Download 23 - Rise of Industry and Gilded Age

1865-1914
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Factories
◦ Improved to keep up with
war needs
◦ Farms became more
mechanized
 Fewer farmers are needed,
many move to cities
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North did not have
physical destruction of
war
Transcontinental railroad
◦ New markets in the West
Transcontinental Railroad
Crops (Wheat, Fruit, Corn, etc.) and Cattle
Machinery, Tools, Finished Goods
Railroad Construction
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More commercialized, mechanized: by 1900, 37%
fewer farmers needed
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Increased production= lower prices
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Fewer self-sustaining farmers: crops grown for
overseas market
More farmers forced off land (city workers)
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•Inventor of
the
Grain Reaper
(1834)
1. Natural Resources. The United States had a great deal
of coal, iron ore and petroleum.
2. People. The United States had large-scale immigration and
a growing population to fulfill its labor needs.
3. The Civil War. The American Civil War stimulated the nation’s
economy:
•Industry and agriculture became larger to supply armies.
•Business people and farmers made great profits during the
war & in turn, bought more factories, land & machinery.
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America’s technological ability is growing
◦ New inventions
◦ More industrialization
 Machines = mass production = cheaper products
◦ New industries, lead to new jobs and product
demands
The
Carbon
Filament
Lamp
(1879)
The
Electric Motor (1882)
The
Phonograph
(1877)
The
Motion
Picture
Projector
(1889)
Alexander
Graham
Bell (1847-1922)
Captains of Industry or Robber Barons?
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Corporation –
investors own
shares
◦ Shares = stock
◦ Buy stock with money
and corporation uses
money to produce
their product
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Advantages
◦ Can raise large sums of
money
◦ Dividend
 Share in the corporations
profits
◦ Only lose what you put
in
◦ Speeds up American
industry
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Transportation
Building materials
Energy
communications
WHAT IS
THE GOAL
OF THE
GAME???????
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As industries grew, some businesses wanted to
eliminate competition.
Monopoly – A company or group of companies
that has complete control over a particular
field of business.
◦ Why are monopolies bad for consumers?
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Pool – companies in an industry agree to fix
prices and divide business
Trust – group of corporations (mainly have the
same owner) in an industry combine under one
corporation
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Laissez- Faire – “Hands off”, some people
thought that the government should not
interfere with business.
◦ American Government’s attitude towards business
in the late 1800s-early 1900s
◦ No government rules or regulation of business
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No
No
No
No
No
taxes
wage laws
hours limits
safety precautions
worker compensation
Question:
◦ Do we have a Laissez- Faire system?
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Standard Oil Company
Owns oil refineries
◦ Horizontal Monopoly
 Owns all factories in one
step of the oil industry
Used predatory pricing to drive
competitors our of business
Rebate agreement with RR
◦ He guarantees a certain
amount of business, RR
charge him a cheaper price
so he can offer his services
for cheaper
Gives $500 million to charity
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Carnegie Steel Corporation
◦ Vertical Monopoly
 Owns all aspects of steel
production
Homestead Strike
◦ Large strike results in the death of
ten workers
◦ Destroyed steel workers union
Writes “Wealth”
◦ “A man who dies rich, dies
disgraced”
◦ Gives millions to invest in libraries,
hospitals, music and schools
Scottish Immigrant
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Begins in ferrying to
west coast for gold rush
Ends career owning RRs
◦ Controlled railroads from
NY and linked to Chicago
◦ Built Grand Central
Terminal
Would shut down RRs
and bridges to drive
companies out of
business or force them
to pay his prices
Donates $ for
Vanderbilt University
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Banker / Finance
Bought up RR companies
as they began to struggle
in the late 1800s
◦ Consolidates them into bigger
companies
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Purchased controlling
shares in Carnegie Steel,
GE, AT&T
Helped bail out US gov’t
during the Panic of 1907
Criticized for insider
trading and manipulating
markets
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Automobile industry
Assembly Line
◦ Did not invent the car
Mass production
◦ Leads to cheaper product for
consumers
◦ Makes the Model-T aka the “Tin
Lizzie”
Treated his workers well
◦ 8 hour day, $5 a day
Criticized for being anti-Semitic
◦ 1930s – had a pro-Nazi
standings
◦ Wrote “The International Jew”
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New Business structure = corporation
No Income Tax
No Labor Laws
◦ No minimum wage
◦ No safety regulations = no extra costs