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The Gilded Age The Rise of Big Business. Essential Question Essential Question: Was the rise of industry good for the United States?

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Presentation on theme: "The Gilded Age The Rise of Big Business. Essential Question Essential Question: Was the rise of industry good for the United States?"— Presentation transcript:

1 The Gilded Age The Rise of Big Business

2 Essential Question Essential Question: Was the rise of industry good for the United States?

3 A Brassy, Flamboyant Age Gilded Age: {Reconstruction (1877) - - Progressive Era (1901)} brassy, flamboyant age dominated by big business values, political corruption, and extremes of wealth and poverty

4 Major Developments Major Developments: 1.Industrialization 2.Urbanization 3.Immigration

5 From Agriculture to Industry During Gilded Age, U.S. experienced rapid shift from an agricultural economy to an industrial one

6 Relative Share of World Manufacturing

7 USA in the Gilded Age: The North: Experienced an industrial revolution, mass immigration, & urbanization

8 Essential Question Was the rise of industry good for the United States?

9 Gilded Age Industrialization During the Gilded Age ( ), the United States experienced an Industrial Revolution: New technology, transportation, efficient mass-production spread ideas & industrial products By 1900, the U.S. was the U.S. the most industrialized country in the world

10 An Age of Invention The Gilded Age was an Age of Invention U.S. Patents Issued ( )

11 An Age of Invention The Gilded Age was an Age of Invention Cash registers, adding machines, business typewriters Alexander Graham Bell invented the first telephone The Bessemer process transformed iron into stronger, lighter steel What is it?

12 An Age of Invention The Gilded Age was an Age of Invention Thomas Edison (Wizard of Menlo Park) was the greatest inventor of the 1800s In his research lab in New York, he created the 1 st audio recorder, phonograph, and batteries His most influential invention was the 1 st electric light bulb What is it?

13 The Business of Invention New innovations allowed for increased industrial production New machines were incorporated into the 1 st assembly lines that allowed for faster mass production Railroads linked all regions Americas wealth of iron, oil, coal, immigrant labor, & investment capital (money) supplied factories

14 The Industrial Revolution was fueled by 4 industries (R.O.S.E.) Railroads, Oil, Steel, Electricity

15 The Rust Belt The Rust Belt Industrial Resources: Iron, Coal, Railroads, & Steel Plants

16 The Railroad Industry Americas first big business was the railroad industry: Railroads stimulated the coal, petroleum, iron, steel industries Eastern RRs were connected to the West by 4 great trunk lines

17 Railroad growth fueled industrial development 100,000 miles of track laid between standardization of gauge width of tracks (4 feet, 8 1/2 inches) [encouraged development] time zone adoption allowed U.S. divided into four zones massive grants of American land 131 million acres -- federal 49 million acres -- states

18 Railroad Construction in the Gilded Age

19 Oil provided kerosene lighting & lubrication for industrial machinery

20 Steel Production

21 Wadsworth Building, NYC Steel transformed world industry: Allowed for taller buildings, longer bridges, stronger railroad lines, & heavier machinery

22 International Steel Production,

23 Efficiency & Mass Production in Factories

24 Causes of Rapid Industrialization 1.The Railroad fueled the growing US economy: * First big business in the US. * A magnet for financial investment. * Aided the development of other industries.

25 Causes of Rapid Industrialization 2.Technological innovations: * Bessemer and open hearth process * Refrigerated cars * Edison Wizard of Menlo Park light bulb, phonograph, motion pictures.

26 Causes of Rapid Industrialization 3.Unskilled & semi-skilled labor in abundance. U.S. population 3x from Government aid at all levels to stimulate economic growth High tariffs {hurt exporters (farmers)} 5.Abundant natural resources H 2 O, timber, coal, iron, copper, and oil

27 New Business Culture Individuals should compete freely in the marketplace. No room for government in the market! French -- "let it be" Laissez Faire an ideology of the Industrial Age

28 New Business Culture People who risk their $$$ in organizing and running a business French -- "to undertake" Entrepreneurs (another) ideology of the Industrial Age

29 New Forms of Business Organization Corporation: an organization owned by many people, treated (by law) as a single person People who own the corporation are called shareholders Share of ownership is a stock Limited liability

30 New Forms of Business Organization During the Gilded Age, business & industry were transformed: Massive corporations replaced small, family businesses Managers were hired to make factories run more efficiently New business models, such as trusts integrated various businesses under 1 board of directors

31 New Business Organization Combinations of Corporations (WHY?) increases efficiency and profits destroyed healthy competition that often makes capitalism a viable economic model

32 New Business Organization: Board of Trustees (Trust) Board of Trustees Company Manager Employees Trusts use a board of trustees to manage a company

33 New Forms of Business Organization Corporations in the Gilded Age used mergers to increase profits Companies used horizontal integration to buy similar companies to reduce competition Vertical integration allowed companies to buy companies that supply raw materials or transportation for their products

34 Vertical & Horizontal Integration

35 Monopolies Corporate mergers led to giant companies called monopolies: Companies that control nearly all of a particular industry Because most monopolies of the Gilded Age were run by boards of trustees, monopolies became known as trusts Monopolies led to a new generation of U.S. millionaires

36 U.S. Corporate Mergers By 1900, 1% of U.S. companies controlled 33% of all industry

37 The Monopolists Andrew Carnegie created the Carnegie Steel Company: He converted to the Bessemer process & was able to out-produce his competition & offer better quality steel at lower prices He mastered vertical integration to lower his production costs His company made more steel than all the factories of Great Britain, France and Germany combined

38 U. S. Steel Corporation When he retired in 1901, he sold Carnegie Steel to financier J. P. Morgan for over $400 million dollars. Morgan subsequently reorganized the company into the United States Steel Corporation. U S S

39 Andrew Carnegie s rise from a poor Scottish immigrant to one of the richest men in the world was the great example of the American Dream Carnegie did not pay his employees very much & did not allow unions in his factories… …but he was a philanthropist who gave money to New York City libraries, colleges, & performing arts institutions

40 The Monopolists John Rockefeller created the Standard Oil Company Used horizontal integration to create a petroleum company that monopolized the oil industry, lowered costs & improved quality By 1879, Standard Oil sold 90% of all U.S. oil & sold to Asia, Africa, & South America

41 Rockefeller was labeled a robber baron who took advantage of immigrant workers, driving his competition out of business, & used his fortune to influence the national govt… …but Rockefeller gave away $500 million to charities, created the Rockefeller Foundation, & founded the University of Chicago

42 Captains of Industry Entrepreneurs were able to achieve unprecedented wealth and power.

43 The Robber Barons of the Past Robber Barons of the Gilded Age

44

45 Giant Corporations By 1900, 2/3 of all manufactured goods were being produced by giant corporations Swift and Armour dominated meat packing Duke family controlled tobacco Andrew Carnegie took over every aspect of steel production. Swift arm our 1889 Duke Tobacco Advertisement Swift arm our

46 Distant Corporations Needs once met by self-sufficient rural folk now met by large corporations usually located in the Northeast

47 Conclusions Due to the Industrial Revolution: The United States led the world in industry, innovation, & wealth Laissez-faire govt policies & new business tactics led to monopolies However, the gap between the wealthy monopolists & their poor immigrant workers grew wider


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