Presentation on theme: "The Rise of American Business, Industry and Labor,"— Presentation transcript:
1 The Rise of American Business, Industry and Labor, 1865-1901
2 From Agricultural to Industrial After the Civil War, the U.S. was still largely an agricultural nation.By the 1920’s years later ---, it had become a leading industrial power in the world.
3 Major areas of growth in Business and Industry Transportation: railroads and automobiles; urban transportationBuilding materials: steelEnergy sources: coal, oil, electricityCommunications: telegraph, telephone
4 Transportation: automobiles Prior to 1860Use of horses and buggyAfter 1860Automobile engine (two cycle) invented by Karl Benz1893 Diesel engine by Rudolf Diesel1893 Gasoline automobileSteel production increasesConstruction of roads
5 Transportation: railroads Prior to 1860Railroads extended west to the Mississippi River.After 1860Transcontinental railroad connected the nation, east and west in 1869.With rail transportation, iron, coal, steel, lumber and glass industries expanded.Towns grew, new markets opened, new opportunities to make $
6 Representative Entrepreneurs: Case Studies in Wealth and Effort John D. RockefellerStandard Oil CompanyBy 1880 controlled 90% of America’s refining business.Made huge profits, but paid employees low wages.Drove his competitors out of business by selling at a lower price than it cost to produce it. When his competitors went out of business, then he hiked the price up.
7 Inventions Promote Change Inventions affect the way people lived and worked.The harnessing of electricity completely changed the nature of business in America.By 1890, electric power ran numerous machines from fans to printing presses.Photo: Westinghouse Generator for New York City
8 Inventions Change Lifestyles The invention of the typewriter and telephone affected office work and created new jobs for women.With industrialization, clothing could be mass-produced in factories creating a need for garment workers.
9 Entrepreneur: Andrew Carnegie Carnegie was born in Scotland to penniless parents.Entered steel business in 1873.Carnegie Steel Company manufactured more steel than all the factories in Great Britain.Continually searched for ways to make better products more cheaply.Bought out his suppliers –coal fields and iron mines, ore freighters and railroad lines – in order to control the raw materials & transportation.
10 Entrepreneur: Henry Ford Creates quadricycle in 1896.12 years later created a car so good and so cheap it put America on wheels.Model T built by assembly lineMillions of Americans could now afford a car
11 J. Pearpont Morgan Began career as an accountant J.P. Morgan and Company 1895.Coldly rationalReorganized the railroadsCreated U.S. Steel, first billon-dollar corporation in 1901.John Pierpont Morgan ( ) began his career in 1857 as an accountant, and worked for several New York banking firms until he became a partner in Drexel, Morgan and Company in 1871, which was reorganized as J.P. Morgan and Company in Described as a coldly rational man, Morgan began reorganizing railroads in 1885, becoming a board member and gaining control of large amounts of stock of many of the rail companies he helped restructure. In 1896, Morgan embarked on consolidations in the electric, steel (creating U.S. Steel, the world's first billion-dollar corporation, in 1901), and agricultural equipment manufacturing industries. By the early 1900s, Morgan was the main force behind the Trusts, controlling virtually all the basic American industries.
12 Big Business and Capitalism Laissez-faire capitalism ruled the day at the beginning of Industrial Revolution.Unbridled money-making.Captains of Industry orRobber Barons?Ruthless business practicesBut also, philanthropyLaissez-faire capitalism ruled the day during the beginning of the Industrial Revolution in the United States. In this atmosphere of unbridled money-making, numerous types of business organizations gave rise to Big Business. Were the leaders of these companies Captains of Industry or Robber Barons? While some used ruthless business practices to wipe out their competition and earn large profits, others gave enormous sums of money to charities and their communitiesSome feel that the powerful industrialists of the gilded age should be referred to as "robber barons." This view accentuates the negative. It portrays men like Vanderbilt and Rockefeller and Ford and cruel and ruthless businessmen who would stop at nothing to achieve great wealth. These "robber barons" were accused of exploiting workers and forcing horrible working conditions and unfair labor practices upon the laborer.Another view of the industrialist is that of "captain of industry." The term captain views these men as viewed ingenious and industrious leaders who transformed the American economy with their business skills. They were praised for their skills as well as for their philanthropy (charity).In reality the debate over robber barons and captains of industry mirrors views of industrialism itself. Just as their were both positives and negatives to industrialism there were positives and negatives to the leaders of industrialism.
13 Forms of Business Organization Monopoly one company controls an industry or is the only provider of a product or service Conglomerate - large business with a number of companiesTrust An unincorporated business organization created by a legal document, a declaration of trust, and used in place of a corporation or partnershipHolding Company Type of business organization that allows a firm (called parent) and its directors to control or influence other firms (called subsidiaries
14 Adam Smith: Wealth of the Nations Father of EconomicsInfluential thinkerWrote at beginning of Industrial RevolutionFavored an unregulated economy.“The Less government interfers with business, the more prosperous the nation will be”.This Scottish economist was the most influential thinker in the history of capitalist economics, a fact that is all the more remarkable in that he was writing during the earliest phases of the industrial revolution. He is still cited as in support of arguments for an unregulated economy: the less government interferes with business the more prosperous the nation will be, runs this theory
15 Urbanization: a Direct Result of the Industrial Revolution Burgeoning factories were centralized in cities which offered a central location for resources and workers.Immigrants and rural workers flooded cities in hopes of finding employment.Urbanization was a direct result of the Industrial Revolution in the United States. Burgeoning factories were centralized in cities which offered a central location for resources and workers to fuel their production. Immigrants and displaced rural workers flooded cities in the hopes of finding employment. Throughout the Gilded Age there were several positive, as well as negative, effects that can be attributed to urbanization.
17 Positive Effects of Urbanization: New Technologies (elevators, skyscrapers, street lighting, water and sewage systems, etc.)Cultural Benefits (museums, theaters, parks, libraries, education, etc.)
18 Board Game: MonopolyThis board game was invented when America's Gilded Age was in its final death throes. Invented by Lizzie Magie.
19 The Landlord's GameOriginally named "The Landlord's Game" Lizzie said it might well have been called "The Game of Life"
20 "The Commons" for The People not private profiteers Lizzie ws a Georgist (one who follows the teaching of economist Henry George) and believed that things found in nature like mineral wealth, are part of the commons and thus should really be owned by "We the people' not private profiteers.It was an ideology directly born out of the times - The Gilded Age - when Robber Barons used monopolies in steel, oil, rail and finance to dominate the American economy.
21 Massive Monopolies were built The Robber Barrons like Carnegie, Rockefeller, Morgan, built vast fortunes by owning all the stops on the Monopoly Board of America. While working people's conditions collapsed to the point where we went into the Great Depression.
22 Most Americans worked for someone else - monopolists In his 1888 State of the Union Address, President Grover Cleveland said the "citizen is ...trampled to death beneath an iron heel," he also called out the corruption of Congress by the Robber Barons.
23 President Cleveland's reality "We discover that the fortunes realized by our manufacturers are no longer solely the reward of sturdy industry and enlightened foresight, but they are the result from the discriminating favor of the Government and are largely built upon undue exactions from the masses of our people" President Grover Cleveland
24 No restriction on Monopolies President Cleveland's 1888 reality was our most prominent Founding Father's worst fear. On Dec. 20, 1787, Thomas Jefferson wrote to James Madison about his concerns regarding the first draft of the Constitution, namely that it did not include a Bill of Rights, and in particular, it did not include a "restriction of monopolies"
25 See clearly the gross injustice In inventing the Board game Monopoly, Lizzie Magie's hope, and that of many, was that the stranglehold of the Economic Royalists of the era could somehow be broken. "Let the children once see clearly the gross injustice of our present ...system and when they grow up, if they are allowed to develop naturally, the evil will soon be remedied."