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Industrialization The Rise of Industry and the Transcontinental Railroad.

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Presentation on theme: "Industrialization The Rise of Industry and the Transcontinental Railroad."— Presentation transcript:

1 Industrialization The Rise of Industry and the Transcontinental Railroad

2 Essential Question Industrialization increased the standard of living and the opportunities of most Americans, but at what cost?

3 Natural Resources Edwin Drake drilled the nations first oil well in 1859 in Pennsylvania Edwin Drake drilled the nations first oil well in 1859 in Pennsylvania Oil Production fueled industrial growth Oil Production fueled industrial growth

4 Large Workforce Between 1860 and 1910, the population in the US TRIPLED! Between 1860 and 1910, the population in the US TRIPLED! Over 20 Million immigrants arrived between and they flocked to work in our nations factories Over 20 Million immigrants arrived between and they flocked to work in our nations factories

5 New Inventions Alexander Graham Bell invented the telephone in 1876 Alexander Graham Bell invented the telephone in 1876 Thomas Alva Edison invented the phonograph, light bulb, and electric generator Thomas Alva Edison invented the phonograph, light bulb, and electric generator

6 U. S. Patents Granted 1790s 276 patents issued. 1990s 1,119,220 patents issued.

7 Expansion of Railroads 1865 the nation had 35,000 miles track 1865 the nation had 35,000 miles track 1900 boasted over 200,000 miles! 1900 boasted over 200,000 miles! Construction linked distant regions of the nation and helped create a National market for products Construction linked distant regions of the nation and helped create a National market for products Construction stimulated the economy by spending millions on steel, coal, and timber Construction stimulated the economy by spending millions on steel, coal, and timber

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9 Pacific Railway Act Railroad boom began in 1862 when Lincoln signed the Pacific Railway Act Railroad boom began in 1862 when Lincoln signed the Pacific Railway Act The Act provided for construction for the first transcontinental railroad by two construction companies The Act provided for construction for the first transcontinental railroad by two construction companies Union Pacific Union Pacific Central Pacific Central Pacific

10 The Union Pacific Led by Engineer Led by Engineer Grenville Dodge, the Union Grenville Dodge, the Union Pacific moved West from Pacific moved West from Omaha Nebraska Omaha Nebraska Railroad workers included Civil War veterans, new Irish immigrants, frustrated farmers and miners, and ex-convicts Railroad workers included Civil War veterans, new Irish immigrants, frustrated farmers and miners, and ex-convicts Employed over 10,000 workers Employed over 10,000 workers

11 Central Pacific Engineered by Theodore Judah Engineered by Theodore Judah who sold stock to the Big Four who sold stock to the Big Four including Leland Stanford including Leland Stanford They pushed East from Sacramento California They pushed East from Sacramento California A labor shortage in California led the Central Pacific to hire over 10,000 Chinese immigrants to lay the track A labor shortage in California led the Central Pacific to hire over 10,000 Chinese immigrants to lay the track

12 Chinese Workers in the Snow Life working on the rails was rough, dirty, dangerous, with lots of gambling, drinking, and hard fighting Life working on the rails was rough, dirty, dangerous, with lots of gambling, drinking, and hard fighting

13 Two Lines Meet May 10, 1869 the two lines met in Promontory Summit, Utah (near Ogden, Utah) May 10, 1869 the two lines met in Promontory Summit, Utah (near Ogden, Utah) Two celebrate the event, they drove in a famous golden spike Two celebrate the event, they drove in a famous golden spike

14 Two Lines Meet

15 Government Help The Transcontinental RR would never have been built without help from the federal government The Transcontinental RR would never have been built without help from the federal government The gov. gave large Land Grants to RR companies, who could sell that land to settlers or businesses to raise money for RR construction The gov. gave large Land Grants to RR companies, who could sell that land to settlers or businesses to raise money for RR construction By the 1860s the federal land grant system had given over 120 million acres of land to RR By the 1860s the federal land grant system had given over 120 million acres of land to RR

16 Consolidation of the RR By 1900 there were hundreds of small lines that needed to be consolidated By 1900 there were hundreds of small lines that needed to be consolidated Cornelius Vanderbilt purchased and merged many lines in NY and Chicago and was able to offer the first direct service between the cities Cornelius Vanderbilt purchased and merged many lines in NY and Chicago and was able to offer the first direct service between the cities He also built NY Citys Grand Central Station He also built NY Citys Grand Central Station To make rail service safer and more reliable, the American Railway Association divided the country into 4 time zones regions where time was the same throughout each region To make rail service safer and more reliable, the American Railway Association divided the country into 4 time zones regions where time was the same throughout each region

17 Industrial World Leader -by 1880, U.S. is worlds leading producer of goods -reasons why???? unlimited labor force abundant coal supply iron mining- Bessemer Process (steel) discovery of oil in US– Drake railroad development

18 Public Support -laissez-faire government policies: hands off, no government intervention in business -unlimited immigration supplied labor -high tariffs protected American business; made imported goods more expensive -public financing of railroads: Federal Land Grants!!!! 1.Laissez Faire the ideology of the Industrial Age. Individual as a moral and economic ideal. Individuals should compete freely in the marketplace. The market was not man-made or invented. No room for government in the market!

19 Entrepreneurs and Innovations -late 1800s saw an explosion of innovation and invention -telephone: Alexander G. Bell -light bulb: Edison -electric power -Nikola Tesla AC Power and George Westinghouse Generator= Edison, N.Y.C -Bessemer Process: injected air into IRON creating STEEL -typewriter = Sholes

20 Entrepreneurs and Innovations -photography : Eastman= KODAK -phonograph- Edison -motion pictures -radioNikola Tesla -retail stores: sold all of the goods produced in the new factories -canned foods= created from new tin can steel after the rise of the Bessemer process!

21 Entrepreneurs and Innovations -John D. Rockefeller: Standard Oil Company -Andrew Carnegie: U.S. Steel Company -J.P. Morgan: banker and leader of HUGE holding company -Cornelius Vanderbilt: Railroad consolidator; offered first direct service from NY- Chicago, built NYC Central Station -Dupont Family -James B. Duke- mechanized production of cigarettes

22 Railroads lead the Way -iron horse -Leading consumer of goods: steel, iron, coal, timber -better transportation leads to growth -transcontinental, golden spike driven at Promontary Point, UTAH standardization of time: 4 Time zones

23 Railroad Prosperity -growth of urban areas -Development of Company Towns Pullman, Illinois makes RR cars: employees given housing, medical care, entertainment -railroad scandals Credit Mobilier: Union Pacific created CM construction company, hired themselves, charged high fees, skimmed profits into their pockets govt land grants: RR would sell land to businesses instead of new settlers

24 Grange and the Railroads -Railroad abuses: often charge more for short haul than long haul, charge discriminatory rates -Granger Laws: passed to regulate RR companies to protect FARMERS -Supreme Court rulings Munn v. Illinois= Supreme Court upheld Granger laws Wabash v. Illinois=overturned Munn and said that states have no power to regulate interstate commerce -Created after Wabash case Interstate Commerce Act, 1887= made rebated and pools illegal; railroads had to publish their rates to public; unfair discrimination illegal and cant charge more for short haul than long Interstate Commerce Commission (ICC)= Federal Gov. attempt to regulate big businesses, especially RR companies= government will intervene to protect the public!

25 Big Business -corporations develop -limited liability leads to public investment -mass market selling

26 Advantages -greater efficiency -economy of scale: the larger the business the more efficient they can produce -manager system -productivity studies Frederick Taylor: scientifically studied assembly lines and production to make factories and wage workers more productive

27 Disadvantages -unfair competition practices: when monopolies develop they can control all prices and pay low wages -corruption and bribery: they would skim profits and bribe Congressmen for government kickbacks -destroyed labor union movements: Did not want workers to unite for higher wages

28 Public Reactions -mixed public feelings -Social Darwinism -based on Darwins theory of evolution -survival of the fittest -also applies to the business world -the best businesses survive -justified their wealth -Gospel of Wealth: should be able to make as much money as possible as long as they gave back to society -rags to riches American Dream Horatio Alger dime novels promoted individualism, you can pull yourself up by your bootstraps

29 Social Darwinism × British economist. × Advocate of laissez-faire. × Adapted Darwins ideas from the Origin of Species to humans. × Notion of Survival of the Fittest. × British economist. × Advocate of laissez-faire. × Adapted Darwins ideas from the Origin of Species to humans. × Notion of Survival of the Fittest. Herbert Spencer

30 Social Darwinism in America Social Darwinism in America William Graham Sumner Folkways (1906) $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile! $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile!

31 New Business Culture: The American Dream? Protestant (Puritan) Work Ethic Protestant (Puritan) Work Ethic Horatio Alger [100+ novels] Horatio Alger [100+ novels] Protestant (Puritan) Work Ethic Protestant (Puritan) Work Ethic Horatio Alger [100+ novels] Horatio Alger [100+ novels] Is the idea of the self-made man a MYTH??

32 New Type of Business Entities 1.Pool 1887 Interstate Commerce Act Interstate Commerce Commission created. 2.Trust John D. Rockefeller 1.Pool 1887 Interstate Commerce Act Interstate Commerce Commission created. 2.Trust John D. Rockefeller Standard Oil Co.

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34 New Type of Business Entities 2.Trust: Horizontal Integration John D. Rockefeller Horizontal Integration John D. Rockefeller 2.Trust: Horizontal Integration John D. Rockefeller Horizontal Integration John D. Rockefeller Vertical Integration: o Gustavus Swift Meat-packing o Andrew Carnegie U. S. Steel Vertical Integration: o Gustavus Swift Meat-packing o Andrew Carnegie U. S. Steel

35 Types of Big Businesses -monopolywhen a business controls all or most of the supply of a product -trustwhen several businesses act as one under the control of a board of directors -mergerwhen two or more businesses join to become one larger business -holding company---business which exists in order to control other businesses as a parent company -horizontal integration type of monopoly formed by controlling all of the same type of business -vertical integration monopoly formed by controlling businesses related to the primary business

36 Types of Big Businesses -monopolywhen a business controls all or most of the supply of a product -trustwhen several businesses act as one under the control of a board of directors -mergerwhen two or more businesses join to become one larger business -holding company---business which exists in order to control other businesses as a parent company -horizontal integration type of monopoly formed by controlling all of the same type of business -vertical integration monopoly formed by controlling businesses related to the primary business

37 Robber Barons -extreme profits made by business owners -Philanthropy??? Donating money for social progress -big business practices exposed (cheap wages, high profits!) -public finally began to call for regulation by government -Sherman Anti-trust Act, forbade combinations in restraint of trade- made no distinction between good and bad trusts -weak law but set a precedent for future regulation by the government to protect public

38 Regulating the Trusts 1877 Munn. v. IL 1886 Wabash, St. Louis & Pacific Railroad Company v. IL 1890 Sherman Antitrust Act in restraint of trade in restraint of trade rule of reason loophole rule of reason loophole 1895 US v. E. C. Knight Co Munn. v. IL 1886 Wabash, St. Louis & Pacific Railroad Company v. IL 1890 Sherman Antitrust Act in restraint of trade in restraint of trade rule of reason loophole rule of reason loophole 1895 US v. E. C. Knight Co.

39 The Protectors of Our Industries

40 The Robber Barons of the Past

41 The Gospel of Wealth: Religion in the Era of Industrialization Russell H. Conwell $ Wealth no longer looked upon as bad. $ Viewed as a sign of Gods approval. $ Christian duty to accumulate wealth. $ Should not help the poor. $ Wealth no longer looked upon as bad. $ Viewed as a sign of Gods approval. $ Christian duty to accumulate wealth. $ Should not help the poor.

42 On Wealth Andrew Carnegie $ The Anglo-Saxon race is superior. $Gospel of Wealth (1901). $ Inequality is inevitable and good. $ Wealthy should act as trustees for their poorer brethren. $ The Anglo-Saxon race is superior. $Gospel of Wealth (1901). $ Inequality is inevitable and good. $ Wealthy should act as trustees for their poorer brethren.

43 Relative Share of World Manufacturing

44 Modern Robber Barons??


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