at this
time
• Innovations and inventions included:
electricity, communications (telegraph,
telephone, wireless telegraph) steel
• Steel was made cheaper by the
Bessemer Process, allowed the
development of skyscrapers, suspension
bridges, elevators
• Transportation, technology effected how
people lived• Railroads expanded and new technology
improved commerce based on rail travelrefrigerated cars for transporting meat and
produce, improved telegraph
• Time zones invented to make scheduling rail
service more efficient
• suburbs developed, people living outside cities
could commute to work on trains and streetcars
• Commuter trains and subways appeared in
major cities
• Automobiles and airplanes developed in the
early 20th century, created a new industry
• American agricultural and manufacturing exports dominated international
markets
I.
American farms became more mechanized many farmers moved to cities.
II. Exports expanded American economy and United States grew as a world
power
III. Goods could be transported on rails to ports where they could be loaded
onto steamships
• Cities provided access to new goods but higher cost of living made many
farmers dependent on wages from factory work
• Before Civil War many businesses owned by one person or
family, business was local
• Industrialization brought the rise of large scale business and
mass production- emphasized maximum production, national
and international distribution
• Railroads provided access to raw materials and a way to
get products to a large number of consumers
• Business leaders lured by profits responded with new
business methods
• Corporation people share ownership through stock
ownership, created huge pool of capital to invest in the
business, run different factories
• Corporations worked to maximize profits, tried to pay workers as little
as possible, pay low prices for raw materials.
• Monopolies were formed to gain complete control of a
product or service charge low fares to put others out of
business,
• Others tried to eliminate competition by forming cartels to
keep prices artificially high
• Businessmen developed more efficient ways of doing
business and organizing their companies
• Two new methods were vertical and horizontal integration
• Horizontal Integration- consolidating many firms into one
business (Standard Oil and refineries)
• Vertical Integration- gaining control of the many different
businesses that make up all parts of a products
development
• John D. Rockefeller, Andrew Carnegie, J.P.
Morgan, Richard Sears and Alvah Roebuck were
men skilled in organizing and promoting big
business.
• Rockefeller, Carnegie were known for their
innovations in organization
• J.P. Morgan developed investment banking
• Sears and Roebuck were the pioneers of mail
order retailing
• Obsessed with order, precision,
tidiness he decided to bring
order to the oil industry
• Recognized the potential for
profits in the oil industry, his
company Standard Oil of Ohio,
he began to buy out other
refiners in 1870 in less than six
weeks he controlled 90% of all
oil refining in the United States
• He soon began to purchase all
aspects of production barrels,
pipelines, tank cars, oil storage
facilities and he made deals with
railroads to ship his products
cheaply
• Established a trust to make his
business more efficient and
centralize control of the business,
established the idea of a holding
company (controlling the majority of
stock of many different companies
• At the end of his life Rockefeller
gave most of his fortune away, he
gave away more than $500 million
over his lifetime
• Born in Scotland to a poor
family experience a rise
from rags to riches
• During the Civil War
developed a military
telegraph system
• After the war- built
railroad bridges,
steelmaking and
investments
• In 1873 Carnegie began
to concentrate on steel
• Not a technical expert but a salesman,
promoter and organizer
• Hired men of ability to run business and
used the most up to date machinery
• Bought out struggling companies and
had a philosophy of continual
innovation
• Stood out as a thinker and publicized a
philosophy for big business, “ The
Gospel of Wealth” (1889)
• When he retired at 65 devoted himself
to giving away his fortune for the
public good. Gave money to
universities, libraries, parks, churches,
public buildings
• Born to a wealthy family
• Used his connections to bring capital from Europe
to the United States to invest in businesses
• Purchased stock and bonds wholesale and sold
them for a profit- beginning of investment banking
• Morgan began to consolidate these companies
into trusts
• By the 1890’s he was in charge of one sixth of the
nations railroads
• Morgan believed that control brought stability to
the economy
• 1901 Morgan purchased Carnegie’s steel and
iron holdings
• Created the first billion dollar corporation in the
United States
• Many new products in the later 1800’s
needed markets. How did retailers reach
the millions of people that lived in small
towns and isolated farms
• In the 1890’s two Chicago entrepreneurs
Richard Sears and Alvah Roebuck began
offering goods by mail.
• They purchased goods in high volume from
wholesalers and sold it at prices lower than
the local rural stores
• The development of free rural mail
delivery in 1898 meant that rural
Americans could purchase goods that
before were expensive or only available
to city dwellers
• The new business helped create a truly
national market